§ Not amended (in the Standing Committee) considered.
§ Bill reported, without amendment.
§ Motion made, and Question proposed, That the Bill be now read the Third time.—[Mr. Raison.]12.45 am
§ Mr. Stuart Holland (Vauxhall)
The waiving of interest in international development is not something that we wish to oppose. provided the case is right, that it is merited in development terms and that it is subject to the scrutiny and approval of the House. The question is whether the House will have such scrutiny and powers of approval, since clause 1(b) deems that section 17(10) of the Crown Agencies Act 1979 shall cease to have effect. Perhaps the Minister could elaborate on the case for that. On what grounds is it unduly burdensome on the House that it should not have the power of section 17(10) of the original Act? After all, in the Second Reading Committee on 18 December the Minister said that he could notpredict to what extent the power will need to be used."—[Official Report, Second Reading Committee, 18 December 1985; c. 4.]On those grounds, why can the right hon. Gentleman be so sure that no order should be laid before the House and approved by resolution of the House?
We all know the background to the financial difficulties of the Crown Agents—the property speculation of the early 1970s, followed by a cleaning of the stables, only to he followed by the loss of the Brunei contract and the knock-on effect on development financing of other projects which that has entailed. Why is there to be no reference to the House in the future? It is not as if we still have a Select Committee on Development which could supplement the Floor of the House by giving such scrutiny as will be denied by the deletion of section 17(10).
In the Second Reading Committee the Minister failed in his winding-up speech to answer one of the three main points that I put to him on the question of finance. It is relevant to the question of waiving interest. My question was whether there would be any obligation on the Crown Agents to become a licensed deposit taker. We would be glad to know the Government's views on that matter.
I also raised with the Minister the question whether the 50:50 joint ventures with Lloyd's were a liability to the agents. At that time, 18 December, he said that they were not. Is he so satisfied today?
I congratulate the Minister on his decision to retain the pensions division of the Crown Agents within the Overseas Development Administration. We were pleased that he could see delegations on that matter before the decision, and glad that the decision was made. May we have an assurance from him tonight that the provision in the Bill for waiving interest is designed to serve the continuing work of the agents as a public body, rather than a backdoor to privatisation, through reducing costs and raising returns to the agents over and above what they would otherwise be? That is something on which we should have an answer now.
§ Mr. A. J. Beith (Berwick-upon-Tweed)
I welcome the decision affecting the staff at the pensions division at East Kilbride, to which the hon. Member for Vauxhall (Mr. Holland) referred. This is an issue that has attracted much 470 attention during the long period during which the Bill has been before the House. It has been before us since December 1985, and one would imagine that it has been the subject of the most intensive and lengthy Committee consideration. Those who have followed it closely will know, however, that its consideration has been brief and widely spaced.
As I understand the Government's intentions, the Bill is a holding operation. Its function is to enable the work of the Crown Agents to continue and some of their difficulties to be met in a period during which the Government intend to proceed to make the Crown Agents a privatised concern. This was hinted at by the hon. Member for Vauxhall, when he said that the Government might have changed their mind. As I understand it, it is still the Government's intention to proceed to privatisation. The Bill will simply hold the fort until then. The stage will be reached when its provisions are no longer relevant and the Crown Agents will become a privatised concern, thereby losing a status that is necessary for their relationship with Commonwealth Governments, many of whom are accustomed to working through Government agencies for much development work and who expect an organisation such as the Crown Agents to have Government status.
Confidence in the Crown Agents has inevitably been shaken by the experiences of recent years. I am not. satisfied that turning the body into a private corporation will assist the rebuilding of confidence and help to enable it to play as full a part as it can undertake in development work in which the Government are engaged and in the activities of other Commonwealth Governments.
On behalf of the alliance, I welcome the Bill as far as it goes. I welcome the opportunity that it gives the Secretary of State to continue to assist the Crown Agents to enable them to provide the useful function which was impaired for a number of years but which they can still undertake in the work of Commonwealth countries.
§ The Minister for Overseas Development (Mr. Timothy Raison)
The Bill was given a Second Reading and considered in Committee without opposition, although there was a certain amount of discussion. I am happy that Third Reading has been reached. I have been asked one or two questions, to which I shall respond, but I do not think that the House wishes to be detained for very long at this hour.
It is our intention that the Crown Agents should continue to move towards privatisation. We hope to see the organisation strengthened and we believe that it is becoming a stronger body under the excellent leadership that it has received from the chairman and those who are responsible for its management. As I have said, I hope that this will lead to privatisation.
I am grateful for the support that has been given to the Government's decision on the pensions division, which has been widely accepted. I believe that the House was in sympathy with what was done.
I have been asked one or two specific questions. First, the hon. Member for Vauxhall (Mr. Holland) asked about licensed deposit taking. Sections 5 and 8 of the Crown Agents Act 1979 give the Crown Agents authority to accept deposits in respect of their agency activities. While they continue to operate under the Act, the authority will remain valid. When they are privatised and cease to be a 471 statutory body, financial arrangements will have to be made for the privatised company to conform with the requirements of the relevant Acts on the acceptance of deposits or pre-payments. The present situation does not require any further action.
§ Mr. Stuart Holland
The financial effect of the Bill will make it possible for interest of about £10 million due to the Exchequer to be waived. We know that the Crown Agents have been paying interest at rates that are less than the full market rate. If the Minister is really saying that the Government are proceeding to privatisation, will he give the House an assurance that any such £10 million, which amounts, in effect, to a public subsidy, will be paid back by those to whom the sale in privatisation is undertaken? It will be a public subsidy of the private sector otherwise.
§ Mr. Raison
I do not think that the House will expect me at this stage to anticipate the legislation that will bring about privatisation in due course. When that step is taken, a Bill will come before the House in the proper way and it will receive full discussion in the House.
Questions were asked about clause 1(b). This provision deletes section 17(10) of the 1979 Act, which, as a consequence of the amendment to section 17(9), becomes superfluous. Section 17(10) requires that any order extending the original initial period from five years to seven years should be laid and approved by resolution of the House. As I have said, that now becomes superfluous.
I believe that the Bill is an important advance and that the Crown Agents are doing a good job. The Bill gives them a further chance to do that, and I commend it to the House.
§ Question put and agreed to.
§ Bill accordingly read the Third time, and passed.