Commons Sitting of 6 December 1989

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS
  SCOTTISH EPISCOPAL CLERGY WIDOWS' AND ORPHANS' FUND ORDER CONFIRMATION BILL
  Read the Third time, and passed.
Oral Answers to Questions
  TRADE AND INDUSTRY

    Renaval Programme
    Mr. Win Griffiths: To ask the Secretary of State for Trade and Industry if he will make a statement on the operation of the EEC's Renaval programme in the United Kingdom.
    The Minister for Industry (Mr. Douglas Hogg): The Government have submitted Renaval applications for Plymouth and Gibraltar. My right hon. Friends and I hope to be able to decide soon whether to make further applications. Our decisions have been delayed by changes in the position in Brussels.
    Mr. Griffiths: The Minister may not know that I was a member of the European Parliament's regional policy and planning committee which considered this programme. We were concerned that extra help, besides normal regional fund assistance, should go to areas where traditional industries were in decline. Can the Minister confirm that the shipbuilding areas in Britain that have had the biggest job losses will receive the greatest assistance from the fund, and can he tell the House the position on Tyne and Wear?
    Mr. Hogg: The position is this. I understand the concern of hon. Members about the Renaval programme. Hitherto, we have taken the view that it would be premature to make a final decision on the matter, although we have not decided against making a decision. We may make an application, but we have come to no final view. The problem is that a decision on Renaval has to be taken in the context of other objective 2 funding programmes because they impact one on the other. As soon as we can have a clear view of the whole, we shall be in a good position to make a final decision.

    Consumer Credit
    Mr. French: To ask the Secretary of State for Trade and Industry what measures he is taking to ensure that prospective borrowers are aware of their rights and duties under consumer credit legislation.
    The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Eric Forth): Regulations under the Consumer Credit Act 1974 require that consumer credit agreements include statements about the rights of consumers under the Act. It is one of the duties of the Director General of Fair Trading to provide information and advice to the public about consumer credit legislation.
    Mr. French: Will my hon. Friend curb the activities of credit reference agencies that give out references on people's creditworthiness by reference not to the individual, but to the address at which the individual lives? Does my hon. Friend accept that that is a dangerous and misleading practice, and will he provide a means of redress for people whose reputations are harmed in that way?
    Mr. Forth: My hon. Friend has touched on an undoubtedly difficult area. We believe that the laws and regulations in this area are generally adequate and have been so until now, but my hon. Friend is right to point out what can be a difficult area. I undertake to look at the matter again urgently and to see whether there are any methods that we could use to improve the position and to address the problems that my hon. Friend has identified.
    Mr. Janner: When the Minister is looking at consumer credit legislation as it affects borrowers, will he arrange for more information to be given to people who borrow from banks so that they know, for example, that when they obtain money on an overdraft it is normally repayable on demand—most people do not know that—and that if they exceed the limit they could be charged a prodigious, unwarranted and disgraceful rate of interest of which they have had no advance notice?
    Mr. Forth: The hon. and learned Gentleman will be pleased to know that new regulations on credit advertisement will come into effect next February. They will cover some of the points that he has raised, such as the use of more understandable English, and they will close certain loopholes. It is always difficult to legislate or to regulate this area in such a way as to take care of all developments. One often feels that almost as soon as one: has identified one difficulty, others arise. I assure the hon. and learned Gentleman that we are constantly vigilant in this area and that we shall look carefully at the point that he has raised.
    Mr. Donald Thompson: Does my hon. Friend realise that constituents of mine with children and young people in their families are very worried by the fact that they are perpetually bombarded with invitations to borrow more and more money? My wife has a great sackful of these unsolicited appeals. What regulations does my hon. Friend propose to introduce to ensure that people fully understand what they are signing up for?
    Mr. Forth: I know that that causes a lot of concern. Let me say immediately that section 50 of the Consumer Credit Act 1974 prohibits the sending to minors of circulars inviting them to borrow money or to apply for

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    information about obtaining credit, so that aspect is already dealt with. Generally speaking, it is up to lenders to assess the way in which they offer credit, and they rarely offer it to minors, although that is something we shall have to watch. In general, existing legislation covers the point adequately.
    Mr. McAllion: What has the legislation done to protect and extend the rights of savers? A constituent of mine who has spent more than two years in an old people's home, during which time her deposit account at the bank remained untouched. Without her knowledge, the bank redesignated the account as dormant and reduced the rate of interest paid on it to I per cent. Are the banks acting within their legal powers in doing that and does the Minister think it right for banks to profiteer at the expense of old people in the despicable way that I have described?
    Mr. Forth: It is quite right that the hon. Gentleman should raise an important constituency matter at Question Time, but I ask him to write to me with the details so that we can consider the case properly. I should not like to try to give an instant answer, but if he will write to me I will see what, if anything, can be done to help to remedy his constituent's grievance.

    Departmental Expansion
    Mr. Norris: To ask the Secretary of State for Trade and Industry what plans he has to expand the role of his Department.
    The Secretary of State for Trade and Industry (Mr. Nicholas Ridley): None, Sir.
    Mr. Norris: I thank my right hon. Friend for giving exactly the sort of reply that I wanted; it was excellent. Does he agree that although from time to time his Department has an excellent role to play as an enabler, it has been an unmitigated disaster whenever it has tried to act as an intervener?
    Mr. Ridley: My hon. Friend is absolutely right on the latter point. I note that the Labour party policy review says:
    "The DTI's role will be to develop strategies, to identify priorities and provide the assistance, resources and organising capacity which industry will need."
    Is not that the very policy that east European countries have been following until now?
    Mr. Vaz: Will the Minister consider establishing a specialist unit in his Department to monitor and support the work of the British textile and footwear industries? Is he aware that in the past 10 years 380,000 jobs have been lost in those two industries? The Minister for Industry came to Leicester last Friday and was made aware of the deep concern felt by textile and footwear manufacturers about the future of their industry. May we have a unit to support that vital sector of the British economy?
    Mr. Ridley: We do indeed monitor the operations of all industries, including the textile industry. It is for the industries themselves to become competitive if they are to preserve their positions, and there are encouraging signs in the textile industry. The industries have benefited from the multi-fibre arrangement over the years. People in the industry have had time to adjust and in many cases have done so successfully.
    Sir Anthony Grant: Has my right hon. Friend any plans to reduce his Department's role?
    Mr. Ridley: We have certain problems in our industrial performance at the moment in parts of our industrial effort where the Industrial Reorganisation Corporation, the policies of the right hon. Member for Chesterfield (Mr. Benn) and intervention generally left some deep holes.
    Mr. Gordon Brown: With regard to one expanded role for the Secretary of State's Department—that of providing hidden subsidies—and given that the Secretary of State said last week that there was no need to inform the European Commission, will he tell us now whether there were any discussions between British Aerospace and the Government about failing to inform Parliament and the Commission and the risks associated with that? Are there any other matters in addition to hidden subsidies that he now feels that he should disclose to the House?
    Mr. Ridley: For the hon. Gentleman's benefit, I would make a distinction between hidden ongoing subsidies or even overt ongoing subsidies and the necessary deal which has to be struck to end the tyranny of state ownership of a loss-making public corporation. I refer the hon. Gentleman to the acquisition of MBB by Daimler-Benz, which involved the privatisation of a loss-making German nationalised industry. The hon. Gentleman will discover that there, too, a deal had to be struck which was well worth it in the interests of the taxpayer to get rid of that loss-maker.
    Mr. Oppenheim: Are not the Opposition guilty of trying to have it both ways on this? If the Government had tried to sell the Rover Group to the highest bidder, we would have been accused of putting the group up for a free for all instead of looking after the interests of that company. That is precisely the accusation which the Labour party levelled against us in 1976 when we tried to sell the Rover Group.
    Mr. Ridley: I well remember the extraordinary commotion on the Opposition Benches when it seemed possible that the Ford Motor Company might try to buy Rover. That was not a very propitious curtain-raiser for a possible public auction of that company.

    Trade Performance
    Mr. Campbell-Savours: To ask the Secretary of State for Trade and Industry what measures he intends to introduce to improve Britain's trade performance.
    Mr. Ridley: The keys to trade performance are macro-economic policy, non-interference in the working of the market, the maintenance of open, competitive markets at home and abroad and not setting up an industrial reorganisation corporation.
    Mr. Campbell-Savours: May I have a reflective reply to the following question? Would a falling exchange rate in any way help Britain's trade performance?
    Mr. Ridley: It is not for me to answer for my right hon. Friend the Chancellor of the Exchequer on matters of macro-economic policy. However, the export figures in recent weeks have shown a decided tendency to improve now that the pound is at a slightly lower level than before.
    Sir Hal Miller: Does my right hon. Friend also see a need to help to protect the competitive position of our

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    manufacturing industry against the more extreme green demands, which would lead to an increase in energy prices and drive company cars off the roads of this country?
    Mr. Ridley: All those factors are extremely important in maintaining the competitiveness of British industry. If we are to improve our trade deficit, it is vital that we do nothing to put British industry at a competitive disadvantage in a level playing field game with the rest of the Community and the world.
    Mr. Henderson: Given the alarming £4 billion trade deficit in electronic products, and now that British Aerospace has withdrawn its interest in purchasing Ferranti, will the Secretary of State intervene to ensure that the future of Ferranti is secured through a joint venture partnership? Does he recognise that if he fails to act, Ferranti could be gobbled up by yet another hostile foreign predator with further untold damage to our balance of trade and to jobs?
    Mr. Ridley: The hon. Gentleman should look carefully at the trade in electronics. He will find that although our imports in that area are very large, so are our exports. That shows that in a modern sophisticated industry a heavy import and a heavy export are signs of success, not failure. With regard to Ferranti, it is for the Ferranti board to decide what action it wants to take with the various people with whom it is discussing its future. At the present time, I have no role to play in those matters.
    Mr. Wells: Does my right hon. Friend agree that the programme that his Department has pioneered in Japan has produced a remarkable increase in British exports to Japan? Will he now consider a second phase to boost that successful programme so that we can increase our trade with Japan and thus substantially decrease our trade deficit?
    Mr. Ridley: I agree with my hon. Friend, but there has also been a large opening up of the Japanese market in many different ways as the result of the pressures that my right hon. Friends have placed on the Japanese and other nations. The Japanese are trying hard to open their market to exporters in other countries. It is a combination of two factors. We will certainly redouble our efforts to make every facility available to British exporters to increase their share of Japanese trade.

    Toys
    Mr. Buchan: To ask the Secretary of State for Trade and Industry what steps his Department is taking to monitor the safety of children's toys.
    Mr. Forth: Local authority trading standards departments have a statutory duty to enforce the Consumer Protection Act 1987 and the toy safety regulations made thereunder. The Act provides the necessary powers for the discharge of this responsibility.
    The new Toys (Safety) Regulations 1989, which implement the EC directive on the safety of toys with effect from 1 January next year, will provide more comprehensive safety measures to ensure that only safe toys are placed on the market. They will also require enforcement authorities to notify my Department of enforcement action taken under those regulations.
    Mr. Buchan: It is fine that the provisions exist, but we are about 20 per cent. short of trading standards officers. That is the real problem. We are entering a period in which there is a constant television propaganda campaign for parents to buy toys. There was a disastrous case involving Kinder eggs, which are chocolate eggs with tiny inedible and poisonous toys inside them. Will the Minister ensure that there is urgent action by the Department in the form of a television campaign to warn parents?
    Mr. Forth: The hon. Gentleman has raised a number of points. The number of trading standards officers is a matter for local authorities. I am sure that they will discharge their responsibility fully in that regard. My Department is organising a campaign to reach out to parents to remind them at this time of the year of what is principally their responsibility—to ensure that they purchase only safe toys for their children or relatives.
    The Kinder chocolate eggs case was a tragedy. A young girl died as a result of the contents of a Kinder egg. We considered the matter carefully and agonised about what we should do. In the end, my view was that as millions were sold every year it would be wrong to seek to ban the product but that we should instead seek to reinforce precisely the hon. Gentleman's point—that parents must always satisfy themselves that anything that their young children have, use or play with is used safely and responsibly.
    Mr. Buchan: On a point of order, Mr. Speaker. In view of the Minister's grossly unsatisfactory answer, I give notice that I shall seek to raise the matter on the Adjournment.
    Mr. Speaker: Order. The hon. Gentleman has the right to say that, but it ends supplementaries on that question.

    Internal Market
    Mr. Clelland: To ask the Secretary of State for Trade and Industry what additional help is being given to businesses to help them to take advantage of the internal market in 1992.
    Mr. McFall: To ask the Secretary of State for Trade and Industry what additional help is being given to businesses to help them to take advantage of the internal market in 1992.
    Mr. Douglas Hogg: We provide a comprehensive single market information service through our Europe Open for Business campaign, which is regularly updated and expanded. The practical assistance available through our enterprise initiative is also particularly relevant to firms preparing for the single market. In the private sector an increasing level of information and advice is being provided to help business to adapt to the liberalised European trading conditions.
    Mr. Clelland: Is the Secretary of State aware that although other European countries have been forging ahead for some time with their preparations for 1992, his Department has been so dilatory that the television advertising campaign aimed at assisting British industry was arranged so late that the British taxpayer has been landed with a bill £300,000 higher than it need have been, for which the hon. Gentleman has been severely criticised by the National Audit Office? Is the hon. Gentleman

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    further aware that if a local councillor took a similar decision he would be liable to surcharge and disqualification from office for gross negligence?
    Mr. Hogg: British industry is singularly well equipped to go into the 1992 market. The developments in the hon. Gentleman's own constituency demonstrate that.
    Mr. Clelland: What about the £300,000?
    Mr. Speaker: Order.
    Mr. Hogg: Unemployment in the hon. Gentleman's constituency has fallen in the past 12 months from 12·1 to 9·8 per cent. and there are two extremely exciting developments there—the Newcastle business park, which will create 2,000 jobs by 1991 and the Gateshead Metro centre, which will create 6,500 jobs by 1991. That shows how well the economy is equipped for 1992.
    Mr. McFall: The Minister will be aware of the comments of Sir John Harvey-Jones, a former chairman of ICI, who said that only half Europe's businesses will survive and that over the next five to seven years the rest will disappear, by acquisition, by mergers or by going bust. Since the implications for big businesses and for small firms are profound, will the Minister turn his attention to the hidden agenda—or is he prepared simply to accept that in areas such as my own in Scotland small businesses on the periphery will disappear because they will be sacrificed on the altar of the Government's twisted approach to 1992?
    Mr. Hogg: Yet another hon. Gentleman is allowing his imagination to run riot. As the hon. Gentleman mentioned his own area, let us look at that aspect. I am glad to say that in the past 12 months unemployment in his constituency has fallen from 15·9 to 12·6 per cent. The hon. Gentleman will be pleased, I hope, to know that in the next five years the Scottish Development Agency is planning to spend £10 million in the Leven valley, which is close to the hon. Gentleman's area. That is precisely the kind of commitment that the hon. Gentleman has urged upon us.
    Mr. David Evans: I congratulate the Government on the help that they are giving to companies in the run-up to 1992, but does my hon. Friend agree that companies should also be gearing up to meet the opportunities presenting themselves in the eastern bloc and the Soviet Union? Is his Department underwriting the future on the Export Credits Guarantee Department so as to help companies in that new area?
    Mr. Hogg: I certainly think that the opportunities offered by the changing situation in the eastern part of Europe are exciting and that British industry should be considering how best it can respond to the investment and trading opportunities in that part of Europe.
    Mr. Tim Smith: Will my hon. Friend encourage the European Commission to give higher priority to the creation of a genuinely single market in insurance services by 1 January 1993?
    Mr. Hogg: My hon. Friend is quite right to address his remarks to that question. It is a material part of the programme and, generally speaking, we encourage the Commission to produce flat playing fields wherever possible.
    Ms. Mowlam: Shall we have to wait until the arrival of the internal market in 1992 before the Minister releases for publication the ombudsman's report into the negligence of his Department in the Barlow Clowes affair?
    Mr. Hogg: That goes rather wide of the question—[Interruption.]
    Mr. Speaker: Order.
    Mr. Hogg: Indeed, when one thinks about it, Mr. Speaker, it goes very wide of the question. That being so, I am not going to answer it.
    Mr. Favell: Does my hon. Friend agree that it is of the utmost importance to construct high-speed links to the Channel tunnel as soon as possible? Can he tell the House why the two Labour members of the King's Cross inquiry Committee did not turn up the other day, at enormous cost—
    Mr. Speaker: Order. Proceedings in private Bill Committees are not discussed in the Chamber.
    Mr. Favell: Can my hon. Friend confirm that the King's Cross inquiry will be conducted with maximum efficiency and speed?
    Mr. Hogg: I certainly hope so, but in view of what my hon. Friend has said, I fancy that that is not entirely in my hands.

    Export Credits Guarantee Department
    Mr. Morgan: To ask the Secretary of State for Trade and Industry what consultations he has had regarding the future operations and funding of the Export Credits Guarantee Department.
    Mr. Ridley: The interdepartmental working group of officials on the Kemp review of status options for ECGD consulted interested parties both within and outside Government. It has now submitted its report to me, and I am considering it.
    Mr. Morgan: In view of that characteristic piece of masterly inactivity on the part of the Secretary of State and with Britain's trade deficit about to enter the "Guinness Book of Records", is it not true that only a lunatic or the Secretary of State, or perhaps both at the same time, would think of monkeying around with those essential support services for exporters? In particular, will he give attention to the fact that any monkeying about of the kind that he may have in mind would affect 770 jobs in Cardiff where essential services are provided for small and medium-sized export businesses—support which is vital as we approach 1992?
    Mr. Ridley: I do not see why the hon. Gentleman feels that the question calls for insults. They are completely misplaced.[Interruption.]
    Mr. Speaker: Order.
    Mr. Ridley: I suggest that the hon. Gentleman awaits the Government's decision about the Kemp report instead of trying to come to conclusions before the Government have given it the attention that it deserves. The purpose of the operation is to improve the services provided to our exporters and there is no threat to ECGD in such a course.
    Mr. Grylls: Does my hon. Friend agree that as 70 per cent. of British firms do not export we need to give them maximum help and encouragement to be bold and go into the world markets to export? Is he aware that while other countries offer export credit guarantees, British firms, especially small firms, need the services of ECGD? Will he bear that in mind when he makes his decision?
    Mr. Ridley: I shall most certainly bear that important point in mind. There is no question of withdrawing services for exports of goods, from large, small or medium-sized enterprises. It is a question of the status of the ECGD and its duty to perform that function.
    Ms. Quin: While I understand that the Secretary of State has still to make a final decision on the matter, will he give a clear statement to the House that he does not accept the ludicrous suggestion put forward by his hon. Friends in the Treasury that the projects division of ECGD be closed down? Will he further undertake to listen carefully to industry and those who work in ECGD before making a final decision? Does he agree that, with a £20 billion trade deficit, our export efforts need to be increased, not reduced?
    Mr. Ridley: I cannot respond to both parts of the hon. Lady's supplementary question. [HON. MEMBERS: "Why not?"] She asked me not to foreclose my eventual decision on the matter and at the same time to foreclose on the question of the projects group by deciding against the zero option. I promise the House that I shall make a decision abundantly clear as soon as possible, and I hope that that will be before long.
    Mr. Cran: Does my right hon. Friend recognise that considerable disquiet has been caused by the Government's delay in coming to a decision? In coming to a decision, will he consult the recent important study by Northern Engineering Industries which shows the effect down the line of project finance, which we now hear that the Treasury is against?
    Mr. Ridley: We have not had the working group's report for long. My hon. Friend will find that the delay in giving the House a decision on the matter is not at all long. I fully understand and hear what he says about the projects group and the importance of capital goods industries to the north-east. It is certainly one of the factors that we shall take into account.

    Golden Shares
    Mr. Rooker: To ask the Secretary of State for Trade and Industry if he will list the golden shares for which he has responsibility and state his policy towards the use of these shares.
    Mr. Ridley: I hold special shares in British Telecom, Cable and Wireless, British Aerospace, Rolls-Royce, British Steel, and Jaguar. Decisions on using the rights attached to each of these shares depend on the particular circumstances of each company.
    Mr. Rooker: Can the Secretary of State tell the House whether he will dispose of any of those golden shares in the same way as he is to dispose of the golden share in Jaguar, thereby giving the company away to Ford? [Interruption.] Of course it was given away. Was that done in order to stop Ford complaining about being shut out of the secret
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    negotiations with British Aerospace over the Rover group? He cannot object to Ford having Rover because he has given it Jaguar.
    Mr. Ridley: The hon. Gentleman should realise that there are two sorts of special share. There are those which are timeless, run for an indefinite period and seek to protect national security interests of one sort or another. The other is time limited. Of the companies that I mentioned, the two which have time-limited special shares are British Steel and Jaguar. The point of those special shares is to protect an industry which is trying to convalesce from the mauling it has had as a publicly owned industry for a few years until it can stand up on its feet and compete in the market. That condition of recovery for Jaguar was abundantly met when I decided to waive the gold share.
    The hon. Member for Dunfermline, East (Mr. Brown) said that we threw the company to the wolves, but the hon. Member for Dagenham (Mr. Gould), who was there at the time, did not much like that expression. I must quarrel with the hon. Member for Birmingham, Perry Barr (Mr. Rooker). The price of £1·6 billion, which Ford paid for Jaguar, cannot be described as giving it away.
    Mr. Roger King: Is my right hon. Friend aware that notwithstanding the rather Neanderthal approach of some Opposition Members, others, namely the hon. Member for Coventry, North-West (Mr. Robinson), have welcomed the opportunity that the Ford-Jaguar arrangements provide? My right hon. Friend's speedy decision on the question of the golden share has enabled that company to join forces with Ford to provide us with a strong element in the British motor car industry.
    Mr. Ridley: I am fully prepared to accept what my hon. Friend says, although I do not think that it is for me to comment on the merits or otherwise of any particular bid or takeover. I am sure that both alternatives before Jaguar should have strengthened it and that is a great tribute to the performance of the Jaguar management until now. I do not particularly like special shares because they put one in a position where one might have to make a choice which could be said to be partial. I am more prejudiced against them having discovered that the Labour party is thinking of using them for its nefarious purposes if it ever gained power.
    Mr. Hoyle: So that we might have some guidance on future policy, will the Secretary of State tell us what discussions, consultations or assurances he received from Ford prior to waiving the golden share about manufacturing in this country, research and development, and the preservation of the Jaguar mark? What consultations has he had with Ford since waiving the share?
    Mr. Ridley: I wish I could have an opportunity to give the hon. Gentleman guidance on a whole range of matters. He certainly needs it. The answer to his question is none.
    Mrs. Currie: Does my right hon. Friend agree that it is about time in this trading country that we stopped being so hostile to inward investment? Is he aware that my constituents in south Derbyshire work happily for the Swiss company of NestlÉ and for the Swedish company of Asea Brown Boveri and that we are about to welcome a Japanese company? I honestly do not believe that my

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    constituents in Rolls-Royce are all that bothered either way about the golden share held by my right hon. Friend. Is not a real golden share, and the only one worth having, the share in prosperity that is brought by these companies and this investment to my region and this country?
    Mr. Ridley: I should like to agree with my hon. Friend that the role played by inward investment into this country from overseas has begun to fill some of the industrial gaps left by the ravages of the Socialist Government when they tried to have an industrial strategy.

    Northern Development Company
    Mr. Trotter: To ask the Secretary of State for Trade and Industry when he expects to be able to announce the level of his financial support for the Northern Development Company for 1990.
    Mr. Douglas Hogg: I expect to announce the levels of grant in aid which will be awarded to each of the regional development organisations, including the Northern Development Company, for the financial year 1990–91, in March 1990.
    Mr. Trotter: When my hon. Friend comes to consider the funding of the NDC, will he give due regard to the great value to the region of the excellent work performed by it in promoting the region both at home and overseas? Will he further give regard to the commendable level of support which it receives locally from industry and authorities in the region?
    Mr. Hogg: Most certainly. I am extremely grateful to my hon. Friend for the help that he has given to the NDC and for the part that he played in setting up that organisation. He will be pleased to know that, over the years, funding has steadily increased. For example, in 1981–82 funding was £230,000, but in 1989–90 it is £1,182,000, inclusive of core funding.
    Mr. Caborn: The Minister gave his usual non-answer. What does the Secretary of State have in mind for English Estates? Incidentally, in 1936, the right hon. Gentleman's father was one of the first directors of English Estates and it is evident that he had more vision than his son, especially as press reports suggest that it is about to be privatised. That privatisation would be a further blow to the northern region because English Estates has played a significant role in the development of science parks and technology transfer centres. Those developments are sorely needed if we are to get manufacturing back on to a competitive edge so that we can start to reduce the £20 billion trade deficit.
    Mr. Hogg: I have a very high regard for the work of English Estates, but the hon. Gentleman will forgive me if I say that if he wants to ask a question about English Estates it would be a good idea to do a bit of homework and table a question. We are now talking about the Northern Development Company, which is a different thing altogether. I am sorry that the hon. Gentleman appears to be unaware of that difference and I find it remarkable that such a person should be sitting on the Front Bench of the Labour party.
    Mr. Jopling: Is my hon. Friend aware that the NDC does not give the appearance of having much more than a polite interest in the affairs that it is supposed to overlook in Cumbria? Before he starts giving it a whole lot of money
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    will he try to extract an undertaking from it that it will demonstrate a more positive approach to the problems of Cumbria?
    Mr. Hogg: Having had the privilege of serving under my right hon. Friend when he was Chief Whip I can think of nobody more competent than he to remind NDC of that. I look forward to the discussion that I am sure will take place between NDC and my right hon. Friend.

    Consumer Protection
    Ms. Armstrong: To ask the Secretary of State for Trade and Industry if he has any plans to introduce new legislation or regulations on consumer protection.
    Mr. Forth: We intend to improve the protection given to consumers in a number of ways, including the introduction of an order under the Prices Act 1974, as amended, on price indications, and unit pricing about which we are currently engaging in public consultation, and changes to other legislation affecting consumers' interests.
    Ms. Armstrong: What steps is the Minister taking to try to implement the recommendations of the National Consumer Council on product guarantees? Is he considering following the practice in the United States where consumers are given a guarantee that if a major purchase breaks down and is not satisfactorily repaired a full replacement is supplied?
    Mr. Forth: I am, of course, giving close and careful consideration, as I always do, to the recommendations by the National Consumer Council. Although I yield to none in my admiration for the United States I do not believe that we should always seek to copy what our friends in the United States do. Although I shall consider carefully the recommendations of the National Consumer Council, I have yet to make up my mind about whether they would be beneficial to our consumers.
    Mr. David Shaw: Does my hon. Friend agree that the best way to provide consumer protection is to have a proper degree of competition between the companies that provide the goods and services consumed by the public? Surely it is competition and free enterprise that provide good consumer protection.
    Mr. Forth: I have enormous sympathy with what my hon. Friend says. I am sure that if we look carefully at these matters we shall see that consumers in the West under capitalism have enjoyed a much greater degree of consumer protection and benefit than their opposite numbers behind what we used to call the iron curtain. Therefore, the best possible approach is the one that we are now taking. which is to temper the advantages and benefits of the market and competition with a light regulatory touch.
    Mr. Matthew Taylor: In view of the Minister's direct responsibility for consumer protection, will he be contacting the Minister of Agriculture, Fisheries and Food to urge him to make available to the consumer information regarding the safety of the use of microwave cookers?
    Mr. Forth: The hon. Gentleman has wasted his opportunity because, as he well knows, my right hon.

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    Friend the Minister of Agriculture, Fisheries and Food will shortly be at this Dispatch Box giving a full and comprehensive statement on the matter.
    Mr. Barry Field: Does my hon. Friend agree that one of the joys of the market place is the ever-changing perspective of the need for consumer protection, as with the levelling off of the housing market? Does he agree that now that the frothiness has been taken away, the need to legislate against estate agents has been reduced?
    Mr. Forth: As my hon. Friend knows, I have asked the Director-General of Fair Trading to look carefully at estate agency and its business practices, and to come up with recommendations. When he reports to me early in the new year, as I have asked him, I will look, as always, most carefully at his recommendations to see whether we can agree on the best way forward.
    Mr. Nigel Griffiths: Does the Minister accept that public confidence in any new legislation to protect the consumer is severely dented by his failure to implement current legislation? A young girl died on 5 November after swallowing part of a toy in an egg like the one I have in my hand. That was the second such death and the manufacturers are withdrawing the egg. Consumer protection officers have asked for it to be banned, and yet despite that it is on sale in large quantities in hundreds of thousands of shops throughout the country. Why does not the Minister use his powers under section 13 to ban the toy altogether?
    Mr. Forth: I slightly regret the tone and terms with which the hon. Gentleman has presented the matter to the House, but I shall give him a full answer. As he well knows—or perhaps he does not—the enforcement of existing laws is a matter for the trading standards officers who do an excellent and superb job in enforcing consumer protection laws at local level. In this case, which one of his hon. Friends raised earlier, we looked carefully at the matter and were affected by the death of the young child. However, on balance, given that the product has been on sale for many years in this country and throughout Europe—millions of them are sold every year and its packaging contains a warning—I took the difficult decision that the death did not justify banning the product. I did so mainly because the child's tragic death was caused by the ingestion of a small part of the egg's contents. Many other products and toys with small parts are available in the market place. If we were to start banning every product that could be swallowed by a child, there would be very few toys left in the market. This is primarily a matter for parents and I am sure that all parents are aware of the potential danger to children of small items. On that basis, I hope that the hon. Gentleman will accept that we look at all such cases most carefully and, in this case, made a difficult—I believe the right—decision.

    Takeovers and Mergers
    Mr. Ian Taylor: To ask the Secretary of State for Trade and Industry what progress is being made within the European Commission in agreeing Communitywide powers to regulate cross-border takeovers and mergers.
    Mr. Ridley: At the 23 November Internal Market Council, major progress was made in negotiations on the proposed EC merger control regulation setting out
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    Community powers to regulate certain EC mergers. Agreement was reached in principle on a number of important issues. Discussion will be resumed at the Council on 21 December.
    Mr. Taylor: Will my right hon. Friend accept congratulations for the work that his Department has done to speed progress in European co-operation towards achieving the 1992 programme in competition policy and other matters such as insurance services? Will he confirm that the French have dropped their requirement for an industrial element in this policy as opposed to our desire for competition principles to be predominant? Has the Commission decided satisfactorily on the degree of flexibility in referrals for smaller countries?
    Mr. Ridley: I am grateful to my hon. Friend and I can confirm that good progress was made at the last Council. I am hopeful—but not certain—that an agreement will be reached during this Presidency. We can be satisfied with the criteria for the Communitywide mergers to be considered by the Commission, which are almost entirely on competition grounds.
    On the possibility of smaller nations with no mergers control machinery inviting the Commission to consider mergers betwen the thresholds of 2 billion and 5 billion ecu, we have a satisfactory formula which will allow the Commission to take remedial action only in the smaller member state that makes the application in the first place.
    Mr. Ron Brown: Whether the House is for or against the EEC—I am certainly against it—can the Secretary of State tell me exactly what the Government are doing to protect Ferranti, bearing in mind the predators within and outside this country who intend to take it over and asset strip it? That means that jobs will go and a major asset will be reduced to ruins both north and south of the border. Are the Government doing anything about that? Will the Government act as a guarantor for British industry or will they just sit back and listen?
    Mr. Ridley: I think that everything in that supplementary question was out of order and unacceptable—[Interruption.]
    Mr. Batiste rose—
    Mr. Hood: On a point of order, Mr. Speaker. Am I right in thinking that you are the only person who can rule whether something is in or out of order in the House and not a Minister from the Dispatch Box?
    Mr. Speaker: If I had thought it out of order, I would have said so.
    Mr. Batiste: Does my right hon. Friend agree that there is an important strategic need to develop large transcontinental companies across Europe in many of the important industries of tomorrow? In order for those companies to emerge, is there not a need for a coherent and consistent takeovers and mergers policy across Europe? Will my right hon. Friend confirm that he is wholly committed to the creation of such a regime?
    Mr. Ridley: I do believe that the regime—[Interruption.]
    Mr. Speaker: Order.
    Mr. Ridley: I believe that the regime in Europe should put as its first priority the preservation of competition, both in distinct markets and in the Community market as

    311
    a whole. It is more important that there should be competition than that we should seek to construct large European champions in any industry. I believe that there is room for both, but competition must come first.
    Mr. Riddick: Once the European countries have hammered out an agreement on this, will my right hon. Friend confirm that the Monopolies and Mergers Commission in this country will not carry forward its unfortunate practice of investigating whole industries where companies are competing unless there is clear evidence that prices are being fixed or that the companies are following other incorrect trade practices? Will he stop the MMC from producing grand bureaucratic designs for those industrial sectors as it did with the brewing industry?
    Mr. Ridley: The subject matter of this question has been Communitywide mergers of assets in excess of 5 billion ecu. Of course it is true that the Monopolies and Mergers Commission is also asked to carry out investigations into situations of imperfect competition. Those investigations are agreed by myself or, in the case of the beer report, by my predecessors. It would be wrong not to turn the spotlight on uncompetitive aspects of the particular industry under consideration. We should continue to have that power. I am sure that my hon. Friend will have views on the beer report that he might wish to express when the orders come before the House.
    Mr. Cryer: On a point of order, Mr. Speaker. My hon. Friend the Member for Clydesdale (Mr. Hood) raised a point of order about the Secretary of State not being allowed to decide which questions are in order in the House, and you indicated your agreement. Surely the Secretary of State cannot brush aside a question by declaring it out of order? He should apologise to the House for usurping your job; otherwise, any Minister could ignore questions.
    Mr. Speaker: I have said endless times before that I am not responsible for what is said in answer to questions. I said that I did not judge the question asked by the hon. Member for Edinburgh, Leith (Mr. Brown) out of order.

    Japanese Market
    Mr. Yeo: To ask the Secretary of State for Trade and Industry what recent representations he has received regarding access for British exports to the Japanese market.
    Mr. Douglas Hogg: I refer my hon. Friend to the reply given by my hon. Friend the Member for Wokingham (Mr. Redwood) on 1 November. In the first 10 months of this year our exports to Japan increased in value by 30 per cent.
    Mr. Yeo: Does my hon. Friend agree that, given level playing fields in the markets of Japan and elsewhere, plenty of British exports such as Scotch whisky and financial services are world beaters? As we allow free access to our market for the benefit of British consumers, will he do everything that he can to ensure full reciprocation in Japan and other countries?
    Mr. Hogg: I agree with everything that my hon. Friend has said. My hon. Friend the Prime Minister pressed the Prime Minister of Japan vigorously on this point, and Japanese markets are being substantially liberalised. I have
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    already mentioned the increase in exports in the first 10 months of this year. Last year, I am glad to say, there was an increase of 17 per cent.
    My hon. Friend referred to the Scotch whisky market. He will be pleased to know that whisky sales between last August and April of this year increased by 102 per cent.
    Mrs. Margaret Ewing: The Minister will know that that 102 per cent. increase is greatly appreciated, not least in my constituency, in which there are 43 distilleries. What specific action is he taking to ensure that the advance achieved over the past year will be enhanced by finally breaking down all barriers against Scotch whisky in the Japanese market?
    Mr. Hogg: I should like to have said that I had the hon. Lady in mind when I gave the figure but that would not be wholly true. She is right to be concerned. The problem relates to deception by look-alikes. The hon. Lady will be pleased to know that my right hon. Friend the Prime Minister strongly pressed the Japanese Prime Minister on the need to take action to prevent deception by look-alikes in the Japanese market and she was able to obtain considerable reassurances from him on that point.
    Mr. Ian Bruce: Does my hon. Friend agree that one way of getting more products into the Japanese market is to make British products more competitive? Under a previous Conservative Government there was a 6 per cent. payroll tax, in the form of employers' national insurance; under the next Labour Government it was 13 per cent., and it is still too high in the United Kingdom, at 10·5 per cent. Will my hon. Friend talk to the Chancellor about reducing it is soon as possible?
    Mr. Hogg: As so often, my hon. Friend is right. The Labour party has learnt nothing on this sort of matter. For example, it proposes a payroll tax, echoing the errors that it committed in the past.

    Citizens Advice Bureaux
    Mr. Ron Davies: To ask the Secretary of State for Trade and Industry what discussions he has had with the citizens advice bureaux on the funding requirements in 1990-91 of their comprehensive advice service.
    Mr. Forth: The funding of individual citizens advice bureaux is a matter for local decision, and my Department is not involved in those discussions. I have however met representatives of the National Association of Citizens Advice Bureaux and of Citizens Advice Scotland in recent months and among the topics discussed was their funding requirements.
    Mr. Davies: Will the Minister take this opportunity to express his appreciation of the invaluable work carried out by CABs in giving free and confidential advice to members of the public? Will he acknowledge that the CABs are now dealing with a vast increase in the number of inquiries about, for example, unemployment benefit, health and social security payments, cuts in housing benefit and now problems about debt repayment following the increase in interest rates? Given that many of those problems stem directly from the Government's social and economic policies, does he think that he has a moral responsibility to ensure adequate and continuing funding for the CABs?
    Mr. Forth: I certainly join the hon. Gentleman in praising citizens advice bureaux all over the country for their marvellous work in advising people who come to them for advice on a range of matters. I remind the hon. Gentleman that the Government have funded the National Association of Citizens Advice Bureaux to the tune of £9·9 million this year, an increase from less than £2 million 10 years ago. That demonstrates the Government's recognition in funding as well as praise, which I am happy
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    to give to the work of the national association. I emphasise that, as the hon. Gentleman well knows, the funding of local bureaux has always been and remains a matter for local authority decision. Local authorities can amply take care of that and I expect them to do so.
    Mr. Mallon: On a point of order, Mr. Speaker.
    Mr. Speaker: I shall take the point of order later.

Microwave Ovens
3.30 pm
Dr. David Clark(by private notice): To ask the Minister of Agriculture, Fisheries and Food whether he would make a statement on the list of models of microwave ovens which failed to reach the required safety standards in tests undertaken recently by his Department; and what proposals he has to inform the 8 million owners of microwave ovens of the details.
The Minister of Agriculture, Fisheries and Food (Mr. John Gummer): Last summer I was informed of the results of tests on five microwave ovens carried out by my Department. These indicated that some ovens, when operated in accordance with the manufacturers' instructions, did not always perform sufficiently consistently to kill the bacteria in the food. I therefore announced a larger test programme to cover all the most popular brands.
The day before yesterday I received the first facsimile copy of the report on the programme, which covered 102 ovens and 70 different models. Two thirds of these performed satisfactorily, but the remainder gave rise to a range of different concerns. I provided copies of the report to the microwave working party, which includes representatives of consumers and manufacturers, published it in the afternoon of the day I received it and placed, a copy in the Library of the House. At the same time, before there was any request from the Opposition or from any other quarter, I called in the manufacturers' representatives and insisted that they make available a list of the ovens tested, together with the advice and new instructions which would ensure that the ovens would perform properly.
I was pressed publicly to give a list of those ovens but I made it clear that such a list, without the detailed information and advice, would be of no use. I announced that the manufacturers would produce this information as rapidly as possible and, I hoped, before the weekend. The house will be pleased to know that the full list of every oven tested, together with these updated instructions is being published by the manufacturers this afternoon, that is, within two days of my receipt of the report.
Anyone who has a microwave oven will be able to check against the list and see what steps, if any, are needed to ensure that food is fully cooked. The manufacturers have also agreed to rush through updated instruction literature, where that is necessary, so that customers will be able to get the new instructions to keep with their machines.
The Association of Manufacturers of Domestic Electrical Appliances—AMDEA—has further agreed that all its members will ensure that new microwave ovens will meet the higher standards which the tests that my Ministry carried out have shown to be necessary. I promised all that on Monday.
As Minister with responsibility for food, my first responsibility is the protection of the health of the public. That is why I insisted upon this research. That is why I wanted the earliest possible results and the earliest possible publication. Today the House will recognise that we have been able to get the earliest possible advice to the public. By seeking co-operation and not confrontation, this whole programme has been completed faster and the public have
316
been more fully informed. As a result, the information that I promised on Monday, a promise that I repeated on Tuesday, has been delivered on Wednesday.
Dr. Clark: I am glad—[Interruption.]
Mr. Speaker: Order. This is a matter of great interest to our constituents.
Dr. Clark: Thank you, Mr. Speaker.
I am glad that, at last, we have managed to drag the Minister to the Dispatch Box to make a statement—[Interruption.] I remind Conservative Members that the Minister had refused to make a statement to the House. He has now given us the information we requested only as a result of my private notice question.
I am pleased that the Minister has changed his mind since his broadcast this morning, when he gave a completely different answer. Why does he think it right that the manufacturers should publish the results of a Government study? Why do not the Government publish their own independent results? Will the right hon. Gentleman confirm that the simple reason for the delay in persuading manufacturers to make an announcement was his agreement with them that, to save the Government money, the manufacturers would provide the models on the understanding that no results would be published about any models that failed?
Will the Minister make it clear—and it is his job, not that of the manufacturers—which models are safe and operative because it is vital that the firms survive and that the jobs of those working in the industry are maintained? Is it not time that the Minister began to speak up for the consumer, and not the manufacturer?
Mr. Gummer: It is a little difficult to understand how I have changed my mind when all that I have done is what I announced on Monday I would do. I had the manufacturers in my office at exactly the moment that I published the report and at exactly the time that the working party meeting ended. It had been sitting from 10.15 am on the day that I received the report, and the manufacturers, together with representatives of the consumer, were present at that meeting.
There is no question of any delay. Indeed, I congratulate my scientists on the speed with which they have moved. The report was published by the Government on Monday because it was a Government report. A statement on how the models should be used is being published by the manufacturers because it is their models that are involved and they are updating their information.
The hon. Gentleman's third question shows that he has come to understand that, by unnecessarily stirring up people's fears, jobs have again been endangered by the Labour party. It is precisely because I put the consumer first that the document has been published today. That is why I did not merely seek headlines, as the Opposition have done.
Mr. Jerry Wiggin: Would my right hon. Friend care to say a word about the role of the Consumers Association in this matter? I have looked up some recent reports. Is it not extraordinary that the consumer magazine "Which?" has at no time mentioned minimum temperatures in relation to microwave ovens? From its statement yesterday, it might be thought that the association was more interested in promoting itself than in the interests of consumers.
Mr. Gummer: I think that the my hon. Friend should be rather careful about mentioning the Consumers Association on this occasion. It turns out that the one oven that proved so unsatisfactory that it had to be withdrawn was one of the "best buys" recommended by the association after its tests. I note that the association said:
"When you buy a microwave, choose one which comes out well in our tests for cooking and defrosting: we take evenness into account."
I suspect that the association's concern in this instance has been motivated more by its history than by any desire to protect the consumer.
Mr. Alan W. Williams: I congratulate the Minister on his rapid climbdown. I heard him give a very different account on the one o'clock news yesterday; as always, he instinctively took the manufacturers' view, taking consumers into consideration only under pressure from my hon. Friend the Member for South Shields (Dr. Clark).
What provision do the Government intend to make for the repair of defective microwave ovens? Two million are now known to be defective in households up and down the country, and one third of cook-chill foods are contaminated with listeria. Microwave ovens are now posing a danger in every one of those homes.
Mr. Gummer: I find it difficult to see how the hon. Member for South Shields (Dr. Clark) can have forced me into doing something, given that I said what I was going to do before he had even heard about the problem. Let me tell the hon. Member for Carmarthen (Mr. Williams) that, admirable though his hon. Friend is in many ways, he has not been at the forefront on this occasion.
As for the hon. Gentleman's second question, he plainly does not understand what has happened. The machines themselves are, in large measure, not defective at all; the problem is simply that the instructions do not tell housewives or other consumers how to use them properly. The hon. Gentleman ought to remember that, rather than 2 million ovens being defective, a number of ovens require updated instructions, and those instructions are being given out today. The hon. Gentleman should thank my staff for the unparalleled speed with which they have moved.
Dame Janet F'ookes: As one who is not always a friend of the Minister of Agriculture, may I congratulate him on the speed with which he has worked? I hope that he will ignore the long-winded waffle that we have heard from Opposition Members. Can he recall a time when the Labour Government worked with such speed, or to such effect?
Mr. Gummer: I thank my hon. Friend. In such circumstances it is necessary to make a choice: do we wish to serve the consumer's needs or not? Serving the consumer's needs in this case meant obtaining the co-operation of all involved, and as a result not a single oven that was on the list is not now covered by up-to-date instructions. That was very speedy action. Any hon. Member who wants to look at that list need only visit the Library of the House, where I hope that it has been placed by now.
Mr. Matthew Taylor: Nevertheless, surely the Minister accepts that the public will find it extraordinary that his first reaction was to go to the manufacturers for
318
his information rather than to the consumers. Why did he reveal yesterday, in a written answer, that no tests on cooking from raw are being conducted, although it is well known that that process involves many bacterium problems in microwave ovens? Is it not high time that we had a Ministry of Food that put people first, rather than the manufacturers and the industry?
Mr. Gummer: The hon. Gentleman must have thought of that question before he heard the statement. What he has said is nonsense; it bears no relationship to the facts. The report that was made to me on Monday morning was given to representatives of consumers, manufacturers arid scientists at a meeting beginning at 10.15 and it was published in the afternoon. Immediately we received the details I was able to announce that the manufacturers had published them. I do not understand how much faster the hon. Gentleman feels that we could have moved. If he dislikes manufacturers generally and hates their products, he had better tell the people of Cornwall.
Mrs. Teresa Gorman: I congratulate my right hon. Friend on his eminently sensible approach to this latest attempt to drum up a hysterical outburst against a perfectly safe piece of equipment. I have owned and used microwave ovens for at least 20 years on a daily basis. I can assure my right hon. Friend that most people use microwave ovens for defrosting or warming food and that they are well aware that they simply need to stir the food while it is being cooked to ensure that it is heated through evenly.
There is a political dimension to this problem which my right hon. Friend has not mentioned. The Labour party has mounted an assault on the cook-chill industry for a long time and the London Food Commission has described cook-chill food as an assault on the food industry. By condemning the use of microwave ovens they are trying to discredit the cook-chill food industry.
Mr. Gummer: I thank my hon. Friend, with whom I do not always agree, for her kind support. It is a pity that the Opposition and others did not listen to what I said on Monday. If they had, they would not be surprised by what we have delivered on Wednesday.
Mr. Bruce Grocott: Will the Minister confirm that when he lost his temper on the "Today" programme this morning he had no intention whatsoever, as he repeatedly made clear, of publishing the list of defective microwave ovens but that a series of panic phone calls took place between his officials and representatives of the industry? May I, in a bipartisan spirit, ask him to join me in commending the person who made the breakthrough possible, my hon. Friend the Member for South Shields (Dr. Clark)?
Mr. Gummer: The hon. Gentleman must look back to the statement that I made on Monday. I made it quite clear that a list, with instructions, would be published. The hon. Gentleman must tell the truth and not mislead the House. I repeated on Tuesday what I had said on Monday—that the list would be published—and I have repeated it again today. The Opposition thought that they were going to win a point today. They were rather disappointed when they found that they were entirely wrong.
Mr. Jonathan Aitken: Will my right hon. Friend clarify whether we are discussing a food safety

319
problem or a manufacturing problem? If we are discussing a manufacturing problem, of course it is correct to allow the manufacturers to publish the list of technical faults and what needs to be put right, but if we are discussing a food safety problem my right hon. Friend must understand that there will be some surprise that his Department is not taking the initiative by issuing a list of dangerous microwave ovens.
Mr. Gummer: My hon. Friend must see that there have been two publications. I published on Monday the report that had the results of all the tests that had been carried out. What is being published today by the manufacturers is the agreed changes in their recommendations for the operation of their machines—as my hon. Friend said, of the machines themselves. Those are their recommendations, based on our findings. The machines are, of course, those on which the manufacturers had carried out other tests. I am sure that my hon. Friend agrees that I had the responsibility of announcing and publishing the report. I also had the responsibility on Monday of insisting that the manufacturers produced the list and gave the details of the changes with which we had agreed that the machines would be made perfectly safe in use.
Several Hon. Members rose—
Mr. Speaker: Order. This is an extension of Question Time, and we must now move on.

