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Baroness Trumpington: My Lords, I beg to move that the House do now adjourn during pleasure until 8 p.m.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 7.45 to 8 p.m.]

Atomic Energy Authority Bill

House again in Committee.

Clause 3 [Supplementary provisions as to the Authority's powers]:

Lord Haskel moved Amendment No. 26:


Page 3, line 20, at end insert:
("( ) The Authority shall not have the power to dispose of any undertaking unless provided for by a transfer scheme.").

The noble Lord said: This amendment is designed to prevent the United Kingdom Atomic Energy Authority selling off parts of itself other than by the process described in the Bill. In recent weeks the United Kingdom Atomic Energy Authority has announced a further nine businesses for sale in addition to AEA Technology. The process set out in the Bill should be used to ensure that the interests of the public and the employees will be protected as provided for by the Bill.

But the fact that those additional businesses have now been offered for sale brings into question the whole issue of why indeed we need the Bill. The purpose of the amendment is to bring this matter to the Minister's attention. Perhaps he can explain to us why those nine companies have been offered for sale while the Bill is under discussion. I beg to move.

Lord Fraser of Carmyllie: Unless the noble Lord wishes to resume the discussions that we have previously had on the desirability or otherwise of a unitary scheme for the disposal of AEA Technology, perhaps I may say to him that most disposals by the authority other than AEA Technology involve the sale of small operational units with few assets and only a handful of staff.

In such cases, sale by normal commercial contract is all that is required. Giving effect to all such sales—some of them are indeed very small—by way of a transfer scheme would be to make something of a mountain out of a molehill. For example, if AEA Technology is to be disposed of by way of a unitary arrangement, clearly a transfer scheme, as the Bill requires, is appropriate. In our view, it is not appropriate to require such an arrangement to be made in each and every circumstance when such a small disposal is carried out.

I am sure that the noble Lord appreciates that probably the least satisfactory way to go forward for AEA Technology would be an arrangement taking out this little part and that little part. It would be more desirable to regard the two matters separately and appreciate that the small disposals are rather separate from the major objective of the Bill, which is to deal with AEA Technology as a whole.

Lord Haskel: I thank the Minister for that explanation. We realise that these are small disposals. But I raise the point because at some time presumably

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someone will ask where the line is drawn. When does a small disposal become a large disposal and affect the privatisation that we are discussing? Having made the point, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 27 and 28 not moved.]

Clause 3 agreed to.

Clause 4 agreed to.

Clause 5 [Duty of Authority to assist Secretary of State in connection with transfer schemes]:

Lord Peston moved Amendment No. 29:


Page 4, line 2, leave out (", as far as practicable,").

The noble Lord said: This is a very simple probing amendment that was raised in another place. I should like a brief account from the Minister as to what he has in mind at this point. Clause 5 deals with the authority furnishing the Secretary of State with the information that the Secretary of State may require in connection with transfer schemes.

Subsection (2) deals with the obligation of the authority to:


    "include a duty to secure, as far as practicable, that their subsidiaries furnish all such information and assistance as the Secretary of State may require".

I do not understand why the phrase "as far as practicable" is inserted. It seems to me that if it were taken out, the sentence would have exactly the same meaning. Obviously, a duty to secure means a duty to secure as far as practicable. What else could it possibly mean? Having a duty to do something does not mean there is a duty to do the impossible. It means that there is a duty to do what one can do.

This point was raised in the other place. I did not at that time see an answer that made any sense. I had hoped to receive an answer today. I always ask whether there is some clever point that I have missed. But, if I were to say that a Minister had a duty to do something, I should mean that within the bounds of what is practicable he must do it. It would not occur to me to say that he had a duty to do this and then add "as far as practicable".

The Minister may be aware that it is part of my campaign, which is often joined by some of his noble friends but they are not here this evening, to have Bills that we pass into law written in English as we know it. This passage may be an illustration of that. However, there may be some deep philosophical consideration that his officials may wish to draw to our attention on this occasion. If so, I should like to know it.

Lord Fraser of Carmyllie: Whether or not it is particularly clever, perhaps I may offer the following explanation. The subsection to which this amendment relates places an obligation on the authority to secure an equivalent degree of co-operation from its subsidiaries. The duty in relation to those subsidiaries is qualified by the phrase "as far as practicable". I understand that it is that phrase which the noble Lord wishes to remove. The effect would be to place the authority under the same duty to secure the assistance of its subsidiaries as it is under itself.

