§ Dr. Moonie
I beg to move amendment No. 11, in page 16, line 7, at end insert—'(7) The Secretary of State shall seek to ensure that any disposal of securities issued to him under sub-paragraph (1) above shall be in such a manner as to prevent more than one half of those securities passing to any person or persons who, in the opinion of the Secretary of State, are wholly based outside the United Kingdom.'.
§ Mr. Deputy Speaker
With this, it will be convenient to discuss also the following amendments: No. 12, in page 16, line 7, at end insert—'(7) The Secretary of State shall not dispose of more than one half of the securities issued to him under sub-paragraph (1) above until a period of three years has elapsed from the date of their initial allotment.'.No. 13, in clause 7, page 4, leave out lines 11 to 16.
No. 14, in page 4, line 17, at end insert—'(3) The Authority shall not dispose of more than one half of the securities issued to it under paragraph 1(2) of Schedule 2 to this Act until a period of three years has elapsed from the date of their initial allotment.'.No. 15, in page 4, line 17, at end insert—'(3) The Authority shall seek to ensure that any disposal of securities issued to it under paragraph 1(2) of Schedule 2 to this Act shall be in such a manner as to prevent more than one half of those securities passing to any person or persons who, in the opinion of the Authority, are wholly based outside the United Kingdom.'.
§ Dr. Moonie
Amendment No. 13 returns to a principle that we have already discussed: an insistence that the national interest remain a consideration before any disposal. Amendments Nos. 14 and 15 are consequential.
The amendments have three purposes. Nos. 12 and 14 provide in effect for golden shares, time-limited to the first three years of operation of any new company. The idea of an indefinite 50 per cent. shareholding by the Government was tabled in Committee and discussed at great length, but in the debate the Minister offered no opinion on the merit of that idea and concentrated on another amendment. We did not get the opportunity to discuss the golden share properly—hence our attempt to redress the balance this afternoon.
A provision such as this would help to secure the best deal for the work force and management who may wish to be involved in a buy-out. Golden share provisions have been included in a number of other privatisations carried out by the Government, so there is nothing particularly contentious in what we are trying to do. I say that this would 197 be in the interests of a management-workers buy-out because, if the Government retained 50 per cent. of the value of the company, the management and work force would not have to put up the full capital sum to purchase the company in the first instance. The extra three years that we are allowing would give them a bit more time to raise the capital that they might need to complete their purchase of AEA Technology from the Atomic Energy Authority.
I suggest that it would be well worth the Government's considering this motion. They must, like us, be interested in securing the best deal. To ensure that the morale of management and staff remains high, it is greatly in the Government's interest that the management and work force should be successful in any attempt at a buy-out. The golden share provision will also ensure that any predator company will be prevented from taking over AEA Technology, at least in the early stages of its life in the private sector. That will ensure that it has the best chance of surviving once it is moved to the private sector.
Amendments Nos. 11 and 15, on the other hand, would prevent the sale of the Atomic Energy Authority to companies or other bodies based outside the United Kingdom. The Opposition fervently believe that there are still considerable questions of national interest relating to the work of the AEA that are being overlooked by the Government in the present scheme. We seek some reassurances that the Government are aware that the national interest is involved and that they intend to ensure that it is properly managed and taken into account in any sale.
It is worth noting that the AEA has recently divested itself, outside the provisions of the Bill, of its facilities services division, which employs no fewer than 950 staff, to Procord Ltd., a wholly owned subsidiary of Johnson Controls Inc., of Milwaukee, Wisconsin.
I have already discussed the national interest clause. I do not propose to speak any longer on amendment No. 13 but I trust that the Government will provide us with some assurances on the amendments and I hope that we will not have to press the amendment to a Division.
§ Mr. Page
The amendments attempt to restrict the freedom of the Secretary of State and the authority to dispose of securities in AEA Technology after vesting. I would like to explain what I consider to be one or two of the practical effects of the amendments.
