§ 3.28 p.m.
§ Read a third time.
§ Clause 1 [Vesting of property etc. of NRDC and NEB in a successor company]:
§ Lord Peyton of Yeovil moved Amendment No. 1:
Page 2, line 17, at end insert:
("( ) The Articles of Association of the successor company shall at all times from vesting until the Secretary of State has disposed of the securities allotted to him under section 3 contain a provision to the effect that—
§ The noble Lord said: My Lords, this amendment has two aims. The first is that the provisions for the special share which at the moment are to be included in the articles of association should be in the Bill. The second is that the special share should survive for a period of five years after privatisation. I should like to register with my noble friend my considerable concern at the habit of legislating by means of articles of association which we in this House cannot amend but which others subsequently can.
§ My other concern is that the Government give undertakings, apparently firm, acknowledging the importance of the point covered but yet are unwilling to place them in the Bill; in other words, we are just informed. We are free to express an opinion, but no one really minds what that opinion is and certainly no weight is attached to it.
I am curious to find that the Government, at one and the same time, are determined to retain the discretion to change the articles of association before privatisation—here I refer to the words used by my noble friend the Minister in the early hours of the morning, when he said:
We have several objections to the proposal. In the first place, such an amendment would prevent the Government, as the owner of the company up to privatisation, from exercising their discretion to change the articles before privatisation" —[Official Report, 22/7/91; col. 611.]—
and yet, in col. 613 my noble friend went on to give the further assurance that the basic principles of articles of association as they now stand, and in particular those underlying the special share provisions, would not be altered between vesting day and the day of sale. It seems —to put it mildly—odd that the Government should be so keen to retain a discretion which they are not going to use. I hope that my noble friend will be able to produce some explanation of that rather eccentric position.
§ On the same occasion, my noble friend told your Lordships that some of his noble friends were motivated by fear that the Government would not put into the articles of association what they had told Parliament they would put into them. That is not the case. I am content to believe my noble friend when he 1008 tells me that he will put into the articles of association the words that he has promised. There is no difficulty about that.
§ The question which disturbs me and, I believe, some others of your Lordships is why, in the name of conscience, if they acknowledge the importance of the point, are prepared to put the words into the articles of association and have no intention of changing them when they are in the articles, will the Government not go that one step further and yield to what seems to me to be a cogent argument that the words should be put into the Bill. I need not remind your Lordships that this is a legislative Chamber: our business is legislation. I find it strange that we should be asked to be content with words that are merely put into the articles of association, which, as I have said, we cannot amend although others can.
§ I do not wish to detain your Lordships for long, but I should like to refer to part of the statement made by the chairman in BTG's 1991 annual report. He there refers to the importance which he attaches, as do others, to the independence, integrity and impartiality of professional advisers. No one doubts that. He also refers to the possible loss of the "critical mass", as he calls it, of licensing and professional skills which have contributed so effectively to BTG's success over the past 40 years.
The chairman went on to say:
Ministers have assured both Parliament and BTG's Council that these arguments are understood and will be taken into account by the Secretary of State when selecting the appropriate method of privatisation".
I do not know what comfort the chairman drew from that assurance, but it gives me very little. The Secretary of State understands the arguments; he will take them into consideration; but will he be decisively influenced by them? It appears not. That is a matter of considerable anxiety to me, and hence the amendment.
I should be glad to know whether the chairman has been given any more recent assurances than those contained in his annual statement. I do not wish to deal with this matter at any great length because the security of the pension fund is the subject of a later amendment, but I have received a letter from a member of the staff in which he says:
Throughout the group morale is running low and apprehension high".
I am sure that that statement must be a matter of considerable anxiety to the Government. I hope that at this rather late stage my noble friend will be able to say that due to those genuine anxieties he has after all decided to concede what is to my mind an important point; namely, that a proposition which the Government themselves deem to be right and of importance will be incorporated in the Bill so that we can all know that it is the will of Parliament and will not be changed because of some later event which no one can now anticipate.
§ I have no need to say more at this stage. The point has been referred to before, if not completely dealt with. I hope that the Recess will have given my noble friend an opportunity for due reflection and for an important and welcome change of heart. I beg to move.1009
§ Viscount Caldecote
My Lords, I support the amendment. BTG has some special features, as has been said before. It has done, and is still doing, an excellent job for Britain. Secondly, its work is of a long-term nature, as the noble Lord, Lord Flowers, said in a previous debate, in that it has a great fund of intellectual property and spends substantial sums of money on developing inventions to bring into the market place in due course. That "due course" may be 10 years ahead. Those are special features of BTG.
The argument for privatisation is that, with the freedom it gives, privatisation will enable BTG to do its job even better than before. There is no question but that the principle is already accepted. It is our duty to ensure that as far as possible BTG will be able to continue to perform its task in the valuable way in which it has done it in the past. Partly because of the long-term aspect of its work, to which I have already referred, it needs above all time to adjust to the new regime. It wants to be free from threats and from the risk of damage to its work.
On Report, my noble friend the Minister made—I believe that your Lordships will agree—some confusing and contradictory remarks which have already been referred to by my noble friend Lord Peyton. The issue that we must now address is that of the clarification of the Government's intentions. It is not satisfactory, as my noble friend has said, for Parliament to assent to a Bill when doubts about it remain.
Your Lordships will note that the amendment now proposed does not mention the 15 per cent. limit on shareholding to which the Government raised strong objection at Report stage. It mentions only the requirement about the special share remaining for five years. It is confusing; on the one hand the Government say that they intend that that shall be the case and on the other that they want freedom to change that provision, together with other provisions, before privatisation.
It is not satisfactory to legislate on the basis of ministerial assurances relating to the draft memorandum and articles of association to which there is no reference in the Bill. If, as indicated by the Government, they intend to maintain the special share for five years after privatisation—and we accept that that is true—then this important provision should surely be included in the Bill. I therefore hope that the Government will accept the wisdom and logic of the amendment.
§ Lard Williams of Elvel
My Lords, I support the noble Lord, Lord Peyton, and the noble Viscount, Lord Caldecote, in their amendment. But my support is somewhat reluctant, as demonstrated by the fact that I did not wish my name to be added as a sponsor of the amendment. The reason is simple. I regard this as a long stop. I argued at Committee and Report stages that the articles of association containing the important provisions should be in the Bill not just from vesting until privatisation or the sale of securities but until changed by Parliament. In a Division your Lordships decided that that was not acceptable. I still think that it was the right solution; but nevertheless we must accept what your Lordships decide. We now 1010 find ourselves with an amendment which is less satisfactory than the one I hoped to see passed but which nevertheless goes some way to satisfy the concerns that have been expressed by the management and staff of BTG.
An important point has been made by the noble Lord and the noble Viscount. We simply cannot accept ministerial assurances that this, that and thus will happen, particularly in respect of articles of association which can be changed at any time by the then owners of the business.
As the noble Viscount pointed out, we have had discussions about the 15 per cent. and about the special share. All the Government have been able to concede is that something or other will be in the articles of association and not in the Bill. The important, fundamental point was made by the noble Lord, Lord Peyton, in introducing the amendment that if the Government are serious, they will allow us to put this in the Bill. For that reason I support the noble Lord.
§ 3.45 p.m.
The Earl of Halsbury
My Lords, I rise to speak as a voice from the past and as a well-wisher in the present. I do so in the hope that I can dissuade the noble Lord who will answer the amendment from playing his cards close to his chest, not telling us what is going on behind the scenes. That sows distrust, which is not good for morale. With the leave of the House, I should like to read a letter I received this morning from the Committee of Vice-Chancellors and Principals:It is understood from … [the] advisers to the DTI, that other potential consortia and interested parties exist".I believe it is well known to your Lordships that the universities, through the Committee of Vice-Chancellors and Principals, are trying to set up a consortium to provide a neutral shareholding for the British Technology Group. The letter continues:Although this commitment is in the Articles of Association and not on the face of the Bill, the [committee] is surprised that none of these apparently interested parties have made themselves known to the CVCP".—although it is quite common knowledge that the CVCP is taking an interest in the matter.It is crucial that the universities have confidence in and feel comfortable with the composition of the successful consortium. So far the CVCP appears to have taken all the initiatives. If ministers' commitments to the universities are to be worth more than the Articles of Association and the Hansard paper they are printed on the CVCP expects to be kept fully in the picture as the sale process develops".That is the position.
What I am afraid of is that the moment the Bill is passed in its present form, the Government will lose all interest in it for the time being because they are more interested in the run-up to the election. Out of that election only three issues can emerge: one is that this Government will be returned; the second is that there will be a hung Parliament; and the third is that the present Opposition will be in power. Under all three headings, the people who will determine matters will of course be the Treasury.
I do not wish to say anything against that worthy body of men in their capacity of looking after the nation's finances. They are an admirable body but 1011 they have tunnel vision when it comes to matters not directly connected with finance. Giving them a free hand is the wrong way to go about preserving morale because morale is something the Treasury has never heard of. I believe that we shall hear more of this in due course in the debate on defence.
The Government must come clean and not say, "Please put your trust in teacher". That is not the way to go about a delicate matter; it should be out in the open. We should like to know who is bidding for BTG. We do not wish to see the company knocked down to the highest bidder without regard for any other consideration.
§ Lord Desai
My Lords, it may be argued that in this case putting conditions in the Bill would detract from obtaining the highest value for this piece of property. My answer to that is that as properties go BTG is small beer. It will not fetch that much money; it will not make any difference to the PSBR, either now or later. However, it would be a big mistake if for the sake of obtaining the highest value we missed a chance of making the best deal for the growth of the economy in the long run. That is a more important consideration because the loss of value will be small compared with the possible loss of the growth potential the economy would receive by taking good care of BTG after its privatisation. I urge Ministers to think of the growth potential of a well managed BTG compared with the extra money gained by an unhindered sale of the company.
