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Orders Of The Day

Volume 167: debated on Monday 12 February 1990

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Property Services Agency And Crown Suppliers Bill

Not amended (in the Standing Committee), considered.

New Clause 1

Replication Of Property Services Agency Functions

'The Secretary of State shall ensure that the functions hitherto exercised by the Property Services Agency and the Crown Suppliers are not, directly or indirectly, replicated within any department of Government.'.— [Mr. O'Brien.]

Brought up, and read the First time.

7.2 pm

I beg to move, That the clause be read a Second time.

The new clause refers to the replication of Property Service Agency functions—the mini-PSAs. We went into this in some depth in Committee, and the Minister replied to some of our questions. On 16 January he referred to the Ministry of Defence carrying out work that is now done by the PSA, and accepted that the Ministry is now recruiting people to take over the work of the PSA. Between 700 and 800 people will be employed to do the work in the Department. The Minister said that MOD was the largest Department, so it would employ the largest number of people to do PSA work.

In Committee I also asked the Minister about other Departments, in particular about the Home Office and its prisons. I also mentioned the Department of Social Security's new offices to be built in various parts of the country, and the Department of Health's hospitals and clinics. I also referred to other Departments that would assume the responsibilities of the PSA. My question was:
"Is the Minister now saying that all those Departments will have their accountants, consultants, engineers and supervisory staff?"
The Minister replied:
"That is right."
In other words, the Minister said that all other Departments will have their own staff to do the PSA's work. We have agreed on defence, but do I take it that the Cabinet Office, the Department of Education and Science, the Department of Employment, the Department of Energy, the Department of the Environment, the Foreign and Commonwealth Office, the Department of Health, the Home Office, the Northern Ireland Office, the Scottish Office, the Department of Social Security, the Department of Trade and Industry, the Department of Transport, the Treasury and the Welsh Office will all start recruiting personnel to do the work upon which the Property Services Agency is now engaged? Will all those Departments take on accountants, consultants, engineers and supervisory staff, and will they be on the payroll of those Departments? If so, the estimated figure given us in Committee—1,000 people—must be far short of the true number who will be employed in the various Departments. May we have all the details and information?

If what the Minister told us in Committee was factual, it is obvious that value for money is important. So the Minister must explain where the Government stand in relation to value for money in the privatisation of the PSA and the Crown Suppliers.

The Minister has not dealt with the Wardale inquiry, in Committee or in the House. He has commissioned no real inquiry to prove that the privatisation of the PSA is on the right lines and will benefit the Government. There has been no exercise to show that the Government's approach to the privatisation of the PSA is right. The Wardale inquiry, which was never acted or reported on in detail, identified the principal problems in the PSA. It said that the fundamental problem related to management's reluctance to acknowledge that problems existed, and to its lack of vigour in handling them once they had been identified.

People involved in the inquiry believe that this situation shows a degree of complacency by the management. That complacency is reflected in its attitude towards dishonesty and fraud, and we raised those issues in Committee. We wanted an assurance that that situation would not be mirrored in all the Departments that I referred to in my earlier remarks.

The Wardale inquiry said—the Minister has made this point on more than one occasion—that the purpose of untying the various Departments from the PSA was to allow them to have more financial control over their own affairs. One has to ask whether the various Departments understand the concept of financial control sufficiently when it comes to the actions and functions of the Property Services Agency. Unless there has been extensive training and consideration of the problems of financial control, there will be mismanagement when the PSA is privatised, as the Wardale inquiry pointed out.

If management control techniques are not adequate within the various Departments when the PSA is untied from them, it will be difficult to detect irregularities, unless there is to he some sort of in-depth study of problems that may develop in the various Departments which I listed. In Committee we wanted more information, and we mentioned the serious issue that I have referred to tonight. In Committee the Minister said, after he had been questioned:
"I am not sure that we can take the discussion much further, Sir Giles"—
he was the Chairman.
"We have had a good debate on clause 1 and I hope that the Committee will agree to allow the clause to stand part of the Bill."—[Official Report, Standing Committee D. 16 January 1990; c. 121–22.]
We had not had sufficient discussion. We needed to examine and to inquire about a great deal more. The Minister did not come up with the answers to questions that were put to him. Therefore, I shall put further questions to him tonight.

Is it proposed that all Departments, including the Cabinet Office, the Welsh Office and the Scottish Office, will have their own corps of people to do the work that the PSA and the Crown Suppliers carried out?

The Minister said that a lot of the work would be let out to contract but, as we mentioned to the Minister in Committee, who will supervise the contracts and tenders? Who will check the work that is carried out? We have had no answers to those questions, and I hope the Minister will answer them tonight.

Having listened to the hon. Gentleman's argument, I am uncertain whether he feels that it would be better if fewer or more people were employed on those tasks. I am equally confused by the use of the word "replicated" in the new clause. Does that mean reproduce or diminish? It is not a word that I know, and I think that the Opposition should state whether they are in favour of more or fewer civil servants to do this work.

7.15 pm

I have to excuse the hon. and learned Member for not being aware of what has happened previously. We are saying that there is little cause for him and for his colleagues to support the Bill, because the present organisation—the PSA—meets all the demands of the various Departments, which will now have to recruit staff. When we say that we do not want those Departments to replicate the PSA, we mean that we do not want mini-PSAs in every Department because we consider that that would be uneconomic. It is not value for money, and would not result in good management practice.

I ask the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn) the same question that I asked the Minister. The PSA has developed various manuals on the work that it does for various Departments. Security is at the top of its list. The PSA has a manual on security in various Departments, which has been built up during years of experience—for the Ministry of Defence, the Home Office, the Foreign Office, the Cabinet Office and the Departments of Social Security and Health. Under the new system, where will the manual go? The Minister did not answer that question in Committee. I asked him again tonight where will the centrally-owned documents which are now in the hands of the PSA be held in future? At one time, the Minister suggested that they could be held by the property holdings department, which would still be part of his Department. If that is so, why are we here? That means that we will have the same situation as we have at present. The manual will go round from Department to Department and there will be no security. That is the situation into which the Minister is leading the House. If our clause is not accepted, there will be a mishmash of security provisions throughout the various Departments.

There is also the question of supervision to ensure that the projects demanded by the various Departments are in accordance with their specifications. Each Department will have to ensure that and will have to recruit the best personnel to carry out the work. There will be a small group of people in a Department to undertake work, whereas, at the moment, the PSA supervises projects in all Departments and can recruit the best staff. The PSA has the knowledge to carry out the work, and the Minister would be wise to leave things as they are. If that is not acceptable, I ask for the assurance that we are seeking in new clause 1—that there will be no duplication of work. Or will Conservative Members join me and my colleagues to ensure that new clause 1 stands part of the Bill? That would be in the best interests of the House and would show that we are concerned about value for money. The report of the Wardale inquiry made it abundantly clear that there must be efficient management and financial control. If there is not, there cannot be protection against dishonesty and fraud. We are trying to protect the House and to make sure that we get value for money.

Will my hon. Friend the Minister tell the House exactly what will happen after privatisation if replication is allowed? I want to be sure that my constituents have the right after privatisation to be allowed to compete properly and fairly without having set against them an in-house programme and all the problems of single action tenders that can arise through Departments giving the jobs to their own boys. I should like to be certain that there will be open and fair competition after privatisation and that nothing will be held back. I hope that the Minister can convince the House about that.

The Parliamentary Under-Secretary of State for the Environment
(Mr. Christopher Chope)

I certainly hope that I can convince my hon. Friend the Member for Hastings and Rye (Mr. Warren) and the House on that important point. It would be pointless for each Department to set up its own in-house works organisation, and that is not the Government's purpose in proceeding towards the untying of Departments. The policy of untying Departments for the PSA predates the Bill and any proposals for privatisation. That is why the hon. Member for Normanton (Mr. O'Brien) is mistaken in his approach. The new clause would prevent the functions currently undertaken by the PSA and the Crown Suppliers being undertaken by other Departments. Indeed, matters would go further because the new clause would prevent the devolution of procurement responsibilities to Departments, and that is well outside the scope of the Bill.

Untying Departments from the PSA will put financial responsibility where it should be—with the user Departments. It will enable Departments to obtain value for money through their own purchasing decisions instead of having to rely on a central Department to make the decisions for them. That is one of the fundamental principles of the financial management initiative that predates the Bill.

I should like to clarify what the Minister means. Does he think that when the Home Office wants to develop or build a new prison the design work should be left to the PSA and not to the client Department, which is the Home Office? Is the Minister saying that the Home Office will not have an input into the design or building of a new prison but that it will be left to the PSA? Will the same principles apply to the building of a National Health Service hospital? Does the Minister agree that it is for the client Department to instruct the PSA, which then presents designs for which the client can choose? Is not that the way that it works?

That is indeed the way in which the system largely works at the moment. Prior to untying, Departments had no choice but to go to the PSA. They now have the opportunity to go to other organisations. That is why the document issued by the Ministry of Defence, to which the hon. Gentleman referred, praises the essence of the financial management initiative about untying. It says that untying from the PSA will bring greater choice. That is what it is all about.

The financial management initiative aims to obtain value for money through a clearer definition of responsibilities and the benefits of competition. To carry out those responsibilities effectively, each Department will need some expertise to know when or even how to commission consultant advice. Departments will need to be intelligent customers for professional services. That is the essence of what is proposed.

It might be helpful to the House if I refer briefly to an extract from the annual report of the central unit on purchasing. It states:
"Arrangements were made to transfer financial responsibility from PSA to departments (effective from April 1989) for part 1 capital works and to simultaneously untie departments from the requirement to employ PSA. Maintenance and minor works would follow a similar path in April 1990. CUP has been directly involved in three areas:
  • —development of ownership responsibilities in owning departments;
  • —development of a more commercial approach to project management in PSA, together with appropriate organisational and procedural changes both in PSA and the owner departments;
  • —providing specific support and professional input to individual projects.
  • Major departments have adopted the concept of a single point responsibility for each capital project and many have initiated organisational changes…In some departments with large works programme, technical support organisations are being developed to assist the project sponsor. These units will provide the technical expertise necessary to inform the sponsor's decisions. This is a vital role which will significantly improve the project appraisal and management during all stages of the project."
    Fewer people are involved in that than are presently involved in the PSA. It is interesting to note that the central unit on purchasing concludes that, although it is too early to have a full assessment of the effects of untying,
    "it is already clear that project sponsors are benefiting from a more responsive and flexible PSA which, coupled with greater commercialism, should result in a significant overall improvement in project performance."
    That is the Government's aim. I hope that the House will reject the new clause.

    A terrible experience for Scotland was the PSA construction of new court buildings. The PSA was advised by the Scottish courts administration. The buildings are all impracticable, extravagant and extraordinarily badly designed. If they had been subject to commercial competition, it is impossible to believe that buildings that touch upon the lives of so many people could either have been so expensively built or so badly designed.

    I am disappointed to hear what my hon. and learned Friend says. I visited some of the court projects in Scotland and I know that the client, the Scottish Office department responsible for courts in Scotland, is much impressed by the work that the Property Services Agency has carried out. I looked at the new sheriff court in Glasgow. Although the design of the building may not be to everybody's taste and perhaps not to the taste of my hon. and learned Friend the Member for Perth and Kinross (Sir N. Fairbairn), he cannot disagree that the building is mammoth and that it is effective for the function that it has to perform.

    I am amazed that the Minister chose Glasgow sheriff court as the building on which to model the excellence of the PSA. A more impracticable building could not be discovered. It was vastly over budget, 90 per cent. of the space is unused, and to reach the only consultation room the solicitor is required to pass between the cages in which prisoners awaiting trial are kept. It takes half an hour to get from the court to visit a client. There are 15 armchairs in the dock but only two places for counsel who represent the people in the dock. If that is good design, God help us.

    I am sorry that that court's design does not appeal to my hon. and learned Friend, who has experience of using it

    The best court building that the PSA has commissioned in recent years is the court building in Truro, which has won probably half a dozen design awards. It is regarded as one of the best buildings built last year. I was lucky enough to be present when its foundation stone was laid and at its opening. Everybody is much impressed by it. Many other court buildings for which the PSA has been responsible have received similar accolades from the architectural profession.

    Given what I said in Committee, the Minister may be surprised that on Report I rise to agree with him strongly. As a Scottish Member of Parliament, I do not take lightly what was said by someone who is not only a Back-Bench Member of Parliament but chairman of the Historic Buildings Council for Scotland, an appointment that is made by the Government. This is not a jocular matter, because by implication some serious charges have been made against some important people, whose reputation may be affected. At his convenience, will the Minister, or the Secretary of State, write to me commenting on the intervention made by the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn)? This is a grave issue.

    7.30 pm

    Because architecture is a subjective assessment of buildings. Architects disagree about the merits of a particular building. My hon. and learned Friend the Member for Perth and Kinross holds a different view about the sheriff court in Glasgow from the hon. Member for Linlithgow (Mr. Dalyell).

    I congratulate the Minister on defending the architecture and the amount and quality of work done on those court buildings. If the PSA is so good, and I agree that it is, why are the Government privatising it?

    The answer is quite straightforward: because the PSA is so good, it is important that its expertise is available in a wider market.

    Is not the danger that the PSA will be lost? We know that it did extremely well before the Government began to run it down and turn it into a second-class service. Therefore, its value is not as high as it would have been a few years ago. Its past considerable achievements could be maintained if the Government were prepared to back it.

    The facts show that the quality of work that the PSA is commissioning and doing is improving year after year. The work that has been done at Kew gardens is an example of the high esteem in which the PSA is held. The restoration of Fort George is a magnificent example of the PSA at its best. I am sure that it will have an enormous amount to offer the private sector, and I hope that it will do so not only domestically but internationally.

    Before we are carried away on a tide of euphoria, I hope that hon. Members will recall the report that the Select Committee on the Environment made after it had interviewed and examined the PSA. In support of my hon. and learned Friend the Member for Perth and Kinross (Sir N. Fairbairn), may I say that the Glasgow sheriff court was completed by the PSA, but the new senior judge wanted to enter court not from the left but from the right, so it had to start all over again. Hon. Members should consider the PSA's record on finishing jobs on time, but they should not consider its record on finishing work within the cost yardstick, otherwise they will have a heart attack.

    My hon. Friend makes a valid point. Sometimes delays are incurred because, for example, a member of the judiciary disagrees about the design of a building. Sometimes those delays are blamed unfairly on the PSA, when truly the responsibility lies with the client. That is why the essence of the financial management initiative is to ensure that responsibility for such delay lies where it truly should—with the client.

    We have explored the new clause conscientiously and thoroughly, and I hope that the House will reject it.

    The point of the new clause is to avoid empire building within Departments. I am sure that Departments will find reasons for employing experts in security, building design or other matters.

    The new clause aims to avoid duplication of functions that are covered by the PSA at present. I agree with the Minister about effective and efficient administration, but the danger is that duplication will affect the purpose of the Bill. The new clause has much to commend it in that respect.

    I feel that I should intervene, given the remarks made by the hon. Member for Linlithgow (Mr. Dalyell), to which I do not object. I am chairman of the Historic Buildings Council for Scotland, and I hope that I was chosen for that position because I am sensitive to the appearance of buildings and their practicality and cost.

    My hon. Friend the Minister said that Glasgow sheriff court is an example of the excellence of the Property Services Agency. In my opinion, it is a singular example of the fallacy of the monopoly of the PSA and of the excellence of the purpose of the Bill.

