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Baroness Jay of Paddington: My Lords, I am grateful to the Minister for those remarks. Obviously, I understand that we agreed the principle of RHA abolition at an earlier stage. As I said at the beginning of my remarks, I feared that the amendment was somewhat cryptic. I am grateful for what she said about the continuing independence of the community health councils and particularly their staff. The words she used—she said that their employment contracts will be held within the NHS —are frankly not as specific as I should have liked. I am encouraged by what she said about it not being appropriate for them to be held by the regional offices of the new health service. I understand—and we agreed—the reasons for that.

However, the Minister did not say that they would not be held by consortia of trusts or indeed of local purchasing authorities. In my view—I hope I made it clear in my remarks when proposing the amendment—that would be equally as compromising as their being employed by regional offices. I shall want to look at precisely what she said and perhaps consult outside with

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community health councils about the terms that the Minister has now expressed in her reply. At this stage I shall withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 17 not moved.]

Crown Agents Bill [H.L.]

6.45 p.m.

Report received.

Clause 1 [Vesting of property, &c. of Crown Agents in a successor company]:

Lord Judd moved Amendment No. 1:


Page 1, line 18, at end insert ("; and thereafter that company, and any other company to which the successor company is subsequently transferred, shall be a company limited by guarantee, in the form of a foundation committed to social and developmental objectives; and the memorandum and articles of association of that company shall contain those objectives, and shall be included in any order by the Secretary of State regarding transfer of the property, rights and liabilities of the Crown Agents or of the successor company.").

The noble Lord said: My Lords, the Minister was very keen in Committee to say that there was no need for amendments on the constitution of the future of the Crown Agents. She reiterated that the foundation that she intends to create will own all the shares in the company that will operate the Crown Agents' business. She said that the foundation will not distribute dividends to its members, and that its objectives will encompass the social, ethical and developmental principles on which the Crown Agents' business is based. She said, in fact, that this is not and will not be a trade sale.

But we on this side of the House remain deeply concerned about what the Minister did not say. She said only that that the new owner was "likely" to take the form of a company limited by guarantee. She said that the terms of the transfer of the business were not a matter for Parliament but instead the members of the foundation will need to discuss and agree with the Government the terms of transfer of the business once Parliament has agreed to the arrangements set out in the Bill. She said that members of the foundation would not be appointed by Ministers; but she failed to address the question of by whom they would be appointed and what would be the basis of legitimacy for such appointees.

In the same breath as asserting once again that what is intended will not amount to a trade sale, the Minister insisted that it was essential to ensure that full confidentiality for Crown Agents is maintained throughout the process of transfer and thereafter. She promised, not for the first time, that the proposed memorandum and articles of association would be made available to Parliament. As I see it, we are still awaiting that momentous day. But whatever information is provided by the Minister today or hereafter will no doubt be limited by the requirements of full confidentiality to which she referred.

Therefore, it is hard to know just what Parliament is to be told. So far, we have been told only what the Government intend. We have been told nothing of what they have, in fact, arranged. Frankly, we are alarmed by

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the continuing failure of the Government to be more forthcoming. When the Minister says that the terms of the transfer will be agreed with the members of the foundation once Parliament has agreed the arrangements set out in the Bill, we have to recognise that what is set out in the Bill is only the removal of accountability to Parliament, giving the power to Ministers to agree whatever terms of transfer should take their fancy. We argue that that is simply not enough.

What is the Minister's argument against including the foundation on the face of the Bill? It is only that it is unnecessary and unprecedented and would add nothing of substance to the Government's proposals. Let us just consider those points. The amendment that we propose would not so much add substance to the Government's proposals but would give them substance for the first time. The Minister's speeches on this issue have been entirely without substance, if by "substance" we are to understand firm proposals enshrined in law rather than general intentions dependent on the political priorities of the Minister, her colleagues or successors.

Our amendment is far from unnecessary. It is essential for the same reason. I fail entirely to understand why the Minister believes that it is right to stand up in this House and tell us what she intends to do, yet resists any move to confirm her intentions in even the most modest way on the face of the Bill. We have today given her yet a further opportunity to reconsider the logic and consistency of her position by withdrawing the amendment which would require Ministers to appoint members of the foundation. We have done that because we understand that she does not favour such a proposal. We only propose an amendment which contains propositions to which she says she is in any case committed. It is therefore not our amendment which is unnecessary. If the Minister intends to proceed as she said, it is her resistance to the amendment that is unnecessary and, frankly, incomprehensible.