§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Reay)
My Lords, as nearly three months have now elapsed since the previous stage of the Bill was taken in your Lordships' House, noble Lords will perhaps forgive me if I remind the House of the purpose of the Bill and what the Government have already done to meet the concerns which have been expressed in the House about the future activities of BTG.
The purpose of the Bill is to privatise BTG. As I explained to the House on Second Reading, although government-owned, BTG has for many years been run on commercial lines and has received no subsidies or loans of any kind from the Government.
We believe that the company is held back in its commercial development by what are now quite unsuitable constraints that derive from its position in the public sector. The management of BTG must seek ministerial approval for any investment above £250,000. It may not borrow above that amount. The company has already had experience of how its status as a government-owned company can interfere in the obtaining of contracts overseas. It must be borne in mind that 79 per cent. of the company's income now derives from overseas.
In concluding that the time is ripe for the privatisation of BTG, we enjoy the support of Sir Colin Barker, the chairman. In his statement in the 1991 accounts published in August he writes:The Council and Management of BTG continue to believe that the private sector offers BTG the best chance for 1012 further growth and success, and the best opportunity for Britain to retain its leadership position in worldwide technology flows".Nor do I think that the Committee of Vice-Chancellors and Principals could dissent. In an article in Chemistry and Industry published earlier this year, the CVCP stated:privatisation is both desirable and logical for an organisation which acts as though it were already there and suffers nothing but trouble from the fact that it is not".That is the justification for the Bill. At the same time, in response to concerns which were expressed in this House both on Second Reading and on Report, in particular regarding BTG'S ability to continue its traditional technology transfer activities after privatisation, the Government took certain action. We introduced a government special share for a five-year period which will guarantee two provisions in the articles of association. The first provision states that no individual shareholding should exceed 15 per cent. of the total voting rights in the company. Secondly, no material disposal of the net assets of the company—25 per cent. of net asset value or of the average income attributable to such assets—may take place without the consent of the special shareholder.
In addition, we placed two further special provisions in the articles of association. First, one director of the company should be appointed directly by the Committee of Vice-Chancellors and Principals of the universities after consultation with the polytechnics. Secondly, a further director should be someone who appears to the members of the board to have wide experience in the development, promotion and exploitation of public sector research. I should add that the 15 per cent. limitation on individual shareholdings is a benchmark figure. We are prepared to consider higher individual shareholdings, within the context of a consortium, should this prove necessary to attract the right consortium, but we would never consider individual shareholdings high enough to permit one party to achieve an overall controlling interest.
In adopting a special share in this case we have done something which we have previously only done in the case of large public utilities, or industrial concerns which involve key strategic interests. BTG is a small company with a turnover a fraction of that of most previously privatised companies in which the Government have retained a special share. However, we have been persuaded that BTG holds a unique place in the world of technology transfer and intellectual property. In providing for the limitation on individual shareholdings we have ruled out a trade sale to a single commercial purchaser. We have done this in recognition of the argument that if BTG were to be controlled by, for example, an industrial company with an interest in the success or failure of a particular area of technology, this could prejudice BTG's reputation for independence and integrity with its other clients.
In providing for a CVCP appointed director we have given the universities a right to board representation which they do not have today. The universities have been provided with a real 1013 opportunity to continue to contribute in a constructive way to the commercial operations of the privatised company. We have every confidence they will grasp that opportunity. We believe that our measures taken together will help preserve BTG'S independence and the continuation of its traditional technology transfer activities. It stands to reason that the greater the number of restrictions imposed on the freedom of the prospective buyers of the company to manage the company according to their own best commercial judgment, the more we risk jeopardising the process of the sale itself. That is an outcome only desired by those who oppose the privatisation of BTG on principle. I repeat that that does not include either the management of BTG or the CVCP.
BTG can only be sold to a consortium. I am pleased to be able to say that the level of interest in the privatisation is high. This interest comes from a wide range of institutions, most of them based in the United Kingdom. We want this interest to remain high so that a successful privatisation can be completed and a good price obtained for the taxpayer.
I shall now turn to the amendment, but before dealing with its substance I should inform the House that, after receiving advice from the Table, there was some doubt as to whether this amendment came within the rules governing the tabling of amendments on Third Reading given its prima facie similarity to an amendment which the noble Lord, Lord Williams of Elvel, had tabled on Report. The fate of that amendment was decided on Report. However, following representations which were made to us by my noble friend, in which he was supported by the noble Lord, Lord Williams, we have decided that this is a marginal case. I therefore suggest that your Lordships were probably right to allow full discussion of the amendment.
§ Lord Williams of Elvel
My Lords, I apologise for interrupting the Minister but I made no representations to the Government at all. Discussions occurred in a place I shall not mention but I made no representations to the Government about whether this amendment was in order.
§ Lord Peyton of Yeovil
My Lords, before my noble friend reacts to that intervention perhaps I should admit that I made representations to the Government. For once the Government paid attention to those representations and I am grateful for that.
§ Lord Reay
My Lords, I am grateful to my noble friend for that intervention. I take the word of the noble Lord, Lord Williams, that he did not support my noble friend on this matter although it was my understanding that he had done so. I take the noble Lord's word that he made no representations to the Government.
The purpose of the amendment is to ensure that the Secretary of State puts certain provisions in the articles of association and does not change them between vesting and sale. These provisions are, first, that there should be a five-year special share, as already provided in the draft articles of association, but one that is not redeemable before the end of the 1014 five-year period, and, secondly, that after five years the special share may be redeemed following consultation with the board of the company. In the draft articles of association before the House redemption by the company would be automatic at the end of five years. A key provision governing the special share in the articles of association would therefore be regulated by statute.
As my noble friend has already explained, his amendment would have another effect as well as that of putting these provisions on the face of the Bill. Under the terms of the amendment the Government would hold a special share in the privatised company for a rigid five-year period. It is not our current intention to redeem the share before the five-year period is completed nor can I currently foresee any circumstances in which early redemption would be necessary. However, we feel it is a prudent precaution to retain an element of flexibility against the possibility of unforeseen circumstances arising which this amendment would remove. We think it preferable not to fetter irrevocably the discretion of the Government in the way proposed by the amendment of my noble friends. I might add that in the unlikely event of the Government wishing to redeem the share before the end of the five-year period, the articles as drafted require the Government to consult with the company.
I have another objection to putting this provision on the face of the Bill. This objection was put very well by the chief executive of BTG in the letter he circulated dated 19th July where he stated:Any amendment which meant that further changes to the Memorandum and Articles could only take place by reference to Parliament would be commercially undesirable and unhelpful because it would place constraints on BTG which its competitors would not have to suffer".If there is to be a special share—and we are all agreed that there should—then the right and proper place for it is in the articles of association. Articles of association together with its memorandum are the company's constitution. They are a contract between the members and the company. They govern the company's operations and the company can only amend the provisions protected by the special share in accordance with the terms laid down in the articles, that is with the consent of the special shareholder. It would be a unique impediment for a private sector company to have its affairs regulated by statute in this way.
It would be totally unprecedented to have the requirement for there to be a special share written into the Bill. There have been a host of privatisations where there have been special share provisions—for example, the privatisations of the water companies, the electricity companies, British Aerospace, British Gas, Rolls-Royce, Jaguar, Cable and Wireless, Enterprise Oil, British Telecom and British Steel. In all those cases the special share provisions have been contained in the articles of association. I do not think that noble Lords have deployed a good argument as to why we should do things differently on this occasion.
I have been asked for an assurance. I should like, therefore, to give an assurance one more time. Anxiety has been expressed about the possibility that the 1015 Government might vary the articles of association, particularly those pertaining to the special share provisions, prior to sale. I should like to repeat the assurance that I gave noble Lords at Report stage that the basic principles underlying the articles of association will not be altered prior to sale.
By that I mean that the Government will retain in the articles of association those key provisions which have previously outlined, to wit: first, the Government will hold a special share in the new company for a period of five years, subject to what I have already said; secondly, individual shareholdings will be restricted to 15 per cent., but that will be applied flexibly as I have indicated; thirdly, the new owners will not be permitted to dispose of the whole or a material part of the company's assets without the special shareholder's consent; fourthly, the CVCP has the right to appoint a director to the board of the new company; and, fifthly, an additional director will be appointed with experience of the commercial exploitation of public sector research.
Those are the principles which I can assure the House will still be incorporated in the articles of association at the point of sale. Those are the limits within which any discretion, for example over the 15 per cent. shareholding, will be exercised.
I hope that my noble friend will be satisfied with what I have said and will feel able to withdraw his amendment.
§ 4 p.m.
§ Lord Peyton of Yeovil
My Lords, while I am grateful to my noble friend for replying to what I had to say, I cannot say that I am even remotely content with the substance of his answer. If it would be of interest to the Government, I should be perfectly prepared to leave out of the amendment the requirement that the special share should survive for a period of five years provided that in return they would write into the Bill the main provisions relating to the special share. However, my noble friend has made it quite clear that he will not do that. I must make it quite clear to him that, reasonable as he may consider his point of view to be, I do not think it right that Parliament should be expected to legislate on the basis of ministerial assurances, of acknowledged importance, which are written into the articles of association but cannot be put into the Bill.
There is one further point that I wish to make. I asked my noble friend whether the chairman, who he himself has quoted, has accepted any assurance and done so with some satisfaction. All that the chairman has said in his annual report is that:Ministers have assured both Parliament and BTG's Council that these arguments are understood and will be taken into account".Of what value is that? I suppose that it is something that Ministers understand what has been said. To say that the arguments "will be taken into account" does not bind Ministers in any way. I should be grateful if my noble friend would intervene to answer that point and I shall give way immediately.
