TUESDAY 23 OCTOBER 2001
                           __________
                        Members present:
                    Mr Martyn Jones, in the Chair
                    Mr Martin Caton
                    Dr Hywel Francis
                    Julie Morgan
                    Albert Owen
                    Adam Price
                    Mr Mark Prisk
                    Chris Ruane
                    Mr Bill Wiggin
                    Mrs Betty Williams
                    Mr Roger Williams
                           __________
       THE RT HON PAUL MURPHY, a Member of the House, Secretary of State for Wales, MRS
     ALISON JACKSON, Head of the Office of the Secretary of State for Wales,
     MR JOHN KILNER, Principal Finance Officer and Head of Administration, Wales Office,
     examined. 

                             Chairman
  1.  Order, order.  Welcome Secretary of State.  Would you start by introducing your team?
  (Mr Murphy) Alison Jackson on my left has appeared before your Committee on a number of
occasions and is the Head of my Department.  On my right is John Kilner, who is Head of my Finance
and Establishment section in the Department and who has not appeared before you in the past.
  2.  Your Departmental Report says that now the devolution settlement has had time to bed down,
the role of the Wales Office has become more clearly defined.  How would you describe that role now?
  (Mr Murphy) I do not think the description of the role which I outlined to the Committee when this
job started has changed.  What has changed is two years of experience in doing the job.  The fact that
the Prime Minister decided after the general election to retain the role of Secretary of State for Wales,
together with the Secretaries of State for the other countries, was significant.  It meant that there was
an important liaison role between Whitehall and Westminster on the one hand and the National
Assembly on the other which my office performs.  You will remember that in the first instance it is my
job to present the legislative programme to the National Assembly each year, which I have already
done.  Indeed I go back from time to time to take up a seat which is mine in the Assembly, but I fear
not a vote, to ensure that the Assembly are aware of legislative proposals which affect them and the
people of Wales.  Secondly, the role of negotiating the block grant, together with the Chancellor of the
Exchequer and the Chief Secretary is something we have now experienced and you can imagine that
that is a hugely important task for the people of Wales because there are no tax raising powers in the
National Assembly and clearly the budget is based upon the block grant.  Thirdly, there is the question
of the legislative process.  I believe that in the last two years we have seen and experienced quite a
dramatic change in how legislation for Wales is made, as compared to what had happened before
devolution.  That has gone remarkably smoothly.  The relationship between myself and the First
Minister and the Cabinet and indeed other members of the Assembly, including their committees, is
such that I cannot recall in the two years since this role started any disagreement of a major nature
between the Assembly and the Government on primary legislation which has come before us in the
House.  For instance, we had our own Wales Bill on the Children's Commission and the extension of
the Children's Commissioner's powers, but in addition to that there have been many Bills which have
had Welsh clauses attached to them;  those clauses are dealt with between my office, the National
Assembly and the appropriate Government department here to ensure that goes through smoothly.  In
addition to that there is a symbolic role to play and a very important role in ensuring that Wales is still
represented around that Cabinet table.  Beyond the symbolism there are the very real, active and
practical roles of membership of 22 Cabinet committees on which Don Touhig and myself sit.  Wales
is represented on all the major Cabinet committees which affect Welsh life by either myself or my
deputy.  We have become part of the constitutional settlement, we have become part of the political
landscape which is now very different in Wales.  I have enjoyed the job over two years.  It is a hugely
challenging, demanding and very exciting time for Welsh politics and for Welsh public life.  Inevitably
there have been teething troubles, as we knew there would be.  On balance, over the last two years
the settlement, which the people of Wales voted on some years ago, has now become very much a
feature of our public life and, not least because of the fact that the Assembly spend œ10,000 million a
year on our public services, the people in Wales are now realising that it is a huge part of their life as
well.

                            Adam Price
  3.  I see from the Foreword that you say that devolution is an ongoing and evolving partnership,
the crucial word being "evolving".  It seems a little bit at odds with an earlier statement by the Secretary
of State that devolution is an event and not a process.  Has he revised his opinion?
  (Mr Murphy) What is in the definition of words?  What matters to people in Wales is how their
lives are affected by the existence of the National Assembly and the constitutional settlement.  I am not
saying that as the years go by there will be changes in the way in which we are governed in Wales;  not
for one second am I saying that.  What I am saying is that we are very early on in the process, two
years since the Assembly started life and that it is the job of politicians in Wales and anybody in public
life to ensure that the Assembly are now accepted as part, a hugely important part, of Welsh life.  The
way that affects people is how it affects the services which are delivered to them:  the Health Service,
the schools, the transport, local government and all the other things the Assembly are responsible for. 
There is still a tremendous amount of work which can be done within the constitutional settlement which
the people of Wales voted on so little time ago which can affect their lives.  Whilst I am saying, "Who
knows that will happen in the future?", I still think it is early days for the Assembly.  The essential
element of what the Assembly and the Government must do between us is to ensure the effective
delivery of public services.  All of us who fought the last general election around this table, every single
one of us, irrespective of the party we represent, will have got the message that it is those services
which have to be delivered.  Those essential services in Wales are services which are delivered by the
National Assembly and not directly by us, although our role is to ensure, amongst other things, that we
pass the necessary legislation and we provide the finance for those services, which I believe we have
done.

                           Mr Williams
  4.  Could you expand upon your role of ensuring that the enabling clauses in the Act of Parliament
give the Assembly robust enough powers to deliver on such policy initiatives as the Learning Country?
  (Mr Murphy) That has happened on a very large number of occasions.  When I addressed the
National Assembly with the legislative programme I made it clear in my speech to them that I thought
that enabling clauses were very often a good way in which the Assembly themselves, through secondary
legislation, could determine the way they would go in the delivery of their services.  I welcome that
development and it is a development which we jointly and in partnership share in the sense that we
work out between ourselves how best to ensure that those enabling clauses can actually deliver.  There
are times of course when that might not be possible because of the way the law is structured, but
generally speaking enabling clauses are a good system which we could develop.

                           Julie Morgan
  5.  Have mechanisms been created to guarantee that the primary legislation made in Westminster
will enable the appropriate regulations to be followed in the National Assembly?  I understand there
have been some problems with GPs' contracts, where the primary legislation did not cover the fact that
GPs were with local health groups rather than with primary health trusts.  Doctors have been very
concerned about this and also there is concern about the forthcoming consultant and GP contracts. 
Can you tell us how you can ensure that there is no time lag and the problems of primary legislation not
fitting in neatly with the arrangements in Wales?
  (Mr Murphy) You will never guarantee absolutely that there will be a relationship on the time scales
which is exactly right.  There are several reasons for that:  perhaps the most important is that our
parliamentary year does not necessarily coincide with the Assembly year.  There will be gaps which will
be difficult to overcome.  I do take the point you make about the GPs.  It was early days.  Since then
there has been quite a lot of development in the way in which the relationship between Whitehall and
Cardiff, in terms of drawing up legislation, has changed quite dramatically.  Only yesterday we had a
Joint Ministerial Committee on health for example.  Clearly with the forthcoming NHS England and
Wales Bill and the forthcoming draft NHS Wales Bill, primary legislation is going to be a means by
which the Assembly can modernise the Health Service in Wales, albeit in a way the Assembly itself is
determining.  Nevertheless, it is now clearly known amongst Government departments here that liaison
with my office and with the Assembly is now critical in terms of ensuring that we avoid the sort of
problems you have just outlined.  It is a question of experience, of time, of getting used to different
systems and my job  and Helen Liddell's job and John Reid's - although he has other responsibilities -
is to get the British dimension aware of the importance of acknowledging the devolution settlements in
Scotland, Wales and Northern Ireland.  I believe that is working.
  6.  You think that with these new contracts coming up there will not be a time lag and it will happen
about the same time.
  (Mr Murphy) What I know is that the Department of Health and the Assembly are working very
closely together on those sorts of issues and indeed the issue you referred to has been discussed
between the Ministers from Cardiff and from here in London too.

                           Chris Ruane
  7.  Have you had any formal or informal requests to extend the powers of the National Assembly
to areas like the police or fire service?
  (Mr Murphy) No.  The formality of those requests would come through the normal channels.  They
have not come to me anyway, but they might have asked somebody else, though I am not aware of it. 
Those powers have not been requested.  What the Assembly are discussing is obviously a matter for
them but there have been no formal requests to me or indeed informal ones.