Public Expenditure (Scotland)
3.50 pm
The Secretary of State for Scotland (Mr. Malcolm Rifkind): With permission, Mr. Speaker, I should like to make a statement about public expenditure in Scotland.
Following the announcement of the Government's public expenditure plans by my right hon. Friend the Chancellor of the Exchequer on 15 November, I have now completed detailed decisions on the allocation of resources to the expenditure programmes for which I am responsible in Scotland. The total resources that I am able to deploy next year amount to just over £9·5 billion. That is £525 million greater than the latest estimate of outturn in the current year. Plans for future years will take the total to just over £10 billion in 1991–92 and to almost £10·4 billion in 1992–93, the third year of the survey.
In making my decisions on the resources to be allocated to individual programmes over the next three years I have, of course, had close regard to what are known as the "formula consequentials"—that is, the amounts that reflect the increases in the relevant comparable programmes south of the border. However, my final decisions reflect very clearly the priorities that I and my colleagues attach to particular Scottish needs and the requirements of particular programmes. The overall effect of my decisions is summarised in a table which is available from the Vote Office and will appear in Hansard. However, I should single out a number of key priority areas.
We are all concerned to see a significant improvement in our drinking water and in the quality of our environment. To achieve that, the Government will provide substantial additional resources, over and above the operation of the normal formula arrangements, for increased capital expenditure on water and sewerage services. That will enable me to boost capital expenditure above this year's level by more than £100 million over three years. That will take our investment level to no less than £190 million in 1992–93, almost 50 per cent. above this year's level, and provide a programme of £500 million over three years. I am sure that that will be widely welcomed.
I have also substantially increased the transport programme, by nearly £30 million next year compared with this, and made further increases which will bring the programme to over £400 million in 1992–93. That will enable us to make a significant start on the new M74 and further improvements to the M8, to the A96 and to other important trunk and local authority roads.
In housing, the resources available to Scottish Homes will be some £36 million—11 per cent.—greater than for the current year. I have substantially increased the public sector contribution to the funding of the local authorities' capital programme. The provisional net capital allocations for council housing will increase in total by £25 million, or 15 per cent. That will allow authorities to maintain the capital programme of improvement and repair of their own stock at the level per house announced this time last year, notwithstanding a forecast reduction in the level of receipts from sales. If local authorities wish to finance higher programmes of maintenance or new construction, they can increase receipts by speeding up council house sales, as Scottish Homes and the new towns have already done so successfully.

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My decisions on housing also recognise the importance of the four partnership areas, Castlemilk, Wester Hailes, Whitfield and Ferguslie Park. I am including in the increases an extra £11 million for those areas, split almost equally between Scottish Homes and the local authorities' capital programmes. Those decisions on housing in Scotland clearly respond to the major priorities at the present time.
The priority that we attach to the partnerships in the peripheral estates and to similar deprived areas is underlined by the 50 per cent. increase in the urban programme in 1990–91, which will inject an additional £16 million of Government grant into projects improving the social infrastructure and employment opportunities in those areas.
The Government's strong commitment to education is underlined by my expenditure decisions. Spending on my education programme will rise by 12 per cent. next year to £439 million, and to £500 million in three years' time. Expenditure then will be more than 25 per cent. higher than it was this year. In recognition of the fact that more of our young people and mature students wish to enjoy the benefits of higher education, I am increasing support for students by £134 million over the next three years. This means that we shall be planning for an extra 6,000 students in Scotland next year, and 8,000 in 1991–92.
My spending decisions also reflect the Government's firm commitment to improving the quality of our environment and supporting the maintenance of our heritage. There will be an increase of 10 per cent. in funds for the Countryside Commission for Scotland next year and new provision of at least £3 million over the next three years for projects within the central Scotland woodlands initiative. There will be a 16 per cent. increase in historic buildings grants next year, an extra £2·5 million over three years for repairs to the Royal Scottish Academy building in Edinburgh, and a 25 per cent. increase in the National Library purchase grant to enable it to make heritage purchases and fill gaps in its collection.

£ million

1989–90 Estimated2 Outturn

1990–91 Planned Provision

1991–92 Planned Provision

1992–93 Planned Provision

Net

Gross

Net

Gross

Net

Gross

Net

Gross

Agriculture

200

210

233

233

240

240

250

250

Industry

265

340

251

352

260

350

250

340

Water

130

133

142

143

170

170

190

190

Tourism

12

12

13

13

10

10

10

10

Transport

352

359

382

387

380

390

400

410

Housing3

621

1,109

639

1,024

650

1,140

660

1,030

OES4

141

211

133

194

140

200

120

180

LOPS

274

288

302

317

300

320

320

340

Education (including Sport)

390

396

439

440

490

490

500

500

Arts & Libraries

28

28

35

35

40

40

40

40

Health

2,714

2,821

2,937

3,041

3,090

3,190

3,240

3,330

Social Work

38

38

38

38

40

40

40

40

OPS

128

149

139

169

160

190

160

190

NI external financing

-60

-60

-118

-118

10

10

10

10

Sub-Total

5,233

6,033

5,560

6,268

5,980

6,780

6,190

6,860

Central Government support for local authority current expenditure

3,818

3,818

4,016

4,016

4,110

4,110

4,210

4,210

Total

9,051

9,851

9,576

10,284

10,090

10,890

10,400

11,070

Note: Owing to rounding, individual figures do not necessarily sum to the totals. Figures for 1991–92 and 1992–93 are rounded to nearest £10 million.

The figures for each service consist of central Government's own expenditure, net capital expenditure allocations and grants to local authorities and public corporations' expenditure.

Finally, I would single out health for a particular mention. The health programme is, of course, the biggest single programme within my block and it accounts for almost one third of the total resources that I have at my disposal. Indeed, expenditure per head on health in Scotland is well over 20 per cent. above the comparable level in England. I continue to attach a very high priority to the Health Service. I have therefore allocated to it an additional £220 million over this year's expenditure, which is more than the formula consequentials from comparable expenditure in England. Overall, it takes spending on the health programme in Scotland to a figure in excess of £3 billion for the first time—almost three times the size of the programme that we inherited on taking office 10 years ago. By 1992–93, the total expenditure will be fully £500 million higher than in the current year.
In addition to these key decisions on programmes, I have, as already announced, set aside resources to enable a significant start to be made in bringing business rates in Scotland into line with those south of the border. Business ratepayers will be paying £80 million less next year than would otherwise be the case.
I have also already announced details of the provision I am making for the Scottish Development Agency and the Highlands and Islands Development Board. The gross expenditure of the Scottish Development Agency will reach a new record level of £180 million next year, while the Highlands and Islands Development Board will have an additional £9 million over the next three years, in recognition of the particular problems of Caithness. Both bodies have welcomed the generous provision being made.
The decisions that I am announcing today represent good news for Scotland. They will enable us to address the real priorities and needs of the Scottish people. I commend them to the House.
Following is the table:

2 The introduction of the new planning total means that it is not possible to make precise comparisons between the expenditure plans for 1990–91 and those for 1989–90. It is for this reason that the above table shows comparison between estimated outturn and plans. The estimated outturn figure for 1989–90 is higher than that shown in the Autumn Statement because it takes account of supplementary estimates and supplementary capital allocations since the figures for the Autumn Statement were compiled.

3 Scottish Homes' estimated gross outturn, excluding NLF repayments, in 1989–90 is £313 million: the proposed figure for 1990–91 is £349 million. Local Authorities' latest net capital allocations for investment in their own stock in 1989, including the recently announced supplementary allocations, total £164 million. The provisional net allocations for 1990–91 will be £189 million.

4 Estimated urban programe grants in 1989–90 are £32 million; the proposed figure for 1990–91 is £48 million.

Mr. Donald Dewar: The Secretary of State has made his annual appearance as Santa Claus. He is not very convincing in the role. Certainly no self-respecting department store would employ him to dispense Christmas cheer, and I know of no grotto that would be prepared to house him.
On detailed examination the right hon. and learned Gentleman's message this year once again falls far short of the expectations of the advance publicity. Does he remember last year's confident talk of generosity, and has he seen table 1.12 in this year's Autumn Statement, which shows that general Government expenditure in Scotland is expected to fall by £100 million in real terms between 1988–89 and 1989–90? Does not the Chancellor's own testimony in this year's Autumn Statement make it clear that Opposition Members were right in the comparable argument last year?
Last year central Government support for local government expenditure was included in the individual programmes. This year it has been excluded from the tables and appears as a single unallocated block almost as an afterthought. As that total of about £4 billion in real terms will be at a standstill next year, if the figures had been allocated as they were in the past, they might well have depressed the individual spending increases that the Secretary of State is now parading. It gives some reality to the figures if we remember that central Government support for local government expenditure is expected to fall in real terms both in 1991–92 and 1992–93.
Will the Secretary of State confirm that if we take estimated outturn for 1989–90 against net planned provision in real terms for 1990–91, the increase is less than I per cent.? That is anything but generous and is a programme which in no sense measures up to Scotland's needs.
I am happy to welcome certain decisions on priorities such as the increased expenditure on water and sewerage services and the money allocated to the urban programme. However, there are sad omissions and, given the largely standstill budget in real terms, inevitably casualties. Expenditure on the Health Service is planned to increase, as I calculate it, in real terms by under 2·5 per cent., or less than 1 per cent. if we apply the more realistic National Health Service deflator. Will the Secretary of State accept that, having spent a morning earlier this week with some of my colleagues considering the problems of the Greater Glasgow health board, I can see no reason for taking satisfaction from the figures?
Is it not extraordinary that next year the net industry budget is cut in cash terms by £14 million and in real terms by £25 million, or 25 per cent.? Is that not an incomprehensible decision when the economic outlook is so difficult? Does the Secretary of State remember telling the House on 13 December last year that
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"Detailed provision for Scottish Enterprise will appear in my future public expenditure plans."—[Official Report, 13 December 1988; Vol. 143, c. 770.]
He went on to talk of an increase in next year's provision for both net and gross expenditure in the industry programme. What has happened to the provision for Scottish Enterprise? How can the cuts over the next year or two give any grounds for confidence in the Secretary of State's ability to honour his recent hints on television that he would be able to persuade the Treasury to go beyond the imposition of a standstill budget on Scottish Enterprise?
I want to ask the right hon. and learned Gentleman specifically about the problem of homelessness. The Secretary of State for the Environment recently announced a special package of £250 million for local authorities and housing associations in areas of particular need south of the border. The figures released by Shelter and local government for Scotland are frightening.
Does the Secretary of State accept that homelessness is significantly worse in Scotland than it is in the rest of the United Kingdom? If that is so, why has there been no equivalent Scottish announcement? Will he accept that it is not good enough to argue that provision has been made within the overall figure, particularly when the net increase in his contribution to the housing budget from £621 million to £639 million next year is, in real terms, an increase of only 1 per cent.? That would be a cruel mockery when gross expenditure actually falls next year by £85 million, or by £126 million in real terms. Every Opposition Member will remember the callous slight to the homeless contained in the Government's original White Paper on housing. The absence of any specific finance to tackle the problem can only confirm the accusation of complacency and indifference.
The Secretary of State's announcement does not add up or measure up to the problems of Scotland. If, as some fear, recession bites, his announcement will be seen as a tragic lost opportunity.
Mr. Rifkind: The hon. Member for Glasgow, Garscadden (Mr. Dewar) referred to me as Santa Claus. I am always happy to play Santa Claus against his Scrooge. Yet again he seeks to dismiss a superb settlement as one which should be subject to criticism. He sounded today even less convincing than usual in his argument.
The Government have been so generous to Scottish local authorities that I have been required to divert money from other central Government programmes to sustain local government expenditure. The hon. Gentleman should acknowledge and appreciate that fact. I welcome his support for the announcements on water and sewerage and on the urban programme. That will be widely welcomed.
The hon. Gentleman referred to problems that he has identified in the Greater Glasgow health board. He might

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like to emphasise the fact that the Greater Glasgow health board is, and will remain, probably the best funded health board anywhere in the United Kingdom. If it has problems, I have no doubt that, under its present management, it will seek to rectify them at the earliest opportunity. It is worth remembering that my announcements today represent an 8·2 per cent. increase in expenditure on the Health Service, compared with the outturn in the current year. In the case of family practitioner services, an increase of no less than 13 per cent. has been announced.
The hon. Gentleman bewailed the absence of any reference to Scottish Enterprise. It would have been rather astonishing if there had been a reference to it. The Bill is yet to be introduced into the House. Scottish Enterprise will not come into effect at the beginning of the public expenditure survey. Obviously the appropriate time to determine resources for Scottish Enterprise will be when Parliament approves its establishment. As the hon. Gentleman has indicated that, unlike the rest of Scotland, he is opposed to the creation of Scottish Enterprise, he is hardly the best person to bewail the alleged lack of resources for it.
We fully recognise the seriousness of homelessness. That is why I have provided for an increase of 11 per cent. to Scottish Homes—a substantial increase on top of the significant resources that were provided for its first year of operation. In addition to local authorities, there has been an increase in the Government's contribution—more than double the rate of inflation. I have told local authorities that, if they wish to increase their gross expenditure, they should realise that, in Scotland, they have the full benefit of receipts from council house sales. If they were to apply the same energy to assisting their tenants to acquire their homes as the new towns and Scottish Homes have done, it would be entirely to the benefit of their housing expenditure opportunities.
Sir Hector Monro: I warmly welcome the huge expenditure in Scotland, including a far higher cost per head than is available to England. I welcome also the fact that there is to be a big increase in expenditure on roads, housing, health and education. Bearing in mind the vast increase in local authority expenditure, does my right hon. and learned Friend agree that the quality of life in Scotland should be far higher than ever before, and achieved without any increase in the community charge?
Mr. Rifkind: My hon. Friend is correct. A large number of local authorities in Scotland will be able to contemplate reducing the community charge for next year, given the removal of their contribution to the safety net and the fact that the vast majority of local authorities will therefore receive an increase in revenue support grant. That will mean than any decision not to reduce community charge levels, particularly on the part of district councils, will be almost impossible to understand or justify.
Mr. Alexander Eadie: The Secretary of State placed great emphasis on spending on education. May I take it that, as a consequence of his statement, he will look favourably at the proposals by the governors of Newbattle college, in Dalkeith, Midlothian?
Mr. Rifkind: The hon. Gentleman will recall that the problem relating to Newbattle college arose out of the unwillingness of local authorities and trade unions over
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the years to continue their contribution to the support of Newbattle, which left the Scottish Education Department as the only body providing any substantial support. Naturally, one will look with interest at any proposals coming from the college, but I cannot anticipate any change in the Government's position, because the reasons for that policy still appear to be substantiated by the present situation.
Mr. Allan Stewart: I congratulate my right hon. and learned Friend on his statement and on his rejection of the wilder assertions that were made by the hon. Member for Glasgow, Garscadden (Mr. Dewar) in his annual appearance as the spectre at the feast. I welcome what my right hon. and learned Friend said about increased investment in water. He said that the increases were outside the block and that, in effect, Scotland has benefited enormously from privatisation receipts from England and Wales. I assume that my right hon. and learned Friend used some pretty good Unionist arguments for that, as it seems a considerable political achievement.
I should like also to ask my right hon. and learned Friend about transport. My understanding of his figures is that, in effect, expenditure on new motorway and road construction will have increased by 50 per cent. by 1992–93.
Mr. Rifkind: I am grateful to my hon. Friend, but I do not think that I can claim that the resources allocated for water and sewerage arise out of privatisation receipts from the sale of the industry south of the border. Rather they reflect a willingness by my colleagues—and I am grateful to my right hon. Friends the Chief Secretary to the Treasury and the Chancellor of the Exchequer—to appreciate the need for a substantial increase in expenditure on this important area to improve the quality of our environment in Scotland. There are similar schemes elsewhere in the United Kingdom and I think that we all agree that this is a crucial priority.
Likewise with roads: we have identified an exciting roads programme, especially the upgrading of the M74, which has been widely welcomed.
Mrs. Ray Michie: I welcome the announcement about increased expenditure on water and sewerage. However, will it be sufficient to help the rural areas in Scotland where most of the sewage is discharged straight into the sea as raw sewage and often returns straight on to the shore?
I am still concerned about what the Secretary of State said about homelessness in Scotland which remains unacceptably high, especially in Argyll and Bute, where it has risen by 55 per cent. in the past five years. I know that the council finds it difficult to cope with that.
The right hon. and learned Gentleman also referred to increasing support for students, which I find a bit false in view of the top-up loans that are supposed to be imposed on them. The right hon. and learned Gentleman talked about support and about trying to plan for an extra 6,000 students next year. What proportion of that 6,000 are likely to be Scottish students and which countries will the others come from?
I should be grateful if the Secretary of State would give some detail about the subsidy for Caledonian MacBrayne. Will it be increased or decreased? If it is to be decreased, I hope that the right hon. and learned Gentleman realises what he is doing, because he would be forcing CalMac to

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make more and more money from tourism, which would mean that in the end it will become a tourist service instead of remembering that its first priority is to serve the islanders.
Mr. Rifkind: I thank the hon. Lady for her warm welcome to my announcement on water and sewerage. We certainly hope that Argyll, as well as other parts of Scotland, will substantially benefit from it.
On the question of homelessness, I am very conscious of the fact that the reduction in receipts from council house sales would, by itself, have led to significant problems for local authorities. Therefore, it is appropriate for both Government and local authorities to do what they can to respond to that problem. That is why in our Government contribution we have provided a substantial increase that is well over the rate of inflation to help local authorities. However, I hope that the local authorities will show more enthusiasm than they have up to now in assisting and encouraging their tenants to use the opportunities of the tenants' rights legislation, because that will also work to the benefit of their housing programmes.
With regard to what the hon. Lady said about students, it is obviously for the universities to determine admissions, but the point of the increased resources is to enable a higher proportion of people in Scotland to benefit from higher education. That figure has already reached 22 per cent., compared with the United Kingdom average of 15 per cent., and the figures announced today will allow for further improvements in that area.
We are not making any announcement today with regard to CalMac. The hon. Lady should recall that support for CalMac is based on the deficit subsidy approach, which means that we cover the difference between revenue and expenditure. We obviously take into account the pattern of use of the service and the need for a fair and reasonable tariff structure.
Mr. Bill Walker: My right hon. and learned Friend's statement will be welcomed in Scotland, and especially his choice of priorities. However, that choice of priorities could well be affected by other factors. Is he aware that in Tayside, for example, the region's Labour administration has handled the education policy in such a way that it has not dealt with the problems in Dundee, where there is 40 per cent. over-capacity and consequently Alyth school in my constituency has been forced to consider the possibility of becoming self-governing?
Also, general practitioners in Scotland may find that they will not benefit from the additional funds because their representatives on the Scottish BMA are not prepared to have special discussions on the needs, aspirations and wishes of Scottish GPs because they do not want a separate deal.
Hon. Members: This is a speech.
Mr. Speaker: Order. This is not a debate but the time for questions. The hon. Member must ask a question.
Mr. Walker: I was following the example of earlier questioners. I was present throughout Question Time, but this is the first question that I have asked today.
Mr. Speaker: Unfortunately, that does not entitle the hon. Member to ask a series of questions.
Mr. Walker: I am simply following an example. I trust that you, Mr. Speaker, will accept that I usually endeavour to follow your instructions to the letter.
Will my right hon. and learned Friend bear in mind that he does not always control where funds finally go and that the activities of others could impede his wishes?
Mr. Rifkind: That is indeed the case. We provide resources to several organisations, and ultimately it is their responsibility to decide how those resources are used.
Mr. Dennis Canavan: What adjustment will have to be made to Government expenditure plans if large numbers of people continue to refuse to pay the poll tax? Despite the Secretary of State's brave words to Edinburgh business people the other day, is it not a fact that bankers as well as local authorities are finding it increasingly difficult to cope with the resultant chaos? That chaos is likely only to worsen until the Government come to their senses and replace that iniquitous tax with a fairer system of local government finance.
Mr. Rifkind: I am sorry to disappoint the hon. Gentleman. I do not recall him complaining a year ago about administrative problems caused under the old rating system when Strathclyde regional council had to issue more than 78,000 summary warrants to owner-occupiers and private tenants who had not paid their rates on time, apart from what warrants were necessary for council tenants. The hon. Gentleman found it unnecessary to comment on those matters under the rating system. Similar attempts to delay paying the community charge should not surprise the House, even if it surprises him.
Sir Nicholas Fairbairn: I thank my right hon. and learned Friend—perhaps I should declare an interest—for the enormous and welcome increase in historic building grant.
Mr. Robert Hughes: The hon. and learned Gentleman will be able to buy a new suit.
Sir Nicholas Fairbairn: I thought that my suit had an historic appearance.
I also congratulate my right hon. and learned Friend on increasing the expenditure for Scotland, once again increasing the quality of life in Scotland beyond that of any other part of Europe.
Mr. Rifkind: I am grateful to my hon. and learned Friend. The Government attach great importance to Scotland's natural and national heritage and the Historic Buildings Council, so ably chaired by my hon. and learned Friend, makes a splendid contribution, supported by the whole of Scotland, to ensuring a splendid future for Scotland's national heritage.
Mr. Adam Ingram: Does the Secretary of State agree that one of the real tests of his announcement will be whether homelessness is reduced and the housebuilding programme is stepped up? What specific sums has he allocated to those worrying and growing problems, and by how much does he estimate that homelessness and housing waiting lists will be reduced over the next four years?
Mr. Rifkind: I said that resources to Scottish Homes were being increased by £36 million, an increase of some 11 per cent. In addition, we have provided £11 million particularly for the partnership estates, which are

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primarily local authority council estates. The £36 million will be divided between the local authority allocation and Scottish Homes. In addition, local authorities will receive an increase in their net allocation for their capital programmes of about 15 per cent. That reflects the difficulties that would otherwise arise from the reduction in receipts from council house sales. I make no apology for repeating that local authorities also have an obligation to do what they can to increase their resources, as the new towns have done so successfully.
Mr. Robert Hughes: Does the Secretary of State recall that, in previous years when he has come to the Dispatch Box and made glowing announcements about his generosity, it has almost always been followed after Christmas and the new year by Members for Aberdeen and north-east Scotland telling him that he grossly underestimated and misrepresented the sum which was to be available to my part of the country? Will it be the same this year? Can he give us the figures for the north-east? Can we spare ourselves our annual trip down to see him to get justice for our part of the country?
Mr. Rifkind: Naturally, each local area, not just the north-east, would like to get the lion's share of the resources available. Today's announcement is of the global sums available. Over the next few weeks my hon. Friends and I shall determine the individual allocations to individual local authorities. I can assure the hon. Gentleman that we shall continue to treat fairly the needs of Grampion region and district councils in the north-east. Each local area believes that it should have more than any other area, but that is not always possible, as the hon. Gentleman will appreciate.
Mr. Alex Salmond: When will the Secretary of State take time to educate English Tory Back Benchers and some Scottish ones about the enormous flow of funds for defence procurement, mortgage interest tax relief and transport subsidies which are siphoned off into the already overheated economy of the south-east but mysteriously do not appear in any of the identified public expenditure tables? Is he aware that an analysis from the Library shows that from his period of office to the end of the forecast period in 1992 the Scottish Office budget will increase by 39 per cent., overall United Kingdom public expenditure by 42 per cent. and the Welsh Office budget by 57 per cent.? Why is it that every time the Secretary of State claims a miracle on public spending it turns out to be a mirage?
Mr. Rifkind: If the hon. Gentleman is advocating on behalf of his party levels of public expenditure for Scotland which correspond to those of either England or Wales, he must explain to his constituents why he advocates major cuts in the present level of provision for health, housing, education and roads, all of which are substantially higher for Scotland than for England or Wales. He should escape for a moment from the paranoia associated with his party.
Several Hon. Members rose—
Mr. Speaker: Order. I must have regard to the subsequent business, but I shall endeavour to call all hon. Members provided that they ask brief questions.
Mr. Tam Dalyell: As everything is so rosy in the financial garden, why is it necessary to introduce the
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principle of toll roads from Edinburgh to the M74? Is it because there is a fall in real terms in the money allocated to transport between 1991 and 1992?
Mr. Rifkind: The hon. Gentleman is misinformed. There is no proposal for toll roads from Edinburgh to the M74. There are several projects that may include the use of tolls in various parts of the United Kingdom. Our recent discussion document on routes south of Edinburgh suggests that there may be a case for a fast link between part of the M8 and the M74. The proposal has not been previously suggested by other interests, nor does it appear in the existing roads programme. Rather than defer such a project for the good number of years that would be required, given our other transport priorities and initiatives, we have suggested that it might be worth considering whether the fast link could be provided in the form suggested. I stress that it is only a proposal at this stage.
Mr. John McAllion: The Secretary of State told us this afternoon, as he told us in his statement last year, that the health programme has been identified as an area of priority. Yet we learned only this week that during the past year 200 patients at the Lennox Castle psychiatric hospital suffered undernourishment as a result of staff shortages. He can say what he likes at the Dispatch Box, but how does he expect anybody to believe him when so much evidence in Scotland flies in the face of his claims?
Mr. Rifkind: I share the hon. Gentleman's concern about reports of undernourishment at that or any other hospital. Suggestions that it is due to staff reductions cannot possibly be justified. Apart from anything else, staff numbers at that hospital have increased rather than decreased recently.
Mr. Ron Brown: Although the Secretary of State has been addressed as Father Christmas, does he not understand that there is no sanity clause in his statement? He has told us that Scottish Homes and local councils should sell public housing in Scotland, but the Government, through the quango, the Scottish Development Agency, have bribed Barratt's with more than £300,000 to develop the West Pilton Circus site in my constituency. Worse still, they have kept that secret and they will not divulge the facts, but it is all true. Why does not the Secretary of State speak up, or does the kick-back system still operate? Does he support it as part of the capitalist system?
Mr. Rifkind: If the hon. Gentleman wants to pursue that point, he should either put down a Question or write a letter to either myself or to my hon. Friend the Minister concerned, as his question today is somewhat confused.
Mr. Alistair Darling: Does the Secretary of State recall that, last year, he painted ari optimistic picture of National Health Service funding? I have in my possession a confidential memorandum that shows that Lothian health board has stopped filling vacancies because it does not have the cash to do so. Surely the promises that were given last year were untrue. What reason do we have to believe the Secretary of State this year? A lot of the money that he has announced today will be used to oil the wheels of privatisation and to introduce the health reforms that the Government are so keen to support.
Mr. Rifkind: The hon. Gentleman should be as aware as anyone that the introduction of, for example, competitive tendering in Lothian and elsewhere has led to substantial savings which have remained with the health boards and have been used by them to improve services for their patients. It is true that some of the resources announced today will be used for the NHS review. That is right and proper, because that review will be a further means whereby we can improve the quality of service and therefore the well-being of patients in Lothian and elsewhere in Scotland.
Mr. Gavin Strang: Will the Secretary of State admit that, against the background of the Government's high-interest rate economic policy, and taking into account the likely level of inflation next year, the public expenditure he has announced will not be sufficient to stop unemployment rising again next year in Scotland?
Mr. Rifkind: Before the hon. Gentleman reaches such conclusions, he should look at some recent reports and surveys. This morning The Scotsman quoted the chief economist of the Royal Bank of Scotland as predicting that economic growth in Scotland will outstrip the rest of the United Kingdom next year; presumably because, in part, the effect of high-interest rates, although undesired in any part of the country, has its greatest impact where mortgages are highest—in the south-east of England. That report this morning corresponds with reports and surveys by the Fraser of Allander Institute and the Scottish Confederation of British Industry, all of which point to the fact that growth in Scotland is likely to be higher than the United Kingdom average for the forthcoming year.
Mr. Tom Clarke: Did the Secretary of State consult COSLA on his statement, or does he plan to do so? In view of the absence of any reference in the statement to community care, how does that match with the Government's rhetoric on the subject? There are problems of homelessness, poverty and fuel poverty as well as problems arising from the notorious social fund, and social work departments experience those problems day after day. What recognition has the Secretary of State given in the statement to those social work departments that are trying to operate and to respond to people's needs under the sort of pressure that they know, and the Secretary of State should know, to be totally unacceptable?
Mr. Rifkind: Central Government provision for social work is planned to rise from £16 million in 1991 to £20 million in 1992—93, which is a substantial increase. As for consultation with the local authorities, my hon. Friend the Minister with responsibility for housing met COSLA on Friday and discussed the housing allocations with it.
Dr. Jeremy Bray: Will the Secretary of State confirm that he has received a major hospital building programme from the Lanarkshire health board? Will he confirm that it includes a proposal for a new district general hospital in the Motherwell district to replace the temporary wartime emergency hospital which is incapable of development because of mining subsidence on the site? Will he confirm that there is room for a start at least on the planning expenditure on this hospital in the next financial year?
Mr. Rifkind: Proposals such as those to which the hon. Gentleman refers have not yet been drawn to Ministers' attention. However, I assure the hon. Gentleman that when that happens I shall take into account the point that he has made.
Mr. Nigel Griffiths: How does the Secretary of State justify the cut in public services of £100 million revealed in last month's Autumn Statement—table 1.12, page 30—and what confidence has he that the future spending increases he announced will bring about the desired results over the next year?
Mr. Rifkind: I have already informed the House that expenditure in Scotland, for which the Scottish Office is responsible, will increase by more than £500 million next year compared to outturn for this year. That answers the hon. Gentleman.
Mrs. Margaret Ewing: In drawing up his budget allocation for the Scottish Development Agency and the Highlands and Islands Development Board, did the Secretary of State take special account of the possible need to assist the hard-pressed fishing communities on the coastlines of Scotland?
Mr. Rifkind: I share the hon. Lady's concern about the problems faced by the fishing industry, and I have already made clear my total opposition to the latest proposals from the Commissioner in Brussels with regard to haddock quotas for the industry. Clearly we shall have to await further developments to see exactly what the scale of reduction in fishing entitlements might be. The hon. Lady can rest assured that we shall do our best to protect the fishing communities from any unreasonable proposals made by the Commission.
Mr. John Maxton: Does the Secretary of State seriously believe that the people of Scotland will be deluded when he uses terms such as "superb", "generous" and other over-flowing adjectives to describe the settlement when examination of the figures will show that the settlement will mean a policy of cut, cut and cut again? Is it not clear that his evasively complacent answers to my hon. Friends' questions about homelessness in Scotland show that he is cruelly and callously indifferent to the plight of thousands of Scots with no roof over their heads at this time of year?
Is he not aware that to use the increased allocation to Scottish Homes is totally irrelevant because Scottish Homes has no statutory obligation to the homeless? Does not the recent Shelter survey show that there is a major crisis of homelessness in Scotland which he can solve only by dealing with it as his right hon. Friend the Secretary of State for the Environment did—by allocating special funds for the purpose and allowing local authorities to get on with the jobs that they are best able to do?
Mr. Rifkind: Only the hon. Gentleman could describe an increase of £500 million as a cut. He seems unaware of the work that Scottish Homes is doing and proposes to do with its resources. Far from operating in a vacuum separate from local authorities, Scottish Homes already works closely with many local authorities in Scotland, and a substantial proportion of its resources is being used in the local authority estates in co-operation with local

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authorities. How the hon. Gentleman, representing as he does the Castlemilk estate, can be ignorant of that fact is extraordinary when Castlemilk is—
Mr. Maxton: What about homelessness?
Mr. Rifkind: Yes, there is homelessness in the hon. Gentleman's constituency. He should know that, even if he is not drawing it to our attention.
Castlemilk is one of the partnership areas into which substantial new resources are being put in co-operation with local authorities. The hon. Gentleman does his constituents a grave disservice by appearing to be ignorant of that fact.

Points of Order
4.34 pm
Mr. Seamus Mallon: On a point of order, Mr. Speaker. I think we would all agree that one of the great strengths of the House is the way in which it respects and defends the position of every person in it, however lowly or exalted. I fully agree that you, Mr. Speaker, cannot be responsible for the ill manners and discourtesy sometimes shown by Ministers to hon. Members. I sat here yesterday and today and watched the hon. Member for Edinburgh, Leith (Mr. Brown) being treated in a discourteous manner by a Minister. When a pattern like that is established, it becomes the business of the House. I ask your ruling, Mr. Speaker. Would this be the time to ask the Leader of the House and the Government Chief Whip to remind Ministers that, when they offend against one person in that way, they offend against the integrity of the entire House?
Mr. David Winnick: Further to that point of order, Mr. Speaker. It is on this point.
Mr. Speaker: Why?
Mr. Winnick: The explanation is that on many occasions you have asked hon. Members to withdraw or apologise. As you know, hon. Members respond to the Chair. The Secretary of State for Trade and Industry said that the supplementary question of my hon. Friend the Member for Edinburgh, Leith (Mr. Brown) was out of order. You accepted that it was not out of order, or you would have pointed it out. Although you cannot force Ministers to apologise if what they say is not directly out of order, under those circumstances should not the Secretary of State have apologised? By not apologising, has he not shown contempt to the House and to you?
Mr. Speaker: As the House knows, I am not responsible for what is said, provided that it is in order. Yesterday I did not hear the question from the hon. Member for Edinburgh, Leith (Mr. Brown), because, as I explained, the microphones are out of date. I hope that in due course they will be replaced. However, the hon. Gentleman was heard today, perhaps because I suggested to him that he move his place.
Mr. Ron Brown: On a point of order, Mr. Speaker. I would like to raise a separate master concerning the Secretary of State for Scotland. He said that I should table a question to him on Barratt's. I have done that, but I am not satisfied with the reply, and neither are my constituents. If it is a cover-up job and he does not want to answer openly, then something is wrong. I believe in perestroika, glasnost, and open government, whereas the Government do not.
Mr. Speaker: Again, I am not responsible for the answers given to questions.
Mr. Jim Sillars: On a separate point of order, Mr. Speaker. Are you aware that, while this afternoon's exercise on the Scottish statement was quite useful, it is no substitute for the inquisitorial attitude towards the Government which is required and would come from a Select Committee on Scottish Affairs?
I should like, Mr. Speaker, to take you back a few minutes to the slight altercation between yourself and the

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hon. Member for Tayside, North (Mr. Walker) who complained that he was not receiving enough time to question the Minister. Is it possible, through you, to invite the hon. Member for Tayside, North to reconsider his position in respect of the Select Committee on Scottish Affairs?
Can you explain why, if someone in the House allegedly—I use that word advisedly—disobeys the Standing Orders, he can be evicted from the precincts of the House, yet when a Government refuse to obey Standing Order No. 130 and set up a Select Committee on Scottish Affairs, they can do so with impunity?
Mr. Speaker: This matter was raised with me by the hon. Member for Angus, East (Mr. Welsh). I have given him a reply, and I have nothing further to add to what I said the other day.
Several Hon. Members rose—
Mr. Speaker: Order. We do have an important debate before us.
Mr. Bill Walker: On a point of order, Mr. Speaker. I seek your guidance and, I hope, your protection. May I draw your attention to the fact that the issue of membership of the Select Committee on Scottish Affairs is regularly alluded to in the Chamber?
You will remember, Mr. Speaker, that in two Parliaments the Scottish National party refused categorically to serve on that Committee. Those hon. Members are no longer with us, but the present members of the Scottish National party seek to deny me, as an hon. Member, the rights that they enjoyed. Their reasons for refusing to serve were quite different from mine. I have served in two Parliaments and know something about what happened in that Committee.
Mr. Speaker: The hon. Gentleman, like all hon. Members, has my protection. We have heard what he said, but it is not a matter for me.
Mr. Robert Hughes: Further to that point of order, Mr. Speaker. Since there is real difficulty in scrutinising Government business adequately, if the Government persist in their refusal to set up a Select Committee on Scottish Affairs, might it be a matter for the Procedure Committee to examine? If we cannot have a Select Committee on Scottish Affairs, perhaps we can have at least double the ration of Question Time.
Mr. Speaker: The hon. Gentleman must put that matter to the Procedure Committee.

BILL PRESENTED
  BROADCASTING BILL
  Mr. Secretary Waddington, supported by the Prime Minister, Mr. Secretary Hurd, Mr. Chancellor of the Exchequer, Mr. Secretary Walker, Mr. Secretary Ridley, Mr. Secretary MacGregor, Mr. Secretary Rifkind, Mr. Secretary Brooke and Mr. David Mellor, presented a Bill to make new provision with respect to the provision and regulation of independent television and sound programme services and of other services provided on television or radio frequencies; to make provision with respect to the provision and regulation of local delivery services; to amend in other respects the law relating to broadcasting and the provision of television and sound programme services; to make new provision relating to the Broadcasting Complaints Commission; to provide for the establishment and functions of a Broadcasting Standards Council; to amend the Wireless Telegraphy Acts 1949 to 1967 and the Marine, &c., Broadcasting (Offences) Act 1967; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 9.]

STATUTORY INSTRUMENTS, &c.
Ordered,
That the Food Protection (Emergency Prohibitions) (Contamination of Feeding Stuff) (Wales) (No. 4) Order 1989 (S.I., 1989, No. 2269) be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Chapman.]

