§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Freeman.]6.43 pm
§ The Chancellor of the Duchy of Lancaster (Mr. Roger Freeman)
Anyone with a working knowledge of the House or of any Department of Government, will know that Her Majesty's Stationery Office has a long and illustrious history. It is one of the oldest Government Departments remaining in existence.
In 1786, a Treasury official called John Mayor suggested that the Government might make substantial savings if they bought all their paper and stationery through a central source. As a result, Her Majesty's Stationery Office was established as a small office fulfilling precisely that role. In all its activities since then, it has continued to honour that founding purpose by providing its customers with a cost-effective and high-quality service.
From such humble origins, HMSO gradually expanded into many other sectors, including printing and print buying, all aspects of publishing and supplying stationery, office equipment and furniture. In many of its activities, it came to represent a single, authoritative and trustworthy supplier to government and, in return, HMSO has been assigned many functions vital to effective government in this country.
For more than 100 years, HMSO has acted as printer to Parliament and, as hon. Members are of course aware, has also provided a service of the highest quality and efficiency, which is vital for the effective conduct of business in the House and the other place.
Much of HMSO's official printed output has, since 1882—
§ Mr. Patrick Thompson (Norwich, North)
I am grateful to my right hon. Friend for giving way so early in his remarks, but while he is doing a historical survey of HMSO, and bearing in mind HMSO and Hansard's very strong connections with Norwich, will my right hon. Friend make crystal clear his commitment to future jobs in Norwich? Will he also express his determination that there will remain a very strong presence for HMSO in Norwich in future, as there has been in the past?
§ Mr. Freeman
I am well aware of my hon. Friend's attention to his constituency duties, and I am able to give the following assurances about employment prospects: first, that Ministers will continue to consult the trade union representatives of the work force; secondly, that I can confirm that there are no plans for compulsory redundancies at HMSO in Norwich or anywhere else in the period running up to the proposed sale of the business; and, thirdly, that the provisions of the Transfer of Undertakings (Protection of Employment) Regulations 1981 will apply. Incidentally, the provisions of TUPE are not time-limited. As far as a buyer is concerned—
§ Mr. Martin O'Neill (Clackmannan)
I am grateful to the Minister for giving way at this early stage, but surely he is aware that, after 90 days, the requirements of TUPE are over and that there is no commitment on the part of an incoming employer to honour the undertakings laid down by his predecessor for any longer than that period. 1275 The Minister should check with his officials, because that is the position, and there is chapter and verse in industrial relations law at present to show that that is the case.
§ Mr. Freeman
The provisions of TUPE apply, obviously, at the point of transfer of an undertaking from one owner to the other, and the owner is bound by those provisions. If an owner seeks to change and negotiate changes in the terms and conditions that apply to the work force of the business, the usual procedures for negotiations apply.
Perhaps the House will permit me to complete my answer to the first intervention, I inadvertently gave way a second time during my answer to the first intervention.
Finally, as I assure my hon. Friend the Member for Norwich, North (Mr. Thompson) that, in searching for an acceptable purchaser of the business, we shall seek to select a company that wishes to, and has clear and acceptable plans to, expand the business of HMSO.
No Minister can give any assurances about the total level of employment or the nature of the operations of any public or private sector organisation in future, but I hope that my hon. Friend is satisfied with those four very clear assurances of our policy.
§ Mr. Andrew Miller (Ellesmere Port and Neston)
Further to the question to which the Minister has just responded, is it not the case that, the day after the change of ownership, the new employer can give contractual notice in respect of any term and condition of employment? Given that that is so, is the Minister therefore saying that he is guaranteeing, in the sale arrangements, a commitment that any future purchaser would have to give something stronger than the basic contractual requirements? Is he saying that a term of the sale will be something that guarantees that changes will not take place in contracts of employment?
§ Mr. Freeman
I would not use the word "guarantee". I said that, in seeking a purchaser for the business, we shall look for a company that wishes to expand the business, and therefore the job prospects. I did not say that we would either seek or expect guarantees from any company. If HMSO were to remain in the public sector, I could not guarantee what jobs would be retained. I have already forecast that if HMSO remains in the public sector, its business and its employment base will contract.
§ Mr. Freeman
For the very simple reason that the business of government is reducing. I am sure that the hon. Gentleman is aware that, in the past 10 years, the work force of HMSO has contracted very substantially; it has halved in the past decade. That contraction is primarily a function of the reduced volume of turnover available to HMSO within the public sector.
Since 1882, much of HMSO's official printed output has had the unique legal privilege of being conclusive evidence of the matter stated and it is frequently relied on in the courts. By the end of the decade, HMSO had assumed formal responsibility for overseeing legislative printing and the then controller of HMSO and his successors were appointed as Queen's or King's printer in pursuit of that function. From that time, the controller 1276 has also administered Crown copyright on behalf of the sovereign and, by agreement with the House and the other place, he also administers parliamentary copyright. In discharging those functions, HMSO has demonstrated and enhanced its reputation for diligence and reliability, which is now well known across the public sector and beyond.
The parliamentary and statutory publishing business accounts for about 10 per cent. of HMSO's total turnover. HMSO has always relied substantially on its original activities of supplying its customers with the essential requirements of administration—for example, printing services, office equipment and stationery. HMSO naturally brings to that work the same reputation for high quality and service. Since its founding days, it has been guided by the need to minimise the overall cost to the Government, and therefore to the taxpayer, while maintaining the standards that its customers have come to expect. That objective has guided the Government's policy of reforming HMSO in the past 15 years and it must clearly be paramount in any decisions taken about its future.
For the greater part of its history, HMSO's services were funded by means of an annual vote from Parliament. HMSO's supplies were, in accountancy terms, an allied service. Therefore, its customers did not have to draw on any of their voted funds to pay for the goods and services that they received. They effectively received them free. Although they benefited from HMSO's purchasing expertise and the savings that are inevitably made when buying in bulk, there was no incentive for them to look for a better deal elsewhere. Similarly, there was no pressure on HMSO to ensure that it offered the best deal.
As alternative suppliers became increasingly available for most HMSO services, it was clear that more could be done to ensure that the cost to the taxpayer was minimised. For those reasons, in 1980 HMSO became one of the first of the Government's trading funds. That meant that, for the first time, it had to cover all its costs through customer charges rather than through an annual vote of cash. In return, it gained considerable management freedom over operational and finance matters.
§ Sir Patrick Cormack (South Staffordshire)
Does my right hon. Friend concede that, from that point, the price of Hansard has increased to such an extent that people can no longer afford to buy it? That was a direct consequence of the Government's decision.
§ Mr. Freeman
That was correct at the time. However, I am delighted to inform the House that, as a result of negotiating a new service agreement and of HMSO's responsiveness, the price of Hansard is now falling. I hope that the price not only of Hansard but of other documents supplied to the House and to the other place will continue to fall. That is a function of greater efficiency at the stationery office—I congratulate the management and the staff—and of a tougher and more businesslike attitude on the part of the House and the other place regarding the supply of documents.
§ Sir Patrick Cormack
My right hon. Friend knows that I am very displeased with the general plans to privatise HMSO. Do not his comments illustrate the good sense of keeping the publication of parliamentary papers properly within the control of Parliament? Is it not impossible to guarantee that if the work goes to a wholly free-standing commercial operation?
§ Mr. Freeman
I agree with the first part of my hon. Friend's statement. Parliament must control the supply of those immensely important services; I do not dissent from that view. I believe that the House will have greater powers than it has at present through the negotiation and execution of a contract between it and the supplier of the services. The powers would be formalised. I do not believe that any successful purchaser of all the printing, publishing and other allied business of Her Majesty's Stationery Office, as it is now called, would seek to renege from, diminish or belittle the importance of the services that it provides to the House. The contract will be extremely important and I believe that Parliament will be able to control it better than at present.
I am aware of my hon. Friend's concerns in that regard. Although I believe that it would be commercially unattractive to separate the parliamentary from the Crown business, as my hon. Friend has pressed me on that point I shall certainly reflect further on the matter. It may be that, on reflection, I shall decide that some arrangements could be made, but I offer no immediate prospect of a satisfactory solution.
§ Mr. Tam Dalyell (Linlithgow)
The Minister said that Parliament could control the business better. What methods does he have in mind to ensure that?
§ Mr. Freeman
I explained to the House that, for the first time in the history of the relationship between Parliament and Her Majesty's Stationery Office, there is now a formal service agreement. That was signed last week and it will come into effect on 1 January. There is a similar agreement with the other place. It is envisaged that the authorities of the House will enter into a formal contract on behalf of the House with the supplier of those services, in the same manner as many other services to the House—which perhaps are not as significant, but which are subject to normal commercial contracts. I believe that the existence of a public document that specifies the nature and the quality of services, together with the price of those services, represents a better mechanism through which the House can control the supply of the services.
§ Mr. O'Neill
In the event that HMSO is unable or unwilling to comply with the undertakings into which it enters, what powers will the House have to excise any damages or compensation from the printer?
§ Mr. Freeman
It depends on the provisions of the contract. The House may wish to have the right to veto any change in ownership or to inscribe damages into the contract or it may wish to remove the business of printing Hansard from other printing and publishing business. That is the nature of a commercial contract.
§ Mr. Nigel Waterson (Eastbourne)
Is it correct that the contract could specify that any future change in the operations of the buyer should be subject to the requirements of Parliament? Although parliamentary business may constitute a relatively small proportion of the new operator's turnover, from a commercial point of view it would be under a great deal of pressure to maintain a good relationship with the House and the other place because any failure to fulfil its requirements could jeopardise the rest of its business.
§ Mr. Freeman
It must be right that the dozens of private sector companies that supply services to the House 1278 and the other place seek to retain their good name and maintain their business with the Palace of Westminster and both Houses of Parliament. I am sure that the same will apply a fortiori to the supply of printed documents.
§ Mr. Garrett
If HMSO breaks its contract, all we can do is sue it. Surely the Government should put those requirements into the tender document in the first place.
§ Mr. Freeman
I disagree with the hon. Gentleman. It is a matter for the House and not for the Government. [Interruption.] One may laugh, but, although I shall be responsible for the contracts placed by the Crown with the printer and publisher supplying documents, the precise contractual arrangements are a matter for the House. Speaking on behalf of the Crown, I would envisage that any contract for the supply of such important documents as White Papers, Green Papers and other statements of Government policy would include extremely tough contractual provisions.
§ Mr. A. J. Beith (Berwick-upon-Tweed)
Let me make it clear on behalf of the House of Commons Commission, first, that the service agreement that the Minister has described is entirely independent of the discussion about privatisation and comes into force on 1 January as a result of work already done. Secondly, on behalf of the House, the Commission would expect to reserve the right to make whatever arrangements seemed appropriate if there were any default on the contract by a private organisation that took over the duties of HMSO.
§ Mr. Freeman
I quite accept what the right hon. Gentleman said and I agree with him.
Shortly after 1980, customers—Government Departments—were freed for the first time from the requirement to deal with HMSO and were permitted to use any supplier that offered them the best deal. The results were dramatic. The commercial imperatives placed on HMSO meant that costs fell sharply after it attained trading fund status. That could only be good news for customers. Not only were they now free to shop around but they benefited from the savings passed on by HMSO as a result of its new-found commercial freedom.
That commercialisation also exposed HMSO to true competition for the first time and the private sector was quick to seize the opportunity. Central Government were and remain an attractive market for many of the services provided by HMSO, which soon had to compete with suppliers that were well used to the rigours of the marketplace and, more important, were not bound by the same public sector regulations as HMSO. In retrospect, the management and staff of HMSO rose to the challenge remarkably well and, despite that intense competition, HMSO remains the clear market leader in the supply of printing and stationery to central Government.
Ultimately, however, that competition will work against HMSO if it remains in the public sector. For instance, its governmental status means that it is still bound by restrictions on the prudent use of taxpayers' money, which ultimately accounts for nearly all its income. That rules out decisions that would carry only normal commercial risk in the private sector. It is unable to raise investment capital in ways open to private sector business or to diversify into new markets. Most important, it cannot trade with private sector customers when its own central Government market is in decline. 1279 In such an environment, HMSO would clearly struggle to maintain its position. Although it has generally continued to meet the financial targets that it has been set, its turnover has declined by some 10 per cent. since 1990. A continued cost-cutting programme has led to the reduction of staff numbers by some 600 over the same period. To allow matters to continue in the same vein would be a gross disservice to the management and staff at HMSO, whose efforts have built on the organisation's formidable reputation and who in recent years have found their futures in jeopardy through being unable to compete fairly with other suppliers.
At the same time, to return to the old way of a protected market into which customers were tied would deny those customers and the taxpayers the benefits that they have gained since 1980. It would also imply a wholly unjustifiable lack of confidence in the ability of the management and staff of HMSO to run a prosperous, competitive business.
As I announced in the House last week, we therefore plan to privatise HMSO by means of competitive tender offer. That will allow the business to compete on equal terms with the private sector for the first time. It will be able to trade into wider markets and to diversify and expand as business opportunities present themselves. It will be able to raise funds for investment through all the channels open to private business, rather than having to apply to the Treasury. All those improvements will allow its customers to benefit from further efficiency savings and, as nearly all of them are at present funded from taxation, that will also benefit the taxpayer. At the same time, working in a more secure and prosperous environment will naturally present its staff with a more secure future.
I am convinced that, without privatisation, the business will continue to decline and its staff will face continuing job losses.
§ Mr. Mark Robinson (Somerton and Frome)
Is it not fair to say that HMSO is a centre of excellence that will attract a prospective purchaser and that, far from wanting to destroy the business, any prospective purchaser will want to keep the management team together and build on that business?
§ Mr. Freeman
I agree with my hon. Friend. I take a constructive attitude to the future of any business which has built its success, albeit in a declining public market, on not only its integrity but its hard work and its skill in obtaining business from Government and Parliament and discharging its function satisfactorily.
§ Mr. Patrick Thompson
I am grateful to my right hon. Friend for giving way again, but, as he is referring to the hard work and the skill of the staff of HMSO, many of whom live in Norwich and the surrounding area, will he respond to the particular point I made earlier about the importance of maintaining a strong base for HMSO in Norwich? That is traditionally so and I believe that it should continue. Can my right hon. Friend make a commitment to that?
§ Mr. Freeman
As I said to my hon. Friend earlier, I cannot make any forecast about how a business is organised into the future. However, having visited Norwich 1280 twice—I intend to do so again to discuss the future with management and representatives of the staff—it is clearly the sensible headquarters of the business and I know of no reason why there should be any change in that regard. I cannot forecast how the nature of the business of HMSO will change the individual loadings of specific factories or depots in future. Norwich is clearly the centre, and I see no good reason why that should change.
