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Lord Marlesford: My Lords, I thank the noble Lord for allowing me to intervene. He is suggesting that the matter is much more cut and dried than it is. If he looks at page 70 of Mr. Heseltine's evidence he will see in the answer to question 454--the question asked by himself--that Mr. Heseltine was saying that they would have to consider whether or not to accept a bid. It is therefore more open than the noble Lord suggests.

Lord Taylor of Gryfe: My Lords, I do not know whether the noble Lord, Lord Marlesford, heard the Lord Privy Seal this morning. If he did, he would have heard that the negotiations are at a fairly advanced stage. Indeed, if he reads the report he will see that the firms are named and listed as being in the final running for appointment. Therefore we can assume that the process is proceeding.

I have never regarded this matter as a party matter. I am speaking for the Labour Party and from these Benches. But this matter relates to the organisation of the British Civil Service. It is a matter of great importance, as my noble friend Lord Callaghan of Cardiff said when we addressed it originally. The ethos and structure of the Civil Service has always been a matter of consensus and not a matter of party debate.

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I regret to say that it has now been introduced as a matter of dogma; of party philosophy--"We are going to change the Civil Service". I regard that, as should the House, as totally unacceptable.

I was interested to read and listen to the evidence submitted to the Committee. I shall not go through it all, but I will refer to page 90 of the report and Sir Frank Cooper. He was a distinguished public servant as well as holding extremely responsible positions in private industry. He summed up my view. He said,

    "Let me say that I am not an opponent of privatisation as a knee jerk reaction. The same applied to moving work out of Government. But I am quite clear that each case must be looked at on its privatise RAS, particularly on the inadequate grounds put forward is a bridge too far".

That is my view. I am not opposed to privatisation. There are cases where it is justified and has been successful. The Lord Privy Seal said that his case was based on the fact that privatisation is being extensively copied throughout the world. I do not know of any countries which have privatised the recruitment of their civil service. Indeed, people in other countries and other governments have come to RAS for their expertise and advice in running their own civil service recruitment services. I hate the idea that one applies privatisation as a dogma to everything: that is irresponsible government.

When privatisation takes place, whether it is British Rail or any other industry, one generally produces a prospectus and says, "All right, it will be done. The Treasury will receive so much and there will be a benefit to the nation to this or that extent". There is no evidence in the Government's submission which provides any clear-cut indication that there will be a return to the Treasury or that the service will necessarily be more efficient. Indeed, the noble Earl, Lord Howe, when we discussed this matter on an earlier occasion, said that the RAS had a well-established reputation as a centre of excellence. Yet the Minister sits here today, telling us that the RAS has a reputation for being a centre of excellence, but that we are going to privatise it and change it anyway.

The noble Lord, Lord Marlesford--he is not now in his place--made reference to the firms who may be appointed to take over the RAS. I have a Dun & Bradstreet report on the three companies who appear on the shortlist for the candidates who will run what is our Civil Service centre of excellence. One of them is engaged primarily, as described in the report, as a health practitioner. It may have something to say in terms of recruitment of civil servants; I do not know. However, it is described as being a health practitioner. It may have something to say because it also dabbles in psychology.

A second company is called Capita Group plc. That company was formed to take advantage of privatisation. It was appointed in various fields in which it has expertise. It is doing remarkable business as contractor to local government in chasing up people who have not paid their poll tax. It is engaged in privatising the testing of new motorcar licence applicants. It is engaged in privatising waste product disposal. That is one of the three firms to be considered for taking over the RAS and its sophisticated and excellent services.

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Similarly, the other company shortlisted is described as publishers and public relations officers with no expertise whatever in the field of recruitment assessment and training. I suggest therefore that it is a scandal that we are about to dispose of a business with a record of excellence in order to consider those kinds of companies to take over and run the recruitment services. I suggest that the Government think again. That is all we ask them to do.

It is interesting--I know that the noble Baroness, Lady O'Cathain, has a great deal of knowledge in this field--that no major international or national organisation with substantial experience in this field has applied for the job.

Baroness O'Cathain: My Lords, I am grateful to the noble Lord for giving way. As I said in my speech, I have direct working knowledge of one of those three companies and I do not recognise, from the descriptions the noble Lord gave, the activities of that specific company. The company involved was employed by the organisation of which I was a managing director many years ago to become involved in psychometric testing. It has a huge client base from doing psychometric testing for this type of recruitment. I know that it publishes definitive works on psychometric testing and recruitment and if it is describing itself as publishers and PR officers, I do not know where the PR comes in. It may be that it does work for PR firms also. However, unless the company has changed dramatically over the past few years, I am most surprised by the noble Lord's description.

Lord Taylor of Gryfe: My Lords, I am sorry if the noble Baroness believes that I am misrepresenting. I have been quoting from Dun & Bradstreet's report on the companies concerned. I shall be happy to make that available to the Baroness after the debate. Because of the doubts that have been raised and the very strong, unanimous recommendation made by a committee of this House, all we are asking for is time to consider this matter. Cannot the Government just delay this matter? What is the hurry in the last days of a dying government? Can we have time to consider the very important matter of the Civil Service of this country, which is the envy of many countries in the world? I beg the Government so to do.

1 p.m.

Lord Cuckney: My Lords, I should like, as a member of the Public Service Select Committee, to thank our noble and learned chairman, Lord Slynn of Hadley, for his very skilful navigation through difficult and sometimes choppy waters. The report emphasised--and it has been emphasised again this morning--that the committee had severe time constraints in tackling a difficult and complex task. It was difficult and complex not because of the size of the Recruitment and Assessment Service but because of the qualitative issues involved. One result of the time pressures was that, in effect, we had to put the cart before the horse. We had to consider recruitment and how it should be undertaken, for a service that we had yet to examine: a service which has undergone dramatic and major change

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over the past few years, the impact and implications of which we were denied the opportunity of studying carefully.

I believe that we were unable fully to take account of the huge structural and, more important, cultural changes which have occurred in the Civil Service. Had we been able to do so I believe that we might perhaps have been more clearly able to recognise the changed and limited role that RAS now plays.

I shall be very brief this morning, but should like to underline the point that we had perforce to make a study and come to conclusions under time pressures which, I believe, are uncharacteristic of a Select Committee of this House. Inevitably, we conducted a rushed study of the actual role of RAS in today's dramatically changed Civil Service. In making these remarks I wish to assure your Lordships that this was a unanimous report and that I was honoured to be a member of the committee.

1.3 p.m.

