HC Deb 22 June 1995 vol 262 cc501-7

'.—(1) The Secretary of State shall not dispose of any securities or rights issued to him in pursuance of section 3 above or acquired by him under section 4 above except to a company which shall be known as the Crown Agents Foundation (the "Foundation") and which complies with the conditions set out in this section.

(2) The objects of the Foundation shall be—

  1. (a) to acquire and hold on such terms as the Foundation may think fit such securities or rights issued to the Secretary of State in pursuance of section 3 above or acquired by him under section 4 above as the Secretary of State may, with the consent of the Treasury, transfer to them;
  2. (b) to relieve the poverty, distress and suffering of peoples in any part of the world arising from any disaster or the immediate or continuing results of want of natural or artificial resources or the means to develop them; and
  3. (c) to promote the education and training of peoples in any part of the world where there is a want of natural or artificial resources or the means to develop them in any vocational, commercial, industrial or agricultural skills calculated to alleviate the want of such resources or means.

(3) Every member of the Foundation (a "subscriber) shall, with the consent of the Secretary of State, undertake to contribute such amount as may be required, not exceeding £1, to the Foundation's assets if it should be wound up while he is a member, or within one year after he ceases to be a member, for payments of the Foundations debts and liabilities contracted before he ceases to be a member, and of the costs, charges and expenses of winding up, and for the adjustment of the rights of the contributories among themselves.

Provided that a majority of subscribers shall have direct experience of the objects of the Foundation under subsection 2(b) and (c) above.

(4) The subscribers shall elect, whether from among their number or otherwise, the Council of the Foundation ("the Council") which shall manage and may exercise all the powers of the Foundation.

Provided that a majority of members of the Council shall have direct experience of the objects of the Foundation under subsection 2(b) and (c) above.

(5) The powers, duties, obligations and organisation of the Foundation shall be set out in a Memorandum and Articles of Association, a draft of which shall be laid before both Houses of Parliament by the Secretary of State.'.—[Miss Lestor]

Brought up, and read the First time.

4.45 pm
Miss Joan Lestor (Eccles)

I beg to move, That the clause be read a Second time.

Underpinning debates on Crown Agents in the Chamber, in Committee and in the other place has been a genuine cross-party desire to maintain the development focus of Crown Agents, while at the same time securing its commercial future. That task is difficult, and I must record my continuing belief that the privatisation is not wholly compatible with the development aims of the organisation. Opposition Members will be keeping a close watch over the fine print of the privatisation programme, and will not hesitate to raise our relevant concerns in the future.

Many of our detailed misgivings, however, have been somewhat allayed as a result of the answers given by Ministers during those debates, and in particular the Government's response to close and persistent questioning in Committee from my hon. Friends the Members for Carrick, Cumnock and Doon Valley (Mr. Foulkes) and for Glasgow, Cathcart (Mr. Maxton).

Mr. Peter Bottomley (Eltham)

Where is the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes)?

Miss Lestor

I believe that he is in an aeroplane, if the hon. Gentleman really wants to know.

I am also particularly grateful to the Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs and the Minister for Overseas Development for the eve-of-Committee release of the memorandum and articles of association. The resulting brisk and businesslike discussion clarified many important aspects.

I am being so nice to the Parliamentary Under-Secretary of State, but he is not responding in any way. In case he did not hear what I said, I was thanking him very much for the memorandum and articles of association, for which we had asked during an earlier debate.

One of our concerns related to the lack of detail in the Bill and, in particular, to the vague references to the composition page 9 of the foundation that will assume responsibility for the running of Crown Agents. Our anxieties on that specific issue have not been allayed. What do we know about the composition and responsibilities of members of the foundation? The Minister for Overseas Development has told us that foundation members will not receive dividends and will not be appointed by Ministers, that some may serve on the board and that existing members of Crown Agents' board will be among the founder members.

In Committee, the Parliamentary Under-Secretary of State provided us with a list of organisations from which foundation members would emerge. I say "emerge" because it is far from clear by what process potential members will identify themselves, or he identified by some other body or individual. He said: The Government will not be involved in nominating or selecting subscribers, but we hope"— hon. Members should note the word "hope"— that a group of organisations will naturally coalesce". Is it really all to be left to chance? Can we expect to see a rash of small ads in the financial columns of The Guardian, for example—"Single company seeks others for joint venture, view formation of foundation to run Crown Agents. Please send prospectus"? Of course not. The Minister went on to say: I imagine that the existing Crown Agents will have some synergy in that process. Such vagueness is why I raise this point; it is a clear abrogation of Government responsibility. When pressed by my hon.—and absent—Friend the Member for Carrick, Cumnock and Doon Valley, the Minister suggested a list of the sort of organisations that might be interested in "coalescing". He suggested that the British Consultants Bureau, the British Chamber of Commerce, the Chartered Institute of Purchasing and Supply, the Chartered Institute of Building might be in the frame, but he did not go on to give any more specifics, adding that that group might be joined by organisations that are involved in developmental studies".— [Official Report, Standing Committee F, 15 June 1995; c. 13.] Which organisations? Why, when he could be specific about the former group, was he unable to name a single developmental organisation that might be involved? That vagueness causes us concern.

