Committee of Public Accounts (Reports)

– in the House of Commons at 12:00 am on 11 December 1963.

Alert me about debates like this

3.58 p.m.

Photo of Mr Douglas Houghton Mr Douglas Houghton , Sowerby

I beg to move, to leave out from "That" to the end of the Question and to add instead thereof: this House takes note of the First, Second and Third Reports from the Committee of Public Accounts in the last session of Parliament, and of the Special Report from the Committee of Public Accounts. This is the annual outing of the Public Accounts Committee. On this day we emerge from the cloistered seclusion of a Committee Room upstairs and say something to the House and country of what we have been doing. The House has in its possession the formidable volume of evidence that we have taken during the last Session. Members of the Committee are occupied on this work for two afternoons a week from November to the end of May, and this volume is the product of our labours.

I open the debate in my capacity as Chairman of the Public Accounts Committee—a position that I have held only since last February, when I was very gratified and honoured to succeed my right hon. Friend the Member for Huyton (Mr. H. Wilson). Perhaps I may say a personal word here. After many years in and about Government Departments, and as one of the earliest members of the Royal Institute of Public Administration, I find this work very much to my taste, and fascinating withal.

But my term as Chairman may be a short one. It may be the shortest on record. My days may be numbered because, as the House knows, the Chairman of the Public Accounts Committee traditionally is a Member of the Opposition. After the General Election next year, I expect to be succeeded by a right hon. or hon. Gentleman from the benches opposite. This will be a great disappointment to me, but—one never knows—it may have its compensations.

I speak in this debate, as my predecessors have done, in a kind of neutral posture, although from this Box, because I speak on behalf of the Committee as a whole, and I must not stray from the path of the discourse which it falls to me to make. We do not do our business in the Public Accounts Committee on party lines, as hon. Members know. Although the Government have a majority of members of the Committee, no one would ever notice it. There nave been only 64 Divisions in the Committee during the last 100 years; none in my short time, none, I believe, in the three years of my predecessor; and probably none in the eight years of the chairmanship of my hon. Friend the Member for Chesterfield (Sir G. Benson).

In nearly every debate on the Report of the Public Accounts Committee reference is made to its founder, Mr. Gladstone, because the Committee was set up on his instigation by Resolution of the House in 1861, which was a year after the last meeting of the National Debt Commissioners. The total of the budget when the Committee was set up was about £69 million which, I suppose, is the small change of public expenditure in a Budget of over £6,000 million. Little did Gladstone foresee that long before we marked the centenary of his death, public expenditure would be a hundred times greater than it was in his time.

This vast amount of public money being spent every year on the nation's business is voted by the House on detailed Estimates presented by Departments and the Treasury. It must satisfy the highest standards of public administration in these matters. The money must be properly spent and accounted for. The books, accounts, and all relevant documents are open to the inspection and audit of the Comptroller and Auditor General and his officers, and the House must be satisfied that in all this enormous apparatus of public affairs there is a clean bill of health.

We should acknowledge the work of the Comptroller and Auditor General and all his officers, without whose diligence, vigilance, zeal and efficiency the work of the Public Accounts Committee would be almost impossible. He is a servant of this House. He can go about his business without fear or favour. He need not look over his shoulder, because he cannot be removed except by a vote of both Houses of Parliament, which puts him in a very strong position. The Comptroller and Auditor General is armed with the powers of inspection and investigation, and if he is obstructed or thwarted in the performance of his duty, he can report the matter to the Public Accounts Committee, and he would have the full support of the Committee and of the House in discharging his duties to his own satisfaction. He and his officers scrutinise and probe, and if anyone wants to know what they are doing and what they are looking for, the answer is "Trouble"; and some of the troubles which he has discovered in the course of his investigations are contained in his Report on the Appropriation Account.

Our duty, as a Public Accounts Committee, is to investigate the matters which he raises and to look into allegations or suggestions of waste, faults or weaknesses of administration. We have to be satisfied, as far as we can, that the country is getting value for money for all its expenditure. We are a committee of inspection or elected auditors, and the big question which overhangs the whole of our work is this: is the business of the Departments being conducted properly, with efficiency, and with due regard to economy in accordance with the decisions on policy, approved or authorised by this House, and with probity and integrity?

One feature of our public administration which we constantly boast about, I think rightly, is how free it all is from corruption and scandal. There can be few countries in the free world where there is so little of a sordid and unpalatable character to report to the Legislature on what has been happening in public Departments and administration. In expenditure, and, of course, on the corresponding revenue side, of these dimensions it would be impossible to carry out our business but for the incorruptibility of the Civil Service, the vigilance of accounting officers and the perceptive and penetrating eye of the Comptroller and Auditor General. Especially in view of my long connection with the Civil Service, perhaps I might be permitted to take the opportunity of paying tribute to the hundreds of thousands of public servants of all grades whose accuracy, zeal and sense of duty enables the Public Accounts Committee to give public administration such a clean bill of health in its Report to the House today.

The anxieties of the Public Accounts Committee lie elsewhere, as our Report clearly shows. They can be classified in this way, in ascending order of importance, and put, if I may say so, quite crudely: first, the exploitation and abuse of compensation payments; secondly, the exploitation and abuse of subsidies; thirdly, the obvious problems of private doctoring at public expense; and fourthly, how to get full value for money and the best terms possible for the Government as a customer, as a buyer of goods and services, on a vast scale, the biggest buyer in the country.

As an example of the first, I draw the attention of the House to paragraphs 56 to 59 of our Report, which relates to the compensation paid under the reorganisation scheme of the cotton industry. The House will see that certain conditions were laid down for the payment of compensation for firms going out of business. This scheme was designed to reduce the size of the cotton industry on both the spinning and the weaving sides in order to make it a more viable industry with the decline in the export trade and the inroads into the home market of tax and quota-free imports from the Commonwealth.

The scheme was introduced with a view to encouraging people to get out of business and so contract and concentrate the industry. The House will see in paragraph 57 that in the case of a company registered under the Companies Act, if one firm in a group wanted to go out of business they all had to go out if they were to receive compensation at premium rates. That was to avoid a company or group of companies contracting themselves, getting compensation for concentration, and probably doing better out of the smaller unit than they did before. What the scheme did not do was to require businesses controlled by principals themselves to go out of the cotton industry so that a firm which was controlled by one big share- holder could go out of the business and get compensation at premium rates, but the principal in that business could either acquire another one or remain in another business and carry on as before, probably getting the benefit from the concentration of his own activities with compensation for a reduction in the scope of his firm, already threatened to some extent by a decline in business.

We are bound to have in all these matters rules and conditions about payment of compensation. If they are too rigid the complaint is that they leave no room, no flexibility, no opportunity, for meeting special cases. If they are not rigid enough we get the sort of incident to which I have referred. Although we were assured by the Board of Trade and the Cotton Board, who came before us, that they had carried out their duty in strict accordance with the Act and the regulations, nevertheless the Committee reports, in paragraph 59, that we were not convinced that it was necessary or desirable for so complete a distinction to have been made between participating companies and their controlling shareholders or directors. There is no suggestion that compensation was improperly paid. I am drawing the attention of the House to the problems of administration when that room for manoeuvre is provided in the conditions laid down in the Regulations.

The next main head of my four points is illustrated by agricultural subsidies. The Report, in paragraphs 85 onwards, deals with one aspect of a wide range of agricultural support subsidies. The House does not need reminding that the Committee does not go into questions of policy. We are not concerned with whether particular policies are good or bad. They have been decided by this House and it is not for the Public Accounts Committee to question them. Our job is to draw attention to the problems of administration of policy. There is no doubt that agricultural support subsidies add up to a very large slice of public expenditure. The Estimates for the current year, 1963–64, put them at £364 million, which is a large sum of money by any reckoning.

We examined during the course of our work the operation of the lime subsidy, which costs the country £9½ million a year. Farmers are encouraged to spread lime on their land and they are given a subsidy of 60 per cent. of the cost of the lime and the cost of spreading. I need scarcely say that there are opportunities for unscrupulous people to buy lime, to get it under the subsidy scheme and not use it for the purpose for which it was intended.

Another matter was that bonus payments under the tuberculosis attested herds scheme, which costs the country £3million a year. A question which arose there was whether, in the farmer's return of the numbers of his attested herd, there should be any check on the accuracy of the numbers. Would it be enough to ring him up on the telephone and ask what the numbers were and take his word for it? It is not easy to decide in matters of this kind whether it would cost more to go and have a look or to keep officers at home and take the risk of this subsidy being abused. Special checks were imposed at the instigation of the Committee, but were found to be quite costly in comparison with the amount of loss through improperly returned numbers.

There are other aspects of the support subsidies which, of course, no one can control, which are at the mercy of the market and of nature. A farmer friend of mine a year ago said, "We have the biggest harvest ever. In 50 years of farming I do not remember anything as bountiful as this, but, by goodness, it is going to cost the British taxpayer a lot of money because the price fell and the gap between the market price and the support price involved the Exchequer in very large payments." It will be noticed that in 1962–63 the wheat and rye price guarantee had risen from £16 million to £34 million. That is the size of this problem.

A particular matter referred to in paragraph 85 of our Report had to do with the certification of live fatstock. The House will see that in a particular season when the price of fatstock fell, farmers decided to sell while prices were low so as to draw the fatstock subsidy which was the difference between the price at which they sold and the support price. There was no obligation on the farmer selling his fatstock to send them immediately to slaughter. He could sell them to another farmer. Then the vendor farmer could buy some more and, when the price rose, he could sell again and reap the benefit of the higher price. It is estimated that that cost the country about £3 million. It was very difficult to estimate.

All kinds of questions have arisen on safeguards. At one hearing we had witnesses come before us with a whole assortment of marking instruments for clipping the ears, dyes and other things which could mark a beast which had been sold, upon which the subsidy was being paid, and upon which a rule might be made that it must be slaughtered within 28 days. But we were told that no suitable identification mark, no date stamp, could be put on a beast which would last for even 28 days. One can clip the ears of calves, apparently, but one cannot clip the ears of grown animals.

We comment on that in paragraph 90 and we express the opinion that the measures so far taken are not sufficient to protect the Exchequer from exploitation by the device of premature presentation of fatstock for certification. We consider that further action should be taken next time to prevent a recurrence of the results experienced in 1961. We understand that the Minister is considering alternative ways of dealing with this problem.

Under the third heading, the obvious problems of private doctoring at public expense, or in socialised medicine, as the Americans call it, I come to the very troublesome and delicate matter of the cost of pharmaceutical services under the National Health Service. This has appeared in the Reports of the Public Accounts Committee for some years. I must preface what I am about to say by emphasising that a doctor has the right, under the Health Service, to use his own clinical judgment and his own responsibility to prescribe for each patient what he thinks best.

There is no question about it. The doctor can choose the treatment he gives to his patient and there is no one to question his clinical judgment in that regard. The doctors insisted upon that. The public has insisted on it, too. Members of the public want to feel that when they see their doctor he is not crabbed and confined by a voluminous instruc- tion from the Ministry of Health that he cannot do this or that, and must not prescribe this or that.

But certain consequences follow from this inviolable condition attaching to the doctor's place in the Health Service. Clinical freedom must be paid for. It is being paid for and when we hear of doctors being carpeted for over-prescribing the charge is generally one of extravagance and not relating to clinical judgment. There could be extravagance in the frequency or quantity of the prescriptions. But the quality of the prescription is within the judgment and responsibility of the doctor.

