HC Deb 15 May 1995 vol 260 cc21-5W
Mr. Betts

To ask the President of the Board of Trade (1) what account was taken of the role of Richard Budge as a director of AF Budge (Mining) when awarding the franchise to mine coal in the three English coal regions; [22706]

(2) if the Government were aware of the concerns raised by Coopers and Lybrand, officers in the insolvency unit of his Department and the official receiver about the actions of Richard Budge as a director of AF Budge (a) when the shortlist of companies to be considered for the coal franchise was agreed and (b) when RJB (Mining) was awarded franchises; [22707]

(3) what consideration Ministers gave to monitoring the concerns being expressed by Coopers and Lybrand, officers in the insolvency unit of his Department and the Official Receiver over the actions of Richard Budge as a director of AF Budge when making statements to the House about the shortlist of firms to be considered for coal franchises and the awarding of franchises to RJB (Mining); [22708]

(4) what stage had investigations into the actions of Richard Budge reached (a) when RJB (Mining) was shortlisted as a franchisee and (b) when it was given the coal franchises. [22709]

(5) what consideration was given to the questions still surrounding Richard Budge as a director of AF Budge when deciding not to choose a second, back-up, franchisee for the coal franchises awarded to RJB (Mining). [22712]

Mr. Page

[holding answer 9 May 1995]: The Department and its advisers undertook a careful assessment of each of the bids for the regional coal companies and care and maintenance collieries when tenders were submitted in September 1994. Bids were assessed on their merits, including the prospects for the long-term viability of the industry and value for money for the taxpayer.

The preferred bidders for the regional coal companies and care and maintenance collieries were announced on 12 October. As envisaged when bids were invited, a single preferred bidder was identified for each regional coal company, with whom detailed negotiations were to take place. It was made clear to the preferred bidders that their identification as preferred bidders did not commit the Government to a sale if the detailed negotiations did not reach a satisfactory conclusion. The position of each of the preferred bidders was kept under close review throughout the course of the negotiations.

Decisions in relation to disqualification were taken on 21 November 1994. The decision not to take proceedings against Mr. Richard Budge and some other former directors of AF Budge Ltd. and related companies was made after careful consideration of the circumstances of the failure and in the light of legal advice.

In the light of consideration of the conduct of Mr. Richard Budge in the context of the failure of the AF Budge companies, as well as the decision on proceedings, the Department reviewed RJB (Mining) plc's status as preferred bidder for the English coal companies, having regard to Mr. Budge's position as chief executive of RJB (Mining) plc. The Department concluded that RJB (Mining) plc should properly continue as preferred bidder.

The contract for the sale of the English Regional Coal Company was signed on 9 December and the sale was completed on 30 December 1994.

Mr. Betts

To ask the President of the Board of Trade what investigations are pending or being considered into loans made to Richard Budge as a director RJB (Mining). [22710]

Mr. Jonathan Evans

[holding answer 9 May 1995]: It is not our practice to comment on the affairs of individual companies.

Mr. Betts

To ask the President of the Board of Trade what involvement and knowledge he and his Department had about the agreement reached between Sheffield development corporation and Budge which divided responsibility for providing the infrastructure for an airport at Tinsley, Sheffield, and the authority for opencasting the site. [22714]

Mr. Page

[holding answer 9 May 1995]: The agreement between Sheffield Development Corporation and AF Budge (Mining) Ltd. is a matter for the Department of the Environment and I refer the hon. Gentleman to the answer given by my hon. Friend the Minister for Local Government on 9 May 1995, Official Report, column 421.

The agreement was disclosed to the official receiver in relation to the subsequent failure of AF Budge Ltd. and related companies.

Mr. Betts

To ask the President of the Board of Trade what was the role of Ministers in deciding not to disqualify Richard Budge as a director following his actions as a director of AF Budge. [22715]

Mr. Jonathan Evans

[holding answer 9 May 1995]: Decisions in relation to the disqualification of directors of failed companies are taken on behalf of the Secretary of State by the Insolvency Service which has operational responsibility. Those decisions are based on statutory provisions, on criteria agreed by Ministers, informed by developing case law, and legal advice where necessary; and the likelihood of a court making a disqualification order. Ministers were advised of the Insolvency Service's decisions on disqualification proceedings relating to the failed AF Budge companies and endorsed them.

Mr. Byers

To ask the President of the Board of Trade on what date his Department received the Coopers and Lybrand report into the collapse of AF Budge; and if he will place a copy of the report in the Library. [22582]

Mr. Jonathan Evans

[holding answer 4 May 1995]: The insolvency service received the report on AF Budge Ltd. on 28 September 1993. Such reports are confidential between the Secretary of State and insolvency practitioners.

