Girobank plc

HC Deb 07 June 1988 vol 134 cc721-31 3.48 pm

The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry (Mr. Kenneth Clarke)

Mr. Speaker, with permission, I should like to make a statement about Girobank plc, a subsidiary of the Post Office Corporation.

Since 1968 the Girobank has grown into a successful banking arm of the Post Office, with a particular strength in money transmission and in handling deposits of corporate cash. It now has about 2.5 million customers and in 1986–87 made a profit before tax of £23.1 million.

Girobank now needs to expand vigorously and take on other activities in order to develop in the competitive world of modern banking. The Government believe that this expansion can best be achieved in the private sector. I therefore asked the Post Office to consider this and the Post Office Board has agreed that taking Girobank out of the public sector is indeed the best way to proceed. The Post Office and the Government have therefore agreed that the Post Office should offer Girobank for sale to a financial institution or other suitable company. Suitable bidders will now be given the opportunity to tender.

The Post Office Board and its chairman, Sir Bryan Nicholson, have agreed with me on the main factors that will be taken into account in evaluating bids. Price will, of course, be a major consideration in order to ensure a fair deal for the taxpayer. We also agree that weight should be given to the prospect of selling to a purchaser who will widen choice for the general public in banking services. It will also be important to safeguard the close links between Girobank and Post Office Counters Ltd. A new rolling contract has been concluded between Girobank and Counters which will govern their relationship under new ownership. We will be looking for a purchaser capable of developing and expanding Girobank's business. Post Offices Counters can expect to see increased business opportunities from that expansion as it is achieved.

The management of Girobank is today explaining and discussing this decision with its employees and their unions. Prospective purchasers will be invited to propose arrangements to enable management and employees to share directly in the future success of the business. The successful purchaser will, of course, also have to satisfy the strict requirements of the Bank of England.

This is a major opportunity to promote competition and to widen customer choice in the banking market through the trade sale of a nationalised bank. I believe that the Post Office, Girobank, Girobank's staff and its customers will all be well served by this new and important stage in the bank's development.

Mr. Bryan Gould (Dagenham)

The statement prompts one basic question—why? What possible justification can there be, apart from political dogma, for disrupting a successful public enterprise of which Girobank is such a splendid example? What evidence is there that Girobank customers are dissatisfied with the service that they receive, a level of service in which Girobank, a prime example of public sector innovation, has so often set the standard? What guarantee is there that that service will be maintained in private hands? What protection is there against the takeover of Girobank by a clearing bank or other major financial institution which could only limit consumer choice and increase an already unhealthy concentration of British banking in a few hands?

Does the Chancellor accept that a continuing commercial relationship with Post Office Counters is absolutely essential to Girobank's continued efficiency? What guarantee is there that Girobank will remain regionally based? How safe are the 5,000 or more jobs in Bootle, and what is the future of plans for a second site in the north-west?

What guarantees are there as to conditions and pensions for Girobank employees? What commitment is there to new expansion and continuing investment, and what assurance can there be that a successful public sector initiative which has widened consumer choice and set new standards in banking services will not be damaged and weakened in the hands of private sector predators?

Mr. Clarke

On the first key question asked by the hon. Member for Dagenham (Mr. Gould), it is a matter of disagreement between the Opposition and the Government that private sector ownership of businesses tends to improve their performance. We believe that the bank, which is now poised for further expansion and development, will carry that out most efficiently and effectively in the private sector where it is able to raise its capital in the ordinary way, to be free from political constraints on its management and to win its customers by offering them improved services.

The customer base in particular is extremely important. It is a very good approach to examine the whole question from the point of view of the customer. Obviously, anyone interested in merging with Girobank will regard its present customers—2.5 million of them—as one of the principal assets of the bank's business and will be looking to enhance and improve the service. I know that the bank is contemplating moving into plastic card cash dispensers and more corporate finance and is looking to extend its insurance and mortgage business. It will find it easier to do so in the private sector.

