SCHEME OF TRANSFER

HC Deb 15 April 1991 vol 189 cc79-93

Mr. Michael

I beg to move amendment No. 4, in page 5, line 28, at end insert— '(4A) A scheme under this section shall contain no provision which may force any person to cease to be employed in the service of the state.'.

Madam Deputy Speaker (Miss Betty Boothroyd)

With this it will be convenient to take the following amendments: No. 23, in page 5, line 35, at end insert— '(8) No civil servant will be transferred to the new organisation until such time as they have given their consent, in writing, for such a transfer to the Permanent Secretary.'. No. 9, in clause 9, page 6, line 7, at end add— '(c) he shall be allowed, on his request, to re-enter the service of the state within two years of the commencement of his employment by a transferee.'. No. 26, in clause 9, page 6, line 7, at end add— `(4) No member of the executive, administrative and support staff shall transfer unless he or she has previously consented to do so in writing.'.

Mr. Michael

These amendments raise issues concern-ing people who are now in public service and who are worthy of respect as civil servants. Despite what the Government appear to intend, they are not chattels to be despatched into the private sector with disdain and lack of consideration.

Amendment No. 4 addresses the fact that staff in the Insurance Services Group fear that so few of them will volunteer to join the privatised company that, to ensure its viability, management will try to compel them to transfer to it. One understanding of the Transfer of Undertakings (Protection of Employment) Regulations 1981 is that any employees occupying ISG posts at the time of the transfer to the purchaser must transfer to the privatised company. Even if the employment terms offered by the purchaser are, as the Government have promised, broadly comparable to current civil service terms, there are advantages to civil service employment that are unlikely to be replicated in the private sector. Not only is a fully index-linked pension scheme unlikely to be offered, but the security of employment in a large, nation-wide staffing pool cannot be available in a private company and that entails an increased potential for redundancy and a reduction in promotion and personal development prospects.

The amendment is intended to prevent any member of ECGD being compelled to join the new ISG insurance company or being made compulsorily redundant under the terms of the scheme established to convert it into a Government-owned company.

Amendment No. 23 addresses what many see as a disregard of the reasons for which people enter the civil service. Many of them chose to make a career in that sector and have given years of dedicated service to it. That should be respected. I am gravely disappointed by answers that I have received from Ministers at the Department of Trade and Industry, and particularly from the Minister responsible for the civil service, about protecting staff who wish to remain in public service. The amendment would ensure that proper consideration and respect is given to civil servants when they decide whether to join the new company.

Amendment No. 26 also emphasises the importance of choice. I should have hoped that all right hon. and hon. Members would enthusiastically support that.

Amendment No. 9 would allow an employee to re-enter the service of the state within two years of the commencement of his employment by a transferee". That change would make it possible for all staff currently in the ECGD who join the new ISG insurance company to return, if they wish, to the civil service at any time up to two years after they start work in the new company. It is not open-ended; it is time-limited and it is reasonable. It would mean that staff who, perhaps for domestic reasons such as children at school or a spouse at work in Cardiff, have no choice but to join the new company would have the right, for a limited period, to rejoin the civil service. That might be when the children have left school or their spouse is able to find a new job elsewhere. The amendment would guarantee a return not specifically to the ECGD, but in general to public service.

There has been disappointment at the failure of Ministers to respect and protect the position of civil servants, whose choice to remain in public service should be protected by the House. In recent years, the Government have sought to undermine public service and to discredit it publicly just as they have sought to discredit local government service. That is both sad and wrong. It is greatly to the credit of civil servants generally that so many of them continue to display such dedication and integrity in their work. It is greatly to the credit of the civil servants to whom I refer that the Insurance Services Group is so highly respected. Without exception, those who have made representations to us during the passage of the Bill have paid tribute to its efficiency and effectiveness. The tributes have come from employers in the private sector and those involved in our export industry. For that reason, I hope that the Minister will join the Opposition in protecting, and respecting, those who have chosen to make a career in the public service.

Mr. Morgan

I support what my hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael) said about our attempts to beef up the protection of the staff affected by clauses 8 and 9 and to strengthen the rights given to employees under the scheme of transfer and the regulations in clause 9. My hon. Friend put his finger on the button when he said that there was something Orwellian about the Government's attitude to the public sector. It is a matter of "public bad, private good". They do not analyse the particular circumstances or consider the people involved because they have a straightforward ideological belief.