                            Dr Francis
  8.  Could you bring us up to date on the work of the Joint Ministerial Committee and its four
subject committees since we last met?
  (Mr Murphy) Yes. We had a JMC yesterday on Health.  A JMC was also held in June 2000. 
Since we last discussed it as a committee the main JMC met on 1 September 2000 and we are due for
a further meeting of the main JMC as well.
  9.  Could you comment on the word you have used in describing the relationship between the
Assembly and Parliament as a "partnership" and how that partnership has now developed?  Would you
say that it is an enthusiastic partnership on both sides, comfortable, uncomfortable?
  (Mr Murphy) The JMCs have considerably improved in the way that people get to know each
other.  The whole business of politics is personal relationships.  The fact that you meet your
counterparts from different parts of the United Kingdom, different Ministers of Health, for example,
who met yesterday, means that they come to know each other through JMCs and the shared
experience and best practice from those particular people and it does help in understanding the
problems in our own countries.  The fact that they bring people together to talk about common
experiences and shared values is hugely important.  The JMCs are not the only mechanism for
relationships between the National Assembly and this Government.  There are other ways in which it
can happen.  There can be bilaterals between the respective Minister here and the respective Minister
in Cardiff but also a bilateral between Ministers from Scotland, from Wales and indeed from Northern
Ireland as well.  I know that those relationships exist and all good luck to them for doing that.  In a
strange sort of way we probably now know more about the Scottish health system and the Northern
Ireland health system and the Welsh health system between us as a consequence of JMCs than before
devolution, even though the Government had direct responsibility for the respective territorial
departments for those particular services in Scotland, Wales and Northern Ireland, because people
come together in a very different way now.  That is something which is not generally known but which
is to be widely expected to continue and to be welcomed.

                             Mr Caton
  10.  Continuing on your relationship with other departments, why did the Wales Office decide  to
undertake the survey of departmental contacts which are summarised in Figure 4 on page 11?
  (Mr Murphy) Because each individual Government department has to try to find out some method
of measurement of effectiveness of the departments or offices which the Departmental Report covers. 
It is very difficult in a department such as mine, which does not have executive responsibility - we do
not run anything, we do not deal with planning applications or build roads or do all those things which
Secretaries of State in the Welsh Office used to do - and any sort of evaluation of what we do
inevitably has to be subjective.  Sometimes they cannot even evaluate lots of what I do, because a lot
of what I do is done behind closed doors in talking to people.  They do not know what I say and
sometimes I have no intention of telling them because at the end of the day it is the result that matters
in that there is a smooth working relationship at the end of that exercise between myself with the First
Minister, between the Ministers here and the Ministers there and the Assembly and the Government. 
Sometimes you have to do these things in private.  We cannot always evaluate in the established sense
of evaluation work what we do.  I was not terribly impressed by that particular system and I doubt we
shall have it again.
  11.  Can you tell us a little more about it?  Who was invited to participate and who responded?
  (Mr Murphy) I can give you the list:  the Cabinet Office, the Department for Education and
Employment, the Department of the Environment, as it then was, Transport and the Regions, Health,
Social Security, Trade, Foreign Office, Home Office, Treasury and yourselves as the Welsh Affairs
Committee.  Of course I exempt the Committee from the comments I have just made about the other
departments.  Not all responded;  not necessarily in any sense out of discourtesy, but they did not feel
there was a need to;  others did.  I thought it was too subjective in terms of what perhaps one official
or two officials might think about what might have happened about the devolution settlement in the
course of that year.  The responses were all reasonable;  none of them was bad;  some were better than
others.  I did not really think that it was the best way to evaluate it.  It is very difficult to know precisely
how to do it in a department like the Wales Office.
  12.  May I take you up on one of them?  On one of them, "presentation of the UK Government's
policies to the Assembly", you actually achieved a score of "less than satisfactory". 
  (Mr Murphy) Yes.
  13.  Why was that?
  (Mr Murphy) Because that was the view of one of the Government departments about that
particular issue.  That table was based on a small number of responses.
  14.  Were any of the respondents from the Assembly?  
  (Mr Murphy) No.
  15.  There was no expression of dissatisfaction from the Assembly.
  (Mr Murphy) No;  no.  This was on whether my office was presenting the United Kingdom
Government's policies to the Assembly in the best way as felt by another Government department.  It
could well be that my view of the presentation to the Assembly would have been rather different from
another Government department's.  My own view is that having done this particular job for two years
I probably know a little more about the Assembly than they do.
  16.  You have made clear that this system is not going to be used again.  Are you looking for
another way?
  (Mr Murphy) We shall have a look at ways in which we can deal with it.  It is difficult in that you
can easily evaluate performance when you are running things, but it is a very different thing  when it is
about performance of a political office.  In the same way when I was a Minister in Northern Ireland,
if you took any particular week when things were going badly then it would have been regarded as a
rotten performance.  On another occasion, because Northern Ireland is like that, it goes up and down,
there would have been a different view on it.  A political office, which is mine, is very different from an
executive office and that is why I thought this was a rather inadequate way of trying to evaluate.  If
anybody has some ideas on how to do it, I should be tickled pink.

                            Adam Price
  17.  On one of the other key objectives of the Wales Office, facilitation of communication between
the Assembly and Government departments, I notice that the rating there is only "satisfactory".  I take
the point about the subjectivity.  May I offer you another subjective view of the same role which is that
of the First Minister of the National Assembly who said last week in relation to the BSE in sheep fiasco
that part of the problem was the National Assembly were outside the Whitehall loop.  Do you think that
is a fair assessment of the current situation?
  (Mr Murphy) In terms of the agricultural side of it I know for instance that the Agriculture Minister,
Carwyn Jones, meets very regularly with Margaret Beckett and all the other Agriculture Ministers.  I
must say that I have had no complaints in the sense of being outside a loop.  At the end of the day we
are separate administrations:  we are a separate Government, the Assembly are a separate
administration governing Wales.  Ultimately there has to be some sort of difference because we are
separate bodies.  However, I certainly would not emphasise that too much.  In fact he said it was a
positive thing and not a negative one.  What happened last week, in terms of what we have all read,
would have been the subject of discussions between the territorial Ministers as well as the Secretary
of State for that department.  It is for that department to answer in detail on that rather than for me.

                            Mr Wiggin
  18.  You mentioned being outside the loop, but from your definition surely you would be the last
person to know, if you were outside the loop.  You said a few moments ago that you were being
accused of being outside the loop, but by default you would not know.  You are the loop effectively.
  (Mr Murphy) No, it was the Assembly who were saying that, not me.
  19.  They feel they are outside the loop because they are not getting the information they require
from you, surely.
  (Mr Murphy) You would have to ask them on that in terms of whether they feel they are.  My
experience over the last year or so is very much the opposite.  If indeed there is a problem, because
running the National Assembly is a huge business, then my advice to Ministers in the National Assembly
and the First Minister as well is that my door is always open for them to raise queries with me and they
do all the time.  Every week there are telephone calls, meetings and different types of communication,
which means that I have to take up matters with colleagues.  Sometimes they are not very important,
sometimes they are very important.  That conduit for improving relations between the two bodies is very
much open to the Assembly and I do not think there is a problem.  Obviously because of the size of
Government there could always be occasions when things will go wrong and then it is for us to try to
ensure that does not happen again.  I think that is improving from the early years.

                           Albert Owen
  20.  Moving on to aims and achievements, in the report at page 12 it talks about performance
against the target for correspondence replied to within 15 working days being low:  only 50 per cent. 
Why is this?
  (Mrs Jackson) As far as the correspondence is concerned, we are not in the least satisfied with
the performance we give.  When the Wales Office was first set up, we were not staffed up to
complement and we were still receiving a great number of letters which should actually have been for
the Assembly or other Government departments.  The staff were overwhelmed by that number of
letters.  Now the situation has settled down we have more staff and people have learned about the
devolution settlement.  Although we still have to transfer a fair number of the letters we get to other
departments or to the Assembly, more of the letters are ones which we need to answer.  The
proportion is easier for us and we are now improving our performance.  We are not satisfied with it,
but both the Secretary of State and Mr Touhig have taken considerable interest in our performance,
as indeed have I.  We have set up new systems.  We have set up a monitoring system.  We have
employed somebody specifically to oversee the progress of correspondence who will be starting work
in a couple of weeks.  At the moment we are meeting the 15-day target for correspondence in over
90 per cent of cases.  By the time we get to the next Departmental Report poor performance earlier
in the year will mean that our figure will still look bad.  We cannot be absolutely confident that we have
turned the corner, but we are determined to do so.  Over the last month our performance has been
considerably better.
  (Mr Murphy) I was very worried about the correspondence situation during the course of the last
year.  There is a very real difference between ourselves and other Government Departments which
needs to be explained; Alison has done that but I should like to emphasise it.  A lot of the
correspondence which my office deals with has to go back to Cardiff again because of correspondents
writing to us about matters which are for the National Assembly, on health, education, whatever it might
be, which is not for this Government to answer but for the Assembly.  Therefore either we transfer the
letter or we get information back from the Assembly to incorporate in the letter which I or Don Touhig
then send out.  Obviously that is going to take longer than when a Department is actually responsible
for a matter.  That is very different.  Clearly too we have to be very sensitive in how we answer letters
when another body is involved, in this case the National Assembly.  I still was not satisfied, so we are
now appointing someone specifically.  You will be aware that I am reluctant to appoint staff willy nilly,
but I believe that there is a very, very strong case for us to improve that correspondence, because of
the difficulties we have.  So someone will be starting at the beginning of November whose job it will
be specifically to monitor and to deal with the correspondence.  Every week now Don Touhig takes
a report on how correspondence has been handled.  He has actually followed the life of a letter -  not
completely as that would have meant going back to Cardiff, but so far as this side of it was concerned -
to see what happens within the system, which is rather different from other Government departments. 
I do hope that there will be a considerable improvement, as we all do, in terms of handling
correspondence in the weeks and months ahead.