Lord Rodgers of Quarry Bank: My Lords, this is an unequivocal report. I believe that noble Lords who are not with us today should read it. The concluding paragraph 88 is clear enough, but the preceding paragraph 87 is, if anything, stronger. I endorse everything said today by the noble and learned Lord, Lord Slynn of Hadley. He made a very plain statement. I also thank him for the great skill and patience with which he chaired the committee. As the noble Lord, Lord Cuckney, has just reminded your Lordships, this is a unanimous report. That does not mean that individual members of the committee were not obliged from time to time to accept a compromise, to recognise the need for concession in order to produce a unanimous report. Nevertheless, on the evidence before us--and others apart from those who gave evidence had the opportunity to do so--we came to a conclusion which is clear and spelt out in detail in this report.

I join in welcoming the maiden speech of the noble Lord, Lord Gillmore of Thamesfield, not only for the speech that he made, but also for his contributions in committee. It is unusual for a Member of your Lordships' House to be as active as the noble Lord was in committee before he had actually spoken in this place. He was an invaluable member and all that he said today was reflected in his remarks in our discussions.

It is very important indeed to recognise, as he did, that the idea of public service is a very real one. He mentioned the qualities of integrity, loyalty, impartiality and fairness. Although Mr. Michael Heseltine was remarkably insensitive to those considerations and failed to understand that the motives of other people in their life and work might be different from his own, I believe that the idea of a public service ethic is real to very many people and something which we should seek to preserve.

Mr. Heseltine said that there is merit in

    "the interchange of public and private sectors".
Of course, the Civil Service has needed, and may still need today, more specialists. I believe that, by common consent, a greater degree of numeracy is also something

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from which the Civil Service has benefited. I do not doubt either and none of us could--this is another point made by the Deputy Prime Minister in his evidence--the dedication of many professionals. Nevertheless, there are those who joined the Civil Service because it was the Civil Service. They wanted to serve the public interest and they believed that this was the best way of doing so. I greatly regret that a number of men and women in that category will now find themselves transferred to the private sector with little or no choice about whether that should happen.

Other noble Lords have referred to the evidence given and remarks made by members of Her Majesty's Government in trying to persuade the committee at one stage that its purpose had not, and could never had been, achieved, but that there was still scope for account to be taken of what your Lordships' committee might say.

I remind the House of the precise words of the noble Viscount the Lord Privy Seal. He said,

    [The] "final decision need not and will not be taken until the Select Committee ... reports".
tbemphasise the word "decision". My understanding at that time was that the final decision was whether privatisation should go ahead. At least, the noble Viscount was emollient and helpful. The Chancellor of the Duchy of Lancaster said that the observations of the committee would be taken into account and carefully considered. Here again, I believe that he was conciliatory if not as positive as the Lord Privy Seal. However, I say with reluctance that the Deputy Prime Minister gave a performance which was cavalier, dogmatic and contemptuous. He gave the impression that he was wasting his own time in giving evidence before the committee and that it should recognise that we were wasting ours. He said,

    "We have taken a decision. We intend to proceed. We have made up our minds".
Those are the precise words he used in presenting evidence to your Lordships' committee.

We were left not with questions of policy, but only of the process. Here again, I refer your Lordships to Questions Nos. 501 to 504, printed in the evidence with this report. In one case I asked,

    "What are the matters still to be settled?"
It was a civil servant, Mrs. Margaret Bloom, who accompanied the Deputy Prime Minister, who said,

    "Shall I take you briefly through the process?".

I made it clear that it was not the process that the committee was concerned with but the policy. Mr. Heseltine then said,

    "At the moment the procedure is advancing and I am not aware of hurdles which would be difficult to jump".

That is a classic example of "word-speak". It could have come from "Yes, Minister". It meant that he was paying no attention at all to the questions put by the committee and had no adequate reply to give. Finally, when asked whether there were any remaining policy issues, the reply that came from Mrs. Bloom was "No". So, when your Lordships' Select Committee was first convened and considered how to proceed under its terms of reference, there were no policy issues left to decide and there was never an opportunity for the committee to influence policy.

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If there was anything more depressing than the futility of the course upon which we embarked, it was the dogmatic and cavalier way in which the decision had apparently been made. We referred to that in the penultimate paragraph of the report, paragraph 87. The Chancellor of the Duchy of Lancaster explained in his own words why the decision had been made. He said:

    "You might say, unkindly, that that is dogma".
He was fetchingly honest and I would not complain about that, but dogma it was. As Mr. Heseltine confirmed, it was dogma in his case also when, finding himself Deputy Prime Minister barely more than a year ago, he came into office and looked around for things to do. On his own account, he consulted no one. He made a personal decision in favour of privatisation--and that was that. Nothing said by the Deputy Prime Minister suggested any reference to Cabinet. Indeed, it was unlikely that the Cabinet was meeting at the time that that decision was made, according to his own account. There was no reference either to whether the matter was put to the Prime Minister. I shall be interested to see whether the Minister can confirm when he replies whether Mr. Heseltine made the decision alone (as in the terms of his own evidence) or whether there was a Cabinet decision or any reference to No. 10.

As other noble Lords have said, this has been a profoundly wrong decision. The Civil Service is not the property of any one government. In any case, it is quite wrong that privatisation should take place in the dying months of the Government. A commitment to this privatisation did not occur after 1979; nor after 1983; nor after 1987; nor after 1992--all general elections which provided the Government with the necessary majority. It is only now, after 17 years in government, on the eve of an election, that a decision has been made. Such an arbitrary and impudent decision brings the whole system of government into disrepute. In October it will all be over. There will be no national campaign to save the Recruitment and Assessment Services. There will be relatively few letters to Members of Parliament. The RAS will go out not with a bang, but with a whimper--but no good will come of it.

1.13 p.m.

Baroness Park of Monmouth: My Lords, I fear that I shall be plunging some hat-pins into my noble friend the Minister and I hope that he will understand that they are not directed at him. They arise from my deep concern for the future of the public service as a national issue.

If I were the Principal of Somerville today and an undergraduate came to me to ask for advice on how to enter the public service, I would have to advise not the CSSB procedure, but an early application to KPMG, Coopers and Lybrand, McKinseys, NatWest Markets, Price Waterhouse or some other city consultancy firm, for it is they who decide what will happen in the Civil Service and the BBC--or to the homes of our soldiers. National policy appears to be made by consultants today.

In preparing for this debate I have taken time to read the Civil Service White Paper of 1994, Continuity and Change--only the latter word is applicable--the July

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1996 paper Development and Training in the Civil Service; the 1996 reports of the Cabinet Office, the Privy Council and several other departments; the framework document of the Ordnance Survey, an executive agency, and of course the RAS 1994-95 report. They are all splendidly and expensively glossy, and full of soundbites signifying nothing.

