ARRANGEMENTS FOR THE CARRYING ON OF CERTAIN ACTIVITIES

HC Deb 24 April 1991 vol 189 cc1092-136 3.42 pm

Mr. Allan Rogers (Rhondda)

I beg to move amendment No. 1, in page I, line 22, leave out from 'for' to end of line 23 and insert `an Executive Agency within the Civil Service of the Crown to carry out designated activities at the premises; and'.

Mr. Speaker

With this it will be convenient to discuss the following amendments: No. 3, in page 1, leave out lines 24 to 27.

No. 2, in page 1, line 24, leave out 'or another company' and insert 'Executive Agency'.

No. 4, in page 2, line 4, leave out 'their services and'

No. 5, in page 2, leave out lines 7 and 8.

No. 8, in page 2, leave out lines 10 to 13.

No. 9, in page 2, leave out lines 10 to 19.

Mr. Rogers

Our amendments are an attempt to restore a little sanity to this vital issue. Over the next few hours, we shall debate, in effect, the privatisation of the production of nuclear warheads. That fact cannot be dressed up, however much the Government may try to do so by using words such as "contractorisation", and by saying that they will keep control. As the Minister acknowledged throughout the Committee stage, this is privatisation—privatisation based on the Government's incompetence. In effect, they are saying that they cannot manage Aldermaston and our nuclear weapons production any more, and that they are not good enough at the job, so private contractors will have to be brought in.

As my hon. Friends know, the Conservative party is the party of big business. It likes to present an efficient streetwise image, although we know that it cannot manage the economy. The Minister of State for Defence Procurement was a member of the Committee, but he was too busy to turn up for its meetings. He was probably too busy polishing his antique cars to bother to show up. With his background, it is no wonder that he does not want to talk about defence procurement. After all, he is the Minister of State for Defence Procurement. Any procurement failures in the areas that we shall be discussing this afternoon and evening fall directly upon the right hon. Gentleman.

The Minister of State for Defence Procurement (Mr. Alan Clark)

Name one.

Mr. Rogers

The Minister says, "Name one," by golly. We shall be embarking upon the single-service debate shortly. Every procurement problem that we have faced has involved overruns in time and costs. The Minister knows that he is hopeless at doing his job, but he is a military historian. He is not like his right hon. Friend the Member for Henley (Mr. Heseltine), the Secretary of State for the Environment. [Interruption.] Well, I do not know whether the right hon. Member for Henley is his friend. I believe that he described him as the "wrong horse" on one occasion. The right hon. Member for Henley was appointed Secretary of State for Defence specifically to introduce a business element into the Procurement Executive. He brought in his friend Sir Peter Levene to head the executive, and for the ensuing seven years we have had disaster after disaster.

The right hon. Member for Henley is now, as I have said, the Secretary of State for the Environment. Again, we shall have disaster after disaster. The right hon. Gentleman walked out of the Cabinet because he had quarrelled with his mistress or master. I am not sure how the previous Prime Minister, the right hon. Member for Finchley (Mrs. Thatcher), should be described. I suppose that the right hon. Gentleman is likely to run out again over the community charge or poll tax problems.

The decision to privatise the production of nuclear warheads was based upon the incompetence and mismanagement of the Government. They set up a committee of inquiry under Sir Francis Tombs, who is now Lord Tombs and the chairman of Rolls-Royce. The Tombs report never really came out. It has become one of the most secret documents under this most secretive of all Governments.

In Committee, my hon. Friend the Member for Ashfield (Mr. Haynes) asked on several occasions whether we could have sight of the Tombs report and other documents so that we could properly conduct our opposition to the Bill. We were allowed no sight of the report. The Government said that we could not have the report in full or in summary: the report remained entombed. The Government said originally that they would not let us have sight of it because it contained confidential advice to Ministers. There was talk of an internal advice note. In Committee, the Minister said: The Tombs report is an internal report that was commissioned by the Ministry of Defence for its own use on the Atomic Weapons Establishment. Many other Departments in Whitehall commission their own reports to help them to manage their own Departments effectively. As it is an internal report, it is not for publication. Indeed, it would be bizarre if every such report were made public. That is the main reason for it being confined to the Ministry of Defence. That is not a good enough reason. The Minister added: Secondly … it refers to the Atomic Weapons Establishment."—[Official Report, Standing Committee F, 24 January 1991; c. 5.] In other words, anything that refers to the establishment has a security classification.

Later, when the Government's credibility was punctured, they played their usual Tory trick. They wrapped themselves in a Union Jack and responded a little more hysterically, saying that disclosure would be against the national interest and against national security. The truth is that disclosure would be against the interests of the Tory party. I venture to guess that there is no classified material in the report. I guess also that there is no mention in it of the production of nuclear weapons. I have no doubt that it refers to organisation and management, but that could be the organisation of management of Marks and Spencer or Tesco. The same principles are involved.

Mr. Menzies Campbell (Fife, North-East)

If there were classifed material in the Tombs report, would it not be simple to excise it and allow the remainder of the report, and in particular its conclusions, to be put in the public domain? Would that not better inform the House when it is making a decision on whether the Bill should pass into law?

Mr. Rogers

We specifically asked on many occasions the Government to do that. [Interruption.] The Minister is not really interested in the Bill; he showed that in Committee. That is why he is rabbiting on now. Instead of gabbling with his colleagues on the Front Bench, he should listen to the debate; he might then learn something about his Department.

The hon. and learned Member for Fife, North-East (Mr. Campbell) raised a valid point. We asked the Minister to take the classified material out of the report. Hon. Members who serve on the Public Accounts Committee or the Select Committee on Defence receive reports from which large sections have been censored. Of course, as Members of Parliament we cannot be trusted. The Government would not even think that Members of Parliament should be privy to organisation and management reports. We gave the Government the opportunity to delete classified material from the reports, but they refused to do so. They shrouded themselves in the Union Jack and said that it would be against the national interest.

The Government took the same attitude with the Select Committee on Defence. Despite the fact that it is Conservative dominated, the Government said that it could not see the report. The Select Committee commented on that in its report: A study undertaken by an outside consultant, on the board of a public company, is in a rather different category from advice tendered to Ministers by a Civil Servant acting in a professional capacity. It is unsatisfactory that, where a report by a distinguished industrialist may have formed the basis of a major change in policy, the House let alone the Select Committee charged by the House with oversight of the Department concerned, should be denied a view of it. It is not only Labour Members who object to the Government's secretive manner; so does the Conservative-dominated Select Committee.

If mere management reshuffling was all that would result from the internal review and the Tombs report, we would say that, like every other Department, the Ministry of Defence was entitled to reorganise its management if it so wished. However, it is not just a matter of reorganisation. The Government have the right to instigate such reviews and to implement their findings on the basis of departmental management. But we are dealing with fundamental proposed legislation that will affect the way that we produce the most fearsome weapons that mankind can devise.

We tabled this amendment, which suggests an executive agency rather than contractorisation or privatisation, because we are greatly concerned about the way in which the Government are behaving. The employees and trade unions involved produced proposals and then presented a document to the Secretary of State. They met him and suggested ways in which the Government's fumbling, dithering and mismanagement could be overcome. The Secretary of State rejected those suggestions and said that the Government would go ahead with privatisation.

We understand the Government's objections to trade unions as a matter of political dogma. For the Government, anything that comes from the work force or the trade unions must be bad, while anything that comes from their friends in the City or from big business must be good—except, of course, certain comments made yesterday, which must also be bad. However, as soon as the trade unions make a suggestion, the Government turn a blind eye. They jumped to the most extreme option available to deal with the problems at Aldermaston.

The Labour party and the trade unions accept that changes needed to be made, and still need to be made, in the management of the production of nuclear weapons. On many occasions we have criticised the Government, and we are not alone in doing so. The Tory-dominated Defence Committee said: It must be open to question whether the shortage of production and management experience now identified at AWE should not have been recognised at a much earlier stage and remedial action taken then, rather than after the programme had run into difficulties. Much the same thing happened with the construction of the A90 building.… It would appear that the culture of the 'self-sufficient' research establishment was not only entrenched in AWE but also in senior MoD management who failed to grasp that the AWE lacked the management resources required". Just as importantly, we also recognise, as did the trade unions and the workers in Aldermaston, that a change was needed in the relationship between the Atomic Weapons Establishment and the Government—a relationship that has deteriorated to such an extent that it has led to the Government's extraordinary admission of failure to run those establishments. However, never did we or any rational person expect the Government to come up with the half-baked, ill-considered proposals in the Bill. They are so daft that we can see the Minister of State's hand in them. Such proposals could come only from his hand. I notice that he has retreated from the Chamber in disarray. He probably realised what I was going to say and has gone to the underground garage to polish his Rolls-Royce.

Even the Select Committee on Defence was taken aback by the Government's proposals. Paragraph 57 of its report says: On 5 December 1989, the Secretary of State announced measures far more radical and far reaching than the evidence put before us last year had implied, with his proposals for the full-scale contractorisation of AWE. Paragraph 60 of the report says: Although the Secretary of State recognised the 'valid concern of the Select Committee about the need for improvements at AWE' and sought to place his proposals in the context of that concern, it is clear that they go a great deal further than this Committee envisaged or suggested". Not even the Select Committee on Defence, which investigated this issue in great detail, envisaged that the Government would jump over all the reasonable options and land up with this most unreasonable proposition.

Our amendment would set up an agency formed on the model that was envisaged in "Next Steps", the document issued by the Government. It would be fully in line with the Ibbs report, the recommendations of which were fully accepted by the Treasury and Civil Service Select Committee. The then Minister for the Civil Service, the right hon. Member for Shoreham (Sir R. Luce), characterised "next steps" as the Government's way of improving value for money and quality of service in the absence of a market mechanism. He also made it clear that More direct accountability would not be allowed to undermine the Northcote-Trevelyan principles upon which the Civil Service is based."— that it should not detract from the essential accountability of departmental Ministers to Parliament; such matters are permanent. By adopting that dogma-based suggestion, the Government are creating yet another division between Parliament and the control of vital issues. When I spoke at a public meeting near Aldermaston some months ago, one of the supervisors said, "Mr. Rogers, I wish that they would realise in London that in Aldermaston we are producing not rocking horses but the most fearful weapons." However, it seems that the Government's political dogma has dictated their actions and prejudiced their judgment.

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The dogma is seen particularly in Government's attitude towards the work force in the establishments. If ever there were an industry requiring high morale to ensure maximum safety and security, it is this most potentially dangerous of all industries. But the Government, by their action, have created a poisoned atmosphere of mistrust among the workers and low morale, leading to increasing numbers of people leaving—the very thing that the Bill was supposedly intended to prevent.

The trade unions in the plant and the workers in the plant—more often constituents of Conservative Members than of Opposition Members—have continually made constructive suggestions to improve production and management. They have entered into pay agreements providing considerable flexibility and said that they were prepared to accept new frameworks for consultation. They recognise existing problems and have made positive suggestions, but the Government, due to their incompetence and inability to manage—which we see in so many aspects of public life today—have refused to respond. All reasonable objections and all reasonable suggested options have been rejected. That is why we have had to table the amendment and why we shall push it to a vote.

Sir David Mitchell (Hampshire, North-West)

The Bill considerably affects my constituency because a large number of the people who work at Aldermaston live in the villages of Tadley, Baughurst and Kingsclere and a number of surrounding villages. Therefore, anything arising from the Bill, particularly as it affects the staff, is of significant importance to my constituency.

In Committee, my hon. Friend the Minister was helpful in explaining a number of the Bill's aspects as they affected my constituents. I think that hon. Members from both sides of the Committee will agree that the Minister was helpful throughout, and courteous in his treatment of the Committee. Therefore, I should like to express my gratitude to him, but remind him that, in politics, gratitude is a lively anticipation of further benefits to come.

Will the Minister repeat on the Floor of the House the assurances that he gave in Committee on four matters? First, will he give an assurance that existing and pre-contract No. 1 standards of safety will be maintained and rigorously enforced? Secondly, on security, will he assure us that the costs and standards of staff screening will remain the responsibility of the Ministry of Defence? Thirdly, will he assure us that there will be no reduction in the pensions that staff now have reason to expect, and that full indexation of pensions will remain?

Can my hon. Friend say a little more about a matter that I raised with him in Committee concerning contributors to the United Kingdom Atomic Energy Authority pension scheme, known as the ukulele scheme? Those people were covered by the original arrangements for Aldermaston. When it was transferred to the Ministry of Defence, they were given the option not to move to the new pension scheme, and many remained in the old one. There are about 700 people who would like to remain in that scheme. I have put the point to my hon. Friend, and he has expressed sympathy for the workers. Has he made any progress on the matter?

Fourthly, in Committee, my hon. Friend gave considerable assurances about redundancy. He did not expect any skill redundancies. If there are redundancies, he said that compensation would be on the same scale as for people employed in the civil service. Perhaps my hon. Friend can help me a little further by explaining how far into the future assurances that he can give about the maintenance of the arrangements for compensation for redundancy will continue. I understand that, at the time that the change to contractor employment takes place, redundancy will be fully covered by the existing arrangements. Will the workers be covered two months, three months or six months later by the assurances that my hon. Friend gave in Committee?

Mr. Rogers

The hon. Gentleman has said that the Minister gave assurances in Committee on redundancy compensation and said that it would be in line with redundancy compensation for civil servants. Does not the hon. Gentleman remember that, when we pressed the Minister on the issue, he acknowledged that he would not have control over it, that the workers would be employed by an employing company and would effectively not be civil servants, and that therefore he could not give any promise that they would have civil service treatment if made redundant? If the hon. Gentleman recalls the events in Committee, he will remember that we reminded the Minister what happened when the royal dockyards were privatised.

Sir David Mitchell

My understanding was that the matter was dealt with fully and carefully in Committee when my hon. Friend explained that the contract would require the contractor to meet those terms on redundancy. I think that I understood correctly what my hon. Friend said in Committee. I am now seeking assurances as to how far the contract will bind the contractor into the future.

Assurances on those four matters are of enormous importance to my constituents. I hope that when he replies to the debate my hon. Friend can repeat those assurances on the Floor of the House.

Mr. Menzies Campbell

I too should like to pay tribute to the courtesy and, indeed, good humour of the Minister in Committee. I regret that his courtesy did not extend to accepting the quality and effectiveness of many of the arguments mounted against various clauses as the Committee stage proceeded.