                            Mr Wiggin
  21.  Did the number of letters you receive go up by 50 per cent due to devolution?  Obviously the
Department is not new.
  (Mrs Jackson) No, but before devolution the Department consisted of about 2,200 people;  after
devolution it went down initially to under 30 and is now under 50.  Of them only 18 do all the policy
advice for the Secretary of State, including providing drafts, draft letters, briefing him for Cabinet
committees, briefing him for this Committee.  There are now 18 people as opposed to about 2,000.
  (Mr Murphy) The other point worth making is on percentages,  When you receive a smaller
number of letters you only have to get a couple go wrong and all the percentage figures change.  If only
a couple go wrong when you have thousands of letters, then it hardly dents the final figure.

                           Mrs Williams
  22.  I am very much aware that members of the public are rather confused sometimes as to who
does what, whether it is a matter for the Wales Office, Westminster Government or whether it is a
matter for the National Assembly for Wales.  Have you carried out an analysis to find out whether some
of those letters which are wrongly sent to yourselves come from public bodies or whether they come
from individuals?
  (Mr Kilner) No, we have not.  We still get quite a large number of letters which have to be
forwarded, usually to the Assembly, sometimes to other Government departments.  We have not done
a precise analysis by the kind of correspondent.
  (Mr Murphy) You can bet your bottom dollar that a number of bodies in the United Kingdom or
in Wales are still unclear about the details of the devolution settlement.  All of you and I who went
around knocking on doors and talking to people at the general election were all encountering the same
lack of information or ignorance indeed on the part of people about the nature of the settlement.  It is
not surprising because it is a complicated one, but nevertheless it is going to take some time before
people are completely au fait with who does what.  It is getting there, but our experience at election
time will tell us that there is still quite a long way to go in terms of knowing who does what in the
settlement.
  23.  Would it be a worthwhile exercise to find out?  I really should be interested to know whether
there are public bodies within Wales which are addressing letters wrongly to your office rather than
Cardiff?
  (Mr Murphy) It is a worthwhile suggestion and we shall certainly take it up.  If there are public
bodies, particularly important public bodies, doing that we shall make sure they know the difference.

                           Albert Owen
  24.  In Figure 5 you talk about ad hoc requests for information by post at this time and you  say
they are replied to within 15 working days.  Are all such requests replied to within 15 working days,
e-mails, etcetera?
  (Mrs Jackson) E-mails certainly are.
  (Mr Kilner) It would count as a letter in whatever form it came in.  There is a slightly different target
for responding to requests for published information or unpublished information under freedom of
information.  Whether it is e-mailed or sent by traditional post a letter is a letter for that purpose.
  25.  Can you explain what would be classified as "correspondence" and "requests for information
by post"?
  (Mr Kilner) A request for information would be a simple request for one piece of information,
usually something which has been published.  I agree that there is a certain amount of flexibility  as to
when a piece of correspondence becomes a simple request for information.  Normally that is how we
would look at it.  A request for one piece of information such as the budget, such as the number of staff
and so on, would not be counted as a piece of correspondence but would have its own target.
  (Mrs Jackson) To elaborate on that, if we can respond to the letter simply by putting something
which is published in an envelope and returning it with a compliment slip, it is a request for information. 
If we have to do some research and write a letter, then it is correspondence.  There are grey areas.

                           Mr Williams
  26.  If you are not satisfied with your performance in dealing with correspondence, then you
certainly will not be satisfied with your performance in paying invoices which is below the British
Standard.  Is that because of your reliance upon the Assembly for certifying for payment?  If it is, what
are you going to do about it?
  (Mrs Jackson) Yes, it is because we are reliant on the Assembly.  We have spoken to the
Assembly about that and in the totality of the bills which the Assembly pay the Wales Office bills are
of course a tiny proportion.  So for all bills which the Assembly pay, including ours, they are well on
the targets but ours were getting a lower priority.  The Assembly have now agreed to bring ours to the
top of their priority list and for the past three or four months now we have been achieving rates of 98
and 99 per cent.  I should also like to say to the Committee that payment of the bills is dealt with
according to the number of bills rather than to the amounts.  In fact if you look at the amounts that the
Wales Office owed each month we were paying well over 90 per cent on time.  It is not good enough
but in the amounts we were paying most of it on time.
  (Mr Murphy) May I emphasise that?  It is a bit like the letters but more so in terms of the size of
the department.  A late payment of one pound counts the same as the late payment of one million
pounds.  By value the Wales Office paid 99.9 per cent or more of what it owed in each month of 2000-
2001.  One problematic bill can have more effect on the figures than a large department.  For example,
in September we had two more late bills than in August and performance fell by three per cent just
because of two bills which might be for very, very small amounts.  That is the problem of having a small
department and also because of the linkage which we inevitably have to have with the Assembly.

                             Mr Prisk
  27.  I appreciate what you say in terms of the invoices and the amounts being small, but as a former
small businessman myself, it may be a small amount to you as a department, but to a supplier it can be
the difference between life and death.  It is very important that all Government departments understand
that œ50, œ100, œ500, whatever it is, is really inconsequential to a large finance department, but it is not
to small businesses, whether they are in Wales or elsewhere.  May I have your assurance, may we as
a committee have your assurance, that this will be a top priority  for you in the next year, particularly
as the economy turns down?
  (Mr Murphy) Yes, is the answer to that.  If you were to look at the figures since the details of the
payment of invoices came out, there has been a definite improvement in those payments and I shall
continue to ensure that we monitor it very, very closely.  I take the point you make about the effect on
small businesses, which is so important to us, particularly in Wales.  It is largely as a consequence of
the size of the Office and the fact that even small bills can distort the percentage which would have no
effect on a large office.  I do take the general point you make.

                           Chris Ruane
  28.  When I was first put on this Committee I asked for an inquiry into the Denbighshire Council's
funding legacy - the Rhuddlan Borough debt, as it was known.  The Committee did that, they met in
my constituency and had an inquiry.  The Welsh Office response took six months;  I think there is a
two-month deadline.  The Committee accepted that in the first few months after devolution we could
expect to see some delay, but we expected improvements some two years after devolution.  The
response to our Wales in the World inquiry has taken five months and in fact we have only received
it today.  Other departments, including those which contributed such as the Foreign Office and the DTI,
even though there was an election, managed to get their responses in on time.  Can you explain why
there is continuing delay in the Government's response to this Committee's reports?
  (Mr Murphy) In the general sense I would again refer you to the size of the department.  Very often
it is the case that we have to go to the Assembly or other Government departments in order to get
information as we have no executive functions.  If we come to staffing later we can perhaps touch more
on this.  It is why I am looking at ways in which we can improve our output without putting the number
of staff up inordinately.  That is the general point.
  29.  You mentioned that staff numbers had gone up from fewer than 30 to fewer than 50.  Should
we as a committee be urging extra resources for you or do you have enough there for this matter of
management?
  (Mr Murphy) Is it appropriate for me to deal with the matter of staffing now?

                             Chairman
  30.  It is probably appropriate to deal with it now.
  (Mr Murphy) In that case I shall deal with the two issues.  On Wales in the World I have actually
written to the Chairman apologising for the lateness of the response.  It was caught up when the general
election was called and our mistaken belief, as it turned out, that the response would not be required
before the summer.  That was a mistake, but it was one which was not deliberately made, it was
something we genuinely thought.  I have since apologised to the Chairman of the Committee for the
lateness of that response and it will not happen again.  As to the question of staffing, the Committee has
discussed this on a number of occasions.  I am anxious not to put the number of staff in what is a tiny
department up inordinately unless there is a requirement so to do.  I told the House of Commons on
the floor of the House that I would look at every case individually.  Bearing in mind that the number of
people who work in the Wales Office is actually smaller than would occupy the chief executive's
department of a relatively small local authority, compared with other Government departments it is
extremely tiny.  Nevertheless we have to be conscious of public value for money.  I have decided in
fact, before I take the decision to add more stuff, to ask for an external review of the staffing in the
Wales Office so that they can advise us on whether or not we require extra staff.  So it is not a decision
I will be taking without having advice from outside.  I shall let the Committee know as soon as we have
the result of that report.