As Members of Parliament for Cardiff, we meet the real people involved. One cannot tell those civil servants who have been involved—perhaps on a life-time career basis —and dedicated to their work, some nonsense about the public sector being bad and the private sector good. It does not fit in with reality.

Our constituents who are ECGD staff generally fall into three broad categories. The junior staff have generalised skills in administrative, clerical, financial and personnel work and can transfer to other Departments without too much difficulty because there is not much difference between administrative or clerical work in the ECGD and in other Departments. There are other civil service Departments in Cardiff, Newport and elsewhere to which they can transfer—the Business Statistics Office, the Welsh Office, Companies House and the Inland Revenue. They employ thousands of people and junior staff may get jobs there when they are trawled under the civil service transfer procedures. We are anxious to enable people with such generalised skills to be given the time that they might need to make their choice.

The most senior category of people have highly specialised skills, but they nevertheless think of themselves primarily as civil servants. They may have joined the service at 16 or 18 years of age and may have gone through 10 promotions to reach the position of great responsibility that they now hold in the ECGD. They are probably 50 years of age or over and are beginning to think of themselves as life-time career civil servants. They might not find it very attractive to transfer, because within seven, eight or nine years they will draw their civil service pensions. Their functions are highly specialised and we should consider whether it is fair to push them into the private sector company when they have little time in their life-time careers to adjust to the idea of being employed by Trade Indemnity or Assicutazioni Generali. When they are asked at the golf club or down the pub, "What do you do for a living?", they have always said that they were civil servants. Suddenly, they would have to say that they worked for Assicutazioni Generali, and they do not want that. They are too old to be able to absorb such a change. They are used to the idea of being able to draw a civil service pension at 60 or, if they have worked for 40 years, a little sooner—as is common these days—and they do not want to transfer.

What should we do for such people, because they are very important to the organisation? If they have been with ECGD for 20 years or more, they are probably in responsible positions and without them the business will be in difficulties. If they feel that they are being treated like chattels, as my hon. Friend the Member for Cardiff, South and Penarth said, the transfer scheme will be heading for big trouble.

The middle group of people are those who have worked for perhaps 10 years for ECGD and have what might be called executive responsibilities. Their jobs are also fairly specialised and we have attempted to cover them by saying that they may be willing to give Assicutazioni Generali from Trieste a reasonable shot if it is the successful bidder. They may be willing to join the company, but it might not suit them and they might find that Triestino ways of working are not those of Cardiff or of Britain. If, after two years, they decide that it is no good, they may beg, "Can I please be given a chance at the Inland Revenue, Companies House or BSO or a transfer to London?" They may have come from London 11 or 12 years ago. What can we do for them? Apparently, the legislation will mean that they are forced to go and have no choice. If they do not like it, they are out and must accept redundancy. They will be treated like the GCHQ trade unionists and, if they hold out, they will receive redundancy, a bit of a premium and a goodbye. Is that the attitude that the Government want to communicate to civil servants who, the Government say, provide an A1 service to exporters through their commitment to the job and to advancing technology in the job?

We ask the Government to take seriously our attempts to strengthen the rights of employees, because that will help them to make the employees believe that the Government really care about them and that the Government realise that it is people-oriented business. It is all about computers and a lot of valuable people. If the people walk out of the job, the transfer scheme will not work and British exports will suffer.

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I look forward to hearing from the Minister, not the usual waffle about the amendment not achieving the objectives or the wording not achieving what the Opposition hope, but genuine respect for the people for whom we are legislating. If he does not show that respect, the Government do not deserve to have the Bill passed or to be able to effect a successful transfer to the privatised sector.

Mr. Sainsbury

I can say straightaway that we recognise and pay tribute—as I did on several occasions in Committee—to the skill, commitment and calibre of the work force of ECGD. I am sure that everyone will recognise that the calibre of the staff is one of the most —if not the most—important aspects of any business. In the world of financial services, which we are talking about, it is especially important and we have heard many tributes paid to the quality of ECGD staff. I hope that we shall be committed to providing a first-class service to British exporters after privatization—or an even better service than is provided now.