§ Sir Patrick Cormack
I am particularly grateful for the assurance that my right hon. Friend gave me earlier, but surely any internationally based company could buy HMSO and produce from wherever it wished to produce and that is the blunt fact. I would not begin to impugn my right hon. Friend's good intentions or integrity, for which I have the highest possible regard, but he cannot guarantee it.
§ Mr. Freeman
Like many hon. Members, I spent the majority of my life in business in the private sector, subject to the rigours of the private sector. One locates businesses where that makes the most economic and business sense. I pay tribute to the management of HMSO for doing that and reorganising the business. Of course I cannot give my hon. Friend any assurance about where and how the business will be organised in future. I cannot do that with HMSO in the public sector, let alone the private sector. For the business to expand, it must be given the opportunity to compete for private sector business which I believe is available, and that must load its existing factories, if they are efficiently organised and located, which is clearly the case. That will enhance job opportunities.
§ Mr. Gerry Sutcliffe (Bradford, South)
I recognise that the Minister is accepting interventions; but, to pick up the point made by the hon. Member for South Staffordshire (Sir P. Cormack), the right hon. Gentleman cannot give guarantees, yet he has tried to do so in letters to Madam Speaker and to the work force of HMSO. The Minister has also accredited and applauded the workers and management of HMSO. Does he expect a management buy-out?
§ Mr. Freeman
No. There is no sign of any interest on the part of the management and staff, I suspect partly because of the size of the operation. It is a significant industrial operation and one would not normally expect a management buy-out. To return to the first part of the hon. Gentleman's intervention, I cannot give guarantees about the size of the work force of HMSO in the public sector and nor can the right hon. Member for Bishop Auckland (Mr. Foster), who leads for the Opposition and to whom I give way.
§ Mr. Derek Foster (Bishop Auckland)
May I press the right hon. Gentleman on his statement that the public sector market is in decline? He says that the central Government market is in decline, and that may well be the case for the time being; but the public sector market is far wider than the central Government market, and the right hon. Gentleman has not yet been able to privatise the entire public sector.
Does the right hon. Gentleman take account of the fact that we now talk in terms of the public sector's being the whole European market? As I understand it, HMSO has done little in the way of marketing throughout Europe. Will the right hon. Gentleman bear that in mind when he makes statements in the future?
§ Mr. Freeman
The right hon. Gentleman is right. The public market, as broadly defined, is enormous. However, private sector companies could bid, for example, to print the journals and other documents of the European Parliament and the European Commission; bidding is not restricted to HMSO. I should like HMSO in the private sector to compete vigorously for that business. As a matter of policy, I do not want a public sector body, funded and ultimately guaranteed by the taxpayer, to compete for business outwith the United Kingdom public sector when other companies can compete with that business. I am confident that, given its reputation and expertise, HMSO will be able to expand its business into the European public sector when it is privatised.
§ Mr. Peter Mandelson (Hartlepool)
I am grateful to the right hon. Gentleman for giving way again. He has been very patient.
May I pursue the point that the right hon. Gentleman made to the hon. Member for South Staffordshire (Sir P. Cormack)? He said that he could give no assurances about the location of production in the future. I wonder how that squares with his response to questions from hon. Members on 13 December, when he said:
We, as the customers—that is to say, the Crown and Parliament—can require the business to have a certain nature and structure … Parliament will be able to control the nature of the business that supplies the products."—[Official Report, 13 December 1995; Vol. 268, c. 993.]Is the right hon. Gentleman not flatly contradicting what he said only last week?
§ Mr. Freeman
I was referring to HMSO's entire business. Parliamentary business represents 10 per cent. of the total. When I was questioned about the parliamentary press, I said that the contract written by Parliament could stipulate that the work must be done at the parliamentary press works—which is, in fact, a misnomer: the press prints more than just documents for the two Houses of Parliament, but that is not inconsistent with—
§ Mr. Freeman
Yes, but I was making the point specifically in regard to the parliamentary business and the parliamentary press. If the hon. Gentleman is asking, by implication, whether the Crown—that is, various Departments—would wish to stipulate when writing contracts that certain documents must be printed in certain cities, let me tell him that I do not consider that appropriate. We would look for a contract with the stationery office that offered good value for money in comparison with the alternatives; how that was organised would be a matter for the stationery office. There is one exception, however. If the hon. Gentleman does me justice and reads all the evidence that I gave to the Select Committee on Finance and Services, he will realise that I was dealing with that specific problem. Indeed, I provided even more assurances in response to the intervention by my hon. Friend the Member for South Staffordshire (Sir P. Cormack).
Accordingly, I propose to invite offers in the new year for the whole business, apart from a small residual body to deal with necessary public responsibilities such as Crown copyright. I plan to make a written statement on Government policy for Crown copyright by early February. The sale process will allow full screening and 1282 evaluation of all bids and consultation with customers, principally Parliament. It should also allow for legally binding contracts to be drawn up between customers and the privatised business.
However, as I confirmed in my statement last week, I am not setting deadlines. There is a prerequisite that Parliament be satisfied—although I am also anxious for the uncertainty to last no longer than is absolutely necessary. It would make little commercial sense for us to withhold any of HMSO's operational businesses from the sale. Many of them are mutually dependent, and all benefit from the independence and integrity of HMSO, which I am keen to preserve after the sale. In particular, however, I note the suggestion of some hon. Members that the parliamentary press should not be sold, and could perhaps be taken over by the House. I have already responded to the intervention of my hon. Friend the Member for South Staffordshire.
Hon. Members have also previously suggested that HMSO should be freed from all its current public sector operating constraints yet be retained in the public sector. The right hon. Member for Bishop Auckland advanced that argument, and I am sure that he will do so again this evening. The commercial freedoms that HMSO would need to compete with the private sector in new markets are incompatible with its continuing in the public sector. The first commercial freedom is the right to borrow without the burdens of public sector constraints. No Government could countenance the prospect of a public sector body's having normal commercial freedoms to borrow.
The second commercial freedom is the right to win customers in any market, public or private. If HMSO as a public sector body were allowed such freedom, its competitors in the private sector would be bound to suspect unfair competition, especially if HMSO were able to borrow money cheaply because its activities were thought to be underwritten by the taxpayer. It is far better all around, for both HMSO and its competitors, for business to be transferred to the private sector, where it can compete on equal terms and can have freer access to the finance that will enable it to expand.
The only sensible course is clearly privatisation of the bulk of HMSO as it is currently constituted. During such a process, customers will naturally want the maximum assurance that after the sale they will continue to receive the high-quality and cost-effective service to which they have been accustomed. At the same time, potential purchasers will wish to make their own estimate of HMSO's future viability, and to be sure that it will enjoy a reasonably secure level of business after transfer to the private sector. We propose to accommodate both those needs through legally binding contracts between major customers and the privatised business, wherever it is sensible to do so, and for that to come into force at the point of sale.
Parliament is, of course, HMSO's key customer. The contracts will specify all the customer's requirements, standards of service and, if necessary, the means by which the service shall be delivered, as well as price. Customers' requirements will therefore be clearly specified and fully enforceable, ultimately by recourse to law. Agreeing the contracts with HMSO's customers is an onerous task, but I have every confidence that it can be achieved with the co-operation of those customers, whose interests the contracts will protect.
§ Sir Patrick Cormack
In answer to an earlier intervention, my right hon. Friend gave an assurance that he would reconsider the parliamentary aspect. Will he report to the House on that specific point before pursuing his commercial inquiries?
§ Mr. Freeman
I have already given an assurance. I must now end my speech, as time is short and others wish to speak, but I shall foreshadow a commitment that I intend to give in a moment. I shall publish the short list of potential buyers; Parliament will have its views on their acceptability.
The needs of Parliament are particularly important, and it is vital for them to be fully protected in the new contracts required by both Houses. I note that new supply and service agreements will shortly come into force between the House of Commons and the other place and HMSO; they will provide a sound basis for the contracts. The right hon. Member for Berwick-upon-Tweed (Mr. Beith) is right: they are wholly independent of and separate from the privatisation proposals, and have an entirely different genesis. I am confident that we can reach a position that fully protects Parliament's needs in the privatisation.
§ Mr. Mark Robinson
Does that mean that, when the bids come in, they will first be assessed to establish whether they pass certain quality thresholds, rather like television station franchises? Once those that do not pass those thresholds are eliminated, will those that qualify be considered?
§ Mr. Freeman
Not only would the Government wish to draw up a short list acceptable to Departments; Parliament will insist that, if it is to conclude a contract with the privately owned stationery office, the new owner of the business must be entirely acceptable.
§ Mr. Dalyell
The Minister has talked of binding legal contracts. Does he realise that the whole set-up in Scotland will have to be rather different? Can he make any statement about the discussions that have been held with the Scottish Office about the future of the 200 people working at South Gyle, 95 per cent. of whom voted against privatisation in a poll? So much for the consultation with the work force of which the Minister speaks.
§ Mr. Freeman
With respect, perhaps the work force were not entirely aware of the arguments and advantages of what is proposed, not only for the unit in Scotland but for others, in Wales and Northern Ireland. I can give the hon. Gentleman an assurance that the future of those units, and any others, will be made clear before any contract is negotiated and signed. They have been treated as an integral part of the printing and publishing operations of HMSO. I hope that the hon. Gentleman will have noted my earlier assurances about what is to be offered, that is, the whole.
In her letter of 28 November to the Leader of the House, Madam Speaker set out the safeguards that the House of Commons Commission considers necessary to enable the House to continue its agreement with HMSO after privatisation. It was published in the Official Report of 11 December. My reply on behalf of the Government was placed in the Library of the House on 14 December, and explains how those safeguards can be met, primarily through a legally enforceable contract. As well as meeting 1284 Parliament's requirements in that way, potential purchasers will have to honour recently negotiated improvements, such as reductions in the price of publications, and, I hope, negotiate further reductions.
I fully recognise that a change in ownership is a source of concern for staff. However, I am convinced that it is the best means of safeguarding their future by permitting an expansion of the business. I have already given an assurance that I shall consult the trade union representatives of the staff during the sale process. The staff and the trade unions will, of course, be kept as fully informed as possible by the management and privatisation team during the sale process. I can also give the House an assurance that the Transfer of Undertakings (Protection of Employment) Regulations 1981 will apply to the sale of HMSO, and staff will transfer with their existing terms and conditions. That protection is important and applies, of course, in any transaction whether in the public or private sector. I expect the newly privatised business to be able to offer staff a more attractive future as the business prospers and grows.
In selecting a successful bidder from the short list, one of the factors that we will consider is the bidder's plans for the future growth of the business. Pension rights are protected by social security legislation. The new owner will be required to provide broadly comparable pension arrangements. I draw the attention of the House to the fact that the pension scheme is non-contributory. The Government Actuary will be asked to provide an independent analysis of comparability and to approve the new arrangements as offering broadly comparable benefits. In addition, the pension fund will be under the control of the board of trustees, in accordance with trust law.
We will exclude from the sale a small residual body charged with carrying out HMSO's statutory functions. That body will also be responsible for the administration of Crown copyright and could continue to administer parliamentary copyright if Parliament so wished. Retaining responsibility for copyright in the public sector will allow us to sustain and improve the accessible and affordable publication of government information.
I confirm that the Government will seek a buyer who will maintain the integrity of the present HMSO. In no circumstances will we offer the printing and publishing businesses separately. The buyer must, of course, be acceptable to Parliament. To that end, I intend to publish the short list of bidders in due course and to invite Parliament to be involved in the selection of the successful candidate to ensure that a satisfactory outcome is achieved for work for Parliament. I undertake to consult the right hon. Member for Sedgefield (Mr. Blair), the Leader of the Opposition, and business managers on how that should be accomplished. My dealings have so far been with Madam Speaker, acting on behalf of the House of Commons Commission, but further reflection may indicate another approach. That is the arrangement that has existed so far.
In addition to this debate, I have already made a statement to the House and given evidence to the Finance and Services Committee. I remain ready to outline the Government's plans further, in Select Committee or elsewhere.
I commend these plans to the House, in the best interests of HMSO, its customers, its staff, the taxpayer and Parliament.
§ Mr. Derek Foster (Bishop Auckland)
I thank the Chancellor of the Duchy of Lancaster for arranging to have placed in the Library his reply to Madam Speaker's letter to the Leader of the House dated 28 November. I also thank the Chairman of the House of Commons Finance and Services Committee, who, at my request, published the minutes of evidence of his Committee's meeting of 21 November 1995, at which the Chancellor gave evidence about the privatisation of HMSO.
Both documents have only just been made available. I do not blame the Chancellor or the Chairman; they have done their best. The real culprits are the business managers who brought forward the debate from Wednesday to today. They have played into our hands. Because the debate is taking place when the House has not had the opportunity to absorb important new information, that strengthens the argument for another debate in the new year, when even more details will be available. Will the Chancellor and the Chairman of the Finance and Services Committee join me in urging the Leader of the House—I am glad to see him in his place; he has a deep interest in this issue as a member of the Commission—to respond positively to these requests?
The other day, I described the Chancellor of the Duchy as a decent man fallen among thieves. Perhaps I was unkind to thieves. I really do feel sorry for him, as he only just escaped responsibility for carrying through the privatisation of the railways—the poll tax on wheels, in the words of the late Robert Adlee when he was Chairman of the Transport Select Committee. It was out of the frying pan and into the fire. There he is in the Cabinet Office, privatising everything that moves or is stationery. [Interruption.] That was Matthew Parris; we should give credit where it is due. It is a grand clearance sale, or, more to the point, a closing down sale. Everything must go—unbelievable bargains. A thousand little-used Sir Humphreys are going cheap. Those are the actions of a defeated Government. They know that the voters cannot wait to take vengeance. They are scorching the earth in their humiliating defeat.
§ Mr. Foster
Perhaps Matthew Parris wrote that, too.
Why are the Government doing that? Perhaps they need the money to start another party in the wife's name. Looking at today's public sector borrowing requirement figures, has the Chancellor of the Exchequer so screwed up the nation's finances that he has to sell off every candle end before the bailiff arrives?
The Chancellor of the Duchy of Lancaster, in his statement, denies that the money is important. If it is not, perhaps this is an elaborate job creation scheme: not jobs for those who work in the agencies to be sold off, as they are likely to lose theirs, but rather jobs for the boys on the boards of privatised companies, for former Ministers, defeated Members of Parliament and defeated Tory candidates. The Chancellor looks a little hurt, as though Nolan had never been necessary.
§ Mr. Waterson
The hon. Gentleman drew an analogy with rail privatisation. Is he able to give any commitment to the House that the Labour party, if it were in power, would renationalise HMSO, when unfortunately it is not able to give such a commitment about rail privatisation?
§ Mr. Foster
The hon. Gentleman is a little premature. The Government have not yet privatised HMSO. They could just be frustrated by an early election. Who can tell?