I agree with the hon. Gentleman that we must be careful not to limit choice for the public as a result of the sale or merger. When he studies my statement, he will see that this is one of the things that I agreed with the chairman we should look at when considering the bids. The Post Office will evaluate the bids bearing in mind the need to widen consumer choice if possible. At this stage, I am not cutting out anyone from entering the first rounds of bids to the Post Office, but one of the major British clearers would have considerable difficulty in satisfying our condition that one result of the sale should be a widening of consumer choice in banking services in this country.

I agree with the hon. Gentleman that a continued connection between Counters and Girobank is extremely important. That is why we have waited for the conclusion of the new contract, negotiated at arm's length between Girobank management and Counters management, which ensures a continuing relationship through a rolling five-year contract capable of being terminated only upon five years' notice either way. I expect that anyone buying Girobank will be buying, among other things, access to the Counters network, and therefore will have no intention of terminating the business connection and will be aiming to expand the business that goes over the counters.

As the hon. Member for Dagenham said, one of the main things that will be purchased by any acquirer of Girobank is the regional base—its staff and assets at Bootle and the headquarters at Bootle. I do not believe that anybody will make a bid for the bank with the intention of running it down. In so far as the bank prospers in the future, the position of its employees will be improved. Their precise position is being explained to them by management at the moment.

Above all, one of the things we will be looking for from the purchaser of the business will be a commitment to the continued development and expansion of Girobank. It is because we want to see the bank expand and because we want to see a widening of consumer choice in this area and improved banking services that we think that the time has come to put Girobank in the private sector where we think that that is most likely to happen.

Mr. Neil Hamilton (Tatton)

Will my right hon. and learned Friend accept that there will be a warm welcome from Conservative Members for his announcement? There is no reason to believe that the future for Girobank is anything other than excellent, and, freed from the ultimate control of Treasury constraints on raising capital, there is plenty of opportunity for expanding jobs in the north-west. Although the Labour party seems to be learning something from the experience of Socialist parties abroad, which have been dumping their ideological baggage, it still has something to learn from President Mitterrand, who is denationalising banks in France.

Mr. Clarke

I agree with my hon. Friend. It seems likely that the Labour party, yet again living in the past, will be almost the only Socialist party in western Europe still committed to the idea of a nationalised bank, saying to the employees of the bank in the north-west that their future lies better in nationalisation than it does in the private sector with access to fresh capital and the possibility of expansion.

Mr. Tony Benn (Chesterfield)

Is the Minister aware that everybody understands perfectly why he has done this? There are enormous profits to be made out of Girobank, which it was my privilege as a Minister to carry through the Cabinet and announce in the House 22 years ago. Is he aware that the British banks bitterly oppose Girobank, which is one reason why it was not introduced earlier? Even Ray Mawby, Assistant Postmaster-General in the Government of Sir Alec Douglas-Home, was unable to get Girobank through because the banks did not want competition.

Girobank has been wildly successful and the figures given by the Minister show that. What he has announced today is a naked act of plunder of assets that do not belong to the Government, that were built up by public enterprise, public imagination and public investment and are now, as with so many other assets, to be sold off to the very people who financed the Tory party in its last three election campaigns.

Mr. Clarke

May I reassure the right hon. Gentleman that the process of inviting bidders to tender will ensure that we will get a good price from the sale of the bank which will accrue to the public good? We will ensure that the taxpayer gets a bargain and that the full value of the bank is realised and goes first to the Post Office. But with our arrangements with the Post Office, what is surplus to its requirements will be made available to the Government. I realise that originally, in what was a different political and economic era, Girobank was the creation of the right hon. Member for Chesterfield (Mr. Benn). In those days, he believed that we needed to have a state nationalised bank on the high street. If he were to win the election for the leadership of the Labour party I have no doubt he would reinforce the commitment of the hon. Member for Dagenham (Mr. Gould), who at the moment speaks for his party, to the idea of nationalised banking. The current climate is against that.