The main anxieties of the Committee in this sphere fell under two heads. First, the cost of prescriptions. The House will see in paragraph 34 of our Report that although the number of prescriptions fell from 241 million in 1960 to 226 million in 1961, their total cost increased from £88 million to £92 million and the average cost per prescription increased by 12 per cent. from 7s. 3¾d. to 8s. 2¼d. Sample analyses made by this Departments indicated that in 1961 proprietary preparations accounted for £54 million of the total net ingredient cost of £61 million.

The cost of prescriptions has risen by 32 per cent. in the last five years and the Estimate for 1963–64 puts the total cost at over £100 million. Of course, when looking at the cost we have to subtract from the £100 million the amount paid by the patient in prescription charges. But in prescriptions averaging 8s. 2¼d. in cost the patient pays only 2s. Everything beyond that is a charge on the National Health Service.

Another feature about prescriptions which, I think, baffles almost everyone is the variation between doctor and doctor and area and area. Hon. Members will see a reference to this in paragraph 36. Nobody seems to know why prescriptions per patient in the doctor's list in some areas cost so much more than in other areas. Why is it? Is it that some areas have more people suffering from particular kinds of illness requiring particularly expensive drugs? Nobody seems to know. But the Ministry is carrying out a number of studies in an attempt to explain the wide difference in cost between area and area. As the Report says, the results so far have proved disappointing. I think that that is all I need say about the cost of prescriptions.

Our second anxiety is the really touchy one. It is the prescribing of non-standard proprietary drugs, which we refer to in paragraph 39. It will be convenient for me to link with that subject the voluntary price regulation and related matters referred to in paragraphs 42 to 45 and advertising and sales promotion, in paragraph 49. Here I come to the most unhappy "cold war" in the Health Service. I do not think that that is too strong a term to apply to the condition of things in this respect and I will emphasise that in a few moments.

Here the Ministry representative is the guardian of the public interest. The pharmaceutical industry represents its own interests, the interests of research and the interest of high-quality drugs, and, I am glad to say, in a most enlightened form of self-interest, tries to do this job properly. I shall not say anything about the industry, but it is most distressing to the Committee, and certainly to me, to find the cause for such strong feelings on both sides. This controversy cannot be pushed aside or bought off. It has to be tackled.

I have already explained that it is inherent in the Health Service that the general practitioner service and the freedom of the doctor enable a medical practitioner to prescribe proprietary drugs if, in his judgment, they are appropriate for his patient, and it comes down to the general practitioner service. Obviously, there are greater facilities for the control of the use of drugs in hospitals. I have to emphasise that the National Health Service is the biggest customer of the pharmaceutical industry. There is a big and almost insatiable market for drugs of all kinds, and, if the pace and tension of life quickens, we may become even more prone to bodily and mental ills for which the medicine bottle and the tablet offer relief. Mr. Aneurin Bevan once referred to the cascade of medicine being poured down the throats of the British people every day, at the rate of 226 million prescriptions a year at 8s. 2¼d. a time, on average, for which a patient pays a prescription charge of 2s.

It is difficult to say where the balance may lie in economies as between a state of affairs where the patient pays something and where the patient may pay nothing. There is a difference of opinion about how far the prescription charge tends to influence the quantity of the prescription given by the doctor in medication. I do not pretend to know the truth about that and I do not suppose that anyone does know. Obviously, it is a temptation to the doctor to prescribe in quantity where he feels that the recurrence of the prescription charge may bear hardly on his patient. The issue is not between the use of one drug rather than another, but between the use of proprietary or branded medicines and an unbranded equivalent. That is referred to in paragraph 39 of the Report.

It is a difficult question, and one on which it is difficult for a layman to speak with any authority. I expect that hon. Members have, during the last days, received copies of the pamphlet, "How equivalent is an 'equivalent'?" We have to be guided by experts in these matters. I cannot pretend to Judge. Obviously, it is a matter for considerable discussion about whether what is called an equivalent is, in fact, an equivalent. When the best advice is given to the Ministry that certain proprietary preparations have an unbranded equivalent at considerably less cost, the Ministry would be failing in its duty if it did not give consideration to the widest use of the unbranded equivalent at the cheaper price.

The other question is: what price shall the Health Service pay for proprietary drugs for which there is no unbranded equivalent? It must be borne in mind that the Ministry of Health is not a bulk buyer of drugs. It does not buy them in quantity and distribute them to the chemists or to the doctors. The doctor prescribes. The chemist makes up the prescription. He buys through the normal channels, but at prices which have been negotiated in many cases between the Ministry and the manufacturers. Therefore, they are charged at an agreed price.

That opens up difficult questions of negotiation of price. The Committee refers, in paragraph 41, to an attempt to get agreement on price under a voluntary price regulation scheme. The actual purchaser is the doctor on behalf of the Health Service. He starts the ball rolling. There is no one purchaser. There are thousands of purchasers. The doctor gives the order, which is the prescription. The patient pays the prescription charge for it. The Health Service pays the balance. It follows that, short of the doctors being given instructions, they are free to act as then clinical judgment dictates.

That puts the drug industry in a very strong position. Its customers are the doctors. The Ministry at best can hope to control the price which is paid for many drugs only through a voluntary price regulation scheme. There is a formula for it. It is to be found in paragraph 4 of our Report. This leaves the industry free to influence the doctors, and we refer in paragraphs 49 and 55 to advertising and sales promotion.

The drug industry is engaged in an extensive system of sales promotion amongst the doctors. They are the people to get at because, after all, they are the people who give the orders. They write out the prescription. If the doctor can be got on the industry's side, he is the man to go for. The industry does not bother about the patient—he does not know and he cannot tell the doctor what to prescribe. So it is the doctor who may be susceptible to sales promotion activities by the various branches of the pharmaceutical industry.

We must not be too harsh in this matter all at once. After all, doctors are entitled to know about new drugs and about variations on old drugs. They are entitled to know what is going on in medicine and drugs. They are entitled to hear some clinical reports on what drugs do. Doctors are busy people. It is sometimes easier to think of the proprietary brand instead of writing out a prescription according to the formulary of an unbranded equivalent.

In these days do not let us disguise the fact that there are many patients who tell their doctors what will be good for them. Many doctors feel that at their own peril they will decline to treat a patient in accordance with his own prescription. Such a patient not only prescribes the medicine he shall have. He diagnoses himself before he goes in. Doctors, in their numerous activities, probably think that faith healing is probably as good as any other and, if it is what the patient thinks will do him good, let him have it, unless the doctor has reason to think that there is anything more seriously wrong.

Photo of Mr Joseph Hiley Mr Joseph Hiley , Pudsey

Are medicines for prescription advertised? In other words, does the patient generally know what these remedies are?

Photo of Mr Douglas Houghton Mr Douglas Houghton , Sowerby

I do not know what the patient knows.

Photo of Mr Joseph Hiley Mr Joseph Hiley , Pudsey

The hon Gentleman has said that some patients go to their doctors and tell the doctors what sort of treatment they shall have.

Photo of Mr Douglas Houghton Mr Douglas Houghton , Sowerby

The patient may have read about something that he thinks will do him good. I cannot account for what patients think about the treatment they ought to have. A certain amount of publicity is given to drugs which are available on the Health Service, and privately as well, although many of them are not known to the public at large and are the subject of information to doctors only. I was perhaps indulging in a little editorial licence just now about the relations between some patients and their doctors, but there is a grain of truth in it. I do not want to press it too far.

Photo of Mr Joseph Hiley Mr Joseph Hiley , Pudsey

The hon. Gentleman has so far been very fair, but he is just beginning to exaggerate a little. I thought that I ought to remind him.

Photo of Mr Douglas Houghton Mr Douglas Houghton , Sowerby

I have finished exaggerating. I hope that the hon. Gentleman can now sit back in comfort. I was trying to be very fair indeed. However, I have been speaking for a little while; hon. Members opposite were beginning to look weary, and I thought that I would liven them up.

I must now say something about the sequel to all this. After a few hours hard work on this subject yesterday I returned home last night and saw this headline in the Evening Standard: Drugs Firms Challenge Government. The article which followed said this: British drug industries flung the gauntlet in the Government's face with this challenge: 'If you don't take the pressure off us, research on new drugs will gradually dry up'.

Photo of Mr Kenneth Robinson Mr Kenneth Robinson , St Pancras North

We have heard that before.

Photo of Mr Douglas Houghton Mr Douglas Houghton , Sowerby

I will not trouble the House with the whole story. They particularly criticised the Ministry's authority for imports of drugs from other countries. We have all received "The Drug Makers' Own Medicine", by Christopher George, a reprint from the Statist. We must be very anxious indeed about the maintenance of research in the pharmaceutical industry. None of us wants to do anything which will crab or discourage that research from taking place. It is very difficult for the pharmaceutical industry to put itself in the place of an ordinary supplier to an ordinary customer in a field of this magnitude.

I do not think that I can accept the doctrine of the former Minister of Health, which is quoted in a very excellent new pamphlet, The Health of the Nation. The Second Stage of the N.H.S., by my hon. Friend the Member for Willesden, West (Mr. Pavitt). The former Minister says this: Here, then, I believe is the ground for mutual understanding and respect between the industry and Government: a candid recognition that this ought to be, as nearly as we can make it, a straightforward customer-supplier relationship, the one seeking a good bargain in its vast expenditure, the other side looking to earn a profit in fair competition, and both believing that the public good is served by their respective efforts. Really, is that a rational description of the relationship between the Health Service, the biggest buyer of drugs in the land, and the pharmaceutical industry?

It must be appreciated that a customer of the size of the Health Service is entitled to special terms and respect and full understanding from the suppliers. I know that the pharmaceutical industry can feel that ft is in a strong position because, in certain circumstances, it does not matter what the Ministry says; the industry can rely on the doctors to buy its stuff. It is a difficult relationship because the principal in the matter may not be the Ministry, but the doctor.

When I put to one witness this sort of question, "Do you ever say to the doctors' You should not prescribe this or that' ", he replied, "That would be more than our life is worth. One cannot tell doctors that they should not; and, as for 'must not,' that is blasphemy. No one would dare say that. One can tell a doctor that he need not prescribe certain proprietary medicines for which there is said to be by the experts an unbranded equivalent, but that still leaves the doctor to please himself what he prescribes." If research is the problem, different and better arrangements could be made between the Government and the industry to ensure that the fullest measure of effective research is conducted.

Time does not permit me to deal with every matter in detail, so I turn to my last main point, which is how to get full value for money in the vast expenditure the Government are undertaking. Our Report is littered with problems of this kind. There are now to be large new programmes of capital expenditure on schools, hospitals, universities, the Post Offices, roads and public works of all kinds. Millions of pounds will be spent in buying supplies, professional services and other services. How can the State secure the best terms, especially in a large sphere of expenditure where there can be no effective commercial competition?

How many firms can build motorways, manufacture all the equipment for telephone exchanges, and so on? There are monopolistic tendencies in the present situation because some of these works require enormous capital outlay and considerable expertise. It is obvious that they should tend to become concentrated into a few hands. Some things can be put out to tender while others cannot be open to effective competition.

We have research contracts involving the use of the services of organisations which obviously cannot be put out on a conventional tendering basis. The normal relationship between customer and supplier cannot exist in these cases. Private firms in a similar position to that of the Government usually resolve this problem by acquiring an interest in the business of their suppliers, by take-over bids to take control, or otherwise by mergers. Industry is full of subsidiaries, associated companies and groups by which the activities of the main customer are concerned with the products of a number of subsidiaries.

I recall hearing at the time of the I.C.I.—Courtaulds controversy that I.C.I. regarded it as unhealthy that Courtaulds should be so heavily dependent on I.C.I. for its raw materials. The way to cure that—to relieve Courtaulds of that embarrassing dependence—was to take it over. As a result, what profits Courtaulds would make I.C.I. would share; and this relationship, instead of being between customer and supplier, became one of partnership and unity.