Orders of the Day

  Property Services Agency and Crown Suppliers Bill
  Order for Second Reading read.
  4.40 pm
  The Secretary of State for the Environment (Mr. Chris Patten): I beg to move, That the Bill be now read a Second time.
  This Bill is among the shortest that we shall be introducing this Session; it is none the less significant. It provides measures to allow the sale to the private sector of the Crown Suppliers and PSA Services, which are both parts of the Property Services Agency. The remainder of the PSA will remain within the Government.
  The success of the Government's privatisation programme is acknowledged throughout the world—
  Mr. Clive Soley indicated dissent.
  Mr. Patten: The hon. Gentleman sniggers. I notice that they have just appointed—
  Mr. Bryan Gould: It was a guffaw, actually.
  Mr. Patten: They are not guffawing in Poland, where they have just appointed a privatisation Minister. That is a point to which I shall return with enthusiasm later if invited to do so. Having heard the hon. Member for Copeland (Dr. Cunningham) on Sunday explaining, or perhaps not quite explaining, that the Labour party was or was not enthusiastic about privatisation, we once again look forward to hearing clarification of this issue by the hon. Member for Dagenham (Mr. Gould)—his clarifications on share ownership are like no one else's.
  Over the past decade, almost 45 per cent. of what was the public sector in the United Kingdom has been transferred to private ownership. As a result, major public corporations have been given greater freedom and their performance has improved beyond measure. The two organisations with which this Bill is concerned are small in terms of privatisation, but they are of considerable significance in the Government's drive to improve the efficiency of the public sector.
  In recent years, there have been major changes in the way in which we manage our public services. At the heart of those changes has been the financial management initiative launched by the Prime Minister in 1981. That initiative took as a key principle the fact that the primary responsibility for ensuring managerial efficiency within Government should lie with the spending departments. No longer would concerns about efficiency and value for money rest primarily in the central Departments, in the Treasury, or, for building matters, in the PSA. Responsibility would instead be devolved to the ultimate users; in future the customer, not the provider of services, would decide what should be done—the customer would be king.
  Although privatisation rightly has a high profile among our policies for the long-term strengthening of thc. economy, the importance of improving efficiency within Government is no less significant. For example, the PSA
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  has been handling expenditure of more than £3·5 billion and employing resources of its own of more than £300 million. The prospect of improving the efficiency with which such a large block of expenditure is managed clearly represents a major prize.
  To apply the financial management initiative to building and property services, the Government decided that Departments should assume their own responsibility for all works and estate services which had formerly been provided by the PSA. Departments would themselves manage the money voted for this work by Parliament and would be permitted to choose their supplier of works services from the PSA or elsewhere. In the jargon, Departments would be untied from the PSA. They have been similarly untied from the Crown Suppliers since April 1987.
  As a result of these decisions, the service providers in the PSA and the Crown Suppliers have needed to match their professional skills and property experience with a more commercial responsiveness and speed. They know, as the Labour party might put it, that they must meet the challenge and make the change if they are to keep their work load.
  The case for these privatisations has three elements—
  Mr. Tam Dalyell: Before the Minister goes any further, will he help us by explaining how valuable public resources such as property and equipment are to be valued, and who will be given the task of valuing them?
  Mr. Patten: I am coming shortly to the mechanics of the privatisations, but I assure the hon. Gentleman that when property is involved, a proper valuation will be done before any sale, and it will be made public—
  Mr. David Winnick: I apologise beforehand for the fact that I am off to the Procedure Committee in a moment.
  In view of the sweeteners that were given in the Rover case and the strong and justified feeling that corruption was involved, how can we be persuaded that the same degree of corruption will not obtain in future measures of privatisation and of selling off state assets?
  Mr. Patten: I reject the hon. Gentleman's allegations. Had I known that he was going to make them and that he was going to leave in a moment—even for the Procedure Committee—I would not have allowed him to intervene—
  Mr. D. N. Campbell-Savours rose—
  Mr. Patten: But I shall certainly give way to the hon. Gentleman who, as always, will be staying with us, I dare say, for the entire debate—
  Mr. Campbell-Savours: Despite the fact that I am also on the Procedure Committee. However, I regard this debate as important.
  On the issue of the private versus the public sector, has the Secretary of State been made aware by the Minister of State of what happened two years ago when Richmond house, the DHSS headquarters, was valued? Cluttons, a private sector company, was brought in and charged £44,000 to value the building. It turned out subsequently that an internal memorandum in the PSA had suggested that the same valuation could have been done by its staff for £1,500. Why should the public have to pay an extra £42,500 to use an outside private contractor when the job

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  could be done by a civil servant? Does not that take us to the heart of the argument today? In the end, the public may well end up paying far more for the same services.
  Mr. Patten: Even though the hon. Gentleman has to leave in a moment, he has such an exemplary record of attending debates that I am always pleased to give way to him. I recall that, in the case to which he has referred, the work done involved a particular expertise because of the buildings concerned. I am convinced that, when a Department is managing its own operations and funds, it will make sure that it secures the best possible value for money. That was certainly my experience when I was responsible for a small Department faced with the obligations under the financial management initiative to look after its property interests.
  The hon. Gentleman might also note the difficulty in public sector accountancy practice of ensuring that one is comparing like with like. The most important way in which we can secure best value for money in the public sector is to ensure that the customer is responsible for the budget and has managerial responsibility for what ensues.
  I return now to the main elements in the argument for privatisations. First, Departments now have delegated authority to make their own choices about the services that they require. That is the way to ensure effective procurement.
  Secondly, the PSA and the Crown Suppliers must compete for their work with others who are equally anxious to provide a good service. Thirdly, the PSA and TCS need the freedom to compete effectively and can get it only outside the confines of the public sector.
  The House should therefore see that the privatisation of these two bodies arises naturally for the good of the organisations themselves and hence for the good of their staff and customers. It arises out of a simple principle: decisions are best delegated as far as possible to the ultimate users.
  Mr. Dalyell rose—
  Mr. Patten: I shall certainly give way to the hon. Gentleman, provided he is not going to the Procedure Committee.
  Mr. Dalyell: The Minister used the phrase "for the good of their staff". Why does the National Union of Public Employees object so strongly to the proposals? Where is the evidence for saying that it is for the good of the staff? Does the right hon. Gentleman deny that at least in the view of the staff it is not for their good?
  Mr. Patten: I have had the advantage of a meeting with staff unions. I shall come later to the detailed questions about staff because that issue forms an extremely important part of the debate and undoubtedly it will be discussed in Committee. I hope that the hon. Gentleman will have an opportunity to share in the discussions in Committee.
  I shall now deal with the two organisations. The Property Services Agency, as it exists at the moment and despite its name, is a large self-contained part of a Government Department—the Department of the Environment. In the past, because it has been both provider and customer for Government works services, it has had many services that are regulatory or essentially
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  governmental, such as, for example, the management of the Government's civil accommodation. However, the great bulk of its activities involves the provision of works and estate services to other Government Departments, just as existing commercial agencies—consultants, estate agents or building contractors—provide similar services for non-governmental bodies.
  The PSA has a mixed reputation within Government. It often gets the blame when Government buildings appear badly maintained, although I concede immediately that that can sometimes be the result of its budget having been constrained because of general pressures on public expenditure. In the past, the customer Departments have been free to make the complaints and the PSA was there to receive the brickbats. In future the decisions about what to spend—the point that I made earlier—will lie with the customer departments. If they decide to spend less on maintenance or more on a new building, it will be their own choice. The PSA will be judged on how well it has provided what the customer asked for. That will be good for efficiency in Government and salutory for Departments and the PSA.
  In the past, the system of parliamentary scrutiny of public expenditure through the National Audit Office and the Public Accounts Committee and the studies by the Select Committee on the Environment have ensured that any aspects of the PSA's performance which deserved criticism have received wide public coverage. That is wholly reasonable while the PSA remains a Government department. However, we should not allow that proper degree of public exposure to obscure the less well publicised, but regular, stream of work that the agency does so well.
  It receives a large number of awards each year for design excellence—there were 22 last year alone—and it is held in high regard by some of its largest and most demanding customers and by many of its potential competitors in the private sector. My right hon. and learned Friend the Lord Chancellor has recently paid tribute to the PSA for its work in the extensive countrywide programme of court building. The United States forces have compared the service that they get from PSA favourably with the service they get at bases anywhere in the world. In 1988–89 the PSA won 11 of the total of 21 awards made by the USAF European Command.
  Mr. Richard Livsey: Does the Minister agree that the United States Air Force has said that it is worried about the security implications of privatising the PSA? What will he do about security at military installations and at Cabinet Ministers' houses when the service is privatised?
  Mr. Patten: We are discussing with the Ministry of Defence and United States forces how we can continue to provide as much excellent work for the Ministry of Defence overseas and for United States forces in this country as the PSA provides at present. A great deal of Ministry of Defence work on matters involving considerable security is already carried out by private sector operators. For example, 70 per cent. of the design work for the MOD is carried out under that sort of security umbrella by the private sector. No great principle is being breached here.
  Mr. Dalyell: We have figures here given by the unions and I should like the Minister to tell us whether they are accurate. In 1988, the PSA design costs were shown to be 25 to 30 per cent. cheaper than those of private designers. On the related question of estate surveying, the issue raised by my hon. Friend the Member for Workington (Mr. Campbell-Savours), the private valuation of the new DHSS headquarters at Richmond terrace, Whitehall cost 266 per cent. more than a PSA valuation would have cost. Is that correct?
  Mr. Patten: Given the way that accountancy operations are conducted at present when a potential private sector firm is in the public sector, it is extremely difficult to work out the sort of figures that the hon. Gentleman has mentioned. If his figures are correct, this firm will do spectacularly well in the private sector as the result of a trade sale or a management or employee buy-out.
  Mr. Campbell-Savours: The Minister misunderstands the point that is being made. As we understand it, valuations are often carried out on the basis of a percentage. Let us look at the district works office, Teddington. The Minister may laugh, but this is a serious matter. The outside contractor charged £193,722 for his work. The PSA valuation for exactly the same work was £92,112—a saving of £100,000 to the taxpayer. That was the difference between the private sector and the public sector for exactly the same work. The Secretary of State cannot brush that aside and say that in future prices can be cut. That difference arose because of the basis of valuation and it is for the Secretary of State to assure the House that that will not happen in future.
  Mr. Patten: I am sure that the Under-Secretary of State for the Environment, my hon. Friend the Member for Southampton, Itchen (Mr. Chope), will be succinct and will do just as well later in dealing with Teddington as he did in the recent Adjournment debate.
  As a Minister responsible for a Department, I think that the disciplines of being responsible for one's own budget on matters such as the maintenance of property are extremely good for the taxpayer and ensure that we get the best value for money. That is an important part of the development of the financial management initiative. I look forward to congratulating the management, the employees or those responsible for the trade sale when the PSA operates extremely successfully in the private sector, as it will in due course.
  In 1986, the PSA management launched a fundamental review of its responsibilities and organisation, and its relationship with departmental clients. Shortly afterwards, the Select Committee on the Environment under the direction of my hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi) carried out a study of the PSA, resulting in 1987 in an important and constructive report. Those reviews paved the way for the Government's decision that, from 1 April 1990, all Departments would be fully untied from the PSA and that the PSA's service activities would be managed commercially.
  Steps are now in hand to separate the PSA's commercial activities from its governmental responsibilities, so that, from April 1990, the residual governmental activities, such as the maintenance of the Palace of Westminster and the management of the Government car service, will be transferred as a separate unit to the Department of the Environment with its own accounting
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  officer at deputy secretary level. Within these activities, one has already been established as an executive agency under the Government's "next steps" initiative—the highly successful Queen Elizabeth II conference centre. Two others, the main resident function of managing the Government's common user estate, and the small but significant activity of negotiating contracts for fuel supplies to parts of Government and the public sector, were shown in the recent White Paper "Next Steps" as candidates for agency status.
  Since the major portion of the PSA is to be a competitive commercial organisation, many hon. Members will need no further convincing that we should aim for privatisation at the earliest opportunity.
  For any who are less committed to the principle of privatisation, even after the words of the hon. Member for Copeland on television last week, perhaps I should explain why I believe that early privatisation will be in the best interests of the PSA and its staff. It is a very large organisation—the country's largest building consultancy—which has had the benefit of a guaranteed work load. Suddenly, it is about to face competition. Even if it competes effectively, as I have no doubt it will, it must inevitably lose some of its market share to its competitors. Unless it can compete in new markets, it will inevitably be an organisation in decline. That is not a recipe for a successful operation. Faced with that prospect, the better staff would start to leave, and the quality of service would fall away. The decline would become a downward spiral and customers would suffer. That is not in anyone's interest—not the customers', and therefore not the taxpayers'; not in the PSA's or that of its staff.
  It is essential, therefore, that as a quid pro quo for untying the PSA's protected markets, it must be allowed freedom to widen its market base. For the long term, and on a large scale, that is not an attractive prospect for a department within Government. Government is not the place for a fully diversified consultancy. Any organisation that, in the last resort, is underwritten by the taxpayer cannot be allowed the same unrestricted access as a private company to capital; nor can it be allowed to' face the full risks of the marketplace, nor to reap the full rewards.
  However, it is right and proper that, for a limited period, and with appropriate safeguards, the PSA should be allowed to compete in the general marketplace to offset its shrinking Government market. That will give the business the opportunity to demonstrate the quality of the service that it can offer so that it can secure a foothold in serving private sector clients to prepare itself for full privatisation.
  Mr. Michael Stern: I am sorry to interrupt my right hon. Friend, who has been interrupted many times already. As he will appreciate, many Conservative Members are always a little concerned when the private sector is opened to competition from what is essentially a state-run and state-supported service industry. Does he agree that an appropriate safeguard might be that, during the short time that the PSA is competing with the private sector from within Government, there should be an automatic reference of its tender price to, for example, the National Audit Office? Would that not be a suitable safeguard against the private sector being forced to compete against a subsidised organisation?
  Mr. Patten: I can assure my hon. Friend that, during the short time until 1992, we shall want to be absolutely certain that the arrangements in place are sufficient to give my hon. Friend and others the absolutely necessary confidence in the operation. I shall consider my hon. Friend's point, but I can assure him that we have that sort of problem very much in mind.
  The timing of the sale of the PSA depends on the business being properly structured for sale, and on having the necessary commercial accounting system in place. The appropriate systems are being installed, but that is a major task. Although the earlier the privatisation date the better, the earliest practicable date seems likely to be the second part of 1992. That is a tight timetable given the scale of the changes that are needed, but it is realistic. It also allows sufficient time for the customer departments to prepare themselves for the time when they will obtain all their works services from the commercial market.
  That early target date for privatisation will be good for the PSA and for the Departments in concentrating minds on what has to be done. However, for the PSA's management I am inclined to think that the freedoms that come with being in the private sector cannot come quickly enough. The PSA will be a business whose success depend's on its ability to attract, to motivate and to reward good quality staff. Its freedom to compete for those staff in the marketplace will be very important.
  Although there is now undoubtedly more flexibility than there used to be to adjust Civil Service pay rates to particular market circumstances and to recognise good performance, that does not go far enough if the PSA is to be able to respond as quickly and as effectively to sudden changes of work load as its competitors can. Privatisation should make that possible. In the meantime, the PSA's management will need to make as full use as possible of the flexibility that does exist in the Civil Service environment and to press for further flexibility when it can justify it.
  I hope that the management and staff of the agency will take the time and the opportunity to consider whether they wish to bid for the business themselves. Although the Government will need to be sure, when the sale is made, that a fair competitive price has been obtained, I think that it would be good for the PSA, and good for the commitment and motivation of its staff if there were a strong management-employee buy-out team as well as trade bidders in the competition at the finish. A management-employee buy-out team would have to compete with other bidders, but if it proved successful I should be delighted.
  I come now to the other business covered by the Bill—the Crown Suppliers.
  Mr. Dalyell: On a point about staff—
  Mr. Patten: I assure the hon. Gentleman that I shall deal with the question of staff in a moment.
  The Crown Suppliers is part of the PSA for management purposes, but it operates as an independent business with its own trading fund, supplying furniture and furnishing and related equipment, and operating vehicle hire and document delivery businesses for the public sector.
  The Crown Suppliers has been a highly successful organisation. In the 1988 annual accounts, total sales were reported at more than £230 million. Over the years it has developed new ranges of office furniture, most recently one
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  called Laser, which is now bringing in sales of more than £5 million a year. It has supplied equipment to many prestige projects, like the Queen Elizabeth II conference centre.
  Over the past two years, the business has changed substantially. Those parts of the Crown Suppliers which were not suitable to be undertaken on a normal commercial basis, or could not be privatised for security reasons, or where value for money could exceptionally be better achieved by retention in the public sector, have been extracted from the business and they are excluded from the sale. Total sales by the businesses that are to be privatised were an estimated £168 million in 1988. That was all business won on its commercial merits. As I have already said, Government Departments are untied, and may purchase where they can find the best value for money.
  The business has been increasingly organised on commercial lines. A totally new on-line computer system has been installed this year. In the wake of the decision to privatise, the Crown Suppliers has begun to market its services in the private sector. Since the start of the year, about £600,000 of sales have been made to the private sector. The transport business has won a contract for the maintenance of 150 vehicles belonging to a telecommunication company. These are small beginnings, but there is real promise for growth.
  Because the Crown Suppliers already has commercial systems in place, an early sale is possible. Samuel Montagu, the merchant bank advising the Government on the privatisation, has already written to all organisations and management buy-out teams that have expressed any interest in buying the Crown Suppliers and also to all the major firms involved in contract furnishing, vehicle hire and document delivery.
  Mr. Campbell-Savours rose—
  Mr. Patten: I do not wish indefinitely to come between the hon. Gentleman and the Procedure Committee.
  Mr. Campbell-Savours: Is it true that the Crown Suppliers has been in breach of European directive No. 77/62 by failing to tender for certain contracts over a value of £92,000 and by extending those contracts? Is it true that the Government's Law Officers have advised the Government that they are in breach of that directive? As I have now raised this matter in the House, which will alert the European Commission, what action will the Government volunteer to take?
  Mr. Patten: My hon. Friend the Under-Secretary will be delighted to answer that question comprehensively when he replies to the debate, and I am sure that he will do so to the hon. Gentleman's complete satisfaction.
  We are now considering applications for the purchase of the Crown Suppliers and will shortly be issuing invitations to bid. I am pleased that a number of teams of the Crown Suppliers' staff have expressed an interest in acquiring various parts of their business. I strongly welcome that. It demonstrates the confidence of the staff in the future of the business and in its ability to prosper in the private sector. The Government have offered financial assistance with consultants' fees to assist staff in preparing their bids.
  It will naturally be essential to obtain a fair return for the taxpayer from the sale of the Crown Suppliers, but price will not be the sole criterion. We shall be concerned

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  to ensure that its staff are fairly treated, and we shall be particularly interested in bidders' proposals for profit sharing and equity participation. Throughout the sale competition, we shall also be favouring bidders who demonstrate a knowledge of the business and a commitment to its future development. That will help to safeguard the future of the staff; it will also help to ensure that the Crown Suppliers can continue to be a source of competitive supplies to Government.
  Before turning to the specific provisons of the Bill, I should say something about the implications of privatisation for the staff of the two organisations. I know from having met the PSA trade unions that there is some uncertainty and concern. I can well understand that, but I assure the staff that their fears are unnecessary: the aim of the privatisations will be to create viable, vigorous competitive organisations in the private sector, with better prospects than they would have if they remained in their present position within the public sector. [Interruption.] As the hon. Member for Workington (Mr. Campbell-Savours) will know from his study of these matters, many previous privatisation Bills have said the same. I am sure that he would not wish to be misled by the explanatory and financial memorandum, and will be interested in what I have to say on the subject.
  To put the matter simply, the Government intend that the terms and conditions of service of employees shall not suffer as a result of the transfer of employment. Let me explain precisely what I mean. When the businesses are created, the staff who transfer to them will have their conditions of service protected. Most of their conditions will be preserved identically in the new organisation. The Transfer of Undertakings (Protection of Employment) Regulations 1981—the so-called TUPE regulations—which will apply, will ensure that. They do not cover pensions, for the very good reason that there are so many different ways of handling potential pension provision; however, we shall invite purchasers to offer arrangements for pensions for future service, which—taking all features together—will be comparable with the Civil Service scheme, and we shall take steps to ensure that purchasers' schemes are properly assessed on whether they achieve that aim. Because the old and new schemes are unlikely to be identical, we shall ensure that staff are compensated for any differences. We shall, of course, consult the trade unions about both privatisations.
  If staff are to feel confident about privatisation, they must be clear that they will enter the private sector with pay, conditions of service, redundancy entitlements and pensions all safeguarded. Once staff are in the private sector, they will of course be free to renegotiate with their employer for improved conditions, and, if their performance justifies it, they can share in the growing strength of the company instead of being tied to the public pay framework. Their longer-term prospects will depend on their success in maintaining and improving the business.
  Finally, let me come to the point made by the hon. Member for Workington, and deal with the specific provisions in the present Bill. It is a short Bill, and I will be mercifully brief. The first and most important point is that the Bill does not seek authority for the sales themselves; it includes technical enabling provisions to facilitate them. The intended method of sale will be to transfer property, rights, and liabilities to companies owned by the Secretary of State, and then to sell the
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  Government shareholding in those companies. The sale of shares, as I said earlier, would be by means of a management-employee buy-out or a trade sale; flotation is not envisaged.
  The Bill deals with the problem of technical redundancy. Without this provision, the staff of the PSA and the Crown Suppliers—whose employment will be transferred automatically to the new employer—would become entitled to redundancy compensation as well as keeping their jobs. That would be patently absurd, and the Bill removes the anomaly in clause 2. There are naturally precedents for this provision in earlier privatisations. In case any hon. Members were misled by the explanatory and financial memorandum, let me reassure them that, of course, the Bill does nothing to remove the entitlements of staff to compensation if they lose their employment through redundancy.
  Mr. Dalyell: The Bill refers to the Transfer of Undertakings (Protection of Employment) Regulations 1981. I feel that the Secretary of State should tell us in his opening remarks what undertakings he is prepared to give in regard to any person or persons subsequently made redundant under the new private body. What we need are concrete undertakings.
  Mr. Patten: Such persons would receive exactly the same redundancy payments as anyone else. They are not losing their redundancy entitlement, as I explained a moment ago.
  The Bill seeks to give me explicit authority to establish companies that are wholly owned by the Crown. It will also provide a framework under which schemes may be drawn up to allow for the vesting of property, rights and liabilities in those companies in preparation for sale. The shares of the companies will then be sold to the purchaser for the businesses under a contract.
  In the case of the Crown Suppliers it is intended that the shares will be sold immediately on vesting, but in the case of the PSA it may be desirable for the company to trade for a short period while staying within Government ownership. The Bill allows for that in setting out the necessary financial arrangements in clause 3. It provides for the sales of the businesses to take place at different times, for reasons that I touched on earlier.
  I have explained the reasons why we are bringing forward the privatisations today, and the way in which they fit into the general policy of improving the efficiency of the public service. I am sure that they will be good for the Government as customer, good for the business prospects of the PSA and the Crown Suppliers, and therefore good for their staff. They are based on a sound principle, which has been implemented with considerable success across large swathes of what was once the public sector. Only the most hidebound and narrow-minded ideology could object to the principles asserted once more in this Bill and to the attempt to put them again into successful practice.
  I commend the Bill with enthusiasm to the House, and I am delighted to see on the Benches behind me some of my hon. Friends who have made it possible for us to present its proposals to the House this afternoon.
  5.16 pm
  Mr. Clive Soley: The Secretary of State began by saying that privatisation was now internationally acclaimed. What he forgot to tell us was that that was because so many companies, both British and overseas, had had their hands in the pockets of the British taxpayer. It is worth reminding the right hon. Gentleman of his own Prime Minister's warning that there is no such thing as Government money; there is only public money—money belonging to the people. Whether that money is the £38 million handed out for the Rover deal or some other handout, it is our money, and it is the duty of the House to ensure that such offers are not made inappropriately. We shall look very carefully at what the Secretary of State has said, to make certain that that does not happen under this Bill.
  The Secretary of State has made a thoughtful and careful speech, but—interestingly—one containing an element of schizophrenia. There was a little of the last Conservative Prime Minister—the right hon. Member for Old Bexley and Sidcup (Mr. Heath)—in the Secretary of State's desperate attempt to sell to the employees of the two organisations the belief that all this is in their best interests and that he has their welfare at heart, as well as being concerned for the taxpayer.
  There is also something rather insecure about the right hon. Gentleman's desperate attempt to prove himself by pretending that the privatisation even begins to be necessary. Perhaps "insecure" is the wrong word to use the day after the Prime Minister's re-election as leader of the Conservative party; "wobbly" might be better. One is reminded of those vases that people stand on the mantlepiece and dust very carefully in case they fall off—as this one surely will in due course.
  The truth is that it is neither necessary nor desirable to transfer these organisations to the private sector. That is the central issue on which the Government have failed to convince us.
  Mr. Chris Patten: Just to be anecdotal for a moment, since the hon. Gentleman is being so courteous in referring to me at such length, I spent Saturday morning talking, among others, to employees of the National Freight Corporation. That experience confirmed to me the advantages of privatisation both for employees and for shareholders. Were I to take the hon. Gentleman through my constituency diary, I could give him many other examples.
  Mr. Soley: Unfortunately, the Secretary of State can give only one example.
  Mr. Patten: No.
  Mr. Soley: I do not believe that Conservative Secretaries of State have ever been in love with co-operatives. Once or twice they have pretended to be in love with them. The National Freight Corporation is a good example of a co-operative, but there is no other privatisation that the Secretary of State might draw to my attention that can compare with the National Freight Corporation. The work force—I emphasise the work force, not just the management—wanted to benefit from a co-operative system. A co-operative system of that kind remains loyal to the root benefits of the Labour party.
  Mr. Keith Mans: Does the hon. Gentleman agree that the Water Research Centre is another example of precisely the same kind of employee buy-out? Will he therefore correct his previous statement?
  Mr. Soley: I have not considered the Water Research Centre in the same detail. However, it is not enough to assume that such a buy-out is the same as the National Freight Corporation co-operative. There is a very big difference between the two. Without examining it in detail, one cannot be sure that a management buy-out follows the co-operative principles that were adopted to a very large extent by the National Freight Corporation.
  Mr. Gerald Bermingham: Does my hon. Friend agree that if he talked to some of the former employees at the royal ordnance depot in Enfield who lost their jobs shortly after they were bought out of the public sector by the private sector he would find that they were not so happy?
  Mr. Soley: My hon. Friend is absolutely right. There are many examples of privatisation, most notably in the National Health Service, where the treatment of the work force has been deplorable, by any standards. People are being asked to work longer hours for less money and the job is being less well done. The hon. Member for Southampton, Itchen (Mr. Chope) puts privatisation as one of his interests in "Dod's Parliamentary Companion". He ought to be ashamed of what has happened to many cleansing and catering facilities. People have been very badly done by, including the customer.
  The Secretary of State said that he believes in delegating as close as possible to the ultimate user. That will require some fairly large about-turns by a Secretary of State who is responsible for local government and housing. Contrary to their claims, the Government have centralised power. No other comparable country in the western world has centralised power to such an extent. The Government determine the extent to which local authorities can raise money. They also determine rent increases and how people's homes should be transferred from one owner to another without the people living in them having the right to independent advice.
  So much for the belief in transferring the decision-making power to the user. The Government neither believe in it nor practise it. Tenants are not given the right to independent advice in many of the deals that are struck by Conservative-controlled councils. A council that decides to transfer tenants' homes puts its decision to the tenants. They are forced to choose without having access to independent advice. That is a classic example of abuse of power.
  Mr. Stern rose—
  Mr. Soley: Before the hon. Gentleman is foolish enough to intervene—I shall allow him to do so, because I am all in favour of a few suicide cases on the other side—he ought to remember that the National Consumer Council has said that tenants' homes should not be transferred without the tenants having access to independent advice.
  Mr. Stern: In the light of the hon. Gentleman's comments, will he put on record his congratulations to the Conservative-controlled Northavon district council, which is balloting its tenants on whether they want their

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  homes to remain in council ownership or to be transferred to a housing association or some other form of ownership? The council has even offered to pay for the independent advice that tenants may wish to take before they reach a decision.
  Mr. Soley: You would rightly say, Madam Deputy Speaker, that I was out of order if I pursued that matter. [Interuption] Just before the hon. Member for Bristol, North-West (Mr. Stern) loses control, I ought to point out to him that that would be perfectly acceptable if the council provided sufficient money for independent advice. Labour-controlled local authorities were transferring houses long before this Government even thought about it, but that was done only when tenants wanted their homes to be transferred. Rent levels were controlled, there was security and there were other safeguards, too. I very much doubt whether the Northavon district council is doing anything like that.
  As for the ideological attempt by the Government to privatise for the sake of privatisation, there were a couple of inquiries whose aim was to decide whether privatisation of the Property Services Agency and the Crown Suppliers should go ahead. The Turton report and the Prime Minister's central unit on purchasing report said that it was not in the public interest to privatise. The hon. Member for, Itchen invented the idea of untying, although nobody has known him ever to untie anything. It suggests a degree of finesse and control that he does not exercise.
  The Opposition regard him as the mad axeman of Itchen. Just like children who want to get at their Christmas presents and set about it with an axe in the hope of finding what is inside much more quickly, the hon. Gentleman slipped off bits of the PSA and the Crown Suppliers in order to prepare them for privatisation. However, he could not get the independent reports to confirm that they ought to be privatised, so he did what Conservative Ministers are very good at doing—he changed the question. He said to himself, "I've been asking the wrong question all the time. I've been saying, 'Should we privatise it?' Now the light has dawned. I ought to ask, `How shall I privatise it?". Therefore he brought in outside consultants who said to him, "Yes, if you've made the decision to privatise, this is how you do it." That is how he got round the difficulty of two major reports which said that it was not in the public interest to privatise the Property Services Agency or the Crown Suppliers.
  If the Government could not get the answer that they wanted to the first question and had to change it, why has it suddenly become in the public interest to privatise? The Prime Minister's own unit said that it was not in the public interest to privatise. So did the Turton report, to which I shall return. The two important issues are the way in which privatisation is to be carried out and security, to which, worryingly, the Secretary of State hardly referred. However, both issues raise horrendous problems connected with terrorism and the defence of the country.
  The Crown Suppliers has an impressive background. In August 1988, Samuel Montagu and Company, on behalf of the Property Services Agency, set out the main aims of the Crown Suppliers. It said:
  "The main aim of The Crown Suppliers is to provide furniture, furnishings, equipment, materials, heating fuels, transport and selected services related to the domestic and operational needs of Government departments and other public sector bodies more efficiently,"—
  these are the words that I wish to emphasise—
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  "economically and speedily than they can provide for themselves or enjoy from any other source. In achieving this aim"—
  we should note these words from Samuel Montagu and Co.—
  "the Crown Suppliers is required to act in a way which will help industry to improve its standards of design, to operate more efficiently and to exploit new materials and technologies."
  If that purpose is being achieved, why are the Government privatising the Crown Suppliers? It is not an old report. It was published in 1988, just over a year ago. The Government's case, therefore, looks exceedingly shaky.
  The Government tried to undermine the Crown Suppliers and the PSA by going in for what the Secretary of State described as "untying". It is interesting that the Secretary of State has now said that they will be able to compete with the private sector in the run-up. What is deeply disturbing to Conservative Members, such as the hon. Member for Bristol, North-West, is that they have suddenly realised that some of their private company friends may be in trouble because they cannot compete equally with an organisation that has had a good record in terms of delivery to its customers. The Opposition have no objection to organisations being able to compete for various jobs, but it follows that organisations in the public sector should be able to compete with the private sector on a level playing field. The Government have consistently made it more difficult for companies in the public sector to compete effectively in the private sector, especially in the run-up to privatisation. That has turned them into a burden, rather than the advantage that they are at present.
  One of the most damning indictments of the Government's policy was the reference by Lord Macmillan to selling off the family silver. He was talking not only about selling off the silver, but about debasing it before it was sold. That is why the Government, in doing so much damage to the structure of public sector industries, have damaged the private sector as well. As the Montagu report pointed out, it is not in the interests of the private sector for privatisation to be carried out in the way that the Government are doing it.
  The review by Lord Jenkin, a previous Secretary of State for the Environment in the early 1980s, said that the answer to privatisation should be no, because it was not in the public interest. The Crown Suppliers has been very successful. I quote the words of the hon. Member for Ealing, Acton (Sir G. Young), who was in the Chamber earlier, but has had to leave now, and who was Minister at the time. He said:
  "The Crown Suppliers have had another successful year's trading. Despite the fact that over 65 per cent. of their business is now untied and optional, they have more than met their financial objective for 1985–86. They have achieved this by raising their level of service, speeding up deliveries, reducing resource costs and offering still better value for money for the products and services they provide to an increasing number of public sector customers. This process will continue. They operate of course under the constraint that, as Departments are increasingly free to purchase goods and services elsewhere, the Crown Suppliers are expected to compete for work within the public sector, yet they cannot, generally speaking, seek business outside it as they would if they were a private concern."—[Official Report, 25 July 1986; Vol. 102, c. 572.]
  Two Ministers have praised the work of the Crown Suppliers and the PSA. The question that arises again is why, if they are so good, the Government are flogging them off? If that is not in the interests of the country or of the taxpayer, whose interests are being met?

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  It is also worth bearing in mind the independent assessment of the work done, part of which my hon. Friend the Member for Workington (Mr. Campbell-Savours) quoted in an intervention. It said:

  "1. Design: In 1988 PSA's design costs were shown to be 25 per cent. to 30 per cent. cheaper than private designers.

  2. Maintenance: In 1988 the Government abandoned its attempt to contract out District Works offices after receiving tenders for the pilot at Southwark which proved to be twice as high as PSA's own costs.

  3. Estate Surveying"—

  the section that my hon. Friend the Member for Workington quoted—
  "private valuation of the new DHSS headquarters at Richmond Terrace, Whitehall, cost 266 per cent. more than a PSA valuation would have cost."
  It is no good the Secretary of State trying to wriggle out of answering those comments by saying that he will deal with them later. These are not new facts; they have been known for a long time. Many people have known those facts and the Secretary of State must know them. Why is he unable to tell us why those valuations have been carried out so much more effectively by the PSA than by the private sector? It is not good enough for the Secretary of State to say that he will come back to that at some stage.
  In 1987, a report by David Hencke appeared in The Guardian which implied that the then Chief Secretary to the Treasury—the present Chancellor of the Exchequer—wanted to halt moves towards privatisation. [HON. MEMBERS: "No."] Conservative Members may doubt David Hencke, but the story has never been denied and there are many reasons for believing that it is accurate. The then Chief Secretary was worried that Robert Maxwell or Hillsdown Holdings would bid for the agencies, or large parts of them, and because they themselves provided similar services, they would close down or run down the parts that were not necessary to them. That would have been a classic example of asset-stripping the public sector and that is why the Chief Secretary was worried.
  Mr. Ian Gow: But was not the Chief Secretary, to whom the hon. Gentleman refers, also the Chief Secretary when the decision to introduce the Bill was taken a few months ago?
  Mr. Soley: Yes, but that says far more about the Chancellor of the Exchequer's uncertain position than about his judgment of the issue. I do not know whether this new and rather temporary Chancellor of the Exchequer will resign over the privatisation of the PSA and the Crown Suppliers, but I cannot see it happening. Let us be kind and say that he fought privatisation hard in Cabinet, but lost. He may find, like the previous Chancellor, that he loses more than just one battle and it will be interesting to see whether he loses the last battle. The Chief Secretary to the Treasury also seemed to be quite a patriot because he recognised that 90 per cent. of the products were made in Britain and he did not want to see overseas producers supplying British embassies and defence establishments.
  It follows from all that I have said that the Opposition and, I suspect, many outside the House, will be deeply concerned about the way privatisation is carried out. I acknowledge fully that the Secretary of State has given a detailed exposition of the way in which he wants to carry it out. It follows from what he says that some of the
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  sweeteners that were offered in the case of Rover could not be used in this privatisation. However, there are questions about whether he will hold the shares, at what value they will be sold, at what point in the market they will be sold and whether any other advantages are built into the company to make it attractive. I warn the Government that we shall be watching all this carefully, as will the Public Accounts Committee and the European Commission. There are many reasons for believing that the way in which the Government go about the privatisation will raise considerable alarm and suspicion.
  If the Secretary of State does not want to get into the mess in which the Secretary of State for Trade and Industry finds himself after his predecessor set him up so well with the Rover deal, he should consider independent valuation. Some previous valuations are disturbing and I find it deeply unsatisfactory that public money should be used to prime the pump for the private sector. I know many people who would have liked to buy the Rover works if they had known that £38 million would be thrown in.
  One might argue about the other reasons why that was done, as the Secretary of State has, but the crucial point with Rover, is that it did not need to be done in the first place, and that would be true of the PSA. Rover was set to make a profit and the PSA seems to be successful, so there is no need for softening up or for spending public money on that. When we see £21 million thrown away on advertising the water industry to soften it up, we have a duty to ask what the public is getting out of that. They see their money being used to soften up an organisation so that the private sector can take advantage of it. That must be wrong, and I can think of no other country that does such things.
  We also want to know how the organisation will be split up. I shall have to read the remarks of the Secretary of State carefully, but I think that it follows that there will be a number of organisations that will be sold off and it sounded as if there would be quite a large number—not just two or three, but a half dozen or more. That will make a great deal of difference as to whether there is asset stripping and how viable the organisations will be on their own. It will also control the the question of whether it will be practical for the employees to produce a successful buy-out scheme. It may not be practical unless they are given a wider job, rather than the organisation being split into small bits and pieces. We shall examine that point carefully in Committee.
  I am disturbed—all of us inside and outside the House should be disturbed—that the Government have not touched on security. The Secretary of State hardly mentioned it in his speech, yet security is one of the most profoundly important aspects of the privatisation process. I strongly suspect—although for the moment we cannot know this for sure—that one of the reasons why it was argued in successive reports that it was not in the public interest to privatise was that it was felt that security would be affected. Our Government Departments and our armed forces are advised by the PSA on the physical security of their buildings, and that includes advice on counterterrorist procedures. The Secretary of State will know that, although he did not refer to it.
  The PSA vets employees and contractors on its sites, and the vetting is tough: one in 10 of the applicants do not get through. Suppose that the private building sector takes over and has access to the organisations' plans. We know

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  that the private building sector prefers to employ casual labour. Who will do the vetting? What will happen at Faslane and Aldermaston, let alone in Northern Ireland—a special example, to which I shall come in a moment. Will the work be done by people who have not been subjected to such vetting? Or will the Government exclude those establishments or arrange for the same people to operate an external vetting system, in which case, we ask again, "Why privatise?" What is the point if the same people are to be used to do the vetting?
  Mr. Dalyell: The Secretary of State is muttering and shaking his head. If my hon. Friend is wrong, would it not be helpful to our debate if the Secretary of State would say so? It would certainly save time in later speeches.
  Mr. Soley: My hon. Friend is right. I suspect that the Secretary of State has not given sufficient thought to the security aspect. I think that that is the key.
  I have an important point to make about the terrorist threat. We have seen examples of what has gone wrong with the privatisation of some of the security services that operate for the armed forces, and we know of the criticisms that followed the Deal bombing. Unless the Government get this privatisation right, they are in serious danger of creating a major threat to the security of our armed forces—to married quarters as well as to main bases.
  The security implications are wider than that. Both the PSA and the Crown Suppliers operate in Northern Ireland. The hon. Member for Eastbourne (Mr. Gow), who is an expert on Northern Ireland matters, will appreciate the seriousness of my questions, and he will confirm that in Northern Ireland, the building industry is widely infiltrated by paramilitaries, both Unionist and Republican, who use it to obtain money for terrorist activity. We have known about that for some time, and it is one of the most difficult problems with which we have to deal.
  The Secretary of State may or may not know that some of the civil servants who work for the PSA and Crown Suppliers are considered to be "legitimate targets" in the jargon of the paramilitaries. The Secretary of State and the Government have simply not considered how serious this matter is. Do they propose to transfer all those civil servants to the Northern Ireland Office, and if so, I repeat my question: "Why privatise?" Or will they make separate arrangements?
  Or will they do what I fear most and play into the hands of the paramilitaries, as they often have despite their rhetoric? The Government have a record of profoundly misjudging political and paramilitary activity in Northern Ireland. The Secretary of State is looking worried and shaking his head. Let him say something then; let us hear something from him about security. Why did he not say in his speech that the security implications of privatisation were deadly serious? I choose my words carefully.
  Mr. Chris Patten: There is a limit to what I shall say on this issue, not because of a lack of knowledge but because there are some things that it would be extremely irresponsible for me to say, just as there are some things that I think it is bordering on the irresponsible for the hon. Member for Hammersmith (Mr. Soley) to say.
  Mr. Soley: No.
  Mr. Patten: Let me follow the point through. There are some of us who, for reasons of our past, take a personal as
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  well as a ministerial interest in the arrangements. I am sure that Ministers and others have experienced security arrangements being made perfectly satisfactorily by the private sector, just as the design and construction of many of our military establishments is looked after by the private sector.
  The hon. Member for Hammersmith should be a little careful in his approach to these issues. I repeat that, for personal as well as ministerial reasons, I have even more cause to be concerned about these matters than he has.
  Mr. Soley: That makes it all the more important that the Secretary of State should answer the question. He should not have introduced the Bill without mentioning security—and do not let the right hon. Gentleman stand there and preach to me about what is and is not a responsible thing to do. Does he really believe that the paramilitary organisations are not aware that privatisation is to take place? Does he really think that people concerned about the defence of this country are not aware of it? Does he think that he can pilot the Bill through Committee without ever talking about security? Is that the extent to which the Government would take their secrecy? He is right that he has been concerned with security issues, as all of us who have been involved in the affairs of the Northern Ireland Office have been concerned with them—in opposition or in government.
  It is deeply disturbing that Ministers' cars are not to be privatised although the family homes of armed forces personnel are. I want to know why. It is legitimate to ask, on behalf of every armed forces family in this country and overseas, what sort of security they will have once the PSA and the Crown Suppliers are privatised.
  Mr. Mans: The hon. Gentleman cannot pursue that argument much further, because large numbers of armed forces families live in private dwellings, miles away from the bases. I think that, on reflection, the hon. Gentleman will agree that his point has nothing whatever to do with the privatisation of the PSA.
  Mr. Soley: I shall allow the hon. Member for Wyre (Mr. Mans) to get away with that on the grounds of his naivety and ignorance. If he reads the various reports and assessments of the work done—
  Mr. Mans: Withdraw that.
  Mr. Soley: No. I meant exactly what I said. The Crown Suppliers and the PSA determine and advise on arrangements to deal with counter-terrorist activities on behalf of our armed forces. If the hon. Gentleman does not understand that, he does not understand what they do.
  We did not hear from the Secretary of State whether that aspect of the bodies' activities will be wholly privatised, partly privatised or not privatised at all. We need to know that and it is no good the Secretary of State ducking the issue and hoping it will go away. It will not go away because we are not prepared to gamble with people's lives, even if the Government are. The issue is far too important to ignore.
  Let us look again at what the Parliamentary Under-Secretary of State, the hon. Member for Itchen, had to say:
  "For security reasons, I have decided to exclude from the sale the design and procurement of security furniture and equipment and the car service which transports Ministers and senior officials in London."—[Official Report, 28 July 1988; Vol. 138, c. 441.]

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  That is all. We have to forget the families, Faslane and Aldermaston. The Government are concentrating only on the ministerial car service, security furniture and equipment and its design and procurement. That is what we have been told in a public document, but the Secretary of State said that he could not refer to that. However, the Under-Secretary of State has already discussed it and it has been discussed in public. The Secretary of State is trying to hide behind the idea that somehow we cannot discuss security now.
  The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope): I do not know whether the hon. Gentleman knows, understands or is interested in the fact that most of the married quarters are maintained by private sector maintenance firms.
  Mr. Soley: Yes, but who advises them about security against paramilitary activities? Will the Minister accept that the PSA and the Crown Suppliers advise them? The Minister should not intervene unless he knows what the debate is about.
  The PSA advised on the security on the Prime Minister's home in Dulwich. Is that kind of advice going to be privatised? Will it be excluded from the privatisation? We have heard only one little statement from the Under-Secretary of State, which I have quoted, that certain parts of the PSA will not be privatised. That is not enough and the House would find it unacceptable if those matters could not be discussed in detail in Standing Committee. I put the Government on notice, as I put them on notice about the money involved in the Bill, that we will not put the security factor at risk here just because the Government want a little extra money in an ideologial bid to back their private supporters. That is not good enough and it will not do for the British people.
  Relationships with overseas Governments are also involved. Reference has been made to this and I want to refer to a meeting between senior British civil servants and members of the United States air force represented by Lieutenant Colonel Dean Bartel and General Anderson, the officer commanding the 3rd air force. That meeting took place in October in Germany. The United States representatives said that privatisation would cause great difficulties.
  We must consider the way in which the American Government's attitude on this issue differs from that of the British Government. Congressional rules specifically forbid the United States air force from using a private sector firm. Work must be placed in a relevant Government Department in the host country. I presume that that rule exists for security reasons, something which the Secretary of State is not even prepared to discuss on the Floor of the House.
  Congressional rules also forbid the location of private sector companies on USAF bases. In other words, such companies will not be able to enter those airfields to work. There are PSA works offices based on USAF airfields. Under that rule, PSA works offices on USAF sites would have to be closed after privatisation unless the Secretary of State can tell us that these matters have been considered and debated with the United States' Government and a satisfactory arrangement has been reached. However, that
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  is unlikely because American procurement is based on official United States documentation which cannot be delegated to a non-governmental body.
  Lieutenant Colonel Bartel is responsible for USAF civil engineering work. He has expressed himself fully satisfied with the PSA's performance and has said that the United States Government would oppose the privatisation of PSA because of the interference with USAF operational arrangements. He said that the Americans regarded the privatisation of the PSA as a breach of treaty obligations. I do not know how far that goes in the detail of the treaty, but we will have to pursue that in Committee. However, we should not have this Second Reading debate without the matter being referred to. General Anderson said that pressures were being applied at the highest levels to retain the status quo. Again, we will want to investigate that in Committee.
  The situation is extremely serious and I will touch on other issues in Committee. However, I want to refer now to environmental issues because it is important that we remember that it was the Secretary of State for the Environment who moved this Second Reading. No doubt the Prime Minister gave him this post because she wanted to saddle him with the poll tax, water privatisation and a sports Bill, none of which he believes in. That was a useful way of curbing his ambitions. It was also useful for the Prime Minister to appoint the right hon. Gentleman because that gave some credence to her green record.
  The Secretary of State is in some trouble with this Bill. The Parliamentary Under-Secretary of State, in one of his enlightened moments, which are very few and far between—although I would not like to deny him this one—said:
  "The sensitive use of the landscape is central to the role of the PSA. With over 300,000 hectares of land under its management, from Cornwall to the Shetland Isles, as well as many places around the world … the Agency sets and meets high standards. PSA landscape architects work, along with practices of international standing, to bring about sensitive and effective results."
  It is interesting that the notice of the privatization contained in this Bill appeared immediately next to the phrase in the Queen's Speech:
  "My Government will continue to attach very great importance to protecting the … environment."
  The environmental side of the PSA will be sold out along with the British taxpayer and the interests of the security of this country.
  Mr. Chope: Does the hon. Gentleman believe that it would be a good idea for the PSA's expertise in landscaping to be available to the wider private sector?
  Mr. Soley: It is already available and it would be even more available if, instead of this absurd privatisation exercise, the Minister said that work could be put out to tender for private sector contracts.
  The problem is that the Under-Secretary of State served on Wandsworth council. That council has one of the few hospitals which has not been closed down under the community care programme and the councillors have not yet been put out on the streets. However, they should be. The Minister is trying to live up to an absurd reputation. He seems to believe that privatising and flogging everything off is the only way to influence the private sector. Reports from the Minister's Department show that the PSA raises standards in the private sector. Why does the Minister deny it that role? Why should it be flogged off instead?