§ Lord Reay
My Lords, my noble friend did indeed ask me about representations which I might have received from the chairman of BTG and how I might have responded to them. I received a letter from the chairman, to which I replied yesterday seeking to give him the assurances for which he asked. Rather than repeat the words that I used in that letter I thought it better to give an assurance directly to the House, and I did that.
§ Lord Peyton of Yeovil
My Lords, I am afraid that that reply does very little to alter my position. In the circumstances I feel obliged to seek the opinion of the House.
§ 4.4 p.m.
§ On Question, Whether the said amendment (No. 1) shall be agreed to?
§ Their Lordships divided: Contents, 106; Not-Contents, 115.1017
|Division No. 1|
|Airedale, L.||Jenkins of Putney, L.|
|Ardwick, L.||John-Mackie, L.|
|Aylestone, L.||Kilbracken, L.|
|Beaumont of Whitley, L.||Kinloss, Ly.|
|Beloff, L.||Kinnaird, L.|
|Birk, B.||Kirkwood, L.|
|Blackstone, B.||Lawrence, L.|
|Blease, L.||Leatherland, L.|
|Broadbridge, L.||Listowel, E.|
|Bruce of Donington, L.||Llewelyn-Davies of Hastoe, B.|
|Caldecote, V.||Lovell-Davis, L.|
|Callaghan of Cardiff, L.||McCarthy, L.|
|Campbell of Eskan, L.||McNair, L.|
|Carmichael of Kelvingrove, L.||Mason of Barnsley, L.|
|Carter, L.||Mayhew, L.|
|Castle of Blackburn, B.||Milner of Leeds, L.|
|Cledwyn of Penrhos, L.||Mishcon, L.|
|Clinton-Davis, L.||Molloy, L.|
|Cudlipp, L.||Morris of Castle Morris, L. [Teller.]|
|Dacre of Glanton, L.|
|David, B.||Murray of Epping Forest, L.|
|Desai, L.||Nicol, B.|
|Donoughue, L.||Ogmore, L.|
|Dormand of Easington, L.||Park of Monmouth, B.|
|Ennals, L.||Peyton of Yeovil, L.|
|Erroll, E.||Pitt of Hampstead, L.|
|Ewart-Biggs, B.||Porter of Luddenham, L.|
|Ezra, L.||Prys-Davies, L.|
|Fisher of Rednal, B.||Redesdale, L.|
|Fitt, L.||Richard, L.|
|Flowers, L.||Ritchie of Dundee, L.|
|Gainsborough, E.||Robson of Kiddington, B.|
|Gallacher, L. [Teller.]||Rochester, L.|
|Galpern, L.||Rugby, L.|
|Gladwyn, L.||Russell, E.|
|Graham of Edmonton, L.||Scanlon, L.|
|Grey, E.||Seear, B.|
|Halsbury, E.||Sefton of Garston, L.|
|Hampton, L.||Shackleton, L.|
|Hanworth, V.||Shannon, E.|
|Harris of Greenwich, L.||Shaughnessy, L.|
|Harrowby, E.||Sherfield, L.|
|Hatch of Lusby, L.||Simon of Glaisdale, L.|
|Hilton of Eggardon, B.||Stoddart of Swindon, L.|
|Hollis of Heigham, B.||Strabolgi, L.|
|Holme of Cheltenham, L.||Taylor of Blackburn, L.|
|Hughes, L.||Thomson of Monifieth, L.|
|Jacques, L.||Tordoff, L.|
|Jay, L.||Turner of Camden, B.|
|Jenkins of Hillhead, L.||Underhill, L.|
|Varley L.||White, B.|
|Wallace of Coslany, L.||Williams of Elvel, L.|
|Wedderburn of Charlton, L.||Wilson of Langside, L.|
|Abercorn, D.||Joseph, L.|
|Alexander of Tunis, E.||Knollys, V.|
|Alport, L.||Lauderdale, E.|
|Arran, E.||Lloyd of Hampstead, L.|
|Astor, V.||Long, V.|
|Auckland, L.||Lyell, L.|
|Balfour, E.||Mackay of Clashfern, L.|
|Birdwood, L.||Macleod of Borve, B.|
|Blatch B.||Manton, L.|
|Blyth, L.||Margadale, L.|
|Boardman, L.||Marlesford, L.|
|Borthwick, L.||Merrivale, L.|
|Boyd-Carpenter, L.||Mersey, V.|
|Brabazon of Tara, L.||Middleton, L.|
|Bridgeman, V.||Milverton, L.|
|Brougham and Vaux, L.||Monk Bretton, L.|
|Butterworth, L.||Morris, L.|
|Buxton of Alsa, L.||Mountevans, L.|
|Caithness, E.||Mowbray and Stourton, L.|
|Campbell of Alloway, L.||Munster, E.|
|Carnock, L.||Nelson, E.|
|Cavendish of Furness, L.||Norrie, L.|
|Clanwilliam, E.||Onslow, E.|
|Constantine of Stanmore, L.||Orr-Ewing, L.|
|Cottesloe, L.||Oxfuird, V.|
|Cullen of Ashbourne, L.||Pearson of Rannoch, L.|
|Daventry, V.||Pender, L.|
|Davidson, V. [Teller.]||Perry of Southwark, B.|
|Denham, L.||Quinton, L.|
|Denton of Wakefield, B.||Radnor, E.|
|Downshire, M.||Reay, L.|
|Effingham, E.||Renfrew of Kaimsthorn, L.|
|Elibank, L.||Renton, L.|
|Ellenborough, L.||Rochdale, V.|
|Elles, B.||Savile, L.|
|Erroll of Hale, L.||Sharples, B.|
|Faithfull, B.||Slim, V.|
|Flather, B.||Smith, L.|
|Fortescue, E.||Soulsby of Swaffham Prior, L.|
|Fraser of Carmyllie, L.||Strange, B.|
|Fraser of Kilmorack, L.||Strathcarron, L.|
|Gainford, L.||Strathmore and Kinghorne, E.|
|Gisborough, L.||Strathspey, L.|
|Goold, L.||Sudeley, L.|
|Gridley, L.||Suffield, L.|
|Hailsham of Saint Marylebone, L.||Teviot, L.|
|Thomas of Gwydir, L.|
|Harding of Petherton, L.||Tombs, L.|
|Hardinge of Penshurst, L.||Trumpington, B.|
|Harmar-Nicholls, L.||Ullswater, V.|
|Harmsworth, L.||Vaux of Harrowden, L.|
|Henley, L.||Vinson, L.|
|Hesketh, L. [Teller.]||Waddington, L.|
|Hives, L.||Wade of Chorlton, L.|
|Hooper, B.||Westbury, L.|
|Howe, E.||Whitelaw, V.|
|Jeffreys, L.||Wise, L.|
|Johnston of Rockport, L.||Wynford, L.|
§ Resolved in the negative, and amendment disagreed to accordingly.
§ 4.12 p.m.
§ Clause 3 [Initial Government holding in the successor company]:
§ Lord Williams of Elvel moved Amendment No. 1A:
§ 1A Page 3, line 8, at end insert ("and before he has laid before Parliament a statement announcing—
- (a) the identities of those to whom the disposals are to be made, and
- (b) the consideration for the disposals.")
§ The noble Lord said: My Lords, the object of this amendment is to ensure that Parliament has a Statement before the Secretary of State disposes of the securities in the transferee company. This is a much weaker amendment than the one that I moved in Committee and on Report. At that time I argued that it was essential for the future conduct of BTG that Parliament should be informed of the new ownership before the Secretary of State took a decision. That did not meet with the favour of the Government and I am now arguing the lesser case.
§ In the light of all that has been said in our earlier debate by the noble Lord, Lord Peyton of Yeovil, and particularly by the noble Earl, Lord Halsbury, it still seems to me to be sensible that we in Parliament should know exactly who the beneficiaries of the sale are. In my view, it is not proper to announce the decision to the world in a press announcement before announcing it to Parliament, particularly when Parliament may be in recess. The object of the amendment is to make sure that the Statement would be made to Parliament and would be open to parliamentary comment and discussion before action was taken by the Secretary of State; in other words, to ensure that he cannot use the recess, as I am afraid is frequent practice, to make statements that properly concern Parliament.
§ The advantage of having this provision in the Bill is that we would know before any action was taken on the sale who the buyers were. That would be a statutory obligation on the Secretary of State. Furthermore, we would know what the consideration was to be and how that was to be handled; whether it would be a straight cash transaction or whether it would be some form of loan stock or other method of consideration which the Government have used in previous privatisations and propose to use in the privatisation of the export credits Insurance Services Group.
§ If the amendment is accepted by the Government—it is a very weak amendment—it would be an earnest of the Government's view that Parliament should have some discussion before the event and should be assured by the Government that their solution regarding privatisation meets all the points that the Minister has quite rightly been preaching to us this afternoon; namely, that the integrity of the business will be maintained and that the consortium that will buy it is satisfactory to the Government and to Parliament. As I said, this is a very innocent amendment and I hope that the Government will accept it. I beg to move.
§ Baroness Hollis of Heigham
My Lords, I rise to support the amendment. The Bill is highly controversial in many of its aspects, as we have seen in the close Division on the previous amendment. It is controversial because the originators of intellectual property—our scientists, universities and research councils—have in the past always appreciated the way in which the BTG has brigaded both the commercial and the public interest. All those bodies are anxious that that brigading should continue.