    Glasgow sheriff court rivals in its appearance Goebbels' propaganda ministry in East Berlin, which still stands. It is brutal and hideous. Originally, it was planned to be one third higher than it is, but because the extravagance of its absurdity prevented it from being practical it was required to be one third lower. It is a building of great impracticality, and 90 per cent. of its usable space is unused. It is ill-designed, greatly extravagant and preposterous. Without challenge—the PSA cannot be subject to challenge—the agency decided that the bench in the court should be 40 to 50 ft long. The sheriff therefore cannot speak to the shorthand writer, who is too far away. The witness box is such that the jury cannot observe the witness, and the presiding judge is lower, and therefore appears lower in status, than those appearing in court. There are 15 swivelling armchairs in the docks of the jury courts. I presume that the courts are expected to house 15 accused people, but the table at which their representatives sit has room for only two people on each side. Presumably, on the prosecution side will be the procurator fiscal and his assistant, and on the defence side one advocate and one solicitor.

    The building is remarkably impractical. It has certain modern, tasteless features. The great arms of Glasgow has been smashed into bits so that it is incomprehensible and cast in granite over the door. I imagine that the hall is twice the length of the Chamber—for what purpose, I cannot imagine. The building is impractical. To go to the cells, one must go on a long trail, and there is no system of communication between the courts and the cells. At the cells, there is a huge area where the police can undertake their activities and it is unlike any other court that I have seen. However, there is almost no provision in the cell area for solicitors or lawyers to interview their clients. I question whether the Property Services Agency can design courts.

    Is the hon. and learned Gentleman saying that the court's design and layout were totally the PSA's responsibility and the client department was not involved? Does he believe that the client department does not become involved in that work?

    No, but unfortunately that makes it worse. The Scottish courts administration is the adult child of the PSA. There are extraordinarily badly designed courts in Airdrie, Greenock and Glasgow. Look at what the PSA and the Scottish courts administration propose for the High Court in Glasgow, one of the great buildings of the city. They propose a ruinous and impractical scheme, which was opposed by everyone else, as was the Glasgow sheriff court which practises therein. Therefore, nothing could be better than challenging the PSA's dominance.

    I have had the benefit, or otherwise, of being a Minister. On the first day I moved into my small office, I was visited by six people from the PSA—Mr. Curtain, Mr. Carpet, Mr. Desk, Mr. Chair, Mr. Picture and Mr. Someone Else—who told me that they would transform my office at a cost of £6,600. When the PSA offered to move the Crown Office into the royal high school building in Edinburgh, it did the same, except this time at a cost of £160,000. Monopolies of this kind that fall to Ministers and Government agencies should be challenged by those who have more common sense and more idea of economy and practicalities. If the Minister wants to come with us to Glasgow sheriff court, either as a client or as a colleague, I shall show him the absurdity of the work carried out by the PSA.

    I have not yet been to Glasgow sheriff court, but I am not sure that I want to go as either the client or the colleague of the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn). I have, however, been to Fort George, where the work was done brilliantly. Last week, I was at Kew gardens for the speech by the Prince of Wales on rain forests-a matter close to the heart of the Secretary of State. The experts, whom we both know, were full of praise for the PSA's careful work to take account of special needs. The PSA did a brilliant job there.

    I cannot agree with the hon. Member for Langbaurgh (Mr. Holt) if he believes that, a private

    consultant or architect designed a court house, there would not be changes to the design. Changes are made whether a building is designed by the PSA or by a private company or architect. If a judge says that he wants to enter the court room from the right, that will affect the PSA and the private consultant. If that is the Bill's basis, there are no grounds for pursuing it, because nothing will change.

    7.45 pm

    Paragraph 72 of the Environment Select Committee's report states:

    "The original concept of an all-embracing agency has failed the test of experience. The PSA was established to provide a total service to Departments, but its functions have gradually been chipped away by its client Departments. It has been found to be too impotent and too cumbersome, with lines of communications that are far too long."
    That damning paragraph explains why we need to privatise the PSA.

    The Minister referred to project performance as one reason for giving the various functions to the client Departments. How does one measure project performance unless there is someone in each Department measuring it? The Select Committee's report did not refer to project performance. Research is needed to determine what the Minister means by measuring project performance. He paid credit to the Truro court house. If such expertise is available, why do the Government want to lose it? The Minister said that he would like the PSA to move into a wider market. Why are we not discussing a provision to allow that to happen, instead of destroying it?

    The hon. Gentleman referred to the Government. I should like to make it absolutely clear that the Select Committee's report was a unanimous report by all parties.

    There is no reference in the report to the Minister's point about project performance. I should be interested to learn how the Minister will ensure that project performance is measured in every Department that will benefit from the Bill, as they will all have their own mini-PSAs.

    We should discuss how to give those people with expertise in the PSA and the Crown Suppliers more opportunities to work in the private sector. Because they are dictated to by the Department of the Environment, they are prevented from undertaking other work, just as happens with local authority public works departments. If the aim is to provide a wider market for the expertise of the PSA and the Crown Suppliers, that could be provided without this legislation.

    The Minister has not given us a good reason why we should not pursue the new clause. I know that we have only limited time in which to debate the new clause and amendments, and the Third Reading, and I do not intend to divide the House now; we intend, however, to divide it on Third Reading.

    Question put and negatived.

    Clause 1

    Transfer Of Property Services Agency And Crown Suppliers

    I beg to move amendment No. 2, in page 1, line 21, at end insert ', with the exception of the Security Group of the Property Services Agency and any property, rights or liabilities related to security work.'.

    With this we may take amendment No. 4, in clause 6, page 3, leave out line 46.

    In Committee, my hon. Friend the Member for Linlithgow (Mr. Dalyell) asked the Minister what advice he had on security, and whether it was properly discussed with those responsible. When he asked whether the matter had been referred to either the secretariat or the Joint Intelligence Committee, the Minister failed to answer. If he had said that it was subject to proper discussion, we would not now be discussing the amendment. I suspect that there is now a bigger tale to be told.

    We also asked in Committee whether the Minister had raised the matter with the Ministry of Defence. He replied that the Secretary of State for Defence, being a member of the Cabinet, agreed with the decisions that had been made, but again he did not say what the security personnel thought about the matter. As a member of the Select Committee on Defence, I had an opportunity to raise the point with MOD officials, who replied—in a manner that was both sophisticated and as bland as the Minister's—that they had their concerns, but that those concerns would be discussed later. In our view, they have not been resolved because the Minister has not turned his attention to them.

    I can give an example. The Select Committee discussed the physical security of military installations. Having engaged in public discussions with the MOD over the past few weeks, we have discovered that when security is handed over to private firms they pay poverty wages. We have also discovered massive loopholes. Last week, for instance, I asked the Assistant Under-Secretary whether it was possible for someone to deceive the authorities by assuming a different name, and to get into a military installation. The reply was that it was eminently possible. When I asked the MOD police, I received the same answer. That loophole must be closed.

    I fear that the Minister has paid even less attention to the Bill's security implications than the MOD has paid to the physical security of military installations, and that the consequences of his lack of rigour may be severe. He has responded inadequately not only to Opposition Members, but to his hon. Friends. In Committee, the hon. Member for Basingstoke (Mr. Hunter) said that he hoped that the Minister would take on board the concern felt by many hon. Members; again, the Minister would give no details.

    The Minister himself said in Committee that the majority of the PSA's work was sensitive in security terms, some of it extremely sensitive: for example, more than two thirds of its new construction and maintenance programme is for the MOD. He cited the Clyde submarine base in my constituency, where 110 major projects are currently under way. I take his point that much of the work is untied at present, and that most of those 110 contracts will be carried out by private firms. I am concerned about the maintenance jobs. In the case of the submarine base, 200 jobs are involved. There are 90 industrial and 36 technical staff. It is important for staff to have a deep knowledge of the workings of such plants, which are enormously complex technically, and such knowledge can be gained only through historical familiarity with them.

    I told the Minister that people who knew had told me that it would take a new operator at least 12 to 15 months to gain hands-on experience of the plant—to build up expertise on a learning curve. How can that happen if the contracts are subject to competitive tender, as the Minister says that they will be? The logic of privatisation is that the PSA must compete for work; if it is not to compete, what is the use of privatisation? If work is always given to the PSA for security reasons, I suggest that Faslane and other such installations should not be included in the privatisation proposals.

    In Committee, the Minister was asked whether he had undertaken a risk assessment, taking account of possible management failure. The answer was no. In view of that, I consider it not only reckless but dangerous to proceed with the privatisation programme. The leaked report by the PSA's regional directors predicts a 32 per cent. cut in business contracts and a possible loss of 200 jobs. Still worse, the loss of either Rosyth or Faslane would have a major impact on the PSA's viability. I ask the Minister to consider not only the financial but the security implications.

    It would be fine if the Minister's case was consistent, but the Committee knew from the outset that it was not. My hon. Friend the Member for Hammersmith (Mr. Soley) asked a question which bears repetition: if the Secretary of State's car and the design and security of Minister's homes are to be under the control of the PSA or a suitable Government Department, how can it be acceptable to transfer other personnel who face the threat of the paramilitary? I would like the Minister to answer that question now so that I can take the answer back to the people who work in the military installations in my constituency. What is the difference between the security implications for a Minister or his home, and the implications for highly sensitive military bases? By his failure to answer that question, the Minister underlines both the paucity and the danger of his proposals.

    Another inconsistency has developed since the Committee has been in business. For reasons well known to all of us, in some parts of the United Kingdom services will not be put out to competitive tender. The Minister denies that at his peril. If that is acceptable, why is it not acceptable for services involving military installations and security bases not to be put out at all? The Minister must explain that inconsistency tonight. I have to tell my constituents that PSA work services in certain parts of the United Kingdom will not go out to tender. However, they will go out at Faslane and at the Clyde submarine base because the Minister does not believe that the Clyde submarine base is a sufficiently high security service for it not to go out to tender. That is the only conclusion that I can draw from the Government's inconsistency. I hope that the Minister can at least smooth out that manifest inconsistency.

    The Minister has shown that he cares little for the 200 or 300 jobs that will be lost in Scotland or for the 1,000 jobs that will be lost throughout the United Kingdom. I can conclude only that by privatising the PSA the Minister may save some money. However, will he save lives at the bases that are affected? The Minister is being reckless by pursuing the privatisation proposal. He has not fully thought out the proposal and he does not have the full agreement of the security forces. He is jeopardising the lives of the service personnel in our United Kingdom bases. He should be ashamed about that, and that is why we will press the amendment.

    8 pm

    The amendment is very important because the privatisation of the PSA will have considerable security implications. The PSA designs and maintains sensitive security sites such as RAF Fylingdales, GCHQ and, as has already been stated, the nuclear submarine base at Faslane. Therefore, PSA staff are vetted for those purposes and are also subjected to the Official Secrets Act 1911. The PSA also security vets every contractor working on a Government site and nearly one employee in 10 is rejected by that vetting. Vetting is expensive and time consuming and the whole procedure may be put in jeopardy because of the thrust towards privatisation in which profit may overtake security implications.

    The American and West German Governments have already informed our Government that they will work only through British civil servants for design and maintenance on their military sites for which the PSA works. I understand that there are 500 civil servants in Germany looking after the building and maintenance of military installations. If the West German Government believe that they should remain in place because of the security implications, that is an important consideration. The West German and American Governments oppose privatisation. Will the Minister tell us what feedback he has had in his discussions with those Governments?

    Will the Minister name any other countries in which the functions that we are discussing tonight are privatised? Other countries are not prepared to privatise such work. Ministers have also decided that security work on Cabinet Ministers' homes and their own homes will not be privatised while work on military and married quarters will be.

    Recent tragic events have shown that the homes of military personnel are as vulnerable to terrorist attack as ministerial residences. If the privatisation of the PSA poses no security threat, why are Ministers' residences excluded from the privatisation plans? There is an inconsistency there which the Minister must answer. That is one of the reasons why my party will oppose the Bill tonight. We have not been satisfied by any of the assurances that the Minister has given about security.

    The question of security has taxed the patience of this House for many years. Lapses of security have always created a sense of anger and sometimes frustration when we have not been able to get explanations from the Government—and by Government I mean Governments of all political persuasions. Security is a subject which in some form touches us all. However, whenever we show an interest in how to deal with it and how to put our views to the authorities about how security could be enhanced and ringfenced to provide the highest levels of public confidence, we are treated at arm's length.

    The Bill is small, but it affects many people. When we discussed new clause 1 we were not satisfied that certain things such as empire building in the Departments—under the heading of replication—would not occur. Also we have heard nothing that persuades us of the case for privatisation.

    The Government may have an argument on privatisation and security. They may be able to say that large areas of private enterprise deal with sensitive security matters where there are no problems. The Government may be justified in claiming in those cases that there are satisfactorily ringfenced and regulated accountability conditions so there is a higher level of support for work to be placed in the private sector than in the public sector. Very often there are unfortunate lapses in the public sector. However, that is not a good argument.

    My colleagues have already said that an outstanding disparity follows the unfortunate reasoning behind the privatisation proposal. Why will we exclude Ministers' houses from the proposal? Why should it be a logical conclusion that what is good for Ministers' houses is not good enough for other properties? In many cases people are more in the front line of danger than Ministers.

    I remember being very worried when I was a young officer in the last war. Over the years since then I have pondered about how silly it is for us to send young boys of only 17½ and 18 to Ireland. They do not even know where the enemy is. That is an example of people at the sharp end of the problem who are in danger.

    I do not want to underestimate the importance of the work of the Secretary of State for Northern Ireland, because his is a very dangerous job. However, he is guarded every moment of the day. Therefore, the Bill falls short. We are treating Ministers differently. That cannot be logical.

    Does the hon. Gentleman accept that, when he describes Ministers, he should also refer to former Ministers, some of whom are his colleagues?

    Some of them are so long past that I often have a sneaking suspicion that they enjoy their security too much to allow it to wither away. Nevertheless, one does not want to be too critical about dangerous situations. We must act responsibly.

    Is there a case for privatisation? To put it another way, when we have satisfactory security in defence programmes throughout the United Kingdom, will we put security at risk if we privatise security at defence installations? That is a very good question, and the Minister should be able to answer it. The issue is not party political. Hon. Members have a common interest. We want to know whether, although there is a case for responding reasonably to high standards of security in the private sector, there is a case for widening it and, therefore, possibly weakening it.

    There has been ample time for consultation. What representations has the Minister received from security officers and from representatives of the PSA? Have they indicated any concern, and has the Minister responded to them? Hon. Members may be more confident if the Minister is able to tell the House that consultations have satisfied him and, therefore, that they should satisfy us. I suspect that he will not be able to tell us that with any confidence.

    This has been an important debate. Hon. Members may recall that this subject was important also on Second Reading and in Committee. As I said on Second Reading, the Government have not thought through the consequences of their actions in privatising the PSA and the Crown Suppliers. My hon. Friend the Member for Dumbarton (Mr. McFall) has moved amendment No. 2 dealing with security. Amendment No. 4 would exclude Northern Ireland from the scope of the Bill. On Second Reading, I said that the Bill would allow paramilitaries operating out of Northern Ireland to have greater opportunities for terrorism in this country and in Northern Ireland and for raising money in Northern Ireland.

