TNAG-2094-FCO40-2980-Hong-Kong-Civil-Service-1990 — Page 129

725

Pensions Miscellaneous Provisions) Bill

8 JANUARY 1990

Government Trading Bill

726

[Mr. Ryder]

fair to pensioners and current employees. Against that background, I commend the Bill to the House. I thank those hon. Members who have taken part in the debate ---especially my hon. Friend the Member for Orpington, who has given the Bill his support, the hon. Member for Roxburgh and Berwickshire, who spoke on behalf of the Liberal party, and the hon. Member for Makerfield. If any points need to be clarified, I shall be happy to clarify them during the next few days.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House. -[Mr. Lightbown.]

PENSIONS (MISCELLANEOUS PROVISIONS) BILL [Money

Queen's Recommendation having been signified- Resolved,

That, for the purposes of any Act resulting from the Pensions (Miscellaneous Provisions) Bill ("the_Act") it is expedient to authorise the following-

(1) the payment out of money provided by Parliament of-

(a) any increase in the cost of providing increases under or by virtue of the Pensions (Increase) Act 1971 in official pensions and in other pensions within the meaning of that Act;

(b) any increase in the cost of providing pensions, allowances and gratuities payable under section 1, 7, 9 or 10 of the Superannuation Act 1972; (c) any increase in the sums payable under any other enactment which is attributable to increased expenditure by any authority in consequence of—

(i) any such increase as is mentioned

paragraph (a) or (b) above;

in

(ii) any provisions of the Act requiring the payment of contributions towards the cost of providing increases under Part I of the Pensions (Increase) Act 1971 in official pensions payable under section 9 or 10 of the Superannuation Act 1972; or

(iii) the provision of benefits for teachers in connection with injuries sustained, or diseases contracted, in the course of their employ- ment;

(d) any administrative expenses of a Minister of the

Crown attributable to the Act;

(2) the payment into the Consolidated Fund of any sums received by a Minister of the Crown by virtue of the Act;

and in this Resolution-

"official pension" has the same meaning as it has in the

Pensions (Increase) Act 1971; and

"teacher" has the same meaning as it has in section 9 of the Superannuation Act 1972.~[Mr. Lightbown.] Committee tomorrow.

376 CDS7 10 Job 3-5

Government Trading Bill

Order for Second Reading read.

4.58 pm

The Chief Secretary to the Treasury (Mr. Norman Lamont): I beg to move, That the Bill be now read a Second time.

The main purpose of the Bill is to extend the enabling powers under the Government Trading Funds Act 1973 to establish trading funds. The new powers will be a najor contribution to Civil Service management changes, and thus to the benefits that the Government expect from the "Next Steps" initiative—the creation of agencies-and the fundamental reform of the Civil Service management and financial management.

To illustrate the links between the Bill and the wider processes of management improvement, we have published the White Paper, "The Financing and Accountability of Next Steps Agencies". The House, through the Select Committees that have so far taken most interest in "Next Steps"--the Public Accounts Committee and the Treasury and Civil Service Select Committee-has generally supported the "Next Steps" initiative, and I hope that the Bill will commend itself to hon. Members on both sides of the House. The Bill and White Paper are designed to strengthen the performance of Government Departments by encouraging civil servants to take a more businesslike approach to the efficiency and quality of the delivery of Government services.

The White Paper sets out the background to the Bill. As it says, although the powers to set up trading funds are not limited to "Next Steps" agencies, it is expected that future trading funds will be entirely, or almost entirely, drawn from agencies. Thus the Bill takes forward the objectives underlying the Government's whole strategy for public service reform--greater freedom for managers, coupled with greater accountability for delivering agreed objec- tives. It will allow more organisations to operate as trading funds, which will give them greater financial freedom and greater disciplines akin to those of private sector organisations.

It may be helpful if I explain how trading fund status will help to romote those objectives. As paragraph 4.2 of the White per stated:

"A trad g fund provides a financing framework which covers ope ting costs and receipts, capital expenditure, borrowing and net cash flow. It has powers to borrow to meet capital expenditure and working capital requirements, and to establish reserves out of surpluses. Within this framework, it can meet outgoings without detailed cash flows passing through Vote accounting arrangements.”

At present only some 20 per cent. of the running costs of Government Departments are offset by related receipts. It follows that the majority of Government activities will not be suitable to become trading funds. That does not mean that agencies dealing with those activities are second-class citizens. Indeed, much of the White Paper is devoted to improving arrangements for them. It is important that all agencies that could benefit from the more commercial discipline of a trading fund should be able to do so. As my right hon. Friend the Chancellor informed the House on 1 February 1989. when he was Chief Secretary, the main purpose of the Bill is to widen the enabling powers under the Government Trading Funds Act 1973 to cover bodies that are directed by statute to provide a service and where the fees are fixed by

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