The issue is crucial to the continued public interest. As members of society with an interest in our industry 1019 and the future of scientific invention, we are all anxious about the terms of the future sale of BTG —who buys and on what terms. The Minister has gone a long way to meet some of those anxieties, but perhaps not as far as many of us would wish. The amendment moved by my noble friend Lord Williams seeks to ensure that, to dispel some of the fears still associated with the disposal of the BTG, all the details associated with those transactions should be made fully transparent. We are talking about the transparency of the disposal in terms of the identities of those who buy and the terms on which they do so. We are also talking about transparency in the sense that that information would be given in the public domain to Parliament, where it could be properly scrutinised, and not just through the financial correspondence columns of the press.
Such an amendment, were the Government minded to accept it, would not in any sense limit or constrain the value of the BTG at the point of its disposal. I urge your Lordships to agree that it would help to allay the lingering fears that such a disposal might be made to dubious owners and on dubious terms. If the Minister were to accept the amendment, it would be a genuine statement of goodwill and good intent which would allay so many of the fears still surrounding the Bill.
§ Lord Reay
My Lords, this amendment would require the Secretary of State, before disposing of the shares of the successor company, to lay a Statement before Parliament announcing the identities of the shareholders to whom the company was to be sold and the price to be paid, possibly even by each member of the consortium.
I fear that the amendment would introduce all kinds of uncertainties, obstacles and confusion into the sale process. First, as the noble Lord pointed out, it would mean that no sale could be completed during the parliamentary recess as no Statement could then be laid before Parliament. Secondly, it would have an unquantifiable but probably significant deterrent effect on buyers coming forward. Parliamentary scrutiny of their participation and the price that they were paying would be seen by potential investors as a major and often unacceptable hurdle to cross in the complex and expensive business of buying a company.
But even if all the members of a consortium—which is difficult enough to put together at the best of times —were willing to expose themselves to this additional scrutiny by Parliament, what might be the effect of such scrutiny? I suggest it might very well destroy the agreed sale. For example, it could happen that an unsuccessful party, perhaps one that had put in a higher offer than the successful bidder, sought to challenge the terms of the sale and make a public issue of it with the clear intention of trying to frustrate the preferred bid, even though an agreement had been reached with that bidder. Alternatively, some member of the consortium could drop out during the process, or some other consortium or individual party could enter with a higher offer and in that way confuse the issue.
I know that on an earlier occasion the noble Lord argued that contracts could be initialled and 1020 exchanged before parliamentary approval was sought so that no other bidders would be able to put in an offer or revised offer after that moment since the Government would be bound, subject to parliamentary approval, to complete with the party with whom they had reached the agreement. But I must point out it is not clear that this procedure could be followed before the details were laid before Parliament. It could be argued that even an agreement to dispose subject to a condition precedent itself constituted a disposal, in that the Secretary of State was no longer free to deal with other parties. In any case, aside from that objection, Parliament might choose to favour a subsequent higher offer and such offers would in no way be ruled out by the initialling of any agreement. There could be parties which had reached an agreement with the Government but which were not acceptable to Parliament, and there could be other parties which had made alternative offers. Any of those parties might feel that they had a cause for grievance and seek to challenge the Government's decision in the courts.
We see the whole proposal as a recipe for chaos which no government could possibly accept. It is something quite unheard of and was was never contemplated in any other privatisation. One might almost think that it reflected a desire on the part of the noble Lord to prevent privatisation by some means other than persuading the Government to withdraw the Bill. We believe that once Parliament has passed the enabling legislation it is for Government as the executive to carry out the wishes of Parliament and, as they have done in all other cases, themselves assume responsibility for the way the sale is carried out.
The normal procedure is for Parliament to be informed of the sale once it has been completed. The Government intend to abide by that practice in this case. I hope that that assurance will meet concern that Parliament should be informed of the identities of the purchasers as well as the consideration as soon as the sale has been completed. Parliamentary scrutiny does not end there. Ministers remain accountable to Parliament and its Select Committees, including the Public Accounts Committee in another place, which can be depended upon to exercise close scrutiny of the executive's decisions leading to the identification of the eventual purchasers.
We see no good reason in this instance to depart from normal parliamentary practice, least of all when such a departure could seriously jeopardize the sale of BTG—an outcome which is not desired by BTG's management and council nor by the CVCP. I ask the House not to accept the amendment.
§ Lord Williams of Elvel
My Lords, I find it curious that the noble Lord the Minister has replied to an amendment which I moved in committee rather than the amendment I am moving today. If the noble Lord would be kind enough to read the amendment, he will see that there is no question of making it a condition precedent. That was the amendment which I moved in committee, rightly I think, but the noble Lord did not like it. I am now moving, as I said, the weaker amendment. What is required by my amendment is a simple statement from the Government to Parliament 1021 saying, "We have done a deal with X, Y and Z". That is all. There is no question of a conditional agreement; there is no question of that statement destroying an agreed sale. I have been involved in many agreed sales which have been announced but where other people can come in. That is the normal practice of the market. I thought the Government's intention was to get the best value for the business. There is no sinister intent to try to stop a deal that the Government have agreed. If the Government are not satisfied and the members of the consortium (if there is to be one) are not really strong, then there is a problem, but that problem should be one that comes out at the point of the statement.
Ckarly, it must be in the Government's interest to have higher offers. That is the whole point of privatisation and that is what the Treasury insists upon. But to say that my amendment as drafted would in any way destroy an agreed sale other than in the way agreed sales can be overturned by the market in normal conditions is sheer fantasy. I am astonished that the noble Lord the Minister has replied to an amendment which I have not moved.
The noble Lord seems to take exception to my thought that Parliament should be informed of the sale before anybody else. He seems to take exception to my thought that it is unfortunate if, as my noble friend Lady Hollis said, such a sale is slipped into the financial columns of the press, during a parliamentary recess; without Parliament being informed. I can only say that this is a privatisation which we have argued time and time again is unprecedented. It has nothing to do with British Steel, British Telecom or British Gas; it is a special case on its own. We and the CVCP need to know exactly who are going to be the owners, and the Government should not be shy about that. If the Government have a proper deal to do, they ought to come before Parliament and say, "We have done a deal and this is the way we have done it". They should not be ashamed of that. If they now propose not to do it and say, "We will put down a Question for Written Answer and sooner or later after the recess we will let somebody know exactly what has happened", I believe that that shows the Government have no confidence in being able to achieve the kind of balanced sale that the management and council of BTG and your Lordships all want—that is, a sale which will preserve the integrity and continuity of this business.
I have found the noble Lord's reply—I do not mean this personally—even less satisfactory than the one he gave to the noble Lord, Lord Peyton, on his amendment. Therefore I must seek the opinion of the House.
§ 4.28 p.m.
§ On Question, Whether the said amendment (No. 1A) shall be agreed to?
§ Their Lordships divided: Contents, 88; Not-Contents, 124.1023
|Division No. 2|
|Airedale, L.||Aylestone, L.|
|Allen of Abbeydale, L.||Birk, B.|
|Ardwick, L.||Blackstone, B.|
|Blease, L.||Jenkins of Putney, L.|
|Bottomley, L.||John-Mackie, L.|
|Broadbridge, L.||Kilbracken, L.|
|Bruce of Donington, L.||Kirkwood, L.|
|Callaghan of Cardiff, L.||Listowel, E.|
|Carmichael of Kelvingrove, L.||Llewelyn-Davies of Hastoe, B.|
|Carter, L.||Lovell-Davis, L.|
|Castle of Blackburn, B.||McCarthy, L.|
|Cledwyn of Penrhos, L.||McNair, L.|
|Clinton-Davis, L.||Mayhew, L.|
|Cudlipp, L.||Milner of Leeds, L.|
|David, B.||Molloy, L.|
|Dean of Beswick, L.||Morris of Castle Morris, L.|
|Desai, L.||Nicol, B.|
|Donoughue, L.||Ogmore, L.|
|Ennals, L.||Pitt of Hampstead, L.|
|Ewart-Biggs, B. [Teller.]||Porter of Luddenham, L.|
|Ezra, L.||Prys-Davies, L.|
|Fisher of Rednal, B.||Rea, L.|
|Fitt, L.||Redesdale, L.|
|Flowers, L.||Richard, L.|
|Gallacher, L.||Ritchie of Dundee, L.|
|Galpern, L.||Robson of Kiddington, B.|
|Gladwyn, L.||Rochester, L.|
|Graham of Edmonton, L.||Russell, E.|
|Grey, E.||Russell of Liverpool, L.|
|Halsbury, E.||Scanlon, L.|
|Hampton, L.||Seear, B.|
|Hanworth, V.||Sefton of Garston, L.|
|Harris of Greenwich, L.||Shackleton, L.|
|Hatch of Lusby, L.||Strabolgi, L.|
|Hilton of Eggardon, B.||Taylor of Blackburn, L.|
|Hollick, L.||Thomson of Monifieth, L.|
|Hollis of Heigham, B. [Teller.]||Turner of Camden, B.|
|Holme of Cheltenham, L.||Underhill, L.|
|Howie of Troon, L.||Varley, L.|
|Hughes, L.||Wallace of Coslany, L.|
|Jacques, L.||Wedderburn of Charlton, L.|
|Jay, L.||White, B.|
|Jeger, B.||Williams of Elvel, L.|
|Jenkins of Hillhead, L.||Wilson of Langside, L.|
|Abercorn, D.||Erroll of Hale, L.|
|Alexander of Tunis, E.||Faithfull, B.|
|Allenby of Megiddo, V.||Flather, B.|
|Alport, L.||Fortescue, E.|
|Arran, E.||Fraser of Carmyllie, L.|
|Astor, V.||Fraser of Kilmorack, L.|
|Auckland, L.||Gainford, L.|
|Balfour, E.||Gisborough, L.|
|Birdwood, L.||Gridley, L.|
|Blatch, B.||Hailsham of Saint Marylebone, L.|
|Boardman, L.||Harding of Petherton, L.|
|Borthwick, L.||Hardinge of Penshurst, L.|
|Boyd-Carpenter, L.||Harmsworth, L.|
|Brabazon of Tara, L.||Hayter, L.|
|Bridgeman, V.||Henley, L.|
|Brookes, L.||Hesketh, L.|
|Brougham and Vaux, L.||Hives, L.|
|Butterworth, L.||Hood, V.|
|Caithness, E.||Hooper, B.|
|Campbell of Alloway, L.||Howe, E.|
|Carnock, L.||Hylton-Foster, B.|
|Cavendish of Furness, L.||Jeffreys, L.|
|Clanwilliam, E.||Jenkin of Roding, L.|
|Colnbrook, L.||Johnston of Rockport, L.|
|Constantine of Stanmore, L.||Joseph, L.|
|Cullen of Ashbourne, L.||Knollys, L.|
|Daventry, V.||Lloyd of Hampstead, L.|
|Davidson, V. [Teller.]||Long, V. [Teller.]|
|Denham, L.||Lyell, L.|
|Denton of Wakefield, B.||McAlpine of West Green, L.|
|Downshire, M.||Mackay of Clashfern, L.|
|Effingham, E.||Macleod of Borve, B.|
|Elibank, L.||Manton, L.|
|Ellenborough, L.||Margadale, L.|
|Elles, B.||Marlesford, L.|
|Erroll, E.||Merrivale, L.|
|Mersey, V.||Sharples, B.|
|Middleton, L.||Smith, L.|
|Monk Bretton, L.||Somerset, D.|
|Montagu of Beaulieu, L.||Soulsby of Swaffham Prior, L.|
|Morris, L.||Stodart of Leaston, L.|
|Mountevans, L.||Strange, B.|
|Mowbray and Stourton, L.||Strathcarron, L.|
|Munster, E.||Strathmore and Kinghorne, E.|
|Nelson, E.||Strathspey, L.|
|Norrie, L.||Sudeley, L.|
|O'Cathain, B.||Suffield, L.|
|Onslow, E.||Swansea, L.|
|Oppenheim-Barnes, B.||Terrington, L.|
|Orr-Ewing, L.||Teviot, L.|
|Oxfuird, V.||Thomas of Gwydir, L.|
|Pearson of Rannoch, L.||Tombs, L.|
|Pender, L.||Trumpington, B.|
|Perry of Southwark, B.||Ullswater, V.|
|Quinton, L.||Vaux of Harrowden, L.|
|Reay, L.||Vinson, L.|
|Renfrew of Kaimsthorn, L.||Waddington, L.|
|Renton, L.||Westbury, L.|
|Renwick, L.||Whitelaw, V.|
|Rochdale, V.||Wise, L.|
|Saltoun of Abernethy, Ly.||Wynford, L.|
§ Resolved in the negative, and amendment disagreed to accordingly.