I agree with the right hon. Gentleman about the need to inject more competition into banking services, so, as I have said, we have agreed with the Post Office that we will be looking for opportunities for increasing competition when evaluating bids. Girobank has been successful. It went through a difficult time but has been successful in recent years. Certainly it should be more successful—it will have the opportunity to be so—when it is in the private sector.

Mr. Michael Grylls (Surrey, North-West)

Will my right hon. and learned Friend accept that many people will greatly welcome the Government's decision? The track record of privatisation shows that the success of Girobank in the private sector will be assured. Will he confirm that it is the Government's view that Girobank should not be allowed to go into the hands of one of the big banks, arid that it must remain, as my right and learned Friend has said, in independent hands away from the big banking groups so that it will not only be moved into the private sector so that it can do better but will create more competition and more choice for the private customer arid the corporate customer, who need more choice?

Mr. Clarke

I agree with my hon. Friend. The past nine years have changed the climate. Few people still cling to the notion that it is right for a business such as this to be state owned. Privatisation has proved its value to employees, customers and everybody who has an interest in the business.

I have every sympathy with my hon. Friend's second point, which he made so forcefully. It would not be right for me to say that a bank should be ruled out of putting in a bid, but we should need much persuading before we accepted a bid from a major English clearing bank. I share my hon. Friend's aim of increasing consumer choice, and I agree that it would be a mistake to narrow it in any way. A new player on the clearing bank business scene over arid above Trustee Savings Bank, which we successfully privatised, will be of value to customers in this country.

Mr. Allan Roberts (Bootle)

The Minister has not given, but will he please give, an assurance that the 6,000 jobs in Bootle will be secure and that the bank will not be sold to another financial institution or bank that will not need the clearing house facilities on Merseyside? Does he accept that there is much anxiety among the work force and their families? Girobank is a major public sector success story. It is the only flagship of success in providing large-scale employment in my constituency. If the Government destroy it for doctrinaire reasons and reduce competition by selling off the only bank that competes with the private sector, they will be condemned on Merseyside arid throughout the country for an act of asset-stripping the like of which they have not yet undertaken. If Girobank is so successful, why do the Government want to sell it off if it is not simply for doctrinaire reasons and because they want to hand massive public-sector profits to their friends who donate to the Tory party?

Mr. Clarke

I understand the importance of Girobank to Bootle and its Member of Parliament. I completely disagree with the hon. Gentleman that this proposed sale is a threat to business in Bootle. Anybody purchasing the bank will be purchasing the facilities in Bootle and will regard them as one of the assets that they are acquiring. I find it difficult to accept that anybody will find it remotely worthwhile or sensible to contemplate acquiring the bank but then running down the business at Bootle. Nobody can guarantee a set number of jobs on Merseyside. The Post Office has never guaranteed a set number of jobs at Bootle. Those jobs have been secure and the enterprise successful because the bank has done well in recent years. If in private hands the bank continues to expand and succeed, there will be enhanced employment prospects on Merseyside and not the reverse.

Mr. Ian Gow (Eastbourne)

Will the consent of my right hon. and learned Friend be required before Girobank is sold to a purchaser? Are we right to conclude from my right hon. and learned Friend's statement that he would withhold his consent if the prospective purchaser were from overseas?

Mr. Clarke

As I have explained, bids will go to the Post Office and its board will handle the sale. The Secretary of State has a right to issue a direction to the Post Office if it proposes to do something with which he profoundly disagrees. We are content for the Post Office to evaluate the bids in line with the criteria that I have carefully agreed with the chairman of the Post Office, with which the Post Office Board agrees. We shall consider foreign bids on the same basis as any other.

Mr. Dennis Skinner (Bolsover)

Gnomes of Zurich.

