§ 7.42 p.m.
My Lords, I beg to move that this Bill be now read a second time.
This is an important, if technical, measure. It is needed to remove an anomaly in existing legislation whereby HMSO may lawfully contract out the printing of all legislative and other material, with the sole exception of statutory instruments. That is not a trivial loophole; it raises doubts about the evidential status of copies of statutory instruments and calls into question the considerable savings on cover prices HMSO can achieve by contracting out that work. The Bill amends the Statutory Instruments Act 1946 to validate retrospectively and to authorise prospectively the printing of SIs by parties working for HMSO. It has no other purpose whatsoever.
Perhaps I might begin by outlining some of the reasons why HMSO and other printers routinely contract out work. Printing is an expensive business; in particular, printing plant is expensive to acquire, maintain and operate. A printer must obtain maximum usage from the plant he owns, otherwise he will incur unnecessary costs when his machinery is idle or under-used and will not obtain the maximum income to offset those costs. It is therefore very common in the printing industry to own only so much plant as the printer can be sure will be heavily used at all times. At times of higher demand, or for jobs where additional technical expertise is needed, the printer contracts out work to others. This is especially important for a printer like HMSO which has highly volatile demand for its services. Its workload depends on such imponderable factors as the electoral cycle, the legislative programme and new government policy initiatives. If it were to own sufficient plant to meet the peaks in that demand, its costs would increase greatly, with an obvious impact on cover prices and therefore on public access to official information.
814 The necessary alternative is for HMSO to contract out printing work. It has done so for very many years for a very wide range of material, and in the vast majority of cases this practice is perfectly lawful. In particular, it is able under the Documentary Evidence Act 1882 to contract with third parties for the printing of Acts of Parliament and other legal documents. Provided that these are printed under the "superintendence and authority" of HMSO, they retain their evidential status. As well as Acts of Parliament, HMSO has contracted out the printing of Budget and other sensitive official documents, passports and, indeed, the report of debates in your Lordships' House. Most of these jobs are technically very simple and the private sector has had no problems in providing a fully satisfactory service.
HMSO, its customers and the users of its information have therefore benefited for a long time from a regime which allows costs and cover prices to be kept as low as possible. There is only a single, anomalous, exception to this regime, and that is the subject of this Bill. It relates to the printing of statutory instruments. The Statutory Instruments Act 1946, as it currently stands, imposes directly on HMSO or its ex officio head, the Queen's Printer, the duties of printing, issuing and selling SIs. It does not contain the "superintendence or authority" provisions of the 1882 Act. Instead, the 1946 Act followed the pattern of its predecessor, the Rules Publication Act 1893, but these conditions are no longer suitable for modern conditions, even if they had been at the time. It is not clear why Parliament chose this form of words in 1946. However, the volume of secondary legislation passed, and therefore the burden on HMSO as a printer, was in those days very substantially less than it became from the late 1950s onwards.
Notwithstanding the provisions of the 1946 Act, HMSO has in fact contracted out the printing of statutory instruments for some time. Records show that the practice dates from at least 1965, and probably earlier, although it is not possible to give an exact date as HMSO has not retained any details of contracts before that date. Such contracting out may well be technically in breach of the 1946 Act, but HMSO thought it had good reason for acting in this way. First, it was merely following long-established practice for all other official material. Secondly, and more importantly, demand for SI printing is, if anything, even more volatile than for other documents. Large volumes of important instruments may be required at very short notice. If HMSO had attempted to produce all of them itself to the tight timescales required, its costs, and therefore the cover price of SIs, would have had to increase. As it is, contracting out has allowed HMSO to maintain prices of SIs at their current level for some three years at a time when paper and other costs have risen markedly.
The result of HMSO's actions is, though, that there are in existence very many copies of statutory instruments which have not been produced in strict conformity with the 1946 Act. I must stress that there is no question of the SI itself not being valid, nor of past convictions for breaches of SIs being unsound. Secondary legislation becomes law from the moment it 815 is made, or on a specified date thereafter, and can be proved if necessary by production of the original signed version, or a certified copy, to a court. However, individual printed copies may, possibly, be contested by those charged under them and it is possible that courts would be burdened by arguments as to their validity. As things stand, defendants charged with contravening an SI could be acquitted solely on the technical argument that an SI not printed by HMSO had not been properly produced; case law suggests that that is unlikely, but not impossible. It is more likely that the courts might become obstructed by arguments over the validity or status of SIs, and that individual SIs would need to be specifically proved.