    One of the best speeches in Committee was made by the hon. Member for South Down (Mr. McGrady) on behalf of the SDLP in Northern Ireland. He pointed out what and other Committee Members have known for all too long, which is that paramilitary groups on both sides—Unionist and Republican—obtain significant sums of money from threats and extortion. The most vulnerable groups include the private building sector and related organisations. The hon. Member for South Down pointed out that it is well known in the Province that 20 per cent. is usually added to the cost of a contract, and that sum is passed on to paramilitary groups.

    8.15 pm

    If hon. Members are satisfied with that, it would be a shame. They cannot be satisfied. If we include Northern Ireland in the scope of the Bill, and we privatise several organisations, there will be the real danger that funding for paramilitary groups will be increased. I put it no higher than that. I do not expect the Government to say how they have adequately coped with that. However, on Second Reading, it was clear that they had not thought about the consequences. In Committee, it was clear that the Minister did not know all the answers. Perhaps one should not expect him to do so, because the information is particularly sensitive, but I have no reason to believe that adequate thought has been given to how to proceed with the privatisation.

    When a service in Northern Ireland is privatised, company directors are threatened that, if they take on Crown contracts, they or their work force may be shot. That is precisely what happens there—they are shot. Several people have been shot in the past few months. If the Government have got this wrong, it is literally a fatal warning to people in Northern Ireland. I would much prefer that this matter is kept out of the Bill so that we do not create that possibility.

    If we are satisfied with present security—the Government are always telling us that they are doing everything possible to improve and maintain security—surely we should not be changing the practice. If they think that this measure will improve security, surely they can say so. They have not said whether it will improve security or make it worse. The most that we have had is an indication that, somehow or other, the measure will not do an) damage. It is deeply disturbing that the Government's policy is not well thought out.

    My hon. Friend the Member for Dumbarton, who was ably supported by my hon. Friend the Member for Hartlepool (Mr. Leadbitter), referred to Ministers' cars and homes. In Committee, my hon. Friend the Member for Dumbarton and I challenged the Minister on the privatisation of the car driving service and the security of people's homes and the exclusion of Ministers' cars and homes. The Minister said:
    "The hon. Member for Linlithgow knows that a review was carried out in 1988 after the announcement of our intention to privatise the Crown Suppliers. That review concluded that the ministerial car service and some of the Crown Supplier's work on security furniture and equipment should be retained within Government. The reason in the first case was the nature of the terrorist threat to Ministers. In the second case, security considerations argued against delegating to a private firm either the design and development work of the Crown Suppliers security branch or their work in choosing and approving manufacturers."
    The House should note those final words:
    "choosing and approving manufacturers."
    The Minister has just intervened to respond to the argument about why Ministers' cars and their home security were excluded from the provisions. His defence was, incredibly, that it was all right because it applied to Ministers of both parties, from this Government and from previous Governments. That is unacceptable. As my hon. Friend the Member for Dumbarton said, that will not apply to service men's families or homes or to a number of senior civil servants who are at least as much at risk—and in some cases more at risk—from terrorists than Ministers. According to the Minister in Committee, the security is necessary for Ministers, so why is it not also necessary for senior civil servants and the families of service personnel, who are at least as much at risk?

    I repeat what I said on Second Reading. The Labour party is not prepared to accept a second class of security for civil servants or for service men or their families compared with that offered to Ministers, whether they are Labour or Tory Ministers, past or present. That argument is unacceptable to us and it should be unacceptable to all hon. Members.

    The first time that a senior civil servant or a member of the armed forces or one of their families is killed or seriously injured as a result of a second-class service., the responsibility will be on those who have supported the Government on this Bill. The position is that serious. That is why the Opposition are so opposed to the Bill and that is why we are now seeking to exclude Northern Ireland from the provisions and exclude the security group of the Property Services Agency and its related design facilities.

    My hon. Friend must convey distinctly and clearly that the lesson is that if the Government cannot show that their proposals do not put security at risk, they should not put them into practice.

    My hon. Friend is absolutely right. Sadly, he did not serve on the Standing Committee with us; his expertise and knowledge would have been useful. The tragedy is that, over and over again, the most that the Minister has been able to tell us is that he does not think that there is a risk. That is not sufficient. As I have already said, if the Government were to suggest that by keeping Northern Ireland on the face of the Bill—in other words, including privatisation provisions for Northern Ireland—security in Northern Ireland would be improved, it is probable that we should have to accept that as the Government's judgment because, although we cannot ask for evidence on the Floor of the House, at least we would have something to work on. However, the Government will not say that. They simply say that, in their judgment, the provisions will not make security any worse.

    As I have already said, the hon. Member for South Down, who lives in Northern Ireland and knows the scene there and who put the case so forcefully and so well in Committee, has not yet had the response that he deserves to his serious speech.

    Further to the intervention from my hon. Friend the Member for Hartlepool, the issue of Ministers' cars and homes is the clinching argument. If, according to the Minister's own words, this level of security is so necessary for Ministers of the Crown, why is it not necessary for civil servants or for armed service men and their families? Either security for Ministers is better, in which case we should bring everyone's security up to that level, or it is worse, in which case we should improve security for Ministers. The Minister's statement in Committee was clear. He said specifically that the facility should not be privatised for security reasons. Therefore, one assumes that that is because the PSA offers a higher standard than could be achieved in the private sector. If that is the argument—and it must be the only argument unless the Minister has any other suggestions—its logic should also apply to senior civil servants and to members of the armed forces and their families. There should not be a second-class standard or second-class delivery of security services for such people. That is the force of our argument and we should believe that it is a powerful argument.

    My hon. Friend the Member for Dumbarton made some extremely important comments. When considering the design of military bases in this country, we must also consider not only what happens on the base itself, but the perimeter security and everything that goes with that in terms of the people who enter the base to work on it. If my memory serves me right, it was the hon. Member for Southampton, Itchen (Mr. Chope) who said in Committee that it was quite normal for outside contractors to go on to United States or German bases to provide, for example, fast-food outlets. We know that. But I shall refer again to his exact words in Committee. Although I have already quoted this passage, I emphasise the words at the end. The Minister referred to
    "the design and development work of the Crown Suppliers security branch or their work in choosing and approving manufacturers."—[Official Report, Standing Committee D, 11 January 1990; c. 84.]
    What is going to happen when a company is chosen to do some work at Faslane, Aldermaston or one of the other bases in this country? At the moment the PSA has some say about which company should carry out the work and takes into account security factors and the people who work for the company, to the extent that one in 10 of all employees are excluded on security grounds. Although we are told that that system will end, the Government's secret argument is, "Ah but, it will not disappear because we shall transfer it to the relevant Department. It could be transferred to, for example, the Ministry of Defence."

    Although we are also told that there will not be any mini-PSAs, in fact, that is exactly what we shall have. Presumably, the Ministry of Defence, the Northern Ireland Office, the Home Office, the Department of the Environment and a number of other key Ministries will all have their own mini-PSAs for security work. The alternative is to keep the whole thing as a national body, in which case why are we privatising it? Why do the Government not say, "We accept the two amendments, one excluding Northern Ireland and the other excluding the security group and its related work"? I can well understand that the Minister may keep the security group out of the privatisation, but I am concerned about the related security work.

    Let us consider the lighting that is necessary on the perimeters of secure establishments. The design, location and the lighting itself are the work of the PSA and can be crucial. Experimental work is carried out into the anti-blast properties of the materials that are used in the homes of, for example, service men's families, senior civil servants, Ministers and at military installations in general. That work is not only controlled and supervised by the PSA, but carried out by the PSA itself in many instances. However, much of the work is now to be carried out either by in-house PSA in the relevant Ministry or by a private contractor.

    The problem does not stop there. Let us consider Broadmoor and Britain's prisons. Again, the work of the PSA is essential to security. That is why I want to make it clear that, leaving aside the amendment covering Northern Ireland, we are raising the full range of security issues that are affected, in relation not only to terrorism or defence, but to all the secure establishments that are necessary in our society.

    I repeat for the third or fourth time that the Opposition do not expect the Minister to give us details of the security thinking or of the discussions that have taken place. However, if the Minister cannot explain his comments when he said that for security reasons it is necessary not to privatise Ministers' cars and the design, selection and approval of their manufacturers, he should explain why that is necessary for other areas and for other groups of people, such as civil servants. If he is not going to privatise any of those categories, he must address the argument about the mini-PSAs and tell us whether there will be a national group.

    The Minister should be able to say categorically that if the Bill is to apply to Northern Ireland, in the judgment of the Government it will improve the security position there. If the Government cannot make that statement, it will not be enough to say that the Bill will make no difference. All the remarks of the hon. Member for South Down about the activities of paramilitaries and all that we know about threats to employers and companies that do Crown work show that the Bill would risk making the position worse. The Opposition believe that that risk is not worth taking.

    8.30 pm

    Many of the matters about which I was going to voice concern have already been raised by the hon. Member for Hartlepool (Mr. Leadbitter), with whom I share considerable anxiety about security.

    If I had been on the Standing Committee, I should have tried to obtain more detail than seems to have been obtained—but from what I have read of the report of the Committee, I am confident that my hon. Friend the Minister will give us some reassurances.

    I am worried about a particular matter. The unions have drawn the attention of the House to the dangers that they regard as inherent in what they call the Trojan horse of allowing repairs and maintenance to be done by sub-contractors who are not covered by security clearance when the work requires clearance.

    As Opposition Members said, we do not expect my hon. Friend the Minister to describe in public the security arrangements of those who need the cover of security. Nor do I believe that all Members of Parliament are at risk from terrorist attack. We must take our own precautions according to what is required. However, I hope that my hon. Friend will tell the House that those who require the cover of security for repair and maintenance work to their property or transport will continue to receive it. If the chauffeur service is not to be privatised, what about security clearance of those who carry out repairs and maintenance on the vehicles? What about unknown contractors who carry out repairs and maintenance work in the homes of civil servants? In Northern Ireland civil servants carry out everyday duties which here on the mainland are regarded as straightforward, but which carry an inherent risk there because the nature of those duties is considered by terrorists to be contrary to what they stupidly deploy as their views.

    I hope that my hon. Friend will recognise that the matter does not divide the House but unites it. I hope that he will bear that in mind when he replies.

    I give an absolute assurance to every hon. Member who has spoken and to the House that security is not jeopardised by the Bill one iota. The hon. Member for Dumbarton (Mr. McFall), who opened the debate, expressed anxieties about security. Perhaps I can remind him of the answer that my hon. Friend the Minister of State for the Armed Forces gave to a question tabled by the hon. Gentleman on 6 February. The question was:

    "To ask the Secretary of State for Defence what are the implications for the security of military installations of privatisation of the Property Services Agency."
    My hon. Friend replied:
    "The arrangements for the security of military installations will not be adversely affected by the privatisation of the Property Services Agency."—[Official Report, 6 February, 1990: Vol 166, c. 593.]
    Opposition Members do not seem prepared to accept that that is the position. I find that a sad reflection on them.

    All aspects of the security of service married quarters will remain the responsibility of the relevant armed service and will continue to be taken seriously. Up to now the PSA has acted as the agent of the Ministry of Defence for the construction and maintenance of married quarters and other service buildings. It will continue to do so in future. The PSA and the many civilian contractors that it already uses are subject to the general and local security arrangements in force at the time. The privatisation of the PSA will not affect such arrangements in any way. All security matters will remain the responsibility of the appropriate service commander. Therefore, it is absolute nonsense for Opposition Members to suggest that a double standard is being applied. Security is provided with a single standard for the whole of Government business.

    In Committee, the Government were guided by the advice that they received on security matters. When we were considering the details of the privatisation of the Crown Suppliers and deciding which parts of it should be privatised, we were guided by that advice. I assured the Committee, and I assure the House today, that we shall accept the advice tendered. The advice tendered on the ministerial car service was that it should not be privatised.

    Although I know that some of my colleagues and some Opposition Members feel that it would be perfectly reasonable to privatise the service, we shall not privatise it because our advisers tell us that it would be wrong to do so on security grounds. That shows that the Government regard the issue of security as of paramount importance.

    Were the security services consulted about the risk of privatising the PSA where it affects the security of service men and their families and civil servants? If so, what did they advise?

    Private companies are already involved in the security of, for example, Ministers' residences. The hon. Gentleman and others have suggested that virtually all Ministers have security at their residence. The House will know that only a few Ministers have security precautions at their residence. Those who have security arrangements have them because of the position that they hold or have held. That includes former Ministers from both sides of the House.

    My question was about a matter on which the advice was clear. The Government were told not to privatise security for Ministers' cars and homes. I am asking whether advice was requested on the security of service men and their families and civil servants. If so, what was the answer? Was it that it was OK to privatise that service because it was not a security risk? If so, what was the difference?

    There is no difference. The present arrangements for Ministry of Defence establishments and employees will apply in the future. The arrangement is that Ministers and, where necessary, senior officials and service men on official business all have access to secure forms of official transport, either civilian or military, as their duties require. That is the position now and will be the position in future.

    The Minister must bear it in mind that the House will not be critical of the advisers to whom he must listen. However, the House must consider the history of advisers. Sometimes advice is good and sometimes it is bad. Only experience can tell us that. This matter unites the House. To what extent has consultation with the people affected by the Bill, whose future will be determined by it, and who are worried about the security services, supported the advice that the Minister has been given?

    We have completed the consultation on privatisation of the Crown Suppliers. The process has been carried out to the satisfaction of all parties. I am sure that the same will be true of the privatisation of the PSA. The hon. Member for Hartlepool (Mr. Leadbitter) is aware that the PSA is not to be privatised until the second half of 1992. At this stage the finer details of security matters have not been worked out. That is why I give the assurance that the Government will listen to and follow the advice that they receive on those matters and will not put security at risk in any way. I hope that that will be acceptable to the House.

    The Minister said that ministerial cars and homes, and civil servants' homes, will not be subject to tendering. Is he telling us that politicians and civil servants face a greater threat and that their security interests are more paramount than those of military personnel and their families, and military installations? That is the only deduction that we can make. Is that the case?

    That is not the case. The Government accept the advice that they are given by their security advisers. The Ministry of Defence listens to security advice and decides how to act on it in relation to its serving personnel and their dependants. Likewise, the Government listen to security advice and act on it in relation to the protection of Ministers and former Ministers. I am sure that most people would accept that that is a reasonable way to proceed. The Government do not second-guess security advice; they receive advice and act on it. That is a responsible way to behave.

    I wish to pursue this on a further intervention because the matter is extremely important. The PSA and the Crown Suppliers operate across a wide range of services. Two of the Government-appointed bodies that reported said that privatisation should not take place. The third report, the only one that dealt with how to privatise, was asked a different question. It was asked not whether privatisation should take place but how it should take place. If the first two reports advised against privatisation, was security one of the reasons for that advice? Given that the Minister made it clear in Committee that all the security work of the Crown Suppliers should not be privatised, is he saying that it will not be privatised, so the Government accept amendment No. 2?

    No advice that we received on those earlier reports was directed towards the issue of security, but one report mentioned security in relation to the Government car service. The advice was that the service should not be privatised on security grounds. I am sure that it comforts the hon. Gentleman to know that the Government are following that advice.

    I apologise to the Minister for intervening before he has answered my second question. What troubles me about that is that it suggests that the Turton report and the second Government-appointed group took account of only the Government side of the work and not the wide range of work beyond that. The least that the Government should be able to tell us is that the security implications of the Bill across the whole range of work, including prisons and special hospitals for the security services or the relevant group of police who deal with these matters, were given detailed consideration.

    Perhaps I can come to those issues. Certainly I can deal with the point about the amendment and why it is not acceptable to the Government, and the extent to which the Government accept the spirit behind it.