Therefore, will the Minister advise us which developmental organisations he has in mind? He has identified that, so he must have some in mind. Has the Crown Agents had any approaches from or made approaches to United Kingdom development organisations, or foreign development organisations based in other countries, for example, the Japanese National Aid Agency? So far, my searches among the major UK providers of developmental assistance—the non-governmental organisations—have failed to identify any such approaches. I hope that the Minister will fill that in.

Mr. Peter Bottomley

May I declare a connection? I am one of the grandchildren of a Crown agent from just before the war. Does the hon. Lady know whether the foundation trustees would be barred from being Members of the House? If not, would it not be a good idea if she suggested that, to give confidence and allay fears, she should seriously be considered as one of the people who could become one of the foundation trustees?

Miss Lestor

I am flattered that the hon. Gentleman singles me out in that way, but, quite honestly, I have no wish to do that and I am not sure of the circumstances surrounding people in such a position; it is not something that I seek in any way.

We know from discussions that have taken place between the Overseas Development Administration and the Treasury that, in some ministerial circles, a strong feeling exists that the foundation should be made up of what I believe has been called "hard-nosed business men"—in order not to be sexist, I would add women as well, although I am not a hard-nosed business woman and have no wish to be. I have no wish to impugn the integrity of such people, but I must call into question their commitment to development—and it is the developmental side that I am concerned about and that should be at the heart of the foundation. That is why we have argued and continue to argue for a balance to be established, and that half the initial subscribers to the foundation should have a background in development issues.

In the circumstances, I cannot see how the Minister can continue to maintain what seems to be his distant approach to the process of establishing the foundation, especially as he has agreed that the Government will retain an active interest in the running of the foundation for the traditional period. If the Crown Agents is to maintain—and enhance—its reputation after privatisation, it must have at the heart of its structure a management that retlects the developmental purpose of the organisation which we would hold it has. I hope therefore that the Minister, if he wishes to have our support, will give us an assurance that that will be the case.

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tony Baldry)

I apologise to the hon. Member for Eccles (Miss Lestor) if I appeared not to be paying full attention at one stage to what she was saying. It was not intentional and I thank her for her kind comments.

Throughout the Bill's passage, we have been trying to reassure all hon. Members of what we are about: ensuring that the Crown Agents can take its work forward into the 21st century as a developmental agency, but within the private rather than the public sector. We have achieved that because, if one considers the new clause tabled by the Opposition, it summarises many of the Government's plans for the Crown Agents. I congratulate the hon. Lady on drafting the new clause in that way. It could have been drafted only by someone who had read the various speeches that Ministers have made here, in another place and in Committee, and it summarises the understanding and commitments that we have given to both the House and another place.

Of course we understand the concern behind the new clause: to know as much as possible about our proposals. The Government have already gone the extra mile to meet that concern. We have placed in the Library a copy of the draft memorandum and articles of association for the foundation that will own Crown Agents. We have said that the information memorandum for prospective members will be published well before transfer, and that we will present a further report to the Select Committee on Foreign Affairs. We have given the House as much information as is consistent with commercial confidentiality and the complex process of transferring a business into the private sector.

It is inappropriate to attach to legislation the extra information that the Government have made available. The Bill follows a precedent set in the House and followed on every previous occasion. It is an enabling measure, designed to expedite measures that the Government have described many times in great detail. It is unnecessary to specify the intended eventual owner in this way.

There will not be any extra benefit from the new clause. It will not reveal more about the nature of the foundation than is already known. It is not designed to change Government policy—we are committed to the foundation route. We have said from the first that the owner of the Crown Agents in the private sector will be an independent foundation whose memorandum and articles will commit it to a social and developmental purpose. We have said that it will be a company limited by guarantee that will not distribute dividends to its members, but use its profits solely in pursuit of its objectives.

We have also given some indication of the balance of membership that we envisage for the foundation. Of course it is appropriate that its membership should reflect the international character of the Crown Agents' activities and social purpose, and that it should provide an enduring basis on which to expand the business. Membership will consist of organisations active in international development which endorse the Crown Agents' purpose and principles. Those will include charities, private sector companies, professional and trade organisations, other aid organisations and enduring institutions.

There has been little time since Committee to enable us to be more definite about prospective membership of the foundation because of the progress that we have made with legislation, but I can give the names of some of the organisations that have expressed their interest in membership since Committee—these are of course in addition to those that I gave on Second Reading. They include financial institutions such as Barclays bank, companies from industry such as Cable and Wireless, professional bodies such as the British Standards Institution, and registered charities such Christian Aid, the Intermediate Technology Development Group and the development education organisation, Worldaware. We are therefore seeking to strike a balance between those with business experience, those who have experience in developmental work, and those who have experience in aid and development more generally.

