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Government Trading Bill Money

Volume 164: debated on Monday 8 January 1990

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Queen's Recommendation having been signified—

Motion made, and Question proposed,

That, for the purposes of any Act resulting from the Government Trading Bill, it is expedient to authorize—
  • (a) the payment out of the National Loans Fund or money provided by Parliament of sums required for the purpose of issues by way of loan to trading funds, subject to a limit of £2,000 million or such greater sum not exceeding £4,000 million as the Treasury may specify by order, and
  • (b) payments into the National Loans Fund or Consolidated Fund—[Mr. Nicholas Baker.]
  • 9.1 pm

    The Minister was unable in the time allocated to him to cover a point that I raised in my speech. Therefore, I have decided to use the opportunity provided by the money resolution to give him another opportunity to reply to it.

    The money will be subject to a limit of £2 billion, or such greater sum not exceeding £4 billion, which is certainly a lot of money swilling around. The explanatory and financial memorandum states:
    "The Bill provides that the aggregate of all such limits must not exceed £2,000 minion, which may be increased to £4,000 million by affirmative resolution order."
    I should be grateful if the Minister could say what the effect of the amendments contained in the Bill will be on section 6 of the Goverment Trading Funds Act 1973. Subsection (3) would be amended to read:
    "A statutory instrument containing an order under section 1 of this Act if made without a draft having been approved by a resolution of the House of Commons shall be subject to annulment in pursuance of a resolution of that House."
    The affirmative procedure is thereby removed. The negative procedure takes its place.

    The Government Trading Funds Act 1973 refers in section 6(3) to an order made under section 2(4). The passage that I read out is the amended version of section 6(3). The Minister will no doubt be acutely aware that section 2(4) is removed. Its substitute is a clause of the Bill with which we are now dealing. New section 2B(7) says:
    "The sum of the maxima in force in respect of all trading funds at any time shall not exceed £2,000 million."
    Subsection (8) of new section 2B states:
    "The Treasury may by order made by statutory instrument increase or further increase the limit in subsection (7) above by any amount, not exceeding £1,000 million, specified in the order but not so as to make the limit exceed £4,000 million."
    That lines up more or less with the money resolution that we are happily discussing.

    Do the amendments to section 6, and of new section 2B, mean that the Minister can use a negative procedure instrument to raise the maximum of the trading funds, or is it just confused wording which provides the Minister with a residual power so that he does not have to use the affirmative resolution procedure? Is the Minister being given the power to decide whether he should use the affirmative or negative resolution procedure? On most occasions, Ministers, by some happy chance, seem to prefer the negative resolution procedure. I would be assured if the Minister would say that, in Committee—just so that it can be clear to the ordinary citizen—we can insert an amendment to new section 2B(8), which states:
    "The Treasury may by order made by affirmative statutory instrument".
    The provision would then line up with what appears to be one interpretation of the present legislation. I know that the Minister likes to be positive and constructive whenever the opportunity presents itself, and I would be happy if he could give such an assurance.

    I have another question. I know that the Minister is keen to give me an assurance. Perhaps I should not stretch his patience, but I shall give it a try.

    A lot of money—up to £4 billion—is floating around, and I am a little worried about what the Minister said about there being a lot of interchange between the private sector and the Civil Service. The trading funds are based on the idea of some form of competition developing. Perhaps the Government had something like Barlow Clowes in mind when they drew up this method of trading. The Minister said that there is a lot of interchange between the Government and the private sector through civil servants. It occurs to me that the Government must maintain a system in which civil servants are kept at arm's length from the private sector and in which there are clear rules. I am not making any accusations, but the public must be satisfied that, when civil servants advise on setting up trading funds, which the Minister argues will offer a better and more efficient service—I do not agree—they will not get so close to the private sector that they become involved and finish up as directors on boards.

    The Minister knows that this issue has been raised before in various contexts. I shall give an example of what I have in mind. I remember the General Electric Company getting hot under the collar with the then Department of Industry and making representations about its desire to take over Northern Engineering Industries. Inquiries about whether GEC was influencing civil servants to make such a decision were made. It was discovered that a civil servant became a non-executive director of GEC. I asked in the House whether the civil servant, who had been in the Department of Industry, had been involved in discussions with GEC. The answer was no, but it subsequently appeared that there had been a series of secret meetings between several civil servants, including the permanent secretary at the Department of Industry, and GEC. There was contact. We asked whether secret meetings were held to be good and whether the civil servant established contacts which enabled him to assume an important position in GEC.

