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Lord Peston: Hear, hear!

Lord Clinton-Davis: That ought to carry the amendment. The Minister is on difficult ground already. Mr. Jackson also thought that this House was more effective than the House of Commons—-

Lord Haskel: Hear, hear!

Lord Clinton-Davis: —is permitted to be. To use a Conservative word which is so frequently overused, Mr. Jackson looked forward to a "robust" attitude being adopted by Members of this House. His statement was a serious indictment of the procedures adopted by the Whips' Office in another place.

We are talking about a unitary process and about the preservation of an important national asset. However, we are also talking about Parliament being able to decide how that organisation should be sold, if at all, and to whom. What the Government want is a blank cheque. They want a blank cheque so that they can rearrange, break up and sell parts of UKAEA. That is what they had under the Electricity Act 1989.

I know what the Minister is likely to say—that is, unless there is complete inconsistency between the Minister in this place and his honourable friend in another place. He will say that the Secretary of State can direct the transfer scheme only at the point of sale; that time taken by parliamentary processes could jeopardise the sale or reduce the proceeds; that bidders might be deterred because of the possibility of public scrutiny in a trade sale or that bids might be reduced contrary to the interests of the taxpayer, as though the Government considered the taxpayer in all regards, which is certainly not the case.

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This is not the sale of a manufacturing operation. We are talking about a research institution which provides commercial services to the Government and to industry. Its form of ownership and the provision and availability of its services must be approved by Parliament. The arguments that have been adduced in another place are simply not good enough. A trade sale should be made only to an organisation of such standing that it is able to accept public scrutiny of the sale. The arguments relied on by Mr. Jackson were powerful, but they did not receive a sufficient reply from the Minister. If, for the reasons that they adduced in another place, the Government feel that they cannot make a clear statement about the form of the privatisation in line with their commitment to keep AEA Technology as a single integrated whole, when on earth will they be required to make a statement? What is the Minister's view of parliamentary accountability? Are we here simply to rubber-stamp the Government's suggestions?

I think that Mr. Jackson's arguments deserve better treatment than the almost contemptuous dismissal that they were given in another place. I hope that the Minister will give Mr. Jackson and this Committee of your Lordships' House the benefit of a proper response. I am told that it was Mr. Ian Bruce, another Conservative Member of Parliament, who was also excluded from that Standing Committee. I am not arguing that both of them should have been included, but it might have been polite to their own side if the Government had included one of them. I beg to move.

Lord Thomson of Monifieth: I should like to say just a word or two about this group of amendments and to speak in particular to Amendment No. 18 which stands in the name of my noble friend Lord Ezra, who is unfortunately prevented from being here today. I am a very unsatisfactory substitute. Since we on these Benches do not deploy quite such an impressive batting order, I am here because there is a broadcasting order down for consideration later. Nevertheless, I turn my hand with good heart to this issue because the more I have studied it, the stronger appear the arguments which the noble Lord, Lord Clinton-Davis, has made.

My noble friend Lord Ezra is employed in industry and knows these matters in great detail. He declared on Second Reading that he was a very satisfied customer of the energy technological support unit and described it as a valuable national asset. He argued strongly that we should maintain the unitary character of the AEAT organisation. I add that there should be a public flotation of the operation. The alternative of fragmentation, which is among the many options which the Government want to leave entirely open, seems to have grave disadvantages. The most probable is that purchasers of the organisation would presumably be its competitors. That does not seem to be in the national interest. The Government have a proper interest in competition, but a sale to an existing competitor would simply reduce competition in the marketplace.

I am sure that the Minister recognises that we fear that, if it is not possible for the Government to deal with the organisation as a unit and to handle its sale by means of a public flotation, they will be driven by the Treasury into purely short-term financial considerations and into

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what would amount to little more than asset-stripping. It is against that background that this group of amendments has been tabled.

On Second Reading, my noble friend Lord Ezra said that in his experience—which is very considerable—no other privatisation measure had retained such wide options. It is a rather extraordinary situation that in your Lordships' House, which is very properly concerned about Henry VIII clauses, the disposal of a vital national asset such as this should be subject to a wide variety of possible options, all of which are entirely at the discretion of the Government once the legislation has passed through Parliament. It is against that background that we strongly commend these particular amendments.

