HL Deb 28 April 1994 vol 554 cc813-5

3.25 p.m.

Baroness Castle of Blackburn asked Her Majesty's Government:

What representations they have received from 13ACMI (British Aggregate Construction Materials Industries) about the privatisation of the Transport Research Laboratory.

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 received representations last year from BACMI on various aspects relevant to the privatisation of the Transport Research Laboratory, which he considered before reaching his decision that the laboratory should transfer to the private sector.

Baroness Castle of Blackburn

My Lords, is it not a fact that that association represents the suppliers of raw materials for the construction and maintenance of our roads and therefore plays a vital role in our roads programme? Did it not in its representations to the Secretary of State urge that the laboratory should be left as an independent executive in the public sector because it is, the association maintains, a world class, indeed, the leading highway laboratory, first, because of its quality, and, secondly, because of its links with the Government, which privatisation will destroy?

Lord Mackay of Ardbrecknish

My Lords, in its letter to my right honourable friend last year BACMI welcomed the agency status and the improvements which that had brought to TRL. It did indeed express the reservations which the noble Baroness mentioned. However, my right honourable friend and I do not believe that the quality of research, nor indeed the reputation of the laboratory, is in any way affected by its ownership. We do not believe that its reputation depends on it being in the public sector.

Lord Clinton-Davis

My Lords, will the Minister indicate what was the cost of the undoubtedly expensive report from KPMG? Do the Government believe that consultants are always right, and are they therefore prepared to deny the evidence and support of most people who are against the proposal? Is the proposal based simply on the assertion that TRL is suffering from cumulative decline? Is it not rather the case that it is the Government who are suffering from cumulative decline?

Lord Mackay of Ardbrecknish

My Lords, certainly there is something cumulative about this Question, as it comes round again and again. KPMG Peat Marwick pointed out that if the laboratory remained in the public sector it would run a real risk of entering a cycle of cumulative decline. We feel that the: only way to prevent that is to move the laboratory into the private sector. As regards the noble Lord's first question, I am afraid that I cannot tell him the cost, but I shall certainly write to him on the subject.

Lord Clinton-Davis

My Lords, was any scientific evidence forthcoming? Did the Government bother to take advice from a firm of scientific consultants rather than a firm of accountancy consultants?

Lord Mackay of Ardbrecknish

My Lords, I have explained to the House on a number of previous occasions that KPMG took advice from a wide range of experts, including experts in this particular field, as many of the major consultancy firms such a; KPMG do.

Baroness Castle of Blackburn

My Lords, is it not a fact that KPMG recommended in its report that the only possible form of privatisation which could preserve the integrity and expertise of TRL would be through the setting up of a non-profit distributing company? Have not the Government rejected the advice of their own consultants? Are they not proceeding to examine the possibilities of a competitive sale which KPMG said could not have any chance of succeeding unless the Government were to give massive contracts and support to the private company which they are refusing to TRL?

Lord Mackay of Ardbrecknish

My Lords, in the future, when TRL is in the private sector, the Department of Transport will be putting out contracts for research, as indeed it does at present. TRL will be able to compete for those contracts. It will then receive the money if it wins those competitions. On the other point, yes, indeed, KPMG suggested one specific method of moving TRL to the private sector. We have not decided against that. However, we think that we should have a wider competitive situation before we necessarily come to a conclusion agreeing with KPMG.

Lord Stoddart of Swindon

My Lords, the noble Lord stated that the reputation of the laboratory did not depend upon it being in the public sector. However, is he aware that in such matters the reputation may well depend on the laboratory being in the public rather than the private sector. Why should an organisation which has been in cumulative ascendency for the past 60 years now go into cumulative decline? We need an answer to that.

Lord Mackay of Ardbrecknish

My Lords, I have answered that point, too, on a number of occasions. In creating an agency status, the Department of Transport decided that it would become more the customer of TRL and would be prepared to look elsewhere in setting out its research needs so that other people as well as TRL would be able to compete in meeting those needs. Against that background, KPMG advised strongly that the construction of TRL within the public sector would make it increasingly difficult for it to compete, and that is what would cause the cumulative decline.