Mr. Clarke

I gather that the widening of competition has narrow, nationalistic connotations for some Opposition Members. In addition to satisfying the Post Office, anybody who bids will have to satisfy the Bank of England, comply with its strict criteria and be subject to the advice of the Director General of Fair Trading, who will advise on the implications, if any, for competition and merger policy. I can see nothing wrong in dealing with bids from overseas on exactly the same footing as those from this country.

Mr. Matthew Taylor (Truro)

Will the Minister elaborate on the guarantees given to consumers that the sub-post office network will continue to be used and on the guarantees against major clearing banks buying it not on this occasion but perhaps on a future occasion on a resale? Will the Minister clarify whether the proceeds of the sale will go to the Post Office? If not, on what basis will they be redistributed into the Government's coffers? What debate and parliamentary scrutiny will there be in the House?

Mr. Clarke

We can tell the customer that the private sector purchaser will be seeking to maintain loyalty and expand the customer base. I am sure that any purchaser will wish to endorse the present plans of Girobank's management for expanding and improving its services. It was an extremely important precondition, without which we could not have proceeded, that there should be a satisfactory conclusion to the contract with Counters, which offers it every guarantee of being able to participate in the future success of Girobank.

If anybody were to try to acquire the business in the future, they would be subject to the ordinary rules of competition law and the banking Acts; that will be relevant to any future change of ownership. The proceeds of the sale will go to the Post Office, but by the unusual accounting devices that it has always operated, there will be an agreement about how much it needs for its own purposes, and any surplus, if there is one, is loaned to the Government for general public expenditure.

Parliamentary debate is a matter not for me but for my right hon. Friend the Leader of the House. The debate about nationalisation and privatisation has become a one-way match. I should not have thought that the Opposition would have wanted to go over it again as they so plainly lost the general argument with the public.

Several Hon. Members

rose——

Mr. Speaker

Order. I understand the wide interest in this matter, but I must have regard to the other business before the House. I ask hon. Members to ask questions that have not been asked before. Then most of them will be called.

Mr. Anthony Beaumont-Dark (Birmingham, Selly Oak)

Will my right hon. and learned Friend accept that most hon. Members realise that there is no need for banking services to be owned by the Government or Government Departments? It is equally important that none of the big four banks should bid for Girobank because it should be a fifth force. Freedom for services and competition is important, as the Government have said.

Mr. Clarke

I take note of my hon. Friend's clearly expressed views. I cannot rule out anybody from making a bid at this stage, but I have probably given enough hints to show that I strongly agree with his instincts.

Mr. Bob Cryer (Bradford, South)

Is not Girobank being sold off because it is a highly successful public enterprise? It will not be improved by selling it to the private sector. Will the Minister give a categoric assurance that no purchaser who has contributed to Conservative party funds will be allowed to bid? If not, the public will regard this as a corrupt practice by which friends of the Tory party are buying their way into a highly lucrative business. Will he confirm that the Secretary of State will not exercise a veto over any prospective buyer, including any bank of Libya that might be interested?

Mr. Clarke

The lack of corruption in public life is extremely important. The lighthearted way in which some Opposition Members toss out allegations of corruption is extremely unfortunate. Plainly we shall sell Girobank to any suitable bidder who can satisfy the strict requirements of the Bank of England and who otherwise seems well poised to expand the business. We have no intention of ruling out any bidder who is prepared to recognise a trade union for negotiating purposes if it contributes to the Labour party's funds.

Mr. Derek Conway (Shrewsbury and Atcham)

What my right hon. and learned Friend has said will be welcomed by the majority of hon. Members. Will he assure those who represent large rural constituencies about the safeguards for the rural sub-post office network and the amount of information that will be given by the chairman of the Post Office to sub-postmasters?

Mr. Clarke

My hon. Friend's constituency is more rural than mine. I share his sensitivity about the interests of the rural sub-post office network, which is why it was so important to get the contract agreed before we offered the bank for sale. Any purchaser will be bound by it, and I do not believe that anyone will buy the bank intending to give five years' notice. One of the assets that will be acquired is the network of counters over which they can trade. If the purchaser is successful in expanding the business, our rural sub-postmasters and mistresses can look forward to an expansion in the work coming over their counters.