Perhaps I may quote just a few of the dazzlingly empty and vacuous programme titles, taken straight from the marketing brochure of some third-rate advertising campaign to sell Mars bars: Competing for Quality; Trading Funds; Private Finance Initiatives; Next Steps Agencies (including the Buying Agency); Competence Frameworks; the Management Charter Initiative (MCI) which has spawned charters by the dozen--add to that the fact that every single White Paper, framework document or review is packed full of paragraphs about trading methods, customers, markets--even a perfectly normal group of Civil Service departments with an interest in recruitment has to be called a "consumer consortium"--efficiency scrutinies, performance reviews, and deregulation strategic plans. I cannot help wondering when the Civil Service is actually allowed the time to do its real job of running the public service. Small wonder that the Efficiency Unit in the Cabinet Office has as one of its main tasks for 1997,

    "to continue to tackle the burden of paperwork in the public service"-
and how is it to do that?--

    "with further scrutinies to be launched".

I read the admirable report of the Select Committee with mounting dismay because it bears out all of our earlier forebodings. The Government said as recently as July 1994 in the White Paper, Continuity and Change,

    "The Government recognises that the Civil Service is not the property of any administration"--
that is a direct quote--but then, as the Deputy Prime Minister made so starkly clear to the committee, he does not read the papers which we so naively suppose to represent policy. He makes up his own mind and feels in no way bound by earlier ministerial commitments. How like our own dear John Birt at the BBC!

It is clear that the Government are hell-bent on privatising every inch of government that they can--not just creating Next Steps agencies, for some of which there are indeed perfectly sound arguments, but turning the whole public service into a series of small businesses. In the case before us, there has been no pretence of giving the staff (who joined the Civil Service because they chose to be public servants with all the responsibility and relatively small financial reward that it offered) the opportunity to continue to be public servants, however limited the range of the Civil Service, which is now so truncated, has become. The staff wanted to be public servants elsewhere in some other department. That was their chosen career. No, they are the intellectual property; they are the invaluable resource which is being sold--and it has been made plain to them that they must stay with RAS. It is, of course, probable that in a Civil Service which has been dramatically "down-sized", to use the jargon, there are fewer jobs available anyway, but that does not alter the

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arrogant disregard of their wishes and interests which the Government have displayed--and this is the Government whose main programme at present, as set out in the July 1996 paper, Development and Training for Civil Servants is the new soundbite programme "Investors in People".

This Government are staggeringly incompetent at man management--the same absolute failure to consult the people who are the Civil Service's most valuable asset, the same disregard of their basic rights (the staff of RAS are still waiting for answers to basic questions about their terms and conditions of service in the private sector to which they have been arbitrarily consigned), was displayed in the mockery of consultation employed in the married quarters estate plans. John Birt has had good models to imitate. I had always thought that man management was one of the cardinal features of any successful enterprise. The present Government's ideas seem to be confined to managing money, and money alone, coupled with some glossy brochures the texts of which consist largely of slogans.

The truly amazing fact which has emerged from the report is that while claiming to base their approach on sound business methods--and, of course, they are selling RAS as a single viable business--the Government have ignored all the facts that a business assessment would recognise: that RAS is highly successful; that major businesses would never dream of putting their recruitment out to external bodies; and that such businesses recognise that it is the insiders who are familiar with their ethos who will best "sell" it to the recruits. The Government of course at least recognise that--and that is why they will not allow RAS staff to transfer. But what of the day when the staff either move off to other private work, or retire? Where then will be the insiders' knowledge?

The Government have never been able, of course, to understand that potential recruits make an early judgment based on the insiders whom they meet (that is why the Army cannot make good a severe shortfall in recruiting, because it has been using the Jobcentres--a brilliant wheeze invented by the Treasury to save money by closing regimental recruiting centres). That of course is a mistake which has now been corrected.

Another interesting fact that has emerged is that the Government count on careful monitoring by the OPS to ensure that standards are maintained, but were quite unable, eight months after deciding to privatise, and with the contracts about to be negotiated, to say how much the monitoring will cost. That of course has been set straight today by the statement of my noble friend the Lord Privy Seal about the three posts which will be created. It is, nevertheless, very late in the day.

It is ominous that monitoring units in the DSS have been cut. Perhaps that is what Mr. Heseltine meant when he said that he wanted to bring numeracy into the public sector as opposed to literacy, but I suspect that the real reason is that the cost might prove a significant argument against the wholly unnecessary move from an agency to privatisation. No one should of course be surprised that he has bluntly said that his aim is to change the culture of the Civil Service, nor that he has

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made his decision, and does not intend to be confused by the facts, still less indulge in consultation. Yet there is hardly one word raised in the whole volume of evidence which is not against the privatisation of this priceless resource. Among the many who gave evidence to that effect were 40 CSSB assessors.

It has been said, too, that no other government would dream of putting public recruitment in private hands. Consider that the new business would only have to hire one possibly quite minor member of staff with access to records, who had an IRA connection, or who was open to exploitation by a foreign intelligence service, to constitute a serious long-term threat. It is not a question of who does positive vetting, it is a question of access to records. Businesses do not expect to put elaborate security measures in place, nor are they trained in security thinking.

But, I come back to the central point--the recruitment of those who are to implement our national policies is not a business, it is a part of public service. The fragmentation and near dismemberment of the public service is what faces us, and it is being done in the name of dogma. The Government said in the 1994 White Paper that it:

    "does not envisage extending the formal establishment of agencies into areas of the Civil Service primarily concerned with policy".
That is an easy commitment to abandon: it is all a question of--what is policy? Anything expensive which can be successfully sold as a going concern will prove to be, miraculously, operational or purely executive--anything but an aspect of policy. It is easy if you know how.

I come back to the Houdini-like ability of Ministers to create charters, invest in people, and advocate better management (which for them means solely business plus, trading initiatives, and private finance initiatives, to get other people to pay) while destroying the major resource they and the country have: the people in the Civil Service who joined to be public servants, not small businessmen. They have been sold short. Virtually, they have been betrayed.