What other reason can the Government have? Perhaps they have nothing else to do. They have no legislative programme, except a few Bills "to smoke out the Opposition", in the words of the chairman of the Tory party.
§ Mr. Mark Robinson
Is not the hon. Gentleman playing a rather familiar record, because every time we have debated privatisation we have heard doom and gloom from the Labour party, when the result has been success?
§ Mr. Foster
If the hon. Gentleman thinks that he has had gloom and doom so far, he should just stick around.
The Government have no Bills to speak of, except to smoke out the Opposition, and Parliament is on a one-day week, so we read. Ministers sit in their offices, dreaming up crackpot schemes to prove that the Government are still fizzing with ideas. The truth is that the Government are drifting aimlessly to the general election, with so little sense of direction that they grasp at anything that will appease their lunatic fringe. Perhaps the lunatics are not yet in charge of the asylum but they have certainly written the business plan. Privatisation is an idea whose time has passed. It has been fatally wounded by the greed of the fat cats.
§ Mr. Foster
If the hon. Gentleman hangs on, I shall give way to him in a minute.
No doubt, hon. Members will have seen the headline on the front page of yesterday's issue of the Observer. It reads:
Fat cats get £16m boost to pensions".The whole idea has been blown out of the water in recent months. The fat cats get the cream while the staff get their cards. The Chancellor of the Duchy is fanning the dying embers, and the grand scheme has been reduced to this—selling off HMSO.
My hon. Friend the Member for Bolsover (Mr. Skinner) was right to ask what the Government would sell off next. Will it be the Mace or the Dispatch Box? Such sales are worse than selling off the family silver—now they are selling off the empty boxes in which the silver was kept.
§ Mr. Hughes
I was happy to wait for the right hon. Gentleman to give way, and I wait in anticipation to find out whether he intends to say anything about HMSO. He said—I am sure I quote him correctly—that privatisation was an idea whose time had gone. At what point did he form that judgment? Presumably he supported privatisations up to a point and now opposes them. Which ones did he support, because from what he has said it is plain that he supported some?
§ Mr. Foster
That was an entertaining intervention, to which I shall not respond.
This privatisation reminds me of the Deputy Prime Minister's plan to sell off the Post Office.
§ Mr. Foster
Someone still supports that sell-off. The Post Office is profitable, efficient and competitive, but we 1287 were told that the status quo was not an option and that privatisation was necessary to allow the Post Office to compete in wider markets and to borrow for investment in the private sector. The Deputy Prime Minister had to back down because there was not a majority in the House for his scheme. That also applies to HMSO, because there is no majority in either House for privatisation. If the Chancellor of the Duchy gets his way, that may never be tested because primary legislation is not required.
I understand that retaining a residual HMSO to administer Crown copyright and to fulfil the functions of the Queen's printer avoids the need for primary legislation. There is some suggestion of secondary legislation connected with the trading fund, but that might involve only a one-and-a-half-hour debate in Committee. No doubt the Chancellor of the Duchy hopes to sneak this measure through Parliament without a vote, and I can understand why. It was clear from the exchanges on the statement that many Conservative Members are not enthusiastic about his plan. If primary legislation were necessary, I am sure that the Government would not proceed.
As the chairman of the Tory party admitted before the Queen's Speech, most of its measures were designed to smoke out the Opposition. Selling off HMSO fails that test because it smokes out those few Conservative Members of the sensible tendency. For that reason, heaven and hell will be moved to prevent a vote. However, in the November issue of "Public Sector Purchasing" the Chancellor of the Duchy said that the new arrangements for HMSO would not proceed without Parliament's approval. That must mean a vote in both Houses, because I know of no other test for Parliament's approval. Will the Chancellor of the Duchy give both Houses a chance to vote on this measure, which impinges on every hon. Member? Perhaps he would care to respond.
§ Mr. Freeman
I thought that I had dealt fully and fairly with that issue but perhaps I can confirm that my advice is that no primary or secondary legislation is needed to permit the proposed transaction to come to fruition. I repeat for the sake of clarity the assurance about the retention of HMSO's business of supplying documents to Parliament as an integral part of HMSO. Parliament must be satisfied about the supply contract for that future business. As I have said, that is a prerequisite for completing the transaction.
§ Mr. Foster
I thank the right hon. Gentleman for that response, but he did not make clear whether there will be a vote in both Houses.
§ Sir Patrick Cormack
I assure the right hon. Gentleman that it is taken in that spirit and I am sure that there has to be a vote.
§ Mr. Foster
Perhaps I may be allowed to finish this point, and then I shall give way to the hon. Gentleman.
The Chancellor of the Duchy believed that if he could convince the House of Commons Commission or the Select Committee on Finance and Services he would be 1288 home and dry. That is clear from his privatisation time schedule. I am not arguing that hon. Members mistrust the Commission or the domestic Committees to conduct detailed negotiations on our behalf and to safeguard the interests of hon. Members. The guarantees that were sought by Madam Speaker in her letter of 28 November to the Leader of the House are comprehensive, although I am sure that Madam Speaker would consider adding other requirements to satisfy the House.
§ Mr. Robinson
Is it not open, through the usual channels, to the Opposition to force a vote on any issue on a Supply day?
§ Mr. Foster
The hon. Gentleman is absolutely right, and that may happen if the Chancellor of the Duchy decides to deny the House a vote. The right hon. Gentleman believed—but I have covered that bit. [Interruption.] That is what comes of spending 10 years in the Whips Office.
I sense from the mood of the House that hon. Members are unwilling to contract out this decision to the Commission or to the domestic Committees. I think that hon. Members will insist on deciding the issue themselves. The Chancellor of the Duchy intends that parliamentary approval should apply only to the terms of a legally binding contract, which will succeed the new supply and service agreement if privatisation goes ahead. That is clear from the right hon. Gentleman's reply to Madam Speaker.
Both Houses will wish to decide on the principle of this privatisation, and I shall explain why. First, HMSO's contract with Parliament is its most prestigious. The Government will not consider privatisation without that contract and, of course, the contract enhances the value of HMSO to a potential purchaser. However, the contract is equally important to HMSO: its services to Parliament are an integral part of the whole operation, which is why management and staff wish HMSO to remain an entity. The Chancellor of the Duchy claims to have been persuaded by that argument, but his wish to keep HMSO as an entity is driven more by the exigencies of his timetable than by any wish to satisfy management and staff. A broken-up HMSO would take longer to privatise, and the right hon. Gentleman's deadline of July 1996 may be unattainable if the House authorities cannot complete the essential preparatory work before that date. Any slippage might send the sell-off into the buffers of a general election.
No doubt, all Conservative Members will have been intrigued by yesterday's front page of The Sunday Times, which says:
Major orders alert for early electionJohn Major has placed ministers and Conservative Central Office on 'amber alert' for a general election next autumn, six months before his term has to end in May 1997.They are probably packing their bags now to get back to their constituencies and prepare for Opposition.
§ Mr. Foster
Or for Christmas, but if this move were scuppered by an early general election, all the additional work imposed on the House authorities by privatisation would have been for nothing because, without privatisation, a legally binding contract would be unnecessary. 1289 The House authorities have only just concluded a new supply and service agreement. If HMSO. remains in the public sector, that agreement would continue for, say, four years. Concluding that agreement has been most time consuming for the House authorities. Drawing up a legally binding contract will prove even more arduous. Doubts have been expressed as to whether that work can be concluded to meet the requirements of the Chancellor's self-imposed timetable.
Hon. Members are entitled to ask whether any estimate has been made of the additional costs imposed on both Houses by the Government's plan. Will the House require additional members of staff? Has that additional expenditure been budgeted for? If not, can those extra demands be met? If so, what work will have to be deferred to meet those demands? Small wonder that, on 9 December, the front page of the Financial Times revealed a furious row between the House authorities and the Government about this scheme.
Perhaps we should ask an even more fundamental question: what right have the Government to impose extra costs on both Houses without either House being able to decide the issue from which those additional costs arise? Arguably, on that point alone, the Chancellor is under a moral, if not a legal or constitutional, obligation, to let Parliament decide whether it wants those unnecessary costs imposed by an unnecessary privatisation.
The next argument goes to the heart of the unease expressed by Parliament about the dilution of ministerial accountability because of the next steps agency initiative, let alone full-blown privatisation. At present, if hon. Members are dissatisfied with HMSO's standard of service, the Chancellor of the Duchy, as Minister with responsibility for public service, is accountable to the House. He will take some remedial action and report to the House. Here we must ask him how many hon. Members have complained about the service from HMSO. Has any formal complaint been lodged by the House authorities? If none, I suggest that the Chancellor of the Duchy should act on the principle, "If it isn't broken, don't mend it!"
What happens to ministerial accountability upon privatisation? Is the Chancellor still responsible or does that responsibility pass to the people who have signed the legally binding contract? Who will answer to the House? Precisely what sanctions are available, by whom and under what circumstances? In the exchanges on his statement, the Chancellor mentioned suspension of the contract, but surely that is unsatisfactory. The House cannot function without its essential papers. Who will serve the House while the contract is suspended? No other organisation could possibly fulfil the contract's terms on an interim or ad hoc basis.
Those are crucial issues. Can the House tolerate any dilution of ministerial accountability or a suspension of a legally binding contract as a sanction for non-fulfilment? It is clear that those issues arise only because of the privatisation of HMSO. That is why the House must be allowed to vote on the principle of privatisation.
There are other reasons why the House must exercise that right. Two hundred years ago, HMSO was set up to stamp out corruption in public sector purchasing. Because it is a market leader, HMSO is able to use the public sector's purchasing power to hold down prices. Because it acts as an independent broker, HMSO is able to spread 1290 purchasing across a wide range of firms, rather than concentrating work in a few favoured companies. If HMSO is privatised, the public sector will not benefit from those advantages.
During the whole of that 200 years, HMSO has served Government and Parliament, while maintaining the highest standards of confidentiality and meeting the most exacting deadlines required by Parliament. Will the Chancellor tell the House if HMSO has ever been investigated by the National Audit Office or the Public Accounts Committee for maladministration or for falling down on a matter of financial probity?
In January last year, the all-party House of Commons Public Accounts Committee produced one of its most critical reports about the decline in standards of administration and financial probity. The Committee said:
In recent years we have seen and reported on a number of failures in administrative and financial systems and contracts within departments and other public bodies which have led to money being wasted or otherwise improperly spent. These failings represent a departure from the standards of public conduct which have been established during the past 140 years.Most of those cases arose because business men tried to short circuit administrative and financial procedures. The Government have been so dogged by allegations of sleaze that citizens no longer trust the system and we come to this pretty pass today when the lottery regulator does not even know that his behaviour is improper.
By this reckless plan, the Chancellor of the Duchy runs serious risks with HMSO's impeccable reputation. After privatisation, will HMSO still be subject to examination by the National Audit Office or the Public Accounts Committee? The Government have sullied the name of the public services by intemperate pursuit of private sector values, but they have no right to risk Parliament's name in the same way.
As a security printer, HMSO produces a wide range of security and "in confidence" papers such as the Budget. HMSO has an unprecedented record. No leaks have been attributed to it. Can the private sector guarantee to match that record? From time to time, the nature of such papers can jeopardise national security, so high is the risk. That is important to the House, as you, Mr. Deputy Speaker, will recognise. Of course, Conservative Members will point to all sorts of market-sensitive information printed in the private sector as evidence that security printing can be handled just as well after privatisation. Indeed, in the exchanges following the statement, the Chancellor mentioned that some of the Budget papers are already subcontracted to the private sector. What he failed to mention—this is crucial—was that it was subcontracted only under the strict control of civil servants at HMSO.
§ Mr. Waterson
I am grateful to the right hon. Gentleman for giving way again. Is he not aware that some highly reputable companies in the private sector, including some in my own constituency, are engaged in security printing day in and day out and conform to high standards of product quality and security? Surely he is not restating the old Labour notion "public sector good, private sector bad"?
§ Mr. Foster
I was not saying that; I was under the impression that the Conservative party was saying the contrary—"private sector good, public sector bad". 1291 Departments may of course choose not to use the privatised HMSO for their security documents. Perhaps the Chancellor will tell the House whether it is true that the royal military college at Sandhurst has already stopped using HMSO for some of its security documents, because it could not be confident about the security of a privatised HMSO. Perhaps he could also confirm that the Ministry of Defence is already radically reviewing its relationship with a privatised HMSO. [Interruption.] Someone obviously hopes so. When one bears in mind the fact that Ministry of Defence contracts account for nearly 50 per cent. of HMSO's revenues, could not the privatisation be rather dangerous? Could not the privatisation be attacking HMSO's core business, and would not that totally scupper the Chancellor's argument that privatisation is necessary for HMSO to sell in wider markets?
I have dealt with the direct risks to services to Parliament; let us now examine the indirect risks. The first is the sale itself. The Chancellor wishes HMSO to be sold as a whole, apart from the residual HMSO. That might be his intention, but there has been a significant change of emphasis from what he said in evidence to the Finance and Services Select Committee to what he said in his statement. He said the same thing tonight. The worrying phrase is:
in any event we would not separate the publishing and printing businesses".I am sure that the Chancellor is aware that HMSO is much larger than just the printing and publishing business. Perhaps he is unaware that the statement, which he thinks is reassuring, is actually quite worrying to the staff of HMSO.
§ Mr. Freeman
The right hon. Gentleman is absolutely right to say that my statement represented a change since giving evidence to the Finance and Services Select Committee. The change was based on the advice of consultants, who recommended not only offering the business as a whole but in any case—whatever the response—not separating the printing and publishing business. Some might say that that represents an advance. I hope that it is a welcome change and that it gives greater assurance not only to the House but to the management and staff of HMSO.
§ Mr. Foster
I do not think that the staff will find that reassuring. They are completely committed to HMSO surviving as an entity. The Minister re-emphasising that he would not in any event separate the publishing and printing business will certainly not be the kind of reassurance that he imagines that it will be. Under the exigencies of having to push through a sale before the general election, surely it is possible that the Chancellor will change his mind even more—perhaps his consultants will advise him again.
Even if the Chancellor succeeds in selling HMSO as an entity, what guarantee is there that it will remain an entity for long? Rumour has it that a finance house will be the most likely purchaser. The purchase would be made with a view to flotation in two or three years' time. What guarantee is there that the new owner would not hive off bits of the business? Indeed, wringing out of HMSO's £340 million turnover the kind of profit that I have heard mentioned could be achieved only by hiving off the least 1292 profitable and concentrating on the most profitable bits of the business. Redundancies would inevitably follow. On that very subject, the Chancellor said that there would be no automatic redundancies. What does that mean?