§ 4.35 p.m.
§ Lord Flowers moved Amendment No. 2:
§ After Clause 6, insert the following new clause:—
§ ("Offers for sale of securities
§ Where an offer for sale of any securities of the successor company is to be made by or on behalf of the Crown or any invitation or advertisement is to be issued by or on behalf of the Crown in connection with the offer, the Secretary of State shall consult such persons appearing to him to be representative of the universities of the United Kingdom as he considers appropriate.").
§ The noble Lord said: My Lords, I move this amendment, to which I put my name as did the noble Lords, Lord Kirkwood, Lord Williams of Elvel and Lord Beloff, in the same minimalist spirit that characterised our proposed amendments at earlier stages; that is to say, minimal assurances are sought that the research community is to be involved at all relevant stages in the process of privatisation. I shall not rehearse the arguments that have already been offered for stressing the unique nature of this particular privatisation and its importance to the research community. I have no wish to bore myself or other noble Lords who already understand perfectly well what is at stake, even if it seems that the Minister does not.
§ My anxiety that the assurances which we sought have been granted in the articles of association but do not appear on the face of the Bill is by now well known. It has already been rehearsed today by the noble Lord, Lord Peyton, and need not be repeated. The present amendment simply asks that appropriate representatives of the universities be consulted about the details of sale. Nothing that the Minister said in response to the first amendment led me to suppose that that will necessarily be the case. It does not seem much to ask and yet it would give much comfort to the research community. If the Minister gives his word today that such representatives will be consulted, he will have granted, albeit belatedly, what we sought.1024
§ Perhaps I may be permitted just one brief elaboration of our remaining worries. Under its present forceful management, BTG has been very successful in attracting business from the United States. The noble Lord, Lord Reay, has already referred to that. It has shown that in some cases at any rate it can look after the interests of American inventors better than the Americans can. Experience gained from processing British property rights is being profitably exported to our competitors. We are proud of BTG for that.
§ However, it is easy to imagine its success being exploited to our detriment. It is easy to imagine that British invention will have less and less significance to a privatised BTG. All it requires is for BTG to fall into the hands of business interests whose chief preoccupation is not with the support of British innovation. As the noble Earl, Lord Halsbury, has already indicated, it is hoped that in some way or other universities and some of the charitable foundations will join with others in a consortium to buy BTG. If that is to have any hope of being fulfilled, it is essential that the universities not only know who their bedfellows are to be in the new company but feel comfortable with them. If they do not, they will not join in.
§ Moreover, they most probably will feel bound—as I have remarked at an earlier stage—to set up their own version of BTG, building on the experience already acquired by a number of them. That would be an unnecessary and wasteful exercise. The Government have a duty to avoid that difficulty. They should not simply be driven by the Treasury's short-term objective of maximising the profits from the sale but should have regard to long-term benefits.
§ If the Minister accepts this perfectly harmless amendment, as I very much hope that he will feel able to do, it will provide the minimum safeguards that we seek that BTG will not fall into the wrong hands at an early stage. If he cannot accept it, I hope that he realises that he will be sending an unmistakable signal to the universities and to the remainder of the research community. It will tell them that they can no longer be confident that their interests and their contributions to the future of British technology will be safeguarded and promoted by the body whose duty that hitherto has been. It is for that reason that I urge the Minister to consider this extremely modest amendment with great care. I beg to move.
§ Lord Kirkwood
My Lords, it is a small but important amendment to the Bill. All it asks is for the Secretary of State to recognise the importance that the universities and their members attach to the only real asset possessed by BTG—that is, the intellectual property rights—when the sale of securities in that company is being considered. After all, that intellectual property has been generated in the main by researchers in universities and research councils working with public funds. They feel a strong proprietorial interest in how IPR are used and disposed of.
It should be remembered that BTG was originally set up to provide funding for development of research ideas into commercial products and processes and as an institution to which patents arising from work in 1025 universities and research councils could be entrusted for their full exploitation for the benefit of all concerned, including the inventors. If the researchers see that the successor company is not being run to their long-term interest and lose faith in it, they will not be happy to see their patentable work being taken up by the new company. As the noble Lord, Lord Flowers, has stressed, that will inevitably lead to a demand for the resurrection of the old style BTG. I cannot believe that to be the intention of the Government in drafting the Bill. I urge your Lordships to support the amendment.
§ Lord Williams of Elvel
My Lords, I should like to give our support to the amendment of the noble Lord, Lord Flowers. I am sure the House will be grateful to the noble Lord for returning overnight from Hong Kong for this important event. He wished to participate in your Lordships' Third Reading because this is the last opportunity that we have for trying to incorporate into the Bill even the most minimal amendments. We began with what I considered a fairly minimal amendment from the noble Lord, Lord Peyton, and the House decided to refuse that on the advice of the Government. We then considered an even more minimal amendment—if such there can be—Amendment No. 1A, which I moved. On the advice of the Government the House decided not to accept that.
The amendment moved by the noble Lord, Lord Flowers, and supported by the noble Lord, Lord Kirkwood, does no more than write into the Bill a process of consultation. For the life of me I cannot see why that should not be in the Bill given the arguments advanced by the noble Lords, Lord Flowers and Lord Kirkwood, and those that I have heard from all quarters that the morale of the staff in BTG is being gravely affected by the attitude of the Government. They do not seem to wish to entertain any form of const ltation with the people who produce most of the business—the universities. That seems to be the essence of the argument.
If the Minister is able to give us an absolute and clear undertaking that he will abide strictly by the text of the amendment, then I dare say that the noble Lord, Lord Flowers, may wish to consider whether he puts it to the opinion of the House. However, having heard the Minister on the previous amendment I am bound to say I am extremely pessimistic about that possibility.
If your Lordships decide that even this amendment and all other amendments are not acceptable it will mean that the articles of association—which have been quite properly brought forward by the Government as a result of requests from all sides of the House during different stages of the Bill—will have no formal consideration in another place. If there is no amendment from this House there will be no consideration of Lords amendments in another place and therefore no consideration of the articles of association. I believe that that is a denigration of the role of a revising Chamber.
1026 I support the noble Lord, Lord Flowers. I very much hope that the Government will accept that this simple and minimal amendment should be incorporated on the face of the Bill.
§ 4.45 p.m.
§ Lord Beloff
My Lords, I had put my name to the amendment in the light of the general considerations advanced on behalf of the universities in previous stages of the Bill. However, my determination to say something about it has been much increased during the course of our proceedings today, in particular after listening to the very important speech of the noble Earl, Lord Halsbury.
When we dispersed in July, one would have thought that the Recess would enable the Government to enter into proper consultation with universities about the possibility of a consortium in which they would find their role and that the Government would be able to indicate to us the broad lines of their thinking as to the participation of the scientific community in the development of its own initiatives, research and discoveries. Instead we return—and the Minister has my sympathies—to a cloud of embarrassment. We are talking about something which we cannot grasp, which is not before us and which we cannot see.