Amendment No.1 raises the fundamental issue of principle in the measure. That issue of principle was referred to by almost all who spoke on Second Reading and it came up time after time in our clause by clause consideration of the Bill in Committee. Of course, it gives rise to the consequences of some of the issues which have just been referred to and in respect of which undertakings have been sought. If the Government were not embarking upon contractorisation of the kind which the Bill embodies, the undertakings sought by the hon. Member for Hampshire, North-West (Sir D. Mitchell) would not be necessary.

I remain firmly of the view that, in the development and production of nuclear weapons, there should be no dilution of ministerial responsibility. Ministers should be obliged to come to the Dispatch Box and to answer to the House for that responsibility. I remain of that view because these are weapons of mass destruction. I suspect that, of all the duties that are incumbent upon Ministers of the Crown, the responsibility to determine whether weapons of mass destruction are deployed, or even used, is probably the most awesome.

In my judgment, it is in the public interest that those who have that responsibility—a responsibility that includes the development and production of such weapons—should be answerable to Parliament. It may well be said that they will remain answerable to Parliament if these proposals are allowed to go through. However, as I have sought to point out on Second Reading and at every available opportunity since, if there is any falling down in safety, if there is any element in the way that the contract is fulfilled that is contrary to the terms of the original contract, Ministers will not say at the Dispatch Box that their Department has failed to exercise proper supervision; they will say that there has been a breach of contract.

As I have pointed out on a number of occasions, it beggars description for us to believe that we should go to the High Court in the Strand and litigate about such matters, especially at a time of national or international tension, when I should have thought that nothing could be more calculated to be damaging to morale.

This amendment is at the heart of the proposal. I am not persuaded that the production and development of something as important and responsible as nuclear weapons should be handed away, or that it should be subjected to the interposition of some other company between Ministers and their responsibilities. After all, the proper defence of the realm is perhaps the most significant of all ministerial responsibilities.

The Minister has tried, with his courtesy, tact and good humour, but he has not persuaded me that the proposal in respect of which this amendment has been tabled is valid. I encourage my right hon. and hon. Friends to vote in support of the amendment. Respectfully, it seems to me that, if it were carried, the Bill would better reflect Ministers' responsibilities and would much better reflect the public interest.

Mr. John McWilliam (Blaydon)

I am not prepared to argue, because the Select Committee on Defence, on which I have the honour to serve, has looked long and carefully at the Atomic Weapons Establishment. Indeed, many years ago it was given a duty by the House to report annually on Trident and our nuclear weapons, and it still does so. I am not convinced that the pre-existing structure was right for AWE and I would not for one minute attempt to argue that it was. It could have been amended without recourse to "next steps" agency status, but the Government were not prepared to do that.

My hon. Friend the Member for Rhondda (Mr. Rogers) has already quoted from a report in which the Committee was unanimous in saying clearly that the Government's proposals in the Bill go too far. There was no Division in the Select Committee. There has been only one Division in that Committee, which was many years ago, because we strive to reach unanimity on major questions, especially on this most important question of the safety and continuity of our Atomic Weapons Establishment.

We have to consider the establishment in context. The only other establishment of the kind in the western world—one that is capable of making Trident warheads—was at Rocky Flats and it is now shut. The Americans have no capability to make warheads for their Trident missiles. That was widely reported last week in the Congressional Armed Forces Committee review, where the question was asked. I believe that diplomatic sources have been approached to find out whether Aldermaston could make warheads for them. I was given to understand that the reply was no and that Aldermaston was too busy trying to make them for our own requirements. Therefore, AWE is the only establishment of its kind. The question must be asked, what happened to Rocky Flats? Was it not capable of making weapons? Of course it was, and they were tested, but it was run in precisely the same way that the Government propose to run Aldermaston under the Bill and it became unsafe, polluted and a disaster area, which it still is. I do not believe that the installation will reopen.

4.15 pm

In 1978, the Pochin report was published. It dealt with a previous occasion when areas of Aldermaston became unsafe. Paragraph 3 of annex H states: In matters of safety it is necessary to have redundancy in all aspects: in materials ('safety factor'), in control systems ('back-up'), in personnel ('emergency teams'), and so on. For example, a bridge or a lift that is just safe, but has no safety margin, paradoxically is in its most dangerous state. Redundancy of effort is as necessary as redundancy of materials. Where staff is the minimum necessary to achieve the bare level of safety any unusual concatenation of events may bring trouble. I agree entirely with the Pochin report in that respect.

It may be convenient if I remind the House that because the new commercial management, which seems to have been in operation even before the Bill is passed, took steps to change the arrangements of shift working for routine maintenance—a desperately important safety requirement—for the first time since the closure of plant which led to the Pochin report, the plant failed to operate on one normal working day. Everybody turned up for work but could not work because the maintenance effort had been cut. That is just one example of what we appear to be facing.

A few weeks ago, when Dr. Glue appeared before the Select Committee, I questioned him about what had occurred. He is supposed to be responsible to the Minister for ensuring that the plant is operated in a safe and efficient manner. I was less than impressed by his response. He implied that it was more important to score minor points against the trade unions on a rota working agreement than to ensure the safety and continuity of the plant. What was the Government's response? It was to continue with the Bill as drafted.

My hon. Friend the Member for Rhondda (Mr. Rogers) explained in detail why we have tabled the amendments. I listened carefully to the points raised by the hon. Member for Hampshire, North-West (Sir D. Mitchell), who is not here. The only way that he can be certain about the issues that he raised is to join us in the Division Lobby in support of the amendments. Anything that the Minister says is consequent on him achieving a good enough contract with the managing contractor and on that contract being complied with. As the hon. and learned Member for Fife, North-East (Mr. Campbell) rightly pointed out, if such matters are dealt with in that way, they will literally become matters of opinion, and that opinion will have to be decided in the High Court. That is not good enough for something as potentially dangerous as the Atomic Weapons Establishment.

I pay tribute to the management, to the employees and to the design of the new buildings at Aldermaston because they are excellent and work safely, and efficiently, when they are allowed to do so. Having said that, because of the previous direct civil service conditions of service and the contraints on the plant, the way it was operated as a research establishment and nothing more and the way in which the manufacturing aspect was taken care of were good enough. However, a "next steps" agency under the Government's own arrangements could take care of those problems without the potentially dangerous introduction of a management contractor, over which the House and Her Majesty's Government would have control only through the contract itself.

I urge hon. Members on both sides of the House who are convinced that Aldermaston should work in a safe and effective fashion to support the amendments. If they do not, they may allow Aldermaston to be run in such a way that there is a better than even chance, on the evidence before us, that it will have to be shut for safety reasons.

Mr. Tam Dalyell (Linlithgow)

Those hon. Members who did not go through the sweat and long hours of the Committee stage should be reticent in arguing with their colleagues. I should have liked to serve on the Committee, but it took place alongside the proceedings on the Natural Heritage (Scotland) Bill on which I had a lot and a half to say, so I could not serve on the two Standing Committees at once. I excuse myself to the Minister for not being on the Committee.

This is a most important Bill. Like the hon. and learned Member for Fife, North-East (Mr. Campbell), I believe that the Bill is the core of an important argument. We have read press reports which may or may not be accurate to the effect that there is some question—I put it no higher—about the stability and long-term safety of existing British nuclear weapons.

I had the honour to be asked to contribute to the obituaries of the late Lord Penney. I recall that one of his anxieties over the years was that testing, monitoring and checking had not taken place because, the distinguished physicist argued, no one could be certain that arms that were stored for a long or longish period of years would remain stable. I am not in a position—I do not think that anyone in the House is—to make judgments about the physics of such weapons, but when a man of the experience of Lord Penney says that there is some doubt, it is up to us to take some notice.

I know better than to ask the Minister outright whether British nuclear weapons are unsafe. Even if he thought they were, I suspect that he would be justified in not telling me, at least on this occasion, in open debate and without the coverage of the Official Secrets Act, by which I am not covered. However, I am entitled to ask a rather different question. Are the Minister, the Secretary of State for Defence and their senior colleagues satisfied that, under the arrangements that they propose, important matters can be monitored in the detail that they certainly were at one stage by those working at Aldermaston? The answer may be that they are quite relaxed about it, that they have made all the arrangements and are absolutely certain that there are no possible dangers and no possibility of the physics of instability applying at Aldermaston. If the Minister said that, I for one would not dispute it much further. I would take it as an honourable answer on behalf of the Government. However, I would like it to be put on the record that the Minister really believes that, under the proposed arrangements, the stability of the weapons can be properly and effectively monitored.

Sir Michael McNair-Wilson (Newbury)

Through circumstances far beyond my control, I was unable either to speak in the Second Reading debate on the Bill or to take part in the Standing Committee proceedings. My information on what was discussed in the debates is somewhat limited, so I shall keep my remarks as brief as possible.

As both Aldermaston and Burghfield are in my constituency, the question of safety is of paramount importance to my constituents—not only those who work in the establishments, but everyone. I live only five miles from Aldermaston. My hon. Friend must be aware of the long-running saga of the leukaemia and lymphatic cancer cases. The Committee on Medical Aspects of Radiation in the Environment has looked at these, but has not yet come up with a definite answer.

COMARE—a Government body, albeit independent of Government control—is responsible for doing what its title suggests it should do. I applaud much of what this Bill contains. If it becomes law, will COMARE retain its predominant position? Will it still be able to investigate anything that gives rise to concern about safety in an establishment, anything that worries people living in the area? I am thinking about possible emissions from Aldermaston or Burghfield. Such an assurance would go a long way towards putting at rest the minds of those who are concerned that contractorisation and the safety element are not spelt out quite as clearly as we should like.

Over the 18 years during which I have represented the constituency of Newbury, there have been a number of reported leaks. On such occasions it is very reassuring to my constituents that their Member of Parliament can put down a question and expect a reply within three days, and that if that reply is not adequate further questions may be put down. If, in such an event, it is no longer possible to take some safeguarding steps on behalf of my constituents, contractorisation will damage itself in terms of the security that is necessary for the sake of the future of the establishments.

Mr. Andrew Hunter (Basingstoke)

My comments will be even more brief than those of my hon. Friend the Member for Newbury (Sir Michael McNair-Wilson). I want simply to reinforce the points that he made and the argument that I understand was made earlier by my hon. Friend the Member for Hampshire, North-West (Sir D. Mitchell). Aldermaston is indeed in the constituency of my hon. Friend the Member for Newbury, but it is also very close to the borders of three parliamentary constituencies, of which Basingstoke is one. As I live about one mile from the Aldermaston perimeter, I can beat the claim of my hon. Friend.

I hope that the Minister is taking serious note of hon. Members' concern about general matters of safety. Members of Parliament representing constituencies in this area feel that they have a particular responsibility. I welcome the assurances that my hon. Friend the Minister has given to date.

Mr. McWilliam

I am very surprised at what the hon. Gentleman is saying. In Committee, he had the opportunity to vote for specific safety amendments that we introduced, but he did not do so. Indeed, he opposed them.

Mr. Hunter

That is very easy to answer. I listened to the arguments of the hon. Gentleman and his hon. Friends, but was not convinced by them. That is why I did not vote for the amendments.

Mr. McWilliam

Rubbish.

Mr. Hunter

We listened for many hours to the arguments, but we were not convinced. The fault lies with the hon. Gentleman and his hon. Friends, not with us.

Mr. Rogers

Even if the hon. Gentleman felt that our arguments were not good enough, surely he should have been convinced by the content of the amendments, every one of which was worded carefully with a view to enhancing the safety aspects of the operation at Aldermaston. I accept that we may not have been able to convince the hon. Gentleman by argument, but surely the text should have done the job.

Mr. Hunter

I do not dispute the hon. Gentleman's intentions, but I certainly dispute the force of the argument which supported the amendments, and for those reasons I shall have no part of them.

I conclude by stressing that I look forward to further reassurances from my hon. Friend the Minister.

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The Parliamentary Under-Secretary of State for Defence Procurement (Mr. Kenneth Carlisle)

It is a pleasure to reply to the first debate on the Bill on Report. As the House will know, the amendments are intended to ensure that the Atomic Weapons Establishment will in future be operated not by a commercial company but by an executive agency within the civil service. We have had a very sober debate, and I shall seek to answer the points that have been made and restrict myself to the scope of the amendments.

We have to admit that, if we accepted the amendments there would be no need for the Bill. Obviously, the Secretary of State has the power to set up an executive agency without a Bill. Therefore, everything in the Bill relates directly or indirectly to the fact that, under contractual operation, the staff at the AWE would no longer be civil servants. However, I should like to reply to the point made initially by the hon. Member for Rhondda (Mr. Rogers) and stress that we are not privatising the assets, property or equipment of the AWE, which will remain under the ownership of the Secretary of State. We are transferring only the management of the manufacturing. It is important to bear that in mind when people start talking about privatisation.

Mr. Rogers

I am afraid that, like the Minister of State, who has left the Chamber, the Minister simply was not listening to what I said. I never said that the Government were privatising the assets or property of the AWE. I said that they were privatising the management of the production of nuclear warheads within the establishment. I accept that the Minister will remain the janitor of the buildings.

Mr. Carlisle

I am glad that, in that poetic way, the hon. Gentleman has made it clear that we have reached agreement on that particularly important point.

In contrary to his assertions, we have seriously considered the arguments in favour of a "next steps" agency at AWE. Such agencies have considerable attractions for those organisations which should be part of the civil service, but after careful thought we reached the conclusion that the AWE is not such an establishment. However, I should like to join the hon. Member for Blaydon (Mr. McWilliam) in paying tribute to the staff at AWE. The fact that they are being contractorised is no slight on their considerable and unique talents, expertise and skills. Some of the staff at AWE are pre-eminent in the world in their branch of science.

However, we believe that enterprises, especially industrial ones, are generally run more efficiently in the private sector. Therefore, where it is right and feasible to introduce full contractorisation, we prefer to do so.

The Atomic Weapons Establishment is involved in research and development and in manufacturing. In our view, such an establishment belongs in industry and not in government. Of course, the fact that the business is nuclear means that very stringent safeguards are required, but not that personnel must be civil servants. Just because manufacturing is best managed by those with experience of industry, agency status would be only a partial solution to the problems at AWE. That would not involve the full and early introduction of private sector expertise and would not allow access to the production and management expertise of a large industrial concern. In my view, it is only full contractorisation that can give full, private-sector management flexibility, pay flexibility without reference to Whitehall, as well as the all-important access to the corporate expertise of a major industrial company or consortium.