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  I now want to refer to a very important point, which to give the Secretary of State his due, he touched on. We will want to consider staff conditions very carefully in Committee. Redundancy is also important. I understand why the Bill prevents what might in effect in certain circumstances be double redundancy. However, I do not accept that the Bill or the Secretary of State's speech explain what will happen to staff who are moved from the present system in which they have certain guarantees about redundancy to a company with worse standards.
  With regard to redundancy and pensions, we should state that staff should not be transferred to a system which is worse than the one they have. We must bear in mind what happened to many workers, particularly in the Health Service and those in lower paid jobs. They were very vulnerable when they were transferred to the private sector which, far from negotiating up their conditions, negotiated them down. A low-paid exploited midnight army of people are doing some of the most essential but most unattractive work in the country. The type of work in the Crown Suppliers and the PSA is different, but the pension rights and redundancy arrangements of the staff are crucial.
  In no circumstances should staff be transferred to a private organisation in which their conditions of service, including redundancy money and pensions, are less than they presently receive from the Civil Service. The Civil Service has an honourable record as a good employer. The last thing that we should do is hand over a group of people as if they were goods and chattels instead of people who need to make provision for themselves and their families. Will they be allowed to transfer to another scheme of comparable value without great cost to themselves? Employees should not have to pay more to get the same pension. We shall explore those issues in much greater detail in Committee.
  I repeat what I have already said to the Minister. There are two key matters. The first is the unacceptable way in which the Government are handling the funding of privatisation and the way in which they have used taxpayers' money to feather the pockets of many private companies in this country and overseas. It is a misuse of the public's money. The second matter relates to security. It is deeply disturbing, and the Secretary of State did not even consider it important enough to debate.
  The Opposition will not play with the security of this country. We will not allow it to be diminished in any way. We will pursue this matter in Committee to make sure that the protection of our armed forces is at least as good as that of Ministers in their cars.
  6 pm
  Mr. Ian Gow: It is certainly a source of great satisfaction to me and, I hope, to my right hon. Friend the Secretary of State to find clause 6(2) included in the Bill. Alas, it is rare to find a Bill introduced into this House or into another place which extends to Northern Ireland. I have long criticised the procedures whereby almost all legislation affecting Northern Ireland is done by unamendable Order in Council, so I am pleased that this Bill extends to the whole of the United Kingdom.
  I felt that some parts of the speech by the hon. Member for Hammersmith (Mr. Soley ) were a little unreal, particularly those parts in which he expressed concern lest there might be a loss of jobs on United States bases following the privatisation of the Property Services
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  Agency. It was not so long ago that the hon. Gentleman's party was advocating the closure of all American bases, so his concern about the possible loss of jobs seems rather unreal. My hon. Friend the Under-Secretary of State will make it clear that proper arrangements will be made to protect and safeguard the legitimate and necessary interests of the United States forces who are stationed in this country at our invitation.
  The other part of the hon. Gentleman's speech which I found to be rather unreal was his statement which gave the impression that the security of the United Kingdom depended upon the Property Services Agency. I shall say some generous things—at least they will be intended to be generous—about the Property Services Agency, but to describe it as a major factor in the security of these islands is to overstate the case.
  The overwhelming majority of the work that is presently done on behalf of or under the direction of the Property Services Agency is done by the private sector. It is ludicrous to say that, if the Property Services Agency happens to go from the public sector to the private sector, which of course I want it to do, there will be less involvement by the private sector. Following the privatisation of the Property Services Agency, some of its security responsibilities will continue to be carried out by the agency itself, whether in public or private ownership, and some responsibility may be transferred to client bodies.
  This is a memorable debate. My right hon. Friend the Secretary of State is the sixth Secretary of State for the Environment in the past 10 years. I had the priviledge to serve under my noble Friend Lord Jenkin of Roding. Each of the former Secretaries of State, even including my right hon. Friend the Member for Henley (Mr. Heseltine), whose absence from our proceedings upstairs yesterday I deplore, had distinguished careers at No. 2 Marsham street. I mean no discourtesy to any of them, but I predict that the record of my right hon. Friend will be no less distinguished than those of any of his five predecessors. His record is already significantly better than those of any of his predecessors. My right hon. Friend has succeeded where each of his predecessors has failed—he has brought this Bill before the House.
  I am happy to see in his place my hon. Friend the Member for Ealing, Acton (Sir G. Young), an Etonian baronet from London, not from Clywd, North-West. When I arrived at Marsham street in June 1983, I had the good fortune to find my hon. Friend, who was then Under-Secretary of State with responsibility for the Property Services Agency. I found also that my noble Friend Lord Jenkin of Roding had allocated the Property Services Agency to me. My hon. Friend will confirm that, from the day I arrived at Marsham street until the day I left, I was strongly in favour of bringing the Property Services Agency into the private sector. I shall give way to my hon. Friend if he wishes to dissent.
  Sir George Young: I could not miss the opportunity of hearing my hon. Friend's second public performance since our proceedings have been televised. My hon. Friend exhibited impatience when he found that standards in the PSA were not up to his high expectations. He quite rightly pursued the policy of privatisation, which comes to fruition this evening.
  Mr. Martin Flannery: This is a tender moment.
  Mr. Gow: The tender can wait.
  I am grateful to my hon. Friend the Member for Acton for his remarks. I hope that he will catch your eye, Madam Deputy Speaker, before 10 o'clock.
  The opening remarks by my right hon. Friend the Secretary of State and by the hon. Member for Hammersmith were characterised by some general references to privatisation. It will come as a surprise to hon. Members to learn that I have always been and remain a strong advocate of putting into the private sector all those aspects of the nation's life that it is not essential to have in the public sector. There may be a legitimate dispute between the hon. Member for Hammersmith and his right hon. and hon. Friends about whether the Property Services Agency must be in the public sector.
  The task of maintaining the Government's stock of buildings and responsibility for some of our new buildings, including military buildings, can properly be entrusted to the private sector. It is perfectly proper for the hon. Member for Hammersmith to say, "No. Responsibility for maintaining Government buildings must be with a public sector body." I do not share that view, but it is certainly legitimate.
  Mr. Dalyell: As the hon. Gentleman is a strong advocate of privatisation, is it not a matter of dismay to him, and doubtless to the electors of Eastbourne, that, two years ago, the Crown Suppliers was making a profit of about £5 million? Am I wrong in saying that, under the guidance of the Under-Secretary of State, it lost 1 million last year? What a mess the Under-Secretary of State has made of things. Would the hon. Gentleman's constituents in Eastbourne not be extremely angry?
  Mr. Gow: I rejoice in the fact that there was profit; I do not rejoice in the fact that there was a loss—
  Mr. Dalyell: He caused it.
  Mr. Gow: That underlines the very point I am making [Interruption.] Well. I have only been a Member of the House for the twinkling of an eye, but in those 15 years nothing has altered the view that I held on arrival—that no special gifts, qualities or abilities were given to Ministers to enable them to run industries and enterprises better than folk outside.
  Mr. Dalyell: Is the hon. Gentleman aware that John Stuart Mill coined the phrase.
  "the deep slumber of a decided opinion"?
  Should not the hon. Gentleman now wake from it?
  Mr. Gow: I shall quote some Mill at the hon. Gentleman—
  "The worth of a State, in the long run, is the worth of the individuals composing it … A State which dwarfs its men, in order that they may be more docile instruments in its hands … will find that with small men no great thing can really be accomplished."
  So I believe that John Stuart Mill supports my argument rather than that of the hon. Gentleman.
  Sir Giles Shaw: I hesitate to interrupt my hon. Friend when he is in such erudite flow, but I was worried because he said that small men can offer no great accomplishments.
  Mr. Gow: I apologise to my hon. Friend. I was not referring to "small men" in any literal sense.
  I was asserting that the private ownership of the Property Services Agency, especially by those who work in it—by worker shareholders—is a concept that has long been dear to my heart. When British Gas was offered for sale to its workers, 99 per cent. of those who work for British Gas took up shares. When British Telecom was offered for sale to its workers, 96 per cent. of those who worked for British Telecom applied for shares. I believe—
  Mr. Flannery rose—
  Mr. Gow: Yes, I shall give way to the hon. Gentleman, whose decision not to stand at the next election I deplore.
  Mr. Flannery: The hon. Gentleman is wrong—it is nearly 16 years since he became a Member for the House. I remember going to Ireland with him at the time.
  On his point about workers getting shares, surely the con is obvious to everybody? They get the shares as part of a propaganda ploy and in no time at all they are sold to the big boys. The hon. Gentleman knows that as well as I do.
  Mr. Gow: The hon. Gentleman has chosen a bad day on which to make that intervention, because today is the day of the sale of the water industry. I am happy to be able to tell the hon. Gentleman that tens of thousands of those who work in the water industry have applied for shares in that industry. There will be a great expansion of worker shareholders in the water industry, for which my hon. Friend the Member for Southampton, Itchen (Mr. Chope) has responsibility.
  I warmly welcome the proposal, because it will give those who work for the Property Services Agency the chance to become owners of the enterprise in which they work, but sadly that will not be until 1992. I hope that my right hon. Friend may be able to bring that forward.
  Many other hon. Members wish to take part in the debate, so I shall make just one more point. The arrangements in recent years for managing and administering the Government estate have been most unsatisfactory. For many years, the Government estate has been run only by the Property Services Agency, which then had to find somebody else to do the work. It was almost the case that if the washer broke on a tap one had to get hold of the Property Services Agency simply to get a new washer. That procedure was cumbersome. Despite some excellent people working for the Property Services Agency, much of its work—although by no means all—was inefficient, not through the fault of those who worked for the agency, but because the system itself was cumbersome.
  Therefore, I greatly welcome the new arrangements that are about to come into force, whereby each Government Department will be responsible for the maintenance of its own buildings and will be able to go where it pleases to find those who will maintain, repair and improve its buildings. I am afraid that many Government buildings, not only in London but throughout the kingdom, are in a bad state of repair, have been poorly maintained in the past and in too many cases provide a working environment that would be unacceptable in many private buildings and private companies. I hope that the new arrangements that my right hon. Friend described will mean that we can bring to a much higher standard of

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  maintenance and repair the buildings in which so many of our civil servants work, because some of the buildings in which some of our civil servants are working are frankly deplorable.
  I congratulate my right hon. Friend on the Bill. It has only six clauses and deserves to receive a speedy passage through Committee. I congratulate him warmly on having introduced it.
  6.15 pm
  Mr. Gerald Bermingham: I listened to the pearls of wisdom from the hon. Member for Eastbourne (Mr. Gow), who is graciously smiling the smile of the crocodile, with the tears to match, but where does that take us? Where is the justification for the Bill?
  Let us look at the Bill analytically. The Secretary of State spent a long time on it this afternoon, but he did not justify what is sought to he done. The hon. Member for Eastbourne made a tour de force across his own Benches, but he did not justify what is sought to be done. We must ask ourselves this simple question; will the service provided to the state be more economical in cost to the state before or after this privatisation? That is the only question and the only test.
  Let us look at the history of privatisation, starting way back with INMOS and moving forward through the royal ordnance sale, and Rolls-Royce and Rover as they rolled through. What have those sales really done? The state has received a capital sum. We have also seen the sale of the gas, telecommunications and water industries—assets that belong to each and every one of us.
  The state received a capital sum, but who received the benefit of that capital sum? Was it the millions of people who do not pay any income tax? Was it the millions who live on social security, or was it those who pay a lot of income tax or who used to pay a lot of income tax, but whose tax rates have been scaled down from 60 per cent. to 40 per cent.? Those people were the beneficiaries. What of the properties, the goods, the companies and the firms that were sold off? What about our assets? Who now has the profits from those?
  I will not bore the House by talking about Rover, because that is a scandal itself, but let us look at the royal ordnance factories that were sold off. Enfield is an example of a once thriving works that is now closed. The value of the land was massive and who has been the beneficiary? The state? No. The beneficiary is the company that bought it so cheaply.
  Let us look at Rolls-Royce, British Steel and the gas industry. Who has been the beneficiary of those sales? Certainly not the people of this land. The major taxpayers have received tax cuts and ultimately it is they who own those industries today.
  I turn now to the Property Services Agency and the Crown Suppliers. I do not intend to follow my hon. Friend the Member for Hammersmith (Mr. Soley) and to discuss security, because that matter can be debated later and elsewhere. I shall simply consider the maintenance of the buildings. Let us take as an example the construction of the courts, where much work still remains to be done. The Truro court, built by the Property Services Agency if my memory serves me correctly, stands internationally recognised. Maidstone is another one. It used the wrong marble, but that does not matter. It may have been the most expensive staircase in history.
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  Leaving that mistake aside, if in future such buildings are built by private companies, they will take into account in their quotations not only labour and material costs but that other element which any private company tendering for a contract includes—namely, profit. The Property Services Agency does not need that profit element so it does not include it in contracts. Hence the examples of valuations that we were given earlier. The costs were considerably less than in the private sector. That is bound to be. The private sector always includes profit in its figures. It has to worry about the variables, because profit is important. Companies do not trade for nothing; they trade to make a profit. That is a piece of simple economics which seems to escape the Government every time. Plainly, the costs to Government Departments will increase.
  Who will benefit from the sale of the Property Services Agency? We know that we the taxpayers, and the millions who do not pay tax, will get nothing out of it. Perhaps in 1992—the timing is significant: just before the next election—there will he further tax cuts funded by the sale of state assets.
  How will the Property services Agency be sold off? There is talk of turning it into a company. Fine. What will we do then? Turn it into a co-operative, such as National Freight? Its thousands of employees receive the benefit or profit. Will the Property Services Agency be sold to some boys in the city—for example, construction companies such as Higgs and Hill, Tarmac or Trafalgar? How will it be valued? The Government's track record in valuing assets before sale leaves much to be desired.
  Mr. Andrew Hunter: If the hon. Gentleman is so anxious about taxpayers' money. how does he defend a system such as that under which Buckingham gate was constructed where the original estimate was £4£5 million and the completion costs more than £12 million? Similarly, the completion costs of Richmond house were over £1 million more than the estimate. That was a waste of taxpayers' money under the present system.
  Mr. Bermingham: The hon. Gentleman makes a valuable point, and I am big enough to concede it. If people under-estimate the cost of construction, whether in the public or private sector, a little column called "extras" is added. The building trade is full of such extras. They represent additions and alterations which are usually certificated by the architects. The hon. Gentleman probably knows that from his experience in industry. There were simply wrong estimates of the actual cost. If someone makes a wrong estimate, they are not employed again, or they are sued.
  Mr. Andrew Hargreaves: How often have responsible members of the Property Services Agency or any other governmental or quasi-governmental agency been sued or dismissed for making such wrong estimates?
  Mr. Bermingham: There is no reason why they should not be sued or dismissed. If mistakes have been made—the Government have been in charge of the agency for the past 10 years—why have they not been inquired into and sorted out? The Government cannot shy away from the problem and say, "We will sell it off to get away from the problems in the future." That is to dodge the issue.

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  As I was saying, if the Property Services Agency is sold to the people who work in it, they will make a profit. However, I suspect that it will slip down a sleazy road and fall into private hands at a valuation far lower than its true value. The City has been laughing for 10 years. It has bought up Government assets at knockdown prices.
  Mr. Geoffrey Lofthouse: It has been the sale of the century.
  Mr. Bermingham: They got an even better bargain from the Government. The Government cannot value anything.
  The Crown Suppliers services embassies abroad and Government Departments. It has developed its own technique.
  It lost money last year, but with proper management it is capable of making a profit. Who will benefit? Certainly it will not be the people who will work in it eventually, unless there is an in-house buy-out in which everyone participates. However, I suspect that, because the Government are not fond of co-operatives, that will not be the case. There will be no winners from the point of view of the state, but simply increased costs.
  Costs will have to increase, because companies have to make a profit to live. It is simple economics. The cost increases, the state pays more and the taxpayers receive a lump sum but pay for it afterwards. If ever there was a case of live now, pay later, the Government are a prime example. They sell anything to survive today, knowing that someone else will have to pick up the tab tomorrow.
  The Bill is not a good Bill. It is full of doctrine and dogma, and it lacks common sense. It is a bill which the next generation will have to meet to pay for the Government's squandering behaviour.
  6.26 pm
  Mr. Michael Colvin: We have heard accusations from the Opposition that the Bill is full of dogma, but that is the only true accusation that we could level at them. The charge of Conservative dogma is completely refutable. In their defence all that Opposition Members do is to preach what to us sounds like a greater degree of dogma. Some years ago I noticed that at one of its conferences the Labour party decided to repeal the clause—I think it was clause four—in its constitution which contains provisions for state ownership. That clause may have been dropped from the Labour constitution but nothing that has been said by Labour Members today gives us reason to believe that they have forgotten the dogma upon which so many of their policies depend.
  I am pleased to take part in the debate and that the measure has at last come before the House after a long delay. Some of us have asked why so much time was wasted in bringing the Crown Suppliers and Property Services Agency into the private sector, but the explanation given by my right hon. Friend the Secretary of State this afternoon satisfies me. We have talked about efficiency and value for money, but another side of privatisation must be taken into account. It may be described as the social implications of privatisation.
  I shall concentrate my remarks on a narrow aspect of the proposals, the knock-on effect of this privatisation on a manufacturer who is largely dependent on the Crown Suppliers as a major customer. I refer to Enham
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  Industries, near Andover. I raise the matter so that the Government may be aware of the effect that privatisation could have on charitable organisations, which could in turn throw an extra burden on to taxpayers, in this case to support disabled people who hitherto have done so much through their efforts in manufacturing to support themselves. Enham Industries is one such organisation. The Papworth centre, near Cambridge, to which it is linked, is another. The well known Remploy factories could be similarly affected by this privatisation measure.
  I declare an interest as an unpaid governor of the Enham village centre for the past 25 years. The village is in the constituency of my hon. Friend the Member for Hampshire, North-West (Sir D. Mitchell), who is sorry not to be in the Chamber now. He has another urgent meeting to attend and apologises for his absence. He knows the Enham village centre well and has visited it often. Even without hearing what I have to say he wishes to be associated with my remarks.
  Enham Industries comprises the industrial and commercial element of the Enham village centre, which is a self-contained community supporting an industrial work force of about 350 people, two thirds of whom are disabled. The centre was founded towards the end of the first world war for the permanent resettlement of disabled ex-service men and their families, with the opportunity to work as an essential ingredient of the rehabilitation process, especially when linked to adjacent living accommodation within the supportive community.
  Over the years the village has adapted to changing needs and today it caters for a wide range of physical and other disabilities, including those resulting from illnesses and accidents as well as congenital diseases. To the uninformed observer, Enham looks like a typical English village. That is why it provides such a good environment for the rehabilitation of disabled people. Enham also offers special training and retraining opportunities for handicapped people, particularly the young. Its commercial activities have reduced considerably the dependence of those people on the state. That is something which we all want to see.
  Some of that work could be put at risk by the Government's proposals to privatise the Crown Suppliers. There is considerable uncertainty at Enham about the method and precise timetable of privatisation. We have learnt something about that this evening, and I am relieved that my right hon. Friend the Secretary of State wishes to proceed with all possible haste. His motto was certainly sooner rather than later. Fears about the timetable have not necessarily been dispelled by the contents of the Bill or the explanatory note which my hon. Friend the Under-Secretary of State made available to us. I appreciate the Government's need to keep their plans fairly fluid, but it is important for those who work at Enham to have a firm idea about timings.
  The survival of the furniture factory, which is the largest unit in the village, is critical to the well-being of the entire village. It has a turnover of £3 million out of Enham's total industrial turnover of £4·5 million. Besides employing many disabled people directly, it supports overheads which enable other disabled people to be employed and has the potential to make money to support some of Enham's other activities, such as a sheltered computer unit and a professional management team who give advice to other employers on the employment of disabled people.

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  For many years the furniture factory has depended heavily on one customer, the Crown Suppliers. In earlier years, its business was less price-sensitive that it is now and substantial profits were achieved. The money was ploughed back to help the beneficiaries in the village. The risk inherent in over-dependence on one customer was recognised in recent years and every attempt made to rectify it—with, I am afraid, rather limited success, mainly because of the apparent inflexibility of the factory and work force. As a result, they remain about 80 per cent. dependent on the Crown Suppliers to supply their goods to the Ministry of Defence.
  Crown Suppliers' work is obtained by competitive tender. The only advantage to Enham as a charity employing severely disabled people is its priority supplier status with Government Departments. Although it competes on price, delivery and other factors, if it does not win a tender, it can still ask to be allocated part of the business on the same conditions as the best tender.
  Much of my anxiety for Enham's future hinges on the Government's apparent formula for privatisation. It has been reported that the Crown Suppliers may be broken up into two or three parts, with its furniture side being one major part. I understand that, of its total sales of £230 million in 1988–89, wooden furniture accounted for £40 million and metal furniture for £33 million. Furniture is the main part of Enham village's output.
  I should be grateful if my hon. Friend the Under-Secretary of State could be more specific about his proposals for the timing and structure of the privatised concern. The sister organisation to Enham, Papworth village near Cambridge, is in a similar position, with its furniture factory turning over about £1 million a year—not as much as at Enham—yet remaining 50 per cent. dependent on the Crown Suppliers as its principal buyer.
  Of particular interest is the position of the Ministry of Defence as the ultimate prime user. Will it use a commercial middle man after privatisation to replace the Crown Suppliers, or will it be able to buy direct? Enham would favour selling directly to the MOD users, but if that part of the Crown Suppliers is to be sold, Enham would favour a management buy-out. I am glad that my right hon. Friend the Secretary of State said that he, too, favoured a management buy-out with an opportunity for the company to continue to deal on a "priority supplier" basis.
  Benbow furniture designs is the trademark for Enham's furniture products. It belongs to the Ministry of Defence and is manufactured by Enham through a licence from the Crown Suppliers. What will happen to those trademarks following privatisation? I have a letter from my hon. Friend the Under-Secretary of State who says about them that the Bill
  "also provides for the transfer to the purchaser of Crown copyright attributable to the TCS business. This is likely to include the copyright of Benbow designs."
  I am not certain that that is strictly true. I was under the impression that Benbow designs belonged to the Ministry of Defence and could be passed to someone else only if it was prepared to sell the licence.
  I appreciate that my hon. Friend the Under-Secretary of State will be tempted to say that all these questions are for the Ministry of Defence because it is the ultimate prime purchaser of Enham's output, but he must have a view and we should like to hear it. In particular, we should like an undertaking from him that he will talk to the Minister of
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  State for Defence Procurement to see whether ways can be found to cushion the effect of privatisation on an organisation which has done and continues to do so much to support itself.
  6.39 pm
  Mr. Richard Livsey: Clause 1 relates to the sale of
  "property, rights or liabilities which are associated with the Property Services Agency and The Crown Suppliers."
  Clause 2 states that no redundancy compensation will be available to staff who are transferred automatically to a new employer. From clause 3, it appears that the Secretary of State will have shares in the company formed, but the right hon. Gentleman did not make that clear this afternoon. I hope that the Minister will clear up that matter when he replies tonight. Clause 4 relates to the
  "winding up of The Crown Suppliers' trading fund".
  The Bill is about reducing public expenditure, and Conservative Members have stated that clearly tonight. The right hon. Member for Blaby (Mr. Lawson) made a number of speeches as Chancellor in which he said that it was the stated aim of the Government to reduce public expenditure to below 40 per cent. of gross domestic product. The Bill is a further step towards achieving that objective. Unlike Conservative Members, however, I disagree with it. If the Government choose to follow that path, they must remember the cost involved.
  Provision for the privatisation of most of the PSA's designs, buildings and maintenance work has a knock-on effect. What will happen to standards? The hon. Member for Eastbourne (Mr. Gow) was right to say that many Government buildings are not in the best state. I have visited many such buildings, and I must agree with him. None the less, what will happen to standards if the Bill is passed? What standard will be laid down for those buildings erected for Government Departments following the passage of the Bill? Will those standards be better than the existing ones? The newer buildings that have been erected to PSA design are excellent. I visited Richmond house yesterday and it is built to a high standard. Perhaps one can criticise the outside of the building, but inside it is excellent.
  Mr. Campbell-Savours: Although I might criticise the arrangements for the valuation of Richmond house, I regard it as one of the most beautiful pieces of architecture erected this decade. It is a tribute to the architects who designed it.
  Mr. Livsey: I agree that the frontage on to Whitehall is truly excellent, but most of us in the Norman Shaw building must look at the back of it, which is not so attractive. The entire building should look well rather than just the front.
  We must ensure that standards are maintained and improved. We are talking about a large business and the Secretary of State has already said that it is worth £3·4 billion per annum. It is a big business to privatise, but the most important consideration must be the PSA employees. It employs 23,000 civil servants, and I am sure that we would all want their well-being to be guaranteed and their conditions of service protected and maintained.
  The proposals for the privatisation are some of the most radical to be introduced under the Government's privatisation programme.
  Mr. Campbell-Savours: Reactionary.
  Mr. Livsey: Perhaps that is a more suitable word.
  The proposals are radical because the Government are going beyond just privatising a nationalised industry—they are striking at the heart of Westminster and Whitehall. They are talking about the privatisation of the services that support the Government, and that is a significant change in comparison with previous privatisations. We must ask whether that quantum leap of privatisation, which strikes at the heart of Whitehall, is desirable. On examination, there remains some doubt as to whether these services are suitable for privatisation.
  If the Bill is to see the light of day, safeguards must be built into it in Committee. It is vital to safeguard the pension rights of the staff. The Secretary of State has mentioned that, but we need further evidence that the terms and conditions of the employees will be maintained. If the PSA and the Crown Suppliers become part of the competitive world, what will happen to the 23,000 civil servants who become employees of the new company? Will there be problems of overstaffing, as at present? Will immense cuts be made in the numbers employed? Will such reductions result in a decline in quality of workmanship and design? Will there be many relocations? So far those human-interest questions have not been answered.
  It is also important to consider the land holdings and buildings associated with the PSA. We have been told that only the services provided by the PSA and the Crown Suppliers will be privatised, but the hon. Member for Hammersmith (Mr. Soley) mentioned 300,000 hectares of land. I am sure that all hon. Members would like to know the location of those hectares. My guess is that they will be found in most of our constituencies. In the past 12 months some responsibility for land holdings has been handed from the PSA to the Ministry of Defence. I should like to know the extent of that split of responsibilities.
  We have already flogged the security horse but it is one of the most critical factors of the privatisation. Over and above the questions that I put to the Secretary of State and the comments made by the hon. Member for Hammersmith, I shall mention a report in The Independent of 19 October that detailed the fears of the United States Air Force about the proposed privatisation. It said:
  "The US Air Force has voiced concern over the security implications of privatising the Property Services Agency, which carries out building work at bases in Britain.
  Representatives are to meet officials from the agency and the Ministry of Defence in the near future. A USAF spokesman said: 'We currently have a very sound working relationship with PSA and any proposed change would require serious negotiations.'"
  What happened as a result of the meeting with the MOD in October? Has any agreement been made with the USAF as a result? What guarantees were the Government able to give the USAF in the event of the privatisation of PSA? I hope that the Minister will be able to give answers to those questions.
  The security angle behind the privatisation relates to Cabinet Ministers' houses and foreign embassies. Given that they are the target of terrorists, their protection is of grave concern. Privatisation of the PSA begs the simple question: can one privatise a service that services Government? That question has not yet been adequately answered in this debate.
  The Department of the Environment, which is responsible for the PSA, will have some difficulties as a
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  result of what is going to happen. The services provided by the PSA, including design project management, property maintenance and estate management, are all competitive parts of the private sector. During the Bill's passage, we are duty-bound to ensure that there are safeguards for those operations. The property holdings are to remain in the public sector and the Government will remain the landlord. I hope that I have correctly interpreted the Bill.
  Many weaknesses in the operation of the PSA have been outlined. The escalation of costs for the Department of Energy building—which tripled over 18 months—have been mentioned. That shows the necessity of tightening up the PSA management. Whether there is to be a management buy-out in the long-term future is a matter of public interest. It has been forecast that at least 50 per cent. of present PSA business will be lost as a result of competition. Whether the remaining parts of the PSA operations will prove desirable buy-outs for the management will be called into question.
  Mention has been made in the debate of the furnishing business and core furnishing, which has a turnover of more than £70 million and on which many people's livelihoods depend. As the hon. Member for Romsey and Waterside (Mr. Colvin) said, the people involved in manufacturing that furniture are involved with charities and the disabled. I am sure that hon. Members would not wish those people to lose part of their livelihood.
  The Secretary of State said that some of the Crown Suppliers' vehicles hire services would remain with the Government. Will the courier services and all the transport operations—not just some of them—remain with the Government? What will happen to an extremely desirable residence near Waterloo and one of the future Channel terminals, Wellington house, presently valued at £36 million? Will it be sold off because it is part of the Crown Suppliers? If it is to be sold at a knockdown price, I am sure that there are many sharks willing to take it over and make a great deal of it, because it is in a favourable position.
  Why is the Bill being put through Parliament? What is it all worth? If the Government's privatisation programme is to retain any credibility, the Government should produce a balance sheet which has been audited by the National Audit Office so that everyone can be clear of the valuation of these public assets before the privatisation measure goes through so that the public and the House can judge whether this is the proper way to proceed with legitimate matters of public interest. I trust that this will be done and that we do not see the same sort of shabby business as occurred with Rover and Royal Ordnance.
  Who will get their hands on some of the services involved? Many of the companies may be building companies. They may win in competition with the PSA or they may wish to get involved in other ways by buying their way in. It is salutary that many of these firms, including Cementation, Taylor Woodrow and Trafalgar House, all support the Conservative party, have a vested interest and might benefit from privatisation. We must regard with suspicion the objectives of and motives for this measure.
  The Bill alters the course of Government management which has developed in a direct line since the middle ages when the first public works clerk was appointed to a royal palace. The PSA now looks after 8,000 public buildings. Does the PSA still have any involvement in royal palaces?

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  The Select Committee on the Environment said that the PSA was inefficient and its lines of communication were too long. The privatisation may be being used as an excuse to try to put right some of these matters. It is legitimate to ask whether options other than privatisation are available to make the PSA more efficient. Alternatives may well exist.
  The Bill also involves some aspects of the Secretary of State's career. He has to make a partial commitment to Thatcherite privatisation. He is being clever enough to set up the final stages of the privatisation of the PSA until just after the next general election. It is a good case of the Secretary of State having his cake and eating it.
  6.57 pm
  Mr. Michael Stern: I am grateful for the opportunity of following the hon. Member for Brecon and Radnor (Mr. Livsey), not because of the usual sour platitudes with which he ended his speech, using the normal Liberal tactic of substituting insults for policy, but because he referred earlier to a subject on which I wish to speak: the position of the PSA staff under the proposed privatisation.
  I declare a constituency interest in this matter. There is a substantial PSA office at Westbury on Trym, in my constituency. Many people not only work in that office but live close by. When the former Secretary of State for the Environment, now Secretary of State for Defence, visited my constituency during the 1983 general election and walked the high street of Westbury on Trym he was immediately besieged and almost mobbed by PSA employees worried about the implications of the Alfred report. That report would have caused huge upheavals in the PSA and created the ultimate indignity for a Bristol office by putting it under Cardiff's control.
  Substantial numbers still work at the Westbury on Trym office in north-west Bristol and I was anxious to receive as wide a briefing as possible on this measure's effects on the staff. Not surprisingly, I received a briefing from the Government and asked the union if it would supply me with a briefing, which it duly did. I received a briefing from the south-west branch of the National Union of Civil and Public Servants earlier this week, immediately grabbed it and scanned it with great interest. I admit that my interest rapidly waned as I read through it. The document did not give a broad view of the Bill's effects on the union members at the PSA, but was an openly party political document which set out to denigrate privatisation and slag off those of its members who happened to disagree politically with the writer of the briefing. It was a thoroughly scurrilous little document.
  When dealing with the interests of the staff—its members—the document says that the business of the PSA will decline automatically as a result of privatisation. Let us forget what we heard this afternoon about the favourable costings that the PSA is able to put forward in privatisation because according to the writer of the document, privatisation has to mean decline because that is what the Labour party says it has to mean. Let us forget that the document is trying to look after the interests of its members who will themselves be responsible for whether the PSA is efficient or inefficient in future. I know, apparently better than the trade union concerned, that many of its members regard the PSA as an extremely efficient organisation and are in no way scared of
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  competition. I find it worrying that the people they pay to represent them have totally the wrong idea of the work they are doing.
  It is the union's recommendation that the staff concerned should be quickly offered a choice. One would think that we were talking about the direction in which their careers should go. That is not the case. The choice recommended by the union is between remaining in the Civil Service and joining the new PSA on loan. There is no question in the union's mind that any members of staff, whatever their political outlook, should have enough belief in the organisation for which they have worked for most of their lives to want to join it.
  The nub of the scurrilous little document is that the union predicts that those members of staff with "highly marketable skills" will automatically leave the PSA and go to an employer of their own choosing. Neither we in the House nor my constituents live in a slave society. They have the right to choose their employers. I do not find it in any way deplorable that, as a result of the Bill, my constituents should be given the opportunity of selling their skills in the best marketplace. I find it deplorable that the people who represent them should so resent them possessing ambition.
  The opportunities opened up in the Bill for my constituents are legion. It has already been pointed out that the PSA will benefit from being able to compete with the private sector in the private sector.
  Mr. Campbell-Savours: When the hon. Gentleman consulted those civil servants, did he ask them about morale within the PSA? What did they say about that? He must have consulted them as it is an important issue for the hon. Gentleman. Did they say that morale was good or bad?
  Mr. Stern: I am sure that the hon. Gentleman will appreciate that there is never a simple answer to that question, and I did not receive a simple answer.
  Mr. Campbell-Savours: Did the hon. Gentleman ask?
  Mr. Stern: Of course I asked, as I meet them regularly. They said that morale was variable. Some older members of staff greatly value their titles and positions as civil servants and are reluctant to see those positions changed. One of the reasons that I welcome delayed privatisation in this case is that it will give an opportunity for older members of staff to work out arrangements which will be satisfactory for them for the short remainder of their careers. If I am chosen to serve on the Committee, I will want to look at that point.
  There were and there remain a large number of people to whom I have spoken who are excited at the prospects opened up by the Bill. The Crown Suppliers is excited at the prospects of taking part in the management buy-outs that are likely to come about as a result of the Bill. The answer to the hon. Member for Workington (Mr. Campbell-Savours) is that, as with so many other issues, there is no simple answer.
  Mr. William O'Brien: The hon. Gentleman said that a person should he allowed to transfer to where he can obtain the highest reward. He also referred to older people who may have two years to go. What about job satisfaction? Did the hon. Gentleman question those people who are now employed by the Crown Suppliers or the PSA about job satisfaction and the

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  fear that they may lose that job satisfaction? Did he question those people with perhaps four or five years to go about their fear that after two years they will not know where they belong? Those issues must be addressed. The prospect of privatisation is causing that concern.
  Mr. Stern: I disagree totally with the final point made by the hon. Gentleman. Of course there are concerns in many different areas. They are not caused by privatisation; they exist anyway. The hon. Gentleman rightly speaks up for the people concerned about the effects on their careers, but he discounts the people—and I have spoken to many—who are excited by the prospects opened up by the change in character of the organisation. They are entitled to just as much consideration.
  Mr. Campbell-Savours: The hon. Gentleman said that he believes that morale is mixed. Can he explain why last year a net figure of 500 senior managers left the PSA? Why did they go? Were they happy and contented? Did it have anything to do with the prospect of privatisation?
  Mr. Stern: The hon. Gentleman is seeking to create generalisations where none exists. In any organisation containing 23,000 employees, some will leave in any year and some will be senior managers. They will all leave if they see that prospects are better elsewhere. However, the hon. Member for Workington does not take account of people joining the organisation at the same time.
  Mr. Hunter: My hon. Friend is right. He may wish to know that the Select Committee on the Environment discussed that point with the PSA, which said that it had a recruiting and retaining problem because of competition with the private sector.
  Mr. Stern: I am grateful to my hon. Friend for underlining my point.
  Prospects have opened up for my constituents—both present and future employees of the PSA—and are greatly enhanced by the Bill. For the first time, the organisation will be able to go into the marketplace and fully sell the skills that it has built up. That marketplace is not just in Britain but worldwide. The opportunity for the organisation to compete worldwide will be greatly enhanced by the Bill. I suspect that that is what is interesting many of those employees who are keen to share in the overall organisation. It is a unique organisation that has been held back by its position as part of the arm of just one of the world's Governments.
  Many of my constituents are worried about their conditions and prospects under this change, but I welcome the Bill on their behalf. I have no doubt that it will create more opportunities for more people than there would ever have been had the PSA remained in public hands.
  7.10 pm
  Mr. Tam Dalyell: If selected, I look forward to serving on the Committee examining this Bill and I hope that the hon. Member for Bristol, North-West (Mr. Stern) will serve on it, too. This Bill is a can of worms and there is a great deal to be said about it.
  As the parliamentary debate goes on, it often happens that more issues are raised. I have a great respect for the hon. Member for Bristol, North-West; he and I are both involved in the promotion of chess, but I beg him to realise
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  that, although he may be right about some people being excited by the prospect, a great many others are deeply worried about what is happening.
  On 24 April 1989, I raised this subject by asking whether Ministers would honour the commitment given to this House by junior Ministers that
  "the pensions of the staff of the Crown Suppliers upon privatisation will be comparable to those they are entitled to under the principal Civil Service pension scheme."
  The hon. Member for Southampton, Itchen (Mr. Chope) replied:
  "When tender invitations are issued, prospective purchasers will be invited to offer pension terms to transferred staff broadly comparable to those in the principal Civil Service pension scheme. Detailed future pension arrangements will be a matter for the purchaser to discuss with the Government in the course of the sale."—[Official Report, 24 April 1989; Vol. 151, c. 412.]
  That is open-ended.
  On 25 April, following a clarification question from me and a holding answer, the Minister said:
  "No decisions have yet been taken upon the detailed criteria which will apply."—[Official Report, 25 April 1989; Vol. 151, c. 526.]
  We want to see the small print.
  On 2 May, in reply to my question about non-industrial staff, the Minister said:
  "my right hon. Friend yesterday met the unions representing the staff of the Crown Supplier."—[Official Report, 2 May 1989; Vol. 152, c. 56.]
  The Minister has not satisfied the unions in these meetings.
  On 16 May the Minister said:
  "The pension terms on offer would be assessed by the Government Actuary."—[Official Report, 16 May 1989; Vol. 153, c. 185.]
  That is more than an important point for the Committee.
  The Secretary of State said this afternoon that, after privatisation, the staff of the Crown Suppliers and the PSA who are transferred will have
  "exactly the same redundancy payments as anyone else. They are not losing their redundancy entitlement".
  The Secretary of State referred to the operation of the TUPE regulations. He is aware that regulation 7 excludes pensions, but severance arrangements in the Civil Service are enshrined in the principal Civil Service pension scheme. Does the Minister regard severance arrangements as caught by the regulation 7 exclusion? If so, will he or the Secretary of State tell the House whether he is satisfied that he has discharged his full obligations under the relevant European directive?
  In the Civil Service, severance entitlements are guaranteed by Act of Parliament. The total obligation of the state towards civil servants in the PSA is estimated at £1 billion.
  Does the Secretary of State recognise that the severance obligations are vulnerable in the private sector?
  The construction industry is volatile and not known for its integrity in dealings with staff. Are Ministers aware that the union representing senior managers—the Institution of Professionals, Managers and Specialists—has said that it will take strike action to defend severance terms? The Treasury guaranteed severance terms in the ordnance factories and the dockyards. Why are similar guarantees not being offered to PSA staff?
  Despite considerable underfunding, the PSA has been consistently acclaimed for promoting standards of excellence. Over the years, it has won numerous awards, ranging from the Europa Nostra diploma of merit for the superb restoration of Richmond terrace in Whitehall—I

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  pay tribute to the late Duncan Sandys for his remarks about the PSA's work—to the Association for the Protection of Rural Scotland special award for the modernisation of Fort George in Inverness. Fort George was a fantastic performance by the PSA, and knowing as I do something about the Scottish highlands, I venture that no other body could have done the work as well. I am sure that the chairman of the Historic Buildings Council for Scotland, who is present, would not deny that.
  Sir Nicholas Fairbairn: That was indeed a most remarkable restoration, to which the Historic Buildings Council contributed generously, but the idea that only members of the PSA could have achieved it is phenomenal. The PSA is not restoring Westminster abbey, but no one would deny that that is a remarkable restoration.
  Mr. Dalyell: That is open to argument, but my point about the highlands stands.
  Do the Government accept that the PSA's design costs have been shown to be 25 per cent. to 30 per cent. cheaper than those of private designers?
  As for maintenance, in 1988 the Government abandoned their attempt to contract out district works offices after receiving tenders for the pilot in Southwark which proved to be twice as high as the PSA's costs. My hon. Friend the Member for Hammersmith (Mr. Soley), who spoke excellently, asked about that but did not receive an answer. Is it true or false?
  I have had no answer to my question about the private valuation of the new DSS headquarters costing 266 per cent. more than the PSA's valuation would have done. What are the facts? On Second Reading, the House is entitled to know them.
  We are also entitled to know what physical assets will be assigned to a privatised body, and on what basis. Will such property and equipment remain in public ownership? Will it be leased to such a body or given it as a sweetener?
  I listened extremely carefully to the Secretary of State's opening speech and took down his phrase that flotation was not envisaged. If not, who will own these assets?
  I want to say a word about service and value for money. The Minister has conceded that the sensitive use of landscape was central to the role of the PSA. With more than 300,000 hectares of land, from Cornwall to the Shetlands—as well as many other places around the world—under its management, the agency sets and meets high standards. PSA landscape architects work with practices of international standing to bring about sensitive and effective results. However, the privatisation of the PSA will reflect an ill-considered reliance on market forces to conserve and enhance the environment, and will ignore the PSA's critical role. Ironically, the announcement of the PSA's privatisation in the Queen's Speech was followed by the statement:
  "my Government will continue to attach very great importance to protecting the environment."
  Let us start with the north, although there are endless other examples. What will happen to the ownership of all the Orkney and Shetland brochs? They are of European importance and extend right through Britain. It is not clear who will take over the ownership of royal palaces and so on from the PSA and whether there will be leaseback. The economical use of departmental accommodation requires centralised co-ordination. In the PSA's absence, Departments will end up unnecessarily competing against
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  each other for scarce and costly accommodation with the constraint of central pressures to order the proper use of space. Moreover, the lack of professional understanding in the market place will cause Departments to pay higher rents than necessary.
  Do the Government deny that? In its second report for the 1986–87 session the Select Committee on the Environment said:
  "PSA should be allowed to manage the civil office and storage estate more positively to ensure that the estate is controlled strategically as a major property resource. It should also have control over major new construction work in this sector."
  The unions say that that will not be achieved under the new regime, and they are right. If we are wrong about that, there ought to be some rebuke from the Government.
  I should like to raise the matter of quality of service. Departments will have to fund their works organisations either from existing resources, thus undermining the services that Departments are supposed to provide and increasing pressure on their staff, or raise entirely new funding, placing an additional burden on the taxpayer. Departments may use a mixture of those two. The financial pressures on Departments will mesh with the competitive pressures on the PSA to push down standards across the range of Government accommodation requirements. The cheapest is not necessarily the best but Departments will be forced to accept the lowest tenders. Is that denied? I listened carefully to the Secretary of State and did not hear anything in his speech which would contradict that statement.
  Will the Minister explain how such valuable public resources as property are to be valued? He did not explain that, nor did he say who will be given that task and how soon such a portfolio will be completed. What assurance can he give the House that such valuations will be able to withstand public scrutiny so ensuring that, bluntly, the public are not ripped off?
  Clause 2(2) refers to the Transfer of Undertakings (Protection of Employment) Regulations 1981. What undertakings is the Minister prepared to give in relation to any person or persons subsequently made redundant by the new private body? Like many other parts of the legislation, that has not been thought out.
  My hon. Friend the Member for Hammersmith mentioned security; I shall delete from my speech what I proposed to say about that because he covered it so powerfully. However, he was not answered. It is to the credit of the Secretary of State that he normally jumps up to answer a question, but this time he did not. His uncharacteristic behaviour reveals that the matter had not been thought through. My hon. Friend the Member for Hammersmith posed legitimate questions.
  I should like to put a precise question to the Secretary of State. Is it true that he has already decided that work on Ministers' residences and official residences will not be privatised? Has he decided that such work will remain with the Government? If there are no security problems in privatising the PSA, why are Ministers' residences, certain royal palaces and the House of Commons being excluded from his privatisation plans? Does he agree that that is a case of double standards—one for Ministers, their wives and families and another for service men and their dependants? The Minister may be able to answer that, but it jolly well looks as if there are double standards.