I do not deny that the Civil Service, like any other large organisation, probably needs some reform, and certainly some departments, like the Treasury and the DES have led a very sheltered life, but, as Michael Bett himself said in his review of the Armed Forces manpower, Managing people in tomorrow's Armed Forces:

    "We were puzzled as to why the Armed Forces should need an independent review ... Few private sector organisations would ask their senior management to stand aside while an independent Committee examined their manpower, career and remuneration structures, and there are few precedents for such a review in the public sector".
But, of course, one forgets, there have been internal reviews and option papers. But do Ministers read them? They prefer either to use their advisory boards for independent advice, at least in the case of the agencies--boards which, according to the White Paper:

    "Typically consist of a mixture of civil servants ... and outsiders who bring business expertise or knowledge of the markets".

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Or of course some of them evidently prefer to act on instinct, or, as Mr. Heseltine observed, "happened to take a view", and there are always McKinseys which, as he also said:

    "are inside most Government Departments most of the time and do not seem to have caused any great trouble".
That is a great relief.

Others will speak of the constitutional issues raised by the apparent power of one administration to fragment a great public institution, destroy morale, and change the culture. I can only say now that, although the most the committee has been able to do is to win some relatively cosmetic safeguards and concessions--exactly what happened in the case of the married quarters estate--it is quite vital that the committee proceed with its work so that in the next Session there can be full debate on the Floor of both Houses. It is not yet quite too late, but nearly so.

My concern is for the future. I wish the young still to be able to choose the public service and its ethos which is a noble one. I fervently hope that no further major privatisations will be allowed to go forward before consultation and debate.

1.26 p.m.

Lord Chorley: My Lords, considering the circumstances in which the Select Committee sat, and the provocative nature of much of the Government's evidence, the document we have been discussing today is remarkable for its restraint. Nevertheless, it must surely be one of the most devastating documents to emerge from a Select Committee of your Lordships' House in recent years. It is comprehensive, mercifully short, clear and lucid. We all echo the thanks of other noble Lords to the noble and learned Lord, Lord Slynn of Hadley, and his committee.

My interest in the matter of the RAS stems in large measure from being a member, through most of the 1980s, of the TSRB which frequently took evidence about recruitment into the fast stream from the Civil Service Commission. Many years earlier I was seconded into the Civil Service for two immensely stimulating years, and, generally, in a professional capacity I have worked for, or alongside, or had occasion to consult senior civil servants. Over the years I have come to respect, albeit sometimes rather critically, the quality of our Civil Service. I am speaking of course of the senior echelons, because it is there that I have had most of my dealings.

Coming, as I do, from a City background, what has most struck me about the Civil Service is the ethos of public service and the collegiate camaraderie which have been referred to so eloquently by my noble friend--indeed I might say my old friend--Lord Gillmore, in his memorable maiden speech. That was its strength, and it is a very precious asset. Once destroyed, it would be extraordinarily difficult to recapture. That is what successive administrations seem almost systematically to have been bent on doing over the past 17 years.

That asset depends upon three main factors: first, a general regard, particularly among parliamentarians, for the integrity and quality of our civil servants. Instead of that, what we have experienced is a miasma of

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disparagement over those years. The second is adequacy of remuneration. Here, too, over those years, there has been a progressive deterioration which is not confined to the Civil Service. I am thinking of course in terms of pay comparisons with the private sector, but the comparisons I have in mind are not those with the fat cats, they are of the normal levels of middle management, and there the disparity has been getting bigger and bigger, and it is not satisfactory. Thirdly, the integrity and quality of the recruitment process which the RAS and its predecessor set up are an integral part of the asset. Now, too, that is threatened in a most naked way. The report spells it all out.

The issue in my view is not just one of privatisation versus nationalisation. I have always supported, and indeed have been professionally involved in, the privatisations. The issue for the RAS, as other noble Lords have said, which, in any case, is the smallest minnow in economic terms, is far more fundamental. We are not talking about how best to make or supply widgets, units of electricity, water, steel, telecommunications, or whatever, I believe that the issue has more to do with the role played by the Civil Service in the integrity of the functioning of constitutional government.

Yet to read the evidence, especially the oral evidence of Ministers, one would believe that the RAS was just another boring old business of supplying widgets. The evidence positively reeks of this dismissive attitude. It reeks of an ideological attitude, a crude ideological fixation, whose only parallel in my book is that of an unreconstructed socialist. That was about the most pejorative term that I could think of.

But that is not all. There is, too, the way in which the process has been conducted, about which we have heard a great deal. I refer also the manner of its announcement. Apparently, it was so trivial an issue that it merited only a parliamentary Written Answer and, at that, only part of an Answer. There was no White Paper, no Green Paper and no consultation. In particular, there was no thought for the staff involved. I refer to the brave but damning letter on page 92 from Mr. Barry Hilton, the Chairman of the Staff Representation Group. There was also the awkward position of Mr. Dennis Trevelyan, the then Civil Service Commissioner. Page 21 reads:

    "Mr. Trevelyan told the Committee that he had been authorised by Ministers to say to RAS staff when the Agency was set up in 1989 that it was not the first step in a privatisation exercise".

There was then, too, the fact, according to the report, that the whole exercise had not been properly costed. We have heard more about that today and I am still not clear that the exercise is economically worth while, leaving aside the wider issues. There is no evidence that the sale represents good value for money.

Then there is the sale agreement, which one cannot see because it is not yet finalised. But we can learn enough from the report to infer that it will provide a field day for bureaucrats and lawyers at the taxpayers' expense. We read that the Crown will licence the intellectual property rights of the RAS. But those property rights will change and merge and will become entangled with the buyers' intellectual property rights. However, listening to the noble Lord, Lord Taylor of Gryfe, it does not sound as though they will have many

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intellectual property rights to contribute. But, assuming that they do, those intellectual property rights will merge with the RAS rights as the years go by. So how on earth will the Government exercise their intellectual property rights, and to what end? It strikes me as being a right old muddle.

Indeed, the notion that one can regulate by contract the intricate kind of relationships with a whole host of individual government departments which the report outlines I find breathtakingly naive. I know because I had a little experience of that in an attempt to set up a trading fund. I thought that the whole thing was farcical.

All that is set out in some detail in the report and the evidence. Its conclusions are clear and devastating. It is difficult to find a single point in favour of the proposal. Finally, we are left with the other major issue to which reference has been made; that is the attitude of the Government to the Select Committee and, through it, to this House. I am thinking particularly of the evidence of the Deputy Prime Minister, which has been referred to by almost every speaker today, and the interchange quoted in the report at paragraph 10. I think also of his final interchange on the same point with the noble Lord, Lord Merlyn-Rees. I do not know whether I am using unparliamentary language--other noble Lords have done so already--when I say that I found this breathtakingly arrogant. Indeed, the whole of his evidence was arrogant and dismissive.