AWE does everything from research and development to production, in-service maintenance support and final dismantling. AWE is therefore a complete industry and it should be allowed to benefit from the industrial management expertise of the private sector. I believe that the logic of that argument means that we have every right to carry it through.

We must always remember that our ability to meet the challenging Trident programme which is now building up is our prime aim. That is vital if we are to sustain our independent deterrent. We believe that the contractorisation of the operations at the AWE will secure that aim.

I have visited the various establishments, and I know that there is concern among the employees about various aspects of the change because we are asking them to leave the civil service. Many of the issues raised by them relate to employment and safety.

I am grateful to my hon. Friend the Member for Hampshire, North-West (Sir D. Mitchell) for his kind words, as well as for those of the hon. and learned Member for Fife, North-East (Mr. Campbell). Those hon. Members and others are particularly concerned about safety aspects, which formed the bulk of the questions raised in the debate. Safety is the paramount aim, which we intend to achieve. We shall have all the existing safeguards, such as the safety directorate, but we shall also introduce two important additions.

First, the compliance office, which is responsible to and employed by the Ministry of Defence, will be represented at the four establishments. The staff of that office will have the right to go anywhere in those establishments to monitor any activity to ensure that full safety is achieved. The second addition is the safety requirement which will figure largely in the contract. Penalties will be imposed if safety is not properly pursued, and, in addition, incentives will be part of the contract to reward excellent performance on safety.

Mr. McWilliam

Who will pay the salary of the compliance officer and his staff?

Mr. Carlisle

The MOD. The staff will be employed by the MOD, thereby ensuring their independence.

If the contractor impinges on the safety requirements or does not live up to his legal requirements he will, for the first time, be subject to a court of law, which the Secretary of State never can be.

Mr. Dalyell

Is the compliance office responsible for passing judgment on the stability or otherwise of existing nuclear weapons? If not, who is responsible?

Mr. Carlisle

I shall deal with that point in a moment, but it is important to remember that the responsibility for safety does not rest just with the compliance office. That responsibility will rest largely with the contractor and the work force.

As I said, the safety directorate will remain at the AWE, and the unions and all the employees will have a direct interest in safety. When I visited those establishments, they told me that they would be the first people to jump on any lapse in safety standards according to their views. Therefore, safety is not just the responsibility of one person; it will depend upon the combined surveillance and alertness of a range of people.

The points raised about safety are of particular relevance to the local people and to my hon. Friends the Member for Hampshire, North-West and for Newbury (Sir M. McNair Wilson), who wrote to me raising points of interest throughout the Bill's passage, and it is nice to see him in recovered health, and my hon. Friend the Member for Basingstoke (Mr. Hunter), who also pursued safety matters throughout the Bill's passage.

Mr. Rhodri Morgan (Cardiff, West)

Will the Minister tell us a bit more about how he envisages the compliance officer operating? Can any employee of the private contractor go freely to the compliance officer and say that an infraction of procedures has taken place, of which the latter may not be aware because some of the poisons are invisible and cannot be recorded on a monitor, without it affecting his promotion or job prospects?

Mr. Carlisle

That would be a reasonable way to proceed. The compliance officer will not only receive information as a result of his own observations and studies but also from within the establishment. I hope that what the hon. Gentleman suggests takes place.

Sir David Mitchell

Since the compliance officer is to have a relationship with the Ministry of Defence, can my hon. Friend give the assurance for which my hon. Friend the Member for Newbury (Sir M. McNair-Wilson) asked in relation to answering questions in the House?

Mr. Carlisle

All Members of Parliament will be able to ask questions in the House on any matter concerning the AWE, and the Secretary of State will have to answer them.

Mr. Frank Haynes (Ashfield)

What about the question of safety? It will be the responsibility of the compliance officer to see that everything is okay, but what powers will he have if he notices that the contractor does not have enough staff on the job to provide safety cover? That could happen tomorrow, and we want to know what the compliance officer would do if it did.

Mr. Carlisle

The compliance office will have strong powers. It will be able to instruct the contractor to remedy the defects, and if the contractor fails to do so, the compliance office will have the power to shut down that part of Aldermaston; so its powers are strong.

Mr. Rogers

If that is the case, why are the compliance officer's terms of reference not within the Bill? As I understand it, the compliance office will be set up. Under the terms of contract as outlined at various times by the Minister, if the contractor conforms he will receive his money, if he puts up a good performance he will receive extra money, but if he does not perform, the only way to make him do so is to go to court. That is what the Minister said when he opened the debate. Why does not the Minister put the functions and duties of the compliance office in the Bill, as the Opposition suggested in an amendment in Committee?

4.45 pm

Mr. Carlisle

The hon. Gentleman has been a Member of the House long enough to know that everyone frowns on a part of a Bill that is superfluous. The Secretary of State already has the power to set up a compliance office. To prove that, the compliance office is already being formed. It is bad practice to put into a Bill powers which already exist, and it is right to follow good legislative procedures.

Mr. Menzies Campbell

Is not the Minister being a little disingenuous in that answer? This is a matter of public confidence. We are changing, dramatically and fundamentally, the way in which nuclear weapons are developed and produced. Would it not be in the interests of public confidence and in support of what the Government now propose to ensure that the compliance officer has express statutory responsibilties in respect of the new arrangements that the Bill seeks to introduce?

Mr. Carlisle

No, the Secretary of State already has the power to set up a compliance office, and he has given undertakings time after time that the compliance office will be a central part of our plans for contractorisation. As I said, it is superfluous to write it into the Bill. If one were to follow the hon. and learned Gentleman's line of argument, every Bill would be massive, because everyone would be seeking guarantees. I remind Opposition Members that this is a narrow Bill, which creates arrangements in connection with the setting up of an employing company.

Mr. Haynes

The Minister really is talking a load of rubbish.

Mr. Timothy Kirkhope (Leeds, North-East)

The hon. Gentleman cannot say that.

Mr. Haynes

I am saying it. He is talking rubbish. We want to know what kind of safety cover will be available in the units and what kind of responsibilities this chappie will have. He has massive responsibilities and it is a load of rubbish to say that they should not be in the Bill. It is not just hon. Members who want to know exactly what responsibilities this chap will have. The Minister is pushing things to one side in this important measure.

Mr. Carlisle

If the hon. Gentleman wants to make such an intervention, he should listen more carefully to the debate. I have answered quite a few of his points already and it was a mistake to give way to him.

The hon. Member for Linlithgow (Mr. Dalyell) has been very patient. He raised an important point. As I understand it, he was talking about the implications of the Drell report. We remain closely in touch with our United States colleague. Governments of all parties give the most careful consideration to safety matters, because safety of the nuclear warheads and missiles is pre-eminent.

It may be of some comfort to the hon. Gentleman to know that the warhead that we will be using in Trident will be designed and manufactured in the United Kingdom. It is not the same as that designed in the United States, although we have confidence in the United States warhead. It will be the subject of a comprehensive series of trials and independent assessments to ensure its safety both before and during operational service. There is an independent check on the safety of our nuclear weapons in the form of the nuclear weapons safety committee and the ordnance board, both of which have independent status and which report on and study carefully the safety of our warheads.

We take the matter extremely seriously, but we are confident that what we are designing and have designed is safe. In addition, as I have already explained, safety will be central to the contract, and we will not compromise on it one jot. I hope that that answers the hon. Gentleman. It is obviously a matter that we will have to continue to regard seriously.

Mr. Dalyell

Will the ordnance board, under the terms of the contract, have complete access to the confidential information of the contractors? Are the contractors obliged to reveal anything that is asked of them to the ordnance board?

Mr. Carlisle

The contract has not yet been written, as Labour Members know, but we intend to put into it everything necessary for safety. The nuclear weapons safety committee and the ordnance board will continue to have the full authority of their independent status.

Mr. Rogers

To use the words of the hon. and learned Member for Fife, North-East (Mr. Campbell) the Minister's response is disingenuous. We tried in Committee to get details of the contract, and we were told that the contract had not yet been drawn up. For the past year, however, 22 people at Aldermaston have been carrying out the functions of phase 1 of the contract. The Minister therefore should not say that we do not know what is in the contract because it has not yet been drawn up. There is an extant contract, and my hon. Friend the Member for Linlithgow has asked whether the provisions governing the ordnance board are in that contract.

The Minister appears to be nodding. In that case, next year, after we win the election, we shall check those terms, because he will not let us know them now.

Mr. Carlisle

The provision does not have to be in the present contract, because the place has not yet been contractorised. So the authority of the ordnance board and the nuclear weapons safety committee is the same as it has been for the the past few years. The hon. Gentleman cannot have understood the Bill. At the moment, in phase 1, there is an interim contract. Only in October 1992 will we enter the second phase of full contractorisation. There is no point in starting to draw up the contract in detail until we have secured the Bill.

The hon. Member for Blaydon asked a question about safety, referring to the American experience. The American experience, and indeed the experience of Russia, where there was an horrific nuclear explosion at Chernobyl in a nuclear institution run by the State, show that, whether nuclear facilities are owned by the state or are privately operated, safety has to be considered as a separate issue. We have studied the American experience carefully and have ensured that we would add the safeguard of the compliance office to our current safeguards. Safety will be written into the contract, and we are satisfied that our arrangements will meet any criticisms that arose with the GOCO experience.

Mr. Dalyell

There must be a careful study of the American experience. Has the Ministry of Defence considered the Zebrowski report on Three Mile Island in that context?

Mr. Carlisle

I am certain that it will have done, but perhaps I should write to the hon. Gentleman, who is a past master at bowling googlies.

My hon. Friend the Member for Newbury raised an important point about the Committee on Medical Aspects of Radiation in the Environment. Its studies will continue and have our full support. We value them highly. It may be of some comfort to my hon. Friend to know that the latest study of his area showed that radiation from Aldermaston and Burghfield was negligible—far too low to account for any observed increase in childhood leukaemia in his area. In any event, I understand that the increases noted appear to have taken place in major urban areas such as Reading, not in the villages next to the Atomic Weapons Establishment site.

Sir Michael McNair-Wilson

Would it be fair to ask my hon. Friend whether the tritium leak will be referred to the Committee on Medical Aspects of Radiation in the Environment?

Mr. Carlisle

That is very much up to the Committee. The incident took place in a research facility which had nothing to do with the manufacturing operation now being helped by Hunting-BRAE. The leak was very small—only two thousandths of the normal annual natural radiation to which people are exposed. Nevertheless, any leak of any sort is serious, and we are investigating it. We intend to learn the lessons of any inquiry into it.

Mr. Rogers

Again I do not understand the Minister's answer. The hon. Member for Newbury (Sir M. McNair-Wilson), in whose constituency Aldermaston lies, asked the Minister about the tritium leak. I understood the Minister to reply that the leak took place in a research facility, but in a written answer to my hon. Friend the Member for Houghton and Washington (Mr. Boyes), he said that it took place in the A91 building, which is a production facility, not a research facility. Can the Minister clear up the confusion?

Mr. Carlisle

The A91 building has not even been commissioned yet. There is no tritium in the A91 facility. The hon. Gentleman must get his facts right. [HON. MEMBERS: "You gave that information yourself."] I shall have to look into the matter.

My hon. Friend the Member for Hampshire, North-West was worried about other aspects of safety and security. The Ministry of Defence will retain responsibility for the positive vetting of everyone concerned. Redundancy terms for anyone now at the AWE will continue as if they were in the civil service before vesting day. Those terms will be written into the contract, which will come up for renewal after five or seven years, but the redundancy terms would continue thereafter as a condition of service, which could not change without the employees' agreement. If employees did not agree, they could claim unfair constructive dismissal, under which they would be entitled to their previous redundancy entitlement. That gives them security.

Mr. McWilliam

Will the Minister confirm that the protection under TUPE will last only until vesting day, and that from vesting day plus one it will disappear?

Mr. Carlisle

Will the hon. Gentleman repeat that question?

Mr. McWilliam

Will the Minister confirm that the employees are protected by the Transfer of Undertakings (Protection of Employment) Regulations 1981 until vesting day, but that after they have been transferred into their new employment, they will lose that protection? Even before that time, they can claim only unfair dismissal.

Mr. Carlisle

That is not true. The TUPE regulations persist for a certain time after vesting day.

Pensions were debated at length in Committee, and the House will recall that AWE staff are usually members either of the principal civil service pension scheme or the UKAEA principal non-industrial superannuation scheme. Following contractorisation, a single new scheme will be established for AWE staff; it will match as closely as possible the schemes as they are at vesting day. No one will be made to suffer detriment to their pension arrangements as a result of contractorisation. The pension rights will be written into the contract and thus guaranteed, so that everyone's pension will be at least as good as the pension that he can expect now.

Sir Anthony Durant (Reading, West)

Will my hon. Friend comment on the transferability of the new pension under the new structure? Will it be transferable to other pension funds if the staff move elsewhere?

5 pm

Mr. Carlisle

I shall continue with the section of my brief that I was on before my hon. Friend intervened. I understand that he may wish to return to the question of transferability.

I fully understand that individuals feel an attachment to their pension scheme and may be anxious at the prospect of leaving it. In Committee, my hon. Friend the Member for Hampshire, North-West and others were especially concerned about members of the AWE staff who are members of what they have described as the atomic energy scheme. I undertook sympathetically to consider the arguments that my hon. Friends advanced.

I am pleased to confirm that, if they so choose, staff of both pension schemes will be able to leave their accrued service up to vesting day in their present schemes. They will not have to transfer their accumulated pension rights to the new AWE scheme. A person will therefore be able to receive an atomic energy or civil service pension on retirement that is based upon their length of service before vesting day. That will be topped up by an additional pension under the new scheme that covers service after vesting day. This option may be especially relevant to the older AWE members of the atomic energy scheme, given their attachment to the scheme and the considerable length of service covered by it. To this extent, no one is being forced out of his or her existing pension scheme.

I have discussed in some detail with my colleagues in the Treasury and the Department of Energy the possibility of going further and allowing, by amendment to the Bill, service by ex-atomic energy staff at AWE after vesting day to accrue within the atomic energy pension scheme as opposed to the new AWE scheme. My hon. Friends will remember that the possibility was debated in detail in Committee.

I must tell them, however, that the conclusion of the discussions with the Treasury and the Department of Energy was that it would be wrong to agree to such an amendment. That is partly because of longer-term complications that would result in having some former civil service staff at AWE in a different scheme from other employees, and partly because it is the Government's general policy that, whenever staff are transferred from the public to the private sector, they should not remain in a public service pension scheme.