    I recognise that I am not posing an easy question, but the Minister will have to be satisfied, and it must be clear, that civil servants will remain completely aloof from any inducements or lures to move to the private sector for their own benefit. I am quite sure that that principle guides the Civil Service, Ministers and the House. Under the money resolution which allows increases up to £2 billion and £4 billion and in which a great deal of money is involved, I should like to know how that principle will be maintained.

    9.14 pm

    Under the money resolution I wish to return to the issue of valuation in relation to the Property Services Agency which, as the Minister said in a previous speech, might be very small but nonetheless would remain.

    I asked the Secretary of State for the Environment when a proper valuation of the Property Services Agency would be carried out and at what cost. The Under-Secretary of State, the hon. Member for Southampton, Itchen (Mr. Chope), replied:
    "It is too early to say."
    It seems pretty extraordinary that we are making great changes in the Property Services Agency, which according to the National Audit Office report was valued at £3 billion in 1982 and is now valued at £10 billion—the Minister may challenge those figures if he disagrees with them—yet apparently no proper valuation has been undertaken.

    Secondly, it is within the terms of the money resolution to ask the Minister to explain what physical assets in the Property Services Agency will be assigned to a privatised body and on what basis. Will such property and equipment remain in public ownership? Will it be leased to a privatised body or will it be given to such a body as a sweetener? In other words, is flotation envisaged?

    It is rather unsatisfactory when a Member of Parliament raises a bit ad hominem the position of two key individuals—in this case Mr. Bob Etherington and Mr. Patrick Brown—and the Minister replies, "If you want answers to those questions perhaps you will get them from the Secretary of State for the Environment." He was courteous enough to say that the Secretary of State for the Environment had come in to hear my speech. I thank him for his courtesy, but the purpose of the House of Commons is not to be courteous but to give answers. Precisely because Ministers have had time—

    Order. The hon. Gentleman is right that the purpose of the House is to give answers, provided that it is to the right motion. I am having some difficulty in understanding what relevance this has to the Bill.

    You are at some disadvantage, Mr. Speaker, because when you were out of the Chamber, the occupant of the Chair listened rather carefully to what I was saying and made no attempt to rule me out of order although I spoke at some length. I believe that I am in order under the terms of paragraph 8 of the National Audit Office report and under the terms of the Bill.

    If particular cases are raised, they should, not least for the sake of the individuals concerned, be answered in the reply to the debate. Therefore, I was disappointed simply to hear that the Secretary of State for the Environment was courteous enough to come and hear me. Some answer should have been forthcoming on a rather major issue of principle.

    In relation to property and equipment, will the Minister explain in terms of the money resolution how such valuable public resources are to be valued, who will be given the task and how soon such a portfolio would be completed? What assurance can the Minister give the House that such a valuation would be able to withstand public scrutiny so ensuring that the public was not ripped off in the privatisation of the PSA and Crown Suppliers?

    I am entitled to ask the Chief Secretary again whether it is true that Miss Jeannie Turton chaired a committee on behalf of the Treasury that opposed privatisation. One of the central units in the Treasury made a similar report, and we know that Dewi Jones also did so. Was my description of the circumstances of the report by Coopers and Lybrand correct? Was Mr. Etherington's organisation correct in its valuation? Was what I said about it factually true?

    While the Property Services Agency and Crown Suppliers Bill refers to the transfer of undertakings under Protection of Employment Regulations 1981, what undertakings is the Minister prepared to give in regard to any person or persons subsequently made redundant under the new private body—

    Order. I am reluctant to interrupt the hon. Gentleman, who rightly said that I was not present during his previous speech. However, it seems to me that these matters are concerned with the Second Reading debate rather than with the money resolution.