It is a false economy to believe that fragmentation of the organisation will produce financial benefits. On balance, I doubt whether that will happen. In debate on previous amendments mention has been made of the co of TUPE. I am told that the severance costs of a relatively small number of staff may amount to several tens of millions of pounds. I was modestly reassured by what the Minister said at an early stage in the discussions about the Government's genuine feeling that the unitary option was a serious one. I hope that that is the final outcome of this matter. However, on the principle of the matter and the rights of Parliament, I believe that the arguments in favour of one or other of these amendments are very strong, and I give my fullest support to them.

Lord Fraser of Carmyllie: The noble Lord, Lord Clinton-Davis, asks far too much of me. It is one thing to have to promote the Government's legislation and argue in support of it but quite another for the noble Lord to try to get me to answer on behalf of the Government Whips' Office in another place as to what they may or may not have done in twisting arms or otherwise.

I do not believe that these amendments are helpful, not because I wish to be contemptuous in my dismissal of them but because I am concerned that, against the very interests that he wishes to promote, he may be overstating the situation. Two possible consequences may flow from these amendments. First, they may reduce the proceeds of the eventual sale. The noble Lord may not be particularly concerned about that, but no doubt he will wish to see that a proper price is secured.

Secondly, I would be concerned, as I am sure he would be, that these amendments could work against the best interests of AEA Technology and staff. Whatever form the sale takes, the Government must have the necessary flexibility to manage the sale process and the inevitable uncertainties involved in it. Any restrictions on that flexibility would, in our view, work against the interests of all concerned. For that reason, they are inherently undesirable. For example, if it is assumed that the decision is taken to offer AEA Technology for sale as a single whole, choices will have to be made on whether to vest AEA Technology as an independent company early in the sale process or at the point of sale. A consistent line will be taken between what has been said in another place and what I say. Whichever route is adopted, the requirement to secure parliamentary

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approval for the direction to make the requisite transfer scheme, and for the scheme itself, will inevitably make for delay which will perhaps be considerable. If vesting were tied to the point of sale, those delays might well undermine the whole sale process.

Equally, Amendments Nos. 30, 33 and 34 would require the Secretary of State or the authority, as appropriate, to secure parliamentary approval for the disposal of any shares in the company. The consequence of that, however, might well be to deter potential purchasers—whether they be financial institutions backing a sale to management and employees or trade purchasers—from bidding on the basis that their bids would be subject to close parliamentary scrutiny, even before detailed negotiations about the terms of sale could begin.

Lord Clinton-Davis: I am obliged to the Minister for allowing me to intervene. Is he saying that there is to be no parliamentary scrutiny, other than in the course of this Bill, in relation to any scheme that the Government may devise?

Lord Fraser of Carmyllie: The Bill has to pass further stages. I have no doubt that, as has been the case in another place and in the course of this afternoon and this evening, detailed consideration will be given to what is proposed and careful attempts made to secure a particular line of approach. At the present time I am not prepared to give an indication one way or the other. Let us see how matters stand in the autumn. The noble Lord is correct. I am in the business of explaining why it may be against the best interests of the very people that the noble Lord wishes to see protected if we introduce unnecessarily elaborate arrangements. Even if bidders were not deterred, it might only be possible to explain a preference for one bidder over another by revealing information that the bidder was not prepared to have disclosed for good commercial reasons. Equally, it might not be in the interests of the taxpayer to disclose details of competing bids, because that might cause the lead bidder to reduce the value of his offer or back out of the purchase. These are not academic points; they reflect commercial reality. Delay and consequent uncertainty may easily cause a sale to fall through or reduce sale proceeds.

I appreciate that on the Opposition Front Bench there is a genuine concern to achieve a unitary privatisation. I believe that the Government must have the freedom and flexibility to act in the best interests of the taxpayer and to deal with the business on the basis which best enables it to maximise its contribution to the national economy. That is also the course best calculated to serve the interests of the business and its staff. It is in nobody's interests, least of all theirs, that the business should be sold in one form and then restructured, or broken up more or less immediately, because it is not commercially viable in that form. That is why the Bill is structured as it is, and why the Government wish to keep open their options.

We recognise that the Government are accountable to Parliament and the taxpayer for decisions that they will have to take in the near future on the form and method of sale. But, consistent with that accountability, the

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Government must retain flexibility to act in the light of information that will become available over the course of the next few months and market circumstances at the time of sale.

I do not suppose that that answer will immediately satisfy the noble Lord.

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