I must emphasise that staff will not have to take their accrued service in the atomic energy scheme and the civil service out of the atomic energy scheme if they do not wish to do so. I can help to some extent those who are concerned about these matters. I know from the contents of my postbag and from talking to those who are concerned that the older members of the atomic energy pension scheme are by no means entirely content with all its provisions. Some of those at AWE are less than happy about the scheme's constraints on retirement before the age of 65.

I shall ask my officials to discuss with the trade unions possible ways of extending to ex-atomic energy staff at AWE some of the flexibility that will be incorporated in the new pension scheme for AWE staff after contractorisation. It is unlikely that we shall be able to substitute 60 years for 65, but we may be able to ameliorate the position somewhat. To that extent, the new pension scheme at the contractorised AWE will be an improvement on the pension conditions which would otherwise have prevailed for the ex-atomic energy staff at AWE. When the pension arrangements are improved in the way that I have described, I hope that my hon. Friends will be partially satisfied at least.

Since 5 December 1990, when my right hon. Friend the Secretary of State for Defence first announced the Government's proposal to introduce full contractorisation at AWE, there has been much debate about the principle of contractorisation and the options. I have heard nothing to weaken my conviction that the introduction of a contract operation with appropriate safety, security and financial safeguards is the best way forward for AWE. The House will know that AWE has been able to meet the requirements of the early stages of the Trident programme. As the requirements increase and AWE's manpower shortage continues, it is necessary that it should do even better.

To achieve that, we must bring to AWE the production management expertise and freedom to manage which a contractor operation can offer. We cannot secure that freedom or full management and manufacturing experience if AWE remains an agency. I therefore recommend that the House reject the amendments.

Mr. Rogers

I am most unhappy with the Minister's reply, although I am obviously pleased, as are those who represent employees at Aldermaston, with the proposed alterations to the pension fund. I am sure that my right hon. and hon. Friends would welcome the proposals, as would the work force and the trade unions.

My hon. Friend the Member for Blaydon (Mr. McWilliam) asked the Minister whether he could give any assurance that employees would be protected from redundancy after vesting day plus one, and referred to the Transfer of Undertakings (Protection of Employment) Regulations 1981. The Minister replied, "Yes, that is in the regulations." Where does it appear? I ask the question at an early stage in my remarks, so that those in the Box can have time to advise the Minister.

Sir David Mitchell

I understand that the assurance appeared in the contract and not in the regulations. It will be part of the terms of the contract that the contractor has to comply with the civil service terms on redundancy during the term of the contract. I understand also that that is what my hon. Friend the Minister said in Committee. Perhaps my hon. Friend will have the opportunity to confirm that. I hope that I have succeeded in explaining why the hon. Member for Rhondda (Mr. Rogers) cannot find the assurance in the regulations.

Mr. Rogers

I was not talking about what was said in Committee. I was referring to what the Minister said at the Dispatch Box a short while ago. My hon. Friend the Member for Blaydon asked the Minister whether there would be any protection from redundancy for workers on vesting day plus one. The Minister replied that the answer was to be found in the 1981 regulations. My colleagues and I have read the regulations, and it seems that they do not provide the assurance that the Minister suggested. Our argument is that all the talk about protecting people's rights falls in the absence of the assurance in the regulations.

Mr. McWilliam

Perhaps my hon. Friend will reflect on the Minister's statement that the contract has not yet been written. I do not know how he can construct legislation that ends in a contract when he does not know what will be in the contract. Have I understood correctly what the Minister appears to be saying?

Mr. Kenneth Carlisle

rose——

Mr. Rogers

I shall respond, as my hon. Friend the Member for Blaydon intervened in my speech. He has raised a point of interest, not merely a debating point.

There are 7,000 workers who are concerned about redundancy, and most of them are the constituents of the Minister's hon. Friends. I am happy to allow the Minister to make even a lengthy intervention to clarify the issue.

Mr. Carlisle

With the leave of the House, I shall intervene. My hon. Friend the Member for Hampshire, North-West (Sir D. Mitchell) has provided the hon. Member for Rhondda (Mr. Rogers) with the correct answer. The 1981 regulations have been implemented in the transfers of many employees, not least those in the dockyards.

It seems that the hon. Member for Rhondda has not read my answer on building A91. There is no tritium in the building and it has not yet been commissioned. It has been constructed for the treatment of low-level liquid waste. Some faults were found in it while it was in the process of being commissioned. That is why there was no radioactive material in it. I suggest that the hon. Gentleman reads my answer.

Mr. Rogers

I am quite happy to read the answer. The Minister said that there was corrosion in the A91 building and that it was a production, not a research, facility. I have the grace to say that, in that matter, the Minister may be right. I only wish that he had the grace to apologise when he has been shown so often to be wrong. Hansard will show what he said about the transfer of undertakings on the protection of employment. He cannot bury his answer under a frivolous remark about safety problems. Many constituents of Conservative Members are concerned about the protection of redundancy and pension rights. Indeed, I am not sure about any protection. If those people asked me for advice, I could not give it to them.

The hon. Member for Hampshire, North-West (Sir D. Mitchell), who is a former Transport Minister, is an expert in privatisation matters. I served on the Committee that considered the Bill to privatise bus services. He was so good that, when we asked him why he wanted to privatise bus services, he said, "I went to Cheltenham, where there is a private scheme. I jumped on a couple of buses and asked a few old ladies what they thought of privatised bus services. They said that they thought they were good, and that is why we want to extend privatisation throughout the country." That was the great scientific survey on which the Department of Transport based the privatisation of bus services. Nevertheless, more thought went into the privatisation of bus services than has gone into this Bill, which will privatise the production of nuclear warheads. It is a cobbled-together Bill.

I do want to delay the House as we are anxious to proceed to the first vote. I am anxious to discover how Conservative Members will vote. When we tabled amendments in Committee dealing with such matters as safety, pensions and redundancy, which sought to enhance the position of the constituents of Conservative Members and others who, like me, live in south Wales, Conservative Members voted with the Government. We must not forget that Aldermaston is only one of four atomic weapons establishments. If Conservative Members had any guts or gumption, they would vote with the Opposition tonight. They cannot be clear about the issues. I challenge them—especially those who have had letters from constituents, copies of which have been sent to us—to vote with us tonight.

I know that the hon. Member for Hampshire, North-West voted with us once in Committee, so perhaps I am doing him a disservice. He spoke fluently and impressed the Minister. Conservative Members must put their votes where their mouths are, and that means voting with us tonight.

Sir David Mitchell

The hon. Gentleman has issued a challenge, and I will take it head on. My constituents have raised certain matters with me through letters, meetings and interviews. On each of the four matters on which I asked for assurances from my hon. Friend the Minister, I have had assurance. That is why I feel confident in supporting my hon. Friend in the Lobby.

Mr. Rogers

The hon. Gentleman is easily pleased. He should have pressed the Minister to include some safeguards in the Bill. The Minister said that it is a very narrow Bill. When we spoke about share deals and other matters being included in the Bill, he said that it was too narrow. It is; it is only three or four pieces of paper. There would have been plenty of room to include the regulations and safeguards that we want. We would have been quite happy to read a couple more pages if that meant that we could protect the interests of those working in the establishments.

5.15 pm

We are not happy with the Minister's replies. He will not accept the amendment that would establish an agency, and that is a severe indictment of his party's policy. We want an agency based on the "next steps" model, which is his party's policy. It has been promulgated, developed and promoted by the Government, but the Minister would not trust it to run Aldermaston. He claims that any industrial activity is better in private hands. We all know what happened to Rolls-Royce; it did not do very well in private hands.

Mr. Greg Knight (Derby, North)

It did.

Mr. Rogers

The hon. Gentleman is ignorant of what happened. He is only a young lad in school at the time. His school probably did not have newspapers. The hon. Gentleman is one of those to whom the Prince of Wales referred recently.

Rolls-Royce was a private company, but it went bust. It was taken into public ownership and turned around, and it was then returned to the private sector. Ferranti, another defence company, also went bust, was taken into public ownership and turned around. It is now back in the hands of the private-sector friends of the Tory party. There are numerous examples of private companies which, were it not for public intervention, would have collapsed. That is the history of the car industry. The private-sector friends of the Minister are not really that good.

Mr. Menzies Campbell

I am interested in the hon. Gentleman's theme. Will he apply his mind to what would happen if a company that obtained the contract that the Bill would pass to the private sector fell into liquidation or became incapable of fulfilling its responsibilities under the contract? What would be the consequences for national security?

Mr. Rogers

I had intended to deal later with the problem of the contract. The hon. and learned Gentleman spoke eloquently about that both in Committee and in his earlier intervention. The only recourse against a contractor would be through a court of law. Let us suppose that there was an emission of radioactive waste, followed by litigation against the company. Which company would be the subject of that litigation? Would it be the No. 2 company—the employing company—which is the only company with which the Government will have any connection? At present, the contracting companies are Hunting Engineering, Brown and Root and the Atomic Energy Authority. One of those companies is an American company based in Dallas. Another is a major engineering company, for which the production of nuclear warheads will be only a minor activity.

Against whom can the constituents of Conservative Members litigate? The employing company will exist only to employ people. What assets will it have? The Minister has already said that the Government will not give it any. Against whom can the workers and the communities litigate should there be yet another emission of radioactive material?

The proposal for contractorisation has been ill conceived out of the incompetence of the Government. It is a cobbled-together Bill. In Committee, it was evident time and again that the Government had not thought through the problems. They saw the American GOCO scheme and wanted to follow it, rather like some people wanted to follow schemes for marinas and theme parks. The Government therefore picked on the Atomic Weapons Establishment and decided to make it into a GOCO scheme without thinking the matter through. The production of nuclear warheads is far too serious an issue for a Government experiment. That is why we shall press our amendment to a vote.

Question put, That the amendment be made:—

The House divided: Ayes 170, Noes 219.

Division No. 125]	[5.19 pm
AYES
Abbott, Ms Diane	Campbell, Menzies (Fife NE)
Adams, Mrs Irene (Paisley, N.)	Campbell, Ron (Blyth Valley)
Allen, Graham	Campbell-Savours, D. N.
Alton, David	Canavan, Dennis
Anderson, Donald	Cartwright, John
Archer, Rt Hon Peter	Clark, Dr David (S Shields)
Armstrong, Hilary	Clelland, David
Barnes, Harry (Derbyshire NE)	Cook, Robin (Livingston)
Barron, Kevin	Corbett, Robin
Battle, John	Cousins, Jim
Bellotti, David	Crowther, Stan
Benn, Rt Hon Tony	Cryer, Bob
Bennett, A. F. (D'nt'n & R'dish)	Cummings, John
Benton, Joseph	Cunliffe, Lawrence
Bermingham, Gerald	Cunningham, Dr John
Bidwell, Sydney	Dalyell, Tam
Bray, Dr Jeremy	Darling, Alistair
Brown, Gordon (D'mline E)	Davies, Rt Hon Denzil (Llanelli)
Brown, Nicholas (Newcastle E)	Davies, Ron (Caerphilly)
Brown, Ron (Edinburgh Leith)	Davis, Terry (B'ham Hodge H'l)
Bruce, Malcolm (Gordon)	Dixon, Don
Caborn, Richard	Dobson, Frank
Callaghan, Jim	Doran, Frank

Duffy, A. E. P.	Meale, Alan
Dunnachie, Jimmy	Michie, Bill (Sheffield Heeley)
Eadie, Alexander	Michie, Mrs Ray (Arg'l & Bute)
Fatchett, Derek	Moonie, Dr Lewis
Faulds, Andrew	Morgan, Rhodri
Field, Frank (Birkenhead)	Morris, Rt Hon A. (W'shawe)
Fisher, Mark	Mowlam, Marjorie
Flannery, Martin	Mullin, Chris
Flynn, Paul	Murphy, Paul
Foot, Rt Hon Michael	Nellist, Dave
Foster, Derek	Oakes, Rt Hon Gordon
Foulkes, George	O'Brien, William
Fyfe, Maria	O'Neill, Martin
Galloway, George	Orme, Rt Hon Stanley
Garrett, John (Norwich South)	Patchett, Terry
George, Bruce	Pendry, Tom
Gilbert, Rt Hon Dr John	Pike, Peter L.
Gould, Bryan	Powell, Ray (Ogmore)
Grant, Bernie (Tottenham)	Prescott, John
Griffiths, Nigel (Edinburgh S)	Primarolo, Dawn
Griffiths, Win (Bridgend)	Quin, Ms Joyce
Grocott, Bruce	Radice, Giles
Hain, Peter	Randall, Stuart
Harman, Ms Harriet	Rees, Rt Hon Merlyn
Haynes, Frank	Reid, Dr John
Heal, Mrs Sylvia	Richardson, Jo
Healey, Rt Hon Denis	Robinson, Geoffrey
Henderson, Doug	Rogers, Allan
Hoey, Ms Kate (Vauxhall)	Rooker, Jeff
Home Robertson, John	Rooney, Terence
Hood, Jimmy	Rowlands, Ted
Howarth, George (Knowsley N)	Ruddock, Joan
Howells, Geraint	Salmond, Alex
Howells, Dr. Kim (Pontypridd)	Sedgemore, Brian
Hughes, John (Coventry NE)	Sheldon, Rt Hon Robert
Ingram, Adam	Shore, Rt Hon Peter
Janner, Greville	Short, Clare
Jones, leuan (Ynys Môn)	Skinner, Dennis
Kaufman, Rt Hon Gerald	Smith, Andrew (Oxford E)
Kennedy, Charles	Smith, C. (Isl'ton & F'bury)
Kinnock, Rt Hon Neil	Smith, J. P. (Vale of Glam)
Kirkwood, Archy	Snape, Peter
Lamond, James	Soley, Clive
Lestor, Joan (Eccles)	Spearing, Nigel
Livingstone, Ken	Steel, Rt Hon Sir David
Lofthouse, Geoffrey	Steinberg, Gerry
Loyden, Eddie	Straw, Jack
McAllion, John	Taylor, Mrs Ann (Dewsbury)
McCartney, Ian	Taylor, Matthew (Truro)
McFall, John	Turner, Dennis
McKay, Allen (Barnsley West)	Vaz, Keith
McKelvey, William	Wallace, James
McLeish, Henry	Watson, Mike (Glasgow, C)
Maclennan, Robert	Welsh, Andrew (Angus E)
McMaster, Gordon	Welsh, Michael (Doncaster N)
McWilliam, John	Wigley, Dafydd
Madden, Max	Williams, Rt Hon Alan
Marek, Dr John	Winnick, David
Marshall, David (Shettleston)	Worthington, Tony
Marshall, Jim (Leicester S)
Martin, Michael J. (Springburn)	Tellers for the Ayes:
Martlew, Eric	Mr. Ken Eastham and Mrs. Llin Golding.
Maxton, John
Meacher, Michael