Where do we go from here? It was my understanding that the Government would withdraw the proposal only if the report was a show-stopper. It is hard to think of a report which could be more of a show-stopper. I beg the Government to think again.

1.34 p.m.

Lord Beloff: My Lords, I should like to begin by doing what has become fashionable in your Lordships' House and declaring an interest. It is not the same interest as has marked some of the previous speakers. I have never been a civil servant. I have never acted as an assessor in any of the competitions to which reference has been made. My interest is a different one. For 11 years I was a reader in the comparative study of institutions in the University of Oxford and for 17 years Gladstone Professor of Government and Public Administration. One of my principal duties was to instruct the young students not only from the United Kingdom but from many parts of the world in the principles and practices of the British Constitution. At times that naturally impinged upon the conduct, composition and ethos of the Civil Service. Indeed, for some years, with the assistance and help of the late Lord Armstrong of Sanderstead, then the permanent head of the Civil Service, a number of distinguished people from Whitehall, many of them subsequently to reach the headships of departments, came down and talked to my students. At the same time, I was involved in doing something similar in what was then called the Centre for Administrative Studies, which was the origin of what is now the Civil Service College. I feel a certain commitment to the constitution as I taught it and as I had learnt about it from my predecessors.

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Of course, it must be admitted that not all students benefit from the instruction which is open to them. Noble Lords may have read in this morning's Times a letter from Winston Churchill to his son Randolph upbraiding him for not taking advantage of the intellectual atmosphere of Oxford.

Having read the admirable report of the committee, I believe that in that category of those who have not taken advantage of what has been open to them must be the Deputy Prime Minister. Other noble Lords referred to the arrogance with which he dismissed the concerns of your Lordships' committee. Indeed, it is most marked. By comparison with the Deputy Prime Minister, Louis XIV of "L'etat c'est moi" turns out to be quite a modest little figure.

But I am not so much worried about arrogance because I believe that we can survive arrogance. What we cannot survive is ignorance. What was clear from the evidence of the Deputy Prime Minister, and to a lesser extent the evidence of the Chancellor of the Duchy of Lancaster, was that they had not appreciated the fact that this is not a matter of efficiency.

With apologies to the noble Baroness, Lady O'Cathain, all that she said about British Airways and psychological tests in the private sector have nothing whatever to do with the issue before us. We are considering a major constitutional issue, which was referred to by the noble Lord, Lord Gillmore of Thamesfield. We are considering the changes which were made in the nature of British government in the 1850s which have been the basis of our constitutional system ever since. We are talking about the detachment of the Civil Service from political and other forms of patronage and a clear demarcation between the public and the private sectors. Noble Lords with an interest in things military, like my noble friend Lady Park, who has just delighted us, as always, will remember at the same time the abolition of the right to purchase commissions, which was one of the foundations of our modern professional army.

That is not to cast any doubt or aspersions on the private sector. At the same time as those reforms were taking place in the public sector, British capitalism was in one of its most expansive and innovative phases. The two can and should go together, but there must be a clear separation.

That is not only a principle of the constitution which we have always thought was applied to our own form of government. Where we have had the opportunity in the rest of the world to suggest, or, indeed, in the case of imperial possessions, to introduce systems of government, we have emphasised precisely the same point about an independent non-political Civil Service removed from the market place. Those who have a particular interest in India will agree that one of the reasons that the Indian Republic has, after 50 years of considerable troubles, managed to retain a democratic system, which is not common in third world countries, has been because it inherited from the Raj the steel framework of the old ICS.

This is a very serious issue. It is extraordinary to think that any government of any political persuasion should wish to tamper with this matter, whatever other reforms

25 Jul 1996 : Column 1559

they may think are necessary for the public service. I must confess that I was worried about a tendency to obliterate the distinction between the public and private sectors before the question of the RAS arose. I was worried and to some extent I am still worried about the opening to competition of some of the higher posts in the public service. That is not because there may not on occasion be something specific to be gained by recruiting someone whose previous experience has been elsewhere, as in the case of our maiden speaker, although that was rather earlier in his career. It is because one of the characteristics of our civil servants and the reason why they have been able to devote themselves to this service of government and, through government, to the public, has been that they had laudable ambition within the service. Anything which means that there are fewer posts to which a young civil servant can aspire must, to some extent, damage his commitment and morale. I return again to the military in the presence of my noble friend Lady Park. We are always told that one of the reasons for the high morale of Napoleon's armies was that every infantryman thought that he had a marshall's baton in his knapsack.

Therefore, before this matter arose there was some degree of fear of losing any feeling for the vital importance of what one might call the Northcote-Trevelyan tradition. However, when we come to the present suggestion, which is so outrageous that nothing has been found by the committee from any of its witnesses which gives any credibility to that proposal, one begins to wonder what on earth has gone wrong. How is it possible for a British Government to say that, despite the safeguards, they are prepared to risk surrendering what is such an important part of the duty of every civilised government; namely, the recruitment of young people to the service of the state? How could any government think that that was a sensible step to take? They may privatise as they like but to privatise this core element of government is like privatising the Grenadier Guards. That is the nearest comparison that I can think of.

After all, we do not have to look very far to see what happens in countries where there has been a blurring of the public and private interest. There are a number of European countries at present, our partners as some people call them, whose politics are vitally affected by various scandals--Italy, France and Belgium. All those derive ultimately from people confusing what is proper in a private citizen with what is proper in a servant of the public.

Therefore, like other noble Lords, I still cherish the hope that this will turn out to be a nightmare; that the Government cannot possibly intend to do what they say they intend to do.

Although this debate has been largely lacking in party references, I should like to finish my speech with a party reference. It is the wish of the Prime Minister, repeated on several occasions, that one of the planks on which he will seek re-election in the next general election is the defence of the British constitution. I ask my noble friend the Minister to pass on to his right honourable friend the Prime Minister this thought: if you defend the British constitution, you cannot pick and choose. The

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Northcote-Trevelyan principle of the independence of the Civil Service is as important as the Monarchy, the Act of Union and the constitutional position of this House. If the Prime Minister is to fulfil his wish of presenting the country with the defence of the British constitution, he must tell his deputy to come off it.

1.47 p.m.

Lord Wallace of Saltaire: My Lords, as a former student of the Gladstone Professor of Government and Public Administration, now the noble Lord, Lord Beloff, I was slightly nervous when he referred to the fact that not all students benefit from instruction. I feared that he might be looking too closely in my direction. But I am happy that on this occasion, I agree very strongly with everything that he has just said as, indeed, many of my own views on the British constitution derive from his teaching of many years ago and from the Liberal and Conservative sources which he and others made me read.