    The intention behind the amendment is to prevent the PSA from undertaking security sensitive work once it is in the private sector. The effect would be to make a clumsy impracticable and unnecessary division of the work undertaken by the PSA, between that included in a scheme in clause 1 and that retained in Government. The amendment is clumsy and impracticable because it assumes that there are clear distinctions between management of security sensitive and non-security sensitive work. That is not the case. In most areas, the work contains a mixture of both. That is why the amendment is unacceptable.

    More than two thirds of the PSA's new construction and maintenance programme is for the Ministry of Defence. The PSA is currently responsible for the project management, oversight and design of the facilities for the Trident submarine base at Coulport, Faslane and Rosyth. It manages the maintenance of all the front-line operational RAF and USAF air bases in the United Kingdom. It is the agent for arranging the construction and maintenance of barracks and married quarters for the British Army in the United Kingdom and overseas.

    8.45 pm

    On the civil side, the PSA has responsibilities that include overseeing the design and building of new high security prisons for the Home Office. It is also responsible for works services at Buckingham palace, Windsor castle, the Palace of Westminster and No. 10 Downing street. It maintains buildings and services at GCHQ in Cheltenham.

    Although the PSA manages all those works, that does not imply that it is responsible now for determining security requirements. It is the responsibility of the client Department to assess the level and nature of the threat to its various facilities and to decide what type of protection is needed. That is true, for example, of the weapon resistance of hardened aircraft shelters and the physical protection of individual Government buildings. The PSA's task is to take the requirements specified by the client and arrange to design facilities that meet those requirements.

    The Minister says that the PSA is responsible for No. 10 Downing street. Will he confirm that on 24 January the Prime Minister went to the Tate gallery to see its £1 million revamp and said of the gallery management:

    "I know, because they have told me, that since they didn't have to go to the PSA they have got a lot more value out of the money they've had. And, of course, I must tell you we have found the same in No. 10 Downing Street"?
    Does the Minister share the Prime Minister's criticisms of what happened at No. 10 Downing street?

    My right hon. Friend was commenting on the benefits of untying, which allow customers to decide what they want and where to get it. In effect, it gives customers choice. My right hon. Friend and I are in favour of choice and I hope that the House supports the Government on that.

    Before a Prime Minister says such a thing, what cost comparisons are made between PSA work at Downing street and that which would be done by private firms?

    I cannot go into the details of particular cases. The principle is that it should be for individual clients to decide whether they wish to use the PSA and then to invite quotations from those who may wish to tender. Following the financial management initiative, I am sure that this is becoming common practice throughout Whitehall and that as a result the Government are obtaining better value for money.

    My hon. Friend the Member for Hastings and Rye (Mr. Warren) was worried about clients' responsibility for security clearances of staff and contractors. To ensure that sensitive information does not get into the wrong hands, the PSA, like all Government Departments and private sector contractors, for example, in defence procurement, has arrangements for its staff to be security cleared. More rigorous clearances are required for the most sensitive work. There is a wide range of private sector consultants who, for many years, have been carrying out many aspects of design on sensitive projects under the PSA's overall direction. For example, almost all the work of construction, other than small scale maintenance jobs, is done by private contractors. The main radioactive liquid treatment plant at Aldermaston and the floating jetty for Trident submarines at Coulport have been designed by the private sector. All the staff involved were appropriately security cleared. No security distinction is made between a design done by secure consultants and that done by civil servants.

    The PSA does certain types of design, such as prisons or airfield pavements, with its own staff rather than with consultants because, over time, it has developed those areas as specialisms, not because the design has been kept in-house for security reasons.

    In answer to my hon. Friend, when the PSA is privatised it will be in the same position as the consultants with whom it will compete for work and its staff will be vetted in the same way as are the staff of the present consultants. Decisions about clearance requirements will turn on the nature of the work that the PSA wins or the arrangements that its Government customers demand, since it is the client, and not the consultant, that settles the security regime to be followed.

    As I said earlier, although the vast majority of the PSA's current work is such that we are confident that privatisation will have no deleterious effect on security, there are exceptions to that. There is the remaining very small proportion of work that will be retained within Government. In the case of the Crown Suppliers, a review that we carried out in 1988 concluded that some of the Crown Suppliers' work should be retained within Government. In the case of the PSA, there are one or two areas where more work needs to be done before final decisions are taken about precisely which activities should be retained in Government. The security and privacy of Her Majesty the Queen and the royal family will be an essential consideration. Other activities concern specialised work at very sensitive facilities, including the development, installation and maintenance of high security equipment that the PSA carries out for a range of Government clients.

    Discussions are currently taking place with all the interested parties in Government to decide how those functions should be handled in the future. But the privatisation of the PSA cannot take place before late 1992, so there is adequate time to make sure that we take the right decisions. If it is necessary, as it may well be, to retain specific functions in Government to preserve security, we shall certainly do so. I can assure the House of that.

    The hon. Member for Brecon and Radnor (Mr. Livsey) raised the issue of United States forces. I can tell the hon. Gentleman that the building work managed by the PSA, with few exceptions, is undertaken by private sector building contractors, which have far more men on site at any one time than the PSA has. The United States air force has no general security bar on the use of private contractors on its bases in relation to the sort of services that the PSA provides. Indeed, it has private contractors on its bases for a number of purposes. I know that on one base it has a private sector security agent as well. Following privatisation, the PSA will be in the same position as are the other private sector companies on those bases.

    The hon. Member for Hammersmith (Mr. Soley) referred to Northern Ireland. In Northern Ireland, as elsewhere, security is the responsibility of the customer who commissions the work, rather than of the PSA. The PSA undertakes work in Northern Ireland that is not related to the security services. For example, it works for Northern Ireland Departments, such as the Department of the Environment and the Department of Agriculture, and it maintains Hillsborough castle. Those who have been to the castle recently have been much impressed by the work that the PSA has done there. It also works for the Inland Revenue and for Customs and Excise, and in the new competitive world that it now faces it could well offer very attractive services in areas in which it has skills and resources.

    The purpose of clause 6(2) is to allow the PSA's organisation and facilities in Northern Ireland to be included in the privatisation. They represent a sizeable slice of the PSA's business, and Northern Ireland offers an important area of the United Kingdom where the company could seek to expand its markets.

    Do I take it that the Northern Ireland Office, like the other Departments, will have its personnel—accountants, consultants, architects, the people who oversee the work—in place? Will the Northern Ireland Office have in post the same type of people as other Departments have in post?

    The Northern Ireland Office will have in post the people who are necessary. For example, the Hillsborough castle project is under the auspices of the Northern Ireland Office. That Department has a project sponsorship role. The principles that apply to the Northern Ireland Office will be the same as those that apply to other Government Departments.

    The Minister says that the same principles will apply. Does that mean that, in Northern Ireland, works services will be put out to competitive tender, as happens in other parts of the United Kingdom?

    The details of how works services in Northern Ireland are dealt with have not yet been finalised. In his earlier remarks the hon. Gentleman jumped to a conclusion. No final decision has been taken about the way in which works services in Northern Ireland are to be dealt with. Obviously, security will be paramount.

    When the PSA is privatised, the people in Northern Ireland who work for it will cease to be civil servants. At present any civil servant who comes under a serious death threat in Northern Ireland can be moved, not just from his home, but to a totally different job elsewhere. When the PSA is in the private sector, what safeguard will there be?

    The hon. Gentleman speaks as if there were no private sector people working in Northern Ireland at present. Certainly the PSA people who work in Northern Ireland whom I have met, despite the threats under which they operate—and let us not kid ourselves: there are threats against PSA personnel in Northern Ireland, just as there are threats against other people there—enjoy working in Northern Ireland and wish to continue doing so. I am sure that that will continue to be the case, whether they are in the private sector or in the public sector.

    I am sure that those people enjoy working in Northern Ireland. They are also very brave. But the Minister is avoiding the question. The situation is that if one comes under a death threat, one can be moved from one's house. One can be moved to a Civil Service job elsewhere, even in another part of the United Kingdom. How could that happen if the organisation were in the private sector? In the private sector at the moment, one can be shot. Often, as happened very recently—it was reported in the press—companies withdraw from contracts. Are we going down that road? I want to know. When those people cease to be civil servants, and end up in the private sector, will they simply withdraw from the contract if they are threatened, or will there be arrangements to move them as if they were still civil servants?

    The hon. Gentleman is jumping to conclusions and is overstating his case. Indeed, he is doing so in a rather irresponsible way.

    I do not accept that. Both I and the Secretary of State have had experience of the problems of Northern Ireland. I should be quite happy if the Secretary of State were to have a word with the Minister about this matter. We know that what I have just said is factually correct in every detail. I appreciate that the Minister may not have been told what the process is, but somebody somewhere must have given this matter some thought.

    I do not think that it would be appropriate this evening to go into the details of what happens at present when such a situation arises in the private sector.

    I think that the hon. Gentleman is misinformed as to exactly what happens at present, as to the arrangements in particular circumstances when this occurs in the private sector. I do not think that it would be helpful to go into that tonight. Obviously, such considerations are very much in the forefront of the Government's mind in deciding what to do about privatisation of the PSA in the context of Northern Ireland. I do not think that the security of any individual in the PSA will be affected adversely by the arrangements.

    The Minister has said that we are jumping to conclusions, but he is misleading the House, or talking ignorance. From public documents I can tell the Minister that works services will not be put out to competitive tender. I challenge the Minister on that point.

    The hon. Gentleman is making assertions and challenges, but I think that he is referring to a study that is now under way. The question is whether, initially, maintenance and minor works services will be put out to tender. In the first instance it is for the Ministry of Defence to consider the extent to which it will be involved in market testing. To my knowledge, no final decision has yet been taken on the matter and I believe that the hon. Gentleman is referring to speculation and studies that are now being undertaken. Ultimately, it will be for the MOD to decide how it will procure its works and maintenance in Northern Ireland. I assure the House that a decision has already been taken in principle that there will be competition for all major new works in Northern Ireland.

    9 pm

    To identify within legislation the security group as the part of the PSA to be retained within Government would be an imprecise and blunt instrument of administration. Currently some activities outside that group, such as emergency planning, may need to be retained within Government. Equally the review currently in progress may identify work that could readily be undertaken within the private sector.

    All those issues are being reviewed and I hope that Opposition Members will accept that we treat seriously the question of where certain security activities should rest. Hon. Members will be aware that we brought into the PSA certain secure activities from the Crown Suppliers, which we thought were unsuitable within the private sector. Those and other activities in turn are likely to transfer to Property Holdings or elsewhere within Government.

    I assure the House, as I did the Committee, that nothing will be done under the Bill that is against security advice. Security advice was taken in deciding those parts of the Crown Suppliers which are to be privatised and those parts which are not. We took decisions fully in accordance with that security advice. I hope that that gives confidence that we shall likewise take decisions fully in accordance with security advice when dealing with the detail of what is or what is not to be privatised in the PSA. Obviously, as privatisation is not due until 1992, there is plenty of time in the interim.

    I hope that I have been able to allay hon. Members' concerns about security and that I have been able to show that the Government take the issue of security extremely seriously. The Bill in no way jeopardises that security.

    With the permission of the House, I just wish to place it on record that our concerns have not been allayed, nor are we happy about this. We do not intend to press the amendment to a Division, but this is one of the issues on which we shall press for a Division on Third Reading.

    Amendment negatived.

    Clause 2

    Transferred Staff

    I beg to move amendment No. 3, in page 2, leave out lines 20 to 24 and insert

    'the transferee shall
  • (a) provide pension rights and benefits which are comparable to those presently arising out of the principal Civil Service pension schemes; and
  • (b) provide so far as possible, redundancy compensation rights which are identical to those presently arising out of the principal Civil Service pension scheme, and no rights arising by virtue of this subsection shall be regarded as identical unless they are adequately funded and guaranteed.'.
  • I move this amendment on behalf of my hon. Friend the Member for Hammersmith (Mr. Soley) and my other colleagues.

    There is great concern about the issues of the terms of severance.

    On 8 February the Minister wrote to me about matters of policy and administration not covered by the Solicitor-General's written replies to questions raised in Committee. In the fourth paragraph of his letter, the Minister stated that a statement of terms of employment would be sent to staff while they were in the employment of the Government-owned company. He went on to say that this statement would then be binding on the purchasers of the shares in the company and would be enforceable against him by the staff.

    How will that statement bind the eventual purchaser?

    Does the Minister agree that the new owner will only be bound by the normal application of the rules of the law of contract?

    Does he agree that the terms referred to may be changed by a new employer giving notice of alteration of those terms?

    Does the Minister agree that in such circumstances the only options available to staff will be to accept the new conditions or refuse to accept them by quitting employment and claiming unfair dismissal?

    Does he agree that the maximum compensation available under such a claim is limited to little more than £14,000? That is not adequate compensation for the loss of severance entitlements which may easily be worth in excess of £100,000.

    The Minister should accept that a new employer who is constrained only by the normal rules of contract law is not bound in relation to terms. He must face up to the fact that the terms are easily changed by the new employer and the arrangements proposed in the third paragraph of his letter do not bind the new employer in any meaningful sense of the word.

    Does the Minister agree that none of the arrangements proposed in the third paragraph of his letter protects the staff in the event of the new company being put into liquidation? In paragraph 4, the Minister says:
    "If the new owner failed to pay the agreed redundancy terms the employee could sue…for breach of contract, and ask for summary judgment. The damages could be quantified because they could be ascertained from the statement of redundancy terms issued to staff."
    In that paragraph the Minister describes one of the few circumstances in which a breach of contract could result in the recovery of damages approximating to severance entitlements. Those circumstances are limited. A redundancy payment would have to be under the terms of a transferred contract that had not been altered by the new employer.

    Does the Minister agree that no prospect of recovering damages exists when no redundancy exists, an employer has given notice to vary the terms and no actual redundancy arises during the course of that notice or when the employer gives no notice to vary redundancy terms and the individual is not affected by redundancy during the period of notice that should have been given?

    Will the Minister admit that a large variety of circumstances could arise in which staff could not take action for damages?

    As a constituency Member of Parliament, I am extremely reluctant to advise any constituent to go to law unless he or she has an absolute cast-iron assurance of legal aid. In the cases that I have described legal aid might not be forthcoming.

    Does the Minister agree that the only sure means to ensure that staff retain a practical course of action for damages is by making severance terms a statutory right? In any other case, terms may be varied and staff would have no means of redress except unfair dismissal.

    Does the Minister agree that severance terms are at risk in the private sector? Will he propose some means to minimise that risk? That could be done by the Treasury underwriting the terms, as with the ordnance factories and dockyards, giving staff a statutory right to redundancy terms or setting up some kind of trust fund.

    Does the Minister believe that there are no risks in the private sector? The furniture and furnishings trade is in deep recession at present and the Crown Suppliers is making a loss of £2 million.

    Will the Minister admit that there is a risk that severance terms may not be honoured in the private sector? Where there is such a risk, it is incumbent on the Government to admit that severance pay might be at risk in some circumstances and protect staff when necessary.

    The staff at the Property Services Agency and the Crown Suppliers regard the security of their pensions and their redundancy compensation as crucial. They are alarmed at the Government's refusal to provide any protection other than that contained in the transfer of undertakings in the Transfer of Undertakings (Protection of Employment) Regulations 1981, about which we had so much to say in Committee. I shall tell the House why.