In any event, it is clear that urgent action is needed retrospectively to confirm the validity and evidential status of individual copies of SIs. That would be effected by passage of this Bill at the earliest opportunity. Although the Government have been aware of the potential problem for some time, the extent of it and the need for legislation only became clear after taking detailed and expert legal advice and evaluating alternative courses of action. This Bill was introduced as soon as it was clear that primary legislation was the only way forward. Having publicised the problem, it is now necessary to solve it by passing the Bill as soon as possible. It is therefore essential that the Bill both confirms the status of existing SIs and allows contracting-out to continue in the best interests of all concerned ending this outdated anomaly. As drafted, it does precisely that. It would allow HMSO to contract with others for the printing and distribution of SIs on exactly the same terms as those currently applying to all other material, including Acts of Parliament.
This is a simple step and requires only this short Bill. All that is required is to amend the wording of the 1946 Act in each place, such that instead of specifying that SIs must be printed, issued and sold directly by HMSO, it merely requires that they may be printed, issued and sold by others working under contract to it. That is the substance of the Bill and forms the first part of Clause 1(1). The second part of that subsection deals only with a related document: the list showing when each statutory instrument was issued. There is no reason why this should be printed and distributed directly by HMSO, and again HMSO has in the past contracted out this work. The list can be used as evidence in court of the date on which an SI was issued, and it is essential that its evidential status is clear. This subsection both verifies that practice and provides that it may continue. As a consequence, the statutory instruments issue list would not bear the imprint of the Queen's Printer, but would instead state "printed for HMSO" rather than "printed by HMSO". The House will see that this is a minor point.
The second subsection of Clause 1 is a slightly more complex matter. One of the Bill's effects would be to amend retrospectively Section 3(2) of the 1946 Act. This section states that proceedings for an offence consisting of a contravention of a statutory instrument may be defended on the grounds that the SI concerned had not been issued by HMSO at the time the alleged 816 offence took place. Subsection (2) of the Bill prevents this amendment from applying to proceedings commenced before the Bill was published. Thus, the Bill does not deprive an accused person of any argument he might have had. In particular, it does not prevent a defendant from calling into question the validity of the statutory instruments issue list and thus argue that there is no conclusive evidence of the date of issue of an SI. The Bill makes no other changes to the scope of the defence under Section 3(2) of the Act or to other rights of defendants. It would simply change the criteria by which an SI might be deemed to have been properly printed and issued and the formalities for producing the SI issue list.
The House might have expected that, in introducing this Bill, I would by now have made reference to the privatisation of HMSO. There is a very simple reason why I have not done so. The Bill is not necessary for the privatisation of HMSO, which will proceed to completion irrespective of the Bill's passage. Short-listed bidders are all aware of the position, and each is proceeding on the basis that SI printing would be carried out in the public sector. The House should be aware that the total value of sales of SIs represents less than 1 per cent. of HMSO's turnover, so the work is in any event of no more than marginal importance to bidders. My right honourable friend the Chancellor of the Duchy of Lancaster has instructed HMSO to cease putting SI printing out to contract, and the practice will cease when this House rises for the Summer Recess. This is the earliest date on which HMSO can make alternative arrangements.
The Bill would allow the residual HMSO, which will remain in government after the sale, to contract out the production of statutory instruments. It could do this under contract either with the privatised Stationery Office or with some other printer, and in effect would be acting in the same way as HMSO does now. It is hard, therefore, to see any difference in the service that would be provided. The Bill merely puts its legitimacy beyond doubt.
We must be clear that failure to pass the Bill would have no impact on privatisation. The residual HMSO will have whatever capacity it needs to meet its statutory requirements, whether amended by this Bill or not. If it is not enacted before the sale occurs, all that would happen is that Residual HMSO would arrange to print all statutory instruments directly itself. Detailed arrangements for how this would be done are being drawn up. Residual HMSO would employ printers of its own and rent the night-time use of equipment at HMSO's Sovereign Press at Elephant and Castle. This would meet the requirements of the 1946 Act as it stands but would be a most unattractive option. It would require government to maintain a capacity that was rarely fully used and which would therefore involve needless extra costs. Without a subsidy from the taxpayer, these extra costs would need to be passed on in the form of higher cover prices for SIs. Estimates indicate that, if this course were to be followed, the average cover price of SIs would rise by around a third. There would be no obstruction to the sale of HMSO, only to the affordability of secondary legislation.