I fear that there are only two possible explanations. One is that the Department of Trade and Industry is not very interested in the universities and their possible contribution to Britain's industrial future. If it were to consider itself as having a sponsoring role it would be in the forefront of those who argue that it is essential that the interests of the scientific community be protected in some form after privatisation. At this late stage, it might have had difficulty in convincing the universities, but if the Minister had been able to say, "These negotiations have gone on. We have perhaps not yet reached a conclusion but we hope to. We are fully seized of the anxieties of universities", then perhaps the amendment might not have been necessary. The other explanation is that the Minister and his department share our views and anxieties but have been overruled by other considerations emanating from the Treasury.
There may well be a Secretary of State who is too lily-livered to stand up to the Treasury, and it would not be the first time. Also, we must take into account the hostility which the Treasury appears or has appeared recently to show to the universities in a number of other respects. For example, when VAT was raised, the health authorities were reimbursed for the extra burden on the health service. However, universities were asked to accept the burden at the expense of their proper operations.
We are now told that, having been exhorted by successive Ministers to do more to commercialise their operations in respect of their inventions and discoveries, the universities are not merely to be taxed on the profits of those operations but are to be taxed retrospectively. That is a monstrous indication of the indifference somewhere in government—and I suspect in the Treasury—towards the academic community as a whole.
1027 while agreeing that this amendment is, if one likes, a matter of form, I appeal to the Minister even at this late stage to give some encouragement to noble Lords on this side of the House to believe that the Government are concerned about the future of British research and that they intend to show that they are so concerned.
The Earl of Halsbury
My Lords, on Amendment No. 1 I appealed to the Minister to abandon secretiveness and take us into his confidence and not face us in due course with a fait accompli achieved by anonymous, faceless officials who wish to do things all their own way. He did not deign to reply to my appeal so I renew it in supporting this amendment.
§ Baroness Park of Monmouth
My Lords, I support the amendment. BTG has hitherto combined most of the best features of public service and private enterprise. The Bill, as it stands, must give the universities the impression that they cannot get through to the Government even on the very special issue of the future of intellectual property.
The pity of it is that many of the Government's intentions in this matter seem to be wholly at odds with their own declared and proper policies. The Secretary of State for Education and Science told the universities, in his speech to the CVCP in September, that there are two issues that we need to get right: research funding and quality assurance. He said that there need to be significant increases in efficiency. He was concerned that any changes should deliver increased efficiency without compromising standards. It is hard to see how the measures proposed to change an already efficient and profitable institution will achieve that.
The other Minister most concerned—the Secretary of State for Trade and Industry—when speaking at the party conference this month recognised the country's outstanding success in scientific research but considered that our weakness had been in turning brilliant ideas and significant innovations invented in Britain into commercially successful products. That is exactly what BTG has been doing so why change it?
I have always been a strong advocate of bringing industry and the universities together. I urge the Secretary of State for Trade and Industry, when he speaks of plans to help the universities to respond to the needs of industry, to recognise that the present operations of BTG already go far in exemplifying just that. He struck a very sympathetic note when he spoke of "the ears of government out there listening to industry". I accept that the Minister has gone a long way towards meeting our anxieties. However, I ask that the ears of government listen really hard to the voices of the universities on this issue.
We ask that the Secretary of State should listen to those who wish to ensure that the consortium which takes over is, first, British and, secondly, accepts the same commitment as the present body to support innovation in the long term. The universities should be given the fullest opportunity to establish from those consortia applying what are their intentions. Those considerations should determine the final choice.
1028 For the Government to establish some rapport with the universities on this issue is all the more important at a time when, as the noble Lord, Lord Beloff, reminded us, if we are to believe recent press statements the Inland Revenue is apparently planning to penalise universities retrospectively for being efficient, business-like and cost-effective in the use of their buildings for conferences.
Any action tending to reassure the universities that they can get through to Ministers and are heard would be especially valuable now. I urge the Minister to consider that.
§ Lord Peyton of Yeovil
My Lords, I apologise to your Lordships because I was not here when the noble Lord, Lord Flowers, moved the amendment. However. I wish to make it quite clear that it was and remains my intention to support the amendment.
I endorse what the noble Lord, Lord Williams, said about the amendments which have been moved this afternoon being, as he put it, "minimal". I prefer the word "Mondest". The amendments have not been of earth-shaking consequence but they sought a very small concession on the part of the Government, in this instance, to the universities. It would certainly be within your Lordships' recollection that our legislation is littered with requirements to consult all manner of people of much less eminence than the leaders of the universities with whom we are here concerned.
Therefore, I hope that my noble friend will be prepared to give what is not much more than a courteous nod in the direction of the universities. I hope that he will say that their opinions are important and that he will seek out those opinions.
I endorse what my noble friend Lord Beloff said about how nice it would be if every now and again the Government were to attend to the wishes and views of those behind them. I accept that my noble friend, who is not the head of his department, must take his instructions from elsewhere. Perhaps he will communicate to those who give him the instructions that he must not accept amendments wherever they come from or whatever the reason for them, that those who sit behind him are deeply and bitterly disappointed by the repetition of such attitudes.
The Earl of Harrowby
My Lords, the noble Lord, Lord Williams, referred to the possibility of the noble Lord, Lord Flowers, withdrawing his amendment. I ask him not to do that. As a very recently retired chairman of a large industrial company using high tech, I have the greatest respect for BTG. I hope that if Ministers are not prepared to accept the amendment, they will recognise the strength of general feeling of noble Lords on both sides of the House that this Bill is bad and undesirable. A Division would give us an opportunity to show that fact once more.
§ Lord Butterfield
My Lords, I support the noble Lord, Lord Flowers, and other noble Lords on this amendment. I should like to refer to an event which shows the importance of the consultation process which the noble Lord, Lord Flowers, and other noble Lords have included in the amendment. The amendment states: 1029the Secretary of State shall consult such persons appearing to him to be representative of the universities".As I understand it, many years ago a young man was working in a laboratory trying to synthesise the steroid ring, which is the core of the contraceptive pill. He was fairly close to achieving that when the money began to run out and he lost one of his major research assistants. He went to the NRDC—the National Research Development Corporation—to ask whether it could give him a bridging grant. However, there was no way in the August-September Recess that anyone could consult with government to obtain that bridging grant for him.
Anxious to complete his researches the young man accepted an offer of a modest sum from an American pharmaceutical house. Its terms were exactly the kind of terms adumbrated by my noble friend Lord Flowers in his anxieties for the future. They were, "Yes, dear Dr. Herchel Smith, we will give you some money and support your chap, but we want a major stake in the royalties of any invention which emerges". A major invention did emerge. The clinical school at the University of Cambridge is immensely grateful to Dr. Herchel Smith, who, among other things, established a couple of Chairs for us and various other major university benefactions. But how much better it would have been had there been means to support that young man, so far down the road that many people could have guessed he would succeed in the synthesis of the steroid ring, which was of such immense importance. I believe a quarter of the people taking the contraceptive pill all over the world are taking pills based on his invention. How much better it would have been had the whole development been kept in this country and had there been the amount of consultation which I understand my noble friend Lord Flowers and his colleagues are seeking in the amendment.
I feel a tinge of concern for the Minister. It seems to me that we are all bowling very hard bouncers at him. But there is a simple thing to do under these circumstances and I am sure that the Prime Minister would go down this line: declare!
§ 5 p.m.
§ Lord Reay
My Lords, the purpose of the amendment is to require the Secretary of State to consult with the universities about any offer for sale or invitation or advertisement to be issued in connection with the sale.
As I understand it, the justification for the proposed consultation is that the universities represent a very special interest group which must be closely involved with the choice of purchasers and the terms of the sale agreed. I entirely acknowledge that universities have played and continue to play a vital role in the activities of BTG. It is in recognition of that role that we have provided in the articles of association that one of the directors of the company should be appointed by the CVCP—a right which they do not possess at the present time—and also that another director should be experienced in the commercial exploitation of public sector research.
1030 In addition, my department and its advisers on the sale have been in regular contact with the CVCP, and my colleague Edward Leigh and I also had meetings with the committee. My department explored ideas from the CVCP for taking a shareholding as part of a consortium in the privatised company. In our view the amendment is unnecessary. We have already consulted directly and fully with the universities, not to mention the eloquent and influential contributions made by members of the academic world in your Lordships' House during the passage of the Bill.
Some noble Lords seem to fear that despite the special share and the other provisions in the articles, a successful consortium could emerge which was anathema to the universities. I gave specific assurances to the House on that point, which I should like to repeat; namely, that the Government fully intend to sell BTG to buyers who will take a long—term view and who will want to continue its traditional transfer technology activities. We shall choose the right consortium carefully, bearing in mind both those factors and the need to achieve the best possible return for the taxpayer. Specifically in the information memorandum which we shall be issuing to interested parties we shall be seeking assurance from them on those points and we shall closely scrutinise their proposed plans for meeting those objectives.
I question whether it is correct to consider picking out the universities for any further special treatment. There are other interested parties in the privatisation who may feel that they are equally entitled to be consulted in the same way. We must not, for instance, forget that a large and growing proportion of BTG's supply of inventions comes from non-academic sources—over 50 per cent. in 1991. Apart from the private sector inventors, there are also the worldwide licensees. There are in addition the management and the employees. There are also overseas academic institutions, joint venture partners, polytechnics, government research establishments and so on. All those interests could make a claim for further consultation. All those interests would be discriminated against, in favour of British universities only, by the proposed amendment.
But that leads me to an even stronger reason why it may be wrong to single out the universities in that way for involvement in consultation at this stage. The CVCP indicated that it may be interested in taking a stake in the privatised BTG. Therefore the universities could be involved with specific bidders, or even as bidders themselves. In that situation it would be wholly inappropriate, even if we accepted the desirability on other counts, for the Government to consult with the universities before making the sale. We would be putting the universities in an invidious position, and it would be quite improper for us to do so.