We must consider the amendments against the background not only of our commmitment to the staff and our respect for their calibre and what they have given to the business, but of the importance that we attach to their commitment to the success of the Insurance Services Group. We shall expect the buyer of the new company to show an immense commitment to the success of the ISG and, as a purchaser, he will expect a similar commitment from his staff. Against that background, the amendments would not be helpful.

Amendments Nos. 4, 23 and 26 would limit the staff to be transferred to the new company to volunteers only. It is possible that the number of volunteers will not accord with the business requirements of that company. The ECGD privatisation is unlike some others in that only about half of the total organisation—measured by the number of staff—will be privatised. That gives much more scope than is normal for meeting the preferences of individual members of staff. My right hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) stated as long ago as 18 December 1989 that all ECGD staff would be asked to express a preference on whether to join the new company and that ECGD will use its best endeavours to meet their wishes where these are consistent with the business needs of ECGD and the company."—[Official Report, 18 December 1989; Vol. 164, c. 23.] I hope that the Opposition will accept that that is perfectly reasonable.

They have spoken about the need to support British exporters and that is one aspect of that need. On Second Reading, my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh)—the Under-Secretary of State for Industry and Consumer Affairs—reiterated what my right hon. Friend said. The terms and conditions on offer to the staff will be one factor that the Government will take into account in assessing the bids. I should expect the terms and conditions on offer to staff transferring to the new company to be at least as good as those that they enjoy now.

It is not unreasonable to expect staff to transfer on a permanent basis, because it is only by doing so that they would demonstrate the commitment to the business that we would expect the purchaser of the Insurance Services Group to show. Anyone who considers the position will recognise that if staff were able to walk out of the business at any time in the first two years for whatever reason—or for almost no reason—an effective organisation could not be built up. It would make the business's position extremely uncertain and would damage the interests of exporters.

Amendment No. 9 suggests that everyone who transferred to the new company would do so on secondment. That would be an unsatisfactory position not only for the company and for exporters but for the Government. One would not know how many people—if any—would want to come back. One would hope that there would be none. Such a possibility would be uncertain and unsettling. If many people exercised that option. it would be difficult to find them employment.

Both hon. Members for the various bits of Cardiff—the hon. Members for Cardiff, West (Mr. Morgan) and for Cardiff, South and Penarth (Mr. Michael)—implied that people would want to stay in Cardiff. However, there are not many jobs available at any one time in the civil service in Cardiff.

Mr. Morgan

To cope with what I anticipated would be the Minister's reaction, I split the staff into three categories. Much of what the Minister has said does not apply to one third of ECGD staff who have common skills which could be used in other branches of the public service. They include administrative, personnel, establish-ment and finance staff who are not specialists in insurance.

The second group of whom the Minister has failed to take note, although I tried to draw his attention to them, is the one quarter of staff at ECGD-ISG in Cardiff, half of whom are in executive and administrative positions, who joined ECGD in London. They were persuaded to move to Cardiff in the public interest on civil service terms. They might say, perfectly reasonably, "I accepted a move down to Cardiff in 1978 because I was persuaded that it was good for me, as a civil servant, to move in the public interest and on public service terms. If I am not going to work for the ECGD as a civil servant I would rather move back to London. I was never completely sold on the idea of coming to Cardiff, so given that it will not be a civil service ECGD, I may want to move back to London because that is where my mother, brother and sister live." Does not the Minister accept that it is perfectly reasonable for people to feel like that? They were willing to accept a move in the public interest, but they are not willing to accept the move if they are not civil servants.

Mr. Sainsbury

Having heard the hon. Members for Cardiff, West and for Cardiff, South and Penarth speak at some length on the merits of Cardiff, I am astonished to hear the hon. Member for Cardiff, West suggest that there could be even one person who would want to leave Cardiff for anywhere else. However, it is a possibility. Equally, staff might not wish to leave the town in which they work and I am sure that the hon. Gentleman will be familiar with that position. It can create considerable difficulties in finding alternative employment. The objective will be to avoid a position in which redundancy may occur. However, amendment No. 9 would make that more rather than less likely. We would not want to have to make people redundant because its provisions were included in the Bill.

I appreciate the understandable concern that the hon. Members for Cardiff, West and for Cardiff, South and Penarth have shown for their constituents, but they must take into account the reasonable needs of the staff and the Government's assurance, which I repeat, that the terms and conditions on offer to staff will be one factor which we shall consider when assessing the bids because we are aware of the value and importance of the staff, and of their skills and the importance that is attached to them by exporters. In the light of that, I urge the hon. Member for Cardiff, South and Penarth not to press the amendments. They would not be in the overall interests of the staff, of exporters or of the continuing, privatised Insurance Services Group.