817 The brevity of this Bill belies its importance and urgency. It would, first, confirm the evidential status of existing statutory instruments, prevent the courts from being obstructed by specious debate as to their validity and remove any chance of defendants in criminal cases being acquitted solely on the technical grounds that an SI had not been properly produced. Secondly, the Bill will allow HMSO to continue to contract out SI production and secure best value for money and lowest possible cover prices in doing so. Its failure would create a real risk of burdening the courts and necessitate rises in the cover prices of Sls. I trust that noble Lords will see that this is a non-contentious and urgent measure, and it is in these terms that I commend it to the House.
Moved, That the Bill be now read a second time.—(Earl Howe.)
§ 7.56 p.m.
§ Lord Richard
My Lords, I wish I could agree with the noble Earl that this is a simple and non-contentious matter. I do not believe that it is. On the face of the Bill, the matter is simple and clear. The noble Earl has opened the matter on the basis that the Bill merely purports to rectify an uncertainty in the present law. It is also retrospective in its application. I go part-way towards the noble Earl in saying that prima facie if that was all it did I believe that it would be relatively unobjectionable. The problem is that it does not stand on its own but must be seen against the background of what we believe to be the Government's foolhardy determination to press on with the privatisation of HMSO. On the 18th December 1995 in another place the Chancellor of the Duchy (at col. 1285 of Hansard) said:… I can confirm that my advice is that no primary or secondary legislation is needed".Yet, here we are approaching the Recess and, according to the noble Earl, rushing primary legislation through the House with great urgency. Both he and the Government continue to argue that this has nothing to do with the privatisation of HMSO. The Written Answer given by the Chancellor on 19th June 1996 (at col. 471 of Hansard) says:Some of the printing of statutory instruments has been contracted out by HMSO for over 30 years as the most cost-effective way of producing them. A careful examination has recently been made of the legislation which refers to HMSO and the Queen's Printer. This has revealed that while the Queen's Printer can contract out the printing of statutes, this may not be the case for statutory instruments".On the face of it, HMSO has been acting outside the law for over 30 years in contracting out the printing of statutory instruments. To put it into economic perspective, as I understand it the annual cost of this work is about £200,000, while the total bill for the publication and printing of statutory instruments is about £2 million out of a total HMSO turnover of some £375 million a year. The Government's difficulty is patent. The legal basis of all statutory instruments contracted out would be open to challenge on the argument that those instruments were illegally printed. As the noble Earl has said, that might lead to doubt—I put it no higher—as to the propriety of the convictions 818 of those found to be in breach of regulations which had been so illegally printed. However, one ought to note that, although the legal force of statutory instruments so printed has been challenged on a number of occasions over the past 30 years, apparently no one has so far thought of the ingenious argument that as they have been illegally printed that is a reason for challenging them.
So, leaving aside the question of retrospection—if there was a hole in the law in 1946 I accept that should be put right—the rest of the Bill is the part which causes me some problems. The Stationery Office—HMSO—could easily have done the necessary printing itself. The noble Earl confirmed that tonight. It could, indeed, go on to do the necessary printing itself. It is not necessary to include in a statute the requirement that the Queen's printers should be allowed to contract out the printing of statutory instruments in order to fill the hole which existed in 1946. It is designed for a privatisation package so that whoever buys HMSO knows that they will be able to contract out the printing of these instruments without the possibility of legal challenge.
I am concerned about where this privatisation now stands. I propose to say one or two words about it. Over the last month or so the trade unions have taken the opportunity to hold detailed discussions with each of the bidders. I have a document which sets out the result of those conversations. The conclusion they come to is this:When the proposed privatisation was debated in Parliament the Government continually emphasised that if HMSO were to he privatised there would be 2 substantial benefits—HMSO would increase its turnover by trading with the Private Sector and HMSO would be able to invest in the future of the business without affecting the Public Sector Borrowing Requirement".To put it more correctly, HMSO would be able to reinvest for the future without being constrained by political judgments on the PSBR. With this in mind, the unions posed two issues to each of the bidders: "What plans do you have to grow the trading base in both the Public Sector and the Private Sector'?" and secondly, "What plans do you have for future investment in HMSO?" Each bidder identified that the key for HMSO to continue to be successful was to ensure that it progressively took a larger share of the public sector market, not the private sector market. They all argued that this is the sector where HMSO is known and is the sector for which HMSO has the expertise. None of the four bidders anticipated seriously attempting to make inroads into the private sector market in either the short or the medium term.
If that is right, and if that is the opinion which the trade unions went away with, one can only say that it knocks a hole in one of the strong arguments that the Government make for this whole privatisation in the first place.