In the light of that I must counsel noble Lords to accept that the best route to meet their concerns is that down which we have already travelled—the safeguards and further assurances the Government have given and our continuing pledge to consider very carefully all representation. I ask the noble Lord to withdraw the amendment.
§ Lord Flowers
My Lords, I am extremely disappointed in the Minister's response. Noble Lords will be able to judge from the short speech that I made why I am disappointed and there seems little point in repeating it.
All we are asking is that the universities should be consulted with regard to who their partners are to be. That is all. It is a harmless request. To deal with one point made by the Minister, I am sure that the universities—which, after all, are the largest customers of BTG—would be regarded as a suitable representative of the research community at large. The amendment is completely harmless. I know that many other noble Lords agree with me. In those circumstances I seek the verdict of the House.
§ 5.8 p.m.
§ On Question, Whether the said amendment (No. 2) shall be agreed to?
§ Their Lordships divided: Contents, 111; Not-Contents, 102.1032
|Division No. 3|
|Addington, L.||Hylton, L.|
|Allen of Abbeydale, L.||Hylton-Foster, B.|
|Alport, L.||Jacques, L.|
|Ardwick, L.||Jay, L.|
|Aylestone, L.||Jeger, B.|
|Beloff, L.||Jenkins of Hillhead, L.|
|Birk, B.||Jenkins of Putney, L.|
|Blackstone, B.||Kilbracken, L.|
|Blease, L.||Kilmarnock, L.|
|Bonham-Carter, L.||Kirkwood, L.|
|Bottomley, L.||Listowel, E.|
|Broadbridge, L.||Liverpool, E.|
|Brookes, L.||Lovell-Davis, L.|
|Butterfield, L.||McCarthy, L.|
|Caldecote, V.||Mclntosh of Haringey, L.|
|Carmichael of Kelvingrove, L.||McNair, L.|
|Carter, L. [Teller.]||Mallalieu, B.|
|Cledwyn of Penrhos, L.||Mayhew, L.|
|Clinton-Davis, L.||Milner of Leeds, L.|
|Dacre of Glanton, L.||Molloy, L.|
|Dainton, L.||Montagu of Beaulieu, L.|
|Darcy (de Knayth), B.||Morris of Castle Morris, L.|
|David, B.||Mulley, L.|
|Dean of Beswick, L.||Nicol, B.|
|Desai, L.||O'Cathain, B.|
|Elibank, L.||Ogmore, L.|
|Ennals, L.||Park of Monmouth, B.|
|Erroll, E.||Peyton of Yeovil, L.|
|Ewart-Biggs, B.||Pitt of Hampstead, L.|
|Falkland, V.||Porter of Luddenham, L.|
|Fitt, L.||Prys-Davies, L.|
|Flowers, L.||Rea, L.|
|Gainsborough, E.||Redesdale, L.|
|Gallacher, L.||Richard, L.|
|Galpern, L.||Ritchie of Dundee, L.|
|Graham of Edmonton, L.[Teller.]||Robson of Kiddington, B.|
|Grey, E.||Russell, E.|
|Halsbury, E.||Seear, B.|
|Hampton, L.||Sefton of Garston, L.|
|Hanworth, V.||Serota, B.|
|Harris of Greenwich, L.||Shackleton, L.|
|Harrowby, E.||Sherfield, L.|
|Hatch of Lusby, L.||Soulsby of Swaffham Prior, L|
|Hayter, L.||Stedman, B.|
|Hilton of Eggardon, B.||Strabolgi, L.|
|Hollick, L.||Taylor of Blackburn, L.|
|Hollis of Heigham, B.||Thomson of Monifieth, L.|
|Howie of Troon, L.||Tombs, L.|
|Hughes, L.||Tordoff, L.|
|Hunter of Newington, L.||Turner of Camnden, B.|
|Underhill, L.||White, B.|
|Varley, L.||Wilberforce, L.|
|Wallace of Coslany, L.||Williams of Elvel, L.|
|Wedderburn of Charlton, L.||Wilson of Langside, L.|
|Wharton, B.||Winchilsea and Nottingham, E.|
|Abercorn, D.||Johnston of Rockport, L.|
|Abinger, L.||Killearn, L.|
|Allenby of Megiddo, V.||Knollys, V.|
|Arran, E.||Lauderdale, E.|
|Astor, V.||Long, V.|
|Balfour, E.||Lyell, L.|
|Belhaven and Stenton, L.||Mackay of Clashfern, L.|
|Birdwood, L.||Macleod of Borve, B.|
|Blatch, B.||Margadale, L.|
|Blyth, L.||Marlesford, L.|
|Boardman, L.||Merrivale, L.|
|Borthwick, L.||Mersey, V.|
|Boyd-Carpenter, L.||Middleton, L.|
|Brabazon of Tara, L.||Milverton, L.|
|Brougham and Vaux, L.||Monk Bretton, L.|
|Butterworth, L.||Morris, L.|
|Caithness, E.||Mountevans, L.|
|Campbell of Croy, L.||Mowbray and Stourton, L.|
|Carnock, L.||Munster, E.|
|Cavendish of Furness, L.||Norrie, L.|
|Cochrane of Cults, L.||Northbourne, L.|
|Colnbrook, L.||Oppenheim-Barnes, B.|
|Constantine of Stanmore, L.||Orkney, E.|
|Daventry, V.||Orr-Ewing, L.|
|Davidson, V. [Teller.]||Pearson of Rannoch, L.|
|Denham, L.||Pender, L.|
|Denton of Wakefield, B.||Pennock, L.|
|Downshire, M.||Quinton, L.|
|Eccles, V.||Reay, L.|
|Effingham, E.||Renton, L.|
|Ellenborough, L.||Renwick, L.|
|Elles, B.||Rochdale, V.|
|Faithfull, B.||Saint Oswald, L.|
|Ferrers, E.||Savile, L.|
|Flather, B.||Sharples, B.|
|Fraser of Carmyllie, L.||Smith, L.|
|Fraser of Kilmorack, L.||Somerset, D.|
|Gainford, L.||Stodart of Leaston, L.|
|Gisborough, L.||Strange, B.|
|Greenway, L.||Strathcarron, L.|
|Hailsham of Saint Marylebone, L.||Strathmore and Kinghorne, E.|
|Hardinge of Penshurst, L.||Suffield, L.|
|Harmsworth, L.||Swinfen, L.|
|Henley, L.||Thomas of Gwydir, L.|
|Hesketh, L. [Teller.]||Trumpington, B.|
|Hives, L.||Ullswater, V.|
|Hooper, B.||Vaux of Harrowden, L.|
|Howe, E.||Waddington, L.|
|Huntly, M.||Westbury, L.|
|Jeffreys, L.||Wise, L.|
|Jenkin of Roding, L.|
§ Resolved in the affirmative, and amendment agreed to accordingly.
§ 5.17 p.m.
§ Schedule 1 [Provisions supplementary to s. 1.]:
§ Lord Williams of Elvel moved Amendment No. 2A:
Page 10, line 48, at end insert—("and
(c) the NRDC Group Pension Fund including any accrued surpluses shall remain solely for the benefit of the members of the fund and their dependants and shall not be used by the successor company for any other purposes.")
The noble Lord said: My Lords, the purpose of the amendment is very simple. As your Lordships will be aware, the pension fund has been a contributory one. The contribution from the employer has obviously been indirectly from the taxpayer since at the moment
this provision is in the public sector. Under the note on the pension fund in the British Technology Group accounts, it is revealed that, in admittedly the last preliminary actuarial valuation, the fund has a substantial surplus which has accrued to the scheme. The annual report states:
On the basis of this draft valuation and on the actuaries' subsequent recommendation, the trustees have agreed to continue the suspension of the employer's contributions and benefit improvements are being considered".
The important point is covered by the following words:
It is not anticipated that contributions will be necessary for a period of 10 years or more".
In other words, there will be a pensions holiday for the employer for 10 years or more on this actuarial valuation. The surplus that has accrued to the scheme is one that should be to the benefit of the taxpayer. It is what the taxpayer has contributed to the pension scheme of the present employees of the British Techrology Group.
§ If the Government are saying that the accrued surplus will be for the benefit of the members of the fund—and that is the point of my amendment—then as a taxpayer I am perfectly relaxed, if I may put it like that. It is sensible to increase the benefits of the members of the scheme. However, if the owners of BTG, when it is privatised, are to be relieved of the necessity to contribute towards the pension scheme at all and, as has happened on several occasions, strip out the surplus funds from the pension scheme, that is a completely different matter. That is stripping out money that the taxpayer has put in for the benefit of the present employees of BTG and using it to repay themselves the costs or part of the costs of purchasing the business in the first place. I hope very much that we shall get assurances from the Minister on exactly how he intends that the privatised company should treat this surplus. I beg to move.
The Earl of Halsbury
My Lords, I do not know whether I have the temerity to query something said by the: noble Lord, Lord Williams of Elvel. However, the taxpayer has not put up anything towards the pensions of NRDC. It has all been paid off out of the profits. NRDC owes the taxpayer nothing.
§ Lord Williams of Elvel
My Lords, with the leave of the House, the taxpayer has been the owner of the business. As the noble Earl will know, the profits of the business are the property of the owners of the business.
§ Lord Reay
My Lords, when this amendment was tabled at Committee stage, I gave a detailed explanation of the complex issues regarding the pension fund and I made the Government's position clear.