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  I am embarrassed that the security of 650 hon. Members and that of those who work with us should be judged on one set of standards while we lay down different standards for other people. If it is argued that those different standards are in no way inferior, the obvious questions to be posed by people outside is, why are they not good enough for people in the House of Commons and the royal palaces?
  Mr. Andrew Hargreaves: They are not.
  Mr. Dalyell: Did the Minister say that?
  Mr. Chope: No, it was a mere mortal.
  Mr. Hargreaves: As a mere mortal, may I inform the hon. Gentleman that Conservative Members would be quite happy to see those standards improved, because we do not find acceptable the standards that have to be endured in this place and in another place. Some of us would urge my hon. Friend the Minister to go further in terms of the standards provided by the PSA.
  Mr. Dalyell: If that is so, why is the House of Commons not being privatised like everything else?
  Mr. Hargreaves: We are referring not to the House of Commons but to its management and security.
  Mr. Dalyell: I do not know whether that means privatising the Serjeant at Arms. This will be seen as double standards, and that is a source of embarrassment. I see that my hon. Friends on the Front Bench agree with me. The matter needs to be dealt with.
  Other hon. Members wish to speak, so I will shorten the remainder of my speech. In terms of clause 2(2), will the Minister tell us what provision has been made with regard to the equalisation of pension rights and conditions as contained in the principal civil service pension scheme compared to those that the private body will be required to undertake? That is a rather careful question, and as far as I can make out it has not previously been answered.
  Mr. Richard Holt: The other questions were careless ones.
  Mr. Dalyell: The others were pertinent; I never ask careless questions.
  In terms of clause 3, is it the intention of the Secretary of State to hold any shares or part shares in the proposed privatised body? I have ears like Jodrell bank and distinctly heard the Minister say to his parliamentary private secretary, "Never answer his questions." What limits are the Government likely to place on their proposals? Clause 4 is about the Crown Suppliers. Can the Secretary of State advise us about the order and extent of the liabilities that he seeks to extinguish?
  In Committee, the debate will become more and more interesting, because some of us will keep an open mind and will continue to ask questions until they are answered. We shall make as much parliamentary difficulty as we can if Ministers are reticent. If they are forthcoming and frank, the Bill will go through Committee like lightning.
  7.30 pm
  Mr. Andrew Hargreaves: I am grateful for the chance to catch your eye Mr. Deputy Speaker, especially as, unfortunately, because of other commitments in the House, I shall probably not have the pleasure of joining the hon. Member for Linlithgow (Mr. Dalyell) in serving on the Committee to which he is looking foward so much.
  I wish to make a few comments on the hon. Gentleman's remarks about standards of security. My hon. Friend the Under-Secretary is aware of recent incidents at premises under the management of the PSA in which I and my hon. Friends work. The incidents concerned breaches of security such as theft, the rifling of hon. Members' cabinets and so on. They were brought to the attention of my hon. Friend, the Serjeant at Arms and others whose busines it is to know about such matters. There might just as well have been bombs.
  I ask the hon. Member for Linlithgow to pay attention to this point, as he referred to double standards of security. Conservative Members are concerned about the standards of security, and no doubt will be urging my hon. Friend to assure us that, in not transferring these specific services to the private sector, he can undertake that they will be improved by the PSA.
  Mr. Soley: The hon. Gentleman is not giving a fair crack of the whip to those who have a duty to manage our security. We put them—quite rightly—in a difficult position because we tell them that we are prepared to take certain risks to ensure that the democratic process is as open and as public as possible. They must balance the security throughout the Palace; that is not the case for Ministers.
  Mr. Hargreaves: I respect the hon. Gentleman's view, but I do not think that it applies to the office accommodation of hon. Members. It is a problem that needs to be addressed.
  Mr. Campbell-Savours: The hon. Gentleman is a valuation expert.
  Mr. Hargreaves: Indeed I am, and I make no bones about it.
  The hon. Member for Brecon and Radnor (Mr. Livsey) referred to the whole process of privatisation. The Opposition have previously referred to privatisation as selling the family silver, but this valuation expert considers that we are selling the silver duster and improving it, the better to preserve the silver.
  The whole question of privatising the PSA is one of efficiency. The hon. Member for Brecon and Radnor asked why the legislation was being introduced. The simple answer is that we require these services to be provided more efficiently and more cost-efficiently. For the benefit of those Opposition Members who tend to be a little sceptical, I shall cite a personal example that I have brought to the attention of my hon. Friend the Under-Secretary. In the car park some nine months ago, my car was unfortunately reversed into a pillar by one of the attendants. It took the PSA almost nine months to find out who employed the attendant and who was responsible and, subsequently, to arrange for insurance cover to be paid.
  That is not the standard of efficiency that hon. Members would applaud. It is the very inefficiency that the

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  Environment Select Committee referred to when it said that the PSA was inefficient. It is my experience, and that of many of my hon. Friends, that that is true. It is in an effort to improve that efficiency that we are embarking upon this legislation.
  We are discussing, especially in the case of the Crown Suppliers, the provision of such items as light bulbs and fuel. We might as well be talking about the provision of cabbages. Surely the Opposition are not suggesting that only the PSA can provide this House or other Government institutions with cabbages—[Interruption.] As one who has stood on the rostrum selling such objects, I assure hon. Members that they can be provided with equal skill, to better effect and more cost-efficiently by the private sector.
  The hon. Member for Brecon and Radnor referred to striking at the very heart of Whitehall. Many of my constituents—and, I am sure, many others—would welcome a fresh approach to the provision of services and the management of facilities around Whitehall. I have been ashamed by the shoddy condition of Government buildings. I have escorted senior foreign bankers—one, alas, was blown up the other day—to the Treasury. It is a disgrace compared with the Treasuries of other countries, which in a former existence I have visited either on official business or unofficially. I do not refer in particular to the outside of the building, which although not magnificent is reasonably well preserved; it is the inside of the building that shames me.
  I urge hon. Members to reflect on what this legislation attempts to achieve—an improvement in the management and the provision of such items as light bulbs and heating oil. To say that only the PSA can supply those items is nonsense. There may be parts of the PSA—and I bow to the superior knowledge of my hon. Friends—which, for security and other reasons, might be better in the public sector, but surely not the provision of light bulbs and heating oil. It is crazy.
  Mr. Campbell-Savours: Why?
  Mr. Hargreaves: Because there is a perfectly good marketplace in which to buy such items direct and more cheaply, which means better value for money. My constituents want cheaper services to Government and therefore lower public expenditure.
  I rest my case in saying that there is good reason for privatising the PSA and the Crown Suppliers, and I urge my hon. Friends to support that view.
  7.37 pm
  Mr. D. N. Campbell-Savours: The hon. Member for Birmingham, Hall Green (Mr. Hargreaves) made an interesting speech, which takes me to the heart of my case. I always try to be extremely objective about commercial matters—[Interruption.] Oh yes I do. Those hon. Members in the Chamber this evening, especially my hon. Friends, who have heard my comments on Finance Bills and trade and industry matters generally will know that I have sometimes dissented from a position because I felt that arguments about efficiency, effectiveness and delivery were crucial. However, I have never accepted the premise that efficiency in delivery of service is necessarily the monopoly of the private sector. I cannot intellectually come to terms with that as a proposition.
  Mr. Andrew Hargreaves: I would appreciate it if the hon. Gentleman could also include in his remarks the
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  concept that competition tends to lead to great efficiency in companies bidding for the same contract. It sharpens the acuteness with which they attempt to do the job. I am sure that the hon. Gentleman appreciates that.
  Mr. Campbell-Savours: I accept that and I shall deal with the question of competition when I speak about the Crown Suppliers. I shall draw the hon. Gentleman's attention to a report of the Public Accounts Committee and appendices to evidence that we took on these matters some 15 months ago.
  The proposition that the man who buys a cabbage in the private sector can necessarily acquire better terms than the man who buys a cabbage in the public sector is quite ludicrous. Whether I worked in the private or in the public sector would not influence in any way the efficiency and effectiveness of my operations as a buyer for a commercial organisation.
  Mr. Hunter: The hon. Gentleman is embarking on an argument for the PSA's efficiency. He must bear in mind that he is flying in the face of the findings of the Select Committee on Environment.
  Mr. Campbell-Savours: I do not suggest for a moment that the PSA is my ideal example of absolute efficiency. My case is that the efficiency with which problems are handled in any organisation manned by mortal human beings such as myself, who can work equally well in either sector, is entirely dependent on motivation. If those in the public sector are motivated in the right way—
  Mr. Andrew Hargreaves rose—
  Mr. Campbell-Savours: I would willingly give way if I had time, and perhaps I can deal with the hon. Gentleman's point in private conversation. I have a good deal to say this evening, however, and I do not wish to detain the House unreasonably at such an early hour.
  Let me ask the Minister to take the advice offered by President Bush last year at the Republican convention in the United States, which I was fortunate enough to attend. Turning to his opponent, the President said, "Watch my lips." I hope that the Minister will watch mine very carefully, as I should like him to address many of my remarks specifically in his reply.
  In my interventions this evening, I have persistently argued that in this instance the public sector provides a cheaper service than the private sector. [Hon. Members: "Nonesense."] We are starting the debate in the knowledge that the party with the most votes to deploy at 10 o'clock tonight believes that my view is nonsense. Let me draw hon. Members' attention to the third report of the Public Accounts Committee on the Property Services Agency and management of the civil estate. Questions were asked, and the Committee was subsequently provided with information by the accounting officer, Sir Gordon Manzie.
  I asked about a report into in-house and out-house design work done by the PSA. My question was:
  "Is it true that the latest Semple Sweett comparison into in-house out-house major design work shows that PSA are 25–30 per cent. cheaper than private consultants on major design work?"
  The question concedes a little to the Government, and I shall therefore read the reply in full so that we can consider the implications:
  "The original Sweett/Semple review in 1983 concluded that there was likely to be an additional cost of about 10–20 per cent. in putting work out to private consultants. However,

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  the review also concluded that it would always be more economical for a proportion of the design work to be carried out by the private sector, in particular to give the agency flexibility to deal with fluctuations in its workload. The latest management update of the Sweett/Semple review is still under consideration. When finalised it will cover the 44 year period to March 1987 and allow for the introduction and extension of fee competition for work done by private consultants. But the only really accurate and valid basis for comparison of in-house and out-house costs will not be available until the Agency is moved to a system of full commercial accounts, underpinned by much improved management information and accounting systems."
  I understand that those systems of "full commercial accounting", underpinned by
  "much improved management information and accounting systems",
  are currently being put into place, and that computerised programme is being used in the Department. If I am right, will the Minister confirm that that programme has now been subjected to 1,900 modifications, that the whole system is a disaster and that it is making it almost impossible to evaluate the relative costs of in-house and out-house work?
  These are internal departmental matters, separate from the propaganda of the debate. The Minister has come to the House with a proposal to privatise the agency, without having even established whether his proposal will save money: that, at any rate, is what was said in a recommendation that the Government accepted, provided by Sir Gordon Manzie for the use of the Committee.
  On the Crown Suppliers, however, the answers given to us are far clearer. Let me quote from evidence provided by Sir Gordon and contained in the appendix to our report. Sir Gordon is in the Chamber this evening, and no doubt is nodding vigorously.
  A paper was produced by the central unit on purchasing, which
  "followed a review of the future of The Crown Suppliers undertaken by a team of officials led by the Cabinet Office. The Cabinet Office review team concluded on the information available to them that whilst privatisation would be possible"—
  it is always possible—
  "it would not, in their view, be in the pulic interest."
  I understand that that review team is one of the most prominent committes in the land, that it is at the very heart of Government and that it advises the Prime Minister; but it says that privatisation would not be in the public interest. Those are not my words.
  Mr. Brian Sedgemore: They are the Cabinet Secretary's.
  Mr. Campbell-Savours: I presume that that is someone like the man who went to Australia some years ago.
  Mr. Sedgemore: It was Sir Robin Butler.
  Mr. Campbell-Savours: My hon. Friend has now established the identity of the person involved.
  The evidence continues:
  "They recommended that The Crown Suppliers should be retained as a central purchasing agency in the public sector with rather greather autonomy in accounting and staffing matters, but that further consideration should be given to contracting out certain of their non-procurement activities." I am reading all this because that is what is says, although I may not agree with it. The thrust of the recommendation is "Keep it in the public sector."
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  "The Central Unit on Purchasing came to a similar conclusion about the central procurement function, but made rather more radical suggestions about The Crown Suppliers' other activities. A request by Dr. Oonagh McDonald"—
  the former Member of Parliament for Thurrock—
  "that a copy of the paper by the Central Unit on Purchasing should be placed in the Library was refused by Sir George Young"—
  the hon. Member for Ealing, Acton, then a Minister in the Department—
  "because it was not in a form suitable for publication."
  What that really means is that the paper was embarrassing, that it should not be read by the public and that the union should not have access to it, because it reinforced its case.
  I asked another question, about the study of the feasibility of privatisation by Coopers and Lybrand in association with Samuel Montagu, and the study of the options other than privatisation by Mr. Dewi Jones. They
  "were commissioned because Ministers believed that, taking into account the wider commercial benefits"—
  again, I am quoting Sir Gordon's reply—
  "privatisation might prove to be a valid option despite the conclusions of the earlier reports. The Parliamentary Under-Secretary of State"—
  who is now in his place but who is not watching my lips—
  "responded to a request by Mr. Tam Dalyell for these reports by saying that summaries had been placed in the Library; the full reports were not proposed for publication because they contained commercially confidential information."
  That was the second occasion on which Ministers were hiding the truth from Parliament because they did not want the case against privatisation to be put, based on accurate information produced by those who had had the opportunity to go into the Department and evaluate what was in the best interests of the general public.
  "The Crown Suppliers Board prepared a commentary for Ministers on the Dewi Jones report."
  Again I quote Sir Gordon:
  "This was an internal document commenting on a commercially confidential report and"—
  in the words of Sir Gordon—
  "was not intended or suitable for publication."
  I can presume only that that is yet another example of Sir Gordon having to defer to the Minister's instruction not to publish information that might be highly embarrassing to the Department.
  I understand that there is another matter to which I might briefly allude at this stage.
  "A team of staff of The Crown Suppliers, who are assembling a bid for all or parts of the business of The Crown Suppliers, asked for assistance with the cost of consultants' fees. The Government has agreed in principle that assistance should be given for some of these costs but no decision has been reached on the level of assistance to be provided."
  I understand that that is a precedent. I hope that the Minister will comment upon it.
  The Government do not want the truth to come out. The privatisation is being driven through by a Minister who is determined to foster his reputation as the grand privatiser of everything in the private sector. However, he has a small problem on this occasion. He has always promoted himself as effective and efficient and as a leading light in the formulation and promotion of the Government's privatisation policies, but the Minister has turned the Crown Suppliers, which was a highly profitable organisation, right round. In 1987 it made a profit in previous years. The Minister has turned the Crown Suppliers into a loss-making organisation. A profitable state concern has been turned into a loss-making state concern.

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  In desperation, therefore, the Minister now comes to the House to propose the privatisation of an organisation that he has been unable to manage effectively. He may say that he is not responsible for the Crown Suppliers management, but I understand that he has attended board meetings on privatisation. He takes an almost day-to-day interest in what goes on in the Crown Suppliers and at PSA generally. If I am wrong, I hope that the Minister will correct me. I understand that he has a permanent monitoring role.
  Mr. Chope: I do not have a permanent monitoring role, in the sense of being a Crown Suppliers executive. It has an independent board that consists of full-time employees and non-executive directors. I have occasionally attended board meetings. I attended my first board meeting earlier this year. I hope to be able to be at another one later this month. I have attended a few other board meetings, and I accept my share of responsibility for the Crown Suppliers' performance. In the last year for which there are published accounts, Crown Suppliers made a profit of over £3 million on its trading activities.
  Mr. Campbell-Savours: The Minister's information perhaps updates that which I have, but there are those who will have heard what he has said. If what he has said can be challenged, it will be challenged on the Floor of the House during Question Time on environmental matters.
  I remind the Minister what happened last year when he was tripped up over Richmond house. He knows what happened. On that famous evening he answered for the Government. We were well-briefed for that Adjournment debate. We knew that he had spent over £40,000 on a service that we knew we could have provided for him, if only he had asked us for our advice, for £1,500. If there had been a Labour Government throughout the Richmond house affair, the taxpayer would be over £40,000 better off, but because there is a Conservative Government who are obsessed with privatisation and contractorisation, public money has been lost.
  Sir Nicholas Fairbairn: Will the hon. Gentleman give way?
  Mr. Campbell-Savours: I shall give way later.
  Sir Nicholas Fairbairn: Will the hon. Gentleman give way on this matter?
  Mr. Campbell-Savours: No. There is plenty of time. We shall return later to it.
  We caught the Minister out last year and we may have caught him out again this year. Does he remember that on 8 May he answered a written question from me, in which I asked
  "the Secretary of State for the Environment whether the Crown Suppliers continue to comply with established public procurement procedures and relevant EEC/GATT regulations."
  The Minister answered:
  "Yes."—[Official Report, 8 May 1989; Vol. 152, c. 355.]
  That was a very clear answer. I understand that no sooner had he given me that answer than there were phone calls to him from the Department asking, "Minister, are you sure that you haven't misled Campbell-Savours with that rather odd reply?" I understand that it was not true. Legal advice was taken by the Department. The Minister might care to intervene to deny what I now say.
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  I understand that for the last two years the Crown Suppliers has systematically avoided European Community requirements to open its supply contracts to competition throughout the European Community and has done so in the full knowledge that its actions could not be defended either in the European Court or, if contested, by European commissioners, in the same way as European commissioners will now contest the subsidies paid to British Aerospace in the Rover takeover.
  The Minister is fully aware of the Crown Suppliers flagrant disregard of the Government's international treaty obligations. He has chosen to hide the information from Parliament by not giving direct and clear answers to questions on these matters. The European Community supplies directive 77/62 requires that
  "Government contracts for the purchase of goods valued at over £92,000 are put out to tender and that such contracts are advertised in the EEC Journal."
  The reasons will be obvious to the House. Probity, fair trading, free competition and obtaining the best value of public money are among them.
  For the past two years, however, the Crown Suppliers has been in flagrant breach of the regulations on numerous occasions over contracts for furniture and furnishings totalling tens of millions of pounds. When such contracts come to an end and further substantial quantities of the same goods are required, tender competition should be organised and advertised in the European Community Journal. Instead, contracts have been extended in clear breach of EC directives and the standard of public accountability that the House expects has clearly been breached. I stand to be corrected at any stage in my contribution, but I have been told that more than 120 contracts have been extended in that way.
  I had some notes on Community rules on this matter, but they seem to have disappeared, so I cannot comment on them. I wanted to place them on the record. Perhaps one of my hon. Friends will ask me to give way.
  Mr. Sedgemore: Would my hon. Friend care to develop the Richmond terrace affair, as I was the hon. Member who raised the matter on an Adjournment debate and I received no satisfactory answer at the time? The Minister used to be on Wandsworth council and he claimed to be a value-for-money person. He is now more adept at wasting public money than anyone cares to mention. When my hon. Friend has talked about that, will he draw the parallels between the Rover sale to British Aerospace and the extension of the 122 contracts that do not accord with the EC directive? If he will comment on that, we can then have another intervention from a Conservative Member and I shall come to help him look for his papers.
  Mr. Campbell-Savours: They were here all the time. In reply to my hon. Friend, the matter of Richmond terrace remains for those who study Hansard to read well into the future and I am sure that they will draw the same conclusion as I have. Richmond terrace is a very beautiful building, but it was a very nasty contract.
  As I understand the arrangements within the Community, contracts can be awarded under open or restricted procedures or, in specified circumstances, under a negotiated procedure. In open procedures, all suppliers who are interested in the contract can submit tenders. In the restricted procedures, tenders are allowed only from suppliers who have been invited to participate. Negotiation procedures allow contracting authorites to

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  negotiate with one or more suppliers of their choice. In certain, closely defined circumstances—and it is on these matters that the Minister will have to comment later—they can do so without prior publication of a tender notice. We may be looking at those areas tonight and I am sure that the Minister will want to be clear about them because we shall be checking to see whether his comment is strictly correct.
  Except in such closely defined circumstances, there must be a call for competition by means of a prescribed tender notice published in the official journal of the European Community, allowing minimum time scales for responses by candidates or by tenderers. When a contracting authority makes an award, it is required to send a contract award notice to the journal for publication and to record details of the award for inclusion later in a statistical return.
  On the technical specifications of the contracts, whether or not procurements are above the thresholds in the directive, the contracting authorities have obligations under article 30 of the treaty of Rome. The Commission takes the view that decisions of the European Court of Justice mean that where there are no European standards, contracting authorities must consider products from other member states manufactured to a different design, but having an equivalent performance on equal terms with products meeting national or other preferred standards.
  There are special procedures for dealing with matters of urgency. The directive provides that purchasers may use the negotiation procedure without prior publication of a tender notice in so far as is strictly necessary when, for reasons of extreme urgency brought about by events unforeseeable by the purchaser, time limits laid down for the open and restricted procedures cannot be met. The circumstances involved must not be attributable to any part of the contracting authority.
  The directive provides separately that when urgency makes the normal time limits impractical, the time limit for the receipt of requests to participate shall not be less than 15 days from the day of dispatch and that the time limit for the receipt of tenders shall not be less than 10 days from the date of the invitation to tender. Purchasers should not abuse these provisions—I hope that the Minister is listening—which the European Court, the Commission and, where relevant, other signatories to the Government procurement agreement are likely to give a narrow interpretation.
  Many of my hon. Friends are concerned that European Court requirements, Commission requirements, parliamentary decisions and whatever has any connection with the European Community are issues that are too often discarded by this Government.
  Mr. Sedgemore: I want to be clear about what my hon. Friend is saying. The Prime Minister tells us constantly that we do not have a level playing field in Europe and that all the other countries are cheating. Is my hon. Friend saying that Britain is cheating?
  Mr. Campbell-Savours: I have been on my feet for 20 minutes and I have spent 10 or 15 minutes on this matter. The Minister has had the opportunity to intervene to put me right, yet he has not. He is looking for his notes, and
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  I am sure that Sir Gordon is being consulted most vigorously on the matter and that he is enjoying himself immensely.
  The directive does not include any provisions for enforcing compliance and it is left to the Commission to take action against a member state under article 169 of the treaty for failing to implement the directive properly. The Commission has said that it intends to do so more vigorously where the directive appears to have been breached and that where a breach is established, any Community funding conditional on compliance may be withheld.
  In theory at least, judicial remedies for injured suppliers may already be available in the United Kingdom. Compliance ought to be challenged. It is of increasing importance in the negotiations in Geneva on the improvement and broadening of the Government procurement agreement and suppliers from other signatory countries can be expected to become increasingly aware of the available remedies.
  I have references in my notes to the threshold being £92,000, which is the equivalent of 130,000 ecu. I want to know whether the rules have been breached. I understand that the rules were breached and, despite consulting Sir Gordon and having had a most vigorous consultation, the Minister has still not been able to get to his feet to tell me whether the rules have been breached. The breaching of rules is a major issue within the Department. Legal advice has been taken on the matter and the legal advice is that the rules have been breached. Yet the Minister is still not tempted to come to his feet. I am sure that the European Commissioner responsible for these matters will be examining what I have said in my modest contribution tonight, yet the Minister still refuses to make a comment at the Dispatch Box.
  I understand that sweeteners have been provided at the insistence of leading members of the management buy-out team in the case of the Crown Suppliers. The Minister has encouraged that bid and financed it from public funds. That breach continues today even though top lawyers at the Department of the Environment have advised that it is in clear breach of the treaty of Rome to which the Government are a signatory. There would be no defence if the European Community became aware of the breach and decided to prosecute the Government—if it had that power. I hope that the European Community takes action.
  Mr. Sedgemore: Before my hon. Friend moves on, can he tell us whether he is claiming that it is Ministers who have deliberately flouted European law, or is he claiming—which would be a serious matter in this Chamber—that Sir Gordon has condoned the flouting of European law either tacitly or overtly?
  Mr. Campbell-Savours: I think that the Minister has condoned the flouting of European law in this case and hoped—as Lord Young hoped—that no one would ever find out.
  There is another matter that I want to raise, which I regard as somewhat controversial. An allegation has been made that the Civil Service is being brought into disrepute. As a member of the Crown Suppliers board, the Minister has sat idly by while members of the management buy-out team have indulged in activity which is highly improper for public servants. I put the allegation to the House. I do not know in any great detail what the evidence is, but I have

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  been given vigorous assurances that what I am saying is correct. It seems that one of the people involved accepted an invitation from a manufacturer called Pentos to attend an all-expenses-paid weekend at this year's British golf open. When that fact was discovered, he said that his attendance had been authorised. I understand that it had, indeed, been authorised—by another member of the management buy-out team. The justification was to provide reassurance to a major manufacturer but that same manufacturer had already been provided with hundreds of thousands of pounds' worth of reassurance in the form of numerous extended contracts. It is thus alleged that someone involved in the management buy-out had an improper relationship with a company that was a contractor to the Crown Suppliers.
  I understand that such activities can be approved, but there are rules governing these matters. I take my text from the staff handbook of the Department of the Environment and the Department of Transport. Under the heading
  "Acceptance of Gifts, Rewards and Hospitality",
  the handbook says:
  "Working relationships often bring civil servants into contact with outside organisations where it is normal business practice or social convention to offer hospitality, and sometimes gifts, to facilitate useful contact and working relationships. Offers of this kind to individuals or to their families can place civil servants in a difficult position. To refuse may cause misunderstanding, or offence to the giver, especially if the offer comes from an overseas Government or government organisation. To accept could involve criminal liability or otherwise give rise to questions of impropriety or suspicion of conflict of interest."
  The guiding principles are as follows:
  "The actions and conduct of individuals acting in an official capacity should not give the impression to any member of the public, or to any organisation with whom they deal, or to their colleagues, that they have been or may have been influenced by a gift or consideration to show favour, or disfavour, to any person or organisation.… The conduct of an individual should not foster any suspicion of conflict between official duty and private interests."
  I understand that the permanent secretary is the final arbitor on advisability of acceptance or refusal of gifts, hospitality and so on and is advised by the director-general of organisation and establishments. The handbook says:
  "The correct course to be followed in the case of proffered gifts or hospitality will be determined by the context in which the offer is made."
  I want to make it clear that I do not myself make any allegation of impropriety against the civil servant involved. [HON. MEMBERS: "Oh."] Listen to what I am saying. I merely question whether he should have been authorised to do that. That is a fair question.
  Mr. Holt: Whether who should have been authorised?
  Mr. Campbell-Savours: Well, the allegation is that he was authorised to do it. When he was questioned, he said so.
  Mr. Holt: Who is "he"?
  Mr. Campbell-Savours: Whoever the civil servant might be. I am sure that the hon. Gentleman would not like to to name a civil servant in the House in connection with such an allegation. Is he really that irresponsible?
  Mr. Chope: The hon. Gentleman is making serious allegations. Why did he not write to me about them rather than raise them in the House without knowing whether they are substantiated? He could have given me notice of
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  the matter. It could have been dealt with in correspondence. Surely that would have been a more responsible way in which to deal with the matter.
  Mr. Campbell-Savours: The Minister will regret that intervention, because it shows that he is not doing his work. If he checks with his Department, he will find that I raised these matters with the National Audit Office two months ago. The correspondence went to his Department, and he should know the answers. If he does not, he should check with his civil servants in the Box. I have raised the matter, and I should have liked it to have been dealt with before tonight.
  Mr. Chope: Has the hon. Gentleman received a reply from the National Audit Office?
  Mr. Campbell-Savours: I have received no reply on the detailed allegation. I do not know as yet what the position is. The Minister must know, because presumably the matter came to him. Or has he once again abdicated his responsibility and told his civil servants to get on with it and ignore any complaints from my hon. Friends and myself?
  Mr. Sedgemore: I used to be what is loosely described as a senior civil servant, and, indeed, a private secretary to Ministers in a previous incarnation. I am now a member of the Treasury and Civil Service Select Committee. My general feeling is that standards of integrity in the Civil Service have declined considerably as politicians have interfered in its conduct. I am sure that the example that my hon. Friend has given is correct, and all that I can say is that in my day that attendance would have been regarded as highly damaging to the integrity of the Civil Service, whether it had been authorised or not.
  Mr. Campbell-Savours: Perhaps the allegation isbaseless. Perhaps it is only a rumour; perhaps it is nonsense. But if it is the truth, the Minister should be asking his Department who authorised and whether, in the circumstances of privatisation, it was correct to authorise.
  A note from the chief executive of the Crown Suppliers to all staff, headed "Conflicts of Interest", says:
  "As the sale of The Crown Suppliers approaches, it may be helpful for you to have a note about particular issues that could give rise to a conflict of interest.
  Staff Conduct
  As privatisation approaches, and particularly after the purchaser has been selected, there is likely to be increasing pressure to look to the objectives and requirements of the prospective new management. Until the sale has been completed (and indeed beyond for those staff who are seconded to the new owner), all TCS staff will continue to be bound by the rules of conduct applicable to civil servants. These are set out in the Staff Handbook."
  It is a very good letter. It goes into the special position of, and the separate guidance to be given to, members of the buy-out team. It deals with the question of personal share dealing and staff conduct generally. The gentleman who wrote the letter is obviously a fine civil servant and understands the responsibility that has been placed on hint by the House to protect the integrity of the Civil Service.
  Even so, we have the allegation to which I have drawn the attention of the House this evening. I do not have concrete evidence. I simply stated my allegation and it went to the National Audit Office, which will have sent it to the Department. As yet, we have had nothing back. I have identified no individuals but the incident has been pressed upon me vigorously and those who have pressed it

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  upon me sound very convincing. If the allegation is true, something is very wrong. It means that, during this sensitive privatisation period, the Minister is allowing relationships to develop, which, in the minds of the public could be treated with great suspicion.
  Mr. Lofthouse: Did my hon. Friend understand the Minister to say that the organisation had made a £3 million profit this year, as I did, whereas only last week the staff were informed that the profit indicators for the nine months that have so far been worked this year suggest a projected loss of £1 million this year?
  Mr. Campbell-Savours: While I was speaking my hon. Friend must have taken advice on these matters and he must have been advised by people who know about these things. I am sure that my hon. Friend would not have intervened unless he had concrete information. The Minister must reply to this. We are like postboxes in this affair. Representatives of the work force contact us on the one hand and on the other there are the civil servants. Perhaps we can establish the truth during this debate.
  Mr. Holt: The hon. Gentleman has made some serious allegations against individuals outside this place and against my hon. Friend the Minister.
  Mr. Campbell-Savours: I have named no one.
  Mr. Holt: It is suggested that my hon. Friend the Minister must know what every person in his Department is doing. I am sure that the hon. Member for Workington (Mr. Campbell-Savours) will recall that during the tenure of office of my hon. Friend's predecessor, members of the Department were found guilty of corrupt practices and were jailed. There is no way in which my hon. Friend the Minister or his predecessor would want to shield people who are carrying out criminal activities. It is irresponsible of the hon. Member for Workington to come to the House with a load of smears, no names and no evidence.
  Mr. Campbell-Savours: Obviously the hon. Gentleman has not listened to me. I have reported no criminal activity. I said that I can understand the context in which this kind of activity could happen. I have simply questioned the propriety of a civil servant perhaps doing these things with the authorisation of his chief. If that has happened, it is wrong. I have waited a long time for answers to my inquiries. In desperation I came to the Floor of the House tonight because I want to know the truth. Where taxpayers' money is being allocated to purchase products, equipment and services from industry, the general public and I do not want to believe that there is any possibility of irregularity. I am sure that the hon. Member for Langbaurgh (Mr. Holt) and his constituents would not want to believe that.
  If the hon. Member for Langbaurgh, or I, were ever tempted by a bottle of whisky or a food hamper in our Constituencies, I am sure that those gifts would he sent back. Although they are meaningless and insignificant in terms of the income of a Member of Parliament, we know that if the public were aware of them, the reasons for those gifts might be questioned. The public might believe that such gifts are wrong, and that is why we do not accept them. The same is true of public procurement. There must be no question of impropriety even if we understand the
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  context in which these matters arise. Impropriety must not happen and that is why I have raised the issue tonight. [Interruption.] I am sorry that the Secretary of State was not present to hear me tonight, or to watch my lips.
  8.22 pm
  Mr. Gwilym Jones: I listened with great interest to the hon. Member for Workington (Mr. Campbell-Savours). He spoke at great length, and he may now hold the record for making the longest speech in this debate. His filibuster served only to expose the weakness of the Opposition's case with regard to this measure because so few Opposition Members have spoken tonight.
  Throughout his overlong speech, the hon. Member for Workington did not advance one positive argument in support of what I would have thought should be the intellectual starting point for the Opposition's case for opposing the measure. I believe that the starting point for any Opposition Member must be to argue why it is necessary for the PSA to remain a nationalised industry.
  We must remember that a nationalised industry does not come about naturally because legislation is required to create one. Similarly, legislation is required when a nationalised industry is moved to the private sector. However, any group of citizens can arrange the shareholding for a public limited company.
  If Opposition Members were arguing that the PSA should become a nationalised industry, they would surely have argued why that was necessary. The hon. Member for Workington did not do that. However, in that he was not exceptional, because no other Opposition Member advanced any arguments why the PSA should remain a nationalised industry.
  We have had a one-sided debate this evening. All the arguments for privatisation and some important reservations have come from Conservative Members. The hon. Member for Linlithgow (Mr. Dalyell) repeated the usual Opposition questions, while making appropriate comments about apprehensions felt by the staff. However, he did not offer any positive arguments why the PSA should remain a nationalised industry. I could not be sure whether the hon. Member for Brecon and Radnor (Mr. Livsey) was in favour of the measure or against it. He referred to the PSA as overstaffed and said that the management needed tightening up. Perhaps his was the unique Liberal position in that he was neither in favour of the measure nor against it.
  Mr. Soley: It is possible that the hon. Gentleman has not been in the Chamber for the whole debate; if he had been here, he would not have said what he has said. He would have heard me and several of my colleagues quote Ministers saying that it was necessary for the PSA and the Crown Suppliers to be in the public sector because that was in the public interest. Whatever else the hon. Member for Cardiff, North (Mr. Jones) can say, he cannot say that the argument was not made. It was made forcefully and we used the Government's own evidence as to why it was in the public interest for the PSA and the Crown Suppliers to stay in the public sector. Perhaps the hon. Gentleman should address that and tell us why he thinks the Government's reports were wrong.
  Mr. Jones: The hon. Gentleman should not be apprehensive. I know that he has not been present for the whole debate because he has been out for a good dinner.
  Mr. Holt: On a point of order, Mr. Deputy Speaker. Is it not out of order for private conversations to take place inside the Chamber?
  Mr. Deputy Speaker (Mr. Harold Walker): Conversations outside the Chamber are beyond my range of vision.
  Mr. Jones: I can assure the hon. Member for Hammersmith (Mr. Soley) that. unlike him, I have been in the Chamber throughout the debate. He need not be apprehensive. because I will refer to his comments in a moment.
  I listened to the hon. Member for St. Helens, South (Mr. Bermingham), who gave us a perfect example of the lawyers' trade. He realised that his case was so weak that he changed the question. Once he had done that, he invented his own answer and claimed that he had proved his case on the most spurious of grounds.
  I also listened to the hon. Member for Hammersmith, who spoke for about 47 minutes. On several occasions he said that privatisation of the PSA was not necessary. He said that it was not in the interests of the public sector. On one occasion, he even said that it was not in the interests of the private sector. While he referred to reports, he did not develop one argument as to why it was not necessary. More importantly, he did not address the fundamental question why it is necessary for the PSA to remain a nationalised industry. I invite the hon. Gentleman to read his remarks in Hansard tomorrow morning, when he will find that he did not advance any positive arguments in that regard.
  I welcome the Bill as I have welcomed all the government's privatisation measures. However, I still believe that the term "privatisation" is something of a misnomer. I do not believe that privatised companies are made private. They have been taken from state ownership and are now owned by the people. When they were nationalised industries, they were far more private affairs than they are now as public companies. The dead hand of nationalisation has been raised from them. They have become successful public companies, in stark contrast to their traditional condition as nationalised industries.
  It is appropriate that we are considering the privatisation of the PSA today. As has been mentioned earlier, the offer on the sale of shares in the water companies in England and Wales closes today. We knew that the privatisation of the 10 water companies in England and Wales would be successful. This day we are seeing people put their seal of approval on that privatisation. Many of the 4 million people who have registered an interest in obtaining shares in the water companies of England and Wales will take up the opportunity to do so. We have seen television reports of the last-minute applications and many people queueing to make sure that they do not miss out on the opportunity to own shares in the water companies of England and Wales. I refer in particular to employees, such as those of the Property Services Agency and of the water companies.
  As my hon. Friend the Member for Eastbourne (Mr. Gow) reminded us, perhaps the biggest privatisation occurred when 99 per cent. of British Gas employees bought shares in the company. I remember doing a fellowship with the Industry and Parliament Trust. I was assigned to British Gas before it was privatised. At the start of my fellowship, several employees asked me, "Why
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  do you want to privatise us? We are not a glamour stock like British Telecom." It took about two years to complete my fellowship, and I completed it almost immediately before the sale of shares in British Gas. Attitudes had changed by then. The same employees and many others impatiently turned to me, asking, "When, at last, will we get the opportunity to own shares in our own company?" That was the attitude of British Gas employees, and it is the attitude of water company employees. I am sure that staff of the Property Services Agency will have the same attitude.
  The Property Services Agency is an appropriate organisation to be privatised. It is a large, important organisation. It is the country's largest building consultancy, and it has an annual expenditure of £3·5 billion. It has resources of £300 million. Nearly 25,000 people work for the Property Services Agency. Its work comprises five main functions: estate management, in which it is involved in the purchase, disposal and leasing of land for departmental needs; building maintenance; the design of new buildings—reference has been made to 22 awards in 1989; the supervision of construction by outside contractors; and, of course, supply, which is essentially the function of the Crown Suppliers. Among the 22 awards in 1989 was the curiously named Europa Nostra diploma of merit for Richmond terrace. I join hon. Members in paying tribute to what the PSA has achieved in Richmond terrace. It is a good example of an attempt to build a brand new functional building but in a style which is appropriate to its setting in Whitehall. I commend all who were involved in it.
  It is appropriate also to mention some other examples which do not hold the PSA to the greatest credit. I have only to think of my own constituency. As some right hon. and hon. Members might know, I have the curious distinction of having in my constituency PD1 of the Inland Revenue—that same Department which handles the taxation affairs of every hon. Member. However, PD1 is sited on a Government block in a surburban part of my constituency. That block contains the most inappropriate high-rise buildings, which should never have been allowed to be built in that setting. They were built some years ago, perhaps before the time of the PSA. I should like to think that the PSA is not to blame for the Inland Revenue complex at Llanishen.
  More recently, a new Welsh Office building has been constructed in Cathays park. It is a building of no recognised outside architectural merit. I would not be at all pleased to be associated with the remarks that have been made about it. I wonder whether even His Royal Highness the Prince of Wales might have cast a glance over that great monstrosity, which is totally out of keeping with Cardiff's otherwise fine civic centre.
  One of the best cases for privatising the Property Services Agency is contained in a union brief. Like my hon. Friend the Member for Bristol, North-West (Mr. Stern), I have read a brief from the National Union of Civil and Public Servants, which cites evidence from an outside specialist that
  "management has been less geared to commercial aspects of running a business, naturally".
  It is most unusual that anyone in this day and age should say that it is natural that the management of the Property Services Agency should be less geared to the commercial aspects of running a business. Surely one must be aware of the commercial realities of life these days. One must be

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  aware of the need to achieve and improve a sound economy. How else have we increased spending on the National Health Service, social services and education, improved our defence and provided more police? We do so only by having a sound economy.
  The NUPCS brief goes on to refer to
  "no proven commercial information records".
  That is rather strange. The only answer that is advocated in the brief is that Government Departments should be denied the advantages of competition—that they should be denied the advantage of being able to place their business on the best terms that they can obtain to get the best services at the best price. Instead, they would have to pay the highest price. They would be unable to provide important services because they had to pay the highest price for the PSA. It is nonsense to suggest that, as customers, Government Departments should not be interested in achieving the best return on their money.
  The brief goes on to state:
  "More money from the taxpayer has to be found for the Property Services Agency."
  The hon. Member for Hammersmith started his contribution with a realistic point. He sought to remind hon. Members that there is no such thing as public funding, that it is money from the taxpayer, and that the taxpayer must be remembered. I disagree with the National Union of Civil and Public Servants. If the situation were half as bad as it makes out, we would be considering not privatisation but liquidation of the PSA. I have much more confidence and optimism for the future.
  The National Union of Civil and Public Servants brief goes on to state:
  "In 1988 PSA's design costs were shown to be 25-30 per cent. cheaper than private designers."
  That is strange, because it describes the PSA as an organisation which is
  "less geared to commercial aspects of running a business"
  when it managed to achieve costs 25 per cent. to 30 per cent. lower. Could it be because, as the brief says, the PSA's spending power and market information enabled it to secure substantial price advantages? A little earlier in the brief, the union claimed that these are
  "no proven commercial information records".
  One statement does not square with the other.
  Clearly, the PSA is not the hopeless case that the union would like to make out. It is an organisation with great ability. It has enjoyed great achievements. It deserves to be freed so that it and its employees can rise above being part of a Government Department. The PSA deserves freedom because of the more competitive arrangements in Government building, construction, management and departmental supplies. Departments now have effective procurement arrangements and the authority to make their own choices in obtaining required services.
  The Property Services Agency is losing its guaranteed market and it must compete with everyone else outside by providing a good service; otherwise, there would be the bleakest prospects for staff. They would leave for whatever they could find elsewhere, and customers would suffer. The PSA needs freedom to compete effectively and on equal terms, and that can be achieved only by privatisation.
  The Bill will create necessary diversification. Inevitably, when Government Departments are able to choose, some business will be lost through competition. The PSA cannot complacently look forward to retaining 100 per cent. of it
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  business—some will be lost. It therefore needs the opportunity to diversify to replace the business that will be lost. One of the most attractive features of the proposal is that that process will enable the removal of the usual Treasury public sector spending constraints from the Property Services Agency.
  We know that the privatisation will take some while to complete. It is suggested that it will not come about before the second half of 1992 at the earliest, but steps are already in hand to reorganise the PSA. The commercial activities, which comprise 90 per cent. of its activities, have been separated from its Government functions. Those activities are now being established in four separate operating divisions: PSA building management; PSA projects; PSA specialist services and PSA overseas. I am glad that, prior to privatisation the PSA will have the scope to expand into other markets and those divisions will be valuable first steps into areas in which I expect greater penetration after privatisation.
  All in all, that bears out the view that I was given by some staff in Cardiff yesterday—that the path to privatisation is well organised. That brings me to the position of the staff. My hon. Friend the Under-Secretary of State knows of my concern about the PSA in Cardiff, which is situated in my constituency at Gabalfa. About 250 excellent, able and hard-working staff are based there. I understand from yesterday that almost everyone at the PSA at Gabalfa is dealing competently and effectively with an extremely large work load.
  In the run-up to privatisation there has inevitably been some speculation in the press. Some has been well intentioned and some has not. Perhaps the most common story has been that the number of PSA officers will be reduced to eight. I was especially concerned about the future of the PSA office in the capital city of Wales. Accordingly, I corresponded with my hon. Friend during the summer recess. I was pleased that he answered my question in Hansard of 2 November, confirming that the office in Cardiff would continue. Indeed, my hon. Friend's actions on the road to privatisation have left open the door not only for retaining the office in Cardiff, but for very much expanding that office.
  I see the PSA in Cardiff as growing in line with the growth in Cardiff. We have an exciting expansion programme for the redevelopment of south Cardiff and a large construction programme for the Cardiff bay barrage, which is likely to be an integral part of that redevelopment. The interest that is being shown in the redevelopment of south Cardiff suggests that Cardiff will definitely be one of the sunrise locations. Indeed, I predict that in the next century Cardiff will be the city of the south-western quarter of the United Kingdom. I feel sure that the PSA in Cardiff will grow in line with Cardiff, and perhaps at a greater rate.
  I know that the confirmation of the continuation of the Cardiff office has been well received there. It provides the essential framework for the staff in Cardiff to apply their known ability and enthusiasm when taking advantage of the new opportunities and of the open door that is now presented to them.
  However, at the same time, we must have the fullest regard for the staff who work in the PSA. Only yesterday a most significant comment was made to me by one employee there. He said that he had not got over his surprise at the fact that he will no longer be working for a Government Department. When he joined the PSA, it was

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  a Government Department, and he had assumed that it always would be. It is important to understand that comment. That employee has completed many years' work for the PSA in Cardiff and others have worked for it for all their lives. We should consider all the staff of the PSA and their natural fear of the unknown and that they might be going into a hostile environment.
  It is all very well to talk about great opportunities, about the staff rising up from being Government employees and about the PSA rising up from being a nationalised industry, but we must never ignore genuine anxieties. The staff must he regarded as the PSA's prime assets. The staff are always important in any company, in any industry, but in a service industry such as the PSA, they are especially important and should be given our fullest consideration.
  The apprehensions that were spelt out to me yesterday included questions such as: would there be the same conditions of service, the same redundancy arrangements and the same pension provisions? The staff need important reassurances in all those areas. I was told that the staff understood that guarantees had been given in other privatisations, but that no guarantees had been given or could be given in the case of the PSA.
  Mr. O'Brien: I am following the train of the hon. Gentleman's argument closely. He is obviously making strenuous efforts to demonstrate the importance of consulting and considering the staff. Will he persuade his hon. Friend the Minister in that context that there should be a ballot for all those who work for the PSA and the Crown Suppliers and that they should decide whether they want the privatisation? Does the hon. Gentleman subscribe to that thought?
  Mr. Jones: I am sorry, but that would not be an appropriate proposition. The staff have much more important problems that deserve our fullest attention. I have been trying to refer to their apprehensions about their terms of employment, redundancy and pension arrangements. The staff are very concerned because they have the impression that the staff involved in other privatisations have been in a superior position and that they will not be in such a position. I very much hope that that will not be the case because in each of those three areas it is reasonable for the staff to expect the same conditions that have been given to staff involved in other privatisations and to expect that, as far as possible, their terms in those three areas should be comparable. It is reasonable that there might be some variations, but if there were to be any significant variation in, for example, the pension scheme, there should be compensations for the staff.
  Mr. Allen McKay: Does the hon. Gentleman agree that clause 2 defines the difference in how people have been treated?
  Mr. Jones: The hon. Gentleman is going ahead of us at this point. That matter is very much for the Committee to consider. However, perhaps he will join me in putting down the largest marker for trying to ensure that the staff are properly looked after and given all the necessary reassurances and safeguards. They must not be treated any less favourably than the staff involved in other privatisations. I want the staff to go forward into the new
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  PSA with whole-hearted commitment, because I believe that there is a tremendous future for them in the new PSA and I do not want them to be put off in that.
  Examples have been given to me of staff in their fifties and sixties in Cardiff. Understandably, they might already be thinking in terms of their own pensions and of retiring direct from the PSA. However, they are now worried about facing an unknown future and about what might happen. They are wondering whether they will be able to retire at the time they had expected and whether they will receive the same pension as expected. They are wondering whether they have any reason to be concerned that a new employer might raid their pension scheme. Younger staff do not necessarily have the same apprehensions and although staff under 50 might think that it will be relatively easy to move to another job, that will not be the case for everyone and for some it may involve moving house.
  In every respect, my greatest concern is about the staff, all of whom—both older and younger—deserve the fullest reassurances. I want to be able to look forward to them continuing to be employed on the same pay and with the same hours and holidays and—in this remotest eventuality—that the basis of any redundancies will be the same as it is at the moment. I also want the staff to be able to receive the same pension.
  I heard what my right hon. Friend said earlier and I imagine that my hon. Friend the Under-Secretary of State may refer to the same subjects when he replies. I hope that he does, because we cannot over-emphasise the great need to publicise to the PSA staff exactly what will happen and the commitments that the Government have made and must make to ensure that they are properly looked after in the change to privatisation.
  I very much welcome the Bill, which has been introduced on a most appropriate day. I look forward to our time in Committee. I believe that it was the hon. Member for Workington who said that the Bill could pass through Committee like a knife going through butter. I hope that it will have a speedy and satisfactory conclusion and resolution so that we can look forward to a successful privatised PSA.
  8.50 pm
  Mr. Andrew Hunter: In sharp contrast to the hon. Member for Workington (Mr. CampbellSavours)—I note that he is not in his place—I warmly welcome the Bill as the first stage in the privatisation of the Property Services Agency and Crown Suppliers. I regret that the hon. Gentleman is not here because I had it in mind to take up a point that he made towards the beginning of his speech. I believe in privatisation, not per se, as an item of dogma, but for pragmatic reasons. Some industries and services benefit from passing from public to private ownership, and I firmly believe that the PSA and Crown Suppliers are such services.
  I acknowledge that my remarks bear in mind the findings of the Select Committee on the Environment. That Committee has had much contact with the PSA, and it annually reviews the main estimates. For a long time, it has urged fundamental reform. I regard the Bill as the Government's response to that demand for reform.
  I strongly welcome the Bill. My reasons have already ben put clearly by several of my hon. Friends, including my hon. Friends the Members for Eastbourne (Mr. Gow) and for Cardiff, North (Mr. Jones). Those reasons can be