As far as the issue of future investment in HMSO is concerned, the answers they received from the bidders did nothing to lead them to believe that any of the bidders contemplated significant investment in HMSO. None of them identified further areas of investment within HMSO over and above those already identified 819 in HMSO's own business plan. All of them were anxious to emphasise that any investment made in HMSO would have to be financed from within HMSO's own resources, presumably previous profits or loans set against projected profits.
The trade unions formed a view that none of the bidders plan to develop HMSO in the way that the Government outlined when debating the matter in Parliament.
I have detailed accounts of the discussions with each of the four bidders. At this time of night I do not propose to weary the House and go through them in detail. But they do say this:Clearly all of the bidders are backed by financial institutions who are all seeking a similar financial return from HMSO. None of them have outlined firm plans for the future that employees can look to and feel that HMSO will be facing a stable future. None of them intend to make substantial investment in HMSO. Crucially all of them envisage substantial further job loss and none of them will rule out compulsory redundancies. In view of all this we do not see one bidder who from our perspective offers a secure future for our members.… With all of the bidders making it clear that they expect to float HMSO on the Stock Exchange within 4 to 8 years following a further period of change and uncertainty there is not a great deal that we can point positively towards.I have to say to the Government, even in a House as thin as this tonight, if that is the real position that the bidders are taking up it does not accord with what the Government set out very fully and very firmly as the objectives of this privatisation. If that is the position, the Government can do one of two things. They can either call it off—which I do not expect they will for I imagine that they are now over-committed on this particular frolic—or, alternatively, they could perhaps readvertise and hope to attract a few new buyers—a few new bidders who would at least pay greater attention to what the Government set out as the original objectives for this privatisation.
In our view, this is a privatisation too far. It is flawed in its concept. It has been ill thought out by the Government and particularly by the bidders. It is creating deep uncertainty in the workforce. I think the Government should think again.
§ 8.5 p.m.
§ Lord Taverne
My Lords, I should like to add a few words to what has been said by the noble Lord, Lord Richard, about the Bill. I should like to congratulate the Government on finding a mess which has to be cleared up and for which they could not possibly be held responsible. One cannot blame the Government for an oversight of a draftsman of a Labour Government Bill in 1946. But it is a piece of retrospective legislation and it should not, therefore, just be automatically passed on the nod. It deprives people of a defence that they now have or may have in proceedings which may be brought against them. They may not realise they had such a defence, but it has now been brought to their attention and we are taking that right away.
820 It is hardly a heinous case of retrospective legislation. One could think of a great deal worse than this particular Bill. If one looks at it one can be satisfied that no injustice will be done and therefore there are not really any objections to the Bill.
But it could, incidentally, also be regarded as an indemnity Bill. If one looks at the Documentary Evidence Act of 1882 it says under Section 3If any person prints any copy of any … order, regulation … which falsely purports to have been printed under the superintendence or authority of Her Majesty's Stationery Office, … he shall be guilty of felony and shall … be liable to penal servitude for a term not exceeding seven years …The printers to whom the printing was delegated in the case of statutory instruments obviously claim to have an authority that the Stationery Office could not possibly give them, or at least may not possibly have been able to give them. So I wonder if Section 3 of the Documentary Evidence Act should also not have been referred to in addition to the Act of 1946. But there clearly cannot be any objection to the Bill itself. It is perhaps somewhat doubtful whether one can really take the view of the noble Earl that this has nothing whatever to do with privatisation because clearly until this muddle is cleared up, it will be an embarrassment to anyone who takes over the Stationery Office.
On the issue of privatisation, I should like to add three extremely brief points to the rather impressive speech on this subject made by the noble Lord, Lord Richard. First, it does seem to me, in a nutshell, essential that a government should have control over their own printing—something which is so vital to many of their activities. To release total control of the printing seems an extremely rash act.
Secondly in the debate in another place it is very significant that one of the speeches made against the Bill by one of the Members of the Government party was made by Mr. Robert Jackson who was the Minister in charge of the Stationery Office. He says that on two occasions he looked at the question of privatisation and the idea was rejected, for some of the reasons which I think I have given.
Thirdly, the most important and ostensible reason given for privatisation is to release the Stationery Office from the restrictions on borrowing. The restrictions on borrowing, as a result of the way in which the matter is treated under the public sector borrowing requirement should be looked at again. This is not something which only restricts the commercial operations of the Stationery Office, or might do so, but it is a very serious restriction on other publicly-owned trading companies and other bodies. It is an important and embarrassing restriction on British Nuclear Fuels, on the Post Office and on the BBC. I think it should be looked at again on its own merits. One should not simply say privatise because this is a restriction which we must get rid of.