Mr. Michael

I assure the Minister that on occasion, family reasons may lead people to leave even the delights of Cardiff. That is a rare occurrence and is not to the detriment of our fair city.

My hon. Friend the Member for Cardiff, West (Mr. Morgan) and I represent some parts of Cardiff, but two Cardiff constituencies are represented by Conservative Members. We sincerely hope that that will be the case for only a short time longer. I point out to the House the failure of those hon. Members to be present for this debate. Clearly, they are not here to support the Minister, but neither are they here to support the interests of their constituents, as we seek to do. As both of them are in the House at present, it is sad that they are not in the Chamber to participate in or at least to listen to our debate. I express some surprise at that.

The Minister quoted the words of the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley) with surprising approval. It is clear from the right hon. Gentleman's words that people's wishes come second to the interests of the business. That may be the way in which the Minister seeks to run the public service, but I do not think that it is right. I believe that one has to take people with one in attempting to build a good service.

The Minister referred to the importance of the calibre of staff. I am glad to know that the Minister has heard as many tributes as we have heard to the calibre of the staff now working for ISG. The Minister has confessed that he wants them to transfer even if it is against their will. That would take away choice. It is clear from the Minister's response that the Government are against choice. The motivation of staff is important, as is their ability. Clearly, the Government do not have the confidence in their own proposals to depend on persuasion to take people into the privatised company which they wish to create. What happened to the free market? It is not free for individuals who have given their lives to the public service; it is not free for employees.

I referred earlier to a question that I put to the Minister of State, Privy Council Office. I asked him whether he would make training opportunities and career development opportunities available to people within the Insurance Services Group so that they could, if they wished, fit themselves for jobs in the public sector and thus stay within the civil service. I did not receive a positive answer. We have had today a far from positive answer to the interests and concerns of people within the civil service whose careers and prospects may be damaged by this measure, which should carry a Government health warning.

At this stage, we will ask leave to withdraw the amendment. I am certain that our proposals will be discussed further in another place and I am also certain that civil servants, not only within ISG but generally, will have heard the Minister's sad message in this short debate. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Cousins

I beg to move amendment No. 5, in page 5, line 28, at end insert— '(4A) 'A scheme under this section shall make provision for the functions so transferred to be made available through services in each standard planning region of the United Kingdom.'.

Madam Deputy Speaker

With this it will be convenient to take amendment No. 27, in clause 10, page 6, line 39, at end insert— '(c) transfer any shares held on behalf of the Crown in any vehicle company unless he has made provision for that vehicle company or its subsidiaries to continue to operate through a regional network which assures an office in each standard planning region of the United Kingdom.'.

Mr. Cousins

The amendments are an attempt to secure within the privatised part of ECGD, which is the main subject of the Bill, a strong and continuing commitment to a regional organisation. When the need to retain a regional organisation in the project group was discussed in Committee, the Minister spoke about the continuation of regional offices in the part of ECGD that is to be privatised. He said: After privatisation the regional offices will be the responsibility of the new owner of the insurance services group. They will be committed to providing a first-class service to the customers. I suspect that their judgment will be, as it has been, that the regional office network is an important part of providing that first-class service. We cannot, however, commit them by writing it into the Bill, as they will not be part of the ECGD, what regional offices they will have. I am convinced that they will wish to keep a close contact with their customers, because that is a good way to do business."—[Official Report, Standing Committee H, 7 February 1991; c. 96.] The Minister emphasised the importance of retaining regional offices for the short-term work of the ECGD. The purpose of the amendments is to ensure that the network of regional offices remains after privatisation.

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The present network of regional offices, of which there are nine, does not extend to each of the standard planning regions of Britain, but the amendments would ensure that there was a regional office in each standard planning region, alongside the regional offices of the Department of Trade and Industry.

It is obvious from the annual reports of the ECGD and from elsewhere that answering the flood of inquiries is an important part of the work of regional offices. The Minister referred to the importance of people being able to seek advice and information from regional offices. The hon. Member for Surrey, North-West (Mr. Grylls), who has considerable knowledge of small and medium-sized business, mentioned the importance of a one-stop shop where advice on export credit insurance could be given. The purpose of the amendments is to ensure that the network of face-to-face contacts in regional offices continues.