                           Chris Ruane
  31.  When will that report?
  (Mr Murphy) I think it will come in the next couple of weeks.
  (Mr Kilner) It will be a few months.  We have reached the stage of almost having agreed a remit. 
We are hoping to appoint people long before Christmas and it should be a fairly short review, we think. 
I would hope we would be in a position around the turn of the year to put forward some firm proposals.
  32.  Will they be taking evidence from this Committee?
  (Mr Murphy) I am not sure whether that is what is normally done, but I am more than happy to
listen to any points the Committee have to make on this.  If the Committee wishes, for example, when
you make your report as a consequence of today's proceedings, then that would weigh very heavily
with me.  We together, collectively, know the importance of the workings not just of my Office but as
representatives of the Welsh people here in Westminster and Whitehall and my aim is to ensure that we
have an efficient smooth-running department.  If I feel that we are insufficiently staffed in different areas
then we shall have to have extra staff.  I should also like to have a second opinion on that and that is
why I have asked people to have a look at this.  It will start in the next couple of weeks and be
completed not long after Christmas.
  33.  You said that you had apologised to the Chairman and we thank you for that.  You said that
the delay of five months would not happen again.  Can you give us an undertaking now that in future
the Wales Office will respond to our reports on time, that is within two months?
  (Mr Murphy) Yes.  I am delighted to give that assurance to the Committee.  You can home into
that next time I am in front of you.  
  34.  We did last time.
  (Mr Murphy) I am sure that Alison and John and others who are listening to the proceedings will
have taken that point.

                             Mr Prisk
  35.  It is clear that the numbers of staff have risen since 1 July 1999 something in the region of
35 per cent or thereabouts.  I am uncertain and wonder whether you could assist me.  Yesterday you
kindly answered my question to you with regard to the staffing figures and set out that the figure is 39
including casual employees.  It is in Hansard dated 22 October.  I was then somewhat confused when
I turned to your Departmental Report which in fact says that the total figure is 44.  Which is correct,
the Written Answer or the report?
  (Mr Murphy) The report indicates the structure of the entitlement of numbers of staff.  Although
we do not employ 44, we employ the 39 figure I gave you, there is an entitlement to 44 in terms of the
budget.  That is our departmental structure.  To give you the detail of that, from Table 2, we
provisionally show the equivalent of 44 staff years as being our complement throughout the period and
then the structure is 48.  Two of those posts have never been filled, four are currently vacant but we
hope to fill them shortly and four posts are occupied by people who work part time.
  (Mr Kilner) Because of vacancies and because we quite often have something of an interregnum
between one person leaving and another arriving the actual number of staff years in any period tends
to lag behind the number of posts and would lag behind the 44 we have indicated.  There is always a
slight gap between the actual complement we are talking about and the number of people which in any
period we have actually had in post and working.  That is why there is a slight gap.
  36.  I am not quite clear on that.  The number here is 39 and it specifically says in the notes
provided by your Office that figures include casual employees.  Yet in Table 2 on page 30 of your
report it says 39 permanent staff, four casuals, 44 in total.  I am unclear about this.  It would seem to
me that there is a clear discrepancy.
  (Mr Murphy) The fluctuation of what I am sure you would agree are exceedingly tiny numbers will
depend on whether people are part time, whether people are leaving.  You can imagine in a small
department that a handful of people, one or two people, three or four people, leaving will have a big
effect on those figures because they are so small in terms of the overall number.  I do want to correct
the impression I gave earlier on:  48 is the structure but they are not filled.  At the moment it is 44 staff
years but I am assuming that the 39 is the number of people employed at that moment.  I shall write to
the Committee on the details of that.

                            Mr Wiggin
  37.  How many of the employees are political advisers or spin doctors to use the trendy
expression?
  (Mr Murphy) No spin doctors;  two advisers.

                             Mr Caton
  38.  Timing of the report.  The report actually came out in March and that was before the general
election and you had a different Under Secretary of State at that time.  Since the general election there
have been quite huge changes in other departments of Government.  Has anything changed in the Wales
Office since the general election and since we received this report?
  (Mr Murphy) In what sense?
  39.  Have there been any organisational changes or, for instance, changes in the allocation of
ministerial responsibilities as between yourself and, at that time, David Hanson.  With the new Under
Secretary of State have you handed over Europe or finance or the environment and taken something
from him?
  (Mr Murphy) In a sense the responsibilities, although they have to be written down in the report,
are extremely fluid because there are only two of us.  When I am away doing something he has to do
the lot and vice-versa.  Because the number of Ministers is so small, generally speaking it would
perhaps be simpler to put that he deputises for me and leave it at that.  When it comes to things like
answering question to members, either on the floor of the House or written questions or attending
certain Cabinet committees, we have to identify various areas of activity which both Don Touhig and
I have to share.  Essentially, because of the nature of the office there is a fluidity and flexibility there
which is very important to maintain.  It is very different from a big Government department with lots of
Ministers, with lots of different things to run;  you are a Minister for this or that.  It does not work like
that because of the nature of the office.  For example, Don Touhig would have to spend quite a lot of
his time, as I do, talking to Assembly Ministers, members of the Assembly, in exactly the same way and
very often on the same issues, trying to resolve different areas we are looking at.  There is one possible
difference in that he would mostly now chair the coal health monitoring group in Cardiff when that is
held.  I do occasionally attend myself and chair it but because of his own background, like mine, coming
from a South Wales valley, we felt it appropriate that he chair that body, although occasionally I do so
myself.
  40.  May I  move on to the next chapter of your report and probe you a bit on the devolution
framework.  Under paragraph 3.6 you say, "... the new arrangements have not operated as smoothly
as they might".  Indeed in your Foreword you use similar words.  Then over the page you say, "... all
parties are committed to addressing weaknesses".  Could you enlarge upon that a little?  In what ways
were things not moving smoothly and in particular what weaknesses have you identified which
everybody is determined to address?
  (Mr Murphy) It is just a question of getting used to new systems as much as anything else.  That
was something on both sides of the equation really.  Here is a new Assembly in Cardiff, just set up,
brand new, new members of the Assembly elected, in a sense a different type of civil service which is
dealing with a totally new body.  So a body establishing itself and at the same time up here Government
departments which have been going for many, many years having to get used to this new set-up. 
Clearly in the first year or two there were lots of teething problems, of course there would be.  My job
is to ensure that I apply the medicine which takes away the pain.  A lot of that is behind the scenes, it
is done by telephone, it is done by meetings, it is done by sitting around the table working things out
together.  I really would not think it appropriate to go into the details of all those issues, but simply to
say to you that we have overcome those difficulties.  To give one example, the way in which we draft
legislation is much smoother than it was in the earlier period of my term of office because we have got
used to the way of doing things now;  also getting my Cabinet colleagues and other Ministers and
officials used to the concept.  It is no longer a Welsh Office, but it is a National Assembly and I believe
that is working.

                           Mrs Williams
  41.  May I take you to page 30, paragraph 5.10.2 People with Disabilities?  There is an interesting
sentence there which states, "The Wales Office does not currently employ any staff with disabilities". 
"People with disabilities" is not a new category.  You end the paragraph by saying, "The office has
worked closely with English Heritage in planning this work, and hopes to be able to make progress in
the near future".  "People with disabilities" is not a new category.  When can you hope to make any
progress?  Is it a fact that you do not currently employ staff with disabilities because Gwydyr House
is not friendly, certainly not friendly towards people with disabilities?
  (Mr Murphy) One of the problems is that Gwdyr House is very old and is a listed building.  There
are difficulties in making major alterations there, which is not the case in more up-to-date buildings.  The
other general point is that obviously it is a tiny department and it is very different from the large
departments which have the opportunity and scope to be able to employ people in a variety of different
ways.
  (Mrs Jackson) I do not believe that anyone with a disability has replied to our advertisements for
jobs.  We do now have disabled toilets inside Gwydyr House;  access for wheelchairs is still a problem,
but there is no bar to people who have different kinds of disabilities being employed in Gwydyr House. 
We also have some offices in the Assembly and there wheelchair access would be perfectly okay.  I
cannot remember, though I would need to check, whether we have ever turned down anyone with a
disability.  Our appointment procedures are on full equal opportunity terms.  We use the Assembly's
procedures for equal opportunities, on each appointment we have to fill in the monitoring form on
equality opportunities, so our appointment procedures are full equal opportunities.  We are a small
department and people have not applied.