Amendments Nos. 11 and 15 raise the substantive issue of foreign ownership. I will deal with that in a moment, but let me deal first with the much less substantive amendments, Nos. 12, 13 and 14. They seek to restrict the sale of securities in successor companies to less than 50 per cent. within three years of vesting. Their purpose is transparent and doomed to disappointment.
Opposition Members tabled an amendment in Committee with the aim of delaying privatisation. That amendment attempted to hold up the proceedings for 12 months. I remember teasing the hon. Member for Kirkcaldy (Dr. Moonie) that he was seeking to make the privatisation of AEA Technology part of an integrated Labour party policy. He assured me, no doubt in jest, that had he sought to delay the sale until a Labour Government were elected, he would have erred on the safe side and made it two years rather than one. I see that his confidence is starting to ebb away and that he now seeks to delay the sale by some three years, to be absolutely certain, as he thinks. That is not going to be long enough for him to succeed in his purpose.
198 Amendment No. 13 attempts to restrict the freedom of the Secretary of State and the authority to dispose of securities in a successor company by deleting clause 7(1). That clause expressly disapplies certain conditions of the Atomic Energy (Miscellaneous Provisions) Act 1981 in relation to the sale of shares in any successor company. It also prohibits the authority from disposing of any securities in a successor company except with the consent of the Secretary of State and the Treasury. It is purely an avoidance of doubt provision and its removal would not serve any useful purpose.
§ Dr. Moonie
Is the Minister embarrassed to say that the content of that clause is the national interest provision; if not, would he like to put it on record that it is the Government's intention with this provision to delete national interest from the Bill?
§ Mr. Page
The hon. Gentleman did not act in such a crude and unsubtle fashion during all the time we were in Committee. He had a gentleness that commended itself to me, but the sort of approach that he adopts today will not obtain the response for which he hopes. Obviously, in everything that the Government do, the national interest must be there. I believe that the word is "paramount".
Clause 7(1) is necessary because, if not expressly disapplied, it is possible that the restrictions in the 1981 Act will be viewed as limiting the powers of sale under the Bill.
Amendments Nos. 11 and 15 are an attempt to prevent foreign ownership or control of AEA Technology. There is nothing between us on that. We have made it perfectly clear that the Government will act in the national interest in making decisions about the form and method of any privatisation.
I recognise the concerns that have led to the amendments being tabled. We all agree that AEA Technology is a valuable and important national asset and that, in deciding its future, we must aim to maximise its returns to the United Kingdom.
Let me set out two general points in responding to the amendments. First, the Government welcome overseas investment. If Opposition Members would care to come to hear me winding up the debate tomorrow night, they will hear me say how much we appreciate the huge investments that have been made in this country by companies that have provided jobs, exports and, I think, a valuable injection of new ideas and technology. However, that is for tomorrow night and, having given that trailer of what is to come, I am sure that hon. Members will not be going canvassing for the local elections in their constituencies but will stay here to contribute to that important debate.
Although we welcome such investment, potential buyers of privatised companies, or shareholders in them, must meet all the criteria that are attached to sales. There is no reason why they should be discouraged simply on the ground of nationality.
Secondly, the scope for restrictions and controls is strictly limited by European Union rules and other international obligations.
199 In the case of AEA Technology, as I have already said, the Government's thinking is driven by our concern to ensure that the particular needs of Government customers are met and to maximise AEA Technology's contribution to the national economy.
The House can rest assured that all appropriate action to that end will be taken. A special share would be a possible line of approach, but I shall not speculate on that any further at present. It would be wrong to restrict ourselves in the way that the amendments seek. Statutory limitation as to when and to whom a successor company might or might not be sold would not be in the best interests of the taxpayer or the business.
I ask the hon. Member for Kirkcaldy to withdraw the amendment.
§ Mr. Maclennan
In view of the judicial decision of the House of Lords on interpretation of ambiguities by reference to Ministers' speeches, I think that it would be helpful to know whether the Minister is saying that, although the Government are deleting the words that deal with national interest, he believes that those words will still be imported into the construction of the Bill. If it is simply a tidying-up operation to the effect that it is no longer necessary to import the language that was used in the Atomic Energy (Miscellaneous Provisions) Act 1981 because it is implicit, it will avoid a great deal of doubt and be very helpful.