The Government have one hand tied behind their back because they cannot use the same weapons and find similar remedies to those used by private enterprise. If the State were to solve these problems in the commercial way it would be called public control or nationalisation—and these are the last words I must mention this afternoon. I urge hon. Members to study our Report and consider our views on this problem. They should refer to paragraph 15 for our views on the universities, to paragraph 21 for our views on the fees of consulting architects and engineers, to paragraph 25 for our views on furniture and equipment in hospitals and to paragraph 31 for our views on household textiles in hospitals. They will see that our views are all designed to get the fullest advantage from buying big.

We want to lay down economic standards, quality design and use the effective purchasing power of buying in bulk. I sometimes wonder whether it would not be a good idea for the Government to call in someone from Woolworth's or Marks and Spencer's to see how those firms carry on. I am sure that the hospitals, universities and the Ministry could be taught something about buying in quantity. I know how some of it is done. Much of it would not please some of the suppliers of public Departments because it would mean the Departments being able to see how the job is done and they could pass items as they go through the various processes of manufacture.

I appreciate that the Government cannot hold firms up to ransom since they are subject to public pressure. They cannot say that the public must wait for telephones while they engage in a battle with the contractors of telephone equipment. The Government cannot say, "The public must do without medicines while we fight a battle with the pharmaceutical industry." The Government cannot tell people that they must do without new schools or more hospitals until the Government have come to terms with the professional bodies engaged in drawing up the plans, and so on. All these things must go on and Government Departments are left to do the best they can in this difficult situation. Governments throughout the world are vulnerable in this matter. They can be hit, but they cannot hit back because they are under the strong pressure of demand from those who have put them there.

I can only conclude that what is needed in this situation is a reappraisal by private industry of its relations with the Government, who will become an ever-bigger buyer as the years go by. We need a frank and meaningful acceptance by industry, suppliers and contractors that the public interest is at stake and that the public are footing the bill. They are engaged in a service and not a commercial enterprise in this respect.

Of course they must have a fair remuneration and profit, but they must not be "on the make". Firms should put their cards on the table, open their books and allow people representing the Government to find out the truth of their claims of costs and their processes of manufacture. If the spirit of candour and co-operation between private enterprise and the Government is lacking, the theme of modernisation, which is so full of hope and excitement now, will lose some of its attraction as the Public Accounts Committee continues to disclose the problems and difficulties of getting value for money.

4.50 p.m.

Photo of Mr Arthur Holt Mr Arthur Holt , Bolton West

I am glad to have the opportunity of raising one point on the Public Accounts Committee's Third Report. There are a number of others which I should have liked to have raised, but I think that it will be for the convenience of the House if I confine myself to the one point since other hon. Members may wish to join the debate, although that was not very apparent a moment ago.

Paragraphs 75 to 80 of the Third Report deal with the renting of State House on behalf of the D.S.I.R. This building, far too large for the requirements of the D.S.I.R., was taken at a rent of £312,000 a year, a rental equal to 30s. a sq. it. If a place had been taken further out of the centre of London accommodation would probably have been obtainable at 16s. or 17s. a sq. ft., and had the D.S.I.R. gone out to the provinces, well away from London, the accommodation would have been a lot cheaper still.

Photo of Mr Charles Fletcher-Cooke Mr Charles Fletcher-Cooke , Darwen

The fashionable word now is regions, not provinces.

Photo of Mr Arthur Holt Mr Arthur Holt , Bolton West

"Provinces" is the word used in these paragraphs and that is why I have used it, as I am sure the hon. and learned Member will appreciate.

In paragraph 80, after the Committee had taxed the Ministry on its policy, it is said that 26,000 headquarters staff have already been dispersed away from the centre and that firm plans are in hand for the dispersal of a further 7,000. I should like to deal with the question of handling these regional developments effectively and, without damaging the efficiency of central Government, how to get centres of real influence out into the regions and consequently secure much greater opportunities for many able youngsters who are going through the grammar schools and the new universities in those areas.

It is no use just sending out a number of civil servants and certain people from industrial headquarters in London unless we move out people of real influence in the country's affairs. I should like to draw the attention of the House to the first two lines of paragraph 78 of the Report: The Ministry stated that D.S.I.R. had close and frequent contacts with other departments, industrial firms and scientific bodies. The Report went on to say that it was because of this that the Committee felt that the D.S.I.R. should be near the centre of affairs in London.

I would suggest, particularly to a body like the D.S.I.R., that it is far more important that it should have easy access not so much to other Departments, but to industrial firms and scientific bodies. If that is so, there is less reason for its having to be in London. I suggest in no uncertain terms that the D.S.I.R. be sent North. It is true, of course, that we have had the Trend Report on the Organisation of Civil Science. If the Government accepted that Report in relation to the D.S.I.R. it would help the proposal which I should like to make.

According to the Trend Report, the D.S.I.R. should be broken up into three groups. I suggest that the Science Research Council, whose job is chiefly concerned with natural resources—and this means land and water—should go to the area where there are most of these, namely, Scotland. If the D.S.I.R. contemplated the large open spaces and the abundance of water in that area it might do something to put those resources to better use.

Photo of Mr Eric Lubbock Mr Eric Lubbock , Orpington

Is the hon. Member referring to the Natural Resources Council.

Photo of Mr Arthur Holt Mr Arthur Holt , Bolton West

I am sorry, did I not say that? I should have referred to the Natural Resources Council.

The second group is the Science Research Council, which is to be chiefly concerned with the universities and the work going on there. I should have thought that its place for easiest access might be the Midlands. There is obviously a very strong case for sending the third division of the work of the D.S.I.R., that which is to be done by the Industrial Research and Development Authority, to the north of England, to the centre and heart of the old industrial England. It is in these areas that many young people are developing from the excellent opportunities now being provided by the advance of our education, but very few of them are able to find opportunities to develop their abilities in their home area.

An excellent centre for this Authority would be Bolton. I think that I should probably carry the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) with me on this, because what applies to Bolton applies in many respects to Darwen.

Photo of Mr Arthur Holt Mr Arthur Holt , Bolton West

Bolton is an excellent centre.

In conversations and in investigations I have carried out over the last 12 months I have been alarmed to find a complete lack of opportunity for the most able youngsters in the area. There is not a single place where they can go to indulge in scientific research. An extremely able young engineer might find a few jobs available but most of these young engineers would have to seek jobs outside.

We have developed a fine educational system which is still being improved. There are excellent services and this area, like many others in that part of Lancashire, will be a great deal more pleasant a place by about 1970, because probably by then it will be smokeless. There will also be easy access to most parts of the country because we are within a few miles of the North-South motorway and of the Lancashire-Yorkshire motorway going straight across the Pennines. There are around Bolton a number of other towns, with very similar problems in this respect, which would gain tremendously by bringing into the area a group of people who were really at the top and were concerned with the development of industrial and scientific matters.

One criticism often made is that we have done excellent work in theoretical research, but there has not been nearly enough early practical commercial application of what is discovered. If the D.I.S.R. were brought up to the Bolton area, I am sure that it would be a great help. Round about, there are Darwen, Chorley, Westhoughton, Farnworth, and Bury. If the hon. Gentleman who intervened a minute or two ago wishes, we can go up the Rossendale Valley to such places as Nelson and Colne. All these towns would develop and greatly benefit as a result of what I suggest. If the Financial Secretary wishes to put in a special plea, we could include Preston as well.

We all know the nature of the problem. During the past year or two, Bolton has not suffered seriously from unemployment among semi-skilled people such as has afflicted the North-East, but this situation has concealed a serious lack of jobs for the ablest of our young people. I am certain that any money which the Government pour into their regional policy will be wasted unless it is understood that the headquarters of organisations or activities related to the Government must move out into the re- gions and so create centres of influence enabling out young people in those areas to say to themselves, "If I want to do a big job, I can do it here. I really can influence the affairs of the country by taking part in something within five or 10 miles of my home". At present, this is not so, and they do not stay.

I have no doubt that an evolution of this kind is in the interests, also, of those who live in the South. I can see no solution for the problems of congestion in London and the exorbitantly high rents which are asked for much property around about until the weight, as it were, is taken off London. At the same time, as I have explained, the regions would derive tremendous benefit.

I had in mind a number of other points arising out of the Report, but I felt that it was more useful to concentrate upon the one matter which I have discussed in order to give time for other hon. Members to get into the debate.

5.3 p.m.

Photo of Mr Joseph Hiley Mr Joseph Hiley , Pudsey

The hon. Member for Bolton, West (Mr. Holt) will, I hope, forgive me if I do not follow him in his geographical excursion into the wilds of Lancashire.

Photo of Mr Joseph Hiley Mr Joseph Hiley , Pudsey

I begin my referring to one or two points made by the hon. Member for Sowerby (Mr. Houghton). Taxpayers generally will be reassured, when they read the hon. Gentleman's speech, to know how carefully all forms of expenditure are examined by the Public Accounts Committee. It is not my purpose to criticise the Committee and its efforts, because I am convinced that all forms of Government expenditure must be put under careful scrutiny, but there are times—this is certainly true in private business, at least—when one can attempt to drive too low the price which one is prepared to pay.

The hon. Gentleman began by saying that the Committee did not work on party lines, but it became increasingly clear, towards the end of his speech, that party dogmas were not excluded from its approach to these matters. The hon. Member said that there would have to be a reappraisal of the supply of drugs to our medical services. He did not elaborate. I do not quite know what he meant. But from what I have been able to read of the argument with the drug industry it seems to me that we should pay a little attention to the industry's success in recent years. I am advised, for instance, that the prices of the 50 leading drugs in use are now 12 per cent. lower than they were three years ago.

The drug companies have a record of achievement which, I believe, is unsurpassed. I do not suppose that the industry itself would take credit for all the recent improvements in medical treatment which have been made, but it is entitled to some credit for the fact that the average stay in hospital in 1949 was 49 days whereas it had been reduced to 34 days in 1961. I make no political comments with reference to those two dates, but it is interesting to note the great improvement which has taken place in the National Health Service during that time, as in so many other ways. Everyone knows that the great killing diseases of the past, like pneumonia, diphtheria and tuberculosis, have all been attacked with great success as a result of the achievements of research undertaken by the various drug companies.

This brings me to the subject of research. How can the research be carried out, and what is the result of the research done by the industry? Having discovered a drug and having tested it, the industry's next step, inevitably, is to give it a name, a brand name. Although I have no knowledge whatever of the industry, I know from general commercial experience that, if one gives any product a brand name, this must of necessity be a guarantee of its high quality. Nobody could afford to advertise and maintain the name unless he was extremely zealous at all times that the quality of the branded article was for ever maintained.

This cannot be said of the non-branded article. I do not deny the possibility that an unbranded article or drug may be equally efficacious, but it does not necessarily follow. So there is good reason why the branded article should be sold at a higher price, and there is good reason also why we should support this and recognise that the cost of research, often very high, has to be met. Some firms are spending as much as £4 million a year on research, and this can be done only out of the sale of the product on a branded line basis.

Photo of Sir Geoffrey Johnson Smith Sir Geoffrey Johnson Smith , Holborn and St Pancras South

Is it not a fact, also, that in exporting the sale of the branded product is particularly important? I understand that the sales of the pharmaceutical industry overseas total about £50 million, a not inconsiderable part of our volume of exports.

Photo of Mr Joseph Hiley Mr Joseph Hiley , Pudsey

I am grateful for that intervention. It was to be my next point.