Let me say a few words about the Minister's argument that what we propose is unprecedented. We are told that the Bill itself is unprecedented. We understand that this is not any old privatisation. There is to be no sale to the highest bidder. Any idea that this Government are ideologically driven must be the fault of the press releases from other government sources seeking to compensate for the scrapping of real privatisations elsewhere.

The foundation that Ministers say that they intend to establish is to be unique—I repeat "unique"—in the history of privatisations over the past 16 years; yet to write the foundation into the Bill designed to enable it to be set up should be at the same time opposed as unprecedented. So "unique" but "unprecedented"—that makes no sense at all.

I plead with the Minister. Clearly she still intends to avoid a trade sale and to proceed with a non-profit foundation, if she possibly can do so. I do not doubt her commitment in that respect. We support that intention. Why not accept the support of Parliament and of those of us who believe the Crown Agents too valuable a national asset to put in jeopardy? Will not the Minister

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even now accept our support in protecting the foundation from predators and write the foundation on the face of the Bill? I beg to move.

Lord Redesdale: My Lords, I support the amendment. I know that this is ground that we have covered before and I do not expect the Minister to give any further information. However, on Second Reading the Minister said that,


    "as the Bill progresses, I shall explain more".—[Official Report, 28/2/95; col. 1410.]

I am afraid that I do not feel that I gained any knowledge whatever in Committee about what was progressing. Can the Minister give any indication of what progress, if any, has been made since Second Reading? If no further progress has been made, the amendment seems like a worthy safeguard which will give Parliament some indication that the Crown Agents will become a foundation in the form that the Minister described.

In Committee, the Minister used as one of her arguments the fact that it would be unique to include such provisions on the face of the Bill. However, as she said on Second Reading, the route that is taken in the Bill is interesting and unusual. Therefore, could she not go one step further and accept the amendment?

The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, I congratulate the noble Lord, Lord Judd, on his persistence and ingenuity in drafting another amendment designed to put the foundation on the face of the Bill, just as the new clause that was proposed in Committee sought to do.

I understand your Lordships' wish to be fully informed about the Government's plans for the foundation. I can assure your Lordships that progress is being made although, to answer the noble Lord, Lord Redesdale, it is slow and not yet complete. I suppose that it is fair to say that I am somewhat embarrassed that I cannot provide your Lordships tonight with complete answers to your questions. Needless to say, nothing has actually happened since we discussed the Bill in Committee which makes any of the comments that I made on that occasion invalid.

The Government still intend to establish a two-tier structure with the foundation the sole owner of the operating company. The foundation will be a company limited by guarantee. I know that noble Lords would like to see that stated in the Bill. I am told that legally that is not required. I can confirm that the foundation will not distribute dividends to its members. I can confirm that it will have its social and developmental objectives clearly defined in the memorandum and articles of association. It is those that we are working on; I shall let your Lordships have details as soon as possible. It is intended that the operating company should be limited by shares and that it will be able to pass its profits to the foundation for use in pursuit of its objectives. That will in no way impair its ability to continue to uphold the high ethical standards for which the Crown Agents are valued by us all.

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In moving the amendment, the noble Lord, Lord Judd, said that he thought it was likely that the company would be limited by guarantee. I can reassure him that that will be a certainty. The noble Lord wanted to know more about the terms of transfer. That is not a matter that we can declare at this point simply because the foundation, which will be independent of government, will be the owner of the new body when the Crown Agents are transferred to it, and further work must be done with the Crown Agents before those terms of transfer become clear. I am not seeking to avoid the question which the noble Lord asked me; I am simply saying that more work has to be done before those terms of transfer can become clear.

The noble Lord asked about members of the foundation. I have said many times that the foundation will be independent of the Government, but the permanent members will comprise a core group of enduring institutions, representatives of the corporate sector, and other bodies such as non-governmental organisations concerned with developing countries and overseas aid. It is proposed that in due course a larger number of term members may also be appointed by the permanent members, but the Government will have no hand in that. However, I assure the noble Lord, Lord Judd, that, before transfer, the Government will wish to be satisfied that the founder members possess the requisite competence and integrity. If the Government were not satisfied, the transfer would be held up until they were.