NOES
Adley, Robert	Bevan, David Gilroy
Aitken, Jonathan	Biffen, Rt Hon John
Alison, Rt Hon Michael	Blaker, Rt Hon Sir Peter
Amery, Rt Hon Julian	Body, Sir Richard
Amos, Alan	Boscawen, Hon Robert
Arbuthnot, James	Boswell, Tim
Arnold, Jacques (Gravesham)	Bottomley, Mrs Virginia
Aspinwall, Jack	Bowden, Gerald (Dulwich)
Baker, Nicholas (Dorset N)	Bowis, John
Batiste, Spencer	Boyson, Rt Hon Dr Sir Rhodes
Beaumont-Dark, Anthony	Brandon-Bravo, Martin
Bellingham, Henry	Brazier, Julian
Bendall, Vivian	Bright, Graham
Bennett, Nicholas (Pembroke)	Brooke, Rt Hon Peter

Brown, Michael (Brigg & Cl't's)	Kilfedder, James
Buck, Sir Antony	King, Roger (B'ham N'thfield)
Budgen, Nicholas	King, Rt Hon Tom (Bridgwater)
Burns, Simon	Kirkhope, Timothy
Burt, Alistair	Knapman, Roger
Butterfill, John	Knight, Greg (Derby North)
Carlisle, John, (Luton N)	Knight, Dame Jill (Edgbaston)
Carlisle, Kenneth (Lincoln)	Knowles, Michael
Carrington, Matthew	Knox, David
Carttiss, Michael	Lang, Rt Hon Ian
Channon, Rt Hon Paul	Latham, Michael
Chope, Christopher	Lawrence, Ivan
Clark, Rt Hon Alan (Plymouth)	Lee, John (Pendle)
Clark, Rt Hon Sir William	Lester, Jim (Broxtowe)
Clarke, Rt Hon K. (Rushcliffe)	Lilley, Rt Hon Peter
Coombs, Anthony (Wyre F'rest)	Lloyd, Sir Ian (Havant)
Cormack, Patrick	Lloyd, Peter (Fareham)
Couchman, James	Lord, Michael
Cran, James	Lyell, Rt Hon Sir Nicholas
Critchley, Julian	Macfarlane, Sir Neil
Currie, Mrs Edwina	MacGregor, Rt Hon John
Curry, David	MacKay, Andrew (E Berkshire)
Davies, Q. (Stamf'd & Spald'g)	Maclean, David
Davis, David (Boothferry)	McLoughlin, Patrick
Day, Stephen	Madel, David
Devlin, Tim	Malins, Humfrey
Dickens, Geoffrey	Mans, Keith
Dorrell, Stephen	Marland, Paul
Douglas-Hamilton, Lord James	Marshall, John (Hendon S)
Dover, Den	Martin, David (Portsmouth S)
Dykes, Hugh	Mates, Michael
Evennett, David	Maude, Hon Francis
Fairbairn, Sir Nicholas	Maxwell-Hyslop, Robin
Favell, Tony	Mayhew, Rt Hon Sir Patrick
Fishburn, John Dudley	Mellor, Rt Hon David
Forsyth, Michael (Stirling)	Miller, Sir Hal
Fowler, Rt Hon Sir Norman	Mills, lain
Franks, Cecil	Miscampbell, Norman
French, Douglas	Mitchell, Andrew (Gedling)
Fry, Peter	Mitchell, Sir David
Gale, Roger	Molyneaux, Rt Hon James
Gardiner, Sir George	Monro, Sir Hector
Gill, Christopher	Moore, Rt Hon John
Glyn, Dr Sir Alan	Morrison, Rt Hon Sir Peter
Goodhart, Sir Philip	Moss, Malcolm
Goodlad, Alastair	Mudd, David
Goodson-Wickes, Dr Charles	Neale, Sir Gerrard
Gorman, Mrs Teresa	Nelson, Anthony
Grant, Sir Anthony (CambsSW)	Neubert, Sir Michael
Greenway, Harry (Ealing N)	Newton, Rt Hon Tony
Greenway, John (Ryedale)	Nicholls, Patrick
Gregory, Conal	Nicholson, David (Taunton)
Griffiths, Peter (Portsmouth N)	Nicholson, Emma (Devon West)
Grist, Ian	Norris, Steve
Hague, William	Onslow, Rt Hon Cranley
Hamilton, Hon Archie (Epsom)	Oppenheim, Phillip
Hamilton, Neil (Tatton)	Paice, James
Hannam, John	Patnick, Irvine
Hargreaves, A. (B'ham H'll Gr')	Pattie, Rt Hon Sir Geoffrey
Hargreaves, Ken (Hyndburn)	Peacock, Mrs Elizabeth
Harris, David	Porter, David (Waveney)
Haselhurst, Alan	Powell, William (Corby)
Hayhoe, Rt Hon Sir Barney	Riddick, Graham
Hayward, Robert	Ridsdale, Sir Julian
Heathcoat-Amory, David	Rossi, Sir Hugh
Heseltine, Rt Hon Michael	Ryder, Rt Hon Richard
Hicks, Mrs Maureen (Wolv' NE)	Shaw, David (Dover)
Hicks, Robert (Cornwall SE)	Shaw, Sir Giles (Pudsey)
Higgins, Rt Hon Terence L.	Shaw, Sir Michael (Scarb')
Howarth, G. (Cannock & B'wd)	Shepherd, Colin (Hereford)
Howe, Rt Hon Sir Geoffrey	Skeet, Sir Trevor
Howell, Rt Hon David (G'dford)	Smith, Tim (Beaconsfield)
Hunter, Andrew	Speller, Tony
Irvine, Michael	Squire, Robin
Irving, Sir Charles	Stanbrook, Ivor
Jack, Michael	Stanley, Rt Hon Sir John
Johnson Smith, Sir Geoffrey	Steen, Anthony
Jones, Robert B (Herts W)	Stevens, Lewis
Jopling, Rt Hon Michael	Stewart, Allan (Eastwood)
Key, Robert	Stewart, Andy (Sherwood)

Stewart, Rt Hon Ian (Herts N)	Watts, John
Summerson, Hugo	Wells, Bowen
Taylor, John M (Solihull)	Wheeler, Sir John
Taylor, Teddy (S'end E)	Whitney, Ray
Tebbit, Rt Hon Norman	Widdecombe, Ann
Thompson, Patrick (Norwich N)	Wiggin, Jerry
Thorne, Neil	Wilkinson, John
Thornton, Malcolm	Wilshire, David
Thurnham, Peter	Winterton, Mrs Ann
Townsend, Cyril D. (B'heath)	Wood, Timothy
Tracey, Richard	Woodcock, Dr. Mike
Trotter, Neville	Yeo, Tim
Twinn, Dr Ian	Young, Sir George (Acton)
Viggers, Peter
Walden, George	Tellers for the Noes:
Walker, Bill (T'side North)	Mr. Sydney Chapman and Mr. Tom Sackville.
Waller, Gary
Warren, Kenneth

Question accordingly negatived.

Mr. Rogers

I beg to move amendment no. 6 in page 2, line 8, at end insert— '(3A) The secretary of state shall not make arrangements under subsection (3) above with any company—

1. (a) in respect of which more than 10 per cent. of the relevant share capital is held by—
1. (i) a person who is not a British subject entitled to residence in the united kingdom, or
2. (ii) a company in respect of which a majority of the relevant share capital is held by a person or persons who are not British subjects entitled to residence in the United Kingdom, or
2. (b) which is a subsidiary of a company which would be caught by paragraph (a) above, or
3. (c) which does not fall within paragraph (a) or (b) above, but which nevertheless appears to the Secretary of State to be under the effective control of a person or a company defined in paragraph (a) (i) or (ii) above,

and if paragraphs (a), (b) or (c) above apply to a contractor at any time, then any arrangements made by the Secretary of State with that contractor shall be terminated forthwith, any contract between the Secretary of State and that contractor shall be void forthwith, and no compensation shall be payable to a contractor on account of such termination or voiding.'.

Madam Deputy Speaker (Miss Betty Boothroyd)

With this it will be convenient to take amendment No. 10, in page 2, line 21, at end insert 'relevant share capital" means the company's issued share capital of a class carrying rights to vote, and as further defined in section 198(2) of the Companies Act 1985; and a percentage holding of such relevant share capital shall be calculated as set out in section 200 of that Act.'.

Mr. Rogers

This group of amendments deals with the ownership of the companies involved in the privatisation. ownership was and is a matter of great concern and we discussed it a number of times in Committee. The Opposition hope to convince the Government of the foolishness of their proposals. We want to ensure that any contract made between the Secretary of State and a contractor would contain a proviso in relation to any transfer to a person or persons not in the United Kingdom of any shares in such a company, so that if a transfer took place, it would be notified to the Secretary of State. in addition, we wanted to ensure that, where the transfer exceeded 5 per cent. of the income or value of the total share capital of such a company, the Secretary of State should terminate the contract.

Obviously, ownership is a major security worry. it would be of great concern if the company running the AWE were owned or controlled from overseas. There is nothing in the Bill, and we have received no assurances about this from the Government, stating that the contract must provide that the ownership of the production of nuclear warheads at Aldermaston, Burghfield, Foulness and Cardiff should not be in the hands of a foreign company or that there should be no foreign nationals working there.

Concern on this issue was expressed not merely by Opposition Members. Conservative Members, in particular the hon. Member for Hampshire, North-West (Sir D. Mitchell), voiced deep fears. The hon. Gentleman mentioned security, and said: secondly, the protection of the national interest, in that secrets which are involved in the high technology production of atomic weapons should not be penetrated by any outside commercial or foreign power interests."—[Official Report, Standing Committee F, 31 January 1991; c. 77.] Earlier in Committee, the Opposition had moved an amendment in an attempt to ensure that legitimate national interests could be protected against the vagaries of the stock market and money lenders. Although we pressed it hard, the Government rejected the amendment and the reasoning behind it—that, in the exceptional sphere of arms production, it was necessary to maintain not only accountability to Parliament, but domestic ownership of the companies involved in production.

In the third sitting of the Committee, the Minister stated in response to the hon. and learned Member for Fife, North-East (Mr. Campbell): I accept that share ownership details must be spelt out in the contract. It would be possible to set out in the contract who should own the shares and how many and provide for the Ministry of Defence to give prior written consent to any changes of ownership and shareholding. That would cover any takeover of the contracting company, and I guarantee that such a provision will be made in the AWE contract when it is drafted. That will meet the Committee's fears on that score."—[Official Report, Standing Committee F, 31 January 1991; c. 85.] It is significant that there was no mention of a special share in either that quote or anywhere else in the Minister's answer. Obviously, there was no intention at that time to introduce the concept of a special share.

Even that statement by the Minister was unsound. The Government will not have any control over the purchase or sale of shares in the contracting company in which the Minister will have a special share because that special share is in the employing company. The contracting companies are Hunting Engineering, Brown and Root and the United Kingdom Atomic Energy Authority, so how can the Minister have a special share in those companies? The only place where he can have a special share is in the employing company.

Mr. McWilliam

What about the contracting company?

Mr. Rogers

My hon. Friend mentions the contracting company, but the contracting company is Hunting-BRAE. Hunting Engineering, Brown and Root and the United Kingdom Atomic Energy Authority are private companies. The Minister intends to set up another company, which will be the employing company. It will operate within Aldermaston and will be a company with no assets. The Minister says that the Government will have a special share in that company. It will not even be floated on the stock market, so how can the Minister buy a special share? In Committee, in response to the hon. and learned Member for Fife, North-East, the Minister said that it would be possible to set out in the contract who owned the shares. Perhaps the Minister can tell us the mechanics of a special share.

This is another example of the Government's muddle-headedness over the Bill. They have not thought the matter through. The Minister has an opportunity to put the record right, or will we have long letters later, as we had in Committee, giving the explanation? When we raised matters in Committee, we were often told that the Minister would write, and a day or two later we got lengthy explanations. The trouble is that the Minister is running out of time. He must stop dithering and decide what he will do.

In Committee, we moved an amendment proposing that the Government retain a majority holding in the company so that there could be accountability to Parliament for the production of nuclear warheads. We thought that we had lost that undertaking. Then, after the fourth sitting of the Committee, we had a letter from the Minister saying that the Government would retain a special share. How can they retain a special share in something they do not own? Is the Minister going to create a special share? Perhaps he can satisfy us on that point and say how he will stop shares being sold. If he can explain how he can prevent shares in Brown and Root being sold on the Dallas stock exchange, I will be more than pleased. I was pleased at first sight by what seemed to be a return to sanity, but after closer examination of what the Minister had said, I realised what a sham the announcement was.

The Minister gave reasons in a letter to my hon. Friend the Member for Houghton and Washington (Mr. Boyes). My hon. Friend has asked me to apologise to the House for his absence. His wife had an operation yesterday and he has had to return home. I thank him and all my hon. Friends for their enormous support in Committee. Had my hon. Friend been here today, he would have been speaking from the Front Bench on some of the issues.

In his letter, the Minister said: The Secretary of State's special share in the employing company will give him certain rights, including the power to prevent the company being dissolved or sold to outside interests. This means that he can ensure that the company will continue indefinitely to fulfil its sole function of acting as the employer of AWE staff. At one time, the Minister says that he will retain a share to ensure that the company does not fall into foreign ownership, and at another he says that its only function will be to act as the employer of AWE staff. Of course, it will not have shares that can be bought or sold, because it will not be a registered company. There will just be a contract cooked up between the Minister and his friends in big business. The Government have done nothing about control of ownership of the contractor, about foreign ownership or about access by foreign nationals into this most sensitive of defence areas. Those matters were of fundamental importance in our amendments in Committee.

The Minister scoffed when I talked about control of ownership of the contractors and friends of the Conservative party. He should look at where the money comes from to elect him. Millions and millions of pounds are paid by big business to ensure that Conservative Members are elected. Surely the Minister does not think that he has been elected because of his great charm.

5.45 pm

The shares of Hunting and of Brown and Root will be sold on stock markets—the shares of Hunting in London, and the shares of Brown and Root, a wholly owned subsidiary of an American company incorporated in Dallas, on the Dallas and other American stock exchanges, although not in London. Our amendment may be too late, because part of the management control of the production of our nuclear weapons is already in the hands of a foreign company. However, the Minister said that he would not mind Americans being in control. He does not regard Americans as foreign nationals.