                             Mr Caton
  42.  On the same page you refer to major refurbishment of Gwydyr House, but you did not include
in that refurbishment ensuring that there was wheelchair access and possibilities for wheelchairs to move
within the building.  Does that not send out the wrong message to disabled people within our
community?
  (Mr Kilner) Within the building there is not that problem.  Refurbishment included changes to the
toilets and the layout of the building;  inside the building there is no problem.
  43.  You do say in your report that wheelchair access to and within the building still needs to be
done and you were talking to English Heritage about it
  (Mr Kilner) There we are taking about immediate entry.  The point about disabled access into the
building is very much a case of trying to square the competing demands of being a listed building with
the Disability Discrimination Act.  We did think a few months ago that the answer was to provide
separate access at the rear of the building for wheelchairs.  Thinking has moved on slightly on the
Disability Discrimination Act and the view now is that the access provided for wheelchairs should be,
so far as possible, on the same side of the building, same entrance that we and everybody else uses and
so on.  That has left us again with the problem of reconciling the competing demands.  Our architects
have come up with the idea which involves having a lift.  The problem, as you know, is that there are
five or six stone steps to get into the door of Gwydyr House.  The idea that we have come up with now
is that we should have a lift to deal with those steps but that instead of rising from pavement level up
to the front door, it will descend from pavement level and there will be a separate entrance below the
existing front door.  We hope that comes much closer to meeting the spirit of the Disability
Discrimination Act than having a completely separate access at the rear of the building.  We are
currently talking to English Heritage and Westminster City Council to establish that it meets their
requirements from the listed building point of view.  If it does, then we shall go ahead as soon as
possible and implement that.
  44.  Did you consider delaying the refurbishment until you could tackle the access question?
  (Mr Kilner) My understanding is that we thought we were under way on tackling the access
question while the refurbishment was going on, so that it was not a question of rushing ahead with one
thing without the whole.

                           Chris Ruane
  45.  You mentioned that your uptake of people with disabilities through job advertisements was
zero.  Do you think you are advertising in the right place?  Are you advertising in specific magazines or
newspapers like Disability News or RNIB or RNID publications to attract people with disabilities?
  (Mrs Jackson) Because we are such a small department, we provide very few career opportunities
for staff.  You could not spend a satisfying career starting at the bottom of the Wales Office and
working up through it.  Therefore all our staff are on secondment either from the Assembly or from
other Government departments.  The Wales Office does not directly employ any staff.  Although we
pay salaries they are on secondment in the same way that much of Cabinet Office is staffed by
secondees.  That means that our only real option is to trawl for staff from the Assembly and our
concordat with the Assembly, which was discussed with the Assembly trade unions, is that we will
always trawl the Assembly first for secondees and if that does not yield us any then we go to other
Whitehall department.  That means that we are going inevitably into an internal civil service pool.  We
talk about this very often, about advertising for an external staff member, but the structure, the time it
would take to move on up, the possibilities for career development in an office of fewer than 50 people
within the civil services are just so small that it does not make sense for us to be staffed in any other
way.
  46.  So it looks as though your report is going to be the same next year then.
  (Mrs Jackson) Not necessarily.  There are plenty of disabled people in the Assembly, it is just a
question of whether they want to come to work for us.
  (Mr Murphy) There is a problem in terms of staffing generally, particularly staffing with disabled
people and others, that it  is a positive decision on the part of people to move from Cardiff to London,
to stay for a number of days or perhaps stay here for a number of months, whatever it might in the way
they have their accommodation, but that is very different from an ordinary Government department here
or the Assembly in Cardiff.  That is one of the reasons.  However, I shall have a look at the whole
question of disabilities and go through both access and employment because I am sure that is something
which exercises the Committee.

                           Mrs Williams
  47.  We are in danger of following one avenue on this.  We are not just talking about members of
staff.  Other people wish to visit Gwydyr House.  It is after all the Wales Office.  Members of
Parliament who have disabilities for instance have in the past failed to enter the Wales Office.  It  is all
very well for Mr Kilner to say that there are facilities within the building, but you cannot get into the
building.  The Committee have not just raised this matter in the year 2001.  We raised it two or three
years ago as a committee and still nothing has been done about it.  Mr Caton's question is very
pertinent:  why on earth was this not taken into consideration when a major refurbishment was being
planned?  Are you all suitably embarrassed?  It is not up to the people who wish to apply for jobs at
the Wales Office to consider themselves as somebody special.  They would probably think "Gwydyr
House?  No, I won't be able to get there if I am wheelchairbound" and then would not apply for jobs
within Gwydyr House.  That is patently obvious to me as a member of this Committee.
  (Mr Murphy) We shall have a look at that situation.  I take your point about the access but it is
important to hear what John said, that it was considered during the course of the recent refurbishment,
but because of the complications we have, being a listed building, it was not easy to deal with.  I shall
continue to look at it and see what can be done.  It is probably one of the most difficult buildings within
the Whitehall complex to be able to adapt in the way we should like to.  It was examined, it is still under
discussion and we shall continue looking at it and make sure the Committee are made aware of
developments.

                            Dr Francis
  48.  I am sure the Committee would welcome your very positive response to that.  May I also
suggest that in that review you consult with the Commissioner for Disability Rights in Wales,
Dr Fitzpatrick, who I am sure would come forward with some very useful proposals?
  (Mr Murphy) I know Dr Fitzpatrick and I shall certainly do so.

                           Julie Morgan
  49.  I want to express a bit of concern about the proposal to go down on a lift to a door which is
at a lower entry to Gwydyr House, if that is correct.  Really the thinking behind all the disability
discrimination legislation is to have something as normal as possible and where everybody else goes in. 
Is there no possible way of gaining access through the same door as everybody else?
  (Mr Kilner) Ideally that is what we should like.  We have given it to our architects who have
thought about it long and hard and are much closer than I am to knowing precisely what can and cannot
be accepted under the listed building arrangements.  Their view is that that is the nearest to a shared
access which would meet the conflicting requirements of disabled people and of the listed building.
  50.  It seems a bit worrying that disabled people have to go down to the basement to get in.
  (Mr Kilner) The detailed plans are on their way to Westminster City Council and we have to see
what they say.

                           Mrs Williams
  51.  May I go on to the next page, page 31, where you give us figures for the percentage of women
at each grade in the Wales Office?  May I make a suggestion for future reports?  It would be a good
idea to have at a glance the situation in your previous years' reports so that we can check these things. 
Also, to make it more user-friendly, could you tell us what SCS and so on means?  I do not know how
many members of the public in Wales or indeed in London will read this report but it would be more
user-friendly if you gave a bit more information rather than use civil service jargon.
  (Mr Murphy) It is a normal description of grades of civil service.
  (Mrs Jackson) There is no reason why we could not put a key.
  (Mr Murphy) It is fair to say that the Wales Office are doing extremely well so far as the
employment of women is concerned, starting at the top, right through all the different grades.  Lots of
my senior advisers who come from Cardiff are women and that is something in which we, together with
the Assembly, are leading other departments in the country.