Regional offices deal with many inquiries, most of which relate to the short-term work of the ECGD, the part which will be privatised. That emphasises the importance of the amendments. About 250,000 inquiries are dealt with by those nine regional offices, which are important because they offer advice on export credit to small and medium enterprises that may be exporting for the first time.

The Government increased the grant of the Northern Development Company by almost 30 per cent. this year. That company made it perfectly clear to me that when it sets up a trade mission or receives an inquiry from a small company it is essential that it can immediately refer that business to an easily accessible regional office where face-to-face advice can be offered. That is particularly important in regions of Britain where, for historical reasons, small and medium-sized enterprise is not playing the part in the economy of those regions that it should. The growth of those small and medium-sized enterprises does not depend solely on the passing of the amendments, but were they passed it would be an important assurance to those enterprises that a one-stop shop in their region will be able to deal with their inquiries and that they will be able to continue to rely on somebody being at the end of a telephone or in an office to deal with their complicated problems.

In Committee, the Minister said that he expected those arrangements to continue. Surely it is not too much to ask him to accept the amendments and ensure, rather than expect, that that network of regional offices survives.

Ms. Quin

Before the Minister replies, I should like to say a few words in support of the amendments.

Earlier, we spoke of sending signals to exporters, but we must consider the importance of sending signals to the regions on the privatisation of ISG. In Committee, we tabled an amendment to ensure that the regional network of offices continues. The Minister said that that was not necessary because the project business of the ECGD is best located in London and that exporters had become used to that system. We said that we were asking not for a huge organisation to be set up in the regions but for the contact point that my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) suggested.

The amendments refer to the Insurance Services Group, which shortly will be privatised. We are concerned about the likely service to the regions. We should be interested to hear whether the Minister intends to ensure that the services of the privatised ISG are properly available in all parts of the United Kingdom.

The principle of regionalisation and regional access to services figures highly in the Labour party's policy review document. The regionalisation of the services of the Department of Trade and Industry, including the ECGD, and the availability of regional services, even if they are in the private sector, are important to our chances of economic success. Perhaps it is no coincidence that the Opposition Members who considered the Bill in Committee represent constituencies outside the south-east and therefore understand the importance of regionalised services.

Mr. Sainsbury

Labour does not have many Members of Parliament in the south-east.

Ms. Quin

That is true, but we have an even spread throughout the rest of the United Kingdom, with representation from Scotland, Wales and the north, and we were all concerned to ensure a balanced regional structure.

Despite the good efforts of the ISG, the present balance of regional offices is not satisfactory. We pointed out in Committee that there are not offices in every standard planning region, which is why the amendments, and the amendment that we moved in Committee, specifically refer to the standard planning regions. We are worried that the spread of offices could be worse after privatisation, which is why we believe that this point is so important.

I am sure that the Minister is aware that export activity is not evenly spread throughout the United Kingdom. I am sure that he has seen the recent survey of exporters carried out by Barclays bank—it appears in its second quarterly survey—which shows a variety of export activity from one region to another. In particular, some of the older industrial regions, which are dear to the hearts of many of us on this side who served in Committee, do not have as much export activity as other regions. In the survey the export ratio of the old, industrial, English regions of the north, the north-west, Yorkshire, Humberside and the east and west midlands was below average. I wonder whether the Minister has examined those figures closely and drawn any appropriate lessons from them.

The figures are important as they show that priority needs to be given to Government efforts, including those of the ECGD and, I hope, the privatised Insurance Services Group, to improve the export services to firms in the regions. That will encourage to export firms that may previously not have thought of exporting. I am sure that the Minister will appreciate that, even if only 10 per cent. of the firms that do not export decided to do so, it could make a dramatic difference to our trade balance. We want to ensure that all measures are taken, including measures for the regionalisation of the ECGD and the privatised ISG, to enable would-be exporters fully to take advantage of the export opportunities which may be open to them. For all those reasons, I strongly support the points made by my hon. Friend.

Mr. Sainsbury

I fear that the amendment reflects both a continuing misunderstanding of, or perhaps a reluctance to consider, how private industry operates and the long-established, always recurring phenomenon of Labour party interference with, intervention in, and excessive regulation of the private sector. In this case, the amendment would lay down where a particular company should have its operations.