This House now needs to think very carefully, and the Government Front Bench need to think very carefully, about the position that we have now reached. In an extremely powerful speech made by the noble Lord, Lord Chorley, from the Cross-Benches, we were told that this is one of the most devastating reports presented to this House for many years; that we are facing a threat to the integrity of constitutional government.

It is also a threat to the role of the position of this House. When I joined this House, I understood that I was joining a revising Chamber, a House which requires to be persuaded; which has the authority to ask the Government to think again and to delay while they do so; and above all, which requires the Government to justify the proposals which they lay before Parliament. I remember always that phrase from the Declaration of Independence, that a democratic government must have a decent respect for the opinions of man. That is what this House is about. That is the constitution of a House which the Government tell us they wish to defend in its present form in the next election. If the Government go ahead, we are faced, effectively, with a contempt of this House and also, I venture to suggest, a contempt for British democracy in that a Government who have not yet produced arguments for this privatisation which can persuade a substantial proportion of the Members of either House of Parliament unwhipped still insist on going ahead.

I also believe that that raises very worrying considerations for the Conservative Party. What we see here is the abandonment of the Conservative Party's own principles and traditions to go awhoring after the strange gods of American libertarian anarchism, with the belief that government is at best a necessary evil and markets the only basis for morality. I remember the extraordinary speech made by the current Secretary of State for Defence, Mr. Portillo, in Barcelona some 18 months ago when he talked about the state as a threat and markets as a defence against the state. It seems to me that that is the position into which we are slipping: Portillo instead of Patten, Gingrich instead of Burke--people who follow Public Interest and National Review,

25 Jul 1996 : Column 1561

not the Daily Telegraph and The Spectator; the capture of the Conservative Party here by a small group of American ideologues, just as on the European issues it has been captured by a small group of xenophobes.

On Tuesday the Leader of the House differed with me on the views of his distinguished great grandfather on the British Constitution. Yesterday I spent some time going through the four volumes of Lady Gwendoline Cecil's Life of Salisbury trying to find out what his constitutional doctrines were. I have to tell the House that he was an utter pragmatist; indeed, he had no constitutional doctrines whatever. However, I did discover the publication of Lord Hugh Cecil of 1912 entitled Conservatism. I quote from Chapter 6:

    "Modern Conservatism inherits the traditions of Toryism which are favourable to the activity and the authority of the state ... Both the central government and the local power of squire and parson were in earlier times inclined to what we should now call 'paternal government'; and had no sympathy with the unrestricted working of competition or the principle of laissez-faire ... And in the 19th century it was among Conservatives that the authority in control of the State was defended and in some cases enlarged and strengthened". After all, we are talking about an idea which comes down from Burke; namely, that government is a trust which is inherited from our predecessors to be passed on to our successors. I quote Edmund Burke, who warns against the greatest danger to the constitution:

    "lest the temporary possessors and life renters in it, unmindful of what they have received from their ancestors and of what is due to their posterity, should act as if they were the entire masters".

I was using my volume on the Conservative tradition fairly thoroughly last night. Benjamin Disraeli goes on to say:

    "The great question is ... whether change should be carried out in deference to the manners, the customs, the laws, the traditions of the people, or in deference to abstract principles and arbitrary and general doctrines".
Here we have change pushed through in pursuit of an arbitrary and general doctrine, without any consideration for the manners, the customs and the traditions of the state--the idea that the Crown is more than the Government; the idea that civil servants are, indeed, servants of the Crown and not just of the government in power.

Therefore, I checked in the most recent book that I could find on modern conservatism by someone called David Willetts, who is not without influence in the current Government. He says that:

    "Our central constitutional principle [is] the sovereignty of the Monarch in Parliament";
not of the Government, but of the Crown in Parliament. He says that it is:

    "a conservative view which would both respect the constitutional traditions which have brought us thus far, and would also recognise that they may change further in ways which we cannot now guess".
I admit that I have been persuaded over the years of the case for administrative reform, even for what some would call "the reinvention of government". Some aspects of public administration are clearly better supplied by the private sector than by the over-expanded, overloaded government system of the

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1960s and the 1970s. But I know of no one outside the Government who thinks that this is a worthwhile part of privatisation as such.

I was having a long seminar over supper last night with an old acquaintance who is now advising the Government on resource accounting, and so on. He took me through part of my introductory lecture as regards the principles of resource accounting, the private finance initiative, customer-provider relations in the NHS and road pricing and he even argued the case for the sale and leaseback of the Treasury. But when we came to consider the Recruitment and Assessment Services, he said, "That's absurd. It is just an expression of Michael Heseltine's machismo".

What we are looking at is the dismantling of a core element of the Civil Service. As several speakers have said, we are also looking at the denial of a public service ethos. I note how that spreads around the Government Front Bench. Indeed, on Monday last during Question Time, the noble Lord, Lord Mackay of Ardbrecknish, said that private enterprise had a lot going for it that state suppliers do not have and that one of the aspects was efficiency and effectiveness. The suggestion that it is impossible to have efficiency and effectiveness within the state administration is, I suggest, absurd, dogmatic and ideological; and, indeed, the Recruitment and Assessment Services is an example in the report of efficiency and effectiveness within the government service.

I find it extraordinary that those who are concerned about the defence of British sovereignty want, nevertheless, to sell off some key elements of the sovereign British state. Ministers seem to take great pride in how much government property they have sold off to Japanese companies, among others. Sometimes the same people who conjure up the enormity of the German threat to take control of Britain's currency are entirely happy for the Japanese to take control of other parts of the fabric of the British state.

We have talked a little today about the question of costs and benefits of the proposed privatisation. As I understand it, the RAS is a centre of excellence currently producing a surplus of between £300,000 and £400,000 a year. That surplus may either be returned to the Treasury or to customer departments, to use the jargon, to reduce their recruitment costs. Under privatisation we must, I suppose, assume that that surplus will become the contractor's private profit, as virtually all the expected efficiency gains are reported now to have been made.

Meanwhile, we see extra costs to the Office of Public Service and the Civil Service as a whole: first, as the Leader of the House told us, as regards extra staff in the OPS; and, secondly, for Whitehall monitoring of the contractor. As I understand it, the draft contract is 100 pages long and any variation in it would have to be approved by a 13-member Whitehall committee. Then, of course, civil servants would have to continue to help the contractor as we have built in this very complex process. We are not told whether they would help the contractor for free or whether their time would be charged out at full cost to the private contractor.

