National Seed Development Organisation (Hansard, 21 May 1984)

§ Lord John-Mackie
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

§ The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead)
My Lords, in the context of their general policy on privatisation, the Government are examining the possibility of privatising the National Seed Development Organisation. A decision on whether to privatise the organisation will be taken in the light of this exploratory examination.

§ Lord John-Mackie
My Lords, while I thank the noble Lord for that reply, does he realise that NSDO would be, without going into the dogma of privatisation, one of the most difficult things to privatise, because it is linked up with the research stations in the country—the Plant Breeding Institute at East Craigs in Edinburgh and at Aberystwyth in Wales? How can they privatise them without giving a complete monopoly to some private company to develop public assets?

§ Lord Belstead
My Lords, so far as the other plant breeding institutes are concerned, the Government's present policy is to maintain the existing arrangements, for financing the production of state-bred finished varieties. I say to the noble Lord that the Ministry of Agriculture will continue to fund those 2 activities within our resources for research and development.
So far as creating a monopoly is concerned, all I would say is that the National Seed Development Organisation is a marketing organisation set up to handle state-bred finished varieties. It is an arrangement that has worked well in the past, and the purpose of our examination is simply to decide whether this marketing function could be privatised for the future.

§ Lord John-Mackie
My Lords, if I may say so, the noble Lord must be aware that there is an awful difference between a public monopoly and a private monopoly. If the Government sell it, for argument's sake, to Dalgety Spillers, I think that Nickerson's would create a fearful row if only one company was to get the monopoly of the PBI's work.

§ Lord Belstead
My Lords, with respect to the noble Lord who, I know, has a great deal of experience in these matters, there are difficulties with the present set-up of the National Seed Development Organisation. It is not in any way the fault of the people who are in the organisation, who have, of course, discharged all their functions most commendably over the years. But the fact of the matter is that it is very difficult at the moment objectively to assess the financial performance of the NSDO. As the noble Lord will know, the NSDO does not purchase the varieties it obtains for marketing from state-financed plant breeding stations but instead we have a situation where the NSDO in Cambridge pays to the Government an arbitrary 50 per cent. of the royalties it receives. That means that the real costs of Government research and development on material passed to the NSDO are not paid for directly. What I am saying to the noble Lord is that privatisation could result in a more realistic return for Government investment in research and development. I believe that that could be a very real advance.

§ Lord Walston
My Lords, is the noble Lord or his department. at the same time as investigating the possibility of privatising the NSDO. looking in any way at the privatisation of the actual research which produces the varieties sold by the NSDO?

§ Lord Belstead
No. my Lords.

§ Lord Cledwyn of Penrhos
My Lords, is it not the case that over a long period of years the NSDO has really rendered a significant service to the agricultural industry? Is the Minister aware that I certainly have heard no criticism of the NSDO in any way and that this appears to me to be a further doctrinaire step by the Government to consider privatisation for the sake of privatisation, without any accompanying benefit to the farmers of this country at all? Will the noble Lord say what is the nature of the inquiry which is going on at the present time? What is the object of the inquiry? How soon will it be before the Government announce the result of the inquiry?

§ Lord Belstead
My Lords, I cannot agree with the noble Lord, Lord Cledwyn. that this is doctrinaire. I have explained at some length in answer to the noble Lord, Lord John-Mackie, the financial reasons which lie behind our belief that it is right to have an exploration of whether it would be desirable to privatise the NSDO. We have of course kept the NSDO governing body informed and. indeed, the staff of the organisation. I should like to go out of my way in replying to the noble Lord to say that of course Parliament will be informed before any decision is taken.

§ Lord Elystan-Morgan
My Lords, will the noble Minister confirm that, whatever decision is reached by Her Majesty's Government in relation to privatisation in this context, the level of financing now enjoyed by the Agriculture and Food Research Council will not be further lowered? I am asking that in the specific context of the Welsh Plant Breeding Station, which, as the noble Minister knows, has already suffered cuts of emasculating proportions?

§ Lord Belstead
No, my Lords.

§ Lord John-Mackie
My Lords, is the Minister aware that the point that was raised about the staff is a very real one and that all the rumours, investigations and so on are very upsetting to the skilled and devoted staff of this organisation? The Government must think a little more about people and a lot less about money.

§ Lord Belstead
My Lords, the staff of the National Seed Development Organisation have been told of the possibility of privatisation. There has been no question of proceeding behind their backs. I think that I should perhaps underline what I said earlier to the noble Lord. I think that, if the Government can foster sound management, commercial efficiency, and value for money for the taxpayer, then it will be found that our great organisations on which we depend—and I have made it clear that I believe that the responsibilities of the NSDO have been most commendably discharged—are on a firmer basis for the future. This is one of the points which we shall certainly be keeping in mind in our exploration of this matter.