The Labour party ignores how the private sector works. It assumes that a private company has no regard for the interests of its customers and that in a mysterious way it can make profits without either having or attracting customers. I assure the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins), as I had to in Committee, that that is not how private industry works. It succeeds by satisfying its customers and giving them what they want. It seeks to do so continually and is in general a great deal more successful, more flexible, and faster to change and respond to customer needs than nationalised industries. That is one of the many reasons why privatisation has been so successful.

The way in which the amendments have been proposed reflects a failure to appreciate the relationship between an exporter and a regional office of the ECGD. We should not object to—indeed, we should welcome—any exporter who called at a regional office, but regional offices are more a base from which ECGD members of staff visit exporters than the other way round. The large number of inquiries to which the hon. Gentleman referred are largely by telephone or, these days, by fax. It is not as if many people are queuing at the door wanting to make export inquiries when the office opens in the morning. That is not what happens.

We share at least one objective—the wish to help and encourage investors—but there are many better ways to do so than by trying to regulate in statute where and how many regional offices the privatised insurance services business should have. As I said in Committee, I am confident that the new owners of the ISG will wish to keep a network that reflects both its needs and those of its customers, and developments in business communica-tions. I hope that hon. Members will at least recognise the speed at which business communications have changed and are likely to continue to change.

It would be unreasonable and unhelpful to impose on a private company—which, incidentally, is in competition with other private companies—a statutory requirement about where it should have its regional offices, and how many there should be. The regional offices and their staff will be among the assets transferred on the privatisation of insurance services. The present locations are of long standing. They were chosen to provide a balance between the needs of insurance services customers for local service and contact, and the costs of running a widespread regional network, which would have to be funded by the premiums paid by exporters.

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The regional office network has never been entirely consistent with the United Kingdom standard planning regions and there is no particular reason why it should be so. The factors determining the locations are not regional in the sense of standard planning regions, but relate to the needs of customers and the balance between the costs of the network, the methods of contacting customers, the modern communications used and what assessment is made by the new owners of the base from which they wish to send out their representatives to contact customers.

I urge the House to reject the amendments which, once more, show a failure to understand private business. They would unnecessarily interfere with and intervene in such business, certainly not to the advantage of its customers.

Mr. Cousins

The Minister's answer is both curious and disappointing. It is curious because it substantially concedes the case that we are trying to make. In view of his remarks in a previous debate this afternoon, the Minister could not seek to deny the value of the regional offices. Nor did he seek to do so in his reply. It is clear in his mind that those regional offices deal with large numbers of inquiries and provide an extremely important counselling service. They undertake effective missionary work regarding the promotion and encouragement of exports, particularly among small and medium-sized industries, along precisely the lines that my hon. Friend the Member for Gateshead, East (Ms. Quin) described. The Minister does not in any way dispute our arguments about the value of that network of regional offices.

The Minister's speech was curious because he said that we did not need to take any measures to retain the network of regional offices in the arrangements following privatisation. If the offices are as valuable as the Minister concedes, they must be worth preserving. There would be nothing extraordinary or unusual for the seller to ensure that the purchaser undertook to retain a network of continuing activity for a reasonable period. That does not constitute meddling or excessive regulation. It is slightly curious for a Minister from a Department that gave us the Financial Services Act 1986 to deliver lectures about the nature of excessive regulation.

It may be far easier to make a provision in the sale to continue regional offices than to attempt to intervene later by administrative regulation or Government involvement to patch together what could have been saved at the outset by a simple inclusion of this point in the terms of the sale.

If we think that the network of regional offices is valuable, now is the easy moment to preserve and develop it. To return after the disposal of these activities to a private company and attempt to reimpose, rebuild, comment on, criticise, develop and worry about counselling services that may have disappeared so that the only service is somebody sitting beside a fax machine in London will be to act too late. Then the matter will be complicated and will require regulation and unnecessary Government intervention in the work of a private agency. We are now engaged in the process of disposal and this is the simple and right moment to ensure that the network of regional offices survives.

Amendment negatived.

Ms. Quin

I beg to move amendment No. 6, in page 5, line 28, at end insert— '(4A) The Secretary of State shall ensure that no scheme shall be made under this section without proper and timeous consultations with the relevant trade and exporting organisations and the accredited representatives of the employees' trade unions.'.