    This privatisation is unique, in that the PSA and the Crown Suppliers are neither monopolies nor established businesses. Both organisations are Government functions and as such are highly unsuitable for privatisation. The Crown Suppliers prove the point. Its main furnishings activity is in ruins. For 1989, its audited accounts will show a loss of about £9 million.

    So bad are its prospects that the Minister has been begging other Departments to guarantee it work. In particular, he has pleaded with the Ministry of Defence to sign contracts which would have the Crown Suppliers provide exclusively all furnishing needs for the next two years. Without guaranteed work from the Government the management buy-out will lose its financial backing and other prospective purchasers will lose interest. The privatisation would collapse. How rich in irony it is that this Minister, the great advocate of open competition who so loudly has proclaimed that the customer must have the greatest possible choice, has performed a U-turn and is now imploring his fellow Ministers to forgo competition and guarantee the Crown Suppliers work.

    Has the Minister suddenly become worried about what might happen to the Crown Suppliers' staff? The problems of a collapsed privatisation are serious. Guaranteed work over a limited period might satisfy bankers, but it does not satisfy the staff. The staff want a guarantee but of a different kind. They want their redundancy entitlements and their pensions guaranteed against future change imposed by the new owner. If accepted, the amendment would give them just that.

    The Minister has come under great pressure on pensions and redundancy payments from staff and their trade unions. He recently sent me a letter seeking to provide further assurances about redundancy compensation. He said that the purchaser would be required to provide redundancy terms by
    "sending a statement of the terms to the staff while the company in question is in Government ownership. That statement would then be binding on the purchasers of the shares in the company and would be enforceable against him by the staff."
    As to the actual payment of redundancy compensation,
    "if the new owner failed to pay the agreed redundancy terms the employee could sue…sfor breach of contract and ask for summary judgment. The damages could be quantified because they could be ascertained from the statement of redundancy terms issued to staff."
    That might sound helpful, but I am advised that the assurances are not worth the paper they are written on, because the new owner can give notice of changes to the redundancy terms from day 1 of the sale and after an extremely short period of notice can then impose new terms.

    The Minister is trying to pull the wool over our eyes. The notion that the letter drafted by the Crown Suppliers privatisation unit provides any meaningful protection is as fanciful as the notion that the Crown Suppliers privatisation unit knew nothing about the Crown Suppliers' extended contracts long before Second Reading of the Bill. The only real protection is through ensuring by statute that redundancy terms and pensions cannot be varied by the new owner without the agreement of staff.

    The Minister has often said that the future for the PSA and the Crown Suppliers is bright. If that is so, the new owner will not be concerned by the amendment.

    9.15 pm

    I must return to the episode with the Prime Minister and Downing street. The Prime Minister cannot think that the future is bright because she virtually guaranteed that it would be rather dim. On 24 January she went to the Tate gallery to see its £1 million revamp and said:
    "I know, because they"—
    the Tate gallery management—
    "have told me, that since they didn't have to go to PSA they have got a lot more value out of the money they've had. And, of course, I must tell you that we have found the same in No. 10 Downing Street."
    That is not exactly a wonderful advertisement for the sale of the PSA; what a kick in the teeth it is for the staff of the PSA. Of course, the Prime Minister was not right. The Tate gallery did not invite the PSA to bid for the work, and No. 10 has had no work undertaken in which a cost comparison between PSA and private firms has been made. The right hon. Lady was wrong, but because she made those remarks, and because her Ministers and civil servants will be forced to make excuses, other Government Departments and potential customers in the private sector will believe her and will be less inclined to go to the PSA.

    The right hon. Lady should admit the truth, and as compensation for the effect of her remarks she should instruct the Minister to agree to guaranteed severance and pensions by accepting this amendment.

    The position on pensions is worse. The Minister has said that he will invite purchasers to provide broadly comparable pensions and that he will insist on it. He has also said that if the purchaser's pension scheme is inferior, the Government Actuary will be asked to assess the difference and to recommend a compensatory amount. However, the amount will not be sufficient to buy a pension equivalent to a Civil Service pension. It will merely be an amount to acknowledge the loss—in other words, to recognise that staff have suffered detriment and it will not compensate staff for the loss.

    The Minister's intention is even nastier. He has said that the Government Actuary will take into account overall differences between the terms that staff now have and those offered by the purchaser. Therefore, if the purchaser offers more pay, a company car or better leave, the Government Actuary will put a value on those extras and deduct it from the compensation. If the new owner withdraws the better conditions soon after the sale, staff will have no entitlement to seek extra compensation from the Government.

    There is no point in the Minister going on about breach of contract. The new owner merely has to give notice of a change, and once that notice has expired he or she is free to impose new terms. Even if the new owner does not give notice, the amount of damages that a court might award would be only the sum of the calculated loss during the notice period. The law is no friend of the employee in this matter.

    The PSA and the Crown Suppliers staff believe that the Minister is prepared to swindle them out of thousands of pounds of hard-earned severance and pensions, and they have said as much in letters to hon. Members and by their actions. Recently the technical staff at the Crown Suppliers were asked whether they wanted to stay with the Crown Suppliers or to take early retirement or redundancy. More than two thirds said that they wanted to get out, but only one third will be allowed to leave.

    My hon. Friend the Member for Hammersmith and I had the privilege of addressing many of the Crown Suppliers staff who came to a rally at the Central hall, in Westminster. There can be no doubt that they are loyal Government employees who feel considerable dissatisfaction. The PSA's employees' unions have skilfully manipulated the Minister to agree to ask the staff whether they want to stay, to move to other posts in the Civil Service, or to take early retirement or redundancy. This preference exercise will take place in March. The exercise is eminently sensible since the Minister is not prepared to play fair with their future conditions of service. However, the Minister, who says that he is a great proponent of free choice, will allow staff to leave only if they are not needed. If they are needed, he and the PSA's new get-rich-quick controllers will force staff to remain. I ask the Minister to tell the House the terms of the preference exercise, and the results when they are known.

    I say bluntly to the House that Ministers are abusing their power. Their actions and intentions are undemocratic, hostile to the work force and add up to a good reason for voting Labour, as 23,000 staff will find when it comes to casting their vote.

    Some of us have, perforce, put a quick legal case. Even if the Bill passes into law, my hon. Friends and I who were on the Committee will use every procedure of the House to monitor what happens to the Crown Suppliers and the Property Services Agency staff. The matter will not go away. The severance terms for loyal staff who have served successive Governments are an absolute disgrace to our society.

    My hon. Friend the Minister well knows the many concerns that I have expressed over several months about procedures for the privatisation which, in principle, I support. I hope that he does not think that I am being too hard on him when I say that as this is not the first privatisation by the Government, I would have expected to see a rule book to which he and my right hon. Friend the Secretary of State would have had access so that there would not be tumult and concern among so many of my constituents.

    The PSA is the largest single employer in my constituency. Over 1,000 staff work at Ashdown house andmy hon. Friend the Member for Bexhill and Battle (Mr. Wardle) also has constituents employed by the PSA. All the concerns that have been raised by my constituents could have been alleviated by clear declarations on Second Reading or before about the intention of Government in relation to the future terms and conditions of those employed by PSA after privatisation. There are precedents for that which I am sure are well known. On Second Reading of the Ordnance Factories and Military Services Bill, the Under-Secretary of State for Defence Procurement said
    "the new company pension scheme … will provide benefits"
    for transferred employees
    "comparable to those that they currently enjoy, including the continuation of index-linking."—[Official Report,16 January 1984; Vol. 52, c.104.]
    On Report Lord Trefgarne said:
    "the Government have undertaken that the company will provide for transferred employees a pension scheme which is comparable to the Principal Civil Service scheme … the benefits of the scheme will be comparable to those of the principal Civil Service pension scheme and will be index-linked in line with the 1971 Act."—[Official Report, House of Lords,16 October 1984; Vol. 455, c. 954–55.]
    All that could have been made clear at the beginning. I have received many thousands of letters and met many delegations, and people are rightly concerned that having chosen a life in the Civil Service, which included a pension scheme to which they contributed, it should be secure at all times. Doubt has been the source of concern and that has besieged me, quite correctly, as the Member for Hastings and Rye.

    These good people have loyally served the Crown. As the Minister has said, the PSA will not be privatised for two and a half years. Therefore, with three years of anticipation of privatisation I should have thought that an assurance would be in the mind of the Government rather than to allow doubts to dwell and grow.

    I am grateful to Sir Gordon Manzie who, with his senior staff, visited Hasting in December. I pay tribute to him for the many years of loyal service that he gave to the PSA and to the Government service before that. He will be sadly missed. He was probably surprised at the way in which the needs of the employees of the PSA have not been considered in the higher echelons of that organisation. I hope that the Minister will be able to put those doubts to rest once and for all. I was grateful for a letter that I received from him on Friday in which he gave an assurance that I am sure he would like me to quote. He said:
    "On pensions the government has given very firm assurances and is certainly not seeking to escape from its commitment. We have said that the Government will expect staff to be offered arrangements for pensions that are broadly comparable to those they now enjoy. If the purchaser's proposed pension arrangements are different from the PCSPS, then the scheme will be evaluated by the Government Actuary."
    That was mentioned by the hon. Member for Linlithgow (Mr. Dalyell). The Minister continued:
    "If he concludes that it is not broadly comparable, the Government will seek in negotiation to improve the pension terms, or to compensate in some other way, for example by improving other terms and conditions of employment. Finally, but only if all those routes proved impossible, the Government would compensate the staff for any remaining pensions disadvantage."
    I am delighted to hear that, but, with respect to my hon. Friend, that could have been made clear from the start. I hope that he will clear up those doubts and offer a commitment that can be included in the Bill to show that the Government accept their duty.

    My second point—and I trust that I will not deviate from the amendment on redundancy and compensation rights—is about the future employment of staff. It has been said that this privatisation is three years away. A letter was circulated to Government Departments by the PSA suggesting that up to 800 staff of the establishment of 1,200 in Hastings would lose their jobs because it could not be foreseen what work they would do. That was the essence of that letter—I have not been privy to a sight of it—and it got back to the employees in some form or another. Two thirds of the people in that establishment believed that their jobs would be wiped out, yet that wiping out was many years away.

    These people are loyal civil servants. I cannot speak for all of them, but they probably want to remain civil servants. Some of them are mobile, but some are not. Their future should have been made clear to them, rather than it having to be left to their Member of Parliament, who is eager to represent their interests, to say, "What will you do about these 800 people who will lose their jobs?"

    The canvassing for job replacement should have begun much earlier. If 800 of the 1,200 staff were thought likely to lose their jobs, one wonders who will do the work that they have been doing. I have been reassured by my hon. Friend the Minister, who has told me in the past week that the efforts to attract other Government work to Hastings are starting to bear fruit. I am delighted to be able to report to the House that he has said that Customs and Excise has confirmed that it expects to open a new VAT office in Ashdown house, Hastings in the autumn and that he will maintain pressure onotherGovernment Departments.

    Good employer-employee relationships rely on employees expecting their employer—and in this case it will be the Government for the next two and a half years—to put loyalty to the employee first and foremost.

    I have made clear that my constituent's concerns can be laid to rest by the Minister, and I trust that he will not fail to do so.

    The hon. Member for Hastings and Rye (Mr. Warren) gave one of the main reasons why we cannot support the Bill. The PSA has 21,000 employees, and national estimates show that up to half of them could lose their jobs.

    Amendment No. 3 at least provides pension rights and benefits comparable to those under the principal Civil Service pension scheme. During the privatisations of the royal ordnance factories and the royal dockyards, concrete assurances were given in the House and in the other place that such rights would be offered to the satisfaction of employees. Why cannot the Government offer the employees of the PSA and the Crown Suppliers the same guarantees? That does not seem unreasonable.

    The other part of the amendment, which refers to
    "redundancy compensation rights which are identical to those presently arising out of the principal Civil Service pension scheme",
    is also essential.

    We are asking for common decency in the treatment of these employees. Ministers have not given employees the cast-iron guarantees that we would want to be provided. The amendment provides a minimum requirement, so it is not asking a great deal. Employees deserve that provision. They are loyal civil servants who have carried out their tasks and who are prepared to change their type of work and even to work in different places as needs be. It will be poor recompense if, in two and a half years when the PSA may be privatised, they do not have a just pension or redundancy scheme. We are asking for the minimum and the Minister should respond positively to our demands.

    9.30 pm

    One would not think from the contributions of the hon. Members for Linlithgow (Mr. Dalyell) and for Brecon and Radnor (Mr. Livsey) that the detailed assurances that they rightly seek on behalf of existing employees of PSA and the Crown Suppliers were given and discussed in great detail by my hon. Friend the Minister in Committee. They are asking for direct repetition of what was said in Committee, but the amendment goes further and asks us to quantify the unquantifiable.

    We have heard from the hon. Member for Linlithgow something that started and expanded in Committee. He attempted—I do not think that he will wish to dissociate himself wholly from this charge—to talk down the business of the Crown Suppliers, and I use that as an example. No reliable figures are available yet, but when the supposed loss of the Crown Suppliers was first mentioned in Committee it was estimated to be £1 million. We have heard tonight that it is £9 million. We have heard tonight that the supposed redundancies among employees of the Crown Suppliers and PSA have risen from one third to one half of the work force. Such exercises by the Opposition may well be advisable politically, but they do no favours to the staff and the future of those organisations.

    I should like to refer to one aspect that makes the amendment look even more out of line. Let us forget its exact wording. I gently chide those Opposition Front-Bench Members who tabled the amendment. We are dealing not with an amendment in Committee tabled for discussion purposes but with an amendment to a Bill that will soon leave the House for another place as a legislative proposal. We owe it to the other place and to our constituents to ensure that such legislation is workable, yet paragraph (b) states that it will be a matter of law to
    "provide pension rights and benefits which are comparable to those presently arising".
    Apples and pears are comparable, but comparison does not have great meaning. I am not sure that it does the Opposition any credit to propose words so loosely chosen as to be meaningless. The media tell us that the Opposition have ambitions one day to form a Government. All I can say is that if that is the sort of law that they are going to propose they are clearly a long way from enabling us to take their ambition with any seriousness.

    As we said in Commitee, what the amendment asks is impossible to implement and, in many instances, undesirable. I would not wish any married woman, divorcee or recent widow to be forced to accept the pension scheme standards currently operating in the Civil Service, and the amendment would make matters even worse by leaving the Government free to determine which Civil Service pension scheme should be used for the purpose of comparison.

    Any pension scheme represents a compromise between the rights of different employees at different stages in their careers. In any scheme some classes of employee will do well and some badly. Surely it is right for us to adopt the Government's approach and offer employees an overall valuation of any alternative pension that is offered, with compensation where necessary, rather than laying down a rigid rule that would ensure that those who do badly under the present pension scheme also do badly under any future scheme.

    My hon. Friend the Member for Bristol, North-West (Mr. Stern) may well be right in saying that the amendment is not ideally worded; I am not a lawyer, so I do not know. What I do know is that I wish that the amendment has been part of the original Bill. It could then have been amended in Committee according to my hon. Friend's wishes and with all the details that he requires, and we would have known whether we were talking about apples or pears.

    Failing that, I wish that this had been a Government rather than an Opposition amendment. Despite my hon. Friend's comment that firm assurances have been given at each stage of the Bill, the fact is that PSA staff in my constituency—and, I am sure, elsewhere—are not convinced of the adequacy of the assurances that they have been given. I say that as a supporter of the principle of the Bill: I have told my PSA constituents that I consider it good and sensible.

