HL Deb 29 June 1994 vol 556 cc776-8

3.1 p.m.

Baroness Castle of Blackburn asked Her Majesty's Government:

Whom they have appointed as their financial advisers on the sale of the Transport Research Laboratory.

The Parliamentary Under-Secretary of State, Department of Transport (Lord Mackay of Ardbrecknish)

My Lords, we expect to appoint financial advisers on the sale of the Transport Research Laboratory next month.

Baroness Castle of Blackburn

Will the Minister accept that they have to start work by next month and complete it the year afterwards? Can he tell us why another 140 key staff in the Transport Research Laboratory—scientific and library staff as well as administrative staff—have been declared to be redundant specifically by April 1995 when his financial advisers are supposed to report on whether it is necessary? Does he agree that it shows that this Government's one aim is to try to bribe private interests to buy public sector assets by cutting the labour force and reducing the standard of that body before sale?

Lord Mackay of Ardbrecknish

My Lords, the noble Baroness confuses two issues: one is privatisation and the other is the ongoing responsibility of the chief executive of the agency to ensure that his staff and staffing levels meet the demands of the customers who ask for his services. The chief executive has made it perfectly clear that the proposed staff reductions have nothing to do with privatisation; they relate to the fact that over the next two or three years he has predicted a considerable decline in the demand for services and the income to which the research laboratory can look. Because of his need to act responsibly, he has felt obliged to match the staff to the work which he anticipates will be obtained. Perhaps I can just correct one point. The great minority of the staff who will be declared redundant will be research scientists.

Lord Clinton-Davis

My Lords, will the Minister accept that it is not my noble friend Lady Castle who is confused but that he is seeking to confuse the House? Is it not a fact that those workers have increased their productivity, have performed well and that the faster they have improved the faster their numbers have been cut? Is it not also a fact that the Minister has effectively made up his mind on this issue almost regardless of the professional advice that he might get?

Lord Mackay of Ardbrecknish

My Lords, we have not made up our minds regardless of the advice that we might get. When the financial advisers look at this issue their advice and recommendations will be made against the background of their terms of reference. It will then be necessary for us to consider the feasibility of the various sales options that they show.

In answer to the first part of the noble Lord's question, one cannot expect the taxpayer to fund the organisation to a certain large size when the workload that it is likely to carry is very much less than is compatible with the size of the laboratory at the moment. That would surely be a waste of public money. I am quite sure that all noble Lords, especially those on the Benches opposite, could think of other things on which to spend the money.

Baroness Castle of Blackburn

Does the Minister acknowledge that, from his own words, the chief executive is guessing about the alleged estimate of the staff that will be required by next year? Does the chief executive have some inside information to say that the Department of Transport intends to cut the contracts that it places with TRL at the present time—in fact, to cut its own research programme? It has already done so. Will he confirm that it is planning to cut it still further in this mad economy drive in which we are now engaged across the whole spectrum of this nation's activities? Is it not quite wrong to suggest that to slash staff who have worked so well is in the public interest, in order to cover up the fact that this Government are reducing the; intellectual assets of this country?

Lord Mackay of Ardbrecknish

My Lords, I do not consider that obtaining value for money can be described as a "mad economy drive". We are looking for value in all the programmes that we put out to tender and indeed in all the work that we do in the various departments of government. The research from the Department of Transport over the next three years will come to something in the order of £100 million, as; I explained to the noble Baroness.

The chief executive of TRL has had to examine the programmes that he has in hand—those which are currently under way and will be under way in the next year or two and those that he is likely to win. He has to make a judgment on the kind of income that he is likely to have and the workload that he will need. In fact, he has made that judgment and as he believes that his income will reduce and his workload will reduce, it is only right and proper that he takes steps to match the number of his staff to that workload.

Earl Attlee

My Lords, can the Minister say which customers are reducing the demand for the TRL?

Lord Mackay of Ardbrecknish

My Lords, there are a number of reasons for the reduction in demand. One of the main reasons is that we have changed the system by which the department undertakes research. Instead of almost filling up the research department with research projects to fill its size, we allow it to be customer driven. The various policy divisions and parts of the department decide on the research that they wish to commission. In many cases that goes out to tender, including to the TRL. For that reason the TRL is finding that there is a reduced demand for its services both from us and from the private sector.