What guarantee can the Chancellor of the Duchy give that the company would not fall into foreign ownership, which would be unacceptable to Parliament? He will recall that Madam Speaker's letter made special mention of that. What guarantee can he give that the new owner would not be driven by the market to look for cheaper and poorer quality services to Parliament? The interests of the City coincide only rarely with the public interest. Despite his good intentions, the market might exert pressures opposing Parliament's wish to make its papers more widely and cheaply available.
For all those reasons, both Houses should have the opportunity to vote on the issue, not only on the narrow terms of the legally binding contract. Those reasons are sufficient for the new Public Service Select Committee to investigate thoroughly the risks to parliamentary services, but the Committee will be able to range more widely.
For example, the thrust of the Chancellor of the Duchy's argument is that HMSO's public sector market is declining and that privatisation will enable HMSO to sell in wider markets and borrow for investment in the private sector. When challenged as to why the Government will not arrange for HMSO to operate with full commercial freedom in the public sector, he responds that that is not Government policy. [Interruption.] Does the hon. Member for Harrow, West (Mr. Hughes) want to intervene?
§ Mr. Foster
I think that the hon. Gentleman said that it was daft.
Frankly, that is not good enough. The Chancellor of the Duchy is forcing through an unnecessary and unwanted privatisation—it is certainly unwanted by the staff, 95 per cent. of whom voted against it, as my hon. Friend the Member for Linlithgow (Mr. Dalyell) said, and we would probably find that it was unwanted by both Houses of Parliament, if they were allowed to vote. He is forcing it through on the pretext that there is no alternative, but he has not even examined the options. Will he confirm that this option was not one of those in the terms of reference given to the consultants who advised him?
HMSO staff are proud of their record in the public sector. It has met all the targets set by central Government and undergone fundamental change in the past 15 years, becoming a trading fund in 1980 and a next steps agency in 1988. It has been trading commercially since 1980 and with increasing commercial freedom as it has responded to competition from the private sector. All the changes have been negotiated with the co-operation of the staff. They are proud of their record and take pride in the high-quality service that they provide to Government and Parliament. They want HMSO to remain in the public sector.
§ Mrs. Gwyneth Dunwoody (Crewe and Nantwich)
Is my hon. Friend not filled with despair by the fact that we have a Government who are so little conscious of the importance of our sovereign Parliament that they are prepared to hand the printing of something as vital as the 1293 papers that flow from Parliament to a private firm, not because that is necessary but for the sake of a spurious argument about profit?
§ Mr. Foster
We are one party, unlike the Conservative party. My hon. Friend is absolutely right. The whole scheme is being driven by the dogma that HMSO must be put into the private sector if it is to succeed in future. [Interruption.] I am addressing the whole argument. The Chancellor of the Duchy fails to address that argument, which is why I want him to refer the matter to the new Public Service Select Committee.
The Select Committee should also examine the costs of privatisation. For example, what has been paid to consultants and advisers so far? What is the Government's estimate of additional fees before the sale is complete? How much will privatisation cost HMSO in staff time? How much investment has been carried out already in preparation for privatisation? How far is the low profit in last year's accounts due to exceptional redundancy payments in preparation for privatisation? How much is the preparation for privatisation costing both Houses and will that be taken into account in the contract? How much will be lost to the taxpayer by sacrificing a stream of profits year on year for a one-off contribution from the sale? How far has HMSO's performance been affected by two or three years of uncertainty and the resulting staff demoralisation? How much will be lost to the taxpayer by selling off valuable assets at knock-down prices to secure a quick sale? Is this a good time to sell in view of last year's poor results?
I shall deal now with the issue of European law, and shall touch on a couple of matters related to the Transfer of Undertakings (Protection of Employment) Regulations 1981. I understand that the House of Commons operates under the provisions of the public service contracts regulations of 1993, which require tender procedures for contracts of service. That may mean that the House could not commit itself in advance to a contract with a privatised HMSO.
I understand, however, that if a contract were entered into before privatisation and transferred as part of the sale, the regulations would not apply. If so, that might contravene European law. In answer to my question during his statement, the Chancellor of the Duchy responded that he was advised that that was not a problem. Will he publish the points on which he sought advice and the advice that he has been given? I shall certainly publish advice that I have received from lawyers advising the trade unions, which suggests that there may be some conflict with European law.
For the Chancellor of the Duchy knowingly to flout European law might make him some kind of a hero with his Euro-sceptics, but it would be quite wrong for him to involve the House authorities in a breach of European law, and wrong for him to involve the legislature in such a breach without a vote in both Houses.
The Chancellor of the Duchy has confirmed that TUPE will apply and we welcome that—although, understandably, staff are suspicious of how long the terms 1294 and conditions of employment will be maintained under the new owner. Pensions, of course, are not covered by TUPE. Although the requirement is said to be "broadly comparable" to the civil service scheme, there are great concerns about what that will mean in practice.
The scheme should not go ahead without a vote in both Houses of Parliament. It should be referred to the new Public Service Select Committee for a thorough examination of the risks to services to Parliament, of the costs of privatisation and of the feasibility of giving HMSO full commercial freedom in the public sector.
The Chancellor must be aware that his scheme is deeply unpopular with HMSO staff. He is also clearly not the blue-eyed boy with the House authorities. His scheme is unpopular with all Opposition parties, and many of his Back Benchers are reluctant supporters. Perhaps he should observe Lord Healey's first law of holes—when one is in a hole, stop digging. That at least would bring relief to the hon. Member for Norwich, North (Mr. Thompson), who would not have to be a Norfolk turkey voting for an early Christmas. Indeed, the hon. Gentleman's Government want to present him oven-ready to the voters and he has been stuffed by the Chancellor of the Duchy. No wonder he is doing the turkey trot. Who would be a Tory candidate in Norwich if this madcap scheme went through?
§ 8.5 pm
§ Mr. Paul Channon (Southend, West)
The House has had a treat that it has not had nearly frequently enough in recent years: a speech by the right hon. Member for Bishop Auckland (Mr. Foster). I cannot say that I agree with everything that he said. Indeed, it could be argued that a speech of 37 minutes was a trifle long for a debate of this length. Chief Whips have said that to me on other occasions, but perhaps different standards apply to those who no longer have that great responsibility.
I shall be extremely brief, unlike some, since my job is to report on the Minister's appearance in front of the Select Committee on Finance and Services, to which the right hon. Member for Bishop Auckland was good enough to make reference. I note that the right hon. Gentleman now wants to send the report to be examined in great detail by the Public Service Select Committee. The more the merrier I suppose. If my Committee were thereby relieved of another duty, I do not suppose that the Committee's members would mind too much.
But, in fairness to the House, I should say that the appearance of my right hon. Friend the Chancellor of the Duchy of Lancaster gave us quite a bit of comfort because he answered all the questions that we put to him and showed no reluctance whatever to appear. Indeed, he has not shown any reluctance to appear in the House, either for the recent statement or this week's debate.
If I understand the remarks of the right hon. Member for Bishop Auckland, he says that we must have a vote on the issue. I would not necessarily mind that. I do not see how a vote could be stopped if hon. Members wanted it. As the right hon. Gentleman said, if necessary, the Opposition can use a Supply day. If those in the House want to vote they will vote. If they do not want to vote, they will not vote. It does not seem to be a particularly difficult thing for which to campaign.
There are differing views across the Floor of the House about the merits of privatisation and how it has worked on various occasions in various industries in the past, but 1295 that is not of great importance to me or, indeed, to the members of my Committee. Whatever our individual views on privatisation, what matters is what effect this particular privatisation would have on the House of Commons.
If we were satisfied that the House of Commons' reputation would be damaged, that the service to the House of Commons would be severely damaged or on other such grave matters, regardless of party affiliation, we would be right to be against the proposal. My Committee therefore examined the proposal and took evidence from the Chancellor in order to try to address the very natural doubts and worries felt by hon. Members on both sides of the House about the privatisation of the stationery office.
I accept what the right hon. Member for Bishop Auckland says about the excellent service that the stationery office gives and has given for many years. I pay my tribute to it. But I do not want hon. Members to go away imagining that it has always been roses dealing with the stationery office in this House. When I was a Minister responsible for the stationery office, again and again statements were made and questions were asked because papers did not appear on time. Indeed, the same thing happened to my immediate predecessors in the Labour Government. So being in the public sector was not always a safeguard that things would be all right with the stationery office.
§ Mr. Michael J. Martin (Glasgow, Springburn)
Does the right hon. Gentleman agree that the absence of documents is a common complaint in Standing Committees? It is important to ensure that the record of the previous sittings is available to hon. Members serving on those Committees. Does the right hon. Gentleman agree that hon. Members often raise points of order because the Hansard for the previous Tuesday or Thursday is not available?
§ Mr. Channon
I am sure that the hon. Gentleman is right. It is some years since I raised a point of order in a Standing Committee, and I hope that opportunity will not arise again for quite a while.
I was the Minister under whose regime and benevolent rule the stationery office became a trading agency, to which the right hon. Member for Bishop Auckland referred with pleasure.
We have seen in Hansard the letter from Madam Speaker containing 12 paragraphs of conditions that she thinks are necessary before the House could agree to a privatisation scheme. It is no secret that the matter was debated in the Commission, nor is it any secret that the matter was debated in the Finance and Services Select Committee—the relevant papers are published. I recall no resistance to the suggestion that the Minister should make a statement. I recall no resistance to the suggestion that there should be a debate. The very fact of a debate implies that, as a possible result of it, there might be a vote. Such a vote could easily be arranged in the future.
All I want to ask is whether my right hon. Friend can repeat the assurance he gave to the House on a previous occasion. Can he repeat that he will not proceed with the privatisation of the stationery office unless he can conscientiously convince the House that the 12 points of 1296 reservation that the Speaker made in her letter will be met in full? My right hon. Friend has already given us that undertaking, but I think that he must give it again to the House tonight. The House can then come to a fair judgment about the future. If those assurances cannot be given, I am sure that the House will not wish to proceed with the privatisation. If my right hon. Friend gives that assurance, I for one will be happy, at least at this stage, to look at the proposal with an open mind and to consider the evidence. I would be happy to give way to my right hon. Friend.
§ Mr. Freeman
I am grateful to my right hon. Friend. I repeat the assurance that I have already given on that point. Because of the importance of HMSO to parliamentary business, it is obvious and self-evident that Parliament must be satisfied. I cannot dictate Parliament's wish or conclusions on the matter, and therefore it cannot proceed unless Parliament is satisfied.
§ Mr. Channon
For me, at least, that goes far enough for me to say that, at this stage, I am content to proceed further and see how the negotiations go. The Minister said that Parliament's wishes must be paramount, and that must be the aim of all of us, whether we are in favour or against privatisation in principle.
§ Mr. John Garrett (Norwich, South)
Her Majesty's Stationery Office employs 2,800 workers, of whom 900 are in my constituency at the Norwich headquarters of HMSO. Therefore mine is a primarily constituency interest, although I also have a public service interest, as we all do.
As my right hon. Friend the Member for Bishop Auckland (Mr. Foster) said, HMSO was set up in 1786 to stamp out corruption in public service purchasing. It is profitable, highly successful and has declared a surplus since 1980. It is in the middle of a three-year plan. As a result of being in the public sector it has the advantage of being able to use the purchasing power of the public sector to hold down prices. It also enjoys large economies of scale, and can spread its purchasing across a range of suppliers. Those advantages have served the Government well.
One essential is that HMSO is not broken up, on or after privatisation. The Minister frequently says that he will not split its printing from its publishing activities. The right hon. Gentleman has not hitherto realised that one third of HMSO's business is in office equipment and office supplies. If those businesses were sold off—that would be a strong temptation to a private contractor—much of the overhead of the total organisation would have to be spread over printing, print buying and publishing. The loss of one third of the business would make HMSO non-viable. We fear that a major institution would buy HMSO as a whole and then, relatively quickly, resell the profitable parts and collapse the rest of it.
What guarantees of employment will be extracted from a purchaser? Every other privatisation has been accompanied by massive job losses. That is the burning question in Norwich, which has lost 2,500 jobs directly, and probably as many again indirectly in the past few years. It cannot withstand massive new redundancies. I believe that guarantees of employment in the tender from potential private purchasers are essential. 1297 The Government tell us that the TUPE regulations will apply to the workers at HMSO, but those regulations specifically state that workers' terms and conditions may be changed for technological, organisational or economic reasons. HMSO operates on the leading edge of a number of technologies, and is therefore regularly reorganised. The protection afforded by the TUPE regulations may therefore be minimal. Equally, those regulations do not apply to transfers via change of share ownership. We understand that the current preferred route for a sale is to a financial institution, which may therefore not comply with current terms and conditions. Even the Government acknowledge that TUPE regulations provide protection only at the point of sale. If HMSO were to be broken up later, the businesses which were sold on would also not benefit from TUPE. I am strongly under the impression that the TUPE conditions last for three months and would not apply any longer to HMSO.
When I asked the Minister at the time of his statement what steps he would take .to guarantee security on privatisation, he was unable to answer. HMSO is a security printer—I am well aware that there are other such printers—which produces in-confidence Government and parliamentary papers, passports, benefit books and other products where security matters, and which are subject to potential fraud. There has never been a leak from HMSO. What private sector company would offer such a guarantee when making a tender to take over HMSO?
HMSO already carries out work for the French Department of Employment and the German Post Office. Why could it not spread into the European public sector markets and British non-Government markets while being retained as a public sector body? HMSO already operates in private markets, and most of its work has already been exposed to market testing. Virtually every test has been won in-house because of the efficiency of HMSO. In fact, 75 per cent. of its goods and services are already purchased from the private sector.
HMSO has made the profit required of it while publishing important but limited-interest publications, which the private sector would be unlikely to publish because of the lack of profit in particular publications. Open government requires a state publisher prepared to publish limited-interest publications without the constraint of profit.
The Minister referred to the constraint on the HMSO of the public sector borrowing requirement, but HMSO has made no call on borrowing in the past 15 years.
In addition to employment and commercial considerations, there are, of course, important parliamentary considerations, which have been the subject of most of the speeches so far. How can a private contractor have the parliamentary experience of HMSO? What will happen if a private contractor fails to provide Parliament with the publications that it needs to do its work? If a contract replaces the present arrangements, all that Parliament can do is invoke a penalty clause. What good is that? Parliament would meanwhile grind to a halt. When will a detailed statement be made on safeguarding Parliament's interests in the cause of privatisation? Will they be made clear in the tender document? Who will be responsible if a private stationery office fails to provide the service that we need? Do the Government propose to hold a golden share in the privatised HMSO, so that at least they have some arm on it?
1298 I have some other questions on parliamentary matters. Will the privatised stationery office be the ultimate owner of current and future stocks of Government and parliamentary publications, and of the associated electronic archive? If so, what would the situation be if the company went bankrupt or were taken into foreign ownership?
