HL Deb 03 July 1986 vol 477 cc1033-5

3.29 p.m.

Lord Graham of Edmonton

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether they are satisfied that the plans for the privatisation of the Royal Ordnance factories are proceeding in accordance with the programme of disposal previously announced.

The Minister of State for Defence Procurement (Lord Trefgarne)

My Lords, the Government announced last October that we hoped that Royal Ordnance plc would move to the private sector in mid-1986, subject to the usual caveats of trading performance and stock market conditions. As your Lordships already know, in the event we decided it was not possible to proceed with these plans and we are now considering further how best to achieve privatisation.

Lord Graham of Edmonton

My Lords, may I first ask the Minister to accept from me that I wish to withdraw without qualification any implication that I may have made on Friday last that he had misled the House in this matter? Is he aware that he must reconcile his statement of intent, which was given on Second Reading, that the 13 factories which were to be floated would be floated in divisions of three and four together with the clear impression gained from recent announcements that factories such as the Enfield small arms factory can be sold separately? Is he further aware that in Enfield there are 1,200 workers who, according to the local press, fear for their jobs as a result of what they perceive as a change in Government policy? Will he give the workers at Enfield an assurance that their fears are groundless?

Lord Trefgarne

My Lords, I can perhaps do no better than quote the words which I used on 19th July 1984. I entirely accept the noble Lord's correction to the remarks he made when we were considering this matter the other day. On 19th July 1984 I said: Inevitably, the setting up of subsidiary companies will facilitate, if this course is proven to be desirable, the disposal of divisions of the ROFs separately to the private sector We have made clear that if this proved attractive, such a possibility has always been on the cards. However, as seen at this moment, the most likely course for privatisation will be a flotation of shares in the enterprise as a whole. Again, the company structure we have proposed will enable either course to be followed".—[Official Report, 19/7/84, col. 1641] That is what I said then. We are now reviewing the policy in the light of the matters to which I have referred.

Lord Diamond

My Lords, the noble Lord did not give any clear indication of the matters he keeps talking about. Will he tell the House exactly what has happened? Why are we in this totally different situation? All the proposals made when the Bill was being considered were rejected by the noble Lord because there was no time to protect the future of the industry or the interests of Parliament due to the need to rush through the legislation. What has happened to make that a nonsense in the two years which have passed?

Lord Trefgarne

My Lords, perhaps again I can do no better than to quote my right honourable friend the Secretary of State for Defence, who said in another place on 18th June that although, substantial progress has been made in the process of transforming Royal Ordnance into a fully fledged commercial entity, it has not been possible to take this far enough and to have in place all the features necessary … for a successful flotation this summer".— [Official Report, Commons, 18/6/86; col. 1034]

Lord Dean of Beswick

My Lords, is the Minister aware that the kind of fears expressed by my friend and colleague on the Front Bench, the noble Lord, Lord Graham of Edmonton, about the group of workers at that factory are also expressed by the workers at the Royal Ordnance tank factory at Barnbow in Leeds? May I take it that the workers at the tank factory at Barnbow in Leeds can carry on on the understanding that in the foreseeable future there will be no change in their circumstances or ownership?

Lord Trefgarne

My Lords, I do not believe that I can add to what I said in the original Answer when I said that we were considering how best to achieve privatisation.

Lord Harris of Greenwich

My Lords, is the noble Lord aware that he is merely repeating a bland statement made by his right honourable friend in another place? He has given no clear indication as to why this has been delayed. Why has it been delayed?

Lord Trefgarne

My Lords, I am indeed aware that I have given no clear indication. The reason for that is that the Government have not yet decided the way forward.

Lord Graham of Edmonton

My Lords, in his response the Minister repeated earlier indications that the factories would be floated either as a whole or in divisions. We are now faced with rumour, innuendo or something stronger that it is possible that individual factories such as the Enfield small arms factory will be floated separately. The employees, whether or not they are right, believe that their interests will be worsened if that happens. Will the Minister confirm that what I have heard—that there is a possibility of the factories all being bought by one purchaser, Vickers—is correct? Will he also tell the House what are the levels of performance or achievement that the Government have in mind before they float an individual factory? At what level do the interests, future and careers of the employees equate to the Government's intentions to float the factories at any price?

Lord Trefgarne

My Lords, I am firmly convinced that the best interests of the employees lie in the moving of their company into the private sector, whether it be in one entity or more than one. That is what we are seeking to achieve.

Lord Hunt

My Lords, will the Minister enlighten someone who is ignorant about these matters? Will the status of the Ordnance factories as Royal factories be affected by privatisation, and if so, how?

Lord Trefgarne

My Lords, clearly the position would be slightly changed. That problem was of course addressed during the legislation's passage through Parliament.

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