The hon. Member for Sowerby, reminiscent of the old stumping days, said that the production and supply of drugs was a service and not a commercial operation. As he used those words, I wondered how he would describe the export business of the drug industry. Surely that must be commercial as far as the interest of the nation is concerned. One-third of the products of the drug industry are exported, and, if the names that we have secured for our products can gain the foreign currency which we so desperately need in this country, that, surely, must be done by an efficient home industry and one by which the products of the industry have secured themselves a good name and reputation.

All these things require the support obviously of the biggest purchaser in the country. The drug industry is not making too high profits. The Committee has investigated them. In one part of the Report it states that one firm is losing money. Therefore, I do not think that we ought to try and drag down the industry and make it less effective and less efficient merely on the grounds of cost.

The references to telling doctors about certain drugs, which some describe as a form of advertisement, could more honestly be described, I think, as the giving of information. The drug companies—as this information is supplied by the men of the highest possible qualification—are indeed rendering a great service to the doctors. The information is not necessarily sent exclusively to doctors so as to influence the sale of particular drugs. It is sent purely as a source of information, and that is why I could not understand what the hon. Gentleman meant when he said that the patients themselves asked doctors to prescribe certain drugs. The bulk of the information which is sent by the industry to doctors is not publicly advertised. It is sent to the doctors in a professional capacity.

I have no more to say except that I think the hon. Gentleman was more moderate than he could have been or might have been, although there was still throughout his speech the suggestion that the drug industry is trying to exploit the nation. That is not so. I think that the nation owes a great debt to the industry and that that is proved by the figures which I have given.

5.13 p.m.

Photo of Mr Laurie Pavitt Mr Laurie Pavitt , Willesden West

On this occasion I wish to follow the hon. Member for Pudsey (Mr. Hiley) and concentrate most of my remarks on the same section of the Report with which he dealt. In his opening remarks, the hon. Gentleman faintly gibed at my hon. Friend for inserting a little bit of dogma in some of his remarks on the way in which drugs should be provided, but I think that the hon. Gentleman responded, in seeking to defend the drug industry, in similar fairly dogmatic terms.

I take it that we all commend the Public Accounts Committee on the way in which it seeks not to make blacks and whites of this thing, and in my comments I hope that the House will not think that I am in any way trying to make out that there is all good on the side of one approach and all bad on the side of the other. I think that the great service that the Public Accounts Committee renders the House is that it deals with the matter in an objective way and does not seek to find blacks and whites but to find out that the expenditure which the public are making through Government sources is well spent. I hope that my remarks will be taken in that light.

I shall be critical of the drug industry, but I would not bow to the hon. Member for Pudsey in my respect for the achievement of the industry since the inception of the National Health Service. However, before I talk about drugs may I say two things? First, I want to con- gratulate my hon. Friend, because this is the first time that I have participated in a debate on the Report of the Public Accounts Committee with my hon. Friend the Member for Sowerby (Mr. Houghton) as Chairman of a very difficult Committee. In congratulating my hon. Friend on opening the debate, I should like to pay tribute to those who served on the Committee. When we look at the 500 pages of the Report we realise that theirs was no light task, and hon. Members who served on that Committee with my hon. Friend as Chairman should be thanked for all the extra time which they put into the job.

The second thing I want to do before I get on to the question of drugs is to congratulate the Public Accounts Committee and commend it on paragraphs 25 to 30 of its Report, which deals with furniture and equipment in the hospital service. The Committee was quite rightly aware of the fact that we are now in the second year of a vast hospital building programme, not, perhaps so vast as hon. Gentlemen opposite sometimes like to think, because last year it was only £30 million, this year £35 million and we do not get up to £45 million until next year. Nevertheless, for 10 years, especially from 1966 onwards, there is to be a vast building programme, and in the buildings erected there must be equipment.

I think that the Public Accounts Committee has done a service in starting already to look at the way in which hospital equipment is purchased and to seeing if some savings can be effected. I very much like the comments which the Committee makes in paragraph 27 of its Report and wonder whether it cannot take a leaf out of another section of the Ministry of Health's service. On hospital building, it has a department which advises on the best possible way of building. I wonder whether something comparable to that excellent Consumers' Association publication Which? could not be considered from the point of view of the equipment going into the new hospitals.

Everyone who serves on a hospital management committee knows the problems of equipment. Every hospital has the same kind of requirements for beds and lockers. But if one goes into five different hospitals, one finds five different types of lockers standing by the beds. If we could have a service which explained why certain equipment was a better buy than others that would be very useful and if it was able to extend buying in bulk in a more thorough fashion public funds would benefit. The Public Accounts Committee is doing a good job in drawing the attention of the spending Departments to these matters.

I come now to the question of drugs. We have to realise that it has been Government policy, and also the policy recommended by the Cohen Committee, the Hinchliffe Committee and the Douglas Committee, that as far as possible the National Formulary shall be used because this is a far more economic use of public funds than the spending of money on proprietaries. The Ministry has the Prescribers' Journal in which it tries to keep people informed and tries to persuade doctors not to prescribe proprietary drugs but those on the National Formulary and drugs in the British Pharmacopoeia. But while the Government are concerned to tell the doctors this the industry is spending large sums trying to persuade them to do the opposite.

My hon. Friend and others have referred to the recent publication which hon. Members have received entitled How Equivalent is an Equivalent? I received this morning another very interesting document from one of the leading drug houses which included an article on generic prescribing with the subtitle "A costly bargain." We must realise that there is a conflict of interest here, because obviously the drug houses are seeking to maximise the sale of branded drugs and inevitably the Ministry is seeking to persuade the doctors to prescribe the National Formulary.

One of the main arguments also used by the hon. Gentleman the Member for Pudsey was that if there is a reputable firm—and most of the large drug firms are reputable—there is thereby the guarantee that its products are of the highest possible quality and standard, and, therefore, will serve the patient far better. I wonder whether I may quote one of the things which came not from a report issued in this country but resulting from the Kefauver Report, from America, on the examination of how this works out in practice in another country. As the House may know, there is a law in America which covers five of the major antibiotics. When a House Committee examined the way in which the law was affecting the preparations being used in the United States, it was shown that firms as large and reputable as the Upjohn company; Squibb's; Parke, Davis; Lederle Laboratories; Pfizer; Merck Sharpe and Dohme; Commercial Solvents and Eli Lilly have on many occasions in the last two fiscal years been caught marketing sizeable quantities of sub-standard drugs. I am not making any attack on these firms. This is a highly complicated and technical matter. However, I do not think that the case can stand up because, as some of the Birmingham public analyst's reports have shown, the standard in this country is not always all that may be required. One can equally say that the ordinary dispensing chemist, given an EC. 10 from a doctor, might well be producting the correct quality drug which the doctor was seeking to prescribe for his patient.

In paragraph 39 of its Report, the Public Accounts Committee draws attention to the fact that if we made only a limited attack on this matter there could be a saving of £600,000 a year on five drugs. If such a saving can be made on only five drugs, it is more strength to the Minister's elbow in seeking to persuade more doctors to prescribe from the National Formulary. I wonder whether we are too careful about trying to ensure that the general practitioner keeps his prescribing costs low and in so doing whether we spend more perhaps than we save.

In connection with another part of the Report, my hon. Friend the Member for Sowerby referred to the methods of the firm of Messrs. Marks and Spencer, which have adopted a streamlined system of purchasing. But it also recently adopted a system whereby it did away with all the control forms used in trying to check whether its assistants were helping themselves to the goods. As a result, this concern has saved about 300 forms and certainly a considerable amount of money. It is convinced that at the end of the day it is not losing financially.

Instead of having the very complicated system under which Ministry medical officers make a check over a complete area after each EC. 10 has been checked and tabulated, with the local average being fixed and those doctors reaching more than 25 per cent. being seen by one of the Ministry's officers, I wonder whether it might be useful to see if over a period of two or three years, as a result of doing away with this check, in a pilot area which most general practitioners resent, we might ultimately save money. In spite of the fact that the majority of drugs are provided through the general practitioner service, I do not think that we can ignore the £15·3 million which it is estimated will be the expenditure of the hospitals on drugs in the coming year. Despite the excellent efforts of the previous Minister in securing bulk supplies and breaking through the monopoly system where the patents law permitted, I am stilt not satisfied that prescribing in hospitals is as effectively checked as is the prescribing of general practitioners. I feel that even more saving could be made in this respect.

In reply to a Question of mine a fortnight ago, the Minister of Health gave the figure of £100,000 as the amount which it cost to keep a check on general practitioners. The answer to the Question about the amount spent on checking hospitals was, "Nothing, Sir". I wonder whether we are satisfied that the way in which prescribing is carried out in hospitals is effective, especially in view of the anomalous position of most consultants being nine-elevenths part of the hospital service and two-elevenths private practitioners.

Photo of Mr Tam Dalyell Mr Tam Dalyell , West Lothian

Is my hon. Friend suggesting that those of us on the Public Accounts Committee should not look into the question of general practitioner prescriptions? If so, we have then the important problem on our hands mentioned by my hon. Friend the Member for Sowerby (Mr. Houghton), namely, the great difference in areas in the value of prescriptions.

Photo of Mr Laurie Pavitt Mr Laurie Pavitt , Willesden West

I would not suggest doing away with the system completely. That would be impossible. We have been using this method since the inception of the National Health Service. However, I should like experiments to be carried out into other means of achieving the same end, because the present system does not do what it sets out to do and arouses considerable resentment among general practitioners. If more research were carried out into the problem of why in particular areas drug prescribing is high—for instance, why it is much higher in Glasgow than in Surrey—we might achieve a more satisfactory saving on the present rather mechanical way of making an assessment from the aggregate of EC.10s.

To return to the question of consultants, I make it clear that I am making no imputation on their integrity. Their clinical and surgical skill is the backbone of the hospital service. However, I think that they are put in a very invidious position if they have private patients who are using partly the hospital service and partly consulting them in their own rooms. They are then in a situation in which it is not clear whether a private patient should pay for his own drugs or whether that part of the service should come under hospital expenditure because he is partly using the hospital service. I suggest that the pink form which a consultant uses in respect of the hospital service should be available only within a certain area of the hospital where he is employed as a part-time consultant and should not range over a wider geographical area.

The question of sales promotion always comes up on debates on drugs. I will not repeat the figures which were given last year, but for every ten general practitioners there is one drug house representative. I challenge the statement of the hon. Member for Pudsey that it is the drug houses' job to provide the general practitioner, particularly, with information. This is the job of the Ministry. General practitioners should have complete backing. They cannot do their job effectively unless they have the proper tools. The Minister's Prescribers' Journal is a step in the right direction, but it is inadequate. The general practitioner should be given all the information and facilities for effective and economic prescribing by the Ministry that he needs.

The general practitioner is influenced mainly by the representative, but I was interested in recent weeks to receive information from a general practitioner showing the number of mailings he had had over the past three years. In the three months May, June and July, 1960, he received 485 mailings from drug houses. In spite of the fact that since that time we have had at least two debates on this subject in the House, and despite the fact that there has been much public and professional discussion about it, the comparable figure for May, June and July of this year was less, it is true, but only a few less—469. Hon. Members can work out the number of mailings a general practitioner receives in a day if he receives 469 in three months. A busy general practitioner, particularly if he has 3,500 patients, cannot assimilate the contents of 469 mailings.

Photo of Sir Geoffrey Johnson Smith Sir Geoffrey Johnson Smith , Holborn and St Pancras South

Is it not true that the general practitioner can write and tell the people concerned that he does not wish to be on their mailing list?