A privatised stationery office will naturally wish, in the interests of its shareholders, to extract maximum commercial value from official documents and data. How does that fit in with Government policies on public access to official information, for example, the trend to put more and more Government documents on the Internet?
The House is making an effort to bring down the sale price of Hansard and other parliamentary documents—a policy which will benefit Government Departments as purchasers of those documents. Do the Government support that policy? Are they making a similar effort to hold down the sale price of their documents? A Government-funded subsidy is currently paid to enable public libraries to purchase all official publications at a substantial discount. Can we take it that subsidy is not affected by the proposed privatisation of HMSO?
The Minister made a great deal of the fact that House officials recently completed negotiations of a new supply and service agreement, or SSA, with HMSO which is intended to come into effect on 1 January 1996. Are Ministers using that SSA, or related information on the House's financial arrangements with HMSO, for the purpose of discussions with potential purchasers? In other words, will the SSA be built into discussions with potential purchasers? Will the south London press—with its access to Parliament and its unique experience—continue to operate under guarantee? Because of parliamentary business, HMSO's costs are relatively high and its return from sales relatively low. This bodes ill for its survival.
I do not find the Chancellor of the Duchy's answers to the Speaker's letter sufficiently satisfying on the main points. The Speaker raised the matter of the parliamentary press in south London, and stated that there was concern that somebody who took it over
would be tempted to experiment with cheaper methods for providing the serviceat a risk to the service to Parliament.
The Speaker referred to the complexity of the House's documents and the procedural rules which underpin them. She said:
HMSO staff and management acquire experience and knowledge of those complexities as they progress from job to job in the organisation; and they are brought up in the tradition that in all circumstances the requirements of Parliament are paramount.It is unlikely that a private contractor would see the interests of Parliament as paramount, because it is an intangible requirement and is very difficult to put into a contractual document.
There is also the question of ministerial oversight. Who will be identified within the privatised stationery office to be responsible for contact with the House? Will there be any attempt to water down the SSA with HMSO without agreement by the House authorities? I assume that there could be a period in which the SSA would lapse. The Speaker's letter continued by saying that
we consider that any prospective purchaser of the Stationery Office should be required to accept the agreed principles which are set out in the SSA, particularly so far as they concern the rights of the House to regulate the production and reproduction of its documents, in both paper and electronic form.1299 That applies also to location, and particularly to the location of the south London press that produces Hansard.
The fact is that this is a mere matter of dogma and ideology. The Minister speaks of new opportunities, but new opportunities could been found for HMSO without a requirement to privatise. The staff at HMSO certainly do not think that privatisation will bring new opportunities, because 95 per cent. of them rejected privatisation. The proposal is simply a product of ideology, and the least the House deserves is an opportunity to vote it down.
§ Mr. Patrick Thompson (Norwich, North)
I am grateful for the opportunity to speak in this debate because, like the hon. Member for Norwich, South (Mr. Garrett), I have some constituency interest in the matter. HMSO is based in the hon. Gentleman's constituency, but many of my constituents—I do not know exactly how many—work at HMSO.
I share one thing with the hon. Gentleman, and possibly more. My constituents' worries are no doubt the same as those of his. After all, I am sure that one could not distinguish between the letters which he has been receiving from his constituents who work at HMSO and the letters that I have been receiving. It would be silly of me to suggest that there is some kind of difference in concern across the constituency boundary.
I want to be frank with my right hon. Friend the Chancellor of the Duchy—there is, if not universal concern among the employees of HMSO, certainly considerable concern. That is why it is important for the matter to be debated and, to that extent, I must support some of the hon. Gentleman's remarks.
The Government should think long and hard about the way in which they go about this change. It is my first duty to get across to the Government that any change must be in the interests of my constituents. Any other constituency Member of Parliament would say the same. However, I differ from the Opposition Members who spoke in that I would say that there is a hard commercial case to be looked at. If there is time, I shall refer to this matter again. The market has been declining, and HMSO has had to take a long look at the question of possible staff reductions. Therefore, it is wrong of the Opposition to suggest that everything can be left exactly as it is, and that everything will proceed if that is the case.
The right hon. Member for Bishop Auckland (Mr. Foster) complimented me by comparing me to a turkey. I may have got his comparison wrong, but it had something to do with Christmas. The hon. Gentleman would have disappointed my constituents. This is not a party political point. He spoke for some 37 minutes, but he did not say a great deal about what the Opposition would actually do to address the commercial difficulties and problems which HMSO is facing. After all, my constituents are concerned with the distinction between public and private service, but they are also concerned about jobs and prospects. My right hon. Friend the Chancellor of the Duchy is right to say that something needs to be done to improve the opportunities within HMSO, or any succeeding organisation, and those arguments must be taken seriously.
1300 It is appropriate that we talk about constituency issues—or Norwich issues—in this debate, even though it is a wider-ranging debate about Parliament and Hansard. Luke Hansard lived in Norwich and served his apprenticeship there before moving to London in 1774. All of us who have read up on the matter know the history. It is important that, in debating HMSO and Parliament, we bring Norwich into it, and I make no apology for doing so. There are other issues which I would like to address briefly in a moment.
The issues are being considered by the House of Commons Commission and by the Finance and Services Committee. The hon. Member for Norwich, South also referred to parliamentary issues in his speech. I referred to some of the issues in an Adjournment debate in April of this year, when I talked about the cost and distribution of Hansard, the reporting of parliamentary debates and other important matters. I shall not go into great detail, but I hope to refer to those matters as well as talking about Norwich.
I would be very unhappy if I felt that there was any chance at all of the main headquarters of HMSO moving out of Norwich. That may sound unreasonable, but—as a constituency Member of Parliament—I would have to be unreasonable if I thought that there was any chance of that happening at all. How could I or the hon. Member for Norwich, South say anything else? The Norwich tradition is tremendous, and the strong connection with Norwich must continue. I make no apology for pressing my right hon. Friend on that particular point, as it is important. It is important that the people of Norwich retain their jobs, and also the strong, traditional and historic links which HMSO has with Norwich. I make no apology for pressing that point over and over again. It is important to me, and it will remain important to me if we debate the matter further at a later stage.
As I said earlier, many of my constituents have written to me to express their concerns about what they see as the Government's plans. I would like to pay tribute to my right hon. Friend the Chancellor of the Duchy for the way in which he has kept me—and, I have no doubt, my colleagues in the House—fully informed about how the Government are going about this. My right hon. Friend has so far kept in touch with the management, staff and trade union side at HMSO, and has done so superbly. I think that he has visited Norwich twice—I know that he has done so at least once—and that he intends to do so again. One cannot fault him on this, and I hope that he will continue to keep fully in touch with everyone involved at HMSO.
When my right hon. Friend visits Norwich, I hope that he will find time also to visit CCTA which, curiously, stands for the Government Centre for Information Systems. I defy any hon. Member to work out that one. CCTA is situated in my constituency, and of course it is also facing changes. I hope that my right hon. Friend will approach the changes at CCTA in the same courteous way in which he has approached the changes at HMSO.
Many fears have been expressed in the correspondence that I have received from my constituents. Some of those fears are not well founded, but some need serious answers.
My constituents are rightly concerned about the effect on the Norwich economy. It is no secret that we have had serious job losses in Norwich in recent years. I hope, 1301 therefore, that my Government colleagues will take seriously the fact that the Norwich economy is an issue at the moment. Communications to Norwich are an issue and jobs in Norwich are an issue. Those points are relevant and my constituents are right to address me on them.
My constituents have referred to other issues about which other hon. Members have already spoken so I do not need to say too much about them. They refer to the possibility of asset stripping and to the possibility of splitting HMSO into units. They also talk about security, to which other hon. Members have referred. I am not saying that those concerns are necessarily well founded, but I know that people are worried about them and Ministers must answer those points.
If there were a vote, would the hon. Gentleman vote for or against the privatisation of HMSO?
§ Mr. Thompson
I would want to find out first whether my right hon. Friend the Chancellor of the Duchy of Lancaster had answered my concerns. As I said a moment ago, he has gone about things sensibly. We shall have to wait and see whether he continues in a sensible way. In spite of the remarks by the right hon. Member for Bishop Auckland, we do not know whether we shall have an opportunity to vote. My right hon. Friend has suggested that the proposal could go through in a Standing Committee. I feel—here I agree with the hon. Member for Norwich, South—that the proposal needs thorough debate and airing in Norwich as well as in the House. It is important, therefore, that I and colleagues here express all our concerns as well as—here I disagree with the hon. Gentleman—the advantages that may accrue from privatisation or from some similar change.
Several hon. Members have referred to security. I have some sympathy with the idea that there is a risk, if the civil service is left out of it all, that there will be extra leaks. The only trouble is that we seem to have an awful lot of leaks even with our present governmental system.
§ Mr. Thompson
I shall not respond to that.
In June 1994, I received from HMSO its newsletter, which comes out at regular intervals. Its controller and chief executive at that time was Paul Freeman; I am not sure whether that name has any significance for my right hon. Friend the Chancellor of the Duchy of Lancaster. Mr. Freeman headlined his article with the words "Streamlining to survive" and then made the following key points:
Up to 30 per cent. of current jobs may have to go for HMSO to remain competitive. Corporate services to be reduced to around 150 staff. Voluntary Early Retirement to continue.I could reel off his key points. Anyone who suggests that HMSO's problems start as of this debate is misleading my constituents and the House. There are continuing problems which the management of HMSO have to address and which my right hon. Friend is trying to address. We must try to push some of the more obvious party political controversy to one side and to look at the serious issues.
My right hon. Friend is probably right, therefore, to suggest that the freedom to trade within the private sector will lead to opportunities for business growth and could well lead to better employment prospects in Norwich. That possibility is, of course, subject to my earlier point 1302 about the headquarters remaining in Norwich. New technology means that the staffing requirement may reduce and the volume of production by the printing presses and so on may need to increase. That is why I support the hon. Member for Norwich, South when he talks about expanding HMSO's activities to printing for the European Parliament and for organisations overseas. That must be good news whatever we do politically and it is an important point.
My hon. Friend the Member for South Staffordshire (Sir P. Cormack), who is not now in his place, referred to public service. I too have some difficulty here because I am a traditionalist at heart and a conservative, as many of my constituents are. Although I fully see the commercial arguments in favour of privatisation—perhaps jobs are the issue that will really count in the end—I have some sympathy with those such as my hon. Friend who say that public service is important in itself. That does not mean that I go along with the old Labour view that everything in sight should be nationalised, but I believe that there is a concept of public service. Those of us who have served in the professions, as I have, will not allow our party colleagues to sweep aside the concept of public service. I will certainly not have that. Those in HMSO who are genuinely arguing, not in political terms, for the concept of public service should not be dismissed out of hand. To be fair, I do not think that my right hon. Friend the Chancellor of the Duchy of Lancaster dreams of doing that. I must, however, put on record that the concept of public service is an issue that we have to address.
I have made most of the points that I wanted to make on behalf of my constituents. To sum up, I believe that my right hon. Friend is handling the matter well. He is keeping people in Norwich fully informed and, as I know, he has a lot of support from those who are responsible for HMSO and for taking it forward into the future. However, my right hon. Friend has a lot of work to do to convince the employees as a whole of the rightness of this move.
The point of my speech is to persuade my right hon. Friend to do all that he can to ensure that there is, if not here in Parliament certainly within HMSO, a thorough debate about the future. Subject to all that—here I respond to the hon. Member for Norwich, South—I would have no difficulty, if the matter came to a vote, in voting for the proposals as long as I was convinced that they were in the interests of my constituents. If I were convinced of that, I could override any other reservations that I might have or any old-fashioned ideas that I might have—which unfortunately I have not got rid of altogether.
There is a parliamentary issue as well. Hansard, which is printed and published by HMSO is important. It should be distributed more widely and that is why I initiated an Adjournment debate on that subject some months ago. I was keen that the price of Hansard should be reduced. On 6 December, the right hon. Member for Berwick-upon-Tweed (Mr. Beith) confirmed in a parliamentary answer that there would be reductions. There had been an earlier reduction in the price of the weekly Hansard from £22 to £12 as long ago as May. Within the past week, there has been an announcement of a reduction in the prices of the daily Hansard, Bills and Select Committee reports. That is a move in the right direction.
If we move to privatisation, about which I am happy subject to the conditions I outlined, we must ensure that Parliament is protected in a number of ways. One way is 1303 to ensure that Hansard becomes more available—whether through electronic communications and the Internet, through cheaper printed Hansard or through free or cheap issues to public libraries, I do not mind, but I believe that it is important to Parliament to ensure wider distribution. I have no idea whether that has anything to do with privatisation, but I believe that whatever change comes, it is important.
I know that many hon. Members on both sides agree that the reporting of Parliament is going by default. The press reporting of Parliament is a disaster; it has now been reduced to sketch writing and the trivial. There were references earlier to Matthew Parris who, dare I say it, is probably the best sketch writer.
§ Mr. Thompson
I have no idea where Matthew Parris is. The sketch writers are here only for the first hour or so of the day and they then go off to dinner or to do whatever else they do. They certainly lead a comfortable life. Matthew Pan-is is probably the best sketch, writer, yet even he often bases his sketches these days on matters that have nothing to do with what has take place in the Chamber. I could expand on that but I shall not do so, you will be relieved to hear, Mr. Deputy Speaker. There is an important issue and I shall return to the subject of Hansard and its circulation at a later date.
I will not submit to the temptation of saying anything more on a subject about which I feel extremely strongly. I say merely that I hope that my right hon. Friend understands my remarks on behalf of my constituents. I hope, once again, that he will accept my appreciation for the way in which he is going about the debate on this important issue.
§ Mr. Martin O'Neill (Clackmannan)
I am sponsored by the printers union, the Graphical, Paper and Media Union, and it is perhaps appropriate that I should deal almost exclusively with that aspect of the matter.
One problem with the reporting of Parliament concerns the technical difficulties that now weigh heavily on newspapers, because of the deadlines that they have to meet, so that the presses can start rolling at a particular time. That sort of problem does not arise with HMSO. The arrangements that have been arrived at between the work force, Hansard and those in this House who pay the bills, as it were, mean that the service is carried out in a unique way.
My hon. Friend the Member for Glasgow, Springburn (Mr. Martin) mentioned a problem that those of us who sit on Standing Committees encounter from time to time: the non-availability of papers. I am assured by my friends who work on the printing presses that they would be more than happy to be able to provide that service earlier for the convenience of the House. It is the constraints that have been imposed on them over a period of time that prevent them from doing so.
It is unfortunate that the Chancellor of the Duchy of Lancaster has left, because I was going to pay him something of a compliment. He is well known on both sides of the House as a courteous and solicitous man. In the past, 1304 I have had to cross swords with him on many occasions when he represented other Departments and I have always found him to be genuinely concerned. As a consequence, he is sometimes a wee bit thin-skinned and takes it all out when the barbarian hordes in the Opposition try to rough him up a bit. Although his answers this evening have been polite and courteous, they have not been satisfactory. He has almost been honest enough to admit that, in so far as he has said that he cannot give guarantees on the number of jobs after the sale of the business or what the working conditions will be.
