Transport Research Laboratory (Hansard, 14 April 1994)

§ The Parliamentary Under-Secretary of State, Department of Transport (Lord Mackay of Ardbrecknish)
My Lords, my right honourable friend the Secretary of State for Transport announced on 30th March his decision that the Transport Research Laboratory should be privatised. After careful consideration of the reports produced by KPMG Peat Marwick and the Transport Select Committee of the other place, he came to the conclusion that retaining TRL in the public sector would risk its being unable to respond adequately to changes in its markets and so lead to a cycle of cumulative decline.

§ Baroness Castle of Blackburn
Will the Minister accept that that decision is further proof that we have an intellectually corrupt government? Is it not a fact that that important announcement was sneaked into another place by means of a Written Answer to a planted Question from the Tories the day before the other place rose for the Easter Recess? Are the Government trying to hide the fact that the announcement flies in the face of every piece of independent evidence put before them —notably, the report of its own consultants, KPMG Peat Marwick, which recommended that the most appropriate form of privatisation (if there had to be privatisation) was through a non-profit distributing company? Did not their consultants warn that a competitive sale of the kind that the Government suggest would involve substantial guarantees of future income, which the Government refuse to give to the publicly-owned laboratory? Did not the Select Committee, which has a Tory majority, announce that it cannot recommend the other place to accept privatisation until it has: much more convincing evidence than it has so far been given"? Can we not therefore have at least an assurance from the Government that the Minister will keep—

Noble Lords
Order, order!

§ The Lord Privy Seal (Lord Wakeham)
My Lords, I believe that the noble Baroness was about to finish her question, and perhaps we ought to have allowed her to do so.

§ Lord Mackay of Ardbrecknish
My Lords, after two previous Questions and an Unstarred Question, I am not surprised that the noble Baroness does not approve of the Government's decision to privatise the laboratory. But to accuse us of intellectual whatever-it-was flies in the face of the way in which the world has moved on. The world has moved on from a position in which absolutely everything had to be in the public sector and nationalisation was worshipped around the world to one in which every country—even those which still have nominally Left-wing governments—is heavily into privatisation programmes. That is what we have done. We did it because the advice given to us by our independent consultants, KPMG Peat Marwick, was that if we were to retain TRL in the public sector, it would lead to a cycle of cumulative decline. I cannot believe that is what the noble Baroness would like.

§ Lord Clinton-Davis
My Lords, would the Minister now concentrate on the realities? He referred to the report of KPMG. Can he point to the clear evidence that the Select Committee of another place called on to show that in fact privatisation would benefit that particular organisation? There is ministerial assertion in plenty; but where is the evidence? There is not a scintilla of it. Does not the Minister know that that is the case?

§ Lord Mackay of Ardbrecknish
My Lords, at the risk of repeating myself, KPMG Peat Marwick made it quite clear that retaining that research institution in the public sector would not be in its best interest and that it would go into cumulative decline. That may well be an assertion but it is one which the consultants based on the evidence that was before them and the work that they had done. In fact, it was their conclusion rather than their assertion. We believe that that is the case. I invite the House to join me in noting that all the other institutions and bodies that we have transferred into the private sector and away from the public sector over the past 15 years have been enormously successful. The path that we have shown to the rest of the world is being followed by every other country.

§ Lord Clinton-Davis
My Lords, Ministers have made many assertions in the recent past. They made assertions to the Scott Inquiry and assertions over the Pergau Dam. They now make assertions over this laboratory, based upon a report commissioned by them. They did not inquire into the issue of whether it was right to privatise TRL. They put it that that was an essential prerequisite. Will the Minister indicate what evidence there is that this move will benefit and certainly not prejudice TRL? I ask for evidence and not assertion. Will he also indicate why this announcement was sneaked in by Written Answer on the day before the Easter Recess? Does he agree that that is not a very desirable process?

§ Lord Mackay of Ardbrecknish
My Lords, the last time I was asked this question I was being attacked because we had not made a decision. promised then that we would make the decision as quickly as we could. I promised also that we would meet the trade union side. 1615 We did that the week before the Easter Recess and as quickly as we could thereafter we announced our decision.
The noble Lord knows as well as I do that there is a long tradition of Written Answers in the other place. He only needs to look at Hansard every day to see that. In relation to his substantive point, which is an important point your Lordships should not miss, the Department of Transport is the customer for this research. We believe that it would be better if there is competition for the research and if the institution is able to compete both for our work and for other work.

§ Lord Hailsham of Saint Marylebone
My Lords, would not the Opposition Benches create more conviction if they did not over-egg the omelette so? Is it not the case that, if there were a case for Written Answers in this House, it would be in order to prevent noble Lords from becoming so excited?

§ Lord Mackay of Ardbrecknish
My Lords, my noble and learned friend is quite right in regard to over-egging the omelette. In relation to every privatisation that has taken place since 1979 the Opposition have said, "Woe is me for I am undone" and "This will be a disaster. We will re-nationalise when we achieve power". But a year or two later all that changes and we hear no more regarding their threats to re-nationalise private sector involvement.

§ Lord Ezra
My Lords, we are discussing a research capability for a specific sector. What concerns some of us is the fear that there could be fragmentation if research facilities serving a whole sector are privatised. And this decision concerns not only transport but also the question of a research facility for coal which will arise in the coming debates on that subject. Does the noble Lord agree that there is reasonable ground for our anxiety that the research facilities may be fragmented and diminished under the uncertainties of private ownership?

§ Lord Mackay of Ardbrecknish
My Lords, of course we appreciate that that is a danger. That is why we are determined to achieve a sale for the TRL which will keep it together and enable it to provide efficient research facilities for the Government and for other people who may wish similar research work to be carried out.

§ Lord Jenkins of Putney
My Lords, is it not a case of ideology gone mad? Are the Government aware that every authority other than the Government recommended against privatisation in this case? Is the Minister also not aware that most of us on this side of the House accept that there are some areas in which public ownership is inappropriate and private enterprise ought to and should remain? If we can accept that, why cannot the Government accept a single area in which privatisation should not be proceeded with against all opinions to the contrary?

§ Lord Mackay of Ardbrecknish
My Lords, I do not think I will take a lesson on ideology gone mad from the noble Lord. We believe that the laboratory will operate 1616 better in the private sector and that we and other people who may wish to use its facilities will be able to obtain them not only from this laboratory but from other institutions and organisations which have them and which can also develop similar research facilities.

§ Lord Molloy
My Lords, can the Minister say that if, after the research and examination that the Government intend to undertake, he is apprehensive about the decision, he will bring the matter back to this House to enable us to make a further thorough examination to ensure that we do not commit a serious error?

§ Lord Mackay of Ardbrecknish
My Lords, in relation to the sale, we shall consider all the offers we receive and their nature. In relation to the research matters, I can assure the noble Lord that we in the Department of Transport will always be looking carefully at the research we wish to put out to tender. We shall want to ensure, whether from this laboratory or elsewhere, that we have facilities in this country to provide us with the kind of research our departments want.