    The hon. Member for Linlithgow (Mr. Dalyell), to whose contribution I listened very carefully, said that he could draw on examples that suggest that the PSA does not necessarily offer the best value for money. I am not sure whether his examples are well chosen, although I assume that he has chosen them with his customary care. I have suggested to the PSA employees in my constituency that there are advantages in being in the private sector, where the pressures of competition will ensure that the new firm offers a service that gives value for money, but they remain concerned about their redundancy payments and pension rights.

    The Minister—who is a not-too-distant neighbour of mine—will probably know one reason why that is particularly true in Portsmouth, where many employees are experiencing privatisation for the second time, having been employed in the royal naval dockyard. They have every reason to say not only that for the second time in a supposedly secure Civil Service lifetime they have been faced with upheaval, but that on the first occasion they were given clear assurances about the establishment and guaranteeing of their future. This time, for some reason, the Government's promises have been wrapped up in jargon that they do not understand.

    I appeal to my hon. Friend the Minister when he replies to recognise that for good or ill there are employees—loyal civil servants—who are greatly concerned about the future of their redundancy payments if they become redundant. The trouble is that none of those employees know whether they will be made redundant. Neither are they aware whether they will be allowed to take early retirement. They are also not aware of what pension conditions will apply if they remain with the privatised company. No wonder they are worried.

    As my hon. Friend the Member for Bristol, North-West said, perhaps assurances have been given. However, the assurances that I have read would not allow me to say to my constituents, "Look at that. There's the answer. Go away and don't worry." Some of my constituents visited the House a few weeks ago and they told me that they were very concerned about these issues.

    When my hon. Friend the Minister replies, I hope that he will spell out in words of two or three syllables—as redundancy cannot be encompassed in words of one syllable—what guarantees exist for my constituents. Some of my constituents have already suffered redundancy and moved from the royal naval dockyards to the PSA. What guarantees do they have that in two years' time they will not face worse redundancy or pension terms than they would have had if the PSA remained in the public sector?

    If my hon. Friend the Minister can provide assurances, I promise him that I will tell my constituents that they will benefit from the Bill. The Government have every reason to offer such assurances tonight. They would then be setting the tone for the debates in another place which, again, must be to the advantage of the Government as well as for those who are worried about their future. The PSA employees have served us well and I hope that the Minister will consider them tonight.

    I am pleased to be able to respond to this very good debate which has covered the all-important issue of terms and conditions of service for PSA staff. As several hon. Members have said, the PSA is blessed with good and loyal staff and the Government are as aware as anyone of the need to ensure that the PSA staff are well looked after. I want to deal with the effects that the amendment would have and explain why the Government cannot accept it. In doing that, I will respond to the points raised by my hon. Friends the Members for Portsmouth, North (Mr. Griffiths) and for Hastings and Rye (Mr. Warren) on behalf of their constituents. I will also pray in aid of some of the points made by my hon. Friend the Member for Bristol, North-West (Mr. Stern). I will also deal with some of the points raised by the hon. Member for Linlithgow (Mr. Dalyell).

    The hon. Member for Linlithgow wanted to have it both ways. On the one hand he suggested that the privatised companies would be in such dire financial straits that they would not be able to meet their redundancy obligations. On the other hand he said that those companies would be controlled by, as he put it, get-rich-quick controllers. No controller will get rich very quickly if the business does not flourish. I hope that the hon. Gentleman's reference to that is an acceptance that the businesses will be able to flourish in the private sector and that all the employees, whether in a management or a subsidiary role, will be able to share in the fruits of the success of the enterprises.

    The amendment would have several effects. It would require the new owners of the PSA and the Crown Suppliers to provide the staff with a pension scheme comparable to the principal Civil Service pension scheme. It would also require the new owners to provide the staff as far as possible with identical redundancy terms to those that they have at present. It also appears to require redundancy terms to be guaranteed out of public funds. It will also delete paragraphs (a) and (b) of clause 2(2).

    On pensions, the Government have no doubt that the Transfer of Undertakings (Protection of Employment) Regulations 1981 will apply to the sales. As hon. Members know, the regulations give effect to the European Community's acquired rights directive. The regulations ensure that staff contracts of employment are not terminated by the sale of a commercial undertaking. They also have the effect of transferring unchanged all their existing terms and conditions of employment, with the exception of those relating to pensions. That omission is because, given the diversity of pension schemes, it would be unreasonable to require purchasers exactly to reproduce the existing scheme.

    That is not to say that employees' pensions provisions are unprotected. It may be helpful if I quote what my right hon. and learned Friend the Solicitor-General said in Committee. At one stage, Opposition Members cast doubt on whether the TUPE regulations were to apply to PSA staff. From what my right hon. and learned Friend said, it is quite clear that the TUPE regulations apply. He said:
    "in the case of a person transferred, under TUPE the transferor and the transferee must so arrange things that the pension rights enjoyed by staff after the transfer are broadly comparable with those enjoyed before. That is the legal requirement".
    He went on:
    "If they do not, or cannot, the Government and the Crown will need to ensure that staff are compensated for any disadvantage."—[Official Report, Standing Committee D, 18 January 1990; c. 202.]
    I assure hon. Members that the Government accept those legal obligations and will comply with them.

    9.45 pm

    My hon. Friend the Member for Hastings and Rye referred to assurances that were made to staff, irrespective of the privatisation of the royal ordnance factories and the royal dockyards. Those privatisations were more advanced when the assurances were given. As the sales of the Crown Suppliers and the PSA proceed, it should be possible to give firmer assurances about the comparability of pensions terms. Obviously, until we know who is to purchase the business, it is not possible to know what the purchaser's pension arrangements are and what he is offering. In cases such as the royal ordnance factories, when the Bill was before the House and was being considered by hon. Members, it was clear who was to be the purchaser and what his pension terms would be. That is why there is an inevitable distinction between what happened in that case and what happens with the PSA.

    On redundancy, the amendment falls into two parts. The first part concerns the redundancy terms themselves. The amendment would require the new owners to provide redundancy terms that, as far as possible, are identical to those that they have at present. That is precisely the commitment that the Government have given the staff. Hon. Members will have realised that, on pensions and redundancy terms, the amendment would do no more than the Government are already seeking to achieve. Those are requirements that arise from existing United Kingdom law and from the Government's obligations arising from our membership of the European Community. I believe that it is unnecessary, and indeed undesirable, to clog up the statute book with provisions that merely repeat existing requirements. My hon. Friend the Member for Portsmouth, North asked why the Government did not put that provision into the Bill. The reason is that it is unnecessary and superfluous. It is already the law of the land, and the Government will comply with the law of the land.

    The second part of the amendment dealing with redundancy refers to guarantees. The trade unions concerned and Opposition Members have made clear their views on the need for guarantees from public funds. That is an important point on which the unions have made representations, and I can assure the House that their views are being considered. Of course, their fears are greatly exaggerated. During the sale competitions we shall give preference to potential purchasers who demonstrate a willingness and ability to run the businesses as going concerns and also have the necessary financial robustness to do so. It is not the Government's general experience that firms act unscrupulously or in bad faith by contriving redundancies for which they cannot or will not pay. It is not easy for employers to avoid their obligations, and they generally prove very reluctant to damage their reputations in the marketplace and with their staff. One of the criteria for selecting the purchasers will be an assessment of their ability to finance any redundancies that become necessary after privatisation, and I do not believe, therefore, that there is any need for guarantees of public funds.

    I shall give way to the hon. Gentleman in a moment. I am referring to the various allegations that he made about the effect on terms and conditions if an employer who purchased the business changed those terms and conditions. I cannot accept the hon. Gentleman's statement. Much of the material that he used as his source was issued by the trade unions and suggests that there is no protection for an employee if the new employer wishes to impose changes in the terms and conditions after privatisation. An employer cannot do that. The general principle of law is that fundamental terms and conditions cannot be changed without the agreement of the employees. If, therefore, an employer tries to impose changes in the terms and conditions, such as those relating to redundancy, the employee merely has to inform the employer that he does not accept the new terms and if the employee is then made redundant after a period of notice, he can insist on the payment of his old redundancy rights. The hon. Gentleman seemed to think that the employee would be limited to his statutory rights, but I repeat that such an employee would be entitled to his old redundancy rights on a contractual basis.

    I accept that if the purchaser went into liquidation, an action for damages might fail to achieve redress, but we shall be at pains to choose purchasers who are financially robust.

    When the Minister and his advisers have had an opportunity to reflect on my speech in print, may I expect a letter of clarification on the points raised?

    If, after reading my speech in print, the hon. Gentleman feels that any further clarification is necessary, perhaps he will write to me and I shall deal with the matter.

    There has only been one Civil Service case in which the Government have agreed to pay redundancy costs. That was Devonport dockyard. It was justified in that case because of the Government's own decision to run down the work load there. We expect the Crown Suppliers and PSA to succeed commercially, which is why the cases are different.

    The fourth and final effect of the amendment would be to delete paragraphs (a) and (b) of clause 2(2). These provisions, which have appeared in all recent Acts for privatisations involving members of the principal Civil Service pension scheme, are to deal with a quirk in the terms and conditions of employment of civil servants. Because their redundancy terms are included in the pension scheme, and because when they are transferred out of the Civil Service they must cease to be members of the pension scheme, they would automatically become entitled to redundancy compensation as well as their jobs. The staff will, of course, in no real sense be redundant when PSA and the Crown Suppliers are sold. They will have their jobs, their existing terms and conditions of employment, and pensions and redundancy terms as I have just described. To expect the taxpayer to pay what would amount to very substantial sums in redundancy compensation for all staff transferred could not possibly be justified in these circumstances. That point was accepted in Committee.

    In conclusion, I advise my hon. Friend the Member for Hastings and Rye that I am well aware of the concern in his constituency about the rundown in the number of staff employed by the PSA. However, that is not a consequence of privatisation. It is a consequence of untying, of reorganisation and of a cost-effectiveness exercise. As I stated in the letter to my hon. Friend to which he referred, we—not only myself, but other Government Departments—are doing all that we can to ensure that alternative employment opportunities are available in Hastings. I have already visited Hastings once and have made arrangements to visit the town again soon. I hope that I shall have the opportunity of meeting the staff there and of allaying their concerns.

    For the reasons that I have outlined, I hope that the House will reject the amendment.

    Amendment negatived.

    Amendment made: No. 1, in page 2, line 25, leave out subsection (3).— [Mr. Chope.]

    Order for Third Reading read. [Queen's Consent, on behalf of the Crown, signified]

    9.54 pm

    I beg to move, That the Bill be now read the Third time.

    When I moved the Second Reading, I said that, although short, the Bill was significant. I am glad that it received thorough scrutiny in Committee. The Committee's proceedings exceeded 26 hours, of which more than 20 hours were devoted to the first two of the Bill's six clauses. The debates on those clauses concentrated mainly on the effect of the Bill on the Government as a customer of the PSA and the Crown Suppliers and on the position of the staff.

    The Government are convinced that the PSA and Crown Suppliers face a better future in the private sector. We also believe that the customers of the two organisations will benefit from the change. Naturally, the Government accept that some of the activities undertaken in the past by the PSA and the Crown Suppliers are not suitable for privatisation. Those parts of the Crown Suppliers that fall into that category have already been moved to other Departments and similar arrangements are being made for the PSA.

    Anxieties have been expressed about the consequences for staff of the two privatisations. We have been at pains to point out that the Bill does not affect the employment rights of staff. Those rights were protected and transferred under the Transfer of Undertakings (Protection of Employment) Regulations 1981. As I explained in Committee, where they are not covered by those regulations they are protected by United Kingdom employment law.

    I hope that the House will acknowledge the care with which the Government have addressed the issue of staff employment rights. I repeat the assurance already given to employees and to the House that the staff of the PSA and the Crown Suppliers will not be disadvantaged as a result of privatisation. I believe that the staff will gain from the measure and that the PSA and Crown Suppliers face a much better future in the private sector.

    I hope that with those brief remarks I have demonstrated to the House that customers, Departments and staff of the PSA and the Crown Suppliers have nothing to fear from privatisation and much to gain.

    I am grateful to my hon. Friend the Under-Secretary of State for the skilful way in which he has piloted this important Bill through its various stages. I have no hesitation in commending it to the House.

    9.57 pm

    We regard the Bill as the pursuit of ideology for its own sake. There will be many mini-PSAs. No doubt they have already been set up in the Foreign and Commonwealth Office. We shall have to re-invent the PSA in years to come, and we all know it. If the Bill has not been enacted by the time that Labour takes office, we shall stop it and rebuild what has been destroyed.

    We have had lengthy and detailed debates about the security aspects of the Bill. We are far from happy about it. I do not accept, and the House does not accept, that privatisation of Ministers' cars and the security of their homes should be exempt from privatisation while the means of security of our forces and their families and of senior civil servants should be privatised. There must be something wrong with that, and we all know it.

    Security in Northern Ireland is even more important. When private contractors are threatened with being shot or have to withdraw from contracts because of such threats, it cannot be right to transfer activities to the private sector.

    I was interested to note that we received the support of a couple of Conservative Back-Bench Members on pensions and redundancy. If all Conservative Members had 2,000 employees in their constituency, perhaps we should have better pension and redundancy schemes.

    It is clear from a leaked document from the Department that jobs will be lost as a result of the measure. We know that. The hon. Member for Portsmouth, North (Mr. Griffiths) referred to the insecurity of the work force in his constituency which has already suffered the privatisation of the royal dockyard. The same could happen again.

    Finally, there is the danger of sweeteners, which occurred with the Rover and British Aerospace deals. We shall watch out for that carefully because we know that in the past the Government have used taxpayers' money to persuade the private sector to buy an undertaking that should not have been sold in the first place. That is our position, and why we shall vote against the Bill tonight.

    9.59 pm

    The principle of the Bill is worthy of consideration. It falls down because we are looking at the privatisation of the Crown Suppliers, which is making a loss, at a Government service and a completely new principle of privatisation. Costs will undoubtedly increase to Government Departments and the estimate for consultancies is an increase of 20 per cent.

    The issue of pension rights is absolutely crucial and we have not received sufficient assurances about them. Two reports from within Government, one in 1985 and the other in 1987, said that this is a bad idea.

    It being Ten o'clock, the debate stood adjourned.


    That, at this day's sitting, the Property Services Agency and Crown Suppliers Bill may be proceeded with, though opposed, until any hour.—[Mr. Nicholas Baker.]

    Question again proposed.

    The decision for privatisation has not been substantiated in our debates. The arguments about the proposals to privatise the PSA and the Crown Suppliers have not been sustained convincingly. For that reason, we are not prepared to support the Bill on Third Reading.

    Question put, That the Bill be now read the Third time:—

    The House divided: Ayes 233, Noes 200.