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  summed up in one word—competition. Competition is wholly good and at present wholly missing. That must be rectified, and that is what the Bill will do.
  It is absolutely right that Government Departments should be able to choose where they purchase the goods and services that they require. It will be good for the PSA and Crown Suppliers to have their guaranteed markets removed, because guaranteed markets do no good whatever. Moreover, the measures in the Bill will ensure that, in the few years before privatisation, the taxpayer will obtain greater value for money.
  I wish to pick out three specific points of detail. I ask the Minister to note them, because some matters need to be clarified, although perhaps it would be more appropriate to clarify them in Committee.
  I note that the Bill and accompanying briefs suggest that the PSA will be reorganised into four operating divisions. One of those will be PSA Specialist Services. Is there really a need for such an operating division? Reference has been made during the debate to the problems of recruiting and retaining staff in the PSA. That is especially true of the most specialist areas where the temptation and lure of the private sector is great. I am of the opinion that the services that PSA Specialist Services would offer can already be provided by the private sector, so perhaps there is no need for further duplication.
  A second area of the reorganisation that disturbs me a little is the creation of PSA Overseas, which was the focus of attention earlier. The hon. Member for Linlithgow (Mr. Dalyell) raised the question of security, as did the hon. Member for Hammersmith (Mr. Soley). The speech of the hon. Member for Linlithgow was an important contribution to the debate. I accept the immediate reassurance given by my right hon. Friend the Secretary of State. However, we must go further, and I hope that in Committee we shall receive a detailed reassurance. Security must be considered carefully.
  Mr. Dalyell: Absolutely right.
  Mr. Hunter: Another point about PSA Overseas disturbs me. We understand that it is to be created mainly to support Ministry of Defence establishments. The different nature of MOD establishments and their geographical spread means that the creation of one PSA Overseas will not prepare that part of the PSA's activities for competition. Perhaps my right hon. Friend should look more closely and consider a subdivision of PSA Overseas.
  A third point which worries me—I shall try to put it constructively—is the emphasis on the length of time that it will take to prepare the operational divisions for privatisation. It strikes me that the best part of three years is a long time. I should have thought that one of the best ways to prepare for privatisation is immediately, or as soon as possible, to expose the operational divisions to the realities of the marketplace and to learn from it. I hope that in due course we shall return to that theme. Why do the Government believe that such a long period is necessary?
  My next point relates to points made by the Select Committee on the Environment. I mentioned earlier that it has positively criticised the PSA for several years. I wish to relate those criticisms to the next two years, or the pre-privatisation period. Can my hon. Friend the Minister
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  give an assurance that our anxieties about the way in which the PSA has operated in the past will be removed during the run-up to full privatisation?
  The Select Committee's first area of concern was the principle of annuality, which has not been mentioned so far in the debate. The Environment Select Committee concluded that one reason why the PSA did not operate efficiently was that it was bound by the principle of annuality. That is not the case for its competitors in the private sector. It can be argued strongly that, in preparing PSA for privatisation, the rigid annuality under which it now operates must be slackened.
  The second area that worried the Select Committee is another instance where the PSA operates artificially, and that is the practice of the property repayment service which is the rates that Departments are charged by the PSA, as a token charge regardless of market reality. Again, the PSA does not operate in market circumstances. Arguably privatisation will increase its efficiency, but one must ask whether the property repayment service aspect will continue during the next two years as the PSA prepares to privatise.
  My last point is about project management. My great criticism of the PSA—it is my conviction that it is right to privatise it—is based on the poor assessments of PSA project management. We have already referred to several of these. When I intervened in the speech of the hon. Member for St. Helens, South (Mr. Bermingham), I may have unintentionally misled the House. I referred to the cost of the Richmond house project and to an additional cost of £1 million. That was not the total difference between the estimate and the final cost of the project but merely the 1987 increase. There was a discrepancy between the estimate and the concluding price of £5·7 million on the total project. I apologise to the House for getting the figure slightly wrong.
  The project management aspect of the PSA has rightly caused great anxiety.
  Mr. Dalyell: Is it not the experience of the National Trust and other ancient monuments organisations that it is difficult to estimate the costs of restoring old buildings? Costs can easily escalate. It is not only the PSA that has problems.
  Mr. Hunter: There is great truth in that, but it is not the entire truth. In these particular projects, there were miscalculations and changes of plan. Even when projects were started, new ideas came in, for example, at Derby Crown court, Richmond house and Buckingham gate. Slack management allowed the projects to spin out over the years as clients demanded one change after another. Public money was at stake. I take the hon. Gentleman's point, but we must look for other reasons why costs escalated so much in the PSA.
  My hon. Friend the Minister may be inclined to argue now or in Committee that for Departments the change from being clients to having financial responsibility will increase the efficiency of project management. I hope that that will be the case. The fundamental question is whether reorganisation will improve project management.
  I entirely support and warmly welcome the Bill. There are still questions to be answered and points to be sorted out, but I have no hesitation in saying that I am sure that the new regime will be far better than the existing one.
  9 pm
  Mr. Keith Mans: I am pleased to speak about this important measure. I have spent a considerable amount of my life living in buildings which have been well or badly built, or modified, by the Property Services Agency and its predecessor, the Ministry of Public Building and Works.
  I shall dwell on two aspects of the Bill. They relate to the Opposition's two main arguments why it is not a good idea to privatise the PSA. First, they argue that security will be compromised, particularly in military establishments, if in future the PSA does not have the same ability to look after security matters. Opposition Members, particularly the hon. Member for Hammersmith (Mr. Soley), are wrong to suggest that the reservoir of knowledge about security matters resides in the PSA and that, if it is privatised, security will be compromised. That argument is fundamentally flawed.
  The major point about good security is that people, not organisations, are important. It is to ensure that those who carry out security exercises and checks on buildings are themselves checked properly and have the necessary expertise. The mere fact that they happen to be members of the PSA or its predecessor or that they work in the public sector does not necessarily mean that the task will be carried out competently. One of the problems has been that security has been judged good or bad according to the organisation rather than the people. In the eyes of many, membership of the PSA seems to have been sufficent to judge that security has been adequate. In the past, that has often not been the case.
  Security, rather than arguing in favour of keeping the PSA in the public sector, is a good reason for ensuring that client Departments, particularly the Ministry of Defence, take greater direct responsibility for the many aspects of security that have resided in the PSA. In that way we could look forward to better security in future in many areas, particularly buildings, than there has been in the past.
  Some remarks made by the hon. Member for Hammersmith about married quarters and accommodation for serving personnel in the three services are way off the mark. The weaknesses in the Opposition's arguments against these proposals are shown by his resort to such tactics. The vast majority of service men live in private accommodation. In the past the PSA advised on the security aspects of new buildings. Now it is not a case of building many more married quarters. The main emphasis now is, and in future will be, on selling them. That, then, is not a good reason to keep the PSA in the public sector.
  The other argument advanced by the Opposition, and specifically by the hon. Member for Hammersmith, is that the PSA is running smoothly in the public sector, so why privatise it? One could turn that argument on its head by asking, why keep it in the public sector? People should not have to make an argument to put things into the private sector, but the argument for retaining anything in the public sector needs to be extremely good.
  Although we might accept arguments for keeping the PSA in the public sector, its record does not stand up to close scrutiny. More than 10 years ago a senior civil servant wrote an incredibly good book on the sort of mistakes made by the PSA and, before that, the Ministry of Public Building and Works. It was entitled "Your Disobedient Servant". He listed in great detail the shortcomings of the PSA—the overmanning, inefficiency,
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  lack of objectives and total lack of project planning, which my hon. Friend the Member for Basingstoke (Mr. Hunter) also mentioned. During the latter part of the 1960s and the early part of the 1970s, the author sought to put some of those deficiencies right.
  I read that book many years ago and I reread it a few days ago. I am certain that the author, if nobody else, could appreciate the need to move the organisation into the private sector to improve its performance. In fact, the PSA's performance is considerably better than it was 10 years ago. In the past, the PSA suffered from a considerable number of shortcomings.
  Mr. Allen McKay: The hon. Gentleman has just admitted that the PSA has overcome the shortcomings from which it suffered 10 years ago. He has admitted that the problems of the PSA have been solved. Recently the PSA has given value for money and has proved better than any private sector organisation against which it operated. It has given the service required. If one gets value, service and quality from the PSA, why change it?
  Mr. Mans: The hon. Gentleman has not quoted me correctly. I said that the PSA's performance had much improved on what it was 10 years ago. That improvement has been achieved because more commercial pressures and greater commercial judgment have been brought to bear on the PSA by the present Government. Such direction was sadly lacking during the Labour Administration. A great deal more, however, can be done and the only way in which to achieve that is to move the PSA into the private sector.
  I welcome the idea of client Departments taking more responsibility for the buildings they occupy. The responsibility for the fabric of a building has been left to the PSA. The Ministry of Defence, for example, has not taken responsibility for the fabric of its various service installations. The client Departments will not only be able to use the PSA for the necessary work but will be able to approach other, more competitive organisations. That is a move in the right direction.
  The move into the private sector will undoubtedly benefit not only the PSA and its staff, but those organisations for which it has worked in the past. Once the PSA is in the private sector it will be able to expand and to use its expertise. Judging from some of the remarks of Opposition Members, there is undoubtedly a huge market for PSA valuation expertise. According to the Opposition. the PSA can undercut the valuation fees of private companies by a large percentage. It is rather odd. therefore, for the Opposition to argue that the PSA should stay in the public sector, especially as it has the opportunity to expand its valuation services rapidly if it manages to keep its prices down to the suggested true levels it has quoted while operating in the public sector.
  My right hon. Friend the Secretary of State talked about the way in which the PSA will be taken into the private sector. I fully approve of, and am encouraged by, his remarks showing that there will be a large measure of employee participation. That is a good direction in which to move. Judging from the experiences of the National Freight Corporation and the water research centre, it bodes well for the PSA if the employees can be persuaded to take part in the buy-out.
  It goes further than that. The hon. Member for Hammersmith was less than honest when he suggested that

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  the privatisation of the National Freight Corporation was the only previous privatisation to include an employee buy-out. The water research centre is another example, and in many previous privatisations huge percentages of workers have bought shares, despite pressure from their union bosses to do the contrary. Those examples include British Gas and British Telecom, in which more than 90 per cent. of the work force bought shares. Those work forces want the firms to be privatised, despite the advice not to do so given by their own union bosses.
  Mr. Eric S. Helfer: Why does the hon. Gentleman refer to the elected representatives of the workers as union bosses? Why does he call them bosses when they have been elected? Does he refer to the Prime Minister as his boss? [Hon. Members: "Yes."] He may do, but she is an elected representative. The term "bosses" is used by the hon. Gentleman and his hon. Friends to try to denigrate trade unionists.
  Mr. Mans: I shall be quite happy to withdraw the word "boss" if it offends the hon. Gentleman so much. The union leaders—or whatever he wishes to call them—gave information to their members which those members did not take. The members voted with their cheque books and wage packets and bought shares in the companies that were privatised. Regardless of the type of privatisation that takes place in the PSA, I suggest that they will do precisely the same thing and show that they want their firms to be privatised.
  So far, 29 state companies have been privatised, 45 per cent. of the public sector is now in private hands, and 800,000 former public employees are now employees of private firms. That is what has happened during the past 10 years. I welcome this latest privatisation proposal, and my only regret is that it has come at the end of this 10-year programme, not at the beginning.
  9.13 pm
  Mr. William O'Brien: It is significant that we are again discussing privatisation. Doubtless Conservative Members will not agree that this is Tory party dogma. However, if we look at the history recorded in the research note by the House of Commons Library, we find that, since 1979, no fewer than 33 privatisations have been approved by the Government or are in the pipeline. Tonight, we are talking about the 34th privatisation scheme to have been brought forward—the PSA. The Crown Suppliers are included in the list in the pipeline. British Coal is also included in that list.
  We have discussed privatisation twice this week. I cannot understand how Conservative Members can deny that Tories are obsessed with privatisation. That obsession is brought to the House and consideration is given to it before any consideration for the taxpayers or the people working in the industry.
  The hon. Member for Wyre (Mr. Mans) and others have said that it is only Opposition Members who are trying to defend and retain the PSA and the Crown Suppliers in the public sector. That is not true. I remind hon. Members of a statement made on 25 July 1986 by the hon. Member for Ealing, Acton (Sir G. Young) who was then a Minister. He said that the review group employed
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  by the Department to review the issue of the PSA and the Crown Suppliers being brought into the private sector concluded,
  "on the information available to them, that whilst privatisation would be possible, it would not in their view, be in the public interest."
  With all the information available to it and the fact that it accepted that it would be possible to include the PSA and the Crown Suppliers in the private sector, the review group believed that it would not be in the public interest. Therefore, it is not just Opposition Members who are saying that it is not in the country's or taxpayers' best interests that the Crown Suppliers and the PSA should be removed from the public sector. Conservative Members have been saying the same thing.
  The same team of officers looking into the matter also recommended that
  "the Crown Suppliers should be retained as a central purchasing agency in the public sector with rather greater autonomy in accounting and staffing matters."
  The body commissioned to look into the privatisation of the Crown Suppliers thought that it should have greater autonomy in certain matters.
  In reply to the hon. Member for Bristol, East (Mr. Sayeed), the hon. Member for Acton said:
  "The Crown Suppliers have had another successful year's trading. Despite the fact that over 65 per cent. of their business is now untied and optional, they have more than met their financial objective for 1985–1986. They have achieved this by raising their level of service, speeding up deliveries, reducing resource costs."—[Official Report, 25 July 1986; Vol. 102, c. 572.]
  Even when action was taken against the Crown Suppliers to untie it from the guaranteed market to which Conservative Members have been referring, it still had a successful year, increasing business turnover and making the business more efficient and acceptable to the people it was serving.
  Mr. Holt: The hon. Gentleman has constantly referred back to a report in 1986. Of course, he has not referred to the Select Committee on the Environment that has been looking into the PSA for several years. A number of Labour Members on that Committee have subscribed to its report and there has been no difference of opinion on political grounds. It is notable that none of them is here today to say anything about the PSA, which was recommended for privatisation by the Select Committee.
  Mr. O'Brien: A good number of Select Committees are sitting at the moment, and hon. Members on both sides are engaged in Committee business. I was not trying to elaborate on the proposals made by Conservative Members; I was just saying that reports commissioned from independent bodies by Ministers have all stated that privatisation is possible, but not desirable.
  On Monday of this week a report was brought to the attention of the House, stating:
  "Britain's most secret military establishment, the Aldermaston atomic weapons establishment, is to be handed over to commercial management. This raises a fundamental issue of national security. The secrets of Britain's nuclear bomb designs are kept there along with many other American secrets, since the atomic weapons establishment is the main agency for Anglo-US collaboration on warhead development and testing."
  The report calls this contractorisation, which is what the Tories now call privatisation.
  My hon. Friend the Member for Hammersmith (Mr. Soley) firmly drew attention to security. It is not only

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  Opposition Members who point out the need for a secure system—the Americans and others who are involved with security are pleading for consideration of the dangers that might arise if everything were put in the private sector, as proposed.
  Hon. Members have mentioned the qualities of the 34 privatisations that have been enacted or are in the pipeline. They have also mentioned the golden handshakes that accompany these privatisations. In this context, I draw attention to a recent report on water privatisation which was commissioned from Arthur Collins and Company, financial advisers, who estimated that water privatisation would cost the taxpayer £8·56 billion, and that the income derived from it would be £5·5 billion—a loss to the ratepayers of this country of about £3 billion. Not only taxpayers but a large number of ratepayers will suffer, therefore, because of the Tories' dogmatic atitude to privatisation.
  The PSA is the largest Government department to be privatised so far. The Secretary of State said today that some of the reasons for bringing the Bill before the House were efficiency, customer service and a desire to bring the agency nearer to the people.
  The Under-Secretary of State for the Environment, the hon. Member for Southampton, Itchen (Mr. Chope), who will reply to the debate, has served on a number of Committees on which I have served dealing with local government reorganisation. On those occasions it was the policy of Conservatives to take services away from people. We argued for hours in an attempt to retain those services in the domain of local government and to keep them closer to the people so that they could be more efficient and more accountable. However, the Secretary of State says that it is necessary to remove services from the public domain and place them in private ownership.
  The Secretary of State said that each Department will be responsible for its own budget and that customer services will be commissioned from the PSA, if it continues, or from whoever is responsible for the PSA if the Bill is passed. I am sure that hon. Members who have served in local government realise that often, when cuts have to be made, the first thing to be cut is maintenance. We have seen that in education and in social services. When there are more important matters to be considered, the first thing to be cut is maintenance. If we accept the philosophy of the Secretary of State, many of the public services, including security, will he the first to be cut by many Departments. That is one reason for retaining the PSA in the public sector.
  My hon. Friend the Member for St. Helens, South (Mr. Bermingham) admirably exposed the people who will benefit from this privatisation. Neither the workers nor the taxpayers will benefit, because the people who get their filthy hands on the privatisation will benefit most. My hon. Friend spelled that out quite clearly. The Government have given no reason for privatisation except that they believe that the best prospect for the future lies in making unimpeded progress towards privatisation and all the freedom that it can offer.
  Mr. Stern: The hon. Gentleman said that the only people to gain from the privatisation are those who will get their filthy hands on the privatisation. I hope that I quote him correctly. Some of my constituents who are ordinary working people in the PSA have already said that they
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  hope to take part in the buy-out that will result frorn the Bill. Does the hon. Gentleman wish to stand by his statement?
  Mr. O'Brien: If the hon. Gentleman thinks that they are the people who will make the real killing out of the privatisation, he is living in cloud cuckoo land. The hon. Gentleman should look at the report in the Library on privatisation. It reveals in a startling way who makes the money out of privatisation. It is not the people who pick up a few crumbs. The hon. Gentleman should read the report, because it is worth reading.
  The hon. Member for Romsey and Waterside (Mr. Colvin) expressed fears about the effects of the Bill in its present form on charities with which he is associated. The hon. Gentleman is not in his place. If he wants to protect those charities and is sincere in his concern about what the Bill will do to the organisations for which he pleaded, he should join us in the Lobby, because the only way to protect those charities is to vote with the Labour party.
  I imagine that all hon. Members and many people outside the House have experience of dealing with the construction industry. It is not famous for its integrity, arid we all know the problems that can arise. Government Departments have had the protection of the PSA safeguarding their interests. The Secretary of State and Conservative Members have suggested that each client Department could engage its own PSA—in other words, that there could be many PSAs duplicating services and wasting money—
  Mr. Mans: Does the hon. Gentleman agree that the PSA's history shows that precisely the opposite is true, and that it did not look after its client Departments? Indeed, in many cases it was far too close to the very contractors in the construction industry about which the hon. Gentleman is now complaining. I am referring to cost overruns.
  Mr. O'Brien: The hon. Gentleman should study the report, which refers to the Ministry of Defence and the work carried out on its behalf. It shows that there is protection for client Departments that engage the PSA. Hon. Members have said that client Departments can still engage the PSA to carry out their work. Therefore, the PSA is not so much being taken away as split into a number of PSAs. Services will be duplicated, and that will be a waste of money. No industry would have competition between the various sections within it. The hon. Gentleman is wrong.
  It is not only Labour Members who continually plead for the PSA. In May 1972, the Prime Minister said that the inclusion—
  Mr. Holt: In 1972?
  Mr. O'Brien: Nothing has changed in the need for the PSA. The Prime Minister said:
  "The inclusion of the Agency within the Department of Environment will ensure that the Government's practice as a builder and developer will remain in accord with its policies for the conservation and improvement of the environment." That statement is as valid now as it was in 1972. We need to demonstrate a conservation and an improvement of the environment. The best way to do so is to engage the PSA.
  Mr. Holt: It is apposite of the hon. Gentleman to refer to 1972, because there is a paragraph in the Environment Select Committee evidence headed "Changes since 1972". It shows that the number of people employed has declined

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  from 45,000 to 23,000. Of the work that used to be carried out in 1972, 85 per cent. of the planned maintenance and 100 per cent. of new construction work is carried out by private contractors. There have been vast changes, so it is silly to say that there have been no changes since 1972. The PSA has changed dramatically.
  Mr. O'Brien: Let me remind the right hon. Gentleman what I said earlier—that the protection, conservation and improvement of the environment are as important today as they were in 1972. If the hon. Gentleman reads more of the report he will find that, although there are contractors carrying out work on behalf of Departments, the PSA is responsible for the preparation and supervision of the contracts. Despite the slimming down of staff, the PSA's protective influence remains. Not only Opposition Members but distinguished Tory leaders have pointed out the foolishness of that.
  My hon. Friend the Member for Hammersmith (Mr. Soley) has exposed a weakness in the case on security—clearly a subject dear to the hearts of Conservative Members. If it is right for the PSA to provide protection for the Prime Minister and other Members of Parliament, how can it be wrong for the armed forces to receive the same service?
  Hon. Members have mentioned the protection of staff. What protection will be given to the pension rights of those approaching retirement age? The Minister has been provided with a number of answers by his right hon. Friend the Secretary of State, and I hope that he will explain what will happen to those among the 23,000 staff employed by the two organisations who are worried about their pensions.
  I appeal to Conservative Members who oppose the privatisation to join us in the Lobby to vote against it.
  9.37 pm
  The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope): There have been two notable features of today's debate. First, it has featured high-quality and, normally, good-humoured speeches. Secondly, it has been the privatisation debate in which the Opposition ran out of speakers—which shows, I think, that it is they who are running out of steam, while the Government are moving forward with a vigorous, radical programme.
  No Back-Bench speech was of higher quality than that of my hon. Friend the Member for Eastbourne (Mr. Gow). All who were present will treasure for a long time the unscripted and unrehearsed exchange between him and the hon. Member for Linlithgow (Mr. Dalyell). My hon. Friend reminded us of his long-standing belief that the proper place for the PSA is in the private sector, supporting eloquently a proposition in which Conservative Members all believe—that organisations should be in the private sector unless there are compelling arguments against it. There are no compelling reasons why the Crown Suppliers and the Public Services Agency should be in the public sector.
  There have been positive and constructive contributions from many of my hon. Friends. My hon. Friends the Member for Bristol, North-West (Mr. Stern) and for Cardiff, North (Mr. Jones) have constituency interests; a number of their constituents are PSA employees. They
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  stressed the positive approach that many of their constituents have adopted towards that privatisation and the opportunities that it will provide for them with the widening of the market. Important contributions were also made by my hon. Friends the Members for Basingstoke (Mr. Hunter), for Wyre (Mr. Mans), for Romsey and Waterside (Mr. Colvin) and for Birmingham, Hall Green (Mr. Hargreaves). I shall do my best to reply to their points and to those that have been made by Opposition Members.
  I am sorry that the contribution by my hon. Friend the Member for Ealing, Acton (Sir G. Young) was so brief. His ministerial experience in the Department of the Environment made him an enthusiastic supporter of these privatisations. It was he who decided in 1986 to seek the advice of an outside financial institution on the feasibility of privatising the Crown Suppliers. In so doing, he helped to lay the foundations of the Bill.
  Debating points were made about the reports on the privatisation of the Crown Suppliers. They were published before 1986. The problems connected with privatisation that worried the writers of the reports have been overcome by restricting sales to the commercial parts of the Crown Suppliers. The reports did not take fully into account the potential impact of untying on the Crown Suppliers. It is a commercial organisation. We are strongly of the opinion that it will operate much more efficiently and effectively in the private sector. That has been confirmed by independent outsiders.
  The speech of the hon. Member for Hammersmith (Mr. Soley) was predictable. It relied heavily on the tendentious briefing document from the National Union of Civil and Public Servants. The hon. Gentleman resorted to irresponsible scaremongering, particularly when he referred to security.
  Mr. Soley: I made use of only two bits of the NUCPS document. The rest came from the Library's research document.
  Mr. Chope: I congratulate the hon. Gentleman on the depth of his research.
  Opposition Members are absolutely right to emphasise the importance of security. I categorically assure the House that national security will not be prejudiced in any way by these privatisations. A very few activities, not just those related to Ministers and Parliament, will be excluded from the sale and are not covered by the Bill. The vast majority of both the PSA and the Crown Suppliers services that are covered by the Bill are already commonly carried out for the Government by private firms.
  Mr. Dalyell: Will the Minister explain clearly why he is so certain that privatisation is all right for security elsewhere but is not all right for the House of Commons and the royal palaces? We shall be accused, whether he likes it or not, of double standards. People will say, justifiably or not, that the House of Commons takes a very different view when those who sit on green Benches are affected.
  Mr. Chope: I do not understand the hon. Gentleman's point. Much of the work in the House of Commons, the House of Lords and the royal palaces is carried out by the private sector. There is nothing wrong about that. There is adequate security. The same procedures will be followed in the future as have been followed in the past.
  Mr. Heifer: The private sector is now active in the House of Commons. Is the Minister aware that the House of Commons is filthy compared to what it used to be when it was cleaned by ladies who came in regularly and who were employed as a public service to look after the House. [HON. MEMBERS: "Talk about security."] I am not talking about security, but about the whole principle. The House of Commons is dirty. Hon. Members should look at it. They will find that that is because private enterprise has been brought in.
  Mr. Chope: That is a point for the Select Committee on House of Commons (Services). It is stooping a bit low for the hon. Gentleman to attack the staff who work in the House. Most of the construction work that is commissioned by the PSA, including that for the Ministry of Defence, is already contracted out to the private sector. Up to 70 per cent. of the design of new projects is already undertaken for the PSA by consultants in the private sector and it includes a large proportion of work with a high security content. The Ministry of Defence is already familiar with contracting out the manufacture of sensitive defence equipment. On the Crown Suppliers side, secure document delivery and vehicle hire are already carried out for some Departments by private firms. The Ministry of Defence estate will remain in MOD hands, and therefore under the control of the MOD.
  Mr. Soley: When the PSA and the Crown Suppliers go, who will vet the staff? Will the Minister also deal with the point about United States bases?
  Mr. Chope: I am not going to be drawn—[HON. MEMBERS: "Answer the question."] I am amazed by the irresponsibility of the hon. Gentleman. I shall not be drawn into saying what arrangements will be made for the vetting of staff. All I can say is that it would be unthinkable for this Government of all Governments to do anything that jeopardised or undermined national security or the personal security of individual citizens, whether or not they work in the armed forces. Conservative Members can say openly that we must be trusted. If the hon. Gentleman wants to bring security matters out into the public domain, I can only say that it is regrettable.
  Mr. Soley: I charge the Government with being careless about security, as I have on a number of occasions. We know, and it is common knowledge, that the PSA vets staff. The Minister cannot hide behind security. If he is saying that vetting will be carried out by the security services, that is fine, but he must recognise that the manpower consequences of that decision would be enormous. The logical position is to leave vetting with the PSA. I suspect from the answers that he has not even thought about the question, which is a damning indictment of the Government's policy.
  Mr. Chope: I shall say no more about that. The hon. Gentleman may want to develop the point further in Committee, but I hope that after consideration, he will realise that it is not appropriate to discuss security vetting in the House.
  The hon. Member for Hammersmith and others made points about the work for the United States forces. The relationship with the United States Air Force is valued by both sides and it is the subject of a Government-to-Government agreement. A study has been put in hand to examine how the formalities of the relationship will be
  406
  affected once the PSA has been privatised. Whatever the conclusions of the review, I am confident that the unique range of skills developed by the staff to meet the specialised requirements and procedures that are demanded by the client will make it possible for the agency to retain a substantial proportion of the business of the United States forces.
  The greatest asset of the PSA and the Crown Suppliers is their work force and, rightly, much of our debate has concerned the staff. I pay a warm tribute to the skill and dedication that all staff throughout PSA and the Crown Suppliers bring to their work. As the Minister with day-to-day responsibility for the PSA for the past three years, I have got to know many of the PSA employees all over the country, and I have also been able to witness the high esteem in which they are held by their clients. There has been a period of considerable change in Government organisation which has put a premium on loyalty and commitment. I am proud of the loyalty and commitment that has been shown by the staff.
  The chief executive and second permanent secretary of the Department of the Environment, Sir Gordon Manzie has been mentioned several times during the debate, and it is appropriate that I should pay a special tribute to him, as he will be retiring from the Civil Service early in the new year and as his work has been an important factor in bringing the PSA to its present successful position.
  The staff of the PSA and the Crown Suppliers are civil servants. Privatisations involving civil servants give rise to particular issues, and I know that hon. Members will want to examine carefully the proposals that we have and the assurances that we shall be able to give to the staff. Staff of both the PSA and the Crown Suppliers are members of the principal Civil Service pension scheme, which includes provisions relating to redundancy.
  That has two important consequences. First, because the staff cannot remain members of the Civil Service scheme when the PSA and the Crown Suppliers are sold, they would, unless special measures were taken, become technically entitled to the redundancy compensation provided for in the scheme. It would obviously not be right to expend substantial sums of public money on redundancy compensation to staff who have retained their jobs. As I have said, their employment will continue with the new owner on the same terms and conditions.
  The second consequence is that the redundancy terms are not passed automatically to the new employment, because they were part of the pension scheme. Therefore, special measures will need to be taken to ensure that equivalent redundancy terms are offered to the staff to give them continued protection in future.
  Mr. Allen McKay: I have never before seen anything like clause 2. It sets a precedent. In the past, all redundancies resulting from privatisation have been as the Minister described. But now the Government are selling the people with the jobs, which is wrong in any case.
  Mr. Chope: If the hon. Gentleman had been here to hear the opening speech given by my right hon. Friend the Secretary of State he would have heard the answer to his question. In fact, such provision has been made in almost every privatisation Bill that has come before the House.
  The measures that we are taking to ensure that the staff's interests are protected as regards pensions and redundancy are worth explaining in more detail. When

  407
  invitations to tender are issued, we shall draw prospective purchasers' attention to the terms of the Civil Service pension scheme, as regards both pensions and redundancy. We shall make it clear that we expect them to offer broadly comparable terms for pensions. The terms that they offer will be subject to analysis by the Government actuary. If the pension terms offered by the chosen purchaser are not assessed as being as good as the Civil Service scheme, some means will be found to ensure that the staff are not disadvantaged in terms of the overall terms and conditions of service.
  The position on redundancy will be slightly different. We shall ensure, by means of the contract for sale, that the staff will be provided in the private sector with redundancy compensation that mirrors what they have now.
  Sir Peter Hordern: If the present pension scheme is to be transferred to the private sector, does not that mean that it will in future be a funded scheme? The Government will be liable to pay a large sum to set up that scheme. Will my hon. Friend tell the House roughly what his estimate is of the sum that will be transferred into a funded pension scheme?
  Mr. Chope: My hon. Friend draws attention to the difference between the pension arrangements in the public and the private sectors. The job of providing pensions in the private sector will be the responsibility of the purchasers of the organisation, and they will have to take responsibility for providing a fund. At the point of sale all the contributions that have been made so far will be preserved. The money that is available in the public sector to enable the pensions to be paid will be called upon in the future when the pensions become payable in respect of service carried out prior to privatisation.
  Mr. Soley: The Minister is clearly getting into difficulty again. I am here to help him although I appreciate that he does not always see it that way. The hon. Member for Horsham (Sir P. Hordern) asked quite rightly about the amount of money and how it would he transferred to ensure that pensions do not fall below what staff receive at the moment. There must be some transfer of funds. That was the question: Will the Minister answer it?
  Mr. Chope: I have answered the question. The employees will retain their existing pension entitlement until the point of sale. Thereafter, the responsibility for their future pension entitlement will be taken up by the new owner. That is perfectly clear and I am sorry that the hon. Member for Hammersmith does not understand it.
  My hon. Friend the Member for Romsey and Waterside (Mr. Colvin) raised an important point about Enham Industries and Papworth village. As he said, I have written to him about that. I am sure that the points that I have set out in my letter will reassure the employees in Enham Industries. As my hon. Friend suggested, I will take up the issue with my hon. Friend the Minister of State for the Armed Forces. As I have said, privatisation does not alter the position of the priority suppliers scheme. Therefore, the Bill is in no way bad news for Enham Industries.
  Mr. Colvin: Has my hon. Friend taken on my principal point, which is that organisations like Enham Industries and Papworth, which are charitable organisations, and
  408
  manufacturers have done pretty well out of the Crown Suppliers' buying policy over recent years? Will my hon. Friend talk to other Ministers? If preferential treatment is not maintained, the Housing Corporation, the county council social services committees and the Department of Social Security are likely to be burdened with additional costs. My hon. Friend the Minister should alert his colleagues to that eventuality.
  Mr. Chope: There will not be additional costs for Departments. The priority suppliers scheme will continue as it is now, but the Crown Suppliers will no longer necessarily be the intermediary.
  I believe it was the hon. Member for Hammersmith, although I am not sure, who wanted to know how we were going to ensure that the privatisation would be fair. He drew attention particularly to the sale of Wellington house. I can assure the House that Wellington house will be valued carefully prior to sale because it is one of the largest assets belonging to the Crown Suppliers. That sale will be on a competitive basis, thereby ensuring the very best value for money to the taxpayer.
  Mr. Campbell-Savours: Will the Minister give way?
  Mr. Chope: I will not give way, because I have only three minutes left. We have had a long debate and, as I have already explained, Opposition Members were not present to take their turn and we heard a series of speeches from Conservative Members.
  The PSA is basically a major building and estate consultancy. The Crown Suppliers is basically a furniture supplier. Neither has a natural place in the public sector. They are commercial organisations which will operate best in a fully commercial environment. The Government will ensure that adequate safeguards are put in place to ensure that the staff who are transferred have equivalent conditions under the new employer.
  This is a radical Bill, which will bring major benefits. It facilitates privatisation. In that way, it offers a major benefit for employees because for employees the Bill is a springboard for further success.
  Mr. Campbell-Savours rose—
  Mr. Chope: The opportunities offered by wider markets and the disciplines of the private sector will replace the controls and shackles of the public sector. I look forward to the time when 20,000 more employees join the 800,000 who have already moved to the private sector as a result of the Government's privatisation policies. The Bill will give customers increased choice and lead to greater competition and increased efficiency. For taxpayers, there will be better value for money all round. This is a good Bill, and I commend it to the House.
  Question put, That the Bill be now read a Second time:—
  The House divided: Ayes 237, Noes 181.

  Division No. 10]

  [10 pm

  AYES

  Aitken, Jonathan

  Arnold, Tom (Hazel Grove)

  Alexander, Richard

  Ashby, David

  Alison, Rt Hon Michael

  Aspinwall, Jack

  Allason, Rupert

  Atkins, Robert

  Amery, Rt Hon Julian

  Baker, Rt Hon K. (Mole Valley)

  Amess, David

  Baldry, Tony

  Amos, Alan

  Banks, Robert (Harrogate)

  Arbuthnot, James

  Batiste, Spencer

  Arnold, Jacques (Gravesham)

  Bellingham, Henry

  409

  Bendall, Vivian

  Hampson, Dr Keith

  Bennett, Nicholas (Pembroke)

  Hanley, Jeremy

  Benyon, W.

  Hannam, John

  Bevan, David Gilroy

  Hargreaves, A. (B'ham H'll Gr')

  Biffen, Rt Hon John

  Hargreaves, Ken (Hyndburn)

  Blaker, Rt Hon Sir Peter

  Harris, David

  Body, Sir Richard

  Haselhurst, Alan

  Bonsor, Sir Nicholas

  Hawkins, Christopher

  Boscawen, Hon Robert

  Hayward, Robert

  Boswell, Tim

  Heddle, John

  Bowden, Gerald (Dulwich)

  Hicks, Mrs Maureen (Wolv' NE)

  Boyson, Rt Hon Dr Sir Rhodes

  Higgins, Rt Hon Terence L.

  Braine, Rt Hon Sir Bernard

  Holt, Richard

  Brandon-Bravo, Martin

  Hordern, Sir Peter

  Brazier, Julian

  Howarth, Alan (Strat'd-on-A)

  Bright, Graham

  Howarth, G. (Cannock & B'wd)

  Brooke, Rt Hon Peter

  Howe, Rt Hon Sir Geoffrey

  Brown, Michael (Brigg & Cl't's)

  Howell, Rt Hon David (G'dford)

  Browne, John (Winchester)

  Hughes, Robert G. (Harrow W)

  Bruce, Ian (Dorset South)

  Hunt, David (Wirral W)

  Budgen, Nicholas

  Hunter, Andrew

  Burns, Simon

  Irvine, Michael

  Burt, Alistair

  Irving, Charles

  Butler, Chris

  Jack, Michael

  Carlisle, John, (Luton N)

  Jackson, Robert

  Carlisle, Kenneth (Lincoln)

  Janman, Tim

  Carrington, Matthew

  Jones, Gwilym (Cardiff N)

  Carttiss, Michael

  Jopling, Rt Hon Michael

  Channon, Rt Hon Paul

  Key, Robert

  Chapman, Sydney

  King, Roger (B'ham N'thfield)

  Chope, Christopher

  King, Rt Hon Tom (Bridgwater)

  Clark, Hon Alan (Plym'th S'n)

  Knight, Greg (Derby North)

  Clark, Dr Michael (Rochford)

  Knox, David

  Clark, Sir W. (Croydon S)

  Lloyd, Peter (Fareham)

  Clarke, Rt Hon K. (Rushcliffe)

  Maclean, David

  Colvin, Michael

  McLoughlin, Patrick

  Coombs, Anthony (Wyre F'rest)

  McNair-Wilson, Sir Michael

  Coombs, Simon (Swindon)

  Mawhinney, Dr Brian

  Couchman, James

  Miller, Sir Hal

  Cran, James

  Mills, Iain

  Currie, Mrs Edwina

  Miscampbell, Norman

  Davies, Q. (Stamf'd & Spald'g)

  Mitchell, Andrew (Gedling)

  Davis, David (Boothferry)

  Moate, Roger

  Dorrell, Stephen

  Monro, Sir Hector

  Douglas-Hamilton, Lord James

  Montgomery, Sir Fergus

  Dover, Den

  Morrison, Rt Hon P (Chester)

  Dunn, Bob

  Moss, Malcolm

  Durant, Tony

  Moynihan, Hon Colin

  Dykes, Hugh

  Mudd, David

  Emery, Sir Peter

  Neale, Gerrard

  Evennett, David

  Nelson, Anthony

  Fairbairn, Sir Nicholas

  Neubert, Michael

  Fallon, Michael

  Nicholls, Patrick

  Favell, Tony

  Nicholson, David (Taunton)

  Field, Barry (Isle of Wight)

  Nicholson, Emma (Devon West)

  Fishburn, John Dudley

  Norris, Steve

  Fookes, Dame Janet

  Onslow, Rt Hon Cranley

  Forman, Nigel

  Oppenheim, Phillip

  Forsyth, Michael (Stirling)

  Page, Richard

  Fox, Sir Marcus

  Paice, James

  Franks, Cecil

  Patnick, Irvine

  French, Douglas

  Patten, Rt Hon Chris (Bath)

  Gale, Roger

  Patten, John (Oxford W)

  Gardiner, George

  Pawsey, James

  Garel-Jones, Tristan

  Peacock, Mrs Elizabeth

  Gill, Christopher

  Porter, David (Waveney)

  Glyn, Dr Alan

  Portillo, Michael

  Goodlad, Alastair

  Powell, William (Corby)

  Goodson-Wickes, Dr Charles

  Rattan, Keith

  Gorman, Mrs Teresa

  Raison, Rt Hon Timothy

  Gow, Ian

  Renton, Rt Hon Tim

  Grant, Sir Anthony (CambsSW)

  Rhodes James, Robert

  Greenway, Harry (Ealing N)

  Riddick, Graham

  Greenway, John (Ryedale)

  Ridley, Rt Hon Nicholas

  Gregory, Conal

  Ridsdale, Sir Julian

  Griffiths, Peter (Portsmouth N)

  Rifkind, Rt Hon Malcolm

  Grist, Ian

  Rost, Peter

  Grylls, Michael

  Rowe, Andrew

  Hague, William

  Rumbold, Mrs Angela

  Hamilton, Neil (Tatton)

  Ryder, Richard

  410

  Sackville, Hon Tom

  Thompson, Patrick (Norwich N)

  Sainsbury, Hon Tim

  Thorne, Neil

  Sayeed, Jonathan

  Thornton, Malcolm

  Scott, Rt Hon Nicholas

  Thurnham, Peter

  Shaw, David (Dover)

  Townend, John (Bridlington)

  Shaw, Sir Giles (Pudsey)

  Tracey, Richard

  Shaw, Sir Michael (Scarb')

  Tredinnick, David

  Shepherd, Colin (Hereford)

  Trippier, David

  Shersby, Michael

  Twinn, Dr Ian

  Sims, Roger

  Vaughan, Sir Gerard

  Skeet, Sir Trevor

  Waddington, Rt Hon David

  Smith, Tim (Beaconsfield)

  Walker, Bill (T'side North)

  Soames, Hon Nicholas

  Waller, Gary

  Spicer, Michael (S Worcs)

  Wardle, Charles (Bexhill)

  Squire, Robin

  Warren, Kenneth

  Stanbrook, Ivor

  Watts, John

  Stanley, Rt Hon Sir John

  Wells, Bowen

  Steen, Anthony

  Whitney, Ray

  Stern, Michael

  Widdecombe, Ann

  Stevens, Lewis

  Wiggin, Jerry

  Stewart, Allan (Eastwood)

  Winterton, Mrs Ann

  Stewart, Andy (Sherwood)

  Winterton, Nicholas

  Stewart, Rt Hon Ian (Herts N)

  Wood, Timothy

  Stradling Thomas, Sir John

  Woodcock, Dr. Mike

  Sumberg, David

  Yeo, Tim

  Summerson, Hugo

  Young, Sir George (Acton)

  Tapsell, Sir Peter

  Younger, Rt Hon George

  Taylor, Ian (Esher)

  Taylor, John M (Solihull)

  Tellers for the Ayes:

  Taylor, Teddy (S'end E)

  Mr. David Lightbown and

  Temple-Morris, Peter

  Mr. Nicholas Baker.

  Thompson, D. (Calder Valley)

  NOES

  Abbott, Ms Diane

  Darling, Alistair

  Adams, Allen (Paisley N)

  Davies, Rt Hon Denzil (Llanelli)

  Allen, Graham

  Davies, Ron (Caerphilly)

  Alton, David

  Davis, Terry (B'ham Hodge H'l)

  Anderson, Donald

  Dewar, Donald

  Archer, Rt Hon Peter

  Dixon, Don

  Armstrong, Hilary

  Dobson, Frank

  Ashdown, Rt Hon Paddy

  Duffy, A. E. P.

  Ashley, Rt Hon Jack

  Dunnachie, Jimmy

  Ashton, Joe

  Dunwoody, Hon Mrs Gwyneth

  Barnes, Harry (Derbyshire NE)

  Eadie, Alexander

  Barron, Kevin

  Evans, John (St Helens N)

  Battle, John

  Ewing, Mrs Margaret (Moray)

  Beckett, Margaret

  Fatchett, Derek

  Bennett, A. F. (D'nt'n & R'dish)

  Faulds, Andrew

  Bermingham, Gerald

  Fearn, Ronald

  Boateng, Paul

  Field, Frank (Birkenhead)

  Boyes, Roland

  Fisher, Mark

  Bradley, Keith

  Flannery, Martin

  Bray, Dr Jeremy

  Foot, Rt Hon Michael

  Brown, Gordon (D'mline E)

  Foster, Derek

  Brown, Nicholas (Newcastle E)

  Foulkes, George

  Brown, Ron (Edinburgh Leith)

  Fraser, John

  Bruce, Malcolm (Gordon)

  Fyfe, Maria

  Buchan, Norman

  Garrett, John (Norwich South)

  Buckley, George J.

  George, Bruce

  Caborn, Richard

  Godman, Dr Norman A.

  Callaghan, Jim

  Golding, Mrs Llin

  Campbell, Menzies (Fife NE)

  Gordon, Mildred

  Campbell, Ron (Blyth Valley)

  Gould, Bryan

  Campbell-Savours, D. N.

  Grant, Bernie (Tottenham)

  Canavan, Dennis

  Griffiths, Nigel (Edinburgh S)

  Clark, Dr David (S Shields)

  Griffiths, Win (Bridgend)

  Clarke, Tom (Monklands W)

  Grocott, Bruce

  Clay, Bob

  Harman, Ms Harriet

  Clelland, David

  Hattersley, Rt Hon Roy

  Clwyd, Mrs Ann

  Healey, Rt Hon Denis

  Cohen, Harry

  Heffer, Eric S.

  Cook, Robin (Livingston)

  Henderson, Doug

  Corbett, Robin

  Hinchliffe, David

  Cousins, Jim

  Home Robertson, John

  Crowther, Stan

  Hood, Jimmy

  Cryer, Bob

  Howarth, George (Knowsley N)

  Cummings, John

  Howell, Rt Hon D. (S'heath)

  Cunningham, Dr John

  Howells, Geraint

  Dalyell, Tam

  Howells, Dr. Kim (Pontypridd)

  411

  Hoyle, Doug

  Quin, Ms Joyce

  Hughes, John (Coventry NE)

  Radice, Giles

  Hughes, Robert (Aberdeen N)

  Rees, Rt Hon Merlyn

  Hughes, Simon (Southwark)

  Reid, Dr John

  Janner, Greville

  Robertson, George

  Jones, Barry (Alyn & Deeside)

  Rooker, Jeff

  Jones, Martyn (Clwyd S W)

  Rowlands, Ted

  Lamond, James

  Sedgemore, Brian

  Leadbitter, Ted

  Sheerman, Barry

  Livsey, Richard

  Sheldon, Rt Hon Robert

  Lloyd, Tony (Stretford)

  Shore, Rt Hon Peter

  Lofthouse, Geoffrey

  Short, Clare

  Loyden, Eddie

  Sillars, Jim

  McAllion, John

  Skinner, Dennis

  Macdonald, Calum A.