However, I suspect that the Minister is really saying that the Government's action is quite deliberate. He is taking the provision out because a Government decision that is not put before the House in a form that hon. Members might have an opportunity to consider will not be so readily challenged by judicial review if he has taken the words out. I think that that is a most unattractive and sinister development, especially as it has not been made explicit. It has been implied that nothing is changing. The reality is that significant change in the law is being imported into the Bill. That is a very powerful reason for suspecting that the Government are up to no good.
§ Mr. Ken Purchase (Wolverhampton, North-East)
Clause 7 is a result of the hurried and unthinking way in which the Government have introduced the Bill. It is widely understood that the value of AEA Technology is based on its intellectual capital. The questions of securities within the company and of ownership should have been dealt with comprehensively and in a way that ensured that the ownership and direction of the company were wholly in the interests of the United Kingdom. The possibility of the company offering services overseas is another matter. Its control, its central direction and its understanding of its task should have been implicit in the Bill.
In Committee, I mentioned the possibility of a hybrid formation for the company which would ensure that it remained wholly and properly controlled within this country so that it could carry out the purposes for which it was set up in the first place and its increasingly important role of supervising the disposal of waste and the decommissioning of plant. I suggested that a hybrid formation might be an appropriate way to proceed. Such a hybrid should be based on the company's shares being wholly in the hands of the people who work in the company. I also suggested that there should be a form of 200 supervisory board whose clear duty would be to ensure that at all times, the national interest was protected and served by the new company. Such a hybrid would meet all the concerns expressed by Conservative Members.
The Minister has said that he shares our concerns and that he believes that the national interest will be protected because the Government always act in the interests of this country. That is fine. We will not dwell on the Government's record and their understanding of what is in the national interest. That is a debate for another time which you would not welcome now, Mr. Deputy Speaker.
If we had a hybrid formation in which the company was owned by the people who worked in it, it would be a recognition that the value of the company was almost wholly based on the intellectual capital in it and on the ability of the workers to deliver the service that was wanted. Such a formation would ensure, through the supervisory board mechanism, that the company always acted in the interests of the nation and that it served the nation as was originally intended.
In the disposal of the company, it should have been implicit that it could be disposed of only with the encumbrance of a supervisory board with the duties that I have described. In that way, we could, in perpetuity, have ensured some consensus between the two parties. As it is, we know that the privatisation of the company is being used as nothing more than a substitute for the fact that the Government were unable to introduce a Bill to privatise the Post Office. As a result, this Bill has been hurried and it will not serve us as it should do. At the very least, the Government should consider our amendments.
§ Dr. Moonie
Let me get this clear. The Minister is not prepared to accept our amendments on retention of a certain proportion of ownership, but he is sympathetic towards the idea that the Government should prevent disposal in the wrong way. I suppose that one has to accept the Minister's good will, so I shall try to do so. He is not prepared to introduce a provision to prevent foreign ownership of the company, but he is prepared to say that the Government would consider the prevention of such ownership. He is certainly not prepared to own up to the fact that the Government intend to delete the provision on national interest. He is quite prepared to talk about clause 7, but he has not said exactly what is being deleted—the national interest as a condition of sale. Nor is he prepared to justify the deletion, because he knows only too well that there is no justification.
It may be more appropriate to attempt to amend the Bill in another place, so I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments made: No. 6, in page 17, line 7, leave out from second 'the' to 'in' in line 8 and insert'statements of account prepared by the Authority under section 4(3) of the Atomic Energy Authority Act 1954'.No. 7, in page 18, line 2, after 'accounting', insert 'reference'.
No. 8, in page 18, line 25, leave out from 'be)' to first 'the' in line 27 and insert'amount determined by or under the transfer scheme or (if there is no such determination)'.No. 9, in page 18, line 28, leave out from first 'the' to 'in' and insert'statements of account prepared by the Authority under section 4(3) of the Atomic Energy Authority Act 1954'.—[Mr. Page.]