We have given the Chancellor of the Duchy of Lancaster four or five days' notice, but he seems to misunderstand the nature of the Transfer of Undertakings (Protection of Employment) Regulations 1981. My hon. Friend the Member for Norwich, South (Mr. Garrett) referred to the criteria by which a change in circumstances may take place. When ownership changes, some three months' notice has to be given before the TUPE regulations can be altered. I think that the figure is 90 days, so it is nearly 14 weeks. That is the point at which negotiations start.
We know that such negotiations would not necessarily involve the preservation of the status quo. Indeed, there would be no point in having negotiations or giving notice if there was not going to be a change. We also know that when ownership changes, new owners are often ambitious enough to notice areas of profitability or loss that they would like to promote or cut out. As a consequence, jobs may go and factories may be moved about the country.
As a Scotsman, I remember that it was only 10 years ago that Mr. Ernest Saunders came to Edinburgh and told everyone that the Distillers company headquarters, which was then located in the city, would remain there and that Guinness, having taken over Distillers, would locate its business in Edinburgh. That may have been an early sign of the Alzheimer's disease that apparently afflicted Mr. Saunders later and from which he miraculously recovered.
I do not suggest that the people who take over HMSO if the privatisation goes through will behave as Mr. Saunders did, but unless something that will last for a long time is written into the terms of the sale, the chances of the headquarters remaining in Norwich are, to say the least, difficult. I do not say that because I wish anything to happen to the headquarters in Norwich. As one who represents a Scottish constituency, I know the importance of breaking the stranglehold of London on all business and commercial life. One does not have to be in favour of devolution as much as the Government are opposed to it—or dubious about it, like my hon. Friend the Member for Linlithgow (Mr. Dalyell)—to recognise that we need a diversity of not only ownership but location of ownership across the country. I am dubious about any assurances that the Chancellor of the Duchy of Lancaster might try to give us on the matter.
Hon. Members have continually returned to the point that it is somehow necessary to change ownership because the business is contracting, so there has to be some sort of commercial freedom that has hitherto been unavailable. Such a lack of commercial freedom did not restrict British Rail, prior to the threats of privatisation, from being in competition with companies to deliver parcels or, indeed, bodies. No competition was allowed in respect of the railway lines, but there was competition in respect of parcels. There is also the Post Office, which offers a range 1305 of services in the public sector, enters into competition with private sector companies and goes after commercial contracts with private businesses.
I do not understand why HMSO, in its myriad activities, cannot, for example, bid to provide local authorities with papers and services or offer to print examination papers for examination boards. If it can produce cheques for giros, why not for banks? Why could it not be allowed to print bank notes? Some of those activities might well require investment, but nobody suggests that the sizeable investment that HMSO has had to undergo over the past 15 years came from the City or broke the Treasury rules. It was generated from within the business. I cannot see why the rules that apply to some bodies that operate in the public sector should be denied to HMSO. I find the Government's blinkered attitude strange.
It is equally strange that when, at this late stage of a Parliament, the Government are trying to keep the privatisation fires burning, this is the best that they can get away with. The criteria for privatisation now are not how much money they can get or the scale of the operation; they are whether it can be achieved without legislation. That is the case with the privatisation of the nuclear industry and with that of HMSO. Both are businesses which have operated extremely efficiently and which, of their sort, could be classed as world leaders, but both are to be sold off.
We do not know what the sum involved will be yet. We shall find out, doubtless, in due course. We shall want to know whether the quality of service that the House and the country receive will be sustained. It is a service that enables people to go to HMSO retail outlets and purchase papers at the same time across the country. It publishes papers of a sensitivity that can sometimes be of tremendous commercial advantage to individuals. That service is carried out by people who are not especially well paid and who will not themselves gain from the privatisation. Those people have committed themselves to the service of the community. I emphasise the point that the hon. Member for Norwich, North (Mr. Thompson) made—an ethic of public service still prevails and has its adherents.
Some of the people of whom we have been speaking, such as those who are recipients of non-contributory pension schemes, may begin to look at the matter differently if they are required to pay 6 per cent. or 9 per cent. of their salaries towards the pension fund, which will by and large, but not necessarily, just about meet present pension requirements. That is where the Minister's lack of clarity throws into doubt the sincerity of the whole operation. Between Thursday and today, the Government's position has shifted. On Thursday, HMSO was to be sold off in its entirety; tonight, the Minister said that he is willing to look at the printing and publishing business being dealt with separately. If the printing and publishing business is separate, I am not sure whether the headquarters at Norwich could survive.
§ Mr. Patrick Thompson
I am grateful to the hon. Gentleman for giving way because I wanted to speak on that point, but time did not permit me to do so. It was also raised by my hon. Friend the Member for South Staffordshire (Sir P. Cormack). I, too, have my doubts about the separation of the two sides of the business, although I realise that this is a parliamentary rather than 1306 a constituency matter. However, jobs could be at risk and I am grateful to the hon. Gentleman for raising that concern, which I share.
§ Mr. O'Neill
Other hon. Members have raised the issue and will continue to do so.
We are not happy with this proposal. My colleagues in the printing unions are dreadfully worried about it because they have seen too many takeovers in the recent past, in which working conditions have worsened, factories and printing shops have closed down and pension funds have been messed about. We welcome the Minister's assurances, but I hope to God that his ambitions and ours will be realised. As we say in Scotland, "I hae ma doots aboot that," because we do not believe that those who want to take over HMSO will have anything like the ethics of public service behind them and will take the company's long-term interests to heart. Ultimately, they will run the company for three or four years, strip it down, separate off parts of the business that are not commercially attractive, perhaps give them away at knock-down prices, and then try to realise from the profitable core the best price that they can get. They will do that not for the taxpayers, this House or those who work for the business but simply for the company shareholders whom they represent and with whom their loyalty lies.
The House of Commons has far higher standards and far stronger commitments. We should have the right to vote on the issue and the House should have a clear prospectus of what is on offer. Until we do, I hope that no Opposition Member will encourage the Minister in the foolishness of his endeavours.
§ Mr. Nigel Waterson (Eastbourne)
I am pleased to have an opportunity to speak in this important debate. It has been interesting, not least because Opposition Members have given us a re-run of many themes and prejudices of old Labour. As the definitive voice of new Labour will wind up for the Opposition, it will be interesting to see at the end of the debate how the two philosophies are reconciled.
I shall make four main points. First, we must view the proposal as a natural progression. HMSO has had a sweep of history of some 200 years or more, but in terms of its recent history, we have been told that, in 1980, it began to recover its costs and some two years later, Government Departments were liberated from the obligation to purchase from HMSO. So competition with the private sector has been a fact of life for the organisation for the past 10 years or more. In 1988, it became an executive agency, so there is nothing new about the current proposal. It is the natural result of all that has gone before, particularly in the past 10 or 15 years.
Secondly, hon. Members on both sides of the House have echoed the view that, whatever happens to HMSO, it is important to have clear safeguards about the future role of the stationery office, especially vis-à-vis this House and the other place. My right hon. Friend the Chancellor of the Duchy of Lancaster made it clear the other day that he is determined that whoever buys the stationery office will maintain its independence and integrity. That is important for all those participating in the debate. It is also clear from the points that have been 1307 canvassed in the important exchange of letters between Madam Speaker and my right hon. Friend that an eventual buyer must be fully acceptable to this House.
§ Mr. Dalyell
Let us suppose that, at first, the buyer fulfilled all those criteria and the sale was accepted in good faith but then, for some reason that we cannot determine here and now, things went sour and became less and less satisfactory. Can the hon. Gentleman imagine himself or one of his colleagues on the Government Front Bench coming along to this House and saying, "Sorry, we have no means of producing parliamentary documents"? That scenario is not fanciful; it could too easily happen.
§ Mr. Waterson
I am grateful for the opportunity to deal with that point. I have no dreams of being on the Front Bench, but if I were, I cannot imagine that scenario arising. This is a matter not between the Government and HMSO, but between this House and another place and the stationery office in its new incarnation. All Opposition Members have signally failed to appreciate the importance of a contractual relationship. At present, the arrangement between this House and HMSO does not come close to such a relationship. As my right hon. Friend explained, there will be a series of detailed provisions not only on the existing position but on any future changes in the stationery office's structure or operation, on the basis that it would have a paramount obligation that those would be subject to Parliament's requirements. As the hon. Gentleman knows, any contract would include two possibilities: first, to sue for damages; and, secondly, if a breach or breaches were sufficiently serious, to withdraw from the entire contract and claim a "fundamental breach", to use lawyers' jargon.
Beyond that, as I said in an intervention on my right hon. Friend, considerable commercial pressure will be placed on the stationery office's buyer to ensure that the relationship does not go sour. The right hon. Member for Bishop Auckland (Mr. Foster) said that such a relationship was a key factor in any privatisation. I am the first to appreciate that that is a two-edged sword, but it gives the ultimate buyer a substantial commercial incentive to ensure that the relationship does not "go sour".
To continue with the question of safeguards, it is also important that this is a fully transparent process. As my right hon. Friend said, the shortlist of bidders will be published and officials of this House—not members of the Government—will be involved in the selection. He went further and listed the wide range of consultations that will take place, not only through the usual channels, but more generally in the House and no doubt in another place.
As I said in response to the intervention of the hon. Member for Linlithgow (Mr. Dalyell), the whole process will result in a detailed, legally binding and enforceable contract with the newly privatised stationery office, spelling out in great detail a range of enforceable obligations including, as I have said by way of an example, a provision that any future changes in its operation should take account of Parliament's requirements.
As a lawyer, I am the first to appreciate that the devil is in the detail. However, commercial contracts of that type are entered into all day, every day, throughout the 1308 commercial sector, and it appears to me bizarre in the extreme to suggest that there are especially insuperable obstacles to legal draftsmen about what is now proposed, especially when, in addition to the supervision of the lawyers involved, there will be such a heavy weight of other, as it were, back-seat drivers looking over their shoulder to ensure that they get the detail right to protect the requirements of the House—and all that, with the recourse to law as a back stop, should anything go especially wrong. Further, we have spoken already about the protection for existing staff under TUPE, which would mean that their existing terms and conditions would apply.
We have heard a great deal from Opposition Members about that apparent poll of employees, suggesting that 95 per cent. of them oppose the idea. Is that a surprise? If one tells people that they are likely to be hit on the head by a meteor, they will start worrying about being hit on the head by a meteor. I wonder in what terms the options available to HMSO were described to the work force.
The third main issue is: what other options exist for HMSO? We have heard some airy-fairy talk in the debate about foreign contacts, developing business overseas and so on, without any true recognition of the scale of capital outlay that might be required. We have heard about a shrinking Government market. We have also heard how, between 1990 and 1994 alone, HMSO's turnover declined by more than 10 per cent. There are job loss implications in that trend; there already have been job loss implications, and it would be foolish and irresponsible of the House not to recognise that truth.
The fourth issue is the freedom that may be introduced to the stationery office's current operations—freedom from the constraints of Government and the public sector; commercial freedom to embark on those new and exciting markets that hon. Members spoke about. The stationery office and its employees should not look nervously to the past; they should look boldly to the future. The vast experience and expertise of HMSO's staff, coupled with the efficiencies that have been won in recent years, should make it, on any view, a major player in any market, national or international.
However, as I have said, access to capital—the freedom to raise capital where and how it wishes—is essential to grow that business, like any other. In other sectors, we are witnessing the development of the private finance initiative, producing hospitals and the like, and moves to give grant-maintained schools the opportunity to borrow on the open market. That is all part of the process, which is so much a feature of the Conservative philosophy, of setting free organisations which have a role in the modern world, and which have the expertise and the commitment of their staff, but which are held back by the dead hand of the public sector.
In that context, I might mention the possibility—only briefly, Mr. Deputy Speaker, because, were It do otherwise, you would no doubt call me to order—
§ Mr. Deputy Speaker (Mr. Michael Morris)
Order. The hon. Gentleman already seems to be wandering out of order, so I should be grateful if he would stick to the subject of debate, as there are other hon. Members who wish to get in.
§ Mr. Waterson
I was mentioning only the very same arguments that we have heard in favour of what is proposed for HMSO. Many of them could apply equally to the Royal Mail. 1309 Finally, a significant feature of the debate has been the attitude of Opposition Members. They have opposed every privatisation, whether it be of electricity, water, British Telecom or gas, and apparently propose to oppose this one. We have heard about the railways from the right hon. Member for Bishop Auckland, who was not regarded as out of order in making that argument. There was no pledge to renationalise—
§ Mr. Deputy Speaker
Order. The hon. Gentleman may be a lawyer, but he does not challenge the Chair like that. I should be most grateful if he would respect the Chair and conclude his speech, as he would appear to be doing, on the subject before us.
§ Mr. Waterson
I am sorry, Mr. Deputy Speaker. I was not intending to challenge your judgment, but I was suggesting that a more general issue about privatisation has run as a theme through the debate. Although I would be the first to accept that we are discussing a specific privatisation, many of the themes are common to other sectors.
However, I was drawing my remarks to a conclusion. There was no pledge to renationalise British Rail. There is apparently no pledge to renationalise HMSO.
You and I are very familiar with the process, Mr. Deputy Speaker. It begins with Opposition Members objecting strongly to a proposal to privatise. It moves on to the rubbishing of every aspect at each stage of the process, seeking to sow unjustified fears in the minds of employees, potential investors and the electorate. It continues with carping from the sidelines while the hard work proceeds and the enterprise goes ahead. The criticism becomes more muted as the privatisation is deemed a success. Labour party policies are fudged and any commitment to renationalise is quietly interred at dead of night in that rather large socialist graveyard with which we have all become familiar. Finally, there is an acceptance—usually tacit—that once again privatisation is here to stay, bringing tangible and lasting benefits to consumers, taxpayers and employees.
§ 9.4 pm
§ Mr. Michael J. Martin (Glasgow, Springburn)
The hon. Member for Eastbourne (Mr. Waterson) spoke at some length about privatisation, but this debate is not about privatisation in the usual sense. If the Government were serious about privatising HMSO, they would present a Bill to the House so that all hon. Members could debate the matter and consider the problems in detail both in Committee and on the Floor of the House.
The Chancellor of the Duchy of Lancaster is an honourable man—I have dealt with him before on transport—and he should admit that he agreed to a debate on the privatisation of HMSO, without a vote, only after sustained pressure from hon. Members and the Finance and Services Select Committee. I believe that there should be a debate with a vote—and that it should be a free vote. We are discussing the provision of services to the House. The decisions that we make in the months ahead will affect the future work of Members of Parliament, particularly Back Benchers.