§ 8.10 p.m.
My Lords, I am grateful to both noble Lords who have spoken. Despite all that has been said, I hope that the House will appreciate the importance of this measure. I also hope that I have no need to repeat what I said a few minutes ago. The measure will ensure 821 that the courts are free of doubt on the status of copies of statutory instruments. It will ensure that HMSO can continue to offer such copies at the lowest possible cover price. Failure of the Bill will have the opposite result; it would obstruct the courts and would push up the cover price of SIs. I hope that at the very least noble Lords will appreciate that it is in no one's interest to allow either of those results to happen.
The noble Lord, Lord Richard, sought to question my assurance that the Bill has no bearing on the Government's plans to privatise HMSO. He also sought to accuse the Government of inconsistency in what they have said on the matter. Perhaps I may emphasise that there is no connection between this Bill and our plans for privatisation. There is an urgent need for the Bill to be passed and the reasons for that are unconnected with the sale.
The Government reviewed HMSO's statutory functions in detail and uncovered the current anomaly in the law and in HMSO's compliance with it. The Government have taken detailed legal advice and have concluded that legislation is the best course to correct the position and to place the status of existing copies of SIs beyond doubt. That is the long and the short of it; there is nothing further to be said. The measure is not necessary for privatisation for all the reasons that I have explained. It would be perfectly possible to continue without the Bill, but the effects would be as I have stated, which would not be desirable.
Notwithstanding all that, the noble Lord, Lord Richard, rehearsed his objections to the privatisation plans. I would simply say that HMSO is facing a difficult situation. Despite successfully struggling to meet the demands made of it, it is a business in decline. Its future in the public sector would be bleak. The core market is shrinking and unless action is taken, HMSO's ability to offer its customers good value for money will be eroded.
During the past 15 years HMSO's annual turnover has risen from £260 million to £359 million, but in order to have kept pace with inflation it would have had to have reached £523 million. In order to avoid unfair competition, HMSO has been prevented from competing for private-sector work. But even on its home ground, the public-sector market, it averages only an 8 per cent. market share. HMSO is under increasing pressure in public-sector markets as customers are looking for better deals from their private-sector competitors. Why should they not do so? However, that is background and it is why I have no doubt that those to whom the noble Lord has spoken have rightly referred to their wish to expand their public-sector work. That is a laudable objective.
The noble Lord, Lord Richard, suggested that the Government should re-advertise for more bidders. In fact, the bids which we have received are of a high quality. I believe that all of them demonstrate a real commitment to the business. A re-advertisement would do no more than prolong the uncertainty to which HMSO and its staff have been subjected, and I cannot see that that would be desirable.
Bidders plan to invest in the future development of HMSO. I understand that the trade unions are receiving presentations from the various bidders tomorrow, when 822 no doubt the plans for investment will be explained in as much detail as is proper at this stage. I have no doubt that those bidders want to consolidate the current business in the public sector before expanding into the private sector. They want to ensure that current public-sector customers receive a first-class service. As I said in the debate in this House some months ago, that is a natural objective for them. Without satisfied customers, they would be in danger of losing the business. The matter works two ways.
As regards redundancies, a significant number are already pencilled in in HMSO's current business plans. However, I believe that if we are looking to protect jobs, the best long-term future for employment is with privatisation. With HMSO in its present form, the downward spiral looks set only to continue.
The noble Lord, Lord Taverne, referred to Section 3 of the Documentary Evidence Act 1882. There was no force purporting to be acting under superintendence and authority of HMSO. That, on general principles, would require actual knowledge by the printer that he had no authority from HMSO. The printer was entitled to assume that HMSO could give the authority. Therefore, I am not sure that the noble Lord's point was well founded. The retrospective element of the Bill also puts right any doubt that there may have been as regards any question of an offence under Section 3. There is no need for further provision.
The Bill closes a loophole and puts the law beyond doubt. I repeat that there is no impact on privatisation. The sale will continue to completion regardless of the passage of this Bill.
The Bill is the only way to resolve what could become a serious problem. I believe that it is a non-contentious measure which I hope noble Lords on all sides will support. Its urgent passage is essential for the efficient administration of justice—and I was grateful for what the noble Lord, Lord Richard, said on that point—and to control the cost of public access to the text of secondary legislation. I therefore urge the House to give the Bill its wholehearted support.
On Question, Motion agreed to.