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That takes us to the whole question of the relationship between the private monopoly contractor and the Government; namely, the question of patronage and the risks of corruption in such a relationship. That was why Edmund Burke in the Government of 1793-94 proposed the setting up of the Queen's Printer and Her Majesty's Stationery Office. It was precisely to get away from the buying influence and the potential corrupt practices that such a relationship involved--the links between private contractors and government, with all the payments in those days to Ministers themselves (though now, of course, to the governing party or to government MPs) in return for favours received. We have already seen a dangerous blurring of the proper distinction between the state and national interests and private advantage in the sphere of arms exports in recent years. The question of whether private interests would come in to that sort of relationship with the state is one that was posed by the secretary of the First Division Association in her evidence to the committee.

I do not know whether any of the companies involved in the current round of privatisations have contributed funds to the Conservative Party. But I know that it would be improper for any company holding such a supply contract to contribute to the funds of the Conservative Party. If this goes ahead, I shall put a Question down in the autumn to ask that the contract--which has ended up at 101 pages--should include the condition that whoever takes it will be debarred from contributing to any political party.

I now turn to the role of the Deputy Prime Minister. Michael Heseltine is now emerging as the Wedgwood Benn of the current Government. I was not a member of the committee and I did not attend any of its sessions. However, I was impressed by the remarks of the noble Baroness, Lady O'Cathain, on the conduct and behaviour of the Deputy Prime Minister before the committee. That seems to me to come close to a contempt of this House. I appeal to members on the Government Bench to represent the interests of this House within the Government in calling on the Deputy Prime Minister to think again and to make sure that these decisions represent the interests of the Government and, dare one say, of the state as a whole, of the monarch and Parliament, and of the Crown, rather than simply of the Deputy Prime Minister. There is therefore an underlying constitutional issue.

As the noble Lord, Lord Beloff, has said, it is the Conservative Government's current intention to go to the country some time in the next nine months defending the present constitutional balance and even the present composition and functions of this House. Here we have in effect an attempt to dismantle part of the core of the British state, which undermines the entire Conservative case, as we shall argue as the election approaches. I thought my party would be arguing the case for constitutional reform. I find that we shall have to argue the case for constitutional renewal and for the restoration of British institutions and values against a Government who have forgotten them.

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2.2 p.m.

Lord McIntosh of Haringey: My Lords, this has been an astonishing debate. The whole issue started with the utmost impropriety of being announced by way of a Written Answer. It continued with another astonishing debate on 8th March of this year in which all but one noble Lord, other than Ministers, attacked the Government for their proposals to privatise the Recruitment and Assessment Services. I hope that it is not now concluded, but it has proceeded towards a debate today in which every single speaker, other than the Ministers opening and closing the debate, have said that this proposal should not be proceeded with. The Lord Privy Seal used the word "show-stopper" in the House last month. If this is not a show-stopper, I do not know what is.

The debate began by speakers discussing whether there was any propriety in the proposals. On 8th March my noble friend Lord Callaghan of Cardiff magisterially said,

    "the Civil Service is not the private property of temporary, fleeting Ministers to trifle with as they please. It is the property of us all, and Parliament has always accepted that"--[Official Report, 8/3/96; col. 546.]
Not only was it improper for the issue to be started in the way I have described but every single stage of the process has been improper. I refer to the lack of a Green Paper and a White Paper, and the lack of prior parliamentary debate. I refer to the lack of consultation with the consortium of customers of RAS and, above all, the lack of consultation with the staff of RAS. Those staff were not only not consulted but were formally debarred from giving evidence in person to the committee. There cannot be any question but that what is proposed, and the way it has been processed, is utterly improper.

Now I turn to the practicality of the issue. At an earlier stage Ministers were full of the supposed advantages of the privatisation of RAS. I notice that virtually all of those arguments have slid off into the sand and are hardly being repeated at all. Even the Lord Privy Seal, in what was, I assume, a deliberate attempt to make a boring speech--that is not easy for him because he is not naturally a boring person, but he was clearly trying to defuse debate by making as low key a speech as he could--did not repeat the arguments about the advantages for RAS of having new financial resources and access to capital. He spoke of none of that. None of that was found in the evidence of anyone to the Select Committee.

Therefore we have this afternoon a debate in which we have heard the support of two Conservative members of the committee for the unanimous recommendations of the committee, and the support--constrained by the natural requirement to be uncontroversial--of the noble Lord, Lord Gillmore, in his excellent maiden speech, to which I shall refer later. We have heard speeches of the utmost ferocity from normally mild people such as the noble Baroness, Lady Park, the noble Lord, Lord Beloff, and the noble Lord, Lord Chorley. The Lord Privy Seal will have an opportunity tomorrow to read the speeches that he missed. I understand why he had to miss them. He will note the ferocity of the speeches made by those

25 Jul 1996 : Column 1565

on his Benches and by speakers such as the noble Lord, Lord Chorley, who are not sympathetic to my politics. It is difficult to see therefore how he could proceed unchecked with what is now proposed.

I turn to the committee itself. Let us forget the argument about time pressures. That committee did a good job. It was clearly well chaired and it was composed of Members of your Lordships' House who knew their mind and who knew the subject and were capable of making up their own minds. Some noble Lords said that the evidence was one-sided. It need not have been one-sided. If the Government had wanted to, they could have made sure that the point of view in favour of privatisation was put to the committee. There was no problem in achieving that if they had wished to do so. If the Government had wished, they could have ensured that other noble Lords from their own Benches supported privatisation. They have not done so. They have conspicuously failed to do so.

What we have to remember about the work of the committee is not that it acted in haste but that for defensible and understandable reasons it restricted its own terms of reference. In paragraph 66 it states specifically that it would not be concerned with the philosophical arguments for or against privatisation but would be concerned only with the effect on recruitment to the Civil Service. That is why we are now talking about the practicalities.

In his opening speech the noble Viscount the Lord Privy Seal referred to the detailed recommendations. He went through them in some detail. That was most helpful and we are grateful to him. But he did not recognise that the recommendations of the committee were put in the context of, "Don't do this, but if you have to do it these are the necessary precautions that you have to take"; and even there the noble Viscount the Lord Privy Seal did not answer all those questions or agree with the committee in all its recommendations.

Perhaps I may take only one example with which I am well familiar. It is the question of the possibility of transfer back to the Civil Service of staff under the terms of the Transfer of Undertakings (Protection of Employment) Regulations. The noble Viscount the Lord Privy Seal said that if TUPE applied those staff would be able to transfer back. At question 500 Mrs. Margaret Bloom made it clear that TUPE applies and that the staff will be able to transfer back.