When I was elected to the House in 1979, I did not realise that I could receive a transcript of the proceedings of Parliament within 12 hours of a debate taking place. Over the years, I have realised what an asset that facility is, not only to Ministers and Front-Bench spokespersons 1310 but to Back Benchers like me. When constituents write to me and ask for my views and those of other hon. Members about an issue, I can reassure them about the matter and send them a copy of Hansard within a few days of its being debated here. The service is very useful for Back Benchers who do not have the civil service back-up Ministers enjoy.
HMSO's services were developed over hundreds of years, and I do not think that we should surrender them willingly. We have an old saying in the engineering profession: "If it works, don't fix it". Why are we seeking to fix something that works very effectively for us and for the people of this country?
Many hon. Members have spoken about the control that Parliament exercises over the pricing of Hansard. Not so long ago, the Administration Select Committee—of which I am Chairman—reached the unanimous decision that Hansard should be produced more cheaply for those who supply libraries, schools, universities and other academic institutions. That is possible only if we retain control of HMSO.
It must be cause for concern that the service might be delivered into the hands of private printers. Unlike some of my hon. Friends who want to speak in the debate, I have never worked in the printing industry. It has always seemed an uncertain industry—Maxwell comes to mind—of ownership changes and asset stripping. I do not know whether the famous Lord Hanson had any influence over it—it is always argued in the tobacco industry in my Glasgow constituency that, if a company is profitable and has good industrial relations, there is no need to worry about it— but lo and behold, because a company was on a certain site, a new owner could take away the facilities that it provided for the sake of making a quick buck.
At present, HMSO is an excellent asset with printing facilities across the river at Bermondsey. We might negotiate a contract with another printing company, but what will happen if the facilities move from Bermondsey to another part of London? That would make it difficult for Hansard to be delivered on time. We all know the problems of road transportation in London.
Hon. Members know that space in the House is precious; it is used by Officers of the House, Members, back-up staff and for many other purposes. The advantage of the facilities across the river is that they provide printing and storage. No contract, no matter how tightly it is drawn up, could ensure the continuation of those facilities.
The Canadian Parliament handed over its printing service to a private contractor and it is now an absolute disaster. New Zealand is also experiencing difficulties with private contractors, as are many other Parliaments. I am not arguing about privatisation—my views are well known—but, like every other hon. Member, I want to ensure that we keep the good facilities that we have. The dedicated Hansard staff service all the Committees and work night and day to ensure that the printer receives the material.
When there is a crisis, the House appreciates the work of Hansard. I recall the Falklands and the Gulf war when Ministers and Opposition spokesmen made certain comments that we wanted to see on the record before we proceeded—and we could within hours of the House rising. We have to ask ourselves whether we want to risk losing that facility. I do not want to run that risk and I shall vote against it. 1311 We should improve our existing facilities. Putting our proceedings on the Internet and improving computer links so that more people can read about what we do in Parliament has been mentioned. The press has failed abysmally to cover the work that we do. The dedicated work that Back Benchers and Ministers do receives no press coverage, but people want to know about various issues that affect their daily lives. We must have a debate and a free vote.
§ Mr. David Lidington (Aylesbury)
I shall begin by taking up one theme that was mentioned by the hon. Member for Glasgow, Springburn (Mr. Martin)—public access to the documents produced by HMSO, notably Hansard, and the other papers it presently produces for the benefit of the House.
There will be considerable agreement on both sides of the House that the day-to-day coverage of Parliament provided by newspapers and the broadcast media falls below the standard that is desirable if we want the electorate to be informed about the issues that are debated in the House and the arguments that are presented by both sides of it.
Earlier today, I received a letter from the Buckinghamshire county librarian expressing some concerns to which I hope my hon. Friend the Minister will he able to respond when he makes his welcome debut at the Dispatch Box. I believe that that librarian speaks on behalf of other, similar, services in expressing anxiety about the possible impact of the proposals on the availability of Hansard and other parliamentary papers to the general public through libraries.
As the hon. Member for Springburn said, the present policy is to supply public libraries with HMSO publications, including reports of the House's proceedings, at discounted prices, with the aim of securing a properly informed electorate. I hope that my hon. Friend the Minister can reassure me that the Government intend to make binding arrangements for the discounts to be continued after privatisation.
I have no objection in principle to the privatisation of HMSO. It is, in my view, somewhat otiose to argue that only through the public sector can the House expect documents to be delivered on time and printed accurately. Those of us with experience in the private sector of the way in which our printing and publishing companies deal with documents such as annual reports, or companies' financial results, will know that that sector is perfectly capable of meeting the demanding standards that the House would wish to impose on it.
Some Opposition Members have tended to overlook the fact that the contract to produce parliamentary documents on behalf of the two Houses would be highly prized. The company would have every commercial incentive to ensure that it delivered a service to Parliament that would enable it—the publisher and printer—to boast about that service, and about its continuing contract with the House of Commons, when seeking business with other clients both here and abroad. I expect the pressures of the market to ensure the delivery of the high-quality service that the House expects.
1312 I was grateful for the assurances that my right hon. Friend the Chancellor of the Duchy of Lancaster was able to give about the procedure that will apply to the details of the proposed privatisation. I hope that Ministers will be able to give us more details of their thinking before long. I believe that it was the right hon. Member for Bishop Auckland (Mr. Foster) who spoke of the possible risk of a foreign publishing company's securing the business; I do not think that that, of itself, is to be feared. I imagine that, in any case, under European Community law it would be illegal for the Government—or, possibly, the House of Commons—to discriminate in favour of a United Kingdom company as against a company based in another European Union state.
This, however, is the important point. Will my hon. Friend the Minister assure us that all hon. Members will be informed in good time of the nature of the criteria that will apply in the judgment of the individual bids that are submitted?
§ Mr. Dalyell
With a foreign company, what would happen to the stringent security arrangements that now apply to the employees of HMSO?
§ Mr. Lidington
As I understand it, employees of a private sector company, whether it is British-owned, German-owned or American-owned, would be subject to the same process of law and to the same contractual obligations. Given the increasingly international nature of the publishing business, those are constraints of which the management of any company that sought business the Government and Parliament might offer would be well aware.
I hope that my hon. Friend the Minister will be able to reassure me on the points that I have raised. The principle of privatisation seems to be sensible. We are discussing a business with a considerable turnover, and the arguments adduced by my right hon. Friend the Chancellor of the Duchy of Lancaster for giving it the freedom and opportunity of the private sector are sensible, but we must ensure that we get the detail right, so that we can carry the measure forward with the full support that it deserves.
§ Mr. Tam Dalyell (Linlithgow)
Many hon. Members wish to speak, so I shall ask the Minister just two questions. First, a factual question. With whom has he discussed the matter in relation to the staff? I am told that it was not discussed with the Amalgamated Engineering and Electrical Union; the Graphical, Paper and Media Union; or the GMB. I am told that he had one somewhat cursory meeting with the Civil and Public Services Association; the Institution of Professionals, Managers and Specialists; and the National Union of Civil and Public Servants, but that, other than that, there has been no contact. When the Minister replies, can we have the factual truth—or untruth—of that situation?
Secondly, I return to vetting. We are talking about some of the most sensitive documents that our country handles. Huge amounts of money could be made. Are we entirely, as the hon. Member for Aylesbury (Mr. Lidington) suggested, to rely on contract law? What will happen about the vetting of individual employees? With the Budget statement and equally sensitive documents, it is not sufficient for the firm to 1313 give a general blanket assurance. There must be very clear track records of employees who are to handle such matters.
I should like answers to those two questions.
§ Mr. Gary Waller (Keighley)
Much attention has been paid today to the interests of employees of HMSO and of this House and the other place. That is quite right, but I want to say a few words about the interests of the ultimate customer—the user of official information—and the dissemination of that information using electronic means. I have no doubt that, in future, it will become common for such information to be conveyed in that way, for it to be manipulated and for added-value services to be applied to it.
The Information Committee of the House, of which I am Chairman, has already given some attention to the matter of parliamentary copyright, not specifically because the matter of privatisation has arisen but because we recognise that copyright is in many ways the key to the way in which information is used. It must be a key to open doors, not lock them. I know that some publishers are concerned that it is being used to lock doors rather than open them.
I shall speak about Crown copyright this evening, because I know that my right hon. Friend the Chancellor of the Duchy of Lancaster is planning—early in February, I believe—to complete a review of the matter and that his views will then be published. Leading firms of legal publishers such as Butterworth, Sweet and Maxwell and Longman, and specialist electronic publishers such as Context, with whom the House has an agreement for the electronic dissemination of POLIS, are concerned about what they describe as
the limitations that HMSO has been attempting to impose on our freedom to reproduce materials which state what the law is and how it is administered.Few matters are as important as freedom of information in relation to the law. Ignorance of the law is no excuse and it is vital that there should be no barrier to access legal information.
I have one or two questions for my hon. Friend the Minister, who is to wind up. If the privatised stationery office is required to obtain a licence to exploit Crown copyright from that part of HMSO which remains in the public sector—I assume that it will—will that licence be offered to the stationery office on the same terms as those on offer to competing private sector publishers? Will the stationery office be in a different position from others who add value to official information? What, if any, exclusive access will the stationery office have to Crown copyright materials? Will it operate in the same way as any other publisher of information in this area or will it have a special, privileged position?
I have a specific question about the statute law database project. Work has been continuing on that database for some time and I understand that the project will be completed next year. Will the stationery office have an exclusive right to offer services from that project to the public or will an open licence be available to any suitably qualified private sector publisher? I hope that all those important matters will be addressed.
I know that my right hon. Friend the Chancellor of the Duchy of Lancaster has already said in evidence to the Select Committee on Finance and Services and in his 1314 helpful comments to the House that his instinct is for open government. That is encouraging, and I hope that, when he makes his decision about the use that will be made of copyright, he will demonstrate in a tangible way that he is determined to put his words into practice.
§ 9.27 Pm
§ Mr. Robert Litherland (Manchester, Central)
I have been connected with the print industry for 51 years. I started in the industry as a boy of 14, and I am rightly proud of the fact that I am a sponsored member of the Graphical, Paper and Media Union. My prime allegiance is to the workers who are affected by the privatisation policy.
The question that goes begging is, "Why privatisation at all?" The Minister repeatedly recognised the quality of service and the efficiency of HMSO's workers and paid tribute to the management and staff for their commercial success in recent years. Why the big hurry? Why are we discussing a deadline of the summer of 1996?
From the Minister's speech and from his statement last week, it appears that the arguments are excuse rather than good reason. It all boils down to the Government's policy of privatising public concerns however successful they may be. Their dogmatic approach is that HMSO must be privatised although, as hon. Members in all parts of the House have said, it is working and providing a good service.
A great deal of money has gone into the streamlining of this successful enterprise and I query the investment. Is it another example of the fattening-up process that takes place before every privatisation? HMSO is a free-standing organisation that has never had any history of leaks of highly sensitive details and that should be allowed to compete in the outside market and has the capability to do so—but to this Government that would be heresy.
What is dismaying—hon. Members have called for it tonight—and needs extra debate and questioning is the Minister's inability to give complete assurances on whether future private owners will sell on after purchase. He cannot give an assurance on what workers' pensions will be, whether they will be secure and whether all the terms and conditions, such as pay, holidays, health and safety, will be met. Can he give an assurance that a future owner—my hon. Friend the Member for Linlithgow (Mr. Dalyell) mentioned it—could not be a foreign printer, perhaps a powerful German printer?
What about the most precious commodity of all: the workers. What will they make of the Minister's remarks? Will the proposal be to their benefit in the long run? I and, I am sure, they come to the conclusion, "Not a lot". They are not fools, Minister. They have witnessed the redundancies following the privatisation of gas, water and electricity.
The fattening up may be good for the fat cats, but it will be disastrous for many workers. What a prospect that is to offer workers just before Christmas, when they will sit with their families and ponder what next year will bring and what predicament they will be in. As has been said, the results of a ballot gave workers' views loud and clear: 95 per cent. voted against privatisation.
From the Speaker of the House down to the shop floor, concern is being expressed. The letter from the Chancellor of the Duchy of Lancaster to Madam Speaker states:
I recognise, and am sympathetic to, the concerns which you raise about the service which HMSO provides to the House and how to safeguard it for the future.1315 I shall not give a long quotation, but it continues:
No supplier would want to be associated with a failure to deliver the services required by such a noteworthy customer. Done well, the Parliamentary business would be the best possible advertisement for the company. Done badly, other potential customers would take flight.To me, that reply does not reek with confidence. What would happen if the new owners could not meet their obligations? Perhaps, in his winding-up speech, the Minister will explain who would be accountable.
As has been recognised, there is cross-party concern for HMSO's future. We wonder where privatisation will end when, now, it is on our very Parliament's doorstep.
I am getting the nod to end my speech, but I for one, unlike the Chancellor of the Duchy of Lancaster, do not believe that a relationship with the private sector can be stronger or better than what we have now. I agree with the argument that there should be further debates and that the matter should go to a free vote.
§ Mr. Peter Mandelson (Hartlepool)
This debate has been useful. It has revealed the paucity of the Government's argument on the privatisation of HMSO and exposed some serious and justified concerns among not just Opposition Members but Conservative Members. It has focused attention on employees' understandable anxieties. I hope that the Minister will respond in particular to the questions raised by my hon. Friend the Member for Linlithgow (Mr. Dalyell).
The debate has left unanswered a host of legitimate questions about the future course of our parliamentary proceedings and work if privatisation goes ahead. I perfectly understand why the hon. Member for Norwich, North (Mr. Thompson) has, as he said, decided to quit the House at the next election. He had some very strong things to say about the Conservative party.
§ Mr. Patrick Thompson
I ask the hon. Gentleman not to put a spin on what I may have said, and I hope that he will not misquote me further.
§ Mr. Mandelson
I do not want to count my turkeys or my chickens, but the hon. Gentleman had some harsh words to say about the Government's attitude toward public service. I share his views entirely. I will only say in addition that if he felt reassured by what the Minister had to say to him about job losses, he is very easily satisfied indeed.
As my right hon. Friend the Member for Bishop Auckland (Mr. Foster) made clear at the outset, the Opposition do not agree with this privatisation. We take that view not because we are opposed to all private sector involvement in the delivery of public services—I can reassure the hon. Member for Eastbourne (Mr. Waterson) on that point—but because privatisation for its own sake, regardless of economy, efficiency or effectiveness, simply cannot be justified.