Photo of Mr Laurie Pavitt Mr Laurie Pavitt , Willesden West

He can, and he does, but the average general practitioner, especially the large number of practitioners who have no staff to help them—they act as filing clerks and as their own stenographers, writing their own letters—being faced with the need to write another letter, is inclined to put the brochures straight in the waste paper basket. The other point is that he never knows whether perhaps the 469th may not be something like a calendar or a diary which he can usefully pass over to the next patient who comes in.

Photo of Sir Albert Costain Sir Albert Costain , Folkestone and Hythe

I am following the hon. Member's argument with interest. He said that the Ministry people ought to be the people to tell the doctor what he should do. Does he not agree that the drug manufacturers are the only people who know what their drugs are and that they ought to advise the Ministry?

Photo of Mr Laurie Pavitt Mr Laurie Pavitt , Willesden West

No, I do not. I think the Ministry is quite capable, with its scientists and qualified people, in various other Departments, too, of assessing what the properties and indications or contra-indications of a drug are. Of course, when a drug house puts a drug on a market it will provide information. It seems to me that the general practitioner ought to have an authoritative statement in a standardised form from the Ministry saying just what the properties of a drug are.

I would make a suggestion which would help the industry in this respect. It is followed by some firms already. If all the firms were to give their information in precisely the same form, on cards of precisely the same size, perhaps to fit into a little cabinet which might be provided as an additional service, that would make a useful form of reference. By last year 400 such cards were issued by some of the drug houses, and since my particular Dr. X started collecting them, a total of nearly 500 cards have been collected. What I have suggested would provide a useful, quick, handy reference service, but if there is a large number of assortments of cards of different sizes, with the information being given in different ways, then it is evidently not useful as a form of reference and constitutes only a part of the sales promotion for the commodity.

I think it is true to say that as a result of the work of the Public Accounts Committee a lot of the gimmicks have been dropped. Apart from the excellent sales code which the industry tries to operate, it is true that there has been a diminution of the number of gifts given in trying to promote the sale of products. The fact remains that although doctors do not have to pay for them, nevertheless they are able to secure quite large orders for the drug firms.

It would be helpful, too, if there could be some disentanglement of firms' accounts so that the Public Accounts Committee could be quite clear which part of a firm's activities is devoted to producing drugs and which part of its activities is devoted to the production of something entirely different, fertilisers or some other produce manufactured on a large scale but having nothing whatever to do with drugs or the National Health Service. It must be extremely difficult, one judges from the evidence before the Committee, for the Committee to disentangle the part of a firm's balance sheet what is mainly concerned with drugs and the part concerned with things extraneous to drugs. I think at the same time it would be helpful if there could be clear-cut accounting to show just how a drug house is operating through subsidiaries, so that one could get to the meat of the problem, instead of having to investigate a number of different balance sheets which make it difficult to form a fair assessment.

Photo of Mr Tam Dalyell Mr Tam Dalyell , West Lothian

Would my hon. Friend agree that the logical conclusion of this argument is that the Public Accounts Committee should be allowed to summon expert, outside, technical witnesses?

Photo of Mr Laurie Pavitt Mr Laurie Pavitt , Willesden West

Yes, I agree with my hon. Friend, who is a member of that Committee.

I would make another conclusion, too. I would suggest that the Ministry would be quite entitled to lay down conditions under which firms would be permitted to supply drugs to the National Health Service, and I think that one of those conditions could well be the way in which accounts are submitted, so that information could be easily available both to the Ministry and to any watchdog Committee of this House which wished to look at it. Let us know just how much is spent on research and promotion in each case. When we are spending millions of pounds I think we are entitled to lay down such conditions. In all other buyer-seller relationships conditions are laid down between the two parties, and I cannot see why the Minister cannot insist that as a condition of being a supplier to the National Health Service a firm should conform to certain standards and certain forms, to be generally accepted.

Photo of Sir Hugh Linstead Sir Hugh Linstead , Wandsworth Putney

I am very interested in the point the hon. Member has made, but it would amount to saying—would it not?—that the products of firms not on the list could not be prescribed by doctors under the Service. That would be a very substantial breach in the principle that the doctor is the person who should choose.

Photo of Mr Laurie Pavitt Mr Laurie Pavitt , Willesden West

I am grateful to the hon. Gentleman, who knows this matter very well indeed. I accept that this is fraught with difficulties, but I think equally fraught with difficulties is the present situation, where there is a certain amount of mistrust being built up around an excellent industry. I think this is the third or fourth time that in our annual debates on the Reports of the Public Accounts Committee this part of the Reports has been the main item of our discussion. I accept that no one wishes to interfere with the right of the general practitioner to prescribe that which is best for his patient, but I believe that by consultation and negotiation between the industry, the profession and the Government on a particularly thorny problem it could be got over, and I think it would be well worth while getting over it, to achieve the kind of result which I should like to see achieved.

I would conclude by paying tribute, like other hon. Gentlemen, to the amount which the drug industry has saved by reducing the number of days a person has to spend ill or under hospitalisation, an amount which, in a teaching hospital, is now nearly £50 a week. That is saved by keeping a person out of hospital. At the same time I would be prepared to go further. This is one of the areas where I would be a little idealistic. I should like this to be an area in which manufacturers would be prepared to operate, not just as an industry but as a social and public service, and instead of their amassing profits and then forming foundations and charities to give part back in some form or another, I should like to see them deliberately and voluntarily operating on a non-profit basis, because if there is one area in our social life in which one would like to see no profit made at all it is the area of sickness and suffering. No one would take a penny out of the tin of a blind beggar. Surely it is equally relevant that this business should not be just on the buyer-seller relationship which the previous Minister of Health mentioned in his address to the A.B.P.I. We should look to rather higher standards of service and public spirit and for medicines to be taken, if possible, out of the area of sheer profit making.

5.38 p.m.

Photo of Mr Charles Fletcher-Cooke Mr Charles Fletcher-Cooke , Darwen

I should like to take up and support the observations of the hon. Member for Bolton, West (Mr. Holt) relating to that part of the Third Report of the Committee and found in paragraphs 75 onwards, particularly that relating to State House—and I am delighted to see a representative of the Ministry of Public Building and Works here to listen. It is a most revealing passage because it shows the immense and entrenched influence which the civil servants can maintain against the efforts of the Government to make them disperse. It seems that the D.S.I.R. insisted on being near Whitehall. That seems reasonable, but they were unwilling to move any part of the headquarters out of London, and then come the most revealing words of all, or even to Earls Court". The differences in rent between State House at 30s. a sq. ft. and the accommodation at Earls Court at about 16s. sq. ft. is a very large difference indeed, and the difference in distance—or, rather, in time—between Earls Court and Whitehall, and Holborn and Whitehall, bearing in mind the layout in the inner circle and of traffic generally, is absolutely marginal, and yet in spite of the powers of persuasion of the central Government it was impossible to persuade those distinguished civil servants to move into Earls Court and accept a rental which is about half of what they were prepared to pay. It is amazing.

Then, we find in paragraph 80 that Your Committee note the Ministry's assurance"— that is the Ministry of the Parliamentary Secretary who has come to hear what I have to say— that they are keeping up a constant pressure on Government Departments to accept accommodation in the provinces, where rents are much lower than in London. They observe that some 26,000 headquarters staffs have already been dispersed and that firm plans are in hand for dispersal of a further 7,000. Where are they being dispersed to?

Those of us who are occasionally lucky enough to have to pay a little Surtax notice that we no longer pay Surtax—the hon. Member for Sowerby (Mr. Houghton) will realise what I am coming to—to a headquarters for collection in London. This, one would have thought, would be all to the good—this dispersal, this regional development—and that it showed that the Government were taking the matter seriously. One might have thought that the work of this fine body of men who accept this heavy tax, but whose functions and work are chiefly clerical, would have been performed in Anglesey, Ilfracombe, the Orkneys, Bolton, the North-East or the North-West, or certainly in Darwen, that it was an ideal function to be dispersed—and instead of one sending it to London one might expect to address the envelope to one of those outlying regions. But not a bit. To where has this body of men been dispersed?—to Worthing. What good does that do to relieve the pressure on the South-East and to provide jobs for highly-trained people in the areas of which we have spoken? It is a shocking example. If that is what they mean by an attempt to disperse from London, all I can say is that it is not far enough and not taking the matter seriously.

It is not good enough to say that we have all to be within computing distance of Whitehall, and certainly not good enough to say that we will not go even as far as Earls Court, which is what the D.S.I.R. said, even though the saving in rent is very considerable. I support the hon. Member for Bolton, West in this because it is very serious. If I might inject in what is usually a non-partisan debate a slightly controversial note, it is said by the Labour Party that one of the things that they would do to cure this imbalance between the South-East and the Rest is to promote public enterprise to do what private enterprise, they maintain, refuses to do, that is to go to these places. All I can say is that the experience of the D.S.I.R., of those who collect Surtax, and of many other Government services shows that it is just as difficult and recalcitrant, if not more so, to persuade public servants to leave the South-East as it is to persuade private service. It is no good saying that the cure is to direct public enterprise to these areas because, judging by the books, public enterprise refuses to go.

Photo of Mr Tam Dalyell Mr Tam Dalyell , West Lothian

Is this not a reflection on either the strength or the weakness of particular Ministers?

Photo of Mr Charles Fletcher-Cooke Mr Charles Fletcher-Cooke , Darwen

When the hon. Member, as I am sure he will in his career, has the same experience as the hon. Member for Sowerby has of the great strength and resistance that public servants can put up in this case, then he will be entitled to criticise Ministers as they are today and not before. I appeal to those Ministers today and to any who hope to be Ministers in the future really to see that this dispersal policy is a reality, that the centres of power are dispersed to the areas where we need to give opportunities for people to exercise power and not to send them to State House, Earls Court, or Worthing.

5.35 p.m.

Photo of Mr Tam Dalyell Mr Tam Dalyell , West Lothian

It was nice of my hon. Friend for Willesden, West (Mr. Pavitt) to say thank you to members of the Public Accounts Committee. As one who has just completed his first year, I, too, should like to say thank you to the Clerk of the Committee, to the immensely patient shorthand reporters, whose toughest assignment it may well be, and in particular to the Comptroller and Auditor General, Sir Edmund Compton, who has shown infinite patience in explaining the ins and outs of our work.

To return for a moment to the remarks of the hon. and learned Member for Darwen (Mr. Fletcher-Cooke), if it is true, as he says, and I agree with him, that there is formidable resistance on the part of civil servants—the last 12 months has shown me, if nothing else, how formidable they are—nevertheless, it is equally true that certain Ministers have succeeded in dispersal, to Newcastle and to Cardiff, for example, in cases that we know of. If certain Ministers can succeed, why is it that others do not succeed? Is that not a legitimate question?

I would draw the attention of the Minister representing the Treasury to paragraph 15 and ask some specific questions of which I have given notice. All these questions relate to Class IV, Vote 12. May we hear from the Minister what has been done in the last three years since the Public Accounts Committee recommendation that the University Grants Committee should energetically pursue the further development of standard costs…"? This particular question assumes added significance in the light of the Robbins Committee's Report and the fact that we may have seven new universities of fairly modest size at a cost of some £40 million plus.

Another specific question is to what extent is there liaison between his Department and the Ministry of Public Building and Works Development Unit under Sir Donald Gibson. Perhaps some time could be devoted to this, as it seems to be of crucial importance. I thought that 6 per cent. was a significant overall difference between U.G.C. standards and Ministry of Education standards. Surely, sound proofing is as important to the Ministry of Education needs as it is to those of the U.G.C.

In paragraph 17 I was a little frightened by the quotation that …the Treasury intended to neglect no opportunity of developing further the organisation for securing due economy in the higher education building programme by all available means. I hope that we will not have silly little economies, purely marginal, which do not save much money, which do not save any significant amount of resources, but which make some difference to the completed building. If we are to make savings, let them be significant and not marginal chips off such-and-such a programme here and there at random.

