British Technology Group Bill [Money] (Hansard, 12 February 1991)

§ Mr. Bob Cryer (Bradford, South)
There has been a gap between the Second Reading debate and this money resolution. Before the Minister mentions my absence from the Chamber during the Second Reading debate, I should tell him that I was chairing the Joint Committee on Statutory Instruments. It is not a glamorous job, but it has to be done, and it takes me out of the Chamber for a couple of hours every Tuesday afternoon from 4.30 pm. Therefore, I apologise for not being here during the bulk of the debate, but, as the Minister knows, I was here for the Front-Bench replies, so I am familiar with the arguments used.
The money resolution provides, in the usual form, for covering expenses—one cannot cavil at that. It relates to administrative expenses in addition to expenses involved in acquiring securities of the successor company. However, the second part of the resolution causes me some concern, because it authorises the payment out of the National Loans Fund of any sums required by the Secretary of State for making loans to the successor company". The successor company is the replacement for the British Technology Group. When the Minister spoke, he had that fanatical gleam that comes to the eyes of any Members of the no-turning-back or goose-stepping tendency in the Conservative party. We have seen on previous privatisation occasions how the rules of probity and good sense that normally govern the operation of our government are cast to the wind.
I want to suggest to the Minister a possible scenario. Let us consider a contributor to the Conservative party, such as Lord Hanson, who at one time was put forward to buy at least one of the generating companies that are now being offered to the public. It was hoped that he would get the Government off the hook in that area of privatisation. Let us suppose that a Tory party sympathiser comes along and says, "I am very willing to take up the purchase of the British Technology Group." Arrangements are then made to privatise it, and the most influential purchaser of shares in the company is Lord Hanson. What is to stop the Minister expressing his appreciation of that by making loans to the company? He could not do that when it was not a Crown company, but there is a time before full privatisation when the Secretary of State has control of the company and can make loans under clause 8(3). He can lay down conditions and require that the loan 805 shall be repaid to him as such time and by such methods, and interest on it shall be paid to him as such rate and at such time, as he may, with the consent of the Treasury, from time to time direct. That is a pretty wide power to give the Secretary of State, and it is included in the primary legislation. I am not talking about his producing any delegated powers of any rules subject to approval by the House.
All that is saving us from handing over loans at preferential rates of interest to a company that it is arranged is about to be bought by an influential figure in the City scene—or whomever it may be—is the consent of the Treasury. It is rather alarming that, in the money resolution, we are handing over such powers in a process that I regard as wholly lamentable and which is in the hands of Ministers who are deeply committed not only to privatisation, but to privatisation on the basis that the process will not be subject to the criticism of hon. Members. Those Ministers need to make the process as successful as they can.
One of the ways in which Ministers can make the transfer successful is to ensure that the company is given all the loan money that it needs from the public purse. This will not be the first time that that has happened. Rover was an example of a privatisation in which a firm with assets of more than £750 million was handed over to British Aerospace at a cost of about £150 million. Lord Young, who was then Secretary of State for Trade and Industry, was criticised by the European Commission for the sweeteners that he allowed to be given to British Aerospace and which were not revealed to the public at large in the privatisation. This is a matter of considerable alarm.
My hon. Friend will recall that Lord Macmillan talked about selling off the family silver. We are now getting on to the peripheral pieces of family silver about which most people do not know. We are going into the attic. However, in this attic there is a highly successful group, as has been acknowledged by everyone. All the privatisation proposals have involved organisations that have been widely praised by the Government for the devotion and determination of the workers involved. Yet the Government thrust them out into what is euphemistically termed the "marketplace".
We know that the marketplace is not the never-never land that is so loved by the Minister. We know that it involves deals and arrangements between people who are in influential positions because they have a lot of money. If the Government seek to make this privatisation successful, they will want to make substantial loans. The money resolution and the components of the Bill provide that power. There are few safeguards in the Bill or in the money resolution to restrict what the Government can do.
It is alarming that the Minister, who has a reputation for extreme right-wing zeal, and the Secretary of State, who is part of the No Turning Back group and who is 806 another little zealot in the Government machine, are ready to hand over large sums of taxpayers' money. What will happen? We shall be too late. The money resolution and the primary legislation will have been passed. The whole thing is to be handed over with a veneer of legality.
However, we know that the process is designed to ensure not the reasonable loans that are needed but large sums to be handed over to a privatised company. The Government will then proclaim, "This is a success of privatisation." We know that it is a public success in every sense. The Government take a public organisation that has been successful and they then take public funds to provide further loans from the national loans fund to guarantee some sort of success.
I raise those points in perturbation. I tend to examine money resolutions. It is not a convention to vote on those resolutions, although I think that it should be. I should like to vote on them more often, because the money is the key to the whole business. We have passed the primary legislation which authorises the Government to provide money. The money resolution is a specific control by Parliament so that we can say to Ministers, "You have got the power to do this." I should like to withhold that power. I wait with eagerness to see whether the Minister, with the zealot's gleam in his eye, provides a satisfactory explanation or whether he simply provides the defensive briefing on money resolutions with which, I am delighted to say, most Ministers are now provided because money resolutions tend to be debated more frequently these days. I look forward to the Minister's comments.

§ The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Edward Leigh)
We always enjoy the contributions of the hon. Member for Bradford, South (Mr. Cryer) on money resolutions. It is true that I have come prepared for the comments that I thought that the hon. Gentleman might make. He had some fun, but I will not follow him down that road.
The essence of the hon. Gentleman's remarks was a technical point concerned with the national loans fund and with lending to the successor company under clause 8. If I understood the gist of what the hon. Gentleman said, he seemed to suggest that the money might be misused.

§ Mr. Cryer
Making excessive loans.

§ Mr. Leigh
I think that I can give him the reassurance that he needs about excessive loans. The Secretary of State is empowered only to lend money to the successor company from the national loans fund while it remains wholly Government owned. That is merely a contingency measure in case privatisation is delayed. I hope that I can also reassure the hon. Gentleman by saying that it will be a condition of any such loans that they are repaid in full before privatisation. I think that that answers the hon. Gentleman's point.