The privatisation of HMSO is unwarranted on those three grounds. It is a needless rigamarole that involves great risks to the service that Parliament receives from HMSO. In all probability, it will leave everyone worse off or, at the least, dissatisfied—including, as I shall argue, 1316 quite possibly the private sector purchasers too. In our view, the privatisation is a recipe for huge tensions, if not chaos, between the prospective private purchaser and its chief clients—Parliament and the Crown—as my hon. Friend the Member for Glasgow, Springburn (Mr. Martin) made very clear, and as my hon. Friend the Member for Norwich, South (Mr. Garrett) spelled out in his detailed and comprehensive speech.
This is of course the latest in a series of unjustified privatisations which have been pushed forward by the Government. One wonders where the Government's next lurch to the right will lead. Perhaps Madam Speaker herself will be next in the firing line. Perhaps she will be sponsored, rather as the speaking clock that says, "The time as sponsored by Accurist." We might hear, "Order—as sponsored by Securicor." That may be a joke, but then the Government are proceeding with the privatisation of the railways. If they can do that, anything might follow.
I come directly to what the Minister has described—he placed great stress on this in his original statement to the House last week—as the "point of substance" and the "nub of the issue". He maintains that, to safeguard jobs and expand job opportunities, HMSO should become a private sector company so that it can enjoy the freedoms of the private marketplace and avail itself of the opportunities that are provided by free competition, unshackled, unconstrained and uninhibited by the burdens at present placed on it by its public service and Parliament-related obligations.
I agree that that is the nub of the issue. On the surface of it—certainly as presented by the Minister—what he is setting out has some attractions to it, in his terms. In making his case, however, the Minister is being thoroughly disingenuous because the realities of the marketplace could turn out to be very different. As one hon. Member after another has made clear, we are not dealing with the privatisation of any ordinary business. If anyone had any doubt about that, Madam Speaker's letter to the Leader of the House and the 12 conditions which she set out make it absolutely clear that we are dealing not with an ordinary business but with an essential and highly complicated public service.
Let us examine the case that the Minister made last week and again tonight. He seeks to create the impression of a wonderful free market nirvana, which is set to liberate the imprisoned business of HMSO. In the next minute, he is anxious to spell out and emphasise that, in its work for Parliament and for the Crown, nothing will change and therefore the handcuffs will stay on; every protection, every peculiar standard and idiosyncrasy that we demand in this place, every vagary, every pressure, every timetable, every ebb and flow of parliamentary business will be met faithfully and on time by the newly privatised business.
That does not sound like commercial freedom to me in its accepted sense. It sounds like the sort of framework and conditions that are not linked to the costs, competition or considerations of profit, which are the basis of private business, but are instead fundamental to the provision of public service.
Of course there will be attractions to the private sector. The Minister has previously described HMSO as a valuable asset with substantial recent investment in plant and machinery. Who could gainsay the rich pickings there? But how long will that attraction last and how long 1317 will the new owners' interest be sustained if the business is maintained in its present state, as the Minister has claimed and promised repeatedly tonight?
The Minister said in his original statement that the new owners will organise their business as they are told to do in order to safeguard HMSO's unique parliamentary and public service obligations. What other self-respecting private business is told by its customer which specific "nature and structure" its company will have, not only now but for all time? The Minister used that description.
According to the Minister, Parliament will even be entitled to lay down
the location of the press and the staff and the way in which the business is structured and organised."—[Official Report, 13 December 1995; Vol. 268, c. 993.]He says that the business will not be broken up. The parliamentary press will be integral to the rest of the business and it will all stay as it is at the moment, so the Minister insists. According to him, the customer will be calling the shots about the supply of products in every respect. Some commercial freedom that. I do not call that an ordinary commercial freedom. I find it a very exotic definition of commercial freedom—if the Minister is to be believed. Of course we are entitled to wonder how far that will be the case and how his promises will be fulfilled in practice.
Let us not get on to the practice; let us dwell a little longer on the principle that the Minister enunciated in his speech. In relation to their official printing and publishing work, the new private owners—apparently—will be bound hand and foot by a Draconian, far-reaching all-embracing contract, the Minister claims, imposed by its core customers: ourselves and the Crown. Will these conditions, dictated by public service and Parliament's needs, really offer the privatised stationery office the full opportunities to roam, compete in the marketplace on an equal footing with its rivals, and pick up business as and when and where it wishes, as the tender document implies? I rather doubt it.
If something has to give in this arrangement, I think that I know what it will be. Will it be the company's commercial freedom or our publishing needs? I think that market forces will have their way and no slap on the wrist from us or attempted enforcement of our contract is likely to have any sway at all in the face of those overwhelming market forces, which the Minister has said—and advocates—as the proper conditions in which this new privatised business should operate.
The whole complicated and unnecessary exercise is a thoroughly misconceived and botched job from start to finish. It has been dreamed up by the peddlers of right-wing dogma who infest the modern Tory party. They change the name, change the status, introduce private shareholders, and clothe the whole thing in reassuring rhetoric, all as long as the private sector can be substituted in form and appearance for what is at the moment an extremely successful public enterprise.
That is the nub of the issue. The privatisation is not about safeguarding jobs and expanding job opportunities, as the Minister has claimed, but about protecting Tory dogma and advancing ministerial careers. The idea is to get one more privatisation scalp on the Government's belt, and, incidentally, many thousands of pounds more in the pockets of Coopers and Lybrand in the process, and then 1318 to sit back as the whole thing proceeds to fall apart. Of course it will not be those on the Conservative Front Bench who will clear up the mess; it will be us.
I am not surprised that the Government have fixed the debate so that no vote can take place at the end of it. Too many of their own Back Benchers—we have heard from many of them tonight—know that the privatisation is a needless, pointless, wasteful exercise, which, in its haste and clumsiness, will result in Parliament, its authorities and staff having to spend more time, more energy and more money on getting the same or worse service than they get from the current arrangements. What on earth is the point?
On behalf of the Opposition, I welcome the Parliamentary Secretary to his new position. I hope that he will be able to give a darn sight better explanation of this crack-brained scheme and a much better justification of it than we have heard to date. I hope that the assurances that have been called for on timing and other considerations will be given, as my right hon. Friend the Member for Bishop Auckland requested. Better still, the Minister could do us all an enormous favour and announce to general relief all round that the Government have had second thoughts in the Tea Room and called the exercise off. If they cannot do that, let us test the opinion of Parliament and put the issue to a proper vote in the new year.
§ The Parliamentary Secretary, Office of Public Service (Mr. David Willetts)
This debate has been a welcome opportunity for hon. Members on both sides of the House to express their views about the effect of the proposed privatisation of HMSO on services provided to Parliament.
The debate has arisen from a series of concerns which Madam Speaker herself expressed in her letter of 28 November, and to which my right hon. Friend the Chancellor of the Duchy of Lancaster gave a full reply in his letter of 12 December.
It appears that the hon. Member for Hartlepool (Mr. Mandelson) is not familiar with the fundamental points that my right hon. Friend made in his letter. It has been made clear before, and I am pleased to take this opportunity to repeat the point, that, for example, no supplier taking on the responsibility of a privatised HMSO would possibly want to be associated with the failure to deliver the services required by such a noteworthy customer as ourselves. There is an enormous potential for the House to ensure that it gets the services which it is rightly entitled to expect through a clear, enforceable and legally binding legal contract.
§ Mr. Willetts
The hon. Gentleman does not seem to understand the power of a legal contract in terms of the quality and the enforceability of service that it can bring. The sanctions would be available through law rather than through arrangements within the public sector. The sanctions would be explicit, legally enforceable, contractual arrangements. 1319 We have already made it clear that it is ultimately for the House to set that contract. We will work with officials of the House to ensure that it reflects the issues that have been legitimately raised in the debate.
§ Mr. Michael J. Martin
It is all very well for the Minister to talk about a contract; but it is not a contract to deliver 20 pints of milk to the door of the House of Commons but one to deliver the record of the parliamentary proceedings. If that is held up even by a day, it can cause havoc and represents a great deal of work wasted by the dedicated Hansard staff.
§ Mr. Willetts
That is why the contract could make it clear, for example, that local overnight production facilities should be available close to the House. These matters should be made explicit in a contract. Although this is a matter for the House rather than for the Government, I would suggest that there is potential for the House to set out clearly and enforce more rigorously the standards that it is rightly expecting.
§ Mr. Garrett
The Chancellor of the Duchy of Lancaster said that the House would have a hand in the selection of the company to take over HMSO. How will that be done?
§ Mr. Willetts
Through Madam Speaker, we have invited officials of the House to become involved in all stages of privatisation, including the selection of the final winning tender.
§ Mr. Channon
I may be interrupting the right hon. Member for Berwick-upon-Tweed (Mr. Beith). When dealing with the position of members of staff of the House, would it not be wrong for them to take part in that sort of decision? Surely they will be observers of, rather than active participants in, any such Committee.
§ Mr. Willetts
This is ultimately a matter for the House—it is not a matter for the Government. I can only say that the Government have invited, through Madam Speaker, the officials of the House to become involved in the process. It is not for the Government ultimately to decide.
§ Mr. Deputy Speaker (Sir Geoffrey Lofthouse)
Order. The hon. Member for Linlithgow (Mr. Dalyell) must control himself. [Interruption.] Is the Minister giving way?
§ Mr. Foster
I am sorry to intervene, as I know that the Minister's time is short. However, this is a crucial point. 1320 My hon. Friend the Member for Linlithgow is asking whether the officials of the House have agreed to take part in such a privatisation procedure—yes or no.
§ Mr. Willetts
It is not for me to speak for the officials of the House. I have made clear on behalf of the Government that an invitation has been offered, but it is not for me to speak on behalf of the House. It would be impertinent for me to try to do that. That is why we have exchanged some important correspondence with Madam Speaker on this subject, but I am not going to try to tell the House how it should conduct its own affairs.
§ Mr. Beith
May I make it clear on behalf of the House of Commons Commission that the invitation that the Commission received was for officials to take part in a process by which a contract would be prepared? The Commission would be willing to allow the officials to attend such a meeting as observers only, to make clear what the interests of the House are, and not as participants. The Commission has not yet considered the invitation—because it is entirely new—to officials to be involved in the selection of a company that might be entrusted with such a contract. That matter has not yet been considered.
§ Mr. Willetts
It is very important that the House should be satisfied at all stages that the winning company meets the requirements that the House wishes to specify for the contract. That is ultimately a matter for the House, rather than for the Government. We, for our part, will do everything possible to ensure—
§ Mr. Willetts
I am afraid that I must make some progress. There are a lot of other points that I wish to cover, and I have only eight minutes remaining.
One of the other matters raised was the question of TUPE, and the hon. Member for Clackmannan (Mr. O'Neill) asked questions on that subject. I can assure him that TUPE applies at the moment of transfer, and TUPE will apply in this case. There is no period of time attached to TUPE as it takes place at a specific moment. The reason why people reflect on a 90-day rule is that if any employer wishes to change the terms of employment of his or her employees, it is normally thought reasonable by the courts to offer that sort of period of notice. That is a separate matter from TUPE.
The hon. Member for Linlithgow (Mr. Dalyell) raised the issue of security vetting. If a Government Department contracting with HMSO has an important security concern, it will be perfectly free to specify exactly what security vetting of individual employees is necessary for it to publish such documents, as it does at the moment. The hon. Gentleman also asked about consultation with the trade unions. My right hon. Friend the Chancellor of the Duchy of Lancaster has already had one meeting with trade union representatives and he hopes to have further meetings with them in the new year.
The hon. Member for Norwich, South (Mr. Garrett) and my hon. Friend the Member for Aylesbury (Mr. Lidington) asked me about the arrangements for ensuring that the quality of public debate was encouraged—something about which both sides of the House care—by continuing the current arrangements whereby public libraries received government documents 1321 at a discount. I am pleased to be able to give my hon. Friend the assurance that those arrangements will continue.
Underneath the variety of specific points raised in the debate, perfectly legitimately, there was a deeper problem. The problem is that, for the past 15 years, every time we have explained the merits of privatisation, the Opposition have steadfastly refused to understand them. The fears voiced by the Opposition have been proved false by events. Yet again, we had today the threadbare arguments that we have heard before every privatisation. The right hon. Member for Bishop Auckland implied that private business men were sleazy and could not be trusted with money. We were told that the security requirements were such that it would be impossible for the requisite standards to be met by a private contractor. I must tell hon. Members that we can be proud that many of the world's banknotes are printed by private security printers in this country.
There is an assumption that only public ownership will do. There is an assumption that if one has a public policy objective, one has to own the means of production, distribution and supply and that, otherwise, one has no means of meeting those public policy objectives. That is our fundamental disagreement with the Labour party and it remains as clear now as it was when we embarked on privatisation 15 years ago.
Labour Members now ask why HMSO cannot enjoy greater market freedom to compete with the private sector while remaining within the public sector. That argument at least reflects a recognition that things cannot carry on as they are. Anyone who looks at the figures for HMSO over the past few years can understand why. In 1990, its turnover was £389 million. In 1994, its turnover was £351 million. In 1990, it had 3,400 employees; it now has 2,900. As currently constituted, subject to all the inevitable constraints of the public sector, the business will not be able to thrive. We offer the best prospect for the employees of HMSO to be part of a growing and expanding business.
It would simply not be acceptable to allow a public sector trading organisation, which borrows from the national loans fund—it has, incidentally, £30 million of public sector borrowing outstanding at present—to go out and compete with private sector printers or publishers. It would not be reasonable for a body that would not pay corporation tax to compete in the private sector. It would not be reasonable to expect Ministers, who are accountable to the House, to allow HMSO to take on commercial risks when those risks would ultimately be borne by the taxpayer.
The only way in which HMSO can enjoy the freedom that the Opposition now say they wish it to enjoy is for it to be part of the private sector. That is the only credible way forward. At the moment, HMSO faces increasing competitive pressure in its public sector marketplace. We have heard claims that the Ministry of Defence is now looking to market-test its publishing and printing requirements. I am not aware of that taking place as a result of the prospective privatisation of HMSO. It is what is going on throughout the public sector. The public sector is free to choose where it goes to purchase its printing and publishing services.
HMSO is competing with private bodies for public sector work. As currently constituted, it has no reciprocal freedom to go out and compete with private sector providers for 1322 business in the private sector. I do not believe that any hon. Member, on careful consideration of the arguments, could possibly imagine that HMSO could remain in the public sector and have such freedoms. All the Opposition Members who have said that they wish it to have greater freedom while remaining in the public sector have made as clear a case as one could possibly imagine for the privatisation of HMSO as the only way forward.
§ Mr. Dalyell
On a point of order, Mr. Deputy Speaker. It is the tradition of the House that the Department of the Clerk of the House is not brought into controversy. May I suggest that you bring to Madam Speaker's attention what has been said tonight and that she might take a statement on the position?
§ Mr. Deputy Speaker
I can help the hon. Gentleman. The Speaker has already ruled on the matter. I thought that the hon. Gentleman might have been aware of that.
§ It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.