AEA Technology plc: Privatisation Plans (Hansard, 9 May 1996)

§ Baroness Miller of Hendon
My Lords, following vesting on 31st March 1996, AEA Technology plc is now fully legally separated from the United Kingdom Atomic Energy Authority. Her Majesty's Government plan to privatise the company later this year.

§ Lord Haskel
My Lords, I thank the noble Baroness for that Answer, and start by wishing her a happy Europe Day. Is the noble Baroness aware that, although vesting day was on 31st March, the Government's intention of splitting the United Kingdom Atomic Energy Authority and of privatising that part of the business which is now AEA Technology was mooted over two years ago? That uncertainty has now been hanging over the business for two years. Is not the noble Baroness aware that the kind of business undertaken by AEA Technology, which is technical research and the provision of scientific services, is very competitive and that that uncertainty is a competitive disadvantage to the company? Will the noble Baroness speed things up and give us a date on which something will happen?

§ Baroness Miller of Hendon
My Lords, I thank the noble Lord for his good wishes. Although I could find better ways of spending Europe Day than in answering his Question, I shall nevertheless do my best. As I have already said, Her Majesty's Government plan to privatise AEA Technology plc later this year but, as the noble Lord said, no timescale has been formally announced. The Government will sell AEA Technology as soon as it is ready to be sold. The Government have consistently said that the decisions that they will take on the sale will be in the best interests of AEA Technology as a business, and in the best interests of its employees and the taxpayer. Those things take time, and the Government take the time that is necessary.

§ Lord Skelmersdale
My Lords, does my noble friend recall that back in 1980 or 1981 the Government's first privatisation measure by law was to privatise another part of the Atomic Energy Authority; namely, Amersham International? That has grown and grown to 200 be an extraordinary success within the private sector. Is there any reason why this part of the company should not do the same?

§ Baroness Miller of Hendon
My Lords, my noble friend is absolutely right. I am happy to repeat that privatisation is in the best interests of companies and their employees.

§ Lord Dean of Beswick
My Lords, will the noble Baroness cast her mind back to what happened to INMOS when it was privatised some years ago? That company in the microchip industry was quickly flogged off to the French, who have exploited it ever since, much to our disadvantage. Although we were originally one of the leaders in the microchip industry, we now have to go abroad for that commodity. Can the noble Baroness give an undertaking that that will not happen in this case and that we shall not once again lose one of our industries of excellence?

§ Baroness Miller of Hendon
My Lords, that has nothing to do with the Question. Furthermore, I am happy to say that that happened before my time.

§ Lord Wade of Chorlton
My Lords, does my noble friend agree that AEA Technology has taken great strides to improve its efficiency and that it is now an effective company which has responded enormously to the opportunities of the Bill that was recently passed? Does my noble friend further agree that it is important to keep that company as whole and effective as possible so that it can play the important role that it should play in the world marketplace?

§ Baroness Miller of Hendon
My Lords, my noble friend is absolutely right. The vesting was a significant milestone in that company's history and plc status will give AEA Technology greater flexibility to respond to customer needs. Perhaps I may remind my noble friend that my noble and learned friend the Minister of State announced on 23rd October last year that the Government had no intention of breaking up AEA Technology in advance of the sale. He went on to say that the Government aimed to sell the business as a single whole. That remains the position.

§ Baroness Nicol
My Lords, are the Government aware of the existence of over 40 technology clubs which are run by AEA Technology and which deal with groups of small businesses, teaching them about the technology to keep their businesses up to date? How will the Government ensure that that situation continues? In view of the Government's commitment to the wellbeing of smaller businesses, surely it is important not only that the uncertainty should be removed quickly, but that those clubs should continue.

§ Baroness Miller of Hendon
My Lords, we have every confidence that the management of AEA Technology will deal with that matter. Whenever companies are privatised they always seem to do very much better in that respect.

§ Viscount Mersey
My Lords, will my noble friend confirm that the Joint European Torus at Culham will 201 continue its research into nuclear fusion? Given that this is Europe Day, does she agree that that is a prime example of the United Kingdom leading Europe in atomic technology?

§ Baroness Miller of Hendon
My Lords, I have to confess that I am not absolutely sure of the answer to that question. Perhaps it would be safer for me to write to my noble friend rather than stand here at the Dispatch Box and make what could only be a good guess.

§ Lord Ewing of Kirkford
My Lords, perhaps I may suggest a rather innovative approach to the drafting of the Bill which the noble Baroness has promised the House later this year. In view of the worry about standards in public life, would it be in order to include a clause in the Bill to state that any Member of your Lordships' House who votes in favour of the privatisation of that company should not be allowed to buy shares in it?

§ Baroness Miller of Hendon
My Lords, that is rather an unusual suggestion. I am sure that the noble Lord would not expect me to respond to it.

Earl Alexander of Tunis
My Lords, what would be the Government's view if the controlling shareholding should fall into foreign hands?

§ Baroness Miller of Hendon
My Lords, as your Lordships know, the Government welcome foreign investment. The Government will consider in due course the need for safeguards against unwelcome purchases. It follows that the Government will consider the need for a special share, a golden share, and any other form of protection that is necessary in the light of decisions on the method of sale and discussions with the business's major partners.

§ Lord Peston
My Lords, is the—

§ Lord Strathclyde
Next Question‡

§ Lord Peston
I beg your pardon—

§ Lord Strathclyde
We have already had seven minutes on this Question.

§ Lord Peston
I should have thought that I might as well ask a question and throw some light on the subject.
May I ask the noble Baroness what she meant by, "As soon as it is ready to be sold"? If the company is doing so well and has been set up as a separate plc, surely it is ready to be sold. Will the noble Baroness clarify another matter on which I got a little lost? Will legislation be required for this sale or is it one of those enterprises which can now be sold directly? I think that it is important for your Lordships to know the answer to that.

§ Baroness Miller of Hendon
My Lords, no decisions have yet been taken on the method by which AEA Technology will be sold. The Government have said consistently that all options, including flotation, remain open. That remains the position. It is too early 202 to say whether a flotation or a trade sale will offer a better return to the taxpayer and would be in the best interests of the customers, particularly government customers. That decision will be taken with regard to the performance of the business and the market circumstances. When they are ready to deal with it, it will be dealt with.

§ Lord Molloy
My Lords—

The Lord Privy Seal (Viscount Cranborne)
My Lords, I wonder whether the time has come for us to move on.