                            Mr Wiggin
  52.  I am grateful for the opportunity to question the Secretary of State.  From what I have heard
today in his opening comments he does not actually run anything, he is not evaluated and sometimes he
does not even have the intention of telling people what he gets up to.  We have a department with only
18 people who can answer letters and a department which does not pay its bills.  So I do think you are
perhaps as brave as a dragon going into the years 2002-2003 with a flat budget of œ2.3 million.  I am
also quite curious as to how efficiency savings are going to absorb any effects of inflation.  Perhaps you
could comment.
  (Mr Murphy) If I might say so, the evaluation of a political department which is wholly new cannot
be done in quite the same way as other Government departments.  I have made that point throughout
the afternoon session.  The effectiveness of what we do cannot be measured in the same way because
lots of the problems we have to overcome are overcome before they ever reach the public domain, and
they never do.  Indeed were it to be the case that lots did reach the public domain, I should be failing
in my job completely.  One of the reasons for my existence is to ensure that we have smooth relations
between the Assembly and Westminister and Whitehall in these areas of devolution.  It is that protection
of the constitutional settlement which is so vital to us in Wales which is the main raison d'ˆtre for the
existence of the Wales Office and for my position at the Cabinet table.  We are very much part of the
United Kingdom, but we are also devolved.  The existence of my job is about ensuring that we have
a successful devolution project, but also that Wales is seen as very much part of the United Kingdom. 
That is what I am about.  As to the points you make regarding those figures ahead of us, the great bulk
of our expenditure inevitably is upon people and supporting people.  You cannot have a legislative
process which does not have people advising me on how primary legislation is to be drawn up or how
our details of policies ought to be dealt with.  That is done by people who are experts in their fields and
have to advise me and my deputy on these issues, but also other departments in the Assembly.  There
are two areas of expenditure which are in this report which are on their own, freestanding.  One of them
is the question of the payment of lords lieutenants which still resides with my office.  The other was the
big question of the North Wales child abuse inquiry which had to be dealt with by the Wales Office and
was a matter for considerable expenditure.  I propose to have a very close look at staffing levels with
the aid of outside experts and it will be within that area that we shall see whether there is a variation in
the expenditure of this office over the coming years.  My aim is to keep it as low as possible, consistent
with an effective operation in the office and ensuring that we do the job as well as we think we can. 
It is up to you and others to decide whether we do that job effectively.  It is also up to people in Wales
and in the Assembly to have their view too upon the effectiveness of the Wales Office.  I know that it
is a matter of common policy amongst political parties in Wales, certainly as there are primary legislative
powers here in Westminister for Wales, that the office continues.  The way in which we evaluate the
success or otherwise of the office can very often be a matter of subjective thinking, but most particularly
I cannot go into every detail of what I say or do or talk to the First Minister about, no more than
anybody else in Government can.  It comes down at the end of the day to whether in fact that
devolution settlement was smoothly worked out between ourselves and the Assembly.  I believe that
it has been successful:  it is for others to judge.
  53.  That does not really answer the question as to how you are going to achieve efficiency savings
on your flat budget of œ2.3 million.
  (Mr Murphy) It does.  I said that the bulk of the spending relates to people and their salaries.  I
cannot give an absolute answer to that until I have decided how we are going to spend money on
people as a consequence of that review which I have initiated.  Obviously we shall look at other savings
as well which are incidental to the employment of people, but they are always incidental because the
bulk of the budget is salaries.  Clearly we need to look at that and I do not know what the review will
come up with.  We shall have to wait and see.
  54.  That is what concerns me.  We are obviously worried about compromising the department's
performance against its targets.  If you are going to leave it in the hands of a review body, that is not
exactly a comforting statement for us.
  (Mr Murphy) I did not say that.  I said I would listen to what the review body advises me on, I will
talk to my colleagues, I will take cognizance of the views of this Committee which have been expressed
over the last few years and I shall see what is consistent with an efficient running of an office to serve
the people of Wales and to serve Members of Parliament and to serve the settlement.  Then I shall have
a look at the figures as well and come to a conclusion on that, always in the knowledge, I repeat, that
the cost of running my office equates to the cost of running a department of a medium-sized local
authority in England of Wales.

                             Mr Prisk
  55.  In the report by your Department for the year 2000 the voted Wales Office expenditure,
including the line related to specific running costs, was set at œ3 million per annum both for the last
financial year and the current financial year.  However, in this year's Departmental Report the figures
changed quite significantly;  you may argue possibly numerically small, but nevertheless as a proportion
large.  They have risen to œ3,362 million and in this financial year œ3,612 million.  What is the reason
for those increases?  What was not budgeted for last year which has suddenly arisen since?
  (Mr Kilner) The clearest figure is probably at Annex 3 and that shows that our running costs have
been fairly flat, but that over the three years up to 2001-2002, additional money was required for the
North Wales child abuse tribunal which ends this year.  That then creates a drop in the total figure for
the last two years of the period.  If you look at Annex 3, you will see the first line, pay bill and general
administrative expenditure, starting this year and running ahead is œ2,279 million each year.  So that
element is rather flatter than the total would suggest.
  56.  Indeed your report distinguishes between the voted Wales Office expenditure and what are
described as running costs.  Could you distinguish the difference between those two figures?  Why has
the total figure risen by 89 per cent over the planned period here and 79 per cent since the first year
we are starting from, which is July 1999, which is the comparable base line from which we begin?
  (Mr Kilner) The first year, 1999-2000 was a partial year because the office only came into being
on 1 July.  It may be that if you are taking that year as your base, you get a rather inflated comparison.
  57.  I accept that but you can see that there is a significant difference between last year's
anticipation when you were well under way and this year.  There is quite a leap in those two financial
years.
  (Mr Kilner) There was a spending review between the two reports, so that would have changed
the figures.  I go back to the point that some years do have in the North Wales child abuse tribunal
funding which tends to inflate them.
  58.  What additional functions did the review show the department that you had not budgeted for?
  (Mr Kilner) My understanding is that it did not add any major functions.
  59.  With the same functions the figures rose by œ362,000 and then œ612,000 in those two financial
years.
  (Mr Murphy) Yes.  We shall write to the Committee on the detail, but there are elements,
particularly with the child abuse tribunal and the lords lieutenants and others too, which change and
numbers of staff  and staff getting normal pay increases all have an effect as well.
  60.  The next two years in your report set out an intended increase of 60 per cent over the base
line year, that first year, in expenditure.  In the first year you were at œ1,911 million, but in the years
2002-2003 and indeed the subsequent year planned, it is running at over œ3,066 million.  That is a
60 per cent increase over where you were at the starting point.  There is concern here that there is a
lack of clarity in the staffing numbers.  The number 39 has been mentioned, also 44 and today in your
oral evidence 48.  What confidence can we as a committee have that there will not be a dissimilar
disparity in next year's annual report when it comes to spending?
  (Mr Kilner) I think you are looking at the top of Table 1 on page 26.  Is that correct?  Are those
the figures you are looking at?
  61.  Indeed.
  (Mr Kilner) The year 1999-2000 was a partial year.  If you then look at the following years, it is
the North Wales child abuse tribunal effect very largely which accounts for the total figure appearing
to rise and then falling back.
  (Mrs Jackson) As well as the first year only being a partial year - and John was not involved, so
he does not remember - it took us some time to recruit a number of staff, so our pay bill was actually
lower than budgeted for.  What you are getting for 1998-1999 and 1999-2000 is outturn as opposed
to plans.  So although our budget for 1999-2000 was higher - I am afraid I do not have the figures with
me, but I can find them - expenditure was in fact lower because we recruited the staffing numbers
gradually, so that the numbers built up gradually.  When we started on 1 July 1999 we had very few
staff which gradually built up towards March.  As far as the North Wales child abuse tribunal is
concerned, the responsibility for that was with the Welsh Office.  Because of the nature of the tribunal,
it was one of the functions which was not transferred to the Assembly, therefore the Wales Office has
had to meet the winding up expenditure of the tribunal.  However, we did not budget for that, we have
transferred into the Welsh Office budget as the expenditure has arisen in order to meet it, with the
agreement of the Assembly who had budgeted for it.  Because the Welsh Office had budgeted for it,
it was therefore the Assembly budget line, but so as not to take the whole budget from the Assembly,
we have transferred the money as we have needed it.  It is very much the staff numbers building up after
the first year, which makes it difficult to take that as a base line, and the North Wales child abuse
tribunal effect.  On the running costs, the pay bill and general administrative expenditure, we have a flat
line and the Committee can be confident that we will not spend above that line without the Secretary
of State having to go to Treasury for agreement and without this Committee knowing that a change has
been made.  At present we are working within the budget and indeed the Committee can be confident
that on present levels we shall not be overspending.
  62.  I do welcome that last point in the sense that if the department would  come back to us, if there
were an intended breach of that, that would be helpful.
  (Mrs Jackson) We shall certainly need to come back to Parliament, because it would be in the
estimates.
  63.  That is very welcome.  The reason for raising these questions is not simply the question,
important as it is, of the department's own financial controls, but because, as the Cabinet Office's
report states, one of the principal responsibilities of the Secretary of State ministerially is to operate the
financial mechanism of the constitutional settlement.  Clearly it is of concern to this Committee that if
the department's own figures are up and down there is a worry about the ability to control the overall
financial mechanisms.  That is a fundamental point which is certainly of concern to myself and other
members of the Committee.
  (Mr Murphy) Alison and John have answered on the detail but simply to repeat that because there
was a lead-in from the Welsh Office into what became the Wales Office and the Assembly, together
with the fact of external influences such as the North Wales child abuse tribunal and also that we are
comparing outturn with plan, which is rather different as we all know, explains the fluctuations there. 
It is important that we inform the Committee of any plan changes there might be.

                             Chairman
  64.  May I also refer to Table 1 and also refer you back to last year's report from your office?
  (Mr Murphy) That I do not have here.
  65.  We have a copy.  The planned spending by the National Assembly for Wales for 2000-2001
and 2001-2002 has risen since last year's Departmental Report by œ100 million for the first year and
about œ80 million for the second year.  Do you have an explanation for this?  It is in Table 1 and the
2000-2001 provision - it says Welsh Office, but I presume that is because it refers to previous years -
is œ7,791,726.  In last year's report it was œ7,691 million.  There is a difference of œ100 million there.
  (Mr Murphy) That was when the spending review came in.  It was the Chancellor of the
Exchequer's decision to increase spending on the National Assembly and the services which our people
use and that went into the block grant which in turn went into the health and education budgets.
  66.  So that was the extra money.
  (Mr Murphy) That was a very welcome increase.

