§ Mr. Deputy Speaker
With this, we may take the following amendments: No. 3, in page 4, leave out lines 1 to 8.
No. 4, in page 4 leave out lines 9 to 17.
§ Mr. Golding
A vote will be required on amendment No. 54. It is a relief to turn back to the Bill and the conditions of employment of Post Office engineers. I speak for the POEU, of which I am a sponsored Member and assistant secretary. We are totally against the creation of joint ventures. That is why the amendments would delete subsections (3)(d) and (3)(g). The amendments would ensure that the Post Office would not have the authority to enter into joint ventures.
I am concerned about the security of employment of Post Office engineers. Since 1919, job security for those engineers has been an essential part of their conditions of service. Many engineers have, in their view, accepted worse pay and conditions because of the security of employment that they enjoy. To a great extent that security has been based on the fact that they have been able to take advantage of the development and expansion of telecommunications and the Post Office's monoply in telecommunications.
Post Office engineers who have enjoyed that security of employment see it as threatened by the Bill. I have said previously that they are already threatened by technological change, and they also feel threatened by changes in methods of work. Over the years, the POEU has preached and practised productivity bargaining. The Post Office and the community have benefited from that attitude, but it has been advocated only because of the background of security of employment.
Like me, the Post Office engineers for whom I speak see that any move towards joint ventures by BT must threaten their jobs. They see the provision for joint 373 ventures as a device which the government have latched on to in order to solve some of the problems of providing sufficient investment for BT.
The argument in the forefront of Ministers' minds is that joint ventures can provide much-needed cash to enable BT to expand and may provide marketing experience. I must admit that BT's approach to the sale and marketing of its services has been lacking.
It is not worth while to threaten the security of employment of Post Office engineers for these reasons. It is wrong for the Government to seek to solve the problem of the cash limits imposed upon British Telecom by resort to joint ventures. Post Office and British Telecom investment should be taken from the public sector borrowing requirement debt, and there should be complete freedom for British Telecom to borrow and invest for itself. It will be harmful to British Telecom to have to go into joint ventures to raise the finance to expand. This argument is partly irrelevant because investment capital in British Telecom is needed to expand the network of which it keeps the monopoly.
When British Telecom develops activities which can be profitable it is wrong that it should be forced to share the profit with private industry just because it is denied the wherewithal to develop those activities. Private industry is to be allowed to take advantage of vast public investment, and the skill of Post Office engineers, particularly in research and development. We know that private enterprise will take part in a joint venture only if it looks like being successful. The Government are saying that they will make it possible for private industry to back the winners found by British Telecom. It is unlikely that British Telecom will find backers for the losers and it will be forced, through the cash limits, to go into joint ventures to finance its own developments.
This is an important subject for all Post Office engineers, and I hope that the Government will think again about their proposals for financing British Telecom. Ministers must do everything possible to remove job insecurity. In the magnificent, successful lobby in Central Hall the point most emphasised by rank and file members of Post Office unions was the threat to job security. The more the Government do to remove that insecurity, the better it will be.
I strongly believe that we are far more likely to develop resources fully if they are under public ownership that if they are partly in private enterprise and partly in public corporations. Between the two some will get lost. I see that Government Members have arrived from the Smoking Room. I hope that they will take the debate as seriously as people who earn their living in British Telecom and the Post Office.
§ It being Ten O'clock, the debate stood adjourned.
§ Question again proposed, That the amendment be made.
§ Mr. MacKenzie
I can think of no good reason why British Telecommunications would seek these powers. I cannot think of any time when British 374 Telecommunications would voluntarily use them. It would be helpful if the Minister could give us a few concrete examples of the possibilities. We should like to know whether he thinks that the joint ventures will come into being and whether he has been told by the chairman and members of the board, which is yet to be set up, that they would like them to. I fear that if the Minister is not able to give a few concrete examples the suspicions of telecommunications workers, which were voiced by many who came to London today, will remain.
Having heard the Minister and the Secretary of State on numerous occasions, I suspect that the Government intend to encourage joint ventures. According to some of the public utterances by Ministers, the Government's intention is to force the British Telecommunications Corporation to set up joint ventures. Despite pledges that there shall be little inerference with nationalised industries and that they should be allowed to take commercial judgements, the Government might choose to force the scheme on British Telecommunications. They could do that by setting stingy cash limits for the corporation that will require it to find the money elsewhere. Ministers have said that the finance required for capital expenditure must be raised in such a way that little of it will count against the PSBR.
I am thrown into confusion. I understand that there can be no joint ventures in the basic network. Clause 4 precludes that. There is a contradiction.
During discussion in Committee the Minister said that there was a need for further investment in British Telecommunications. We support him 100 per cent. in that. We believe that there should be a massive investment in British Telecommunications. Much of that investment should be used to modernise and upgrade the basic network. I do not think that the setting up of joint ventures can help us to improve, modernise or upgrade the existing basic network. That is one of our fears.
The other fear, as my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) said, is that a great many people who have worked for British Telecom and have done so very loyally for many years feel that this is some sort of halfway house towards hiving off the particularly profitable parts of the present operation.