    I think, with respect, Mr. Speaker, that we are in some difficulty. The Minister quite properly conceded that there was to be a fag end of the Property Services Agency and Crown Suppliers Bill—honourably, he nods in assent—among the bodies that we are discussing. Surely, therefore, I am entitled to ask general questions—

    Order. No. The money resolution covers the payment of loans to Government trading funds under new section 1(5) and new section 2B(2), (7) and (8) of the Government Trading Funds Act 1973 relating to payments into the national loans fund or the consolidated fund; under new section 2A(5) relating to public dividend capital; new section 4A(6) relating to operations ceasing to be funded; and clause 2(1)(b) relating to increases of pensions.

    Under new section 2A may I raise a question that has concerned the trade unions about protection from asset stripping? Given the nature of the construction industry, is it not necessary that bidders for the Property Services Agency and the Crown Suppliers do not seek to asset-strip those organisations? The trade unions do not want a repeat of the royal ordnance factory fiasco. They therefore ask that amendments to the Bill—

    —are supported to ensure that windfall profits from the sale do not accrue to the Treasury. I say to the Financial Secretary that of course I am referring to the Property Services Agency and Crown Suppliers Bill. It is easy to assert that that Bill is not relevant to the money resolution of today's discussion. If that is so, why on earth mention the Crown Suppliers in the Bill that we are discussing? Ministers cannot have it both ways. I believe that these are legitimate questions and that they deserve some answer here and now.

    9.18 pm

    In a moment, I shall try to help the hon. Member for Bradford South (Mr. Cryer), but first I should like to respond to the remarks of the hon. Member for Linlithgow (Mr. Dalyell). I thought that I had made it plain in my reply to the Second Reading debate that many of the points that he raised about the Property Services Agency were related to the provisions that we are debating on the privatisation of the bulk of the PSA and that I would draw his worries to the attention of my right hon. Friend the Secretary of State for the Environment, who will no doubt wish to comment on them. Of course I will do that, and I will do the same on the issue that the hon. Gentleman has raised under the money resolution. I shall draw those matters to the attention of my right hon. Friend. I am concerned that the hon. Gentleman should get a proper answer. Most of those issues, including the references to Mr. Etherington and Mr. Brown, do not relate to the Government Trading Bill. It would not be right or proper for me to answer those points specifically.

    This is my last intervention. Is the Minister sure that he is right? Was not the crucial decision to go to Coopers and Lybrand for the report that was wanted—not the "whether" but the "how" report—taken inside the Treasury and Civil Service Department and not in the Department of the Environment?

    Much though I should like to think that Ministers of the Civil Service are infallible, I fear that they are not. If I am wrong in these matters, I shall put it right with the hon. Gentleman by means of a letter or other contact.

    The hon. Member for Bradford, South referred to the ethical standards of civil servants and the possibility of agencies being privatised. As a Minister with day-to-day responsibilities for the Civil Service, I attach great importance to the maintenance of the high ethical standards that the Civil Service already has. Certain rules, codes and guidelines on these matters can and must be followed. There are already rules and guidelines covering civil servants who wish to obtain a job outside the Civil Service. The rules involving the Diamond committee, of which the hon. Member for Bradford, South will be aware, are clear. Very high standards are maintained. Clearly, we must always ensure that there are no conflicts of interest. That is my duty and the duty of my right hon. Friend the Prime Minister as Minister for the Civil Service. There is no evidence that civil servants as a whole have any wish to abuse those rules in any way.

    The hon. Member for Bradford, South made another point which should be seriously considered. I apologise for not picking up the hon. Gentleman's point earlier in my wind-up speech on Second Reading. I could have reassured the hon. Gentleman then. The Government propose to introduce an amendment to make orders under new section 2B(8) subject to affirmative resolution. This was omitted in the drafting. I hope that this undertaking, which we can consider in Committee, will reassure the hon. Gentleman and answer his main point.

    Question put and agreed to.


    That, for the purposes of any Act resulting from the Government Trading Bill, it is expedient to authorize—
  • (a) the payment out of the National Loans Fund or money provided by Parliament of sums required for the purpose of issues by way of loan to trading funds, subject to a limit of £2,000 million or such greater sum not exceeding £4,000 million as the Treasury may specify by order, and
  • (b) payments into the National Loans Fund or Consolidated Fund.