  Smith, Andrew (Oxford E)

  McFall, John

  Smith, Rt Hon J. (Monk'ds E)

  McKay, Allen (Barnsley West)

  Smith, J. P. (Vale of Glam)

  McLeish, Henry

  Soley, Clive

  Maclennan, Robert

  Steel, Rt Hon David

  McWilliam, John

  Steinberg, Gerry

  Madden, Max

  Stott, Roger

  Mahon, Mrs Alice

  Strang, Gavin

  Marek, Dr John

  Straw, Jack

  Marshall, David (Shettleston)

  Taylor, Mrs Ann (Dewsbury)

  Maxton, John

  Taylor, Matthew (Truro)

  Meacher, Michael

  Turner, Dennis

  Meale, Alan

  Vaz, Keith

  Michael, Alun

  Wall, Pat

  Michie, Bill (Sheffield Heeley)

  Wallace, James

  Michie, Mrs Ray (Arg'l & Bute)

  Walley, Joan

  Mitchell, Austin (G't Grimsby)

  Wardell, Gareth (Gower)

  Moonie, Dr Lewis

  Wareing, Robert N.

  Morgan, Rhodri

  Watson, Mike (Glasgow, C)

  Morley, Elliot

  Welsh, Michael (Doncaster N)

  Morris, Rt Hon A. (W'shawe)

  Wigley, Dafydd

  Morris, Rt Hon J. (Aberavon)

  Williams, Rt Hon Alan

  Mowlam, Marjorie

  Williams, Alan W. (Carm'then)

  Murphy, Paul

  Wilson, Brian

  Nellist, Dave

  Winnick, David

  Oakes, Rt Hon Gordon

  Worthington, Tony

  O'Brien, William

  Wray, Jimmy

  O'Neill, Martin

  Young, David (Bolton SE)

  Patchett, Terry

  Pendry, Tom

  Tellers for the Noes:

  Pike, Peter L.

  Mr. Frank Haynes and

  Powell, Ray (Ogmore)

  Mr. Frank Cook.

  Prescott, John

  Question accordingly agreed to.
  Bill read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).

Property Services Agency and Crown Suppliers Bill [Money]
Queen's Recommendation having been signified—
Motion made, and Question proposed,
That, for the purposes of any Act resulting from the Property Services Agency and Crown Suppliers Bill, it is expedient to authorize—

(a) the payment out of money provided by Parliament of any sums required by the Secretary of State for making payments or for defraying his administrative expenses under that Act;

(b) the payment of sums received by him by virtue of that Act into the Consolidated Fund or the National Loans Fund.—[Mr. Sackville.]

10.15 pm
Mr. Bob Cryer: I want to raise one or two questions. During the reply, the Minister did not seem to grasp the nature of the question from his hon. Friend the Member for Horsham (Sir P. Hordern). Therefore, he might avail himself of this opportunity to explain precisely whether the money resolution, which is in fairly general terms, covers the position to which his hon. Friend referred.
The hon. Member for Horsham was saying that some obligation for pension payments would fall on the new companies and asked what provision the Government would make when the new companies take over those activities. It was not my question, but the hon. Gentleman's. He sought information. By common consent, the question was not adequately answered.
It is awkward when a money resolution is found to be inadequate for a range of purposes. There have been occasions when that has happened. I fondly recall one instance when the Minister had to return to the House three times—[Interruption.]
Mr. Speaker: Order. I ask hon. Members who are beyond the Bar either to come into the Chamber or to leave it.
Mr. Cryer: It would be embarrassing for the Minister if he had to return with another money resolution to meet those payments. I want him to be clear in his own mind and to assure the House that he will not be required to do that.
Administration expenses are raised specifically in the money resolution. Paragraph (a) authorises
"the payment out of money provided by Parliament of any sums required by the Secretary of State for making payments or for defraying his administrative expenses under that Act."
It may well be that pensions can be included under that paragraph of the resolution, but the Minister gave no indication either of the sums that he would make in payment or of his administrative expenses. In the introduction to the Bill, the financial effects, which normally give an indication of the sort of money that will be needed, do not give an idea of the money that we are talking about. Clearly, the Minister will say that there will be revenue and that the resolution provides for payment from the Consolidated Fund, and we understand that. At the same time, however, it would be interesting to know what the administrative costs of this privatisation venture will be. Parliament has a right to know.
So far, the entire privatisation programme has cost more than £2,000 million in fees and advertising charges. The privatisation programme of the Government has

413
meant that public assets, which we own, have been sold off. Those assets have been sold to the public as though the public do not already own them, and that amounts to legalised theft. The privatisation programme has been extremely costly. Perhaps the administrative money mentioned in the money resolution is a relatively small amount, but I hope that the Minister can tell us something about it.
What will happen during the construction of, for example, the Crown courts in Bradford? The PSA will start off that work because, presumably, the privatisation will not be accomplished by the time the construction starts. What will happen then? Will work be handed over? If the private contractors run over time and need more money, how will we hold the Minister to account? I had an Adjournment debate on the construction of the Crown courts in Bradford, to which the Minister replied. I spoke of the potential damage that might be caused to an important cross-Bradford rail link, which would provide a much improved rail service in Bradford, but that is not germane to the argument tonight.
How will hon. Members hold the Minister to account? With privatisation, does it follow that all public accountability will disappear out of the window? Will Ministers no longer be required to answer questions, whether about money resolutions or about their general level of accountability? It would be a sad day for Parliament were that so. If the Minister has some concern for democracy, he will assure the House that, irrespective of privatisation, Ministers will still be open to question, to challenge and to account. The House holds that right dearly and I would hate to see it diminished, but I suspect that that will be the case.
I have not detained the House too long, but I believe that the questions were worth raising, and I hope that the Minister will provide the answers.
10.22 pm
The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope): The money resolution deal with two issues. First, it authorises payment of expenses incurred by the Secretary of State for the Environment in implementing the Bill. Secondly, it also authorises disposal of receipts from the sales of the Crown Suppliers and the Property Services Agency.
On the first question, the expenses will be administrative and will relate mainly to advice from consultants about the sales. In the case of the PSA, the privatization
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itself is not sufficiently advanced to be able to estimate the total costs that will be needed. In the case of the Crown Suppliers, I can tell the hon. Member for Bradford, South (Mr. Cryer) that £54,000 has so far been spent on the expenses of the sale. We expect the total expenditure on the sale to be less than £2 million.
Clause 3 would give the Secretary of State power to subscribe for or otherwise acquire shares or securities of a transferee company, and to make loans to those companies. We do not expect to make use of those provisions for the Crown Suppliers, since the companies will be sold immediately the Crown Suppliers' assets are transferred to them. In the case of the PSA, since the privatisation is some way away, and because we expect that the companies may trade as wholly owned public companies, there may be a need for the Secretary of State to make injections of capital from time to time.
On the second question, receipts from the sale of PSA and the Crown Suppliers will be paid into the Consolidated Fund. In the case of the Crown Suppliers, its debt with the national loans fund will first have to be repaid. The Secretary of State may therefore, with the Treasury's consent, direct sufficient proceeds of the sale into that fund, with the balance paid into the Consolidated Fund.
The hon. Gentleman asked about pensions. When the existing staff transfer to the new employer, should they opt to have their pension entitlement preserved, those pensions will still be the liability of the Treasury, through the Consolidated Fund, at such time as they are called upon. If the individual employees choose to have their pension rights consolidated and transferred to the new organisation which is setting up a pension fund, a sum or sums of money will have to be transferred from the Exchequer to those pension schemes. However, that is not new money, because it represents the present contingent liability of the Exchequer for the pensions of existing staff of the Crown Suppliers and the Property Services Agency.
I hope that I have answered most of the points raised by the hon. Gentleman. He also referred to the Crown courts in Bradford, an issue which, as he said, I have previously debated with him across the Floor of the House. The procurement of the Crown courts, as of all civil projects, is, and will be, the responsibility of my right hon. and noble Friend the Lord Chancellor. He and his Department will be accountable to Parliament for the expenditure incurred on such projects.
Question put and agreed to.

Local Government (Sports and Leisure)
10.25 pm
The Parliamentary Under-Secretary of State for the Environment (Mr. Colin Moynihan): I beg to move,
That the draft Local Government Act 1988 (Competition in Sports and Leisure Facilities) Order 1989, which was laid before this House on 25th October, in the last Session of Parliament, be approved.
The order seeks to extend the range of activities which must be put out to tender by local authorities under the Local Government Act 1988 by including the management of facilities for sport and leisure. The order adds a new defined activity of "managing sports and leisure facilities" to section 2(2) of the Local Government Act 1988. It also adds a new paragraph 8 to schedule 1 of the Act which sets out a definition of the activity and it brings the requirements of section 4 and 5 of the 1988 Act into effect in respect of works contracts for managing sports and leisure facilities from 1 October 1991.
Let me emphasise that the Government place the highest possible value on local authority sport and leisure facilities. We recognise that they meet an essential need in the community and provide a wide range of opportunities for local people to participate in sport. This order is not about selling off local authority owned facilities, nor about preventing them from being built in the future. As everyone from the world of sport should know, competition is both a means of ensuring better delivery of the service which such facilities can provide and of promoting value for money. It is in the interest of the users of facilities as well as ratepayers more generally to find ways to improve the management of facilities and to make them cost effective.
Hon. Members may be aware that the Audit Commission published a report earlier this year entitled "Sport for whom?" which stated that there was scope for improvement in the management of sport and leisure facilities throughout local government. The Audit Commission has confirmed estimates which show that typically, savings from voluntary contracting out have been in the region of 20 per cent. or more of previous costs. Clearly major savings are available, perhaps as much as several hundred million pounds a year. Only by facing up to the constant pressure of open competition for the management of sport and leisure facilities is it possible to ensure efficiency. That is what this order is about.
Mr. Dennis Canavan: Is the Minister aware that the all-party parliamentary Scottish sports group, of which I am convenor and which consists of hon. Members from both sides of the House, is strongly opposed to and has roundly condemned these measures? It feels that not only will it decrease access to sporting facilities for many people, including disadvantaged groups of people, but it will probably be a disincentive for local authorities to invest in new leisure and sporting facilities because the local authorities will have to spend a great deal of money and hand over the management of the brand new facilities to private operators. Those operators may simply be intent on making a fast buck out of public facilities which have been financed by public money.
Mr. Moynihan: I recognise that there was considerable concern when the draft order was first published about the
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points raised by the hon. Gentleman. There was concern that pricing, admissions policies and subsidies for disadvantaged groups, to whom the hon. Gentleman referred, would be handed over to the private sector. It is for that reason that I hope that the hon. Gentleman and his colleagues will be pleased to hear that all three of those criteria will continue to be vested in the hands of the local authorities. They will continue to have the right to determine admissions policies, pricing and opening hours in order to protect the interests of the people to whom the hon. Gentleman referred. It is important for the House to recognise that. I am sure that we all recognise that it is important for all users to continue to benefit through participation in sport.
It is clear to me that in many cases it is not a lack of sports facilities or even resources which is a problem. Often the facilities available do not match local needs. Expensive modern sports centres are often under-used in inner cities while down the road other facilities cannot cope with demand. More professional marketing and a better understanding of needs will, I am confident, go a long way towards redressing the problems. In a competitive environment, there is a powerful incentive to get the planning right.
Mr. Roland Boyes: The Minister mentioned under-use. Will he accept that the Crowtree leisure centre in Sunderland has the highest usage of any leisure centre in Britain because of its wide range of facilities and its competitive pricing and because it is well managed? Why should the people of Sunderland and its forward-looking council which provided that facility find themselves disadvantaged by the measure that the Minister is introducing?
Mr. Moynihan: They will not be disadvantaged. When the contract goes out to competitive tendering, we will see whether the hon. Gentleman's statement is correct. I am confident that the management in the sports and leisure facilities of many local authorities is of outstanding quality and will take considerable beating when contracts are put out to competitive tender. However, it is in the interest of the users for that to be put to the test. [HON. MEMBERS: "Why?"] Hon. Members ask why. Where a more efficient and effective management team can be put in place, it must be in the interests of the users, not least because that team may be able to recognise, through the contractual arrangements, that more effective marketing and outreach policies to the local community will bring more people into the facility. That matches the objective of most local authorities, which is "Sport for all."
Mr. Richard Tracey: I am interested in what my hon. Friend is saying. I am sure that he will have had a chance to look at the work of Westminster city council, which is a trend-setter in many ways. Has my hon. Friend had an opportunity to look at the Queen Mother leisure centre, which is a fine example of exactly what he is talking about? Far more private clubs are going through its doors.
Mr. MoynihanMy hon. Friend has mentioned an extremely good example. It is one of five leisure facilities currently owned by Westminster city council. Several major improvements have resulted from its voluntary decision to put out the management to competitive tender.

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For example, in 1988, 172,000 people used the facility and 216,000 now use it under private management. Furthermore, under local authority management, it used to open at 8 am, but it now opens at 6.30 am. Most importantly, many people were concerned about special local clubs being denied the opportunity to use the facility under private management. In fact, there has been an increase in the use of that facility.
Mr. Max Madden rose—
Mr. Moynihan: I want to finish answering my hon. Friend first, and then I shall give way.
Most importantly, in response to concerns about pricing in this facility, under the new management entrance prices have risen by only 6·5 per cent., whereas in previous years under local authority management they were increasing by an average of 10 per cent.
Mr. Madden: Having commented on Westminster, will the Minister comment on developments in Bradford over the past year? When there has been bidding for services, groups of senior council officers have proposed setting up private companies to put in bids for services on the basis of confidential information that they have received as council officers. Does the Minister welcome that sort of development, which seems to raise a number of important ethical issues to do with the conduct of a public service?
Mr. Moynihan: In the implementation of this order it is vital that the detail in the contracts be as comprehensive and clear as possible, and that local authorities ascertain and ensure that no individual gains an advantage because of his knowledge of what is not in the contract. Uncompetitive practices of that sort must of course be frowned upon. When local authorities draw up contracts under this order, it is vital that they make all the information available clearly to all parties who may want to compete for the contract, be they direct labour organisations, people who used to work for the council, or private sector management teams.
Mr. Conal Gregory: In view of the importance of competitive tendering, will my hon. Friend share with us his thoughts on the point made by the hon. Member for Bradford, West (Mr. Madden)? Competitive tenders of this sort should not go to council officials, as there will be no independent audit. Not very surprisingly, organisations can then mysteriously tender for an item at less than a certain figure.
Will my hon. Friend consider sending these bids to the district auditor, who is entirely independent, not to council officials who are entirely dependent on the political will of the party in power?
Mr. Moynihan: I agree that conflicts of interest should be avoided—that applies as much to people working in local authorities as to others bidding under the tendering documentation outlined in the order—
Mr. Alan Meale rose
Mr. Geoffrey Lofthouse rose—
Mr. Moynihan: When I have made more progress, shall be happy to give way.
Hon. Members will be aware that there have been two rounds of public consultation. The first was in 1987, when the Government set out proposals to extend competition
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to sports and leisure facilities. The second period of consultation was at the end of 1988, when the Department of the Environment issued the first draft of the order. Seventy-four organisations and individuals commented on the draft order. Ministers in this Department and in the Welsh Office and Scottish Office have given careful consideration to all the responses which we received.
Four main issues emerged: first, the question of which facilities are to be subject to competition; secondly, the circumstances in which facilities would be exempted; thirdly, the activities which should be included in the managing function; and, fourthly, the implementation timetable.
Mr. Lofthouse: Will the Minister assure me that the league clubs with grounds at Featherstone, Castleford and Wakefield which were recently purchased and are now owned by the local authority will not be affected by this order?
Mr. Moynihan: I am happy to have this opportunity to clarify the position. We are talking about the management functions of local authority sports and leisure facilities, not about their ownership. Where private sector managers already exist in clubs, whether professional or amateur, those arrangements will continue. In this case, it is not the ownership that leads to a difference in moving towards privatisation. Where the management team is currently from the local authority, the order becomes relevant. I have been privileged to see many northern local authority rugby league clubs in which the management is already seconded. It is leased to individual sporting clubs. Where such leases apply, as in many professional football clubs, the competitive order does not apply.
Mr. Harry Barnes: It is said that consultations took place with representatives of local government where such consultations appeared appropriate. The Minister has said that there have been 74 replies. This year alone district councils have received 30 consultative documents from the Department of the Environment to which they have been asked to respond. Those councils are overworked, which means that proper consultations and responses do not take place. Did proper reponses occur in this case and were there facilities for correct consultations? Is the Department going through an exercise by sending documents to local authorities and not providing a real chance to consider them? If there was no chance to give firm consideration, would the Department take account of representations?
Mr. Moynihan: The round of consultations has proved to be an extremely important exercise. As the hon. Gentleman will recall, the House has debated competitive tendering before. One of the matters that emerged from consultation with some of those consulted concerned the whole question of pricing. The local authorities that responded expressed great concern about the possibility of pricing being vested in the new management teams from the private sector. We listened to those anxieties because we were concerned, as were Opposition Members at that time, that that could lead to new management teams pricing out of the local authority sporting and leisure facilities specific groups of local people, disadvantaged groups and others who were not able to pay the going rate for, perhaps, a neighbourhood private club.

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That led to the Government responding to the first draft order and to the consultations from which we have had responses from local authorities and governing and national bodies. We sought to vest the pricing decisions with the local authority when drawing up the tender documentation. That was one example of the Government amending the legislation in the light of the consultation exercise. That exercise did not take place over six or nine months: it has now been in place for over two years. That shows the importance that we rightly attach to consultation.
Mr. Meale: My hon. Friend for the Member Pontefract and Castleford (Mr. Lofthouse) asked the Minister about clubs that were in existence and their management servicing. The new paragraph to the schedule talks about courses for horse racing. The Minister knows that three race courses in Britain are owned and controlled by local authorities: Worcester, Yarmouth and Doncaster. Doncaster is granted by royal charter. Because of the relationship of the Jockey Club to that course, there is a limited list of personnel who can be recruited to the course, and that list is provided by the Jockey Club. There is a limit on the people who can even be shortlisted for jobs. Will the Minister give to those three race courses and in particular to Doncaster the same guarantee that he gave my hon. Friend the Member for Pontefract and Castleford in relation to rugby clubs? Doncaster race course, which enjoys the royal prerogative, does not cost the ratepayers a penny but earns many hundreds of thousands of pounds. Surely he will give the guarantee that I ask for.
Mr. Moynihan: The hon. Gentleman's point is not relevant to the debate. It is relevant not to the management of the facility but to the decisions that the local authority has taken in relation to its ownership and the criteria under which the race course is managed. As a result, provided that the tender documentation is not anti-competitive, it will be possible to include details that outline the very high standards required. That will be a matter for the local authorities concerned, both with race courses and with other facilities. There is nothing to stop local authorities, in determining the high standards that they require for management, outlining that sufficiently high standards should be obtained by the management team when, for example, contracting out the teaching of swimming. The governing bodies can have a positive and important role to play just as much in the Amateur Swimming Association as in the Jockey Club.
On the question of the managing function, a number of those who responded to the document were concerned that the definition of "management" in the first draft order precluded coaching, instruction and supervision by anyone other than the new management team—
Several Hon. Members rose—
Mr. Moynihan: I shall not give way. Many hon. Members wish to speak and there is only one and a half hours for debate.
I understand the concern expressed, and the order has been amended so that the new management team can, if it wishes, arrange for coaching, instruction and supervision along the lines that I have outlined. That will allow it to bring in local coaches or trainers if it wishes.
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Under the terms of the 1988 Act, the implementation timetable is not specified in the order but will be included in a separate order that is subject to negative resolution. Hon. Members may be aware that we postponed the original implementation date by one year to January 1992 to avoid cutting across the timetable of competition for other services under the Local Government Act 1988. As a result of that—
Mr. Michael Colvin rose—
Mr. Moynihan: I hope that my hon. Friend will forgive me, but, having refused to give way to Opposition Members, it would be unreasonable of me to give way. I am sure that my hon. Friend will wish to contribute to the debate. I apologise to him.
To spread the work load of the councils in preparing tenders and also that of the contractors, we propose to phase in implementation on a percentage basis. Thus, all authorities in England and Scotland will be required to have exposed to competition facilities representing 35 per cent. of their gross expenditure by 1 January 1992, 70 per cent. by 1 August 1992 and 100 per cent. by 1 January 1993. In Wales, competition will be phased in over a two-year period. The detailed interpretation of the order will be for local authorities themselves. It must be for individual authorities to make sensible judgments about, for example, the facilities that will or will not be exempt within the terms of the order.
To assist the Department of the Environment, the Scottish and Welsh Offices will prepare for publication during the first half of next year circulars giving guidance on a number of issues. They will offer general guidance, and local authorities will continue to have a close interest in the running of facilities, even if the contract is awarded to a private sector firm. In addition to retaining control of pricing and admissions policy, they will be responsible for drawing up the tender specifications.
As I hope I have made clear, this order is about improving the management of sports and leisure facilities. It is about securing better value for money and heightening local government's sensitivity to local sporting needs. I believe that everyone will benefit—the local councils, the ratepayers and the users of the facilities. I commend the order to the House.
10.48 pm
Mr. Bryan Gould: This order takes a bad idea, gives it a new lease of life and then lets it loose where it can do most damage. It applies the idea of compulsory competitive tendering to an area—the management of local authority sports and leisure facilities—where it is certain to create the maximum disruption and disbenefit for the least possible gain.
The best evidence for that is the somewhat defensive tone adopted by the Minister when seeking the approval of the House for the order. He well knows that, from the outset, this proposal has been profoundly unpopular with all those whom it will affect. He knows that not a single sports or leisure body has approved of or supported this proposal in principle. They well understood how damaging it would be to the availability of these facilities to the wider community, to the principles of Sport for All, which hitherto has enjoyed bipartisan support, and, in many important instances, to the achievement of

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excellence in sport, as it is to local authority-run facilities that so many top sportsmen and women turn when they need to train at non-commercial hours.
Mr. Gregory rose—
Mr. Gould: I hope that the hon. Gentleman will forgive me if I do not give way; I know that many of my hon. Friends wish to speak in this short debate.
The other bodies with which the proposal was deeply unpopular were local authorities themselves. I think that the Minister will confirm that all the local authority associations opposed it in principle, and they have expressed their misgivings.
Mr. Gregory rose—
Mr. Gould: No, I will not give way. I want to speak very briefly.
The local authorities speak from some experience: after all, they have encountered compulsory competitive tendering in other contexts. We have the benefit of a study of such tendering, commissioned by Manchester city council, which reveals that local authorities' direct service organisations have been 80 per cent. successful in securing contracts for which they have tendered. Often, however, the price of winning those contracts—the title of the report is "The Price of Winning"—has been the necessity for cutting staff, reducing wages, making terms of employment worse and lowering standards, while at the same time incurring largely hidden but nevertheless real costs, estimated at £41 million for the country as a whole. Those have been the costs of preparing and administering the often unnecessary chore of implementing compulsory tendering.
Mr. Robert G. Hughes rose—
Mr. Gould: No, I have already made it clear that I am not giving way.
All those costs have been for the sake of savings that are much lower than forecast. [Interruption.] The Minister spoke for nearly half an hour; I do not intend to emulate him.
Some local authorities have already tried putting out to tender the administration and management of their facilities. We have been given some instances: my right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell) mentioned them when the Minister made his statement in July. Wandsworth came a terrible cropper in the management of its swimming pool; Chelmsford, having entered into a new contract for the management of its pool, found that within three months that contract had come to a sad end. Torbay entered into a ground-maintenance contract that lasted an even shorter time—just 10 days.
Mr. John Carlisle rose—
Mr. Gould: As I have said, I will not give way, because I want to give my hon. Friends a chance to speak. [Interruption.] I know that the Minister gave way, but he spoke for half an hour. I do not intend to do that.
Mr. Harry Greenway: On a point of order, Mr. Deputy Speaker.
Mr. Gould: There is no point of order.
Mr. Greenway: On a point of order, Mr. Deputy Speaker. Is it not part of the spirit of our debates that
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Front-Bench speakers give way at least once, and sometimes two or three times? The Minister did; why does not the hon. Gentleman?
Mr. Deputy Speaker (Sir Paul Dean): That is a matter for the hon. Member who has the Floor.
Mr. Gould: Thank you, Mr. Deputy Speaker. I know that it is very unpleasant and uncomfortable for Conservative Members to hear a stream of common sense without being able to respond, but they will have their opportunities later.
It is little wonder, in the light of local authorities' experience of being forced to put the administration of their services out to competitive tendering, that they evince so little enthusiasm and support for the proposals; for the proposals concern arrangements that are widely acknowledged to be working very well. How will it help the communities that authorities serve to substitute for that principle of service the search for profit maximisation? How will private profit-takers meet the demands, interests and needs of the disadvantaged groups whom the Minister has mentioned—something that the local authorities have already done very successfully?
I listened carefully to what the Minister said in that regard. He emphasised that pricing, admission policies and opening hours will be fixed by local authorities and included in the tender documents. That is extremely welcome, although it has to be said that the only pricing freedom that local authorities will have will be to fix and pay subsidies in relation to prices set by private contractors.
If the Minister is inviting us to place such reliance on the freedom that he says local authorities will enjoy, why do we have to wait for a circular that has yet to be published? Why has the draft order been introduced before the circular has been published? He has promised that it will be published next year. Much more important, why shall we have to rely on a circular? Why is that provision not in the draft order? I hope that the Minister will answer those questions. If that important provision is so central to the Government's defence of what is otherwise indefensible, why is it not given legislative effect? We demand that it should have legislative effect; otherwise, the provisions of section 7(7) of the Local Government Act 1988 will limit any discretion that local authorities may believe that the Minister's pronouncement gives them.
There are other major concerns. They include health and safety. Why does the order not provide that contractors should be required to adopt staff training programmes so that health and safety standards are met, particularly by managers of swimming baths? Why does the order abandon the original timetable and speed it up very considerably for some local authorities? For many local authorities, the already unnecessary and burdensome expense of preparing for the tendering procedure will be very much exacerbated by having to introduce it much earlier than they had anticipated.
Local authorities will now be required to parcel up their management contracts into neat little groups. That will make it very difficult for them to move their staff from one project to another, particularly if they are engaged in organising large projects. For example, Sheffield is now organising the world student games. Local authorities will be unable to move staff in an emergency to large projects. Why are they to be saddled with a system that will benefit

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and is intended only to benefit private contractors? To parcel up the work means that private contractors will be able to pick and choose and to cream off the bits that they think are the most profitable.
Mr. Colvin: Will the hon. Gentleman give way?
Mr. Gould: No. I have already said that I do not intend to give way. I am surprised that the hon. Gentleman should even try to intervene.
Does the Minister not understand that the measure means that local authorities will lose control and responsibility, in many instances, for the management of these facilities but that they will still retain the onerous responsibility of repair and maintenance and will still be faced with demands to invest in new facilities? The draft order makes it highly unlikely that local authorities will risk putting their own capital into important facilities over which they will have little control. Has the Minister considered the impact of this ill-thought-out measure on the future provision by local authorities of sports and leisure facilities that he has described as an extremely valuable element in the life of many communities?
This ill-thought-out measure owes its origin to dogma and it has been driven by dogma ever since. It is a triumph of ideology over common sense and practicality. Nobody wants it; it has no friends. The Government reveal by pushing it forward that they are operating at the far reaches of their own dogma.
If the public had ever been asked what a Government enjoying a 100-seat majority and with two and a half years to run should do to improve the state of Britain, not one person in 100,000 would have replied, "Privatise the management of the local swimming pool." This is one more example of a Government who are out of touch with the British people, so we shall oppose the proposal tonight.
10.59 pm
Mr. Richard Tracey: The House has been treated to an extraordinary performance by the Opposition tonight. The Labour party has fielded its key Front-Bench spokesman on the environment. I do not know whether it was an attempt to prove to us that he was well versed in all aspects of the environment. He has actually shown us that he knows extraordinarily little about this matter, to the degree of not even accepting any interventions. On future occasions when the Opposition are debating sport, they should perhaps bring out again that old warhorse the right hon. Member for Birmingham, Small Heath (Mr. Howell), who might have taken the odd intervention and might have enlightened us more.
Mr. Nicholas Winterton: Does my hon. Friend, with his considerable experience of sport and his previous portfolio as Minister with special responsibility for sport, agree that the Government's action is something of an insult to Conservative-controlled authorities that run their sporting facilities extremely efficiently and with a management who are probably second to none? I refer to my own authority of Macclesfield and the chief amenities and recreation officer, Max Hartley, who is an outstanding man. In Macclesfield, the leisure centre has contracted out many services, such as catering. Does my hon. Friend believe that local government is unable to manage
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efficiently in accordance with the philosophy of the present Government? If he believes that it is incapable, I can say only that I disagree with him.
Mr. Tracey: I was happy to take that intervention. I do not disagree at all with my hon. Friend the Member for Macclesfield (Mr. Winterton). The point behind the principle of putting local government services out to tender is to bring forward the most cost-effective and efficient method of doing the job. It is conceivable, as has been proved on a number of occasions, that, when asked to look at its own operation and to consider whether it is truly as efficient as it should be, the local authority comes up with the most remarkable methods of improving its efficiency. I look forward to many more examples.
In the past year or so, since tendering was first introduced into the argument by the Government, we have seen the most amazing synthetic indignation from the Opposition parties. I suspect that far more of it has been spurred on by their close affiliation with the National and Local Government Officers Association than by any real regard for the interests of sporting facilities.
There is no reason why this measure should not deeply improve the facilities of sports centres, and there are many examples that already prove that. Pricing policies have been set by the local authority and the prices have not gone through the roof, as the right hon. Member for Small Heath and many of his hon. Friends have so often warned would happen.
My hon. Friend the Minister for Sport gave the example of Westminster, and a very good example it is. The same will happen throughout the country. Far from sportsmen and women and sports clubs opposing the measure, they will welcome it once they realise that professional management—either by private companies or by local authorities that have had their costs driven down—is very much in their interests.
Once again we have had a synthetic show of indignation from the Opposition. It was quite meaningless, however, and once they see the results that the order will have, they too will welcome it.
11.5 pm
Mr. Tom Pendry: When the Local Government Act 1988 was first introduced, it was clear that the privatisation of sports and leisure facilities would be omitted. That was due to the strength of opinion against it, and many Opposition Members thought that that was a pretty good idea. Having been obliged to consult the interested parties, the Government have blithely ignored their fears and worries and pressed ahead with the draft order even though the majority of local authorities and sporting organisations are against it.
Despite their objections, local authorities will now be compelled to put the running of their sports and leisure facilities out to tender, regardless of the detrimental effect that that will have on their efforts to involve more local people in sport and recreation. Cheap prices and concessions for the elderly, unemployed and disabled will be disregarded by the private sector in its drive for more profit.
The Government have blatantly ignored the views of those whom they consulted. Nowhere is that more obvious than in the timetable for the implementation of compulsory competitive tendering. Sports associations and local councils urged a cautious approach involving the

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phasing-in of CCT to allow those involved later to learn from the experience of the councils that first operated the procedure. The new timetable requiring all local authorities in England and Wales to have implemented the CCT procedure 100 per cent. by January 1993 is both impractical and unworkable. It will create intolerable pressure for some local authorities, including my own local authority in Tameside, with the draft order bringing the tender date forward by a whole year.
The contract has also been designed in such a way that escalating costs of administration—in combination with the new timetable—will defeat the very object of the tendering exercise. Pressure of time will adversely affect the safety of sports and leisure facilities such as swimming baths, as health and safety specifications must be comprehensive to protect the consumer.
Mr. Allen McKay: Will my hon. Friend give way?
Mr. Pendry: May I continue, because I know that other hon. Members wish to speak. I am sure that my hon. Friend will catch your eye, Mr. Deputy Speaker.
The situation is reaching crisis point, largely because of the legislation that the Government are introducing. I could list many examples of the concerns felt by sports people and sports organisations. Instead, let me give one. I recently attended a forum at which many teachers expressed concern about the way in which physical education is being threatened as a result of the introduction of the national curriculum. It is almost certain that, because of the pressure of time, physical education will lose out to other worthwhile subjects such as maths and science at a time when the situation, especially in primary schools, is becoming critical. It seems ironic that the current disposal rate of so-called surplus playing fields—800 were up for grabs last year—even in inner-city areas so desperately short of open spaces means that soon no fields will be available, even for private management to exploit.
It is therefore clear that the order is yet another half-baked measure of a type that is becoming characteristic of the Department of the Environment. It was a vain hope on the part of many of my colleagues and 1 that the new Secretary of State would have a clearer understanding of the problems of sport, but no such luck. He should have listened to the views expressed following the Green Paper exercise when 95 per cent. of those consulted rejected the Government's whole approach.
My hon. Friend the Member for Dagenham (Mr. Gould) referred to the third volume of the contractors' audit commissioned by Manchester city council entitled "The Price of Winning" which was published last week. It shows how unlikely it is that hundreds of companies will eagerly queue up to take over the 1,500 sports halls, 1,000 swimming pools, 250,000 soccer pitches, 100,000 cricket pitches, golf courses, tennis courts and parachute centres that are up for grabs.
History tells us that when sports facilities are privatised the outcome can hardly be considered an unqualified success. Reference has been made to Wandsworth. That jewel in the Government's crown, that pioneer of privatisation, tried to put the Latchmere centre pools out to tender in 1983, but not one bid was received. The Sobell centre in Islington was brought into the public sector by
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the council because, even with subsidies of £250,000, the trust established to run it, involving firms such as Mecca, could not make the centre pay.
Some people in sport have said that within five years we will see little difference between the good management in the public sector and that in the private sector. A more likely scenario would be a repeat of what has happened to other privatised council services. Last week's audit study found that the lower paid suffer. Where CCT has been introduced, 90 per cent. of the 1,400 jobs lost were manual jobs and 70 per cent. of those jobs were filled by women at very low wages.
Given that councils will continue to own the sports centres and retain discretionary powers over pricing, the only possible way to make savings for the new private sector managers—who will undoubtedly arrange higher salaries for themselves because that is what has happened over the past few years—will be through cutting wages, cutting staff numbers and lowering safety standards. As a Member sponsored by the National Union of Public Employees, I deprecate any move that makes lower-paid workers earn even lower wages, and I also deprecate the lowering of safety standards. Even if private sector companies bother to bid, how will the companies that win tenders hope to make a profit without cutting pay rates, staffing levels or corners in safety provision?
Much play has been made by the Government—and the Minister did this again today—that local councils will supposedly be able to continue to determine admission prices and opening hours at sports facilities. When the Minister replies, will he comment on the point made by the former Under-Secretary of State, who said that local authorities will be permitted
"to delegate their discretionary charging powers … to contractors who manage sports facilities". [Official Report, 2 March 1989; Vol. 148, c. 283.]
This order will have a serious effect on sports like swimming which is particularly expensive to operate. It is highly significant that many of the failures of CCT have involved swimming pools. There is particular concern among physical education teachers and the Amateur Swimming Association that in future children will have less opportunity to learn to swim under supervision. Even without this legislation, it is a sad fact that one in five men and one in three women cannot swim, and on average 800 people are drowned every year.
We have already heard about Westminster. The Otter swimming club in Westminster is one of the country's most consistently successful clubs, but it has lost three subsidised hours of swimming a week because prices for pool hire have risen. In my constituency, the Hyde Seal amateur swimming club, which was once the world champion club, is alarmed by the threat that this order poses for the sport. Organisations representing disadvantaged groups such as the disabled have expressed strong fears. Those who need encouragement to pursue sport and leisure activities—that includes the disabled—are certainly not at the forefront of the Government's thinking.
The goal of achieving high quality and widely accessible services will be replaced by the need to meet financial targets. In short, the Government should realise that private contractors cannot compete with local authorities in developing certain management facilities. Local authorities have much more intimate knowledge of local needs and conditions. The private sector, motivated by profit or by cost-effectiveness, is unlikely to have the same

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positive approach to encouraging mass participation through subsidisation. If the Government genuinely believe in a sport-for-all policy, they must withdraw this nonsensical order. More and more sportsmen and women are asking, "What have the Government got against sport and recreation?"
The Government's sports policy—if that is not a contradiction in terms—is completely bankrupt. The order is just another example of the way in which they are discriminating against sporting activity in this country. It is desperately sad that the Government seem unable to grasp the fact that sport is of immense benefit to our society and an integral factor in improving the quality of life.
11.15 pm
Mr. John Carlisle: I promised the hon. Member for Stalybridge and Hyde (Mr. Pendry) that, if he caught your eye tonight, Mr. Deputy Speaker, I would say nice things about him because of my savage attack on him during the debate on the Football Spectators Bill. After the nonsense that hon. Members have heard, I must desist from the accolades I was about to pay him. At least we heard some words of knowledge from him about sport, which is rather more than I can say about his hon. Friend the Member for Dagenham (Mr. Gould).
The hon. Member for Stalybridge and Hyde said that this is a privatisation matter. That is nonsense. Some Conservative Members almost wish that it were. Many of us would like most sports centres and facilities to be taken out of local authority hands and sold to the private sector, which would be of immense benefit. However, that is not what the order states. It states that the facilities are not for sale. The motion merely asks the House to approve the order, which says to the ratepayers of this country that we believe that sports centres and leisure facilities should be considered in terms of the money that they are spending—taxpayers' money—to make absolutely certain that that money is spent correctly and wisely.
Mr. Peter L. Pike: Will the hon. Gentleman give way?
Mr. Carlisle: I will not give way because there is not much time left.
As my hon. Friend the Member for Surbiton (Mr. Tracey) has said, the siren voices among the Opposition have no concern for ratepayers' money. They think that there is a bottomless pit and they will not even consider sports facilities in terms of their management capability and the opportunities that they offer. It is nonsense for the Opposition to say that the order excludes any form of public benefit. Many examples could be given—they can be given if need be, but it would take until tomorrow morning to do so—of facilities that have had private input. They have brought immense benefit to those who genuinely believe in and want to participate in sport. The benefit has been afforded not only to participants but to hard-pressed ratepayers.
Of course, Opposition Members do not worry. about ratepayers. They exclude them from the debate. Opposition Members say that the order will exclude the disabled and those in our society who are most disadvantaged. Again that is nonsense. The order gives
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councils, so beloved by Opposition Members, the opportunity to say to those who manage their facilities—I sincerely hope that many private firms will manage facilities—"We still want an input. We still want to give some subsidy to make sure that those very people are given opportunities."
That is the tragedy of the speech by the hon. Member for Dagenham. He came fresh into the debate, advised as he was at the very last minute by the right hon. Member for Birmingham, Small Heath (Mr. Howell) for whom Conservative Members have great affection because he knows what he is talking about. Sadly, he may not catch your eye, Mr. Deputy Speaker. The hon. Member for Dagenham did not understand the order, but that is no surprise in one who has so suddenly come on to the scene.
Mr. Colvin rose—
Mr. Carlisle: I willingly give way to my hon. Friend.
Hon. Members: "Oh."
Mr. Colvin: I am most grateful to my hon. Friend for giving way, because I must spring to the defence of the hon. Member for Dagenham (Mr. Gould). 1 thought that he made the case convincingly for greater flexibility in the provision of the services for which local government currently tenders, but surely, the one way to obtain the flexibility that he wants is to put these services out to tender?
Mr. Carlisle: Of course it is. My hon. Friend is absolutely right, but I am afraid that the hon. Member for Dagenham was obviously so new to it tonight that he did not understand the full implications of the two years' discussion.
The order will bring a sharper perspective to the management of leisure and sports facilities. It will also bring vast opportunities to those young people who are training now and attempting to enter sports facility management but who are currently unable to find any opportunities. If the private sector is allowed in, as I believe and hope that it will be—although many town halls will obviously try to frustrate that—it will enable a complete new career structure to emerge. The Audit Commission has said that, in all the other services that have been put out to tender, a saving of 20 per cent. is available, and that will increase the opportunities available to those young people.
Mr. Keith Vaz: May I take the hon. Gentleman away from the aspects of profits and into the aspects of safety? Does he share my concern about some of the terms of the order? Although local authorities will be able to set the programme for the safety aspects of sports centres, the order does not make clear the influence that the local authority can exercise over the contractors' ability to comply with health and safety legislation. Does he agree that when costs are cut to make greater profits, safety becomes an issue and the public's safety is put at risk?
Mr. Carlisle: I do not agree with the hon. Gentleman. He must understand that whoever takes on the management of these facilities must remain within the law and the strictures that the Health and Safety Executive imposes upon those leisure facilities. Just because a facility passes into private hands, that does not mean that it becomes outside the law. Opposition Members seem to feel that those who might tender—indeed, people are queueing

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up to tender for these facilities—will have to keep within the rules and the legislation that has been laid down by the House.
But what really grates on the Opposition is that that will bring a new professional approach to leisure and sports facilities. Opposition Members must understand—and in their heart of hearts they must agree—that that does not exist in the majority of sports centres today. Of course there are the exceptions which my hon. Friend the Member for Macclesfield (Mr. Winterton) mentioned in the rather Mad Hatter style that he brings to the House—[HON. MEMBERS: "Oh."] I do not agree with all that he says but in terms of improving the management of those facilities, those in the private sector can bring a breath of fresh air—
Mr. Pike rose—
Mr. Carlisle: No, I cannot give way because I have given way twice already.
The order at last brings the ratepayers of this country—
Mr. Madden: On a point of order, Mr. Deputy Speaker. Do you agree that it is outrageous for the hon. Gentleman to attack the hon. Member for Macclesfield (Mr. Winterton) in his absence in such a way? Is it in order to call into question the sanity of the hon. Member for Macclesfield?
Mr. Deputy Speaker: I have the impression that the hon. Member for Macclesfield (Mr. Winterton) is well able to look after himself.
Mr. Carlisle: My hon. Friend the Member for Macclesfield and myself are the closest personal friends; we have a deep affection for each other and I know that when he reads the Official Report in the morning [Interruption.] Perhaps my hon. Friend has ventured out of the Chamber because he does not want to be embarrassed by the vote at 12 o'clock—I do not know.
In conclusion, Conservative Members find it extraordinary to wonder about exactly what the Opposition are frightened of. They are frightened of another body looking at the facilities that are run by both Labour and Conservative councils and saying to them, "The facility that you are offering your ratepayers could be improved." Of course, "improvement" is not a word that the Opposition like. It is the availability—
Mr. Allen McKay rose—
Mr. Carlisle: No, I cannot give way.
The order presents an opportunity for many young people in this country to have new facilities and new opportunities. As has been said, in places such as Basingstoke, which is to privatise, or put into the private sector, its swimming facilities, there will be longer hours and greater variety in the services that are offered. It is that type of variety and opportunity that sticks in the throats of Opposition Members and that is why we support the order.
11.24 pm
Mr. Menzies Campbell: I should like to take this opportunity to raise a point of particular constituency interest before turning to some more general observations. I shall try to he as brief as possible because many hon. Members wish to speak.
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I do not know whether, when the Under-Secretary of State for Scotland, the hon. Member for Stirling (Mr. Forsyth), attended St. Andrews university, he played golf. If he did not, I hope that he is aware that the golf courses there, particularly Old Course, are managed by trustees appointed under the St. Andrews Links Order Confirmation Act 1974. The local authority owns the golf courses but has no part in their management. Indeed, by legislation the House has provided otherwise.
I understand that the order can apply only to what are described as defined authorities which are defined in section 1 of the principal Act. It seems that the order cannot apply to the golf courses at St. Andrews, particularly to Old Course which is of world renown. I observe from the assenting nods of the Minister for Sport and the hon. Member for Stirling that that is the case. In the light of that silent undertaking, which will undoubtedly be repeated verbally when the Under-Secretary replies, I can pass on to more general observations.
The debate has revealed a sharp division in philosophy about the way in which public facilities should be managed. I am most interested in the anxiety of the hon. Member for Luton, North (Mr. Carlisle) to ensure that ratepayers get value for money. If he were to conduct an opinion poll among ratepayers in an area with a substantial number of public sporting facilities, he would find that the vast majority are perfectly satisfied with the management of the facilities. They would undoubtedly regard it as doctrinaire and unnecessary that the policy of privatisation should be applied to such facilities.
In his introduction to the order, the Minister did not promise us one more international sportsman as a result of the order passing into law, or a broadening of the base of the pyramid of participation which is the essential feature of the development of sport and recreation.
Mr. Robert G. Hughes: Will the hon. and learned Gentleman give way?
Mr. Campbell: No, I shall not give way because of the lack of time.
The Minister for Sport should have opposed these measures root and branch. He should not be here signifying his acquiescence to them. His job is to be the sports representative in Government, not the Government representative in sport.
All these proposals have been universally condemned by sporting bodies that know something about the management of facilities. The proposals undermine the national strategy which the Scottish Sports Council is endeavouring to implement in its programme Sport 2000. They are opposed by the Central Council of Physical Recreation. Mr. Peter Lawson recently pointed out that the average deficit on running a swimming pool is £200,000 a year. How is a pool to be run profitably unless one makes some concessions in safety and staffing? The curious legal relationship which will exist between the local authority and the management company may well mean that the local authority will continue to have the legal responsibility for safety, but not the means of discharging it because the management company has been interposed between it and the people who use the facility.
These facilities were built with public money and with a public purpose. They were never designed to be run by management companies in any element of their activities. When did we last hear of private enterprise building a

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track such as the international standard running track at Gateshead which has had such a profound effect on sport and social conditions? How many Olympic swimming pools have been built by private money? Not one.
Mr. David Clelland: The hon. and learned Gentleman has mentioned Gateshead. I would have done so if there had been time and if I had caught your eye, Mr. Deputy Speaker. Gateshead has been successful because staff of all departments can be used when major events are taking place at the stadium. That flexibility will be lost if the order is agreed to. Flexibility is an extremely important factor, and Conservative Members are ignorant of it.
Mr. Campbell: The hon. Gentleman makes a powerful case, and I do not seek to add to it.
The Minister seems not to understand—I speak of track and field athletics, which I profess to know something about—that the majority of the fine atheletes who represent the United Kingdom in such events as the European cup enjoy their first taste of sport at public facilities which are provided by public funds. Their Olympic aspirations, unlike the Minister's and my own, were not nurtured in the cloisters of universities. The days of Corinthian sportsmen have long since gone. Public facilities make the most significant of all contributions to sport. The order will do nothing for sportsmen of the next generation, and that is why the Government stand condemned. We shall vote against the order.
11.31 pm
Mr. Terence Higgins: The House will have noticed the remarkable contrast between my hon. Friend the Minister for Sport, who gave way generously to those who wished to intervene, and the hon. Member for Dagenham (Mr. Gould), who did not give way at all. I am not surprised, because my hon. Friend, like myself, is an ex-Olympic athlete and is not worried about competition.
I wish to make a brief constituency contribition on timing, and I hope that my hon. Friend the Minister will clarify the matter for me. He will know from the strong representations which I have made on behalf of my constituents that Worthing is to host the world bowls championships and that it is anxious that there should be appropriate preparations to ensure that the greens are of an exceptionally high standard. That being so, the timing of the implementation of the order is important. A change of management ahead of the championships would create a considerable problem. I am sure that my hon. Friend will agree that it is important that the facilities at an international event should be of the highest possible standard.
I understand that the order will accommodate the representation that I am making and that the existing management will be able to proceed to prepare facilities for the world bowls championships without interruption.
Mr. Moynihan: I can assure my right hon. Friend that his understanding is correct.
Mr. Higgins: The lady in the crowd used to say, "Whatever happens don't shoot Santa Claus, and don't go on talking." I express my thanks to my hon. Friend and resume my place.
11.33 pm
Mr. Alun Michael: It must be made clear that local authorities in Wales and throughout Britain are appalled by the scale of the task that will face them, and that is what the Minister seems to have disregarded. A heavy burden will be placed on local authorities by the inefficiency and the cost penalty for local services that the Government are introducing. The timescale for the introduction of the measure is worrying when we consider the leisure centres, pools, bowling greens and other facilities that will be involved. The proposals are predictable and contain nothing that is new. The Government have listened to no one and they have learnt nothing.
I can say on behalf of Welsh Members that the measure is rejected wholeheartedly in Wales, where local authorities recognise the manpower burden that is being imposed on them by a political party whose record of providing sports and leisure facilities has been appalling. Why has the Secretary of State for Wales been so silent? Why has he allowed this piece of dogma to be imposed on Wales? I do not wish it to be imposed on England or Scotland either, but in Wales there are many local councils that have spent years trying to provide decent facilities for their communities, and there is no reason for this piece of inefficiency to be imposed upon them.
The Minister tried to say that the order was not about preventing sports and leisure facilities from being provided in future, but that was meaningless in view of the straitjacket that is being placed on local authorities. Cardiff city council has received a 65 per cent. cut in capital money for the coming financial year. Most of the minuscule remainder will have to go to housing, where there is a desperate need. That proves that the Government are determined to undermine sports and leisure facilities as facilities for the communities.
Local authorities in Wales have long sought to provide decent facilities for their communities. Neither the Conservative party nor its masters in the private sector did anything to provide decent facilities. For example, in 1973 Cardiff had no leisure centre. Now we are close to having a pattern which can serve the whole city. Slowed down by occasional aberrations of Tory administrations, Labour has created the pattern, communities have benefited and the centres are generally respected and valued. They should not be messed up by this measure, which introduces another tier of wasteful administration into local government.
Why do this dogmatic and blinkered Government have to interfere and thrust their partisan views down local councillors' throats? If the Government are right and the measure will introduce efficiency, why do they have to dictate to local authorities and force the order down their throats? Local councillors know what their local communities need and want, and have provided it. One Conservative Member who left the debate early said that the order was pure political diktat. The Minister should keep his nose out and leave local authorities to provide what their communities want and need.
11.37 pm
Mr. Robert G. Hughes: What we have heard from Opposition Members tonight makes it abundantly clear that the Labour party is interested only in who runs sports facilities, not what goes on inside them.