Madam Deputy Speaker

With this it will be convenient to discuss the following amendments: No. 21, in page 5, line 31, at end insert— '( ) A scheme under this section shall contain a provision that there shall be a period of not less than three months, starting from the date of the announcement of the agreed purchase, for consultation and agreement on employment terms and conditions at transfer between the transferee and the employees' trade unions.'. No. 10 in page 6, line 7, clause 9, at end add— '(3) A scheme under Section 8 of this Act shall contain a provision that there shall be a period of not less than three months, starting from the date of the announcement of the agreement between the transferor and the transferee, for consultation and agreement on employment terms and conditions at transfer between the transferee and the employees' trade unions.'.

Ms. Quin

The amendments deal with the important issue of consultation with the work force who will be affected by the establishment of the privatised ISG and the conditions under which those consultations should take place.

Amendment No. 6 refers to proper and timeous consultations with the relevant trade and exporting organisations and the accredited representatives of the employees' trade unions. Although we believe that consultations with the work force at Cardiff are important, we have also referred in the amendment to the importance of consultations with the relevant exporting organisations. The way in which the Government have proceeded with the Bill has not led to such satisfactory consultations.

Amendment No. 21 refers to a period of not less than three months, starting from the date of the announcement of the agreed purchase, for consultation and agreement on employment terms and conditions at transfer between the transferee and employees' trade unions. That is the minimum that should be required. Despite the so-called process of consultation, we are not convinced that there has been any meaningful consultation to allow the views of the work force to be heard. We do not believe that their ideas have been noted and accepted.

Such consultation would be normal in most parts of the European Community. Given that one of the reasons the Government feel the Bill is necessary is as a response to possible changes in export credit in Europe, it would be a good idea if the Government followed the European practice for consultation with the work force in Cardiff. We know, however, that the Government are opposed to the European social charter and that they do not like the idea of being obliged to consult employees, or to take their views into account. Presumably that explains their attitude to the privatisation of ECGD.

Amendment No. 10 also refers to a period of not less than three months … for consultation and agreement on employment terms and conditions". We believe that the discussions between the Government, the trade unions and the employees who will be affected must be wide-ranging to cover all the various terms and conditions that will obtain at transfer.

Some of those terms and conditions will be the subject of later amendments and I know that the issue is also likely to be considered in another place when the Bill is subject to further discussion. However, we make no apology for referring to consultation and agreement now, as they are of vital concern to the employees who will be affected by the transfer.

Mr. Sainsbury

Since the outset of discussions leading to the proposal for privatisation, ECGD has been careful to involve and consult interested parties, and that includes the staff, their trade unions and the relevant exporting associations. I am surprised at the suggestion of the hon. Member for Gateshead, East (Ms. Quin) that there have been no such full and comprehensive consultations with the trade unions and individual members of staff. That suggestion is contrary to the facts.

Before the decision to privatise was taken, Mr. Kemp received comments from all interested parties during his review, as did the inter-departmental working group of officials set up to study the options in the Kemp report. Those interested parties included trade unions. Major exporters and exporting organisations submitted their views to the Select Committee for Trade and Industry when it examined the future of ECGD. Numerous written representations have been taken into account. The trade unions also submitted evidence to the Select Committee through the Council of Civil Service Unions.

Since the intention to privatise ISG was announced on 18 December 1989, the trade unions have been kept informed of developments and have had numerous opportunities for making their views known to ECGD's management at meetings of the department's Whitley committee and its sub-committees, including a special sub-committee relating to privatisation issues, which meets monthly.

The hon. Lady will be aware that there have already been an exhaustive number of meetings. From time to time, there have also been meetings of the management and the chairmen of various sub-committees dealing with particular aspects of the privatisation. The topics covered in those meetings include personnel records and preliminary staff projections for the new company as well as for the proposed organisation of ECGD post-privatisation. I assure the hon. Lady that ECGD's trade unions will continue to be fully consulted as required by TUPE—Transfer of Undertakings (Protection of Employment) Regulations 1981.

All the invited bidders have already met the ECGD trade unions or have arranged to do so. The bidders will be able, if they wish, to have further discussions with the unions before they submit their bids. The preferred purchaser, when identified, will have the opportunity to have further discussions with the trade unions about the terms and conditions offered.