In Committee, I mentioned the names of some institutions interested in becoming members of the foundation and holding shares. Perhaps I may remind your Lordships that they include notable bodies such as the British Consultants Bureau, the British and international chambers of commerce, and chartered institutes, including the Chartered Institute of Building. Once established, agreement must be reached by the Government and the foundation on the terms and conditions of the transfer to the operating company. If the foundation should decide to seek registration as a charity, I see no need for the Government to be a member of the foundation. We have not discussed that aspect tonight, but we can return to it on later amendments if your Lordships wish.

I want to make absolutely clear that the foundation's objectives must be satisfactory because the Crown Agents must be able to continue to give their overseas and, indeed, their UK clients assurances about their structure and that they will continue to operate very much as now. I believe that the membership of the Crown Agents Foundation will give that sort of assurance to clients who have been built up over the years. We must ensure that there is no disruption while the new arrangements bed down.

The noble Lord referred to the need for full confidentiality. which I explained at an earlier stage. That is still necessary—even though it will not be a trade sale—to ensure that the financial structure is absolutely right for the transfer.

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The noble Lord asked about the memorandum and articles of association and when they would come to Parliament. I very much hope that they will come to Parliament early next month —or as soon as they are ready. Their preparation has already started, and I shall make them available to the House at the earliest opportunity. They will clarify the proposals dealing with the foundation's name, social and developmental objectives, the application of income to those objectives, membership provisions and the board of directors. As I indicated some moments ago, the foundation will be made up of institutions which have an enduring membership. Obviously, each institution would need to approve individuals to represent it. I believe that it is perfectly feasible and appropriate that we should write into the memorandum and articles of association of the foundation a requirement for the agreement of, say, two-thirds or even 75 per cent. of the members of the foundation before any change can be made to its memorandum and articles of association. By writing that into the original, we can safeguard the foundation in the future against adverse changes that might be attempted.

Both the noble Lord, Lord Redesdale, and the noble Lord, Lord Judd, understandably asked why, if our plans are so well developed, they are not written into the Bill. I cannot give any explanation other than that I gave in Committee, which is that it would be unprecedented to include such provisions in a Bill of this kind, and it is not necessary to do so. As soon as I have information, I shall continue to provide it to the House. I very much hope that that will happen shortly. The amendment does no more for us than the previous one, which the noble Lord, Lord Judd, knows found no more favour than, I have to tell him, this one finds tonight.

7 p.m.

Lord Judd: My Lords, naturally I thank the Minister for her reply, but I wonder whether she will think over this point again. She has once more advanced the argument that it would be unprecedented to write the information that we request on to the face of a Bill of this kind, as she said again tonight. But as I understand it, she is one of the most emphatic advocates of the principle that there has never before been a Bill of this kind; that this is not a normal privatisation; that this is a Bill to set up a foundation with a unique and special purpose.

It is because we are interested in that idea and not at all hostile to it, and we feel that it is so special and exceptional, that it would be sensible to have what is entailed on the face of the Bill. I think the Minister is well aware that she has good friends in all parts of this side of the House who want to support her and to ensure that this brave, new and exciting adventure upon which she has embarked is there for all to see and not just to hear. I just hope that by the time the Bill comes to be considered in another place the Government will have listened to the arguments put forward tonight and will have taken an opportunity to write on to the face of the Bill some of the information which we have not had available here.

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Perhaps I may add that it seems to me rather unfortunate that we should be seriously considering an enabling Bill of this kind when the Minister has volunteered that the work on what is to be done is not yet completed. I find that constitutionally worrying. If we are embarking upon an enabling Bill, there should somewhere be something definite which is being enabled, because otherwise what is it in the end that we are enabling? As the reasonable person she is, the Minister will recognise that there is a worrying point here. I hope that it can be addressed again before the Bill goes forward in another place.

I hope that the Minister will recognise that our arguments have been put forward in good faith and constructively, but, in view of all that she has said and the assurances that she has given, we would do better to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.


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