Mr. Alex Salmond (Banff and Buchan)

Is the Minister aware that, since the Trustee Savings bank was stolen from its customers by the Government, Girobank is the only alternative not in the private sector for low income families who predominate in its customer base? What guarantees can the right hon. and learned Gentleman offer those low income families that their banking charges will not rise as a result of the privatisation?

Mr. Clarke

I shall not be drawn into discussing the TSB, but I remember the curious legal tangle that we got into. I think that it came as a matter of some astonishment to the average customer that he or she was regarded as having some proprietary interest in owning the bank; but that is all behind us. Anybody buying the bank will buy the bank's present customer base and I am sure will be aiming to retain and expand it. The customers will obviously stand to gain to the extent that the new proprietors succeed in broadening the services and making them more attractive. In the end, banking charges have to be determined by the management of each bank, including Girobank now.

Interest has been expressed on both sides of the House about increasing competition in clearing bank services, and it seems to me that increased competition will only exercise a downward pressure on the kind of charges that the ordinary customer has to face.

Mrs. Teresa Gorman (Billericay)

In offering my congratulations to my right hon. and learned Friend, may I say how intrigued and fascinated I was by his comments on the Post Office management's attitude to this privatisation move, and how delighted I am that it acknowledges the importance of competition in creating new jobs, innovation and expansion? Will my right hon. and learned Friend use his persuasive powers to make the Post Office and the Government apply those principles to other more geriatric aspects of the Post Office's work, including the delivery of the letter post?

Mr. Clarke

I am glad to say that on this policy I am in full agreement with the Post Office Board, the Post Office chairman and the management of Girobank. The Post Office is sensitive to the criticisms made of its service. I know that the chairman and the board are determined to raise the standard of service that they provide, and, looking at this aspect of the business with a view to entering the market place and making it more commercial and efficient, I have no doubt that they will apply the same principle to those parts of the business that remain in public hands.

Mr. Peter L. Pike (Burnley)

Will the Minister recognise that, when he talks of customer choice, 2.5 million people have chosen to bank with a bank that is publicly owned? Why should he deny them that option? Will he also recognise that the north-west will have little confidence in the private sector maintaining the head office at Bootle when it looks at what the private sector has done to every other banking head office that used to be in Manchester?

Mr. Clarke

Customers are perfectly free to apply whatever criteria they want to their choice of bank. I have no doubt that a handful of eccentrics choose a nationalised bank rather than any other, but I suspect that they are a tiny minority of the 2.5 million customers who have gone to Girobank for other reasons.

I have already spoken about employment prospects in the north-west. I am glad to say that most of the bank's employees are based in Bootle and the Merseyside area. Any purchaser will be aware of that and, if the bank is successful in private hands, on balance that should be good news for the area, not bad.

Mr. Michael Fallon (Darlington)

Will my right hon. and learned Friend reassure Conservative Members that this welcome addition to the enterprise culture does riot mark the end of the Government's review of Post Office businesses in their determination to ensure a much more commercial approach in all of them?

Mr. Clarke

A desire to improve customer service and to run the business as efficiently and cost-effectively as possible is an agreed aim between the Government and the Post Office Board. We are not studying any other privatisations and we are committed by our election statement not to privatise the Royal Mail. However, Girobank is plainly not within the Royal Mail, and I am not sure that the rest of the business is either.

Mr. Frank Doran (Aberdeen, South)

The Minister will be aware that Girobank does not just serve 2.5 million customers and make the profits that he outlined; it also serves a social purpose. What consideration has been given to the interests of those public sector institutions, particularly the Department of Health and Social Security, a major customer of the bank, to ensure that its interests and the interests of its customers—those millions of benefit claimants—are not prejudiced?