I refer to Questions 1319 to 1324 that were put to witnesses. No guidance on building design has yet been circulated to universities. Why not? Is not this a rather slothful way of carrying on, and is it not more important than ever, in the light of the Robbins Report, that information and experience should be circulated from one place to another? I realise that since the Committee met last Session, steps forward may have been taken. This is an opportunity to explain any steps that have been taken in recent months.

I draw the Minister's attention to Question 1329 concerning the analysis of cost of special scientific services. Again, the inquiry took place six months ago and we would like to know what has happened since Does it not amount to an argument for zoning certain highly expensive subjects such as plasma-physics, radiation physics and molecular biology at three or four institutions throughout the country?

I do not think that anybody who reads the passage in my Question No. 1345 can be entirely satisfied with the explanations given of the efforts of the University Grants Committee to get expert staff. If a real effort were made, it seems inconceivable that the U.G.C. could not attract a number of fairly young men of vast ability when it can offer such a challenge to them to make their names.

There are two general points which, as a member of the Committee, I should like to raise. One concerns the whole question of universities being excluded from the orbit of the Public Accounts Committee. This was understandable in the last century when there were questions of academic freedom. It was understandable when university expenditure was not all that significant. I do not want to be in the position of being dogmatic to the effect that expenditure by the U.G.C. should come within the purview of the Public Accounts Committee, because there are certain disadvantages in that which are fairly obvious to all hon. Members. At the same time, when university expenditure, as it will do in the late 1970s and the early 1980s, runs to the order of £600 million, £700 million and £800 million a year, questions of democracy arise. Is this order of expenditure not to be subject to Parliament?

Photo of Sir George Benson Sir George Benson , Chesterfield

The expenditure of Government money expended by the University Grants Committee on buildings can come within our orbit if we wish. We had a great battle some years ago with the U.G.C. and established our right.

Photo of Mr Tam Dalyell Mr Tam Dalyell , West Lothian

Of course, my hon. Friend the Member for Chesterfield (Sir G. Benson), who was a member of the Public Accounts Committee before I was born, is right concerning buildings, but he would agree with me that there are vast sectors of U.G.C. spending which do not come within the purview of the Public Accounts Committee.

Photo of Sir George Benson Sir George Benson , Chesterfield

We have never claimed anything except to have some say on building costs. We have never suggested that we should interfere in the academic exercises.

Photo of Mr Tam Dalyell Mr Tam Dalyell , West Lothian

My further reply to my hon. Friend the Member for Chesterfield is that no less a man than the Provost of King's College, Cambridge, in a recent controversy in the Sunday Times, stated that he thought there was, perhaps, an argument for the Public Accounts Committee of the House of Commons having a rather closer look at university expenditure, because in this way it might be possible to persuade public opinion to accept considerable increases even, perhaps, above what the Robbins Committee recommended.

I do not raise this argument merely for the sake of raising an argument, because there is a point of substance behind all this. That is the question of the extent to which undergraduates should become cost conscious. Of course, I believe that undergraduate education should be basically paid for out of State funds. At the same time, however, I would like many undergraduates and students to have a far better idea than they have now of precisely what it costs their fellow human beings in the community to keep them at colleges of advanced technology or at universities.

There are various ways of doing that. Perhaps it should be that the students be given a full grant, which would mean, for example, that those studying, perhaps, physics at Imperial College, London, would have to pay something like £1,200 or £1,300 a year—an accounting operation. For art students, it might be £500 or £600 a year. For medical students, the figure, I think, is about £1,100 a year. It is, however, important that somehow or other our student generation becomes a little more cost-conscious than it is now, because if they became more cost-conscious many of them might work a little harder. I am certain that there are many students who have not the slightest idea of how much it costs their fellow human beings to keep them, rightly in my opinion, in higher education.

My last point is again generalised concerning the work of the Public Accounts Committee. Hon. Members may have read the long questioning that took place six months ago between the members of the Committee and Sir Harry Melville, as accounting officer of the Department of Scientific and Industrial Research. In what I am about to say, I do not for one moment doubt either the ability or the honesty of the Secretary of the D.S.I.R.—there is no question about that. There is, however, a question of our competence to extract from him the relevant answers to what we really wanted to know. For the sake of clarity, I will argue this in concrete terms.

One of the most important questions concerned the European nuclear physics centre at Geneva. This is not a question of thousands or tens of thousands of £s. It is a question of tens of millions of £s and, therefore, becomes significant. It is a question, furthermore, of the necessity for setting up a big machine of, say, 28 GeV or some highly sophisticated piece of apparatus. My question is whether we are really competent to put this sort of question. Are we not entirely in the hands of the accounting officer? How are we to argue with him?

I am not saying that any of the evidence which he gave was suspect, but there is a question here that will become much more important in future decades. From now on, the C.E.R.N.s of the world will increase both in number and cost and will not decrease. When this problem first worried me, my immediate action was to write to the former Leader of the House, the right hon. Member for Enfield, West (Mr. Iain Macleod), who very courteously received me and told me that he thought that on the whole it would be unsatisfactory if there was to be a small group of permanent scientists of the staff of the House of Commons, because he thought that power might be unhealthily concentrated among them. This was a rational, understandable argument.

The next possibility was that we should be much better briefed by some representatives from the Research Department.

It is my good fortune that the Chairman of the Library Committee is present, for once again I can put the plea that we should have attached to the research staff at least one qualified scientist, or preferably, as I have suggested before, a qualified physicist, a qualified chemist, a qualified biologist and—possibly more important than any of these individuals—a qualified engineer, so that Members of the Committee, and other hon. Members at all times could consult them. They could also assist in putting forward relevant documents and that, too, would surely be useful.

Photo of Sir Hugh Linstead Sir Hugh Linstead , Wandsworth Putney

I assure the hon. Gentleman that the proposal he has made has been very carefully considered only this afternoon by the Library Committee and that further investigations are being made to see if a worth-while career could be offered to the right type of people in the Library of the House.

Photo of Mr Tam Dalyell Mr Tam Dalyell , West Lothian

One is conscious of the problem of status within the House of Commons stiff and that, for reasons of status, it may be felt necessary to take on a fairly young man. I would respectfully disagree with that point of view. Perhaps the best servant the House could have would be someone who has finished his likely research career—someone aged about 45 or 50—and has a mature judgment. Perhaps he could be put in a special category.

I think that the Chairman of the Library Committee accepts the need for members of the Public Accounts Committee—and other hon. Members—to be rather better informed than at present if they are to cross-question the Secretary of the Department of Scientific and Industrial Research. It is not just a matter of science, which is perhaps the most dramatic example. Involved is the whole question of investment in sophisticated industries and in all sorts of international co-operation.

Indeed this covers not only science proper, but many other Departments of State. I think that my hon. Friend the Member for Barnsley (Mr. Mason), if he were here, would agree that, in dealing with the Post Office, it is becoming more and more necessary to have some kind of technical advice. It is on this theme of proper technical advice that I sit down.

6.2 p.m.

Photo of Sir Albert Costain Sir Albert Costain , Folkestone and Hythe

As a Member of the Public Accounts Committee from this side of the House, I, too, would like to congratulate our new Chairman on the fair and comprehensive way in which he summed up our work for this year. I feel that this is not an occasion for members of the Committee to speak at length. I think that it is rather a time for other hon. Members who have had an opportunity of reading our work to add their deliberations to it.

As the hon. Member for West Lothian (Mr. Dalyell) has raised one or two points with which I am not in full agreement, perhaps I might be allowed a few moments to dwell on them. I think that the Public Accounts Com- mittee—and I spoke at some length on this last year—still needs a competent yardstick, a factor by which it can judge efficiency. But I cross swords with the hon. Member on his suggestion of having technical experts whom we could consult in order to cross-question other witnesses.

I do not think that the Committee would be properly carrying out its job if it did that. A board of directors does not have to take evidence from other specialists to enable it to judge whether the information its executive officers are supplying is "bull" or otherwise—to use a very vulgar expression. Members of the Public Accounts Committee are men of judgment who are able to make adequate assessments. I agree that they cannot do so on the greatest technical detail, but even if this Chamber had scientific experts allocated to it through the Library Committee, I doubt if we would be able to encourage the employment of a specialist who would be able to advise on all subjects.

Surely it is the object of each Government Department to have these experts on its staff. I have great admiration for their accounting officers. They have to satisfy themselves about the evidence they get. They themselves are experts and they present their case to the Committee. The hon. Member suggested, however, that the Committee should have the right to call expert professional witnesses.

My knowledge of the Committee is not much greater than his, but we have hon. Members here who have served on the Committee for much longer. I have always been under the impression that the Committee can summon anyone to give evidence and that there is no restriction on the way we should take that evidence. If on a narrow scientific point we are not quite satisfied with the evidence given by an accounting officer, it would be better for the Committee to get the greatest scientific knowledge it can find in the country on that point, rather than retain scientists who would be there for general discussion and a general appraisal of the situation.

Photo of Mr Tam Dalyell Mr Tam Dalyell , West Lothian

I agree that a retained scientist would be dangerous, for the reasons which were given by the right hon. Member for Enfield, West (Mr. Iain Macleod). But would it not be sensible to invite, at our own discretion, those whom we think are competent? For instance, the hon. Member might invite Professor Denys Wilkinson and I might have occasion to invite Professor Blackett if we were talking about nuclear physics. Would not the hon. Gentleman agree that he and I are competent to pass judgment on contracting but not on particle physics?

Photo of Sir Albert Costain Sir Albert Costain , Folkestone and Hythe

I take the point. However, I think that, in turn, the hon. Member is suggesting that the Committee should get down to too great detail. We are dealing with some 500 or 600 accounts. If we were to get expert witnesses on anything that might occur to us, the Committee would have to sit not twice a week but 48 hours a day during the Session. I do not consider that that is the job of the Committee any more than I consider that it is the job of a board of directors to run the executive side of a company. That is really what we are talking about.

We have all paid well-deserved tribute to the work of the Comptroller and Auditor General. He is of invaluable help to the Committee. He himself has a set of experts, and it is surely their job to ferret out information and present to the Committee those items from their reports which it would be right and proper for the Committee to investigate further.

Membership of the Committee is one of the most interesting jobs any hon. Member can have. To me it is a privilege to be on it. The hon. Member for Chesterfield (Sir G. Benson) has, I believe, been a member of the Committee for more than 30 years, and I think he will agree that every year one learns something new. The longer one sits on the Committee the more benefit one can be to the House.

6.10 p.m.

Photo of Mr Cledwyn Hughes Mr Cledwyn Hughes , Anglesey

I should like to follow the hon. Member for Folkestone and Hythe (Mr. Costain) in paying my tributes to my hon. Friend the Member for Sowerby (Mr. Houghton), both upon the speech with which he opened the debate and upon his work as Chairman of the Public Accounts Committee during most of the past Session. My hon. Friend came into the Chair when it was relinquished, to our regret, by my right hon. Friend the Leader of the Opposition when he assumed that office in the early part of this year. My right hon. Friend was a difficult person to replace, and we were very sorry to lose him when he was, as it were, called to higher service. However, my hon. Friend the Member for Sowerby has proved himself to be a most competent chairman and we have been glad to serve under his leadership.

I am glad that my hon. Friend referred to the pharmaceutical industry. Other hon. Members have followed suit, and I, too, want to say a few words about it, because this is a theme which I discussed in the debate on the Public Accounts Report 12 months ago. Contrary to what the hon. Member for Pudsey (Mr. Hiley) said, we are in fact paying an enormous amount annually in our National Health Service bill for pharmaceutical products. It has been our experience during the last few years that it is extremely difficult to ascertain the true cost of production and therefore the reasonableness or otherwise of the profit which these firms make. What we have gathered—and this evidence is available to the hon. Member for Pudsey in the Report if he cares to read it—is that the profit element in the sales of drugs is very large.

