HC Deb 19 July 1990 vol 176 cc1209-14

Lords amendment: No. 1, in page 2, line 23, at end insert—

"(5A) An order establishing a trading fund for operations carried on by a person appointed in pursuance of any enactment may provide—

  1. (a) for the fund to be under the control and management of that person instead of the responsible Minister and, accordingly,
  2. (b) for this Act to have effect as if—
    1. (i) the reference to the responsible Minister in section 3(1) of this Act and the first reference to him in section 4(1), and
    2. (ii) such other references in this Act to the responsible Minister as may be specified in the order, where they are references to him in the exercise of his function of controlling or managing the fund,
were references to that person."

5.37 pm
Dr. John Marek (Wrexham)

I beg to move, as an amendment to the Lords amendment, amendment (a), after first 'the', insert 'continuing operations of the'.

Mr. Speaker

With this it will be convenient to consider amendment (b) to the Lords amendment, after 'managing', insert 'the continuing operation of'.

Dr. Marek

Amendment (a) is a probing amendment. Consideration of the amendments should not detain the House for long because in principle the Opposition have no problem with any of them. We are pleased with amendment No. 2 and amendments Nos. 3, 4 and 5 are technical or consolidation measures. Perhaps the Economic Secretary will confirm what I have said. I sympathise with the Economic Secretary who has been landed with the Bill at short notice because of the departure of the former Financial Secretary to the Treasury. We shall proceed gently in seeking some assurances.

My noble Friend Lord Bruce of Donington raised three points in Committee in the other place. One point that he made when Lords amendment No. 1 was being considered in the other place was whether a corporate body could be a person. Could the Bill be construed in such a way that a corporate body could be appointed by statute to run a trading fund or an agency? The Earl of Caithness said:

On the first point raised by the noble Lord, I do not believe that there is a need to cover corporate bodies because the Bill refers to a person appointed pursuant to any enactment."—[Official Report, House of Lords, 12 June 1990; Vol. 520, c. 229.] I am sure that the Government have considered that point in detail and I should like clarification of it. It would cause some consternation among the Opposition if the Bill were to allow a corporate body to run a trading fund. It is important that the original intention of the Bill is made clear—that trading funds should be run by the responsible Minister. It was later discovered that some people were appointed by statute to run trading accounts. We accept that it would be wrong for such people to be required to hand over the management of those trading funds to the responsible Minister.

We are not opposed to Lords amendment No. 1, but we are concerned about how wide it may be interpreted. Wherever possible, we want responsibility to lie with the responsible Minister, who is accountable to Parliament. If my supposition is right, it could be open to future Governments, of either party, to move trading funds so that they could be run by corporate bodies. That would introduce all sorts of problems. It raises the fear of privatisation without primary legislation, although I think that Lords amendment No. 2 reassures us on that matter.

My noble Friend sought reassurance that Lords amendment No. 1 was principally concerned with the day-to-day management of the funds. He also sought reassurance that, ultimately, responsibility lay with the responsible Minister, not with some civil servant or person appointed by statute. The Earl of Caithness gave my noble Friend that assurance, but it would be nice to hear it from the Economic Secretary.

Amendments (a) and (b) are linked. There is some confusion about the Lords amendment. I hope that its intention—that a person appointed by statute can run any fund—means that he or she runs it on a continuing basis, from day to day. If a fund had to be wound up, I hope that the responsible Minister would intervene. The Lords amendment—its drafting may be defective—provides for the fund to be under the control and management of that person instead of the responsible Minister". By inserting the words, "continuing operation", the sentence would read, for the continuing operation of the fund to be under the control and management of that person instead of the responsible Minister. That may be otiose, but it makes it clear that the day-to-day management of the fund is under the control of that person, and if it were to be wound up or if there was anything that was not part of the continuing day-to-day operation of the fund, the responsible Minister would have to take responsibility.

I look forward to hearing what the Minister has to say, first, about the points made in another place and, secondly, about the reasons for the Lords amendment.

The Economic Secretary to the Treasury (Mr. Richard Ryder)

I am grateful to the hon. Member for Wrexham (Dr. Marek) for his kind remarks. I appreciate the work done on this legislation by Lord Bruce of Donington. I shall deal first with the amendment and then with the specific points that the hon. Gentleman raised.