Mr. Kenneth Carlisle

indicated dissent.

Mr. Rose

It is no good the Minister shaking his head. He should know by now that I read Committee proceedings. If he wants me to, I can quote what he said about not objecting to Americans because they are friends of ours. If they turn into enemies, perhaps something will be written into the contract to cover that. Perhaps it will say, "If the Americans become enemies, the contract will be null and void."

In that context, we must remember that an important statutory function of our Atomic Weapons Establishments is to carry out research and development. Such is the production facility that all our basic nuclear research and nuclear secrets may he in the hands of foreign nationals. The special share could not prevent that, and the Minister knows it.

Let me quote from the same letter to my hon. Friend: I should first say that this special share does not run counter to anything that I said about the ownership of the contractor during the debate on amendment No. 3. We do not intend that the Secretary of State will hold shares in the contractor. The employing company is a separate company, formed by the Secretary of State solely for the purpose of employing the AWE work force. When a contract is awarded for the operation of AWE, the contractor will be required to acquire the employing company which will thus become a wholly owned subsidiary but only for the duration of the contract. If that contract were to change hands, the employing company would be acquired by the new contractor. How the special share means that there will be any public accountability, or that the company cannot fall into the control of foreign nationals, is absolutely beyond me.

The ownership of the company is a matter of great concern to Conservative Members, as I mentioned when we were debating the last group of amendments. Compensation and possible litigation in the event of accidents were matters raised in Committee by the hon. and learned Member for Fife, North-East and by my hon. Friends the Members for Blaydon (Mr. McWilliam) and East Lothian (Mr. Home Robertson). Against whom will there be litigation if there is an accident? Will it be against the company with no assets, which exists only to employ staff, against the foreign-owned company or against the Ministry of Defence, which will be the landlord or janitor, depending on how we want to describe it? Perhaps the Minister can tell the House.

We tabled the amendments because we are concerned about the matter. The problem is that the Government have allowed their party political dogma to shroud the national interest and to prejudice their judgment. They have not thought this through. The experiment is doomed to failure; that is why I hope that hon. Members will support our amendments.

Sir David Mitchell

I agree with the hon. Member for Rhondda (Mr. Rogers), to the extent that there is a need to ensure that nuclear secrets remain secrets and that the contractor is United Kingdom-based. However, the amendments go much further than that and pursue an extraordinary course of action. They would have three principal effects. First, they would bar a company in which 10 per cent. or more of the shares are held by a non-United Kingdom citizen from having the contract; secondly, they would ensure that, if 11 per cent. of the shares are owned by a non-United Kingdom citizen, the contract is void; and, thirdly, they would ensure that no compensation will be paid if the contract is made void in such a way. That is different from ensuring that a foreign citizen does not have a majority shareholding, and I hope that my hon. Friend the Minister will resist this group of amendments.

These amendments are especially revealing about the Labour party's attitude in 1991. They exemplify its narrow-minded, anti-foreigner attitude. It is a party prepared to accept the United States's nuclear umbrella but not prepared to allow a 15 per cent. shareholding by a citizen from that country. It would not allow a 15 per cent. minority shareholding by a NATO citizen, or by an Irish national, but it would allow——

Mr. Rogers

Does the hon. Member agree that it also would not allow Saddam Hussein to acquire a 15 per cent. shareholding, in the way that he did with Matrix Churchill and other companies that provided the armaments to kill British soldiers?

Sir David Mitchell

It is perfectly reasonable to ensure that the contractor company does not fall into foreign hands, but that is quite different from saying that no more than 10 per cent. of the shares can be held by any citizen of the various countries that I have described, which are friendly to us in so many ways.

The hon. Member for Rhondda is saying that a CND supporter can have more than 10 per cent. of the shares, but that a citizen of a NATO member country cannot.

I recall that the hon. Gentleman is a former card-carrying member of CND, as was his No. 2 spokesman in Committee. All his CND colleagues would be allowed to hold shares through his amendment, but a staunch supporter of NATO would not be allowed to. That strikes me as a pretty nonsensical amendment to table.

Mr. Rogers

rose——

Sir David Mitchell

I have not finished with the hon. Gentleman yet.

One wonders why the hon. Gentleman takes such a view. Is it because he is desperately anxious to ensure the confidentiality of everything that goes on at Aldermaston?

Mr. Rogers

I assure the hon. Gentleman that, if I bought shares in such a company, it would be as an ex-member of the Welsh Regiment and not as an ex-member of CND.

Sir David Mitchell

The hon. Gentleman does not deny that he is an ex-member of CND—a former card-carrying member—and, if I recall correctly, he said that he was proud of it.

I asked whether the hon. Gentleman was anxious to secure confidentiality in what happens at Aldermaston—I see that he nods as an indication of his support for that view. Therefore, I shall quote from the Basingstoke Gazette: A Labour MP leading the fight against bringing in private management at the Atomic Weapons Establishment has asked workers for information about the Aldermaston plant. Apparently the former card-carrying member of CND went down to Silchester, which is just outside my constituency on the borders of Aldermaston, and asked workers for information about the plant. Now he is tabling an amendment seeking confidentiality.

I quote again from the Basingstoke Gazette: Mr. Rogers promised confidentiality for information received". It is a fine kettle of fish for the hon. Gentleman to come here now seeking to protect confidentiality, when he has gone to Aldermaston asking people to give him information about the plant.

The other aspect of this pair of amendments that I find extraordinary is that no compensation will be given to the contractor if it finds that 11 per cent. of its shares are held by any of these offending citizens from America or from NATO countries.

The hon. Gentleman has proposed that, if someone buys additional shares on the stock exchange and so acquires more than 10 per cent. of the shares, which the company has no power to prevent—it cannot control who buys and sells its shares—the contract becomes null and void. Not only that, but no compensation is paid. The shareholders who own nearly 90 per cent. of the shares will lose a valuable contract, with all that that implies, but will receive no compensation. The hon. Gentleman should take his amendment away, because it is rubbish.

Mr. Menzies Campbell

I hope that I shall not be disqualified from participating in this debate by virtue of the fact that I have never been a card-carrying member of CND and have never had the honour to serve in the Welsh Regiment; nor am I a regular subscriber to that compelling organ of public opinion, the Basingstoke Gazette.

The amendment seeks to examine—in the context of Report stage—the circumstances in which control of a company which had obtained a contract under section 1(3) of the Bill might raise questions of national importance in the minds of the people of the United Kingdom. It is right and proper that, when one considers the contractorisation of the production and development of weapons of mass destruction, which form a significant part of United Kingdom defence policy and are likely to do so for a long time to come, we should examine with some scruples the extent to which the control of any such company might pass into hands which are not entirely sympathetic to the objectives of the people of the United Kingdom.

That seems an entirely proper issue for the House and the Select Committee to consider. The hon. Member for Hampshire, North-West (Sir D. Mitchell) might have had something to say about the detail of these amendments, but may I respectfully say that he gave scant consideration to the principle behind them, which seems to me to be of considerable importance.

I have re-read the Minister's observations in column 105 of the report of the fourth sitting of the Standing Committee. As I understand it, he said that the special, or golden, share, will apply only to the company formed for the purpose of employing those who will work at Aldermaston. Apparently there is to be no attempt to create or retain for the Government any similar control in the company which may win the contract. That might raise questions of national importance.

If the shares of a company that won the contract for the production and development of nuclear weapons were to fall into the hands of other companies—or companies formed by national Governments; we know that that is by no means unusual—circumstances might arise in which control of the company at Aldermaston rested with another company or with a nation whose interests were wholly antagonistic to those of the people of the United Kingdom. How could we then guarantee that the company fulfilled the responsibilities placed upon it by the contract? It would be simple for the company to walk away from the contract during its lifetime and to say that it did not want to continue with it.

We should be left—as hon. Members have said—to seek recourse on the Strand to try to compel them to continue with it. In legal terms, that would be extremely difficult, and the Government's remedy would be to try to obtain damages. In the meantime, the production and development of nuclear weapons—which is, and is likely to continue to be, a central part of the United Kingdom's defence strategy—might be brought to an end, prejudiced or dealt with in such a way as to make it difficult for us to maintain an independent nuclear deterrent.

We are dealing with a substantial issue of principle, which we raised with the Minister in Committee. With respect, it seems that, in spite of his courtesy and tact, he did not contrive to deal with it in a way that could be considered intellectually compelling. It is now incumbent on him to explain to the House what remedy he believes that the Government would have in the circumstances that I have outlined. He might be dismissive of the amendments, but he must at least direct his attention to the principle they raise and give us what assurances he can about how the United Kingdom's national interest would be protected in such circumstances.

Sir Michael McNair-Wilson

If we were to follow the principles outlined by the hon. and learned Member for Fife, North-East (Mr. Campbell) to their logical conclusion, we should not buy the missile from America or from General Dynamics, but should make it in this country. We depend on the good will of the Americans for the missiles to carry the Trident warheads. Without that good will, we should not have nuclear missiles.

6 pm

Mr. Campbell

The hon. Gentleman is right. Since the Nassau agreement, the United Kingdom has depended on the good will of the United States for the provision of nuclear missiles. Some people regard that as politically acceptable and some do not, but it is a fact. I am concerned that we should have to rely not merely on that good will, about which I am reasonably confident, but on the good will of unknown companies or unknown Governments whose commitment to the same ideals as us might be, to say the least, lukewarm. They may not be members of NATO or share the aspirations of the western alliance; indeed, it might be in their interests to prejudice the production and development of nuclear weapons in the United Kingdom.

The hon. Gentleman's intervention has, if anything, crystallised the argument. It has made even more sharply the point that the Minister must consider. I hope that the Minister will share with the House his doubtless extensive discussions with colleagues from the Ministry of Defence about how the interests of the United Kingdom can be protected if the contract is won by a company the control of which may pass out of hands that the United Kingdom would regard as entirely friendly.

Mr. McWilliam

I listened carefully, and with some surprise, to the hon. Member for Hampshire, North-West (Sir D. Mitchell). I thought that Senator Joe McCarthy was dead. Clearly, his descendants still exist in some form. He asked, "Are you now or have you ever been …?" If the hon. Gentleman wants to know, yes, I was a member of the Campaign for Nuclear Disarmament and I probably still am. I do not know. If not, I should be sorry because I should like to vote against some of its policies. One of the reasons for staying in an organisation is to change its policies.

Mr. Menzies Campbell

Like the Labour party.

Mr. McWilliam

Yes, like the Labour party. We are members of all sorts of organisations, not because we agree with all of their policies—although we agree with most of them—but so that we have the right to change things.

The hon. Member for Newbury (Sir M. McNair-Wilson) was right—I have been around Aldermaston. I probably have a higher security clearance than he has. That is not something to worry about.

I worry about what the application of section 1 of the Official Secrets Act 1911 to the selling of secrets about atomic production to a foreign national. There is an ugly word for that—treason. The Act does not differentiate between selling to a country that is friendly or unfriendly. It applies only to the passing of information.

Our nuclear programme was founded on American technology and on American transfers of information, but it has come a long way since then, and it is not based on that technology or on those transfers now. Much of the research on which it was based was carried out in this country, so there is plenty of room for co-operation.

The hon. Member for Hampshire, North-West asked whether we should allow one of our NATO allies to acquire shares. I should be extremely worried it, for example, the Belgian company that refused to fill our 155 mm artillery shells, which we needed for the Gulf', was allowed to acquire shares. Belgium is a member of NATO, and that company could legitimately acquire shares if we accepted the hon. Gentleman's argument. I do not believe that that company should be allowed to do so.

I realise that the drafting of the amendment is extremely tight, but it has to be. Hunting Engineering is owned by Brown and Root (UK). Brown and Root (UK) is a myth. It is registered in the United Kingdom, but it has no British shareholder, unless those shareholders have acquired shares in the United States as it is an American-owned company. I am not anti-American. I should object; if it were any other company.

In Committee, we pressed the Minister at least to recognise that it was not a good idea to allow foreigners to acquire sufficient control of our atomic weapons production so as to jeopardise it. What is more, we said that it was not a good idea because the more foreign control there was, the more the security of information was compromised. The Minister did not accept those arguments. I am willing to bet that the hon. Member for Hampshire, North-West will not tell his constituents that he fought for the right of foreigners to own shares in Aldermaston. I have news for him. I bet that the Basingstoke Gazette is hanging on my words, and I hope that it uses them.

Sir David Mitchell

My point was that the amendment prescribes 10 per cent. as the barred level—so to speak—which seems ridiculous. Surely there can be no objection to a minority shareholding. There is an objection to a majority shareholding, which is why the Minister has introduced the golden share. That is different from the minority of 10 per cent.

Mr. McWilliam

I am grateful for the hon. Gentleman's intervention, because it makes it clear to me that he has not even begun to comprehend what the debate is about. It is not about the niceties of who owns a company that makes ping-pong balls. If it were, I should leave the hon. Gentleman and his friends in the City to carry on—as they have since time immemorial—doing what they like. I am pleased that for the moment at least, such manipulation does not apply to the Atomic Weapons Establishment, but it will unless the amendment, or something similar, is adopted. We must prevent some of the things that happen in the City happening in the interesting area of protection.

My hon. Friend the Member for Rhondda (Mr. Rogers) spoke about the Minister's letter about the golden share. I recall reading a newspaper during the Easter recess. Something in that letter triggered my memory, and I am reminded to ask the Minister a question. Which of the members of his private office is a medium, because I am convinced that Lewis Carroll wrote that letter?

Mr. Bob Cryer (Bradford, South)

I listened to the hon. Member for Hampshire, North-West (Sir D. Mitchell) with a good deal of interest. As my hon. Friend the Member for Blaydon (Mr. McWilliam) said, the hon. Gentleman sought to make membership of the Campaign for Nuclear Disarmament some sort of criminal offence. I remind the House that 139 states are in effect members of an international campaign for nuclear disarmament. Perhaps the hon. Member for Hampshire, North-West would like to turn his attention to them and make similar sneering remarks about other NATO countries such as Norway and Denmark which refuse to have nuclear weapons on their soil. The Canadian Government, which is under Conservative control, also refuse to have nuclear weapons on their soil.

The Government of Canada and the Governments of 139 non-nuclear countries share the views of the Campaign for Nuclear Disarmament. They believe that it is sane and sensible not to have nuclear weapons on their soil. I should be interested to know whether any Conservative Members here today wish to persuade any of those 139 countries to take nuclear weapons into their possession. I should be interested to receive any. recommendations to that effect.