I hope that the hon. Lady will be reassured that we most certainly do not see the foundation as being made up simply of, as she put it, hard-nosed business men and women; we see it as reflecting the broad interests of Crown Agents. On Second Reading I explained in some detail—the House will recall that we had a full day's debate on Second Reading—how the foundation and its membership will come about.

I think that the last part of the new clause is intended to subject transfer to an affirmative resolution procedure. Again, we are on well-trodden ground. The Government have made available a wealth of information about the owner of the Crown Agents. Ownership of the business will be passed to the foundation, whose draft memorandum and articles of association are available to hon. Members—copies are in the Library. The Government's plans are well known and there is no reason to break with precedent in this case and attach further unnecessary conditions to the transfer.

I hope that the hon. Lady, having heard further information about the membership of the foundation, and that organisations such as Christian Aid are prepared to be identified with it in due course, will feel that it is not necessary to press the new clause.

Miss Lestor

The Minister has been a little more forthcoming in response to questions that I have raised. As he said and as I reiterated, we are anxious that this has a development angle as well as a business angle. He has gone a little way to meet my requirements. He is asking us to take a lot on trust but, as I am still, despite my many years in the House, a trusting individual, I shall just say to the Minister that we will be watching the formation of the foundation carefully. I hope that what he has said is reflected in the make-up of the foundation and in the angle that we have proposed. For those reasons, I am happy not to press the new clause.

Motion and clause, by leave, withdrawn.

Order for Third reading read

Motion made, and Question proposed, That the Bill be now read the Third.time—[Mr. Baldry.]

4.59 pm
Lady Olga Maitland (Sutton and Cheam)

It is with great pleasure that I welcome the final stage of this important Bill. I have the privilege and pleasure to be the Member of Parliament for the constituency in which the headquarters of Crown Agents is located. Therefore, I have been taking a detailed and careful interest in the Bill's progress. I do that because I regard Crown Agents as the flagship for the United Kingdom. When we talk about Great Britain, we believe that that is symbolised in the magnificent work of Crown Agents. It is the leading aid procurement agency in the world. It has handled an enormous amount of important work for the Overseas Development Administration and the Japanese Government as well as for many other customers throughout the world—indeed, in 150 countries.

This enabling Bill is important because we hope to see Crown Agents being given greater commercial freedom to be able to move into the 21st century. It is essential that Crown Agents should be unfettered and should be set free from the remaining Government restraints. I hope that as we move into the transition phase, all the comments and recommendations that I made on Second Reading and in Committee will be discussed carefully and heeded. In the end we all want Crown Agents to continue the magnificent work of which we are so proud.

5.1 pm

Mr. Baldry

The Crown Agents Bill has now had a thorough examination at each of its stages in this House and in another place. We have debated a number of key issues including the corporate structure of the proposed foundation and the operating company, aspects of the financial arrangements of the new Crown Agents and the interests of staff and pensioners.

I should like to thank everyone who has taken part in the proceedings on the Bill for the constructive way in which they have approached it. It took a little time to convince the Opposition that we were genuine in our intentions. As the hon. Member for Eccles (Miss Lestor) said, there is a measure of trust on this. I hope that we have demonstrated, through the memorandum and articles of association and the other work that we have done, that we want to see Crown Agents move into the 21st century, retaining its existing ethos but within the private rather than the public sector.

The Bill allows Crown Agents to take a further important step forward in its long and distinguished history. It contains the necessary enabling provisions to provide a stable and secure future for the business fully in the private sector well into the 21st century.

We have put the Government's plans for Crown Agents on record in the House and in the draft memorandum and articles of association. We intend that those plans will preserve what is best in Crown Agents tradition in a form suited to our modern and increasingly competitive world. We will continue to make available information to hon. Members if it is not commercially sensitive and once we are certain that it is the right approach. My right hon. and noble Friend the Minister for Overseas Development will present a further paper to the Select Committee on Foreign Affairs before transfer is due to take place.

I have said that I will be glad to consider any suggestions that hon. Members may have to improve the memorandum and articles of association with the proviso that they are not, ultimately, the property of the Government but of the foundation. I am sure that all hon. Members will join me in wishing Crown Agents every success. I thank in particular my hon. Friend the Member for Sutton and Cheam (Lady Olga Maitland), who has the Crown Agents headquarters in her constituency. She has been a tireless champion of Crown Agents throughout proceedings on the Bill. Crown Agents should be grateful that it has such a doughty Member of Parliament. I am sure that every hon. Member wishes Crown Agents every success as it moves on to its next stage.

5.3 pm

Miss Joan Lestor (Eccles)

We could continue this debate until 10 o'clock, but in view of the assurances that the Minister has given and the fact that some important matters may be raised in a moment, I join the Minister in wishing Crown Agents good fortune for the future. We will be looking at the details of this with great interest and I hope that things go well and smoothly.