Mr. Clarke

The advantage to people such as DHSS claimants is the ready availability of the counter network. That is why the contract with Counters is so important, and that is why one of the principal attractions of the bank to someone looking to merge with it will be the immediate access to the nationwide counter network used by such a wide range of people. DHSS is a customer of the bank. That is the position now when it is nationalised, and it will be the position in future. I cannot imagine that the DHSS would contemplate moving to another network because this is the most readily accessible to its claimants. But the negotiations between the DHSS and Girobank remain those between a customer and a bank under whatever ownership.

Mr. Kenneth Hind (Lancashire, West)

I congratulate my right hon. and learned Friend on his move which will remove much of the uncertainty that hundreds of my constituents who work for Girobank have felt for many months. Should there not be a suitable purchaser on the scene, will he consider floating the company, and at the same time giving the employees of Girobank an opportunity to subscribe to the shares?

Mr. Clarke

I agree that uncertainty is extremely damaging to morale in a business which at the moment is doing well and looking to expand. Therefore, we have made a clear and unambiguous statement today and we shall set out a timetable that I hope will move the business into private hands well before the end of this year.

We did consider the prospect of floating the bank, but at its present stage of development that would probably have been a fairly unsatisfactory way of proceeding, not least because newly floated as an independent bank it would have been vulnerable to early takeover. It will probably have greater strength through a trade sale to a strong financial institution which wants to come in from outside.

I hope that the announcement is reassuring to my hon. Friend's constituents. I think that when they consider carefully what has been explained to them today they will realise that this offers extremely good prospects and is an important stage in the bank's development. It is not a threat to the bank.

Mr. Skinner

Is the Minister aware that large numbers of the British people will find it somewhat alarming that, at the time of a Swiss takeover of a British company, he is refusing to say that there will not be a foreign takeover of Giro? Is not that another example of pork-barrel politics by this grubby Government who will make sure that some of their friends in business will make money out of it so that they can hand it back to the Tory party? Will he give a guarantee that Johnson Matthey will not be allowed to make a proposal? Will he also bear in mind that, since the Labour party will vote against the takeover, logically we shall then be arguing for its return to public ownership?

Mr. Clarke

As it happens, I have more friends in business in Britain than I have abroad, so the hon. Gentleman had better decide on which objection he wants to concentrate. Does he object to selling to friends in the Conservative party or foreigners? Neither consideration will be material to any sensible evaluation of any bid. We shall be looking for reputable purchasers who can satisfy the requirements of the Bank of England which are essential to give security to customers and widen customer choice in Britain. I see no reason to adopt bizarre nationalist attitudes towards the ownership of shares either in our banks or in our chocolate companies.

Mr. John Marshall (Hendon, South)

Will my right hon. and learned Friend accept that his statement will be welcomed by the vast majority of customers of Girobank who recognise that when it has access to a wider capital market it will be a more effective competitor and will offer better job opportunities to its staff and better services to its customers?

However, will he confirm that the election pledge not to privatise the Royal Mail does not rule out the possibility that will be welcome to many Conservative Members of greater competition being introduced to that service?

Mr. Clarke

I agree with my hon. Friend's estimation of public opinion and the judgment of customers and those who work for the bank. It was unclear what the Labour party would do, but the hon. Member for Bolsover (Mr. Skinner) has laid down a clear line, so obviously a policy has now been determined and the Labour party will vote against this, but I think that it will have the support of a clear minority of those who have a look at this and who have an interest in the banking service.

I hear my hon. Friend's views on his second point. At the moment we have no similar plans for any part of the Post Office business. We shall honour our election commitment, but all the time in these services, as in other industries, whether they manufacture or provide services, we are looking at means of improving efficiency, spreading the enterprise economy and getting more benefits from privatisation of the kind that we have already reaped in previous privatisations.