I cannot, of course, commit the preferred purchaser to any particular approach to those discussions, but the opportunity for them will exist. There should be sufficient opportunity for such discussions before the package of terms and conditions on offer is formally presented to all staff. When that has been done, the staff will be given at least a month to express their individual preferences. I believe that is an adequate time scale and there is no need to specify a different or longer one in the Bill.

It would be unreasonable to include in statute a requirement that the parties involved should reach an agreement on terms and conditions within a set period, whether that meant three minutes, three weeks or three months.

I agree with the hon. Lady about the importance of full and proper consultation, and that is exactly what has already taken place. Therefore, the amendments are unnecessary and, insofar as they suggest that there should be a period of not less than three months for consultation starting from the date of the announcement of the agreement, they would be unhelpful and would lead to uncertainty and difficulty not only for the staff, but exporters. I had hoped that it remained the hon. Lady's view that we should provide good assistance to exporters rather than make their job more difficult.

Mr. Michael

It is not adequate to quote in support of consultation with staff consultation and comment on policy to a Select Committee in response to the Kemp report. That is no substitute for proper consultation on the current details of the way in which the privatisation will affect staff.

To date there has been no meaningful consultation with ECGD trade unions by the management departments. That is illustrated by the fact that it was necessary to take the case to the central arbitration committee to force the management to release a report prepared by Coopers and Lybrand Deloitte on the terms and conditions and pension right arrangements that are likely to apply to existing ECGD staff who agree to transfer to the newly privatised company.

Mr. Sainsbury

I remind the hon. Gentleman that when that point was made previously I had to point out that the staff had sought the release of that document before it had been prepared. It would have been extremely difficult for Messrs. Coopers and Lybrand Deloitte to hand over a report that had not been completed.

Mr. Michael

The Minister repeats what he said in Committee, but the staff have also repeated their statement since the Minister made that statement. They have repeated that it was necessary for them to take such action to obtain the details of the terms and conditions and pension arrangements that were likely to apply to existing staff. It is surely right that the staff should be given information as early as possible and be fully consulted about it.

The management's intention is as follows: once the purchaser of ISG has been selected, a package of employment terms and conditions will be presented to staff, who will then have one month in which to consider it and to decide whether to join the privatised company or to remain in the civil service. That does not allow enough time for expert advice to be obtained on employment terms or for meaningful consultation to take place—the more so given the current backlog of items on which consultation and negotiation are needed.

8.30 pm

The Minister has said that he agrees with the Opposition on the need for consultation. Sad to say, such words come easily, but staff are still not to be given adequate consideration during the process of privatisa-tion. If the Minister agrees with us so readily, why does he not accept the amendments? If he is so willing to accept the principles behind them, why does he not accept them in full? The Minister has promised full and adequate consultation with staff at every stage from now on. I ask him to ensure that that happens in practice.

Mr. Sainsbury

The hon. Gentleman asks why I do not accept the amendments. Amendment No. 6 states that no scheme shall be made under this section without proper and timeous consultation". Who is to determine what "proper" means? A good reason for not accepting the amendments is that they are far too vague. Apart from the wide-ranging and continuing consultation with the trade unions to which I have already referred, 700 counselling interviews with members of staff have been held.

Mr. Michael

On the second point, the Minister knows about the unsatisfactory answers given by the Department and by the Minister responsible for the civil service. On the first point, the last refuge of a Minister who has lost the argument is to suggest a difficulty in an amendment that would be impossible to resolve in law. The test of what is reasonable is well established in English law, and there would be no problem about testing these points in that way. I seem to remember that in Committee the Minister defended the word "reasonable".

Mr. Sainsbury

The amendment contains the word "proper", not "reasonable".

Mr. Michael

The Minister is quibbling. He is seeking a test of what is reasonable, and if the amendment, including the principles with which he says he agrees, were incorporated in law, the test of what is reasonable would suffice to determine whether a particular course of action was satisfactory. Either the Minister should accept the amendments, therefore, or, given the quality of advice that he has at his disposal, his colleagues in another place should return with fresh amendments to give effect to the principles with which he says he agrees.

We are disappointed with the Minister's response and we shall keep these matters under close scrutiny. How the Minister pursues the undertaking that he has given in this short debate will also be a matter of scrutiny and debate in another place. In the meantime, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.