                            Adam Price
  67.  On the issue of the Welsh block, on page 23 the report outlines the operation of the Barnett
formula.  I am advised that has been discussed extensively in previous submissions, but subsequent to
the publication of the report, the Chief Secretary of the Treasury announced to the House on 19 July,
that the Barnett formula was a convergence formula, that is that over time per capita expenditure,
identifiable expenditure, would converge between Wales, Scotland and Northern Ireland and levels of
spending in England.  It is referred to in the economics literature as the "Barnett squeeze".  The
implication is that the rate of increase on identifiable expenditure will therefore be less over time in
Wales, Scotland and Northern Ireland compared with England.  In the light of this, what discussions
have there been with the Treasury on the precise rate of convergence through the Barnett formula
between Wales and England?  Has the department commissioned research on alternative needs based
assessment which could provide a more generous settlement to Wales in the future?
  (Mr Murphy) Might provide;  I am not persuaded personally.  There probably would not be an
awful lot of difference so far as Wales is concerned.  The other point which has been discussed at this
Committee in the past is that the comparison between England and Wales might be a comparison which
in the future would not be a proper one, it would rather be a comparison between regions of England
which themselves are identified, particularly the North East of England, which has argued for a very long
time that they are disadvantaged compared with  Scotland, Wales and Northern Ireland because they
have their own problems within that region in terms of low pay and deprivation and so on.  So far as
your original point is concerned on convergence, that is not new at all because it was part of the original
Barnett formula that that was to happen.  As we go over the years, how the different budgets converge
is not something new and it was understood from the very beginning.  No, I have not initiated any
research on that.  The Assembly itself might be looking at those issues, I do not know, but the whole
question of the spending review for the next three years is now upon us and will be decided in the
months ahead.  We shall be looking very carefully at those decisions and how the block grant operates
in Wales.

                           Chris Ruane
  68.  I am looking at Annex 4, page 37, the Welsh total managed expenditure, 1997-98, which was
the last year of Conservative government.  It went from œ6.8 billion to œ9.7 billion now and up to
œ11.1 billion by 2003-2004.  That is a massive increase in the slice of the cake.  Is it comparable to
the UK slice of the cake?  Are you getting a good deal as far as Wales is concerned?  I know it is a
huge slice of the cake and I am sure colleagues on the Committee would recognise it as a huge slice of
the cake, bearing in mind that in the last year, 1997-98, there was a drop of œ60,000 in the Welsh
block grant which was set by the previous Conservative Government.
  (Mr Murphy) I wonder what you would expect me to say.  Expenditure in Wales has gone up
faster than expenditure in the United Kingdom.  The block grant has gone up because of the special
reasons all of us know, that Wales needs the extra money, particularly in terms of the Objective 1
funding which came to us, the structural funding which meant that the Barnett formula was actually
broken on that occasion because of the significance of that amount of money for Wales over the next
few years.  It is something like half a billion pounds over a period of three years extra over and above
the normal block which was a great boost to Wales and to the finances for public services in Wales.

                            Mr Wiggin
  69.  Will the Minister agree with me that on Objective 1 it is a great shame that in the 18 months
it has been going only two per cent has been spent?
  (Mr Murphy) Yes, but where I would not agree with you is that so far as the actual amount which
is committed is concerned, that has changed considerably.  It is a very different picture from the one
you paint in terms of spend.  The spending lags behind the commitment in terms of the payment of the
bills.  The Wales European funding office has been committing funds on schedule, possibly even ahead
of it.  For example, the target for committing funds by the end of December of this year is œ348 million
and the present forecast is that it will be œ395 million.  Far from lagging behind, the commitment on
Objective 1 is going forward.

                            Dr Francis
  70.  Will the Secretary of State compare those figures with the English regions which are receiving
Objective 1 funding and whether or not they are ahead or behind us?
  (Mr Murphy) I shall certainly look at that.  It is not quite so simple to compare because the
Objective 1 funding in Wales is directly under the National Assembly, one Government institution as
it were, compared with different departments doing different things and the regions.  I am having a look
at that for my own purposes too.
  71.  Anecdotal evidence indicates that England is behind us.
  (Mr Murphy) I do not know.  You have obviously come across that.   Anyway the committed
schemes are going ahead more quickly than we had anticipated when the scheme was drawn up.
  Chairman: We hope we are ahead of the English on that.

                           Julie Morgan
  72.  Going on to the Welsh language, on page 29 of your report you refer to your Welsh language
scheme.  Has the draft scheme been published yet?
  (Mr Murphy) No, but it is with the Welsh Language Board.
  73.  When do you anticipate that it will actually be published?
  (Mr Murphy) I am not quite sure how long the Welsh Language Board would normally take to
consider a scheme, but I would not have thought it would be all that long.  The scheme is in draft, it is
prepared, but obviously the system is that it then goes to the Welsh Language Board privately for their
comments upon what is in it before we would publish it, which is right and proper.  As soon as ever the
board has looked at it - and that is necessary;  I discuss contents of that scheme with the board - we
shall get that scheme out as quickly as possible but within the remits of what is right to do.
  74.  Do you anticipate that will be fairly well on track?
  (Mr Murphy) Soon, I hope, yes.

                           Mrs Williams
  75.  I should like to visit the Wales Office website with you now.  Would you like to tell us how
your website has developed since we last met?
  (Mr Murphy) It has developed very well.  I am told, though I know very little about websites and
hits, that nearly 11,000 people have hit in October and in terms of the Welsh version, about 885 people
have decided to ask us in one month what we have on our website in Welsh.
  76.  Do you consider it to be fully bilingual now?
  (Mr Murphy) Yes.
  (Mrs Jackson) There is also a bilingual website;  we have two parallel websites.
  77.  Could we explore this a little bit?  When you enter the site of the Wales Office you get an all-
English presentation.  There is not a single word in Welsh on that first page.  Do you agree  it would
be preferable to have a simple first page which is fully bilingual?  May I bring to the attention of the
Secretary of State the fact that Coleg Menai, which is in my constituency, is the winner of the best
college website in Wales 2001?  May I ask the Clerk to pass copies of this around?  It is a very simple
first page, it is fully bilingual and I would ask the Secretary of State for his comments as to whether he
would in the overhaul consider having a fully bilingual first page?
  (Mr Murphy) I am advised on two issues there:  one is that there is an all-Welsh website, so when
you hit that it is all in Welsh anyway.  I also understand that the National Assembly bilingual one would
be as our Wales Office one is as well.  We shall certainly have a look at it and see what is necessary. 
In terms of someone who wants to read the website in Welsh, it is there for them to read it entirely in
Welsh.
  78.  
Will the Secretary of State accept that you need a very welcoming bilingual message on your
first page -  that is the point I am making -  such as the one presented by Coleg Menai in my
constituency?  For instance, if you look at the Welsh site - I have a copy here which I printed last night,
so it is up to date - it says that information about Government services in Wales and the proceedings
of the National Assembly for Wales are at www.wales.gov.uk.  Would you consider
www.cymru.gov.uk to be apt?
  (Mr Murphy) We have to be in line with what the Assembly do.  We shall certainly have a look
at the points you make.  I shall take them back, have a look at the site again and see what it looks like. 
Generally speaking if we are consistent with what the Assembly are doing on their website and also
because we have a specific Welsh language website, I shall take back what you have said and take a
look at that and the practicalities of that.
  79.  I have done my homework and I have a copy of the National Assembly for Wales page as
well.  It is quite clear what their policy is.  All I am asking is that the Wales Office make that first page
a welcoming bilingual page such as the one Coleg Menai is presenting.  You might win a prize, like
Coleg Menai, at the end of the day.
  (Mr Murphy) I shall certainly take that back and have a look at it.

                           Albert Owen
  80.  I know my colleague has done her homework, but she forgot to say that Coleg Menai is also
in my constituency.
  (Mr Murphy) Yes.  I have to tell the Committee that my age is wrong in the website as well, so I
am going to make sure that is altered.  It will be at the same level for the next three years.

                           Mrs Williams
  81.  Would you welcome comments from members of this Committee as to how you can improve
your website?
  (Mr Murphy) Of course I would;  I always welcome comments from this Committee.
  Mrs Williams: I shall make sure that is done.