    Division No. 72]

    [10 pm


    Adley, RobertColvin, Michael
    Aitken, JonathanConway, Derek
    Alison, Rt Hon MichaelCoombs, Anthony (Wyre F'rest)
    Amery, Rt Hon JulianCormack, Patrick
    Amess, DavidCouchman, James
    Amos, AlanCran, James
    Arbuthnot, JamesDavies, Q.(Stamf'd & Spald'g)
    Arnold, Jacques (Gravesham)Day, Stephen
    Ashby, DavidDevlin, Tim
    Aspinwall, JackDicks, Terry
    Atkins, RobertDorrell, Stephen
    Atkinson, DavidDouglas-Hamilton, Lord James
    Baker, Nicholas (Dorset N)Dover, Den
    Banks, Robert (Harrogate)Dunn, Bob
    Batiste, SpencerDurant, Tony
    Beaumont-Dark, AnthonyDykes, Hugh
    Bellingham, HenryEggar, Tim
    Bendall, VivianEmery, Sir Peter
    Bennett, Nicholas (Pembroke)Evennett, David
    Benyon, W.Fairbairn, Sir Nicholas
    Bevan, David GilroyFavell, Tony
    Body, Sir RichardFenner, Dame Peggy
    Bowden, Gerald (Dulwich)Field, Barry (Isle of Wight)
    Bowis, JohnFinsberg, Sir Geoffrey
    Boyson, Rt Hon Dr Sir RhodesFishburn, John Dudley
    Brandon-Bravo, MartinForman, Nigel
    Brazier, JulianForsyth, Michael (Stirling)
    Bruce, Ian (Dorset South)Forth, Eric
    Buck, Sir AntonyFowler, Rt Hon Sir Norman
    Budgen, NicholasFox, Sir Marcus
    Burns, SimonFreeman, Roger
    Burt, AlistairFrench, Douglas
    Butler, ChrisGardiner, George
    Butterfill, JohnGarel-Jones, Tristan
    Carlisle, John, (Luton N)Gill, Christopher
    Carlisle, Kenneth (Lincoln)Glyn, Dr Sir Alan
    Carrington, MatthewGoodhart, Sir Philip
    Carttiss, MichaelGoodlad, Alastair
    Channon, Rt Hon PaulGoodson-Wickes, Dr Charles
    Chapman, SydneyGorman, Mrs Teresa
    Chope, ChristopherGorst, John
    Clark, Hon Alan (Plym'th S'n)Gow, Ian
    Clark, Sir W. (Croydon S)Grant, Sir Anthony (CambsSW)
    Clarke, Rt Hon K. (Rushcliffe)Greenway, Harry (Ealing N)

    Griffiths, Peter (Portsmouth N)Miller, Sir Hal
    Grist, IanMills, Iain
    Grylls, MichaelMiscampbell, Norman
    Hague, WilliamMitchell, Andrew (Gedling)
    Hamilton, Hon Archie (Epsom)Moate, Roger
    Hannam, JohnMontgomery, Sir Fergus
    Hargreaves, A. (B'ham H'll Gr')Mudd, David
    Hargreaves, Ken (Hyndburn)Neale, Gerrard
    Harris, DavidNeedham, Richard
    Haselhurst, AlanNelson, Anthony
    Hawkins, ChristopherNewton, Rt Hon Tony
    Hayward, RobertNicholls, Patrick
    Hicks, Mrs Maureen (Wolv' NE)Nicholson, Emma (Devon West)
    Hicks, Robert (Cornwall SE)Norris, Steve
    Higgins, Rt Hon Terence L.Onslow, Rt Hon Cranley
    Hill, JamesOppenheim, Phillip
    Hind, KennethPage, Richard
    Hogg, Hon Douglas (Gr'th'm)Paice, James
    Holt, RichardParkinson, Rt Hon Cecil
    Hordern, Sir PeterPatnick, Irvine
    Howard, Rt Hon MichaelPatten, Rt Hon Chris (Bath)
    Howarth, Alan (Strat'd-on-A)Pattie, Rt Hon Sir Geoffrey
    Howarth, G. (Cannock & B'wd)Pawsey, James
    Howe, Rt Hon Sir GeoffreyPeacock, Mrs Elizabeth
    Howell, Rt Hon David (G'dford)Porter, Barry (Wirral S)
    Howell, Ralph (North Norfolk)Porter, David (Waveney)
    Hughes, Robert G. (Harrow W)Portillo, Michael
    Hunt, Sir John (Ravensbourne)Price, Sir David
    Hunter, AndrewRaison, Rt Hon Timothy
    Irvine, MichaelRenton, Rt Hon Tim
    Jack, MichaelRhodes James, Robert
    Jackson, RobertRiddick, Graham
    Janman, TimRowe, Andrew
    Johnson Smith, Sir GeoffreySackville, Hon Tom
    Jones, Robert B (Herts W)Sainsbury, Hon Tim
    Jopling, Rt Hon MichaelShersby, Michael
    Key, RobertSkeet, Sir Trevor
    Kilfedder, JamesSmith, Tim (Beaconsfield)
    King, Roger (B'ham N'thfield)Speller, Tony
    Kirkhope, TimothySpicer, Sir Jim (Dorset W)
    Knapman, RogerSquire, Robin
    Knight, Greg (Derby North)Steen, Anthony
    Knight, Dame Jill (Edgbaston)Stern, Michael
    Knowles, MichaelStradling Thomas, Sir John
    Lamont, Rt Hon NormanTaylor, Ian (Esher)
    Lang, IanTaylor, Teddy (S'end E)
    Latham, MichaelTemple-Morris, Peter
    Lee, John (Pendle)Thompson, D. (Calder Valley)
    Leigh, Edward (Gainsbor'gh)Thompson, Patrick (Norwich N)
    Lennox-Boyd, Hon MarkThornton, Malcolm
    Lester, Jim (Broxtowe)Thurnham, Peter
    Lightbown, DavidTracey, Richard
    Lilley, PeterTredinnick, David
    Lloyd, Sir Ian (Havant)Trippier, David
    Lloyd, Peter (Fareham)Twinn, Dr Ian
    Lord, MichaelVaughan, Sir Gerard
    Luce, Rt Hon RichardWalden, George
    Macfarlane, Sir NeilWalker, Bill (T'side North)
    MacKay, Andrew (E Berkshire)Waller, Gary
    Maclean, DavidWardle, Charles (Bexhill)
    McLoughlin, PatrickWarren, Kenneth
    McNair-Wilson, Sir MichaelWatts, John
    McNair-Wilson, Sir PatrickWells, Bowen
    Madel, DavidWhitney, Ray
    Malins, HumfreyWiddecombe, Ann
    Mans, KeithWinterton, Nicholas
    Maples, JohnWolfson, Mark
    Marland, PaulWood, Timothy
    Marshall, John (Hendon S)Woodcock, Dr. Mike
    Martin, David (Portsmouth S)Young, Sir George (Acton)
    Maude, Hon Francis
    Mawhinney, Dr BrianTellers for the Ayes:
    Maxwell-Hyslop, RobinMr. Michael Fallon and
    Mayhew, Rt Hon Sir PatrickMr. John M. Taylor
    Meyer, Sir Anthony


    Abbott, Ms DianeAnderson, Donald
    Allen, GrahamArcher, Rt Hon Peter
    Alton, DavidAshdown, Rt Hon Paddy

    Ashley, Rt Hon JackHealey, Rt Hon Denis
    Ashton, JoeHeffer, Eric S.
    Banks, Tony (Newham NW)Hinchliffe, David
    Barnes, Harry (Derbyshire NE)Hoey, Ms Kate (Vauxhall)
    Barron, KevinHogg, N. (C'nauld & Kilsyth)
    Battle, JohnHome Robertson, John
    Beckett, MargaretHood, Jimmy
    Beith, A. J.Howarth, George (Knowsley N)
    Bennett, A. F. (D'nt'n & R'dish)Howells, Geraint
    Bermingham, GeraldHowells, Dr. Kim (Pontypridd)
    Bidwell, SydneyHoyle, Doug
    Blair, TonyHughes, John (Coventry NE)
    Blunkett, DavidHughes, Robert (Aberdeen N)
    Boateng, PaulHughes, Simon (Southwark)
    Boyes, Rolandlllsley, Eric
    Bradley, KeithIngram, Adam
    Bray, Dr JeremyJanner, Greville
    Brown, Gordon (D'mline E)Jones, Barry (Alyn & Deeside)
    Brown, Nicholas (Newcastle E)Jones, Ieuan (Ynys Môn)
    Bruce, Malcolm (Gordon)Jones, Martyn (Clwyd S W)
    Buchan, NormanKinnock, Rt Hon Neil
    Buckley, George J.Lambie, David
    Caborn, RichardLeadbitter, Ted
    Callaghan, JimLeighton, Ron
    Campbell, Menzies (Fife NE)Lestor, Joan (Eccles)
    Campbell, Ron (Blyth Valley)Lewis, Terry
    Campbell-Savours, D. N.Litherland, Robert
    Canavan, DennisLivingstone, Ken
    Carlile, Alex (Mont'g)Livsey, Richard
    Clarke, Tom (Monklands W)Lloyd, Tony (Stretford)
    Clay, BobLofthouse, Geoffrey
    Clelland, DavidLoyden, Eddie
    Cohen, HarryMcAllion, John
    Cook, Robin (Livingston)Macdonald, Calum A.
    Corbett, RobinMcFall, John
    Cousins, JimMcKelvey, William
    Crowther, StanMcLeish, Henry
    Cryer, BobMcWilliam, John
    Cummings, JohnMadden, Max
    Cunliffe, LawrenceMahon, Mrs Alice
    Cunningham, Dr JohnMarek, Dr John
    Dalyell, TarnMarshall, David (Shettleston)
    Darling, AlistairMarshall, Jim (Leicester S)
    Davies, Rt Hon Denzil (Llanelli)Martin, Michael J. (Springburn)
    Davies, Ron (Caerphilly)Martlew, Eric
    Dewar, DonaldMeacher, Michael
    Dixon, DonMeale, Alan
    Dobson, FrankMichael, Alun
    Doran, FrankMichie, Bill (Sheffield Heeley)
    Duffy, A. E. P.Moonie, Dr Lewis
    Dunnachie, JimmyMorgan, Rhodri
    Dunwoody, Hon Mrs GwynethMorley, Elliot
    Eadie, AlexanderMorris, Rt Hon A. (W'shawe)
    Ewing, Harry (Falkirk E)Morris, Rt Hon J. (Aberavon)
    Ewing, Mrs Margaret (Moray)Mowlam, Marjorie
    Fatchett, DerekMullin, Chris
    Faulds, AndrewMurphy, Paul
    Fearn, RonaldOakes, Rt Hon Gordon
    Field, Frank (Birkenhead)O'Brien, William
    Flannery, MartinO'Neill, Martin
    Flynn, PaulOrme, Rt Hon Stanley
    Foot, Rt Hon MichaelPatchett, Terry
    Foster, DerekPendry, Tom
    Foulkes, GeorgePike, Peter L.
    Fraser, JohnPowell, Ray (Ogmore)
    Fyfe, MariaPrescott, John
    Galloway, GeorgePrimarolo, Dawn
    Garrett, John (Norwich South)Quin, Ms Joyce
    Garrett, Ted (Wallsend)Radice, Giles
    George, BruceRandall, Stuart
    Godman, Dr Norman A.Redmond, Martin
    Golding, Mrs LlinRees, Rt Hon Merlyn
    Gordon, MildredReid, Dr John
    Gould, BryanRichardson, Jo
    Griffiths, Nigel (Edinburgh S)Robertson, George
    Griffiths, Win (Bridgend)Robinson, Geoffrey
    Grocott, BruceRooker, Jeff
    Hardy, PeterRoss, Ernie (Dundee W)
    Hattersley, Rt Hon RoyRowlands, Ted
    Haynes, FrankRuddock, Joan

    Sedgemore, BrianTurner, Dennis
    Sheerman, BarryWalley, Joan
    Sheldon, Rt Hon RobertWardell, Gareth (Gower)
    Shore, Rt Hon PeterWareing, Robert N.
    Short, ClareWatson, Mike (Glasgow, C)
    Skinner, DennisWelsh, Michael (Doncaster N)
    Smith, Andrew (Oxford E)Williams, Rt Hon Alan
    Smith, C. (Isl'ton & F'bury)Williams, Alan W. (Carm'then)
    Smith, Rt Hon J. (Monk'ds E)Wilson, Brian
    Smith, J. P. (Vale of Glam)Winnick, David
    Snape, PeterWise, Mrs Audrey
    Soley, CliveWorthington, Tony
    Spearing, NigelWray, Jimmy
    Steel, Rt Hon Sir DavidYoung, David (Bolton SE)
    Steinberg, Gerry
    Strang, GavinTellers for the Noes:
    Taylor, Matthew (Truro)Mr. Ken Eastham and
    Thompson, Jack (Wansbeck) Mr. Allen McKay.

    Question accordingly agreed to.

    Bill read the Third time, and passed.

    Statutory Instruments, &C

    Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committee on Statutory Instruments, &c.)

    Industrial Organisation And Development

    That the draft Horticultural Development Council (Amendment) Order 1990, which was laid before this House on 18th January, be approved.— [Mr. Kenneth Carlisle.]

    Question agreed to.

    Mr Colin Wallace

    Motion made, and Question proposed, That this House do now adjourn.— [Mr. Kenneth Carlisle.]

    10.14 pm

    As this debate relates to the North of Ireland, I am sure that my colleagues will not take it amiss if I refer, with sadness, to the passing of our friend, Harold McCusker. Shortly after he was elected a Member of Parliament I spent the day with him, as did others, in his constituency. It was an interesting experience because he was a marvellous host, and we learnt a lot. We mourn the passing of this courageous and brave colleague.

    On Wednesday 15 November 1989, Hansard records that I asked the Prime Minister
    "what recent representations have been received by her Cabinet secretariat relating to events at the Kincora boys' home in Northern Ireland."
    The Prime Minister replied:
    "I am advised that there have been no such representations from Members of Parliament and members of the public."—[Official Report, 15 November 1989; Vol. 160, c. 269.]
    The word "such" was underlined. I cannot assert that never, in a parliamentary answer, has one word been underlined, but never in the recollection of four of the most senior Clerks of the House of Commons—not in the recollection of Sir Clifford Boulton, Mr. Sweetman, Mr. Limon or Mr. Winnifrith—has a word ever been underlined. Therefore, we must ask why that happened.

    On 27 November 1989 I asked the Prime Minister
    "why, in her answer, Official Report, 15 November, relating to representations received by the Cabinet Secretariat relating to events at the Kincora boys' home she underlined the word 'such'".
    The answer will not come as a shock to my hon. Friends. She said:
    "I have nothing further to add to the reply I gave the hon. Member on 15 November at column 269.—[Official Report, 27 November 1989; Vol. 162, c. 92.]
    As there were no such representations, the question that I wanted to put down but, under the Table Office rules, could not was to ask why there were representations frotn Sir Michael Quinlan, the permanent secretary at the Ministry of Defence, and Mr. Len Appleyard, the deputy secretary in the Cabinet Office. The question of which I have given the Minister warning is this: if there were no such representations, what representations were made and what were the terms of reference?

    The second question of which I gave notice to the Attorney-General's office, to whom this Adjournment debate was addressed, was to ask about the letter of the shadow Attorney-General, my right hon. and learned Friend the Member for Aberavon (Mr. Morris)—and I thank him for his presence. He wrote on 1 February:
    "Dear Prime Minister,
    I have read with care your letter of 30 January 1990 to Mr. Terence Higgins. Since the issues raised cover a number of departmental responsibilities I am writing to seek clarification of certain aspects of your letter.
    I would be glad if you could clear up the following:—
  • 1. Which statements in your letters, Ministerial statements and official correspondence were in each case either incorrect or require clarification?
  • 2. What in each of the said letters, Ministerial statements and official correspondence was either incorrect or requires clarification?
  • 3. Which, if any, of the Ministerial statements referred to were made in the House?"
  • I remind the House of what the Prime Minister said on 30 January in her letter to my right hon. and learned Friend:
    "I regret to say that a re-examination of Departmental papers has brought to light information which shows that there were a number of statements in my letterss, and in other Ministerial statements and official correspondence, which were incorrect or required clarification."
    My right hon. and learned Friend received an answer to his questions on the very same day:
    "Dear Mr. Morris,
    I am writing on the Prime Minister's behalf to thank you for your letter of 1 February"—
    he does not yet have an answer.
    "This is receiving attention and I shall ensure that a reply is sent to you as soon as possible."
    Even Conservative Members will understand that this was not quite a routine letter. How many of them receive letters from the Prime Minister's secretary signed, "Yours sincerely, Charles Powell." Mr. Charles Powell does not spend his time acknowledging routine letters. What on earth did the principal private secretary to the Prime Minister, responsible for foreign affairs, have to do with the case of Colin Wallace and the statements made by the Prime Minister on it?