Of course those countries will not take nuclear weapons. They know that the United Nations nuclear non-proliferation treaty is an important treaty to stop the spread of nuclear weapons. Who can deny the assertion that, if nuclear weapons spread to other countries, there will be a greater danger of them being used? The rationale behind the amendment is that, because the weapons manufactured at the AWE are the most dangerous on earth, there should be some control by the Government.

The Government wish to continue the policy—with which I disagree—of manufacturing nuclear weapons here in the United Kingdom. We cannot provide absolute prevention of foreign domination through legislation, but we can try. It seems to me that 10 per cent. is not an unreasonable limit on any shareholding. For example, if Saddam Hussein's front men had 10 per cent. of a company—Nuclear Weapons Manufacturing (Basingstoke) Ltd., for instance—the Tories would be slavering at the jaws and saying how dangerous it was that this Hitler-like person had obtained 10 per cent. of the company.

Mr. Rogers

Will my hon. Friend give way?

Mr. Cryer

I shall continue with my remarks, if I may.

The danger of someone like Saddam Hussein gaining more than 10 per cent. of such a company is one of the important reasons for the 10 per cent. limit. I shall come to Matrix Churchill in a moment, if that is what my hon. Friend has in mind.

The 10 per cent. limit is also a safeguard against the shifting sands of other Government's policies. We all remember less than a year ago the Minister of State for Foreign Affairs, not attacking Saddam Hussein as a potential tyrant, but attending a garden party organised by the Iraqi embassy at which he encouraged our manufacturing industry to sell equipment—weapons were embargoed during the Iran-Iraq war—to the Iraqis. That was why a perfectly good manufacturing company in the machine tool sector—Matrix Churchill—was bought up without the Government raising an eyebrow.

Why did they not raise an eybrow? It was because their ideology is that capital should be free; there should be no impediments on it. It should move between countries, gaining its 5, 10 or 15 per cent. return as profit. Therefore, they believed that it was wrong and arbitary for a Government to intercede between the capitalist and the object of his investment. Lying beneath their policy is the ideology expressed time and again by people who are still in the Government.

The present Minister is a perfectly polite and pleasant man, although he has wrapped a shroud around some nasty policies. However, he may not be in his job for long and some free-booting free-market Minister may be put in his place who might not treat the safeguards so conscientiously as the present Minister does.

6.15 pm

The hon. Member for Hampshire, North-West was saying succinctly that the rights of capital are superior to the United Nations nuclear non-proliferation treaty. Let me deal with another argument that he used. He suggested that the Labour party was anti-foreigner because Labour Members wished to exclude foreigners from ownership of the company. I am one of the those people who do not like pointing nuclear weapons at foreigners. By and large, nuclear weapons are pointed at foreigners. The hon. Member for Hampshire, North-West is prepared to point a whole range of nuclear weapons at foreigners, so that on the scale of concern and affection for foreigners I rank higher than the hon. Gentleman. I am not prepared to exterminate foreigners on a greater scale than civilisation has ever achieved.

I remind the hon. Member for Hampshire, North-West that when we were friendly—when I say "we", I mean the Government——

Madam Deputy Speaker

Order. I ask the hon. Gentleman to refer his remarks to the amendment. They are rather too general at present.

Mr. Cryer

My remarks deal with an amendment which is designed to protect against the purchase of an important contracting company by foreign owners through the penetration of foreign capital in a highly sensitive area—the manufacture of the most dangerous weapons that mankind has, sadly, discovered.

The amendment tabled by my hon. Friend the Member for Rhondda (Mr. Rogers) suggests that there are grave dangers in not including some legislative provision other than a golden share. We have often heard Ministers make the case for retaining a golden share in a company. One by one, Ministers have come to the Dispatch Box and told the House that the Government intended to get rid of the golden share. They did so in the case of Jaguar Cars, which was supposed to be an important pinnacle of British manufacturing industry.

There are other considerations. One is the nature of this area of manufacturing. That is why I am pointing out, Madam Deputy Speaker, that we had friendly relations with Iraq not long ago. Matrix Churchill was bought up under the eye of the Government to export good quality machinery for manufacturing weaponry. Some people understood that. I want to demonstrate that, even with this legislation there cannot be an absolute guarantee of protection. All we can do is to seek to influence behaviour and make it conform with the aim and spirit of the Bill.

The perfectly decent firm of Sheffield Forgemasters was involved in the manufacture of a super-gun which the Department of Trade and Industry could not recognise. The Department could not recognise a super-gun if it was sprayed on its eyeballs. Yet we are to depend on the Government. If the gun had been assembled outside the DTI on Victoria street, the civil servants would have looked at it and said, "What a super piece of oil piping." It took the Iraqi civil service to tell them that the oil piping was more expensive and of a higher standard that the average bit of scaffolding, which was what the DTI thought it was.

Mr. Rogers

My hon. Friend talks about companies being encouraged to export to Iraq materials that could be used for the production of armaments. International Military Services, a wholly owned subsidiary of the Ministry of Defence, actively encouraged Astra to purchase PRV of Belgium, which produced the propellant for the big gun, so that it could export the propellant to Iraq, or siphon it through Jordan into Iraq. Of course, this country's main producer of the propellant is Royal Ordnance plc, which was handed over to British Aerospace. Even the present Government would have looked a little sad if they had encouraged Royal Ordnance to supply the propellant for the big gun. However, they certainly encouraged Astra to purchase PRV so that it could do so. So far as this business is concerned, the Government's hands are very dirty indeed.

Mr. Cryer

My hon. Friend makes an apt point.

If the amendment were accepted, breach of the legislation would preclude compensation. Its purpose is to encourage greater scrutiny by the people operating this company. They would realise that, if they did not exercise scrutiny, their pockets would be hurt. I am afraid that one of the traits of some sections of humanity is that, in the absence of a prod of that nature, they turn a blind eye, especially when they get no guidance from a supine and inert Government willing to sell pretty well anything at any time to anybody anywhere, so long as the people who contribute to Tory party funds make a fast buck. That may seem a little crude, but it is the reality, even if the Government try to avoid it with grand words.

At Question Time today, the Secretary of State for Foreign and Commonwealth Affairs said that he supported the nuclear non-proliferation treaty. As I said at the beginning of my speech, the 139 non-nuclear signatories to the NPT want some assurance. They get no assurance from this country, as it is embarking on the manufacture of Trident nuclear weapons. That is what this legislation is about. I do not want people to be put on the dole; I want expertise and skills in this field to be transferred to projects that would preserve and benefit life instead of having the potential to destroy it.

I certainly want to see the end of the manufacture of Trident nuclear weapons in the United Kingdom. As a matter of fact, so do those 139 non-nuclear nations. They keep telling us that it is unfair that the nuclear signatories, including the United States and the Soviet Union, should be negotiating some reduction—as they have been, through the INF treaty—while the United Kingdom does nothing of the sort. In review conferences, they keep asking, "Why should we get rid of nuclear weapons, and refuse to manufacture or deploy them, when the United Kingdom sets no example at all?"

Sir Anthony Durant

I have been following very closely the hon. Gentleman's remarks about atomic weapons throughout the world. Does he advocate the closure of Aldermaston?

Mr. Cryer

I thought I had made it absolutely clear that I should like to see the Aldermaston expertise and skills used in the development of materials and equipment for the preservation and development of life. If the hon. Gentleman is saying that getting rid of nuclear weapons would necessarily result in many people being put on the dole, he is mistaken. We can—indeed, we must—plan the change. It is the absence of planning that has resulted in so much redundancy following the so-called peace dividend.

I want to return to the detail of the clause. The 139 non-nuclear nations to which I have referred are not impressed by the record of the present and previous Conservative Governments, who have spent £10,000 million on Trident nuclear weapons. If they see the manufacture of nuclear warheads handed over in a sloppy manner to private contractors, who, with regard to proliferation, may be subject to rather less Government control, they will be even less impressed.

If the Government are to continue this manufacture, which I steadfastly oppose, and if they are to continue with this legislation, as I have no doubt they are, even though I steadfastly oppose and deplore it, we should at least have some safeguards. Perhaps one day the Minister will get a trip to Canada under Government auspices. If that should happen, would he not want to be able to say, "We are providing every possible safeguard"? If the people there said, "But Labour put forward some decent safeguards, and you rejected them," he would have a perfectly reasonable answer. He would be able to say that the safeguards had been rejected in the Commons but would be accepted in the Lords.

I dare say that all legislation is flawed to some degree. However, the Minister should be in a position to say that the House of Commons at least tried to provide some control over the manufacture of weapons capable of causing more death, more destruction and more lingering horror than occurred in the whole of the Gulf war and the subsequent Kurdish crisis. These are important safeguards, and I ask the Minister to accept the amendment.

Mr. John Home Robertson (East Lothian)

I regret that I was unable to be present for the debate on the first group of amendments. I was attending a meeting of the Select Committee on Defence, which was considering the threatened closure of the Rosyth naval base. Having been a member of the Standing Committee that considered this Bill, I am glad to be able to contribute at this stage.

It is with a feeling of unreality that we see the Government, in their dying weeks—we hope that these are their dying weeks—introducing legislation to commit the ultimate folly of privatisating the manufacture of nuclear weapons, having privatised almost everything else. In these circumstances, we can always depend on the hon. Member for Hampshire, North-West (Sir D. Mitchell) to extend the unreality. He has certainly done so today. Evidently, he is prepared to go to the wall for the rights of any number of foreigners—people from Iraq, Argentina, the Soviet Union, or anywhere else—to purchase any number of shares in the operating company of the Atomic Weapons Establishment. The hon. Gentleman's party regards itself as the party of patriotism. It is the party that wraps itself in the flag.

Sir David Mitchell

I understand the reasons for the hon. Gentleman's absence from the earlier debate. He must have been still absent when I made my speech, as I did not make the suggestion that he has just put into my mouth.

Mr. Home Robertson

I was present, and I listened very closely to the hon. Gentleman's interesting speech. He was at great pains to make clear what he felt about friendly foreigners. But there is nothing in the Bill about friendly foreigners; there are no restrictions. Share ownership in the operating company will be open to anybody. Evidently, the hon. Gentleman thinks that it is a good thing that people from any country should be able to purchase shares. Plainly that is unreasonable, irrational and dangerous. There should be restrictions. Perhaps the hon. Member for Hampshire, North-West, giving due consideration to national interests as well as local interests, will table a manuscript amendment putting foreigners into different categories. So far, he has not done so. He is prepared to go to the wall in support of the case that any foreigner should be allowed to buy any number of shares in the operating company.

Sir David Mitchell

That is not what I said.

Mr. Menzies Campbell

So long as that person is not a member of CND.

Mr. Home Robertson

Yes, so long as he is not, and has never been, a member of CND, and has no relationship with it.

Mr. McWilliam

Or the Welsh Regiment.

Mr. Home Robertson

Or the Welsh Regiment, or the Fife and Forfar Yeomanry, or the Durham Light Infantry.

In the next part of his extraordinary contribution, the hon. Gentleman suggested that there was something seditious about the trip of my hon. Friend the Member for Rhondda (Mr. Rogers), who led for the Opposition in the Standing Committee, to Aldermaston to try to get some perfectly relevant, openly available information about the way in which Hunting-BRAE was conducting its affairs at the time leading up to the introduction of this legislation.

As ever, the Government have jumped the gun about privatising the Atomic Weapons Establishment and Hunting-BRAE is already involved. I put it to the hon. Member for Hampshire, North-West that it was entirely proper for my hon. Friend the Member for Rhondda to find out relevant information in anticipation of the proceedings in Committee and debates in the House. It was equally proper for employees at Aldermaston to brief hon. Members on both sides of the House and tell us what was going on there, how inefficient it was and how they had managed to lose an entire day's production because of the way in which they were conducting their affairs.

6.30 pm

On reflection, the hon. Member for Hampshire, North-West should acknowledge that his outburst was unjustified and disgraceful, and hon. Members on both sides of the House should acknowledge that the amendment moved by my hon. Friend the Member for Rhondda on behalf of the Opposition is the correct and patriotic way to proceed with the legislation.

I personally feel that the whole Bill should be thrown out. I find it quite bizarre that we are talking about privatising the operation of the Atomic Weapons Establishment. Certainly there must be safeguards as to who can own shares in that company in future. We heard from the hon. Member for Hampshire, North-West on behalf of the unreconstructed Thatcherite Tory party that absolutely everything is up for grabs and that anything can be solved. The Tories would even sell their grannies. They would sell the Atomic Weapons Establishment to anyone, including Saddam Hussein. That is irresponsible, and that is why the amendment should be accepted.

Mr. Haynes

The Government are privatisation-barmy. There is no doubt about that, but this time they have gone over the top. Here they are privatising the establishment that is responsible for the manufacture of nuclear warheads. I ask you, Mr. Deputy Speaker, where are the Government going? The things that they are flaming well doing are clearly barmy. We are now discussing the foreign ownership of British companies.

The Minister was warned in Committee, but he did not respond in the way we wanted about the foreign ownership of the four establishments. What are the Government doing? They privatised gas, oil and electricity, but the privatisation of the Atomic Weapons Establishment is a different ball game.

Mention has been made of Saddam Hussein. The Ministry of Defence let him get away with murder when it came to weapons. The Government did not do a damn thing. The Iraqis had pilots in the air in the Gulf war, and we damn well trained them. That is another point about foreign nationals. Now the Government are saying that those foreign nationals can come and buy shares in the Atomic Weapons Establishment. Never mind the percentage—the principle is rotten. I hope that the Minister has listened to all the speeches about foreign ownership of the AWE. The Minister is getting a bit eager. I have not finished yet. I have just opened my notes.

I am worried because we are discussing the Ministry of Defence. I ask the House to concentrate on the cock-up that the Ministry of Defence and the Government have made of military establishments. We are talking about the AWE. Saddam Hussein has been mentioned; we should not forget Colonel Gaddafi. I have spoken to my hon. Friend the Member for Edinburgh, Leith (Mr. Brown), who is a great friend of Gaddafi. He goes to see him from time to time, and he tries to badger him into helping to release the hostages.

What about Gaddafi buying into the AWE? After all, Saddam Hussein was supposed to be a friend of Britain and the Government encouraged him in all manner of things. Now the Government are leaving it wide open for Saddam Hussein, Gaddafi and other nasty dictators throughout the world to buy into the AWE. While I gather my thoughts, I shall give way to my hon. Friend.