                             Chairman
  82.  I should like to wind up now.  You are probably aware that we have three inquiries planned
at the moment:  broadband cabling, Objective 1 and transport in Wales.  May we take them
individually?  On broadband cabling, what discussions have you been involved in with the Assembly
and with other UK departments about the provision of such high-speed internet and telephone services
in rural Wales?
  (Mr Murphy) I am conscious of it because when I visited the different economic fora up and down
Wales, particularly in Mid and North Wales, I have been made absolutely aware of the need for
improvements in this direction.  I am very conscious of that, but of course it is not a function of the
Wales Office, it is a function of the DTI.  I would not have any direct say in that.  What I would say to
the Committee is that I think it is important from a Welsh point of view for the Committee to have a
look at that particular area, because it is so important.  It is one where we work in partnership with the
National Assembly and if there is anything I can do to facilitate the Committee's inquiries in terms of
what the DTI and the Assembly are both going to do, then I am more than happy to do that.  I have
no direct responsibility for it.
  83.  It is becoming obvious, though we have not taken much evidence we did have a seminar on
the issue, that it is a very, very important thing for our future development in rural Wales.  On
Objective 1, this is again probably something you do not have direct influence on, but you do have a
role in securing the necessary UK Government matched funding for Objective 1 money.  What is your
ongoing involvement, if any, with the use of Objective 1 money in Wales?
  (Mr Murphy) I have no executive role in that because my role was in obtaining the money in the
first place - or rather in the second place because the money was originally obtained by the Chancellor
of the Exchequer and the Prime Minister in Berlin.  When it came to Wales, my job was to negotiate
that block grant in the spending review.  I think we got a good deal on that.  From then on it was a
question of my having meetings on a regular basis with the First Minister and other relevant Ministers,
as I do, and to talk generally about matters which affect our constituents collectively.  You will know
as Members of Parliament that very often there are areas  which people approach you on which are
strictly speaking matters for the Assembly, but you have an interest in them because clearly you
represent the same people.  To that extent I am very interested in the progress of the Objective 1
programme in Wales.  I have just outlined to you how I think it is going very well.  It is not for me to
comment to the Committee upon the progress of Objective 1 structural funding in Wales.  Having been
devolved to the Assembly it is for the National Assembly to do that and its Ministers.  It is very
important to see that distinction.

                            Adam Price
  84.  On the issue of Objective 1 funding status, there are two advantages which spring from
Objective 1 status:  one is the structural funds, the pot of money;  the other one, used very, very
extensively by the Republic of Ireland, is the derogations which allow governments to introduce  so-
called operating aids, fiscal variations, tax advantages, to businesses.  The National Assembly
administration has been asking quite vociferously for the granting of powers under that derogation for
quite some considerable time.  I understand that the report has been submitted to the Treasury, though
I do not think it has been published.  Could you say a little bit about progress on that and when you
realistically could expect an answer from the Treasury on the issue of operating aids for Welsh
businesses and whether you think that answer will be a flat no.
  (Mr Murphy) I cannot comment on what the Chancellor of the Exchequer has in mind in terms of
his pre-budget review and his budget, that is a matter for him.  What I can say is that during the course
of the last year several changes were made which were very useful in terms of the Welsh economy. 
I shall write to the Committee on some of those details;  there was a number of them.  In terms of the
present situation, you are quite right to say that the National Assembly is considering various options
which they might think would be beneficial for Wales and that will then be sent to the Chancellor of the
Exchequer for his consideration.  I shall be copied into that correspondence and shall be able to discuss
these matters when the time arises.  I cannot go into details with the Committee on something I do not
have responsibility for.
  85.  May I be clear?  A report outlining the National Assembly's preferred options has already
been submitted to the Treasury has it not?
  (Mr Murphy) Yes, there has been correspondence between the National Assembly and the
Government regarding what they would consider to be important operating aids.
  86.  Has the Treasury already provided a response?
  (Mr Murphy) This happens every year.  It is normal practice for Government departments and
administrations in the devolved administrations, if they have any suggestions, to forward them to the
Treasury and when the Chancellor makes his decisions on these matters he makes them at the
appropriate time.  There is an ongoing process on that.  So far as the Assembly is concerned it is
through the committee system as much as it is through the members of the Cabinet.
  87.  If that continues to be an ongoing process, we might actually reach the end of the Objective 1
period before we have a decision from the Treasury.
  (Mr Murphy) It is not just about Objective 1.  The arguments behind operating aids were not
exclusively linked to Objective 2, although it was a point.  The arguments which were used in the
Assembly itself would have gone wider than that, but obviously since two thirds of Wales is Objective 1
structurally funded, it will be of particular significance to Wales.
  88.  May there be a response during this year?
  (Mr Murphy) If the Assembly writes to the Treasury, to the Government, then we have to respond
to that.

                           Mr Williams
  89.  It will never be able to be explained to me satisfactorily why certain parts of rural Mid Wales
were left out of the Objective 1 area.  Given the fact that those areas have now been very badly hit by
foot and mouth and it has had a huge effect on the local economy through agriculture and tourism and
every other strand of local economy, I hope the Secretary of State will use his best endeavours to
ensure that those areas as well get the necessary resources so that they can have a recovery.  At the
moment they are suffering a double whammy in not being in an Objective 1 area and having had the full
effects of foot and mouth.
  (Mr Murphy) Everybody is very conscious of the problems people are facing in Mid Wales at the
moment.  You and I were together not so very long ago in Brecon to discuss these matters and I fully
appreciate the points you make.

                             Chairman
  90.  Transport in Wales.  The overlapping responsibilities of the Government and the National
Assembly for transport in Wales make it a very complicated area.  We have already found that out with
our preliminary inquiries.  Are there any transport issues you have taken a particularly close interest in
over the past few months?
  (Mr Murphy) All of us have been conscious of the difficulties we face, for example on our railways,
in Wales.  Every Member of Parliament representing a Welsh constituency travels by train and each
has his own story to tell.  We all have our personal recollections.  On a more general and governmental
level, it is a shared responsibility in terms of air transport, railways and  what the Assembly have
responsibility for.  It will be a rather complicated inquiry, I suspect, because it is one of these areas
where ownership of these matters is shared between Westminster and Cardiff.  To come to the point
you were making earlier, when it comes to Mr and Mrs Jones from our constituencies, they do not
make those subtle distinctions.  All they want is a better transport system.  I wish the Committee well
in its deliberations in trying to ensure that there is good co-operation, as I am sure there is, between the
Assembly and the Government on trying to improve transport for the people of Wales.
  Chairman: We are hoping to fill in the gaps between the report the Assembly have already
produced in draft form and our own responsibilities.

                           Mrs Williams
  91.  We discussed staffing levels earlier.  I am just wondering whether in your investigation into how
you want to develop your staffing levels you could consider that there is a case and some merit in the
Wales Office having its own in-house translation team?  Do you still rely on the Assembly for translation
services?  Are you now happy with the level of that translation service which you are getting from the
Assembly?  We visited this the last time we met and I should like you to comment on those three
questions.
  (Mr Murphy) I shall ask Alison to give you a read-out about the actual use of translators in the
Assembly and how we get material translated from there.  If we had to have our own in-house
translation facility, that would be very expensive and we would have to consider the pros and cons of
that when the situation arose.  At the moment we rely upon the Assembly for our translation services.
  (Mrs Jackson) We rely on the Assembly for the normal day-to-day translations.  For example, our
commitment is that when we receive a letter in Welsh we reply to it in Welsh and for that element of
translation we have absolutely no difficulty with the service we get from the Assembly.  They are very
pressed with the work they do for the Assembly, which has to be their first priority.  For example, for
our website, we did have to go to external translators.  For big one-off things like that we have started
to use external translators on a contract basis, but for the urgent stuff we are still relying on the
Assembly.  We do not have enough work to occupy a single translator full time and this work tends to
come in bursts;  suddenly there will be a lot and then there will be nothing for a considerable time.  Our
access to the Assembly for the urgent day-to-day stuff is very adequate;  big things can be predicted
and therefore it is easier to get them out to a translation firm and to let the contract externally.
  92.  You are saying you are happy with the level of service now provided by the Assembly to
yourselves?
  (Mrs Jackson) We are very happy with the level of service which the Assembly provide on day-to-
day issues under the service level agreement.  We have discussed with them our need for such things
as the translation of the website.  It was the Assembly who translated the Departmental Report for
example.  When we are asking for something additional, an additional project, we are happy to go to
external translators when the Assembly tell us that they cannot provide the service.  What we have
never found is that we have never been able to blame the Assembly translators for late correspondence. 
They are always extremely good about that kind of thing.
  93.  We discussed earlier late responses and your record in the Wales Office on that topic.  Could
you tell us whether perhaps the reason, if you received Welsh letters from constituents, for the lateness
of your answer to some of this correspondence, is because you have to pass it on to the National
Assembly, they translate it and perhaps translate your responses?  That could perhaps be a reason for
some of these delays.
  (Mrs Jackson) No, that is not a reason for the delays.  There is absolutely no way that we would
blame the Assembly translation service on that kind of thing.  They give us an excellent service.  As it
happens, at the moment we have several fluent Welsh speakers working in Gwydyr House, so although
letters have to be translated formally, we know what a letter is about as soon as it arrives and can
already start the research.
  Chairman: Thank you, Secretary of State, Mrs Jackson and Mr Kilner, for a very useful session. 
Order, order.