    I can only imagine that the Prime Minister said to him, "Charles, this is a matter for you to handle. After all, you have all the expertise from the Westland affair." So regurgitate my right hon. and learned Friend's letter and I ask for a full explanation. I shall give the Minister plenty of time in which to reply, and I am sure that he will welcome the opportunity to answer me fully.

    I wish to ask the Minister a final question of which he has had notice: why on earth was General Gerald Whiteley, the director of Army legal services, ever involved in the case of Colin Wallace? What on earth was he doing meddling with the Court of Appeal?

    These are serious questions; the House of Commons deserves a full answer to them.

    10.23 pm

    First, I echo the sentiments expressed by the hon. Member for Linlithgow (Mr. Dalyell) about the loss of our colleague Harold McCusker. We send our condolences to his wife and family.

    I am grateful to the hon. Member for Linlithgow [Interruption.] Were it not for his intervention in this matter I would not have read "War Without Honour", about the exploits of Captain Holroyd, or "Who Framed Colin Wallace?" by Paul Foot. The hon. Gentleman has raised a number of issues about the case of Colin Wallace, and, with his usual courtesy, he gave notice on Friday of the three particular questions to which he seeks answers. I shall deal with the latter tonight and with any other essential issues as time permits.

    I know that my response will not satisfy all those who choose to see in Mr. Wallace's various allegations the evidence that they seek to justify their belief in an all-embracing conspiracy by Crown servants against the Government. That does not deter me from explaining the available facts to the House once again, since the facts are more important in this matter, rather than speculation that cannot be substantiated.

    As many hon. Members know, Mr. Wallace was employed as a civil servant in the headquarters in Northern Ireland between 1968 and 1975. He served in the successive grades of assistant information officer, information officer and senior information officer.

    It was worth reminding the House at this point of the situation that confronted the security forces in Northern Ireland in the early 1970s. By that time, law and order in the province had deteriorated to so great a degree that the Government concluded that it was essential to direct the Army to play a major role in support of the police to fight terrorism. That was a daunting task. The IRA was engaged in a campaign of bombings, assassinations and maiming on an unprecedented and horrific scale, supporting that violence with a campaign of virulent propaganda.

    It is a tribute to the many Crown servants who served in Northern Ireland then that they put so much effort into dealing with the extreme difficulties that they faced. For them, the learning curve was steep. It was essential to regain the initiative, and effective measures were imperative to counter both the terrorists and their propaganda. Explaining the true purpose of the work of the security forces and countering IRA propaganda were key ingredients in restoring law and order in the community.

    Mr. Wallace was one of a number in the Government information service who played their part. By all accounts, Mr. Wallace was an extremely hard worker. He devoted considerable personal effort to understanding any aspect of the complex world of Northern Ireland that might have been relevant to the fight against terrorism.

    As each promotion increased his responsibilities, his efforts were increasingly widened. By all accounts, he took great interest in collecting any information, story, or rumour which might be of interest.

    Like all information officers, his duties required him to exercise discretion when deciding how best to communicate with the media, and how much to say on each occasion. That does not mean to say that his exercise of discretion was unfettered. All information officers are expected to operate within the limits of the authority given to them, and to demonstrate constantly that they are interpreting their duties properly. In particular, the release of classified documents is not a matter which is left to the sole discretion of individual information officers.

    The extent of Mr. Wallace's discretion in the handling of classified information falls within the ambit of Mr. Calcutt's inquiry.

    After Mr. Wallace had been transferred to another post, and had left his job in Headquarters Northern Ireland, he provided a journalist with a classified document. He did so without seeking or receiving authority. The act was almost immediately discovered. Mr. Wallace initially denied and then admitted it.

    The view was taken that his act required disciplinary action, and it was concluded that dismissal was appropriate. Mr. Wallace appealed to the Civil Service appeal board, which recommended that, in the light of his earlier good service, he should be allowed to resign. He and the Ministry of Defence accepted that recommendation, and he resigned from the Civil Service in 1975. He clearly felt that he had suffered an injustice, and he sought to air his grievances. In recent years, one of his contentions in this context has been that he was dismissed because he refused to engage in improper activities. He has alleged that during the 1970s the security forces and Crown servants serving in Northern Ireland had engaged in a variety of activities which he seemed to think improper or illegal. He has also alleged that the security forces deliberately covered up information relating to homosexual activities at Kincora. In 1981 he was convicted of manslaughter and has since contended variously that the verdict was unsound and that he was framed. More recently his letters to Government Departments have included the allegation that the project called Clockwork Orange had been undertaken by Crown servants in Northern Ireland in 1974 and had included the issue of defamatory material aimed at Ministers and Members of Parliament.

    Mr. Wallace's case has been brought back into the limelight by the written answer that I gave and letters that I sent to hon. Members at the end of last month. In them I volunteered information to correct the record concerning inaccuracies in information previously given to hon. Members by Ministers. I did that because it was right to do so. In the same spirit, inquiries have been commissioned into two related matters. I must tell the House again that nothing discovered in the process leading to the public correction of those inaccuracies constitutes any evidence to corroborate Mr. Wallace's allegations about illegal activities or about the use of disinformation by Crown servants to denigrate Ministers and hon. Members.

    Mr. Colin Wallace has alleged that he informed his superiors when he was an Army information officer that he had evidence that boys in the Kincora boys' home had been abused and were being abused. Was that information acted on? Is there any record of those allegations having been made to superiors? There is grave disquiet in Northern Ireland and surely it would be much better to have a full investigation into the whole issue of the Kincora boys' home.

    I remind the hon. Gentleman that there have been two full inquiries into the Kincora boys' home, one by Chief Constable Terry from Sussex and one by Judge Hughes. The opportunity was given to Mr. Wallace to give evidence to the Hughes inquiry but he found reasons for not doing so, which were that he would not be covered by the Official Secrets Act. There have been opportunities for him to give evidence and he has not done so. To date we have no evidence whatever, any evidence on which we can work, which indicates that Mr. Wallace had the sort of evidence that we needed to gain convictions over the Kincora affair earlier than actually happened.

    Is it true that MI5 or MI6 obstructed or blocked an inquiry into the Kincora affair in 1973, 1974 or 1975?

    There is no evidence whatever that they are. If the hon. Gentleman has any evidence that that is the case he should present it. There is no evidence about that whatever.

    Some hon. Members have intimated that we would not have commissioned the inquiry by Mr. Calcutt had it not already become clear that Mr. Wallace should not have been dismissed. That is not so. Available papers record that Mr. Wallace did provide a journalist with a classified document, and that it was felt right at the time that he should be dismissed. The reason for asking Mr. Calcutt to look into the dismissal procedure is to enable him to consider whether, with the benefit of 15 years of hindsight, the presentation of his case to the Civil Service appeal board was entirely fair. Mr. Calcutt will consider whether, in comparison with the handling of a similar case today, Mr. Wallace was hard done by. No evidence has been found which justifies the theory of a conspiracy to remove Mr. Wallace because he refused to take part in Clockwork Orange.

    I am grateful to the hon. Member for Linlithgow for giving me advance notice of questions. He asked me to identify those earlier ministerial statements which were incorrect and those which required clarification. As my written answer to my hon. Friend the Member for Arundel (Mr. Marshall) on 30 January made clear, Mr. Wallace undertook duties beyond those described explicitly in his formal job description. An additional job description was drafted to cover those additional duties, but they are not recorded in any subsequent approved and issued job description.

    The letter that my right hon. Friend the Prime Minister sent my right hon. Friend the Member for Worthing (Mr. Higgins) on 30 March 1987 said that the job description given to the Civil Service appeal board was the only one applicable to Mr. Wallace's job. To the extent that it was the only one that formally existed, that was true, but it was felt right to acknowledge the existence of a draft that was brought to light last year.

    Re-examination of files indicated that Mr. Wallace had undertaken unattributable covert briefing, which probably included disinformation designed to discredit the Provisional IRA. It was considered that this should also be put on the record to correct statements about the nature of Mr. Wallace's duties made in the Prime Minister's letter of 30 March 1987 to my right hon. Friend the Member for Worthing and any misunderstandings that may unwittingly have been communicated to other right hon. and hon. Members.

    My answer also explained that documents had recently come to light that made reference to a project called Clockwork Orange. Those documents made it plain that this was to have been an exercise to plant a story designed to discredit the leadership of the Provisional IRA but that its implementation was never approved. In a letter to the hon. Member for Brent, East (Mr. Livingstone), dated 15 August 1988, my hon. Friend the Member for Kettering (Mr. Freeman) and in an answer given on 10 January 1989 my hon. Friend the Member for Romford (Mr. Neubert), each in his capacity as Under-Secretary of State for the Armed Forces, stated that they had no evidence that a project of that name had ever existed. That was a true statement of the information available to them. When information relating to Clockwork Orange was found, it was considered proper to put the record straight.

    I also wrote to the hon. Member for Brent, East to add to the information that I had been able to provide previously about a mock raid on Aldergrove airport. He had asked a number of questions on the subject and it was felt appropriate to make the additional information available to him. Two errors of fact were also corrected in that letter. The records previously examined showed only that Mr. William Black had been shot in 1974 with a Sterling sub-machine gun. Papers re-examined last year contained the additional information that the weapon was a model L34A1, which is fitted with an integral suppressor or silencer. That information was pertinent to the questions that the hon. Member has asked. Other papers indicated that the Ingram MAC 10 sub-machine gun had been issued at an earlier date than had previously been indicated. That information was accordingly passed to the hon. Member to correct an answer given on 15 December 1988.

    I should now like to turn to the reference made by the hon. Member for Linlithgow to the words "such representations." It is important to put that point, which the hon. Gentleman somewhat laboured, in context. The hon. Gentleman asked my right hon. Friend the Prime Minister:
    "what recent representations have been received by her Cabinet secretariat relating to events at the Kincora boys' home in Northern Ireland."
    My right hon. Friend the Prime Minister replied:
    "I am advised that there have been no such representations from Members of Parliament and members of the public."—[Official Report, 15 November 1989; Vol. 160, c. 269.]
    That seems to be a pretty standard answer. I take the hon. Gentleman's word for it that the word "such" was underlined. He should not ask me why that was, but I have nothing further to add to what my right hon. Friend the Prime Minister said.

    Would the Minister like to comment on today's revelations that in 1973 Mr. Wallace's superior officer, Mr. Peter Broderick, saw and initialled Mr. Wallace's report drawing attention to systematic child abuse at Kincora? Does it not worry him that that continued for a further seven years after it had been brought to the attention of senior Army officers? Has he seen the statement in today's newspapers reporting the views of Sir George Terry, who conducted one of the earlier inquiries into Kincora? He says:

    "I am sure that in the light of all that is now being said, any inquiry that can look at everything would be a very wise step".
    Mr. Justice Hughes has been prayed in aid to say that we need no further inquiry. He now states that, contrary to the Government's position, he did not receive the papers that Colin Wallace submitted to the Prime Minister in 1984, although the House has been told that those papers were made available. The Minister has now told the hon. Member for Arundel (Mr. Marshall) that the originals of the documents submitted to the Prime Minister have disappeared from the Prime Minister's office and cannot be traced. Is that not causing the Minister concern? There is something more important than a job description involved here.

    I cannot comment on all those points. If Mr. Broderick has evidence about Kincora, he should take it to the Royal Ulster Constabulary, which is the body to deal with these matters. If he finds that difficult and feels that this is covered by the Official Secrets Act 1911, he should take the matter up with the Director of Army Security, who certaintly will help him.

    It is typical of all the allegations that we have heard that people are more than happy to make statements to newspapers about what should happen, but when they are given the opportunity to present the facts—we are looking for facts—to the authorities, we do not get them. That has been the history all the way. Massive assertions are made, but people are not prepared to present the facts to the authorities, who would be more than happy to deal with them.

    I should now like to turn to a number of serious allegations that were raised by the right hon. Member for Chesterfield (Mr. Benn) in the Adjournment debate on Tuesday 6 February. Those allegations about the conduct of civil servants, members of the security and intelligence services and others suggest that they have been or may have been involved in the dissemination of false information about Members of Parliament. I remind the House of the points that I made last Tuesday. It is no part of the official duties of any Crown servant to disseminate false information about Members of Parliament in order to denigrate them in any way. All Governments and hon. Members on both sides of the House would regard any such action as unacceptable. Government servants are well aware of the conduct expected of them and of the severe consequences that they might suffer in any case where those standards of conduct were breached.

    I had hoped that the statement that I made in the debate on Tuesday would enable hon. Members to draw a clear distinction between disinformation aimed at hon. Members and cases in the early 1970s when disinformation was used to denigrate the Provisional IRA. As I said then, the Government judge that no useful purpose would be served by an inquiry now into disinformation designed to denigrate the Provisional IRA so many years ago, under previous Administrations, in a policy framework long since changed and amid all the operational stresses of the early and peak years of a very difficult emergency.

    I repeat that the Government regard disinformation aimed at Members of Parliament or former Ministers as a quite different and special matter which was dealt with by the Prime Minister's statement in 1987. I must say again that no evidence of any substance has emerged from our review of papers to put that statement into question.

    I cannot give way because I have other comments to make.

    There seems to be misapprehension in some Members' minds that unattributable covert briefing represents an unacceptable practice and that use of classified information in that context is improper. There is nothing wrong in using classified information during unattributable briefing, provided that the briefing is for proper purposes and that the disclosure of classified information has been properly authorised. I know of no reason to believe that, contrary to normal practice, Mr. Wallace was given total discretion to release whatever classified information he wished to disclose.

    May I tell the Minister plainly that the inquiry by the former Prime Minister and myself into dirty tricks certainly did not include the disinformation against Members of Parliament between 1971 and 1975? That should be inquired into, because someone authorised that to be done.

    I am sorry, but I think that the right hon. Gentleman misunderstood me. I was referring to the inquiry carried out by the head of the security services, under the auspices of my right hon. Friend the Prime Minister. That inquiry investigated that matter in great depth and the head of the security services found no evidence that that campaign of disinformation had been carried out by his security services or even by a disaffected group within the security services.

    As my right hon. Friend and I have assured the House, the papers that have come to light on the Colin Wallace case do not contain any evidence to support his allegations about a "smear" campaign about Members of Parliament. As I have described already, the only element of his claims about disinformation that has been confirmed is that an operation known as Clockwork Orange was conceived. The documents found show that that operation was, I repeat, aimed at the Provisional IRA—not at Members of Parliament—and was not approved.

    The motion having been made after Ten o'clock and the debate having continued for half an hour, MR. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

    Adjourned at sixteen minutes to Eleven o'clock.