Mr. Byers

To ask the President of the Board of Trade who took the decision, and on what date, to bring disqualification proceedings against former directors of AF Budge; what criteria were used in selecting the directors; and if he will identify those former directors against whom disqualification proceedings have not been taken. [22584]

Mr. Jonathan Evans

[holding answer 4 May 1995]: Decisions in relation to the disqualification of directors of failed companies are taken on behalf of the Secretary of State by the Insolvency Service which has the operational responsibility. Those decisions are based on statutory provision, criteria agreed by Ministers, informed by developing case law, and legal advice where necessary; and the likelihood of a court making a disqualification order. Ministers were advised of the Insolvency Service's decisions on disqualification proceedings relating to the failed AF Budge Group and endorsed them. In this case decisions were made on 21 November 1994.

Given the number of companies comprised in the AF Budge Group and the large number of directors, it is not practical to list all former directors from the incorporation of the earliest company in 1967. The following were returned as directors in the three years prior to the first appointments of administrative receivers to AF Budge companies in December 1992, and against whom proceedings have not been taken in relation to the relevant companies:

Name Ceased to act (if applicable)
J. R. Bower 28 February 1992
R. J. Budge 22 February 1992
G. W. Jarrett 20 February 1992
G. Muir 7 January 1993
D. T. Threadkell 7 January 1993
S. S. Clarke 15 December 1992
A. A. Mackintosh 13 January 1993
M. A. Connolly

Name Ceased to act (if applicable)
R. V. Sallis 18 December 1992
J. E. Greenhalgh 11 December 1992
D. T. Trewick
M. Wainwright 18 January 1993
C. A. Walton 22 February 1992
K. Jarrett 22 February 1992
M. Chick
D. Cowlinshaw 1 October 1990
G. B. Cowlinshaw 1 October 1990
P. M. Annington
R. S. Allan
E. Bruce
C. H. Coward
M. R. Hampton
M. Shield
S. G. Mort 8 January 1993
J. A. Buck 18 December 1992
N. J. Teal 16 December 1992
M. F. Vasey 31 March 1993

Mr. Byers

To ask the President of the Board of Trade on what dates in 1994 his Department's insolvency service interviewed Mr. Richard Budge; and on what date the Service reported on the conduct of the former directors of AF Budge. [22585]

Mr. Jonathan Evans

[holding answer 4 May 1995]: The official receiver reported initially on the affairs of AF Budge Ltd. and related companies on 25 July 1994. Following further investigations into those affairs Mr. R. J. Budge and two other directors of the AF Budge Group were interviewed by him on 11, 14 and 15 November respectively and he reported the outcome of those interviews on 15 November 1994. The official receiver's report to the court under the Company Directors Disqualification Act 1986 was made on 7 December 1994.

Mr. Byers

To ask the President of the Board of Trade if he will make available to the National Audit Office investigators into the privatisation of the coal industry the Coopers and Lybrand report into the collapse of AF Budge and the report from the insolvency service into the conduct of Mr. Richard Budge as a director of AF Budge. [22583]

Mr. Jonathan Evans

[holding answer 4 May 1995]: The insolvency service will co-operate fully with the National Audit Office.

Mr. Byers

To ask the President of the Board of Trade which Ministers in his Department in the last five years have been a member of a group considering the energy industry policy which had Mr. Richard Budge as one of its members. [23018]

Mr. Page

[holding answer 9 May 1995]: As far as I am aware, no Minister in this Department, or in the former Department of Energy, in the last five years has been a member of a group considering energy industry policy which had Mr. Richard Budge as one of its members.

Mr. Byers

To ask the President of the Board of Trade on what dates in 1992, 1993 and until 12 October 1994, Ministers in his Department met Mr. Richard Budge to discuss the privatisation of the coal industry. [23016]

Mr. Page

[holding answer 9 May 1995]: I have been asked to reply.

My right, hon. Friend the Minister for Industry and Energy discussed coal privatisation with a number of industry figures in this period. At meetings with Mr. Richard Budge on 17 June 1992, 29 June 1992, 1 March 1993, 26 March 1993, 15 April 1993, 15 June 1993 and 7 July 1994 a range of issues were discussed. Mr. Budge met the Minister for Industry and Energy both in his capacity as chairman of the trade association Coalpro, and as chief executive of RJB (Mining).

Mr. Byers

To ask the President of the Board of Trade if any Ministers in his Department since April 1992 have been on trips overseas in which Mr. Richard Budge was in the party. [23017]

Mr. Page

[holding answer 9 May 1995]: No DTI Minister has been on an overseas visit with Mr. Richard Budge during this period.

Mr. Byers

To ask the President of the Board of Trade on how many occasions between 1989 and 1992 advance payments for ordinary soil extraction were made to AF Budge; and what was their total value. [22818]

Mr. Page

[holding answer 9 May 1995]: This is a matter for the British Coal Corporation.