Mr. McWilliam

While my hon. Friend gathers his thoughts, he might recollect that, as far as I am aware, the Libyan Government own shares in the Agusta aircraft company, which is the part-manufacturer of the EH101 anti-submarine helicopter that is being developed for the Royal Navy.

Mr. Haynes

We have another voice of experience from the Select Committee on Defence. My hon. Friends know a lot more than I do about defence because of their experience on that Select Committee. I am not a member of it, so they are way out in front of me, but I can see real dangers in the Bill resulting from foreign ownership of the establishment that manufactures wicked and dangerous weapons.

In Standing Committee, we asked questions about security. We gave the Government a right going over, and we were not satisfied with the Minister's response. If they allow foreign nationals to buy into the Atomic Weapons Establishment, they will have a hell of a job with security and policing. I want to know whether they will build up the manpower when foreign nationals have bought into the establishment.

Mr. George Howarth (Knowsley, North)

Which manpower?

Mr. Haynes

The manpower involved in security. The numbers employed in security at military establishments are dipping all the time. The end result is that they are using people who have just got out of prison to do security work.

Security at military establishments is the responsibility of the Ministry of Defence. I want to stress the cock-up that the Government have made of that, but we are discussing something quite different—the manufacture of nuclear warheads. The Ministry of Defence will be responsible for the security of the establishment. If foreign nationals will be able to buy into the AWE, we must do something about the security system there. The Minister would not answer our questions in Committee. The things that are happening under the present Administration are quite appalling.

I can tell the Minister that my constituents are not too pleased with the Bill. I go round to the British Legion club. Those boys were prepared to give their lives for our nation. They are concerned about what the Government are doing in the Atomic Weapons Establishment Bill.

There is another question that was not answered in Committee. If foreign nationals bought into the privatised AWE, how many jobs would be lost? Every time the Government have privatised an industry, jobs have gone—hosts of them.

If such companies do not make enough money, more and more jobs go. If the companies start to lose money someone else must buy in. As my hon. Friend the Member for Bradford, South (Mr. Cryer) said, if that happens in this case, who knows who will buy in? The Government will dilly-dally and dither all over the damn place in the hope that someone will come along and snap up the AWE quickly. They will not study who those people are, or who they represent. The Government have shot off in this direction and have not listened to the Opposition's suggestions. We have told them the things that could go wrong.

I believe that the Government should dither on this issue so that it is studied properly. My hon. Friend the Member for Rhondda (Mr. Rogers) made particular reference to the need to look at this matter properly. The Government should not rush head on. The Government dither on some things, but they rush like silly beggars on others.

The Minister may think that this is a big joke, but it is a serious matter. In Committee I talked about his baby. He has a lovely baby.

Mr. Home Robertson

Has he?

Mr. Haynes

Oh, aye. That baby was also a serious matter and the Minister could laugh about that, because it was a happy event. I look forward to the next happy event, but he should think seriously about the problems we have described tonight. I hope that the Under-Secretary will convince the Secretary of State. It is no good talking to the Minister of State; he was not a member of the Committee, and today he ducked in here for about two minutes. Oh—I see that he has just returned. I did not notice him by the Chair, but now he is here to listen to the back end of my speech. He has missed all the others and all the serious issues that were raised.

It seems that all the sheep on the Conservative Benches will follow the Secretary of State and the Under-Secretary, just like they followed them on the poll tax. They have had to back off on that, because they got their backsides kicked in their constituencies. I want their backsides to be kicked about this Bill, because, as soon as the electorate wake up to the effects of this privatisation, they will tell Conservative Members in no uncertain terms to back off, just like they did on the poll tax.

After the next election, we shall act at the first opportunity to get rid of the Bill. We shall follow the proposals advocated by my hon. Friends.

Mr. Kenneth Carlisle

I have no quarrel with the basic principle behind the amendment, which is to protect United Kingdom national security interests. There are, however, other ways in which to do that than by including in legislation a requirement limiting the percentage of foreign ownership in the contracting company. The Opposition's suggestion does not represent the most effective way in which to secure full security. We believe that this issue is best tackled through the contract and other means, not through the Bill.

I should remind the Opposition, as I did in Committee, that protecting national security is the job of my right hon. Friend the Secretary of State—it is his central role. He does not need a statutory obligation to ensure that he does his job. He would never hand over the running of the AWE to foreign control.

I should also remind the House that the Government are retaining ownership of all the property, assets and equipment at the AWE. We are only contractorising the management.

Mr. Rogers

The Minister says that he will prevent foreign ownership through the contract. We are simply asking him to tell us how.

Mr. Carlisle

If the hon. Gentleman is patient, I shall outline how we will ensure security. I should be happy to give way to the hon. Gentleman again later.

It may be for the benefit of the House if I outline how we shall ensure that the Government retain influence over ownership of the companies involved in the operation of the AWE. I say "companies" because we intend to adopt for the AWE the two-company structure of an employing company and a contracting company. That was the arrangement we followed when contractor operation was introduced into our royal dockyards. It is therefore a well-proven arrangement, and itself provides important safeguards.

6.45 pm

Our intention is that, shortly before vesting day, my right hon. Friend the Secretary of State will form the employing company for the purpose of employing the AWE's staff. As I have said, this will be a different company from the contracting company, which will be the private sector company or consortium that wins the competition for full contractor operation of the AWE.

As part of the contract, the contractor will take over ownership of the employing company from my right hon. Friend. The purpose of the employing company will still be to act as employer of the AWE staff. However, for the duration of the operating contract, the employing company will be wholly owned by the contractor, with the important exception of a single special share which will be retained by my right hon. Friend. That will provide important safeguards.

The two-company structure and the special share in the employing company will benefit the staff by providing continuity of employment. If, after about five to seven years, a further competition is held and another contractor is appointed to run AWE on our behalf, that firm will be required to take over the employing company from the original contractor. Staff will remain employees of the same employing company.

Similarly, if, for any reason, my right hon. Friend the Secretary of State wished to operate the AWE himself, or if we were unhappy with the contractor, the two-company structure and the special share would enable him to take back the employing company and thus the entire staff of AWE under direct Government control. That is an important safeguard for the Government, as, if necessary, we could revert to operating the AWE ourselves. I believe that that answers the particular concern expressed by the hon. and learned Member for Fife, North-East (Mr. Campbell).

Given the safeguards provided by the two-company structure and the special share, I regard it as neither necessary nor right to seek to legislate on possible foreign shareholdings in the contracting company. The ownership question, which is linked with wider security issues, is better covered at the tender and contract stages.

We have made it very clear that we shall ensure that the choice of contractor and the terms of the contract take full account of all security considerations. The contractor must comply fully with our security requirements, including satisfying my right hon. Friend the Secretary of State about its ownership. I stress that we shall be looking for a United Kingdom-based prime contractor, who can comply with those requirements. We shall ensure that the ownership of the contracting company, whether or not it is owned by a consortium, is not prejudicial to our defence interests. I stress that we shall be most careful about that, but I reiterate that it is not a matter appropriate to legislation. I believe that my hon. Friend the Member for Hampshire, North-West (Sir D. Mitchell) put that argument convincingly.

We will also take measures to ensure that, once the contract has been let, there is no possibility of national security considerations being compromised through shares changing hands. I repeat the guarantee that I gave in Committee—all the requirements to protect security and ensure that the contractor fulfils security criteria will be written firmly into the contract.

I regard this as a matter for the contract rather than legislation, because, irrespective of any foreign shareholdings, there may be United Kingdom companies or individuals who would not meet our high security standards and whom we would find unacceptable as our operating contractor at AWE. That is why it is important that our security criteria are strictly applied both in the award, and during the term, of the contract. A restriction in the Bill defining an acceptable level of foreign ownership would, by itself, be insufficient adequately to protect national security. We need the whole strength of our ability to enforce security, not just a restriction set down in the Bill.

Conversely, AWE experts have always co-operated closely with their counterparts in the United States and will no doubt continue to do so. I cannot accept, for example, that there is any objection in principle to a degree of involvement from companies based in the United States. As everyone will know, and as has been mentioned in debate, our nuclear links with the Americans are close and valued, and have been so valued by Governments of all parties.

As the amendment is designed, albeit unacceptably, to protect national security, I should take this opportunity of reiterating the Government's commitment to maintaining the very highest standards of security at AWE. Those standards will be not only applied in our selection of contractor, as I have already mentioned, but also written in detail into the contract so that the contractor is under no doubt about the high standards that he must meet. In addition, every employee of the contractor, and any parent company, who has access to AWE information or sites will be rigorously vetted by the Ministry of Defence and will meet our high standards.

The contractor will also be required to comply with our "need to know" principle which restricts the dissemination of classified information—a well recognised and widely used principle. Any individual who breaks security rules will risk losing his or her security clearance and could be prosecuted under the Official Secrets Act. In the event that the operating company was itself implicated in those theoretical events, sanctions will be available under the contract which could, as a last resort, culminate in terminating the contract. I must repeat that, if the Secretary of State is truly worried about national security, he has full power to rescind the contract and to take the employing company back into his full ownership.

In conclusion, the Government are committed to maintaining the highest security standards at AWE. This includes the question of foreign ownership, although that is but one aspect in our overall security requirements. Coupled with the safeguards provided by the two-company structure and the special share arrangements in the employing company, it is far more sensible and effective to safeguard security by the careful application of well proven security criteria to those companies who tender for the contract, than by the blunt instrument of statutory provision. I therefore invite the House to reject the amendment.

Mr. Rogers

I still cannot understand what the Minister is on about in relation to retaining a special share. He has said in his letter that he is setting up a company that will be solely an employing company; it will have no function other than to employ people. There will then be a quite separate contracting company. At present, on phase 1, that will be a consortium of Hunting Engineering, Brown and Root, an American company, and the Atomic Energy Authority.

The special share will stop no one from purchasing shares in the contracting company. Anyone who has the money to purchase them on the London stock exchange, or the Dallas stock exchange in relation to Brown and Root, will be able to do so. The present 22 managers are employed by Hunting Engineering, Brown and Root and the Atomic Energy Authority. Is the Minister saying that the special share in the employing company will stop Brown and Root and Hunting Engineering trading on the stock exchange?

I cannot see what the function of the special share is, except that it will prevent any transfer of that company to anyone else and so will secure the jobs of the people who are working there, something which I applaud. It cannot secure who works there in the first place.

Mr. Carlisle

The hon. Gentleman is worried about the transfer of shares in the contracting company. We can well write into a contract that the Secretary of State would have to be advised about the transfer of shares from a contracting company, and then the share in the second employing company, the special share, comes in. If, for security reasons, the Secretary of State disliked that transfer of shares and was determined to stop it but the transfer went ahead and the Secretary of State believed that that was not in the interests of national security, that special share in the employing company would enable him to cancel the contract and take back the employing company into his own ownership, and thereby take over the running of AWE himself. That is the final fallback, and it is foolproof.

Mr. Rogers

It is incredible. The Minister says that he can write into a contract with a company the fact that its shares cannot be free traded on the stock exchange, or at least, if they are, that the Government must be notified before or after. If a company does that, the Minister's only response will be to cancel the contract. The company will be right in the middle of producing warheads for Trident. As the hon. arid learned Member for Fife, North-East (Mr. Campbell) said, the Government will end up in the law courts in the Strand. I have never heard anything so ill-conceived in my life.

Surely to goodness the Minister understands that a special share in an employing company, which in his own words is set up solely to employ people, will have nothing to do with controlling the management of Aldermaston. The Minister is setting up this structure to bring in outside management because, as he says, the Ministry of Defence is not good enough to run the place. He has said time and time again, "We do not have the expertise. We have got to go outside and privatise." Then straight away he says, "Ah, but we are going to set up this structure." The Minister is talking nonsense and the structure that he is proposing is ill-founded.

My hon. Friend the Member for East Lothian (Mr. Home Robertson) described the contribution of the hon. Member for Hampshire, North-West (Sir D. Mitchell) as disgraceful. As it was an attack on me, I will leave the hon. Gentleman to live with his own conscience. Our amendments would prevent the proliferation of the technology and the expertise that are required for the production of nuclear weapons. Surely to goodness Conservative Members are not saying that they want an open seam for the production of nuclear weapons, especially after the Gulf war. Not even the Prime Minister believes in that.

Only yesterday, the Prime Minister suggested that there should be an arms register. That happens to be about five years after the Labour party suggested it. Like his safe haven policy it is a little late—plagiarism yet again. We do not mind him copying our policies—that is why we advocate them—but an arms register is a step along the path of non-proliferation and we applaud it.

We are glad that Conservative Members have come over to our way of thinking. Why not extend the idea to Aldermaston—[Interruption.] The Minister of State for Defence Procurement is muttering again, but as a military historian he should realise the sense of my argument—even though he never bothered to attend Committee to listen to it because he was too busy, as I said before, with his antique cars. He should have attended our debates and carried out his responsibilities as the Minister for Defence Procurement.

7 pm

The hon. Member for Hampshire, North-West mentioned my former membership of CND. Sometimes people change their opinions in the light of new circumstances. The hon. Gentleman may be somewhat neanderthal in his views but some of us are a little more flexible. He suggested that my position as a Member of Parliament was unsound because I was a former member of CND. I know that Conservative Members do not worry about former members of the National Front. Perhaps the hon. Gentleman thinks that his background is more sound than mine. I know that membership of the Welsh Regiment does not count for much—not even with me —but for what it is worth, I was a national service man. I am not sure where the hon. Member for Hampshire, North-West served, but he can take my membership of CND and the Welsh Regiment as he likes.

If I had really wanted to be unsound, I would have been better off going to a public school, since one of the qualifications for membership of the long list of traitors to this country is membership of the Conservative party or attendance at public school. I do not know of many steel workers or miners who have sold secrets to the Russians, but I am sure that quite a few former university and public school boys who may have been friends of Conservative Members or even of the hon. Member for Hampshire, North-West probably sold out to the Russians. The Tory party sold out to the Nazis before the war; it collaborated with them throughout the 1930s and claimed that Hitler was a wonderful man. So Conservative Members should not point the finger at us and call us unsound or traitors. They should look among their own ranks, where they will find a viper's nest. If anyone knows about loyalty in the Conservative party, it is the right hon. Member for Finchley (Mrs. Thatcher).

These were probing amendments to which we have received no response. It appears that we are not going to get the Minister to change his mind, so we shall not press them to a Division. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.