All the assets of RAS are in its people. If they transfer back, there will be nothing left. I have a great deal of experience of training and enterprise councils whose staff were transferred from the Civil Service on the undertaking that after two years, if they wished, they could go back. At the two-year period which was spread over a period of time a large proportion of the staff went back and the work of the training and enterprise councils during that period was severely handicapped. Can we envisage the possibility that a significant number of RAS staff would go back to the Civil Service despite the fact that their exact jobs would no longer exist? What would happen to RAS and the functions that it performs for government? That is only one example.

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In his excellent maiden speech, the noble Lord, Lord Gillmore, spoke of the need to preserve the ethos of the Civil Service. I contrast that with the requirement by the Deputy Prime Minister to change the culture of the Civil Service. Let us consider the dictionary definitions of these words. "Ethos" is a characteristic spirit and beliefs, of community, people or a system. A "culture" is a particular form of intellectual development or civilisation. These are closely related terms. If the noble Lord, Lord Gillmore, is determined to preserve the ethos, as I believe we all are, we must be determined not to change the culture as the Deputy Prime Minister is determined to do.

I am sorry to have to say this, but Mr. Heseltine has humiliated the Chancellor of the Duchy of Lancaster and the noble Viscount the Lord Privy Seal. All of the undertakings they gave to the House and to the committee have been swept aside in one afternoon of evidence from Mr. Michael Heseltine. The noble Viscount the Lord Privy Seal would never have said this to the House. The Deputy Prime Minister said,

    "We have taken a decision and we intend to proceed".

Will the noble Viscount the Lord Privy Seal now report back on this afternoon's proceedings to the Deputy Prime Minister and say, as he is required to do, I believe, "We are now in a position to move forward"?

In the diplomatic language necessary in committee reports, having said that there is no case for privatisation and that there are positive arguments for not going forward even given the philosophy of privatisation, the committee states in its final paragraph that the Government should reconsider their position. That did not mean that the Government should reconsider the details of the proposal. That meant, and could only mean, that the Government should abandon these proposals.

I come back to what the noble Viscount the Lord Privy Seal told us last month: that if the report of the committee were a show-stopper then the Government would have to take account of it. That report is a show-stopper. This debate is a show-stopper. The show should be stopped.

2.14 p.m.

The Parliamentary Under-Secretary of State, Ministry of Defence (Earl Howe): My Lords, I have good reason to remember well the debate which took place in March on this matter in your Lordships' House and the expression of opinion given by the House on that occasion. I could hardly forget it. I have therefore read the report of the Select Committee and listened to today's debate with great interest. Perhaps I may add my thanks to the committee for the work that it did. It has been welcome and valuable in focusing the Government's attention on the areas of particular concern and allowing us to strengthen the arrangements we proposed in respect of them.

The Government's response to the report given earlier by my noble friend the Leader of the House and the considerable amount of detail that we have been able to give to the committee, both on the present operational role of RAS and on the sale arrangements, should have

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allayed many of the concerns and allowed a better understanding at least of why the Government believe that privatisation is in the best interests of the agency, its customers and the taxpayer.

However, I should be the last to obscure the fact that a number of important points have been made in the course of today's debate, both on the Government's response and on the privatisation more generally. I should like to answer them. The committee's central concern, reflected in the debate today, was standards of service. Noble Lords have questioned whether privatisation will really improve the service that RAS offers to its existing customers. The Government have made clear their belief that RAS will be better able to continue its development as a centre of excellence in recruitment and assessment, without the constraints that necessarily go with public sector status. A wider customer base, a range of private sector business management skills to complement those which RAS has developed as an agency and freedom to invest as opportunities arise--all those will benefit RAS in furthering the progress made since its launch in 1991.

The fast-stream schemes are prestigious. The new owner will wish to maintain them at the leading edge of graduate recruitment. We believe that the bidders we have short-listed will be well placed to achieve that and to continue to improve service delivery. In addition, the contracts and the "intelligent customer" arrangements will provide an improved framework for managing the scheme. So the Government believe that the sale will bring benefits for existing customers as well as better value for money.

One of the important recommendations in the report was that the level of resources devoted by the new owner to research should be controlled by the contract, such that any reduction would need the agreement of OPS and the commissioners. In our response, we noted that we agreed with the aim of that recommendation. My noble friend described the contractual requirements for the area and failure to meet them would place the new owners in breach. Again, however, they will have no wish to endanger RAS's reputation for top quality, leading edge work. We are confident from bidders' proposals that strong performance in that area will be a priority. We noted, too, that customers will wish to commission independent research to help them evaluate the success of the recruitment and assessment methods used for the fast stream.

The noble Lord, Lord Gillmore of Thamesfield, in his fine maiden speech and with the wisdom that I believe your Lordships would expect of him, referred to the need to retain that precious commodity: Civil Service ethos. As the noble Lord said, the report lays much stress on maintaining arrangements that are in keeping with the nature of the Civil Service and its work. The Government are entirely in sympathy with that aim. We have, of course, emphasised the continuing involvement of civil servants in selection decisions. There will be no change to the present arrangements in that respect. In addition, civil servants will continue to work in RAS on secondment after privatisation, helping to ensure, for example, that background exercises for the assessment centre stage properly reflect Civil Service work. It is a

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requirement that both the Civil Service selection board and the final selection board continue to be held close to Whitehall. Of course, customers who will retain responsibility for marketing the fast stream will continue to work closely with RAS to ensure that the scheme maintains its distinctive nature as a shop window for the Civil Service.

The Government have always stressed their absolute commitment to maintaining standards of integrity and impartiality which are rightly regarded as cornerstones of the Civil Service. I think it is worth stating again today that our proposals for the future of RAS will in no way undermine those standards. The principle of selection on merit by fair and open competition and the responsibilities for ensuring that this principle is adhered to in recruitment are not affected by the privatisation.

The noble Lord, Lord Jenkins of Hillhead, referred to the remarks of my right honourable friend the Deputy Prime Minister about changing the culture of the Civil Service. The noble Lord may ask: what is in a word? However, he did my right honourable friend less than justice in blurring an important distinction. My right honourable friend explained that the Government wished to broaden the culture of the Civil Service in order to encourage the interchange of the public and private sectors, to bring more specialists into direct management, to bring a greater degree of numeracy, as opposed to the excellence of the literacy of the public service. He was not speaking about ethos in the sense raised by the noble Lord, Lord Jenkins, and the noble Lord, Lord Gillmore, but about the culture. My right honourable friend also said that--

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