At Committee stage the noble Lord raised a number of specific anxieties. The first of these related to the election of trustees, a practice that all of us would like to see continue after privatisation. There is no reason why this should not be the case. As has been stated on several occasions throughout the passage of this Bill, there is an express provision in paragraph 2 of Schedule 1 to the Bill that states: 1034Any agreement made … in relation to the Corporation … which is … effective immediately before the appointed day … whether or not in writing …shall be taken as from the appointed day as referring to the successor company".Further, for the avoidance of doubt, paragraph 4 of Schedule 1 states that this provision extends toany agreement or arrangement for the payment of pensions".I can only reiterate what I said in Committee. In the Government's view, the amendment would fall foul of statutory requirements, in particular the Income and Corporation Taxes Act 1988, and the NRDC trust deed itself.
It is not for the Government to dictate how accrued surpluses should be treated, particularly where this could jeopardise the favourable tax status of the fund by requiring benefits to be raised, or a surplus to accrue, beyond those limits permitted by the Inland Revenue. The treatment of surpluses is a matter for the trustees of the scheme, subject to the corporation's consent, based on advice they receive from the actuaries they appoint. In the past, on actuarial advice, active members, deferred pensioners and pensioners have enjoyed enhanced benefits and the employer has benefited from a contribution holiday. It would be contrary to the rules of the scheme to deny the employer, who has after all contributed to the surplus, the right to benefit from any surplus in this way.
§ Lord Williams of Elvel
My Lords, the point I was trying to make to the noble Lord was that the employer who has contributed to the scheme by using the profits which are his property and which could have been distributed to him by way of dividend has accumulated a surplus. If that surplus is now to be transferred lock, stock and barrel without any remuneration to the employer who has previously accumulated that surplus in the scheme, that is unfair both to the employees who are still contributing their widow's mite and to the taxpayer.
I imagine that the noble Lord will have heard the arguments that I have brought forward, and I hope —that is all one can do at this stage—that the Government will have that in mind when negotiating the sale price of the business. That is the proper way to go about it. I hope that when we come to the next two amendments the noble Lord will be a little more expansive on the changes that are taking place in negotiations between trustees and the unions on the trust deed itself. In the meantime, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Lord Williams of Elvel moved Amendment No. 2B:
2B Page 10, line 48, at end insert—
("( ) From vesting day, the right of the employer to veto any nomination for an elected trustee of the NRDC Group Pension Fund is terminated.").
§ The noble Lord said: My Lords, it may be for the convenience of the House if I speak also to Amendment No. 2C. The purpose of tabling these amendments is to ask the Minister whether he will give the House some indication of how negotiations on the revised trust deed are proceeding. When we debated the matter before the long Recess, he said that this was 1035 a matter to be decided in negotiation about the new trust deed. I have to tell him that employees are worried that not enough progress is being made. They would like to see a proper trust deed put in place before privatisation takes place.
§ We have discussed the specific points of the amendment. I accept that as they stand they are in certain respects defective and I would not wish to press them. However, I hope by moving these amendments I shall give the Minister an opportunity to tell the House and the employees how negotiations are going on the new trust deed. I beg to move.
§ Lord Reay
My Lords, I understand that we are taking Amendment No. 2C with Amendment No. 2B. Amendment No. 2B would remove the employer's existing right to veto any nomination for an elected trustee. As I stated during Committee stage, this amendment is not necessary. It can only be used after full consultation with the recognised trade union and if, in the opinion of the corporation, the person nominated is unsuitable to be a trustee.
The current trustee structure—three nominated by the corporation, three elected by the staff and an independent chairman acceptable to the other six—protects their independence and that of the fund. The chairman, who has a casting vote when necessary, has traditionally been chosen for his independence. It should also be noted that under trust law the trustees are required to act in the best interests of the members, or risk personal liability.
With regard to the question which the noble Lord asked me about a trust deed, I can say that there is a proper trust deed in place. That is a matter for the trustees.
I turn now to Amendment No. 2C. This amendment would give the trustees a veto on new members entering the scheme. During his preamble to the amendment at Committee stage the noble Lord suggested that all BTG employees on reaching the age of 30 must join the scheme. This is not so. The Social Security Act 1986 requires that all occupational pension schemes must operate on a voluntary membership basis. The NRDC scheme was accordingly amended in October 1988 to allow for that change in the law.
The trustees already have significant control over the introduction of new members in that they have a discretion to refuse to accept a transfer of past service benefits if these are not adequately funded. This is true of single or bulk transfers. The position in respect of future service is also within the control of the trustees as the employer's contribution rate necessary to fund future benefits is determined by the actuary appointed by the trustees. Any new members would have had to pay their way for the past and contribute at an appropriate rate if they wished to participate in the NRDC scheme for the future.
There are also employment law considerations. The option to participate in a pension scheme is often part of the terms and conditions of employment and is a benefit provided by an employer for his employees. An employer could be placed in an untenable position
1036 should the trustees be given a power of veto on membership above and beyond that which they held in regard to the adequate financing of the fund.
Any amendment to the NRDC pension scheme is a matter for the trustees and the corporation, not the Government, and I submit that it is not for the Government or Parliament to interfere in arrangements which are in any case subject to the due process of the law. In his report to members of the scheme in February 1991 the independent chairman of the trustees, specifically addressing worries raised by the prospect of privatisation, stated that:the trust deed gives at least as much protection as can be reasonably expected and at a level which compares favourably with other pension funds".He also reported that the legal advisers to the scheme advised that the pension fund trust can operate on the same basis as it does at present, when and if the ownership of the business changes. Therefore, in our view, these amendments are not necessary or appropriate. I hope that the noble Lord will not insist on them.
§ 5.30 p.m.
§ Lord Williams of Elvel
My Lords, I am grateful to the noble Lord for that reply, although he did not answer any of the questions that I asked, but one has in the end to accept that at Third Reading. I am sorry that he was not able to give the employees any assurances about how negotiations on the revised trust deed are progressing. It would have been very easy for that to have been done and it would have given the unions and their members a good deal of reassurance that everything was being done fair and clean. Nevertheless, the noble Lord has not been able to give me any further information. There is no more that I can reasonably say or do. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendment No. 2C not moved.]
§ Lord Reay
My Lords, I beg to move that the Bill do now pass. I took the opportunity of the debate on the first amendment at Third Reading to spell out what the Government had done during the passage of the Bill through the House to meet concerns expressed in all quarters of the House regarding the continuation of BTG's activities after privatisation. I do not think it necessary to repeat it now. Suffice it to say that in taking a time limited special share, and combining that with writing four special provisions into the articles of association, we may not have gone as far towards guaranteeing the continuation of BTG's traditional technology transfer activities as all noble Lords would have wished, but I believe that we have gone about as far as is consistent with carrying out a successful privatisation of the company. I am grateful to noble Lords who took part in our debates for the constructive and moderate nature of their interventions and I congratulate them on the valuable contribution they have made to the outcome I have described.
§ Moved, That the Bill do now pass.—(Lord Reay.)
§ Lord Williams of Elvel
My Lords, the House will be most grateful to the noble Lord, Lord Reay, for the 1037 thoughtful way in which he has handled the Bill. He has shown extreme courtesy to noble Lords who have contributed to our debates. It has been a long process. Our proceedings have gone over the long Recess. We must recognise that the Government have persisted—some of us would say with stubbornness, others would say with resolution—in their intention. We must accept that their intention will become law.
Your Lordships have today made a substantial contribution to a better Bill, not just because the amendment which the House has accepted will be on the face of the Bill but because it will give another place an opportunity to consider the articles of association that have come out in your Lordships House during our debates and which another place has not been able to consider before.
It is no secret that on these Benches we oppose the Bill. I said so at Second Reading and I have said so continuously. I have no reason to change my mind. I would issue two warnings to the Government as they move forward towards privatisation. They both concern the information memorandum to which the Minister referred earlier. First, if my party achieves office at the next election we will establish, if BTG is by then privatised, a rival transfer technology and patent agency. We believe that this is something properly in the public sector. We also believe that the setting up of that agency would attract many of the staff currently employed at BTG. Therefore, potential buyers should be made aware of that point. As in other privatisation prospectuses, it is only fair that buyers should be made aware of the risks that attend the purchase.
Secondly, future buyers should also be made aware of the dispute at BTG which is currently before ACAS. There is a dispute between the trade unions and the management side following a management decision to attempt to change the date of the employees' annual pay award. What is at stake in the dispute is not necessarily a value but the mechanics of granting pay awards. The unions feel strongly about this matter. They have taken it to ACAS. It is in front of ACAS at the moment. I am not suggesting that there will be industrial action. That is not for me to comment on. It is for the unions to take a decision on as and when it becomes necessary for them to do so. However, I believe that a potential purchaser of the company has the right to know that a complex and difficult dispute is at present in front of ACAS. That should be in the information memorandum.
At Second Reading I said that this privatisation was unprecedented. I have said it again today and other noble Lords have said it again today. It is unprecedented because it does not follow any of the characteristics of previous privatisations, the list of which the noble Lord the Minister read out again today. It therefore needs very special consideration and treatment. It is not simply a property that can be flogged off to the highest bidder. For that reason we have continued to press amendments to make sure that the Government are aware of that and live up to their responsibilities in making sure that the 1038 ownership of the company after privatisation will maintain the integrity and continuity of the business. That is fundamental.
We have passed an amendment today. It will go to another place and therefore your Lordships will have an opportunity to reconsider the matter should another place decide that it does not like the amendment. I conclude by thanking those of my colleagues on the Opposition Benches who have contributed to our proceedings. I also thank those on the Cross Benches who have contributed and those noble Lords who are members of the CVCP for their extensive contributions to our debates. I again thank the noble Lord the Minister for his kindness and consideration.
§ Lord Kirkwood
My Lords, I support the noble Lord, Lord Williams. On this side of the House we greatly approve of that.
§ On Question, Bill passed, and returned to the Commons with an amendment.