§ 2.38 p.m.
§ Lord Thomson of Monifieth asked Her Majesty's Government:
§ What steps are being taken to ensure that any disposal by National Transcommunications Ltd. of the intellectual property and patents formerly belonging to the Independent Broadcasting Authority is consistent with the national interest.1558
My Lords, the disposal of assets, including intellectual property and patents, is a commercial matter for the company to decide.
§ Lord Thomson of Monifieth
My Lords, is the Minister aware that engineers in the former IBA engineering research and development department produced developments which give Britain and the European Community a potentially important competitive advantage in terms of future high-definition television technology? Is he further aware that his Answer will cause a great deal of anxiety that the Government will allow purely short-term market considerations to prevail which will result in those advantages being squandered?
My Lords, I do not believe that there is any likelihood of those advantages being squandered because the new company will be able to use its technology, assets and engineering skills to compete in the market in Europe.
§ Lord Peston
My Lords, will the Minister enlarge on his original Answer to the noble Lord, Lord Thomson of Monifieth? Does his Answer mean that with respect to this enormously important area of intellectual property, there is no national interest and therefore the Government themselves have no interest; or do the Government rely on the company's commercial interest to serve the national interest? Is that what used to be called the Thatcherite view, which I thought had gone? Will he tell us what his Answer means?
My Lords, the Government have an interest because when National Transcommunications Ltd. was sold, it was sold with various IBA patents. The Government have procedures so that if those patent incomes reach a certain level, they will benefit from a clawback of some of the profits. Equally, if the company is floated on the stock market between 1994 and 1998, there will be a clawback on the extra profits that the company might receive and on some of the property assets, and so the Government do have an interest.
§ Lord Trefgarne
My Lords, is my noble friend aware that his Answer will provide some reassurance to those of us on this side of the House? What are noble Lords opposite seeking? Is it some sort of national quango to preside over all intellectual property? Heaven forfend!
My Lords, I am grateful to my noble friend for his support. The patents form an important part of the new company's assets; but the company's main assets are the 500 or so masts throughout the country which are used to transmit television programmes.
§ Lord Dean of Beswick
My Lords, does the Minister recall what happened to Inmos? The same arguments were put then: that Inmos should not be sold in the private sector to EMI; but it was. EMI then sold it to French companies with the result that the industry now has a massive balance of payments deficit. From 1559 where does the Minister draw his conclusion that such a thing cannot happen again, if the Government do not take a certain course of action?
My Lords, the noble Lord makes an interesting point, but it is wide of the Question on the Order Paper and the company that we are discussing.
§ Lord Renton
My Lords, is my noble friend aware that it would defeat one of the main purposes of privatisation if Ministers were to bear the responsibility for the kind of decisions referred to in the Question?
§ Lord Thomson of Monifieth
My Lords, is the Minister saying that if these important national assets which have such big implications in terms of our future technological competitiveness were to be sold to our Japanese or American competitors, the Government would stand idly by?
My Lords, the Government have safeguarded their interest in the patents. The company is a British company. Its main assets are in this country. Its MAC system and its patents are part of a European project.
§ Lord Peston
My Lords, does the noble Viscount fully understand the problem? The problem is precisely the one to which his noble friend Lord Renton referred. Is he not aware that the danger here is that such a company when strapped for cash and anxious to raise some cash rapidly will sell valuable patents, the result being that in future the users of such intellectual property in this country will end up paying Japanese or other people for licences, and so on? If this country has any future at all, it is in the area of exploiting our intellectual property. The whole point about privatisation is whether this new body is capable of doing so.
My Lords, if any company or any person uses the patents, a certain amount of money must be paid for doing so. That applies whoever owns the company, whether it be English or Japanese-owned. It is important to note that those patents are in this country and that both the country and the Government have an interest in the matter. The company cannot sell or transfer the patents presently held by it through the GIE MAC system (which is part of a European project) without the Government retaining their ability for the clawback of extra flotation profits.
§ Lord Molloy
My Lords, in respect of the answers which the Minister has given to the noble Lord, Lord Thomson, and other noble Lords on both sides of the House, can he say that what he has said now will be rigidly adhered to in the security interests of our nation, and that in a few months' time those answers will not be changed by the Government thus putting security at risk?
My Lords, I am not entirely sure what the security interest might be on transmitting ITV programmes. However, I do not think that it has any relevance in this matter.
My Lords, does my noble friend agree that the fears of noble Lords opposite are totally groundless? If a company has valuable patents—assuming that such patents have any value—it would not be necessary to sell those assets in order to raise cash. Indeed, there are many other ways of raising cash on the open market.
My Lords, my noble friend makes an important point. That is indeed the case. The company has backing and the patents are a fairly small but important part of its assets.