§ Mr. MacKenzie
Does the hon. Gentleman want to intervene? If he wants to make a contribution, we shall listen to him with great care. I know that he will bring his great expertise to bear on our deliberations.
§ Mr. Biggs-Davison
I am grateful to the right hon. Gentleman for giving way. I am surprised, when he is speaking so constructively about this matter, that he should close his mind completely to any change or experimentation. I should have thought that we ought to give ventures of this kind a chance.
§ Mr. MacKenzie
We are all for experimentation and change in British Telecommunications. I commend to the hon. Gentleman the annual report of British Telecommunications. If he reads it, he will find that it is a highly successful and innovative body. Indeed, the Minister of State will no doubt tell him, if he chooses to ask him, that on Second Reading he personally gave great praise to the innovation within British 375 Telecommunications. It is something, I think, of which we are all very proud, and we have no less an authority than the Minister of State for saying so.
I was on the point of saying that a great many people fear that this is a halfway house to further hiving off. We shall come to that later in our deliberations.
British Telecommunications' activities and successes are largely due to the fact that over many years people of talent and considerable skill have given great loyalty to the Post Office telecommunications branch. They have worked very hard at their jobs. In research and development they have produced many new ideas, and I think that these people are entitled to be assured of their future. This has caused them, of course, a great deal of uncertainty.
We are all conscious of the fact that over many years a great deal of taxpayers' money has gone into the Post Office. We have been amply rewarded, since the telecommunications side has always shown a considerable profit.
We have to concern ourselves with two things; the future of the staff, and what investment we are to see in the future. I cannot see that joint ventures are eagerly sought by British Telecommunications. I cannot see that they will necessarily improve the lot of consumers in these important projects, and I cannot see that they will in any way improve the position of the staff. I can only fear that this will mean a reduction in the revenue of the British Telecommunications Corporation, and that can only mean that at the end of the day we shall all have to pay a great deal more for the services already provided.
I hope that the Minister can reassure us on some of the points which we have made.
§ Mr. Michael Marshall
This has been an interesting rerun of some of the arguments that we had in Standing Committee. I listened tonight with a certain amount of surprise to the latest twist in the story because there seems to be a certain shift of ground on these matters. I thought in Standing Committee that we had seen from the Opposition a certain amount of constructive thinking about ways to provide additional opportunities for British Telecommunications, and one of those was the matter of joint ventures.
The hon. Member for Newcastle-under-Lyme (Mr. Golding) spent a good deal of time talking about security of employment, and it seemed to me that the thoroughly inward-looking and backward view that he was arguing, assisted by the right hon. Member for Rutherglen (Mr. MacKenzie), was one that would reduce security of employment because the kind of joint ventures that we have in mind would give greater scope to British Telecommunications and would allow it to explore new markets. When the hon. Gentleman, with his usual sense of balance, developed some of the more relevant arguments he made our case. There is really no need for 376 me to reply. The hon. Gentleman said that British Telecommunications wants to get additional marketing expertise. He accepted the argument about additional capital although he argued that he would like to see that secured outside the public sector borrowing requirement. He observed that we are in an era of high technological change. He argued that those who will come in from the private sector will be interested only in successful companies. Why should successful companies not be set up by BT and the private sector?
The right hon. Member for Rutherglen asked for concrete examples. He knows that BT is not yet free to move in these areas because until the Bill is enacted the provisions that we are discussing do not take force. In the meantime, the normal commercial processes will continue. The right hon. Gentleman asked for examples, but the proposed practice is already being followed. He will be aware of the work that has gone on with system X. He will know about the BTS organisation, involving the four largest private sector manufacturers in the country, and BT selling system X around the world. He will know about Prestel, which is a joint venture between BT and the private sector, which is now being given further direct assistance in the United States through a joint venture which will be supported by my hon. Friend the Minister for Industry and Information Technology when he visits the United States shortly. My hon. Friend will attend important occasions at which the promotion of Prestel may be pursued. This is the type of joint venture that we have in mind.
On Second Reading my right hon. Friend the Secretary of State made it plain what we have in mind. He said:We need a strong and successful British Telecommunications not only competing with the private sector but co-operating with it in joint ventures … We hope to see BT co-operating with the private sector in, for example, providing auxiliary services which depend on the telecommunications network and attracting private capital into subsidiaries set up to market subscribers' apparatus. Provided that BT is not in control of any partnership … financing can be conducted outside the PSBR and … in addition to the … investment programme of which I have spoken."—[Official Report, 2 December 1980; Vol 995, c. 208.]We are speaking of opportunities to find additional capital, opportunities to move into high technology and opportunities to tap marketing skills that are outside BT. I have quoted some specific examples, but the right hon. Member for Rutherglen will appreciate that because of commercial confidentiality I cannot refer to current negotiations. He would not expect me to do so. There is no reason why there should not be considerable scope in these areas. That will provide additional employment for those who work in BT and outside. We shall return to the issue of wider financing outside the PSBR.
I urge Labour Members to think again. It appears that what they are urging is backward and not in the best interests of BT.
§ Question put and negatived.