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It is not interested in how much they are used, how good they are or in seeing them improved. Those interests are held only by Conservative Members, not Opposition Members.
The hon. and learned Member for Fife, North-East (Mr. Campbell) said that the philosophy of the measure is wrong and the Government should never have conceived it in this way. I do not know what the outcome was when Chelmsford council put its facilities out to private tender. However, that council is run by the hon. and learned Members' party and if the philosophy is wrong and something of which the Government should be ashamed, why did he not at least admit what had been done by councils run by his own party? Perhaps he does not even know about that.
Mr. Martin Flannery: They were wrong.
Mr. Hughes: Now we are told that those councils were wrong. The hon. and learned Member for Fife, North-East merely gave a political view which was humbug, as he knows. The measure will lead to the use of more imagination.
Mr. Clelland rose—
Mr. Hughes: I certainly shall not give way to the hon. Gentleman. No one would give way to me.
This country's leisure industry is growing in private hands. Imagination and flair are being shown and new opportunities are being brought to young people in many areas.
The Opposition's argument has been dominated by the idea that the measure will put safety standards at risk. Private industries are concerned that their own high standards— including their methodical approach to safety and the way they train their staff are frequently being lowered by local authorities. In some cases, local authorities run facilities without trained staff and operate complicated leisure machinery without ensuring that the people using it know how unsafe it is. There are many incidences of that. Standards are higher in the private sector.
Mr. Allen McKay: On a point of order, Mr. Deputy Speaker. Is it right for an hon. Member who is protected by the House to slander local authorities and say that their leisure centres are short of staff and dangerous? Does not the hon. Member for Harrow, West (Mr. Hughes) know that they are run by professional people, not the local authorities?
Mr. Deputy Speaker: That is a matter for debate.
Mr. Hughes: Opposition Members should listen to this, because any accidents would be on their consciences. [Interruption.] I intend to name a local authority to illustrate my point. Leisure facilities at the Glasgow garden festival, run by the Glasgow local authority, were operated by local authority staff who, in the opinion of many people in the private sector, had not been trained to use them. They did not know what they were doing, and it is the opinion of many safety experts that it was only a matter of luck that an accident was avoided.
We heard an important announcement from the hon. Member for Dagenham (Mr. Gould). He said that councils are unlikely to build new facilities if the order is passed. I believe that he was expressing the Labour party's
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view which is, "If you do not allow us to manage and operate these facilities, we will take our hat and ball home and we will not build any new ones." That is not our view. Many Conservative authorities will use this opportunity and the money generated to ensure that they increase the number of facilities in their area.
The order is welcome in my local authority. People will recognise it for what it is—an opportunity to provide better facilities for the people who want to use them.
11.41 pm
Mr. Brian Wilson: We have just heard an appropriately squalid little speech to match a squalid little measure. Glasgow district council needs no lessons from wee boys from Harrow about how to run its leisure facilities. We will pursue that matter again.
The Minister has attracted an unusual number of soubriquets in his short career. Perhaps after this he will go down in Thatcherite mythology as the man who tried to privatise putting greens. The only argument we have heard in support of the measure is based on the incompetence of Westminster city council, which apparently could not open its leisure facilities before 8 am.
This is a doctrinaire measure which will be supported in the Lobby by people who know nothing of sport and who care even less. they certainly cannot aspire to the vision of the hon. and learned Member for Fife, North-East (Mr. Campbell) who realises that sport can change people's lives. Access to facilities in many areas of the country provides an opportunity for young people to achieve and to aspire to a world outside. All that which has been built up by local authorities in this direction is to be put at risk, in the interest of private profit.
We have nothing against the private sector. There are many opportunities open to the private sector in leisure and recreation. The report "Sport 2000" published by the Scottish Sports Council listed what sports facilities are needed. By the year 2000 we need in Scotland alone 210 new centres, 44 new swimming pools, 25 new ice halls, 400 new tennis courts and 13 new track and field facilities. That would provide plenty of opportunities for the private sector to contribute. However, it will contribute nothing. It is at present closing down ice rinks and private sports centres. All that the private sector has to offer in response to the great need that exists for better sports and leisure facilities throughout the country is to act as a parasite upon that which has already been created by public enterprise.
Conservative Members do not understand; they can think only in terms of bricks and mortar combined with commercial services. The Magnum leisure facility in Irvine, which serves my constituency, is open from 5 am to 3 the following morning and is used by 1 million people a year. It is a wonderful public enterprise, and to separate the bricks and mortar from the management functions and social commitment of the people who run it is a fantasy that only Conservative Members could entertain. The centre is an integrated unit, and as soon as anyone tries to split it, the philosophy that brought it into being in the first place and has sustained it, is destroyed.
Let us see what those who understand and care for the arguments about how facilities are run have to say. The Amateur Swimming Association says:

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"we … do not relish the prospect of being at the mercy of operators intent on achieving financial targets, at the expense of facilities available to the sport or indeed as a service to the community at large."
It understands. The All England Netball Association:
"It will be exceedingly difficult to retain the philanthropic aims of the local authority centres with a commercial operator standing to reap the rewards of a more commercial approach."
It understands. These organisations understand that one cannot separate the facility from the service provided in it—
Sir Nicholas Bonsor rose—
Mr. Wilson: The hon. Gentleman has not been here for most of the debate, and I have little time left.
If the local authority is committed to its social remit and the commercial operator to his profit motive, friction is caused in what should be a big happy family serving the community. The clash of interests leads to a diminution of the purpose for which the centre was created.
The definition of management function in the order poses far more questions than it answers. Instruction and supervision, we are told, are to be part of the management function. Would any parent prefer supervision and instruction to be in the hands of the private operator, not those of the local authority? Taking bookings will also be in the hands of the private operator, not of the local authority. That pros des scope for manipulation and the squeezing out of minority interests.
Mr. John Carlisle rose—
Mr. Wilson: This management function does not seem to include outreach to the community. Who is to be responsible for the outreach that has brought in so many disadvantaged groups to the sports centres? Will the local authority continue to pick up that tab if that whole edifice is not to collapse?
There is no mention of the training of staff, even of swimming pool staff, in the definition of management function. Is it for the local authority to pick up that tab, or will the training of staff be removed from the responsibilities of those running sports facilities?
We hear so much about privatisation and enterprise from Conservative Members, but it is a pathetic apology for private enterprise when all it can do is to take over existing public enterprises. Conservative Members cannot stomach the fact that so many of the great sports and leisure facilities around Britain, and the vision that underlay them, were provided by the public sector. Meadowbank, the Kelvin hall, Gateshead, and the great municipal golf courses were all provided by public enterprise. When the private sector can match that, it will have something to offer. Instead, it takes over these facilities to commercialise them.
Nothing has worth, according to Conservative Members, unless it has a commercial value. We reject this philosophy. Sport and leisure have much more to offer our society than mere commercial value. This measure is due to take effect in 1992. By then the Government will be out of office, and there will be no more of the sort of squalid rubbish that we are debating tonight.
11.48 pm
The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Forsyth): The hon. Member for Cunninghame, North (Mr. Wilson) made a somewhat scathing attack on my hon. Friend the Member for Harrow, West (Mr. Hughes) and on his knowledge of the leisure and recreation activities of Glasgow district council. Its most recent publicised activity on the leisure side was to entertain the East German Government to celebrate 40 years in power. Perhaps at least on that occasion it was somewhat misguided. My hon. Friend the Minister for Sport might take note of that.
The hon. Member for Cunninghame, North came up with the astonishing assertion that no parent would want instruction to be in the hands of anybody but the local authority. I know that the hon. Gentleman is not an expert on sport. I do not profess to be one, but at least I am aware, as the hon. Gentleman plainly is not, of the splendid work on instruction carried out by the governing bodies. The hon. Gentleman implied that local authorities would be better at it. It seemed to me that the hon. Gentleman has not read the order and in that sense was sharing the fate of the hon. Member for Dagenham (Mr. Gould), who started by asserting that the order was damaging to sport. He made a lengthy speech and refused to take any interventions. At no point did he mention the customer. His speech was all about facilities and local authorities and not once did he talk about sportsmen and sportswomen.
Mr. Gould: That is quite wrong.
Mr. Forsyth: The hon. Gentleman says that I am quite wrong, but I listened carefully to his speech. I will give way to the hon. Gentleman if he wishes to correct me.
Mr. Gould: I am glad to see that the Minister is prepared to spend the minutes that remain to him in that way. If he looks at Hansard tomorrow, he will see that I referred frequently and repeatedly to the importance of making facilities available to the local communities whom local authorities serve. The Minister may not recognise local communities as customers, but we certainly do.
Mr. Forsyth: The hon. Gentleman confirms what I have said. He says he talked about making facilities available. He did not talk about the needs of sportsmen and sportswomen, or about the range of local authority facilities that are run for the convenience of local authority staff with opening hours that are not convenient for members of the public. My hon. Friend the Minister for Sport gave an example of how, in the Queen Mother sports centre, bringing in private enterprise extended opening hours and facilities.
The hon. Member for Dagenham also spoke about the cost of the exercise and completely ignored the Audit Commission's view that savings of 20 per cent. or more could be obtained. He asked how will private profit takers meet the needs of the disadvantaged. The answer is that the needs of the disadvantaged will be determined by local authorities. They will write the contracts and determine the pricing policy and the range of services to be provided. The hon. Gentleman should know that, and should not oppose the measure if he is unaware of it. He also said that local authorities will determine only the subsidy. That is

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not true. As my hon. Friend the Member for Luton, North (Mr. Carlisle) said, local authorities will determine the pricing policy.
Mr. Gould rose—
Mr. Forsyth: The hon. Gentleman would not give way, but I shall give way to him.
Mr. Gould: Where in the order will local authorities find the power to fix prices, admissions, and opening hours?
Mr. Forsyth: If the hon. Gentleman goes to the Library tomorrow and asks for a copy of the Act, I am sure that the staff will give him one. He will find the power in that.
My hon. Friend the Member for Surbiton (Mr. Tracey) said that the whole point of this exercise is to find out who provides the best deal for the customer. Opposition Members who made speeches extolling the virtues of local authorities have nothing to fear. If they are so confident that local authorities are providing the services that the customer wants and the best possible value, what on earth do they have to fear from competition and the order? Opposition Members speak not for the customer or for the sportsmen and sportswomen, but for the National and Local Government Officers Association, which is terrified that the customer will get a better deal and the ratepayer will get bette value for money.
The hon. Member for Stalybridge and Hyde (Mr. Pendry) asserted that local authorities would be able to delegate their charging policy as part of the contract. That is untrue. The hon. Gentleman also asserted that consultation had been of no worth. If he had gone into the matter he would know that part of the consultation and part of our response was to ensure that local authorities will not be able to delegate their charging policies. I hope that we can expect the support of the hon. Gentleman on that matter.
The hon. Gentleman also made the remarkable statement that this Government had done nothing for or to encourage sport. Under this Government the number of people participating in sport has increased by some 6 million.
The hon. and learned Member for Fife, North-East (Mr. Campbell) rightly pointed out that what the hon. Member for Glasgow, Cathcart (Mr. Maxton) said in the Glasgow Herald on 1 December 1989 was a load of nonsense. The hon. Gentleman was concerned that Old Course should not be affected by this order. He, as Member of Parliament for Fife, North-East, is a trustee of the Links Trust that runs Old Course, which is owned by the local authority. The hon. Gentleman said that there was a difference of philosophy, and there certainly is. He is a member of an organisation running a service for a local authority that is providing a service second to none and that he seeks to defend. It is precisely the kind of measure that this order seeks to introduce.
It being one and a half hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 14 (Exempted business).
Question put:—
The House divided: Ayes 205, Noes 159.

Division No. 11]

[11.55 pm

AYES

Aitken, Jonathan

Alison, Rt Hon Michael

Alexander, Richard

Allason, Rupert

438

Amess, David

Greenway, Harry (Ealing N)

Amos, Alan

Greenway, John (Ryedale)

Arbuthnot, James

Gregory, Conal

Arnold, Jacques (Gravesham)

Griffiths, Peter (Portsmouth N)

Arnold, Tom (Hazel Grove)

Grist, Ian

Ashby, David

Hague, William

Atkins, Robert

Hamilton, Neil (Tatton)

Baker, Rt Hon K. (Mole Valley)

Hampson, Dr Keith

Baldry, Tony

Hanley, Jeremy

Banks, Robert (Harrogate)

Hargreaves, A. (B'ham H'll Gr')

Batiste, Spencer

Hargreaves, Ken (Hyndburn)

Bellingham, Henry

Harris, David

Bendall, Vivian

Haselhurst, Alan

Bennett, Nicholas (Pembroke)

Hayward, Robert

Bevan, David Gilroy

Heddle, John

Biffen, Rt Hon John

Higgins, Rt Hon Terence L.

Blaker, Rt Hon Sir Peter

Hordern, Sir Peter

Bonsor, Sir Nicholas

Howarth, Alan (Strat'd-on-A)

Boscawen, Hon Robert

Howarth, G. (Cannock & B'wd)

Boswell, Tim

Howell, Rt Hon David (G'dford)

Bowden, Gerald (Dulwich)

Hughes, Robert G. (Harrow W)

Boyson, Rt Hon Dr Sir Rhodes

Hunt, David (Wirral W)

Braine, Rt Hon Sir Bernard

Hunter, Andrew

Brandon-Bravo, Martin

Irvine, Michael

Brazier, Julian

Jack, Michael

Bright, Graham

Jackson, Robert

Brooke, Rt Hon Peter

Janman, Tim

Brown, Michael (Brigg & Cl't's)

Jones, Gwilym (Cardiff N)

Browne, John (Winchester)

Jopling, Rt Hon Michael

Bruce, Ian (Dorset South)

Key, Robert

Budgen, Nicholas

King, Roger (B'ham N'thfield)

Burns, Simon

King, Rt Hon Tom (Bridgwater)

Burt, Alistair

Knight, Greg (Derby North)

Butcher, John

Lightbown, David

Butler, Chris

Lloyd, Peter (Fareham)

Carlisle, John, (Luton N)

Maclean, David

Carlisle, Kenneth (Lincoln)

McNair-Wilson, Sir Michael

Carrington, Matthew

Mawhinney, Dr Brian

Carttiss, Michael

Miller, Sir Hal

Channon, Rt Hon Paul

Mills, Iain

Chapman, Sydney

Miscampbell, Norman

Chope, Christopher

Mitchell, Andrew (Gedling)

Clark, Hon Alan (Plym'th S'n)

Moate, Roger

Clark, Dr Michael (Rochford)

Morrison, Rt Hon P (Chester)

Clark, Sir W. (Croydon S)

Moss, Malcolm

Colvin, Michael

Moynihan, Hon Colin

Coombs, Anthony (Wyre F'rest)

Mudd, David

Coombs, Simon (Swindon)

Neale, Gerrard

Couchman, James

Nelson, Anthony

Cran, James

Neubert, Michael

Currie, Mrs Edwina

Nicholls, Patrick

Davies, Q. (Stamf'd & Spald'g)

Nicholson, David (Taunton)

Davis, David (Boothferry)

Nicholson, Emma (Devon West)

Douglas-Hamilton, Lord James

Norris, Steve

Dover, Den

Onslow, Rt Hon Cranley

Dunn, Bob

Page, Richard

Durant, Tony

Paice, James

Dykes, Hugh

Patnick, Irvine

Eggar, Tim

Patten, Rt Hon Chris (Bath)

Emery, Sir Peter

Patten, John (Oxford W)

Evennett, David

Pawsey, James

Fairbairn, Sir Nicholas

Peacock, Mrs Elizabeth

Fallon, Michael

Porter, David (Waveney)

Favell, Tony

Portillo, Michael

Field, Barry (Isle of Wight)

Raison, Rt Hon Timothy

Fishburn, John Dudley

Renton, Rt Hon Tim

Fookes, Dame Janet

Rhodes James, Robert

Forman, Nigel

Riddick, Graham

Forsyth, Michael (Stirling)

Ridley, Rt Hon Nicholas

Franks, Cecil

Ridsdale, Sir Julian

French, Douglas

Rowe, Andrew

Gale, Roger

Rumbold, Mrs Angela

Gardiner, George

Ryder, Richard

Garel-Jones, Tristan

Sackville, Hon Tom

Gill, Christopher

Sainsbury, Hon Tim

Goodlad, Alastair

Sayeed, Jonathan

Goodson-Wickes, Dr Charles

Scott, Rt Hon Nicholas

Gorman, Mrs Teresa

Shaw, David (Dover)

Gow, Ian

Shaw, Sir Giles (Pudsey)

Grant, Sir Anthony (CambsSW)

Shaw, Sir Michael (Scarb')

439

Shepherd, Colin (Hereford)

Tracey, Richard

Shersby, Michael

Trippier, David

Skeet, Sir Trevor

Twinn, Dr Ian

Smith, Tim (Beaconsfield)

Vaughan, Sir Gerard

Squire, Robin

Walker, Bill (T'side North)

Stanbrook, Ivor

Wardle, Charles (Bexhill)

Stanley, Rt Hon Sir John

Warren, Kenneth

Stern, Michael

Watts, John

Stevens, Lewis

Wells, Bowen

Stewart, Allan (Eastwood)

Whitney, Ray

Stewart, Andy (Sherwood)

Widdecombe, Ann

Stradling Thomas, Sir John

Wiggin, Jerry

Sumberg, David

Wolfson, Mark

Summerson, Hugo

Wood, Timothy

Taylor, Ian (Esher)

Woodcock, Dr. Mike

Taylor, John M (Solihull)

Yeo, Tim

Taylor, Teddy (S'end E)

Young, Sir George (Acton)

Temple-Morris, Peter

Younger, Rt Hon George

Thompson, D. (Calder Valley)

Thompson, Patrick (Norwich N)

Tellers for the Ayes:

Thornton, Malcolm

Mr. Nicholas Baker and

Thurnham, Peter

Mr. Stephen Dorrell.

Townend, John (Bridlington)

NOES

Abbott, Ms Diane

Ewing, Mrs Margaret (Moray)

Adams, Allen (Paisley N)

Fatchett, Derek

Allen, Graham

Fearn, Ronald

Anderson, Donald

Field, Frank (Birkenhead)

Archer, Rt Hon Peter

Fisher, Mark

Armstrong, Hilary

Flannery, Martin

Ashton, Joe

Foster, Derek

Barnes, Harry (Derbyshire NE)

Foulkes, George

Barron, Kevin

Fraser, John

Battle, John

Fyfe, Maria

Beckett, Margaret

Garrett, John (Norwich South)

Bell, Stuart

George, Bruce

Bennett, A. F. (D'nt'n & R'dish)

Godman, Dr Norman A.

Bermingham, Gerald

Golding, Mrs Llin

Bidwell, Sydney

Gould, Bryan

Blunkett, David

Grant, Bernie (Tottenham)

Boyes, Roland

Griffiths, Nigel (Edinburgh S)

Bradley, Keith

Griffiths, Win (Bridgend)

Bray, Dr Jeremy

Grocott, Bruce

Brown, Gordon (D'mline E)

Harman, Ms Harriet

Brown, Nicholas (Newcastle E)

Haynes, Frank

Brown, Ron (Edinburgh Leith)

Henderson, Doug

Buchan, Norman

Hinchliffe, David

Buckley, George J.

Home Robertson, John

Callaghan, Jim

Howarth, George (Knowsley N)

Campbell, Menzies (File NE)

Howell, Rt Hon D. (S'heath)

Campbell, Ron (Blyth Valley)

Howells, Geraint

Campbell-Savours, D. N.

Howells, Dr. Kim (Pontypridd)

Canavan, Dennis

Hoyle, Doug

Clark, Dr David (S Shields)

Hughes, John (Coventry NE)

Clarke, Tom (Monklands W)

Hughes, Robert (Aberdeen N)

Clay, Bob

Janner, Greville

Clelland, David

Jones, Barry (Alyn & Deeside)

Clwyd, Mrs Ann

Jones, Martyn (Clwyd S W)

Cohen, Harry

Kaufman, Rt Hon Gerald

Cook, Robin (Livingston)

Kennedy, Charles

Corbett, Robin

Lamond, James

Cousins, Jim

Leadbitter, Ted

Crowther, Stan

Livsey, Richard

Cryer, Bob

Lloyd, Tony (Stretford)

Cummings, John

Lofthouse, Geoffrey

Cunningham, Dr John

Loyden, Eddie

Dalyell, Tam

McAllion, John

Darling, Atistair

Macdonald, Calum A.

Davies, Rt Hon Denzil (Llanelli)

McKay, Allen (Barnsley West)

Davies, Ron (Caerphilly)

McLeish, Henry

Davis, Terry (B'ham Hodge H'l)

McWilliam, John

Dewar, Donald

Madden, Max

Dixon, Don

Mahon, Mrs Alice

Dobson, Frank

Marek, Dr John

Duffy, A. E. P.

Marshall, David (Shettleston)

Dunnachie, Jimmy

Maxton, John

Dunwoody, Hon Mrs Gwyneth

Meacher, Michael

Eadie, Alexander

Meale, Alan

Evans, John (St Helens N)

Michael, Alun

440

Michie, Bill (Sheffield Heeley)

Spearing, Nigel

Michie, Mrs Ray (Arg'l & Bute)

Steinberg, Gerry

Morgan, Rhodri

Stott, Roger

Morley, Elliot

Strang, Gavin

Mowlam, Marjorie

Straw, Jack

Murphy, Paul

Taylor, Mrs Ann (Dewsbury)

Nellist, Dave

Turner, Dennis

O'Brien, William

Vaz, Keith

O'Neill, Martin

Wall, Pat

Orme, Rt Hon Stanley

Wallace, James

Patchett, Terry

Walley, Joan

Pendry, Tom

Wardell, Gareth (Gower)

Pike, Peter L.

Wareing, Robert N.

Powell, Ray (Ogmore)

Watson, Mike (Glasgow, C)

Quin, Ms Joyce

Welsh, Michael (Doncaster N)

Radice, Giles

Wigley, Dafydd

Reid, Dr John

Williams, Rt Hon Alan

Robertson, George

Williams, Alan W. (Carm'then)

Rooker, Jeff

Wilson, Brian

Sedgemore, Brian

Winnick, David

Sheerman, Barry

Worthington, Tony

Shore, Rt Hon Peter

Wray, Jimmy

Short, Clare

Young, David (Bolton SE)

Skinner, Dennis

Smith, Andrew (Oxford E)

Tellers for the Noes:

Smith, J. P. (Vale of Glam)

Mr. Frank Cook and

Soley, Clive

Mr. John McFall.

Question accordingly agreed to.
Resolved,
That the draft Local Government Act 1988 (Competition in Sports and Leisure Facilities) Order 1989, which was laid before this House on 25th October, in the last Session of Parliament, be approved.

EUROPEAN COMMUNITY DOCUMENTS
Motion made, and Question put forthwith pursuant to Standing Order No. 102(5). (Standing Committees on European Community documents.)
EUROPEAN COMMUNITY DOCUMENTS

  PUBLIC TAKEOVER BIDS
  That this House takes note of European Community Document No. 5032/89 relating to takeover bids for public companies; and supports the Government's aim of ensuring that a Community regime can be agreed which is compatible with the flexibility and speed necessary for effective regulation of takeovers and with a continuation of the present system of regulation within the United Kingdom.—[Mr. Patnick.]
  Question agreed to.

PETITIONS

  Broadcasting (Deaf People)
  12.7 am
  Mrs. Llin Golding: I beg leave to present a petition on behalf of 450 of my constituents in Newcastle-under-Lyme. They protest that broadcasters are not providing complete access for deaf television viewers by means of subtitles or sign language. They also say that the more than 4 million deaf viewers are entitled to equal access to television programmes.
  Wherefore your petitioners pray that your honourable House will ensure that legislation be passed placing an obligation on television channel operators to make their programmes more accessible to deaf people by using Teletext sub-titles, sign language or other means and to reach complete coverage by a fixed date.
  And your petitioners, as in duty bound, will ever pray.
  To lie on upon the Table.
  12.8 am
  Mr. James Wallace: I, too, like the hon. Member for Newcastle-under-Lyme (Mrs. Golding), beg leave to present a petition that seeks to allow access for deaf people to the broadcasting of our proceedings and to broadcasting generally. It is signed by 253 of my constituents in Orkney and Shetland. It notes that broadcasters are not at the present time providing complete access for deaf television viewers, that there are at least 4 million viewers affected by this and that deaf viewers are equal citizens with the rest of us and deserve to be treated equally.
  The petitioners pray in terms similar to those set out by the hon. Member for Newcastle-under-Lyme. They hope that we shall pass legislation that will oblige television channel operators to make their programmes more accessible to deaf people.
  To lie upon the Table.

Live Animals (Export)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Patnick.]
12.9 am
Dame Janet Fookes: I rise this evening to draw the attention of the House to the plight of animals which are exported abroad for slaughter, either immediately or after further fattening. I am sure that I am not the only hon. Member who was deeply angered by the revelations in The Sunday Times recently, in which Sunday Times reporters, in conjunction with inspectors from the Royal Society for the Prevention of Cruelty to Animals, followed a consignment of sheep. They found that virtually every welfare regulation was flouted and that some of the unfortunate lambs, which had started their journey somewhere in Scotland, ended up in the south of France and some of them in Spain. As one fairly hard-bitten and seasoned RSPCA inspector said: "When you follow them for hour after hour after hour and see the steady deterioration in their condition, it makes your blood boil." It certainly makes my blood boil.
Worse still, I get a sense of frustration because this is not an isolated incident. Incidents such as this have been recorded meticulously by the RSPCA and by other organisations over the years. Some will recall that in the early 1970s, the position was reached where the Government of the day suspended export licences because of the deep worries that were felt about the welfare of animals, which are subject to enough stress in going from fairly quiet farms to markets, to ports, across the Channel and then on to an unknown and probably grim destination, as we all realise.
We still have a long way to go before anything like humane regulations are enforced. It is not enough to have good regulations on paper. They are worth nothing if there is not someone to enforce them and, clearly, that has been sadly lacking over the years.
What is worse is that the export trade of animals on the hoof appears to be booming—worse, that is, from the point of view of welfare. In 1988, well over 750,000 animals were exported in this way. Many of them were young animals, such as lambs and veal calves. If that continues, it is of grave concern to us all. However, the position is unlikely to remain the same. If anything, it could get worse.
I should like to widen my speech to consider 1992, the economic results of which we all speak about in varying ways, and the creation of an area in which there will be no exports, as it were, between member countries because we shall have one single market. Unfortunately, this will also apply to live animals, which are regarded as agricultural goods for this purpose. Many of the safeguards that we have, such as the stipulation that before the animals set out across the Channel they must be rested at a lairage for 10 hours, checked and given food and water, may no longer be able to exist.
That is a matter of grave concern and we shall need to look most carefully at the directive that will then cover the whole of Europe. In theory, that should be a magnificent opportunity to improve the situation for all animals throughout the Community, and therefore we should see a vast improvement. However, when I look at the record to date of how the directives have failed to be implemented, my heart sinks. We may lose what we already have, even if that is not marvellous, and instead

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have safeguards that are there in theory only. I urge the Government to put pressure on their European allies. We seem to be prepared to do it on other matters, so I hope that we will do it in the interests of animal welfare.
I suspect that the public will be outraged at the plight of horses and ponies if they are exported for meat. At the moment, that is not possible because of the minimum value order, which makes it uneconomic for people to export the animals. If that goes, something that was stopped many years ago—the export of animals of precious little value in money terms to the slaughterhouses of Europe—may begin again. I know that many organisations in addition to the RSPCA are especially worried about the matter and I believe that there would be an outcry from members of the public if this trade were to start again. As far as I can gather, we should be on very thin legal ground if we attempted to keep the minimum values order after 1992.
We should try to make the most of the opportunities that are offered. I should like to present to the Government the view of the British Veterinary Association, which has said for many years that animals should be slaughtered as near to the point of production as possible. If that principle, which is practical in the extreme, were introduced throughout Europe, animals would be spared some of the suffering, stress—and, at times, cruelty—that they have to bear as they are transported all over Europe by people who in many instances could not care less. That would be worth having as our goal. Whether our European partners would accept it is a matter for doubt, but it is nevertheless something for which the British Government should ask.
Failing that—as a second best—I suggest that we try to tighten up the draft directive on the welfare of animals in international transit. Above all, we need a proper inspectorate whose job it is to ensure that the rules of welfare are observed. No matter how good the rules are on paper, they will be worth absolutely nothing without that. I do not believe that we should throw away any of our existing legislation until the inspectorate has been set up. I shall not be content with any promises of an inspectorate being set up. I want properly trained inspectors to be there doing the job, especially at transit points—where animals are gathered at ports, where they are moving from one form of transport to another, at the point of disembarkation after a journey and at slaughterhouses.
What is more, we must be very careful about the detailed regulations. We can make a lot of difference by ensuring that the transporters are properly constructed. I am quite sure that we can lay down such rules in detailed directions if the will is there to do it. I hope that Euro-MPs will join hon. Members in Westminster in putting real pressure on the powers that be in Europe to ensure that that is done.
I greatly fear that if we do not ensure that those things are done, the plight of animals will be made worse rather, than better, following 1992. That would be an absolute disaster, and the British people would be outraged. As it is, I frequently receive letters and telephone calls from members of the public, including my constituents, who have seen distressing sights—for example, animals crammed into transporters as they are exported to Europe from my constituency of Plymouth. People write and ask
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why that is allowed. I cannot give them a satisfactory answer. It should not be allowed. When the Minister negotiates on our behalf in considering the draft directives in detail, I beg him to ensure that they are made watertight, because unfortunately that has not been the case in the past.
We should also consider closely the people who drive the animal transporters. So far as I can see at the moment, anyone can drive a transporter provided that he has a driving licence. I do not believe that anyone should be allowed to drive an animal or cattle transporter unless he has been trained in dealing with animals and has shown that he will treat them humanely. We should be able to remove licences because that would be an incentive to ensure that drivers carry out their duties.
The welfare considerations also make good economic sense—as is often the case. Much work has been carried out by veterinary surgeons into the condition of animals at slaughterhouses. It is clear that there is a great deal of waste meat if animals arrive damaged or bruised. The quality of the meat can also suffer if the animal has been placed under great stress prior to slaughter. My suggestions need not necessarily increase the cost of meat or reduce its quality. On the contrary, they should make good sense from that point of view.
In short, instead of a possible disaster in 1992, I hope that we make real efforts in this country to ensure that animals travelling throughout Europe do so in better conditions. I will want to monitor that very closely. I can assure the Minister and the Government that if we do not see the kind of reforms that we want, we will make the Government's lives a misery.
12.21 am
The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. David Maclean): I would like to congratulate my hon. Friend the Member for Plymouth, Drake (Dame J. Fookes) on choosing to raise a subject which is of constant public concern, but which has not been debated in this House for some four years. It is also most appropriate that my hon. Friend should raise the matter, because she has been a doughty champion of providing proper care and dignity for animals.
The Government regard the welfare of animals in transport as very important. My hon. Friend was right to threaten to make all our lives a misery unless the Government look after the welfare of all animals wherever we can. We regard animal welfare as terribly important and that is why we take considerable steps to ensure that exported farm livestock receive full care and attention while in our jurisdiction. I have in mind here animals for fattening or immediate slaughter, which we describe as "food animals".
Under our law, such animals must be rested for at least 10 hours at an approved export lairage, which must be within a reasonable distance of the port of embarkation. The animals must be inspected by a Government veterinary inspector for fitness to travel and food and water must be provided. In every case, the loading of animals is officially supervised into vehicles which must themselves have been approved for the particular task of carrying animals on roll-on/roll-off ferries. The Ministry offers advice on the conditions for loading and stowing those vehicles.

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Once the animals have crossed the Channel, they are, strictly speaking the responsibility of other Governments, but we ask exporters for prior assurances about the onward journey. The main concern here is that arrangements are made for feeding and watering the livestock on the longer journeys. We require staging posts to be declared to us where journeys would take longer than 18 hours from the export lairage.
None of those measures absolves other Governments from checking that animal welfare during transport is in accordance with the existing directive on international transport. Enforcement must be their responsibility when animals are on their territory. My hon. Friend will understand that MAFF officials cannot, of course, follow journeys into other member states, but there has been close liaison with the French authorities. It has included the monitoring of some journeys, either by accompaniment or by other surveillance. On occasions when the RSPCA or others report on journeys, we pass details to the country concerned for its full investigation.
The recent article in The Sunday Times of 29 October, which my hon. Friend has mentioned, was a case in point. At this moment we are waiting to hear from the French veterinary services, but we took other prompt action. We are no longer issuing licences for sheep exports to the named premises in the south of France run by the gentleman who was featured in the article, pending French and our inquiries. I should like to make it quite clear that cruelty to animals in transit will not be tolerated. We will act against offenders where necessary and within our jurisdiction.
Mr. Jeremy Hanley: Exactly what restrictions are imposed by MAFF on the justification for the export of live animals in the first place? To what extent does the Ministry investigate whether the exportation of live animals is absolutely necessary, or whether it is merely at the whim of the person who is importing animals? What controls do we have over the quality of slaughterhouses in other countries? My hon. Friend the Member for Plymouth, Drake (Dame J. Fookes) made an excellent speech, and I agree with every word of it, but she did not mention the quality of slaughterhouses abroad, which are often awful compared with the conditions which, mercifully, we must endure here.
Mr. Maclean: My hon. Friend has raised two good points. It is not possible for us to try to seek the intention of those who may want to export animals or those who may wish to receive or import animals into the Community. I may be skating on thin ice, but I suspect that it would be contrary to the treaty to try to make such interpretations. It is irrelevant to the means of transport and to the measures on which we insist. It is not relevant to know the end use of the animal, because we want to insist on the highest possible standards of care and transport for that animal, irrespective of the end use. We export pedigree animals—bulls and so on—to France and to other countries. We insist on the highest possible welfare standards, just as we insist on the highest possible welfare standards for sheep which may be exported for slaughter.
My hon. Friend's last point is absolutely right. We do not allow animals to go to Spain and Portugal, simply because they have not come up to the standard for
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slaughtering animals in slaughterhouses which the EC directive describes and which would satisfy us. There is a check. We do not physically check the slaugherthouses, any more than a Frenchman can check our slaughterhouses, but slaughterhouses in the Community are up to an acceptable standard, except for those in Spain and Portugal.
I shall give the House an example of the prompt action that we have taken to demonstrate that we will not tolerate cruelty to animals during transport. Our inquiries are now complete, following the tragic deaths of the 79 beagles while they were being conveyed to Sweden in September. My hon. Friends will understand that I cannot comment further tonight, in advance of possible proceedings against those concerned.
Returning to the Sunday Times article and the RSPCA trail of sheep to France, it was claimed that these were being sent on to Spain for slaughter. As I have just said, we specifically do not license exports of food animals to non-EC countries or to Spain and Portugal which have yet to implement fully the existing EC directives on international transport and pre-slaughter stunning. But we must realise that it is very difficult to police this control where animals are sent to destinations in France for further fattening. Nor are our restrictions related specifically to cruelty in Spanish abattoirs. Once the European Commission is content that the directives are properly implemented, we will be in hot water with the European Court if our exporters continue to be depraved of markets currently met by the EC competitors.
My hon. Friend suggested that we should aim, as an ideal, to have slaughter as near as possible to the point of production. I agree that that is an ideal, but the only practical control that we could effectively have on that would be a complete ban on animals over a long distance.
I fully understand the calls for a complete ban on food animal exports, related to operating a carcase-only trade, but this unfortunately is not a line we can pursue. First and foremost, such a ban would contravene the EC treaty, as my hon. Friend has suggested. There is already an export trade of carcases to EC countries, but a separate demand exists for fresh home-killed meat. The importers concerned need live animals and would simply go elsewhere for their supplies, perhaps even to eastern Europe. So it would be absolutely pointless for us to take a British unilateral stand only for the markets we had refused to supply to be taken up by animals imported from even further away, where welfare standards may be lower. There is no point in our ceasing to supply a market with our higher welfare standards only for that market to be flooded by animals from other countries which might have lower standards.
Compassion in World Farming has also called for animals to be elevated in EC classification from "agricultural products" to "sentient beings". It does no harm whatsoever to emphasise that living animals need special care. Indeed, we applaud this. But the Government take the view that our effort in Brussels is better directed at negotiating and achieving Communitywide safeguards that protect farm animals at all stages. The European Commission has been active recently in proposing direct new animal welfare controls. The proposed regulation on the protection of animals during transport is relevant to the subject under debate. The document would replace and go further than the existing EC directive on the protection of animals during international transport, introduced in

447
1977. As my hon. Friends will probably know, the directive in turn was based on the Council of Europe convention agreed in 1968.
We have circulated the new proposal very widely for comment in this country. The European Parliament is now directing its attention to the document which will be debated in Standing Committee here next month. The objective in the ensuing Brussels negotiations will be to ensure that all countries introduce and police the same high standards of welfare. We are encouraged in this by the proposed involvement of a Commission veterinary inspectorate to ensure uniform application throughout the Community. I hear what my hon. Friend has said, and we are as keen on it working and applying uniformly enforced standards throughout the whole of the EEC as is my hon. Friend. That is an important point.
It would be unwise for me to under-estimate the size of the task which faces us with these new transport proposals. In particular we must make sure that the domestic controls we have built up over many years are not replaced by diminished and unenforceable measures.
I am fully aware of the widespread concern in this country about the prospect of losing British controls, linked to minimum values, designed to prevent the exports of horses and ponies on the hoof for slaughter. My postbag has been bulging on this difficult point.
It may be helpful if I explain briefly what the arrangements are for exporting horses. I am sure that my hon. Friends are fully aware of them, but it may be helpful to put this on the record. The arrangements are immensely complicated, but they include export licensing, pre-export rest and veterinary inspection. The export of ponies and certain types of horse are prohibited if their value is less than that laid down in the Animal Health Act 1981. These categories require official valuation. The values were last fixed in 1978, and we approached horse interests and welfare organisations about two years ago. They were unanimous in agreeing that minimum values should not be increased.
Some people may still claim that horses continue to be exported for slaughter, despite controls. I disagree. We have no substantiated evidence of that. As we issue all the permits for horse exports and inspect certain categories of animal, we would expect to detect any organised trade in them.
I shall conclude that part by stating the minimum values. I shall not go into the detail on ponies, which is far too complicated, and I do not profess fully to understand it. The minimum values for a heavy draft horse is £715, for a vanner mule or jennet £495 and for an ass £220. Such animals must not be more than eight years of age.
The existing controls have been built up over many years following public concern over conditions in which horses were formerly exported. The legislation on horses dates from the 19th century while that on ponies was completed in the Ponies Act 1969, since consolidated in the Animal Health Act 1981. So the minimum values are purely national arrangements. It was therefore inevitable
448
that they would be called into question during the completion of the internal market. It remains to be seen whether we can persuade other member states to take on similar controls throughout the Community. Whatever the precise means of control in future, however, we will insist on measures which fully protect the welfare of animals leaving these shores for slaughter.
My hon. Friend mentioned European Members of Parliament. There is great scope for my hon. Friends and all those who are concerned to lobby European Members on this issue not only to exert pressure on the British Government, who will be campaigning for the toughest measures possible, but to use European contracts and others in Europe who feel as passionately about this as we do.
The new EC transport proposals give an opportunity to negotiate a fresh regime covering the movement of animals throughout the Community. It is an important chance to provide effective safeguards for all animals which are transported, whether for slaughter, exhibition, breeding, pets, circuses or other purposes. My hon. Friend asked us to exert maximum pressure, and I can assure her that we shall do so.
Question put and agreed to.
Adjourned accordingly at twenty-two minutes to One o'clock.

Mr. Speaker's Ruling (Money Resolutions and Revenue Support Grant)
The following Private Ruling given by Mr. Speaker is published in accordance with Mr. Speaker's statement of 5 November 1981—[Official Report, c. 113.]
In the past when any Bill authorised or required local authorities in Great Britain to undertake new services or otherwise to incur expenditure, in the absence of express provision to the contrary, the expenditure was by statute taken into account by Ministers when levels of rate support grant were determined. Rate support grant was paid out of voted money, and accordingly a money resolution was required to sanction the relevant expenditure provisions in the Bills concerned.
Under the Local Government Finance Act 1988 and the Abolition of Domestic Rates etc (Scotland) Act 1987 as amended by schedule 6 to the Local Government and Housing Act 1989, revenue support grant is to replace rate support grant. Revenue support grant will be paid out of voted money, but Ministers are not statutorily required to have regard to the level of local authority expenditure when they determine the amount of grant to be paid. I am asked to rule whether a money resolution should continue to be required for Bills which imply increases in local authorities' expenditure.
I am satisfied that revenue support grant will in the future in practice, if not by statute, take account of local authorities' expenditure. I therefore rule that a money resolution will continue to be required in respect of such Bills.