A fund will usually be under the control and management of the responsible Minister, who will also be carrying on the funded operations. Lords amendment No. 1 is concerned with funds for operations carried on by a person appointed in pursuance of any enactment. An order establishing such a fund may provide that its control and management be with that person. One example of that would be the Chief Land Registrar, who is appointed under the Registration Act 1925 to carry on the whole business of land registration under the Act. In such cases, once a fund is established the operations will continue to be carried on by the office holder, pursuant to the relevant legislation, just as they were previously. The Lords amendment relates only to the control and management of the funds in such cases. It sensibly provides that it may be placed with that office holder by the order establishing the fund.

I understand that the hon. Gentleman's amendments stem from a concern about the winding up of a fund that is under the control and management of a statutory office holder. As with any fund, new section 4A would apply. The responsibility for making appropriate orders under section 4A will remain that of the responsible Minister. Lords amendment No. 2 puts beyond any doubt the fact that the winding-up powers are not concerned with funded operations ceasing because they are being privatised.

I shall take the hon. Gentleman's specific points in turn. His first point related to a statutory office holder. As a matter of construction, the reference to a person appointed pursuant to statute does not extend to bodies corporate. That was not the Government's intention, and they had nothing like that in mind. That question was raised in another place, but, as far as I am aware, no one has yet identified a corporate candidate that has inadvertently been caught by that provision. It should also be remembered that funds can be established only in relation to the operations of a Department of Government.

I cannot rule out privatisation of trading funds, and would not wish to do so. However, if that were to happen, it would require further primary legislation, such as happened with the Crown Suppliers. I hope that that reassures the hon. Gentleman. The Bill does not provide the means to bypass the need for further legislation, and the amendment places that beyond doubt.

Mr. James Hill (Southampton, Test)

My hon. Friend may recall—and it goes back a number of years—that a trading fund was set up for the Ordnance Survey headquarters in Southampton. I am sure that he has used that as a model of what can be achieved. It has succeeded in competing in the private market, even though it is a trading fund. It is moving forward with great prosperity and is creating a vast amount of employment in the area.

Mr. Ryder

I am grateful to my hon. Friend for that helpful observation. As he knows, the orginal legislation was passed by the House in 1973. The purpose of this Bill is to update that legislation in the light of developments that have been put in place by my right hon. Friend the Minister for the Arts, who is also responsible for the civil service. Perhaps I can add a rider to that by informing the House that the Ordnance Survey is not regarded as a trading fund.

Amendment to the Lords amendment negatived.

Mr. Deputy Speaker (Mr. Harold Walker)

The Question is, That this House—[Interruption.] We have just been debating the amendment to the Lords amendment.

Dr. Marek

On a point of order, Mr. Deputy Speaker. There was some confusion when Mr. Speaker called the first amendment. He asked me to move amendment (a) to Lords amendment No. 1. If that was the case, what you have just said, Mr. Deputy Speaker, is perfectly correct. I certainly was not going to shout, "Aye" when you put the Question on amendment (a). I do not know whether that helps you, Mr. Deputy Speaker.

Mr. Deputy Speaker

I do not need any help. I assumed that the hon. Gentleman, having been called to do so by Mr. Speaker, had moved his amendment to the Lords amendment. I put the Question that amendment (a) to Lords amendment No. 1 be made and there was no response other than "No", so I declared that the Noes had it. Therefore, the amendment to the Lords amendment was negatived.

Lords amendment No. 1 agreed to.

Lords amendment: No. 2, in page 6, line 8, after "or" insert while continuing to be operations of a department of the government

Motion made, and Question proposed, That this House doth agree with the Lords in the said amendment.—[Mr. Ryder.]

Dr. Marek

First, I should like to thank my hon. Friend Lord Bruce of Donington for moving the amendment in another place and securing its acceptance there. My hon. Friend in the other place took a great interest in the Bill, did a lot of work on it, and I am sure spent a considerable time examining it and making sure that there were no further pitfalls or loopholes in it. It has been 17 years, since the Trading Funds Act 1973, before the Government have had to introduce more legislation because of what they considered to be a lacuna in that 1973 Act. There is nothing wrong with taking careful measure of any Bill to see whether it is watertight. I am certainly most grateful to my hon. Friend Lord Bruce of Donington.

I should like to pursue the point that I raised about privatisation. I very much approve of the Economic Secretary's reply to amendment (a) to Lords amendment. No. 1. He said that the privatisation of trading funds cannot occur without primary legislation.