Mr. Dave Nellist (Coventry, South-East)

Is the Minister aware that his nose grew nine inches during his statement? The real reason for privatisation is to allow his asset-stripping friends in the City cheap access to the high street properties that are worth billions and access to the DHSS benefits business, which is also worth billions. Is not the success of the Post Office to be put down to the sacrifice of the work force in addition to public investment? However, as soon as public investment makes a return, the Minister and the Government ensure that their friends in the City are allowed to take the profits for shareholders. Quite simply, it is theft.

Mr. Clarke

It always saddens me to hear that the Labour party's view of the capitalist economy is that any private share ownership is wicked theft by a few villains in the City. One of the many things that have changed since the Labour party was in office is that we now have a society in which wider share ownership is becoming an accomplished fact and has considerable public support. As I have already said, we shall be looking for a purchaser to suggest ways in which the management and the work force of Girobank might have a stake in any future success that the business earns. The hon. Member for Coventry, South-East (Mr. Nellist) may live in the past, but if he catches up with what we have achieved during our economic revival over the past few years he will realise that this is a welcome step that bodes well for the bank, its customers and its staff.

Mr. Tam Dalyell (Linlithgow)

To which specific requirements of the Bank of England was the Minister referring in his opening statement, and do they relate to foreign purchase?

Mr. Clarke

I was referring to the so-called prudential requirements of the Bank of England. The requirements of the Bank of England exist above all else to ensure that those who carry out transactions with a bank have complete security and that the bank is a creditworthy institution that is entitled to have a licence to operate as a banking institution in this country. We apply those provisions equally to banks from any country. Certainly for this business I see no reason to apply preconditions against foreign ownership. The provisions of the Banking Act can also be invoked in the case of an acquisition of a bank.

Mr. David Winnick (Walsall, North)

May we take it that it is Government policy that if a public sector concern is not making a profit it must be virtually given away but that if it is making a substantial profit, as in the case that we are discussing today, it must also be privatised? Why does not the Minister drop his explanations and admit the truth—that the present proposal is simply part of a Thatcherite Right-wing dogma policy and that the Government require no particular logic to try to justify it?

Mr. Clarke

Our principle is that if a nationalised industry is losing huge amounts of money and thus draining away taxpayers' resources and diverting money away from the National Health Service or the education service, for example, we seek to improve the efficiency of the business, we let the management put things right and we return it to profitability and commercial success. We then return the business to the private sector where it can raise its capital in the ordinary way and, in all our experience so far, thrive. The best example that we have of that process is British Steel. Only six or seven years ago it was a dilapidated, rundown rust-bucket failure costing the country more than £1 billion a year following years of neglect by the Labour party. The steel industry that we are about to return to the private market is extremely profitable, successful and competitive.

Later——

Mr. Allan Roberts

On a point of order, Mr. Speaker. I am sure that you are aware—I am not sure that the whole House is—that the major proposal to privatise Girobank—it is a major proposal, equal to the privatisation of British Telecom—does not need legislation and therefore will not he brought before the House in the usual way. There will be no Second and Third Reading debates. When the negotiations are completed and when the proposals have been outlined, they cannot be scrutinised in Committee. I know that that procedure is dear to your heart, Mr. Speaker; you have explained that you believe that the Committee procedure is important. The Minister also implied that there might be no justification for a debate on the matter.

May I ask you, Mr. Speaker, to look into the question of how the House is to examine in detail the privatisation proposals and how it is to vote on them. It would be an absolute scandal if the House of Commons did not debate, examine, scrutinise and vote on privatisation proposals that affect a major concern in this country.

Mr. Speaker

I appreciate what the hon. Gentleman has said, but he knows that it is not for me to advise him on tactics. There are ways of raising these matters, either on the Adjournment of the House or by means of a motion.

Mr. Roberts

Further to that point of order, Mr. Speaker——

Mr. Speaker

Order. I cannot help the hon. Gentleman further. It is not for me to advise hon. Members on tactics. That is not my responsibility. I am responsible for order in the House, and nothing out of order has occurred.