Photo of Mr Joseph Hiley Mr Joseph Hiley , Pudsey

Would not the hon. Gentleman regard the export price as a reasonable basis for negotiation on prices, which has been done?

Photo of Mr Cledwyn Hughes Mr Cledwyn Hughes , Anglesey

That is true in part, but the Ministry of Health have constantly said during its investigations in the last three years that they are not satisfied that they have had adequate access to all the facts to enable them to arrive at the true profit made by the pharmaceutical firms.

Let me take one aspect of this matter to which the hon. Member for Pudsey referred, namely, the expenditure on advertising and sales promotion. I am glad that he raised it, because I want to take him up on that subject. He did not seem to think that this was a significant factor, but I disagree profoundly. In these days, we are all subjected to advertising pressures of one kind or another, but general practitioners are subjected to sales pressure almost more than any other section of the community. The family doctor in this country is positively drenched with samples.

I do not know whether the hon. Member has read our Reports on the extent of this expenditure. In 1961–62, the Public Accounts Committee was told that out of total sales by drug manufacturers, amounting to £67 million, the cost of advertising was about £6·5 million, or 9·78 per cent. of the total. We were not given a breakdown of the figures among the firms, but we were told that some spent much more than 10 per cent. of their sales receipts on promotion costs.

This is an exorbitant element in the total sales expenditure. We should also remember that the figure did not include the selling and advertising costs of parent companies in America—I am talking now specifically of the subsidiary companies in this country. The figure of £6·5 million, or 10 per cent., does not include expenditure in sales to chemists, but relates to doctors alone. The costs of sales in the United States are allocated as overhead costs of the United Kingdom subsidiaries, so that in a sense we are paying twice and the element of expenditure on sales and advertising is more than 10 per cent.

I agree that we owe a debt of gratitude to the pharmaceutical industry, but we are not now talking about the efficacy of drugs or the export contribution they make, but the cost of the drugs and especially the cost of advertising. I draw the attention of the House to paragraph 50 of the Report which states that the Ministry of Health had said: The reasonableness of the expenditure was, however, largely a matter of commercial judgment. They had taken up the question with four firms whose costs seemed high but without effect. They also did what they could to see that doctors were properly informed both in general and in relation to particular drugs. Paragraph 55 says: …it is apparent that the Ministry's efforts have been ineffective in securing a reduction in sales promotion costs which they considered excessive. The National Health Service, as the main purchaser of drugs in this country, bears in the cost of those drugs the bulk of the sales promotion expenditure incurred by the drug manufacturers. That is the bulk of the £6,500 million. Part of this expenditure is incurred in promoting the sale of proprietary preparations within the National Health Service in competition not only with similar proprietary preparations but with unbranded standard equivalents which are frequently available at lower prices. Although the expenditure is no doubt commercially sound from the point of view of the manufacturer it may involve a twofold extra charge to the Health Service, first for the sales promotion expenditure itself and secondly for the excess of the cost of the proprietary preparations over the cost of unbranded standard equivalents. In order to secure better control of expenditure by the industry on advertising and sales promotion, your Committee recommend that when the Voluntary Price Regulation Scheme comes up for review, the Ministry should press for regular disclosure by all manufacturers of their promotion expenditure in relation to sales. The hon. Member for Pudsey said that there was a tendency in some hon. Members to be dogmatic, and I think he was referring to the speech of my hon. Friend the Member for Sowerby. However, that is not the case. The Public Accounts Committee is an all-party committee and these are recommendations of a Committee composed of hon. Friends of the hon. Members as well as hon. Members on this side of the House.

Photo of Mr Joseph Hiley Mr Joseph Hiley , Pudsey

Even a Tory can make a mistake sometimes.

Photo of Mr Cledwyn Hughes Mr Cledwyn Hughes , Anglesey

The hon. Member has made an admission which is unusual on his side of the House. But it is not one but several Conservatives who serve on this Committee, as do my hon. Friends who are members, in order to serve the House and the country dispassionately. I hope that the manufacturers will take this recommendation to heart and do so at once. They are making very big profits on their products.

I now draw the attention of the House to another aspect of the drug problem. This is mentioned on page 156 of our Report. We found that in one instance the same group of firms was producing virtually the same preparation under different names. The basic drug in this instance is paracetamol. One of the preparations is Panadol and another is Hedex. One is produced by Bayer and the other by Phillips, Scott and Turner, both firms being members of the Winthrop group. Then we discovered that there are two other similar prepara- tions know as Tabalgin and Calpol made by two other firms. In short we have four products based on Paracetamol being sold over the counter. Why is there this duplication of effort and research in this country with a drug of this kind? I see no reason for it, except possibly to stimulate sales, and if that be the case it must be condemned.

The whole aspect of Pharmaceuticals in this country ought to be inquired into very carefully. For four years the Public Accounts Committee has done its best to elicit information. We have pursued our inquiries as best we could, but there is still a wide field in which we have been unable to obtain satisfactory information upon which to base our calculations and our recommendations to this House. There should be a careful examination of the position, and I hope that a future Labour Government will pursue such an enquiry with vigour, for the sake of the National Health Service, and in the interests of the public purse.

I turn now to a different subject. During the Session the Public Accounts Committee was extremely concerned at the way in which the cost of reconstructing the three Downing Street Houses and the Treasury Building increased. We know the reasons for this, and they are set out in the Report. I am glad that the Parliamentary Secretary to the Ministry of Public Building and Works is in the Chamber to hear this. The increase was due to the fact that the Downing Street houses were occupied right up to the time of commencing the constructional work. I understand that a survey prior to commencing work would have taken anything from six to nine months. No proper survey was carried out, presumably because it would have caused inconvenience to the occupants of those buildings. Perhaps I might add in parenthesis that that inconvenience would have been caused at a time when the Chancellor of the Exchequer was engaged in imposing severe financial restrictions.

The estimate for the work was out by 100 per cent. It increased from £1·25 million in April, 1960, to £2·5 million in November, 1962—£900,000 for Downing Street and £1,600,000 for the Treasury. We, as a Committee, are anxious that proper surveys should be made in future, and that jobs of this kind should be properly assessed. I hope that the Parliamentary Secretary will convey to his right hon. Friend the strong feelings of the Committee on this point.

As the hon. Member for Folkestone and Hythe said, the Report is available for hon. Members to read, and as a member of the Committee I do not propose to dilate on it further. I often wish that we could debate some of the items in the Report following our examination of witnesses, when the issue is "red hot" as it were. The Report is published in August or September, and we have to wait until December before we can debate the matters which the Committee has been investigating, with the result that in many cases the issues have "cooled down".

The Committee does a valuable back room job, but it would not be able to do so without the assistance of the Comptroller and Auditor General, Sir Edmund Compton, and his staff, to whom we are greatly indebted. There are some critics of this House who, because they do not see hon. Members constantly on their feet at Question Time, or in debate, accuse us of idling away a good deal of our time in the cafeteria drinking tea. The fact is, of course, that on Committees such as the Public Accounts Committee, the Estimates Committee, the Committee on Nationalised Industries and others, hon. Members put in endless hours of quiet and effective work. One of the dangers of televising the proceedings in this House is that it might give the impression that all the work is done in this Chamber. I do not know whether the answer is to televise the proceedings of the Public Accounts Committee, but, in any event, I hope that this Report, which is a good one, will be heeded in all the appropriate places.

6.25 p.m.

Photo of Sir George Benson Sir George Benson , Chesterfield

The function of the Public Accounts Committee has been raised today, and I had better say that it is an extremely narrow one. It is concerned with the expenditure of money by Government Departments. Its first purpose is to see that that money is spent according to the Appropriation Bill which allocates the money for certain purposes, and its second is to see that the money is spent economically.

This is a unanimous Report. It is based on the draft report of the Chairman, which we discuss and modify, but for many years there has been no division in the Committee on the presentation of its Report. We have established a tradition of unity, and a tradition that in the P.A.C. there are no politics. We represent the House as against the Government, and that is the strength of the P.A.C. in this country. I think it true to say that this unity of purpose does not exist in the Public Accounts Committees throughout the Commonwealth which have grown up as a result of our century-old Committee.

Our meetings are normally held in private, but we make one exception. We are always willing to allow members representing the Exchequer and Audit Departments of the Commonwealth to sit in with us. We have done that for a long time and only yesterday three representatives of the Exchequer and Audit Department of Siam listened to our discussions.

When I was Chairman, I always stressed to visitors that we were a united body, and that politics did not enter into our discussions. I always emphasised that in this unity lay the real strength of our Committee. On one occasion a lady from one of the Commonwealth Committees sat in at our discussions. I gave her the usual little homily about there being no party politics, and that we represented the House as against the Government. She was rather sceptical, so I invited her to listen to our discussion and to tell me at the end of the meeting to which party various members belonged.

As usual, the questioning was on non-party lines. We were, as always, a united body, and at the conclusion of our proceedings, feeling rather cock-a-hoop, I said to this lady, "Well, can you tell me to which party so-and-so belongs?" She said, "I think so. I think that gentleman over there is a Conservative, and I think that the gentleman who sits next to him is a Conservative, and those two gentlemen are Conservatives and the gentlemen who sit there are Conservatives." She was right, and it rather took my breath away. I said, "How could you know?" She said, "I thought that their clothes looked rather more expensive".

The most difficult problem that has been mentioned today, and one which has given the Public Accounts Committee plenty of headaches, is the cost of National Health Service drugs. There are so many proprietary articles and so many non-proprietary equivalents that we think that the cheaper, unbranded equivalents should always be chosen by the doctors. On the other hand, it is very much simpler for a doctor to write the name of a proprietary article than the name of a complicated formula for a drug. Unfortunately, from our point of view, the doctor has an inviolable right to do his own prescribing.

Questions concerning hospitals and the medical service have taken up by far the largest part of the debate. The question of economic prescribing and of the freedom of the doctor is admittedly an extremely difficult one, and we have not yet succeeded in resolving it. We probably never shall. On the other hand, in the last year the question has arisen of the purchase of hospital equipment, which is a very different one. In 1961–62, approximately £4 million was spent on hospital equipment. There was a great difference between Scottish hospitals and English hospitals. Apparently the Scottish hospitals have obtained some control over expenditure.

Since the purchase of hospital equipment runs into millions of pounds a year we feel that considerably greater savings could be made than are made at present. In this case we are not impinging on any ethical question of a doctor's right to prescribe. Hospital furniture is either efficient or inefficient. It is about time that the Public Accounts Committee and the Ministry of Health looked into the question of equipment more carefully.

Time is getting on, and we have reviewed the year's work. It is easy to criticise. As Byron said: Man must serve his time to any tradeSave censure—critics all are ready made. We in the Public Accounts Committee are critics, and our criticisms over the years have borne fruit.

Lastly, I want to pay a tribute to the Secretary of the Exchequer and Audit Department, Mr. P. J. Curtis, who, for the last 10 years, has sat with us and with the Comptroller and Auditor General in our meetings. Mr. Curtis is now retiring, and I would like to say, in public and on behalf of the Public Accounts Committee, that we owe him a great debt of gratitude for the service that he has rendered to the Committee.

6.35 p.m.

Photo of Mr Alan Green Mr Alan Green , Preston South

I am a novice in respect of the affairs of the Public Accounts Committee. It is by virtue of my present office that I am a member of that Committee, and I want to state simply and directly that I find myself honoured by that fact. If I can do anything at all to help in the work of the Committee I shall gladly do so.