The Paymaster General, the Earl of Caithness, did not reply fully to my hon. Friend Lord Bruce of Donington when he moved the amendment. He said that he was advised that there was no question of any possible privatisation without future primary legislation, but unfortunately he did not say it categorically. He said simply that he was grateful to Lord Bruce for tabling the amendment and recommended that the House should accept it. He said: It proves the diligent work which the noble Lord has carried out on this Bill. It is something that we have come to expect from him and he had not let us down. He had given careful and detailed study to this measure."—[Official Report, House of Lords; 18 June 1990, Vol. 520, c. 604.] He then moved on to another point with which I shall deal in a moment.

The Economic Secretary has already satisfied me in his reply to amendment (a) to Lords amendment No. 1. However, it is an important point, and I hope that the House will forgive me if I mention it again. Privatisation of parts of the civil service that have trading funds will not be possible without primary legislation and the House being given the opportunity to discuss the matter. I am very pleased about that.

The Earl of Caithness then talked about how annual reports and accounts would be presented. I have a letter—

Mr. Deputy Speaker

Order. The amendment merely seeks to insert the words while continuing to be operations of a department of the government. It is difficult to relate what the hon. Gentleman is saying to the Lords amendment.

Dr. Marek

I hope that you will bear with me for about 30 seconds, Mr. Deputy Speaker. I have the Hansard of the debate on Report in another place, considering what is now Lords amendment No. 2. The Paymaster General spoke about annual reports and accounts. If you bear with me for a moment, Mr. Deputy Speaker, I shall be as quick as I can.

I have a letter from the Earl of Caithness to Lord Bruce of Donington, in which he makes it absolutely clear that copies of reports and accounts in the continuing work of the Government trading funds have to be laid before both Houses. Towards the end of the letter the Paymaster General states:

If exceptionally the annual report is published separately, then the Treasury would use its powers of direction under section 4(6A) to ensure that the annual report is available to Parliament, either by laying it before both Houses or by placing copies in the Libraries of both Houses. If those reports were made separately, it would be very useful for them to be laid on the Table of the House as they would automatically come to the notice of hon. Members. If they were simply placed in the Library, the onus would be on hon. Members to seek the information required. I hope that the Economic Secretary will assure me that the reports and accounts will be placed on the Table of the House.

I have made only two quick points: the first concerns privatisation, and the second is about reports and accounts being placed on the Table of the House. I should be interested to hear the Economic Secretary's reply.

Mr. Ryder

I am happy to elaborate on the Government's commitment on privatisation as it is relevant to the Bill. There are differences of opinion between the two sides of the House, but the "next steps" agency's document made the position clear. The Prime Minister said:

Next steps is primarily about those operations which are to remain within Government…Where there is a firm intention of privatisation when an agency is being set up, this should be made clear."—[Official Report, 24 October 1988; Vol. 139, c.14.] Thus, in the rare cases when we anticipate privatisation, that will be made clear when the agency is set up. Of course, not all agencies will become trading funds, but for those that do, the position is now equally clear. Although we cannot rule out privatisation of funding operations, that would require primary legislation to deal with the winding up of funds as, for example, happened with the Crown Suppliers.

Lords amendment No. 2—an Opposition amendment that was accepted by the Government—put that beyond doubt by making it clear that the winding-up provisions are not concerned with finding operations ceasing because they are being privatised.

As for the hon. Gentleman's other point, I am happy to say to him that it would be for the convenience of hon. Members if the reports and accounts of trading funds were given the widest possible circulation in the House, compatible with the existing arrangements. The hon. Gentleman knows that we have already committed ourselves to putting those documents in the Libraries of both Houses. We shall certainly do everything we can to ensure that, compatible with the existing arrangements, they are given the widest possible circulation, outside the two Libraries, within the Palace of Westminster.

6 pm

Dr. Marek

Would it be possible for them to appear on the pink slips in the Vote Office? That would make a big difference. If they appear on the pink slips, they come to the attention of every hon. Member as a matter of course.

Mr. Ryder

I have no objection to them appearing on the pink slips, provided that that arrangement is compatible with what happens in other related spheres. I shall certainly look into the matter with a view to trying to achieve that aim on the hon. Gentleman's behalf.

Dr. Marek

I am grateful to the Economic Secretary for his reply. I can ask no more than that he should look into the matter and try to achieve that aim.

Question put and agreed to.

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