On these occasions it is proper and customary to remind the House of the Committee's main purposes and functions. Both the hon. Member for Sowerby (Mr. Houghton), the present Chairman, and the hon. Member for Chesterfield (Sir G. Benson), a past Chairman, have carried out this proper task very admirably. Indeed, I could not have hoped to hear a more sympathetic and clear description of the essence of the Committee's work than that which the hon. Member for Chesterfield gave. It was so well put that I am extremely doubtful whether I can hold the House at all after that.

In 1961, the present Leader of the Opposition, who was then Chairman of the Committee, said that perhaps it was not going too far to say that the Public Accounts Committee was the only blood sport which was sanctioned by Parliament. The then hon. Member for Dorset, South—now the noble Lord Sandwich—promptly complained that not much blood was shed. I do not feel particularly like a carted stag. Nor do I think that I should have that feeling, because the collective energy of the Committee is turned to the promotion of efficiency and the elimination of waste. These must be objectives very dear to the heart of any Financial Secretary to the Treasury. If it is a blood sport, I am not necessarily the objective of the hue and cry.

It is also true that the objectives of the Committee have no chance of being met without a most patient application to detail—that hard slogging which may not itself make the headlines but without which no valuable story ever gets written. It is patient work which I am bound to praise, having read the Report and as much of the evidence as I have had time to read. But in an era when printed criticism of Parliament is quite frequent and often-times harsh, it is worth making the point that it is not unreasonable to draw attention in public to what parliamentarians actually do, very often unsung and quite often unnoticed. It is proper also to pay tribute to the immense help that we all receive from the Comptroller and Auditor General.

A second historic and continuing objective was also touched upon by the hon. Member for Chesterfield, namely, that the Committee should be satisfied and be able to record its satisfaction to the House, if need be—and certainly its dissatisfaction—

Photo of Sir George Benson Sir George Benson , Chesterfield

Do we ever hear a note of satisfaction?

Photo of Mr Alan Green Mr Alan Green , Preston South

I have known it to happen. But it is proper to record dissatisfaction if Departments have spent money not in accordance with the parliamentary authority under which they received it. That is a very important function of the Committee.

I trust that it is not mere repetition for a Financial Secretary to the Treasury publicily to remind himself of these two main functions, because the maintenance of obviously good objectives does not necessarily carry any implications of a closed mind, or an aversion to a change of method. In this age, when many hon. Members on both sides are accused of being too conservative in their parliamentary habits, it is worth noting what remarkable changes of method the Committee has achieved over a long period. The conservative process may be there, but it works.

On the general point, I make a short reference to the non-party character of the Committee. We can at least be sung in this respect, that in a Session when hon. Members naturally have felt more concerned than usual with prospects for the next Session, we still managed to work in a non-party way in this Com- mittee. I am happy to pay my tribute to what the Committee does.

I shall deal with one or two groups of points which have been made, because the discussion has not ranged very widely. I refer, first, to the comments made by my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) and the hon. Member for Bolton, West (Mr. Holt) on the matter of dispersal from London of civil servants. The Fleming Report, which recommends dispersal and suggests many ways in which it can be achieved, is, I assure both hon. Members, being actively pressed and pursued. My hon. Friend made some play with the removal of Surtax collection to Worthing. I think that he overlooked the fact that it went there almost immediately after the war and it is not part of the present process of dispersal.

What is a part of it, and is a small illustration, though not so small for the people affected, is getting out of London quite a substantial volume of London's P.A.Y.E. work. This is actually being done and I quote it as an illustration that dispersal is being undertaken whenever possible. Before we get too vicious in our attacks on those who do not like to be dispersed—and very few like it— it is well to remember that dispersal may bring more headaches than it alleviates if what is dispersed is policy-making bodies. Then difficulties arise in getting a quick policy decision or a quick execution of it. One has to balance the possible loss of time and money against what is genuinely desired, the dispersal of as many people as possible from the centre of London. I ask that that balancing item should be borne in mind. In my present post I must not give any indications of preference about where we should send them.

A particular kind of difficulty in controlling the expenditure of public money which has cropped out throughout the debate has been in connection with the cost of drugs. It is true that the cost per prescription has increased. The hon. Member for Sowerby gave figures and I shall not repeat them. He will agree, I am sure, that the general rise in costs, the general rise in wages and other cost elements which enter into all things, including drugs, is one of the causes which contribute to this rise. That has to be borne in mind.

Secondly, in recent years some extremely powerful and efficacious new drugs have been discovered and put to work. I do not know how many failures a drug house has before it produces a really effective drug, but I suppose that it is a very large number. This is where part of the cost comes in and why high profits are sought on the drugs which do see the light of day, for many of them do not.

Those are two elements producing part of the increase in the cost of prescribing. None the less, the Ministry of Health and certainly the Treasury—as I know very well from hearing of it first-hand—continue to share the greatest concern about this particular item of public expenditure and the difficulty of controlling it.

Photo of Mr Ellis Smith Mr Ellis Smith , Stoke-on-Trent South

I am a little concerned about the drive for economy in this direction. The Minister knows that I live in an area where people suffer more from bronchitis than those in any other part of the world. When the medical profession arrives at the point where doctors can give preventive drugs, that saves a great deal of time and unnecessary suffering. I hope that that will be borne in mind.

Photo of Mr Alan Green Mr Alan Green , Preston South

That was the other qualifying point I was about to make. Of course, it is not possible to gauge the gain that is got from drugs which cure more quickly, more completely or perfectly. That is the sort of gain that cannot be measured.

Nevertheless, we are obviously bound to be concerned with the wide variations in costs of prescriptions and the apparently much less wide variations in efficacy of prescriptions. This is a point which concerns all of us. The hon. Member for Sowerby put his finger on the major difficulty. I think that he used the term "cold war," but I do not want to use that term. There is a genuine conflict, a genuine difficulty, to be resolved here between what I am certain must be preserved—the doctor's freedom—and the desire of all of us, I strongly suspect of most doctors also, to get a proper control over the cost of prescribing. This is desperately difficult.

The Ministry of Health is taking such further action as is currently open to it. On the Voluntary Price Regulation Scheme, for example, it agrees completely that, unless all members of the industry adhere to it, it cannot work and the Ministry is seeking to get all members of drug houses to subscribe to it. As the Committee knows, the Ministry is doing its best to draw the attention of all doctors to the fact that non-proprietary drugs, suitable for particular treatments, are much cheaper than the branded variety and are encouraging their use.

There is also being pursued the idea of a survey in very high-cost areas to try to establish why these things happen in such places and in such ways as they do. The Ministry is pressing on with this and is very much concerned about it. I am sure that it will seek to do its best to meet the wishes of the Committee in this respect, because it fully shares those wishes.

The hon. Member for Sowerby mentioned the method of working of the Cotton Industry Act. What lay between the Committee and the Board of Trade was basically a matter of judgment whether the scheme was, in fact, sufficiently flexible or not. We are quite satisfied that the Board of Trade had under the scheme quite sufficient means of discovering whether or not a business had really ceased. The Board did not have the power to differentiate in a new way between corporate bodies and their shareholders. We do not think it should have that power. On the point of judgment whether it should or should not have that ability, there is a difference of view between the Committee and the Department. I do not think that I can usefully add to what the Treasury Minute said on that point.

The hon. Member for Sowerby said that he was putting points forward in ascending order and he referred next to getting value for money. Here, the work of the Committee is extremely welcome to the Treasury and, I think, to all Departments without exception. Out of the evidence and thoughts of the Committee come proposals for Ministries to set up groups which can study and produce a standardisation of items, new methods of purchasing and, perhaps most important of all, a cross-fertilisation of one Department's efficiency with that of another. All these methods of marketing and more efficient purchasing are not only being studied, but increasingly being practised.

I must be frank and say that I cannot report any dramatic new advance in this matter. But I think that the hon. Gentleman, from his own experience, will know that these new methods of purchasing, and preparing for purchase—which is the better way to put it—are being practised on an increasing scale by all Departments of which I am aware. Certainly, it is in the interest of the Treasury to secure that that goes on.

The second major point concerns the universities and was referred to by the hon. Member for West Lothian (Mr. Dalyell). He asked one or two specific questions and put a general point. The U.G.C. is energetically pursuing the question of standard costs. It requires a little more experience before it can begin—I will not say to be dogmatic about standards—rather more to be forceful, clear and helpful to separate universities than it is at the moment. But it is pursuing the point with energy, and I am informed by my right hon. Friend the Minister of Public Building and Works that it is in close liaison with Sir Donald Gibson's Committee, so that there need be no fears about that.

On question of guidance for design, we now have the National Building Agency, which has just been set up and that will have a part to play. All I can say about the problem of attracting staff is that it is a difficulty. Highly-qualified architects are in short supply and that is the plain truth of the matter. But I gather that some recruitment has taken place recently and that they desire to get themselves up to full complement so that they may the more readily and properly do their work.

On the point raised by the hon. Gentleman, whether there should be more or less direct control by the Public Accounts Committee of the U.G.C. expenditure, this has a long history, as the hon. Member for Chesterfield will know better than I. The best way in which I can answer the hon. Member is to say, and to put on record once again, so that it may remind me if no one else, what was concluded by the Committee on this matter in 1956–57: Your Committee appreciate that the Treasury have gone some way towards meeting their wishes in the way of closer control, both by ensuring that in future the Accounting Officer is better informed as to the projects on which voted money is being spent and by making a substantial amount of additional information available to the Comptroller and Auditor General. They recommend that the new arrangements should be given a trial over a period of three years, when the matter might be further reviewed by the Committee of the Session then current. This was done and a trial of three years was accorded.

The Comptroller and Auditor General looked into the matter and made his first report as to the efficiency of the new processing methods. Having made that report the Committee concluded its Report in 1961 with these words. Having regard to the assurances given by the Comptroller and Auditor General and the Treasury, your Committee consider that the new arrangements have worked satisfactorily, and they recommend that these arrangements should remain in operation, subject to continued vigilance on the part of the Comptroller and Auditor General and to report by him at any time of developments which he thinks should be considered by future Committees of Public Accounts. I should have thought that in an area as difficult as this, that was a satisfactory report to be able to make. It illustrates extremely well the way in which change acceptable to people difficult to reconcile to this sort of change has been effected through machinery made up of the Public Accounts Committee taking evidence, reporting, and having to receive back—insisting on receiving back—a Treasury Minute which has to carry the argument further. This process of exchange between Committee, Treasury and Department, when everything that is said is published and reported and comes into the open, can provide—as Ministers know to their cost—a continuing supply of ammunition for hon. Members on the back benches. All these factors add up to a first-class vindication of the work of the Committee and the wisdom of the House in retaining the Committee in its present form.

Photo of Mr Tam Dalyell Mr Tam Dalyell , West Lothian

Has the Minister anything to say about the question I raised of special scientific services and analysis of their cost?—Committee Question 1329?

Photo of Mr Alan Green Mr Alan Green , Preston South

I will look at that question. May I crave the indulgence of the hon. Gentleman and have a word about this with him separately. I do not think that it is, strictly speaking, a matter that concerns the Committee in the way in which it has reported. But I appreciate the interest shown by the hon. Gentleman and I should like to see him separately on the matter.

Question, That the words proposed to be left out stand part of the Question, put and negatived.

Proposed words there added.

Main Question, as amended, put and agreed to.

Resolved,That this House takes note of the First, Second and Third Reports from the Committee of Public Accounts in the last session of Parliament, and of the Special Report from the Committee of Public Accounts.

Committee Tomorrow.