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In fact, it would make the Secretary of State's task easier if there were to be an absolute duty on the authority to secure the co-operation of its subsidiaries. But there is a practical problem. The reason why the duty in Clause 5(2) is constrained is that a subsidiary of the authority, even if wholly owned, is a separate corporate entity. The authority's relationship to that company is one of shareholder. There are limitations to the extent of the control which a shareholder can have over a company. Accordingly, it would not be right for the authority to be placed under an absolute duty where it might not be able to discharge that duty. That is the reason for the qualification.

I should have thought that the noble Lord would agree that it is unreasonable to place the authority under a statutory duty which it may be unable to fulfil through no fault of its own. It may be an extremely technical explanation to offer to the noble Lord. Perhaps his ears will prick up when he hears from me that so far as concerns the Secretary of State the task would be easier if the words that the noble Lord wishes to remove were indeed removed.

Lord Peston: I have no objection to that, for fairly obvious reasons. I found what the Minister said most enlightening. Clearly, the obligation is there so that the Secretary of State can do his job. It is all about assisting the Secretary of State. I think the noble and learned Lord is saying that if we left out those words, then the sentence would not be construed to mean absolute duty within the bounds of reality; it would mean absolute duty no matter what.

The Minister is simply adding to my education. I take it for granted that a duty to do something always means a duty within the bounds of reality. The noble and learned Lord is saying that if I do not include "as far as practicable", the duty would somehow be interpreted to mean a duty whether or not it is practicable. That must be the way in which lawyers think—not the lawyers in your Lordships' Chamber, of course. I cannot think anybody else would think about the real world in that way.

However, at least we have the answer on the record. The point has been made. It does not make sense to me but I have at least obtained an answer and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clauses 5 and 6 agreed to.

Schedule 2 [Successor companies]:

[Amendments Nos. 30 and 31 not moved.]

Lord Peston moved Amendment No. 32:


Page 16, line 9, at end insert:
("( ) The Secretary of State shall not dispose of more than one half of any of the securities issued to him under sub-paragraph (1) above.".).

The noble Lord said: As the Committee will be aware, when we dealt with an earlier group of amendments I thought Amendments Nos. 31 and 38, which involved consultation with trade unions, also covered the area of so-called "golden shares". However, we did not discuss them under that heading at that point. The Minister

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indicated that he would rather discuss this subject subsequently and this is the heading under which we are dealing with the matter.

As always with legislation, I find myself in the position of only beginning to understand it when we are a long way into it. I confess that when we were debating this matter at Second Reading, I did not understand this part of the Bill at all. But, looking at the relevant clause and schedule, it is clear that the possibility exists within the Bill of the Secretary of State retaining a share (which would be interpreted as a so-called "golden share"), and I now believe I am right in thinking—the Minister will correct me if I am mistaken—that the authority will also own such shares.

The question arises—the Minister gave some clue as to this earlier—of what the purpose of such shares would be. They may be connected with two things that come to my mind. First, they could influence some of the activities of privatised AEA Technology; and, secondly, they could influence who the successor company could one day be sold on to. The amendments were tabled for clarification. First, am I right to interpret this part of the Bill as relating to golden shares? Secondly, am I right that the purpose of such golden shares would be as I outlined? Thirdly, if I am right on both those accounts—this may be of complete irrelevance if I am wrong—should not such disbursal be a matter for consideration in your Lordships' Chamber and the other place rather than within government?

To put it at its mildest, there would certainly be considerable interest in Parliament if the events I described should occur. This is therefore a probing amendment so that I and others who are interested in the matter can learn something more about the Government's intentions. I beg to move.

8.15 p.m.

Lord Fraser of Carmyllie: Management, as well as everyone else who has looked at the position objectively, is clear that privatisation offers the best means of securing a prosperous and successful future for the business and its employees. Some have suggested that all commercial benefits of privatisation could be achieved in the public sector if AEAT were given greater commercial freedom. But I do not believe that that is the right way forward.

Full commercial freedom means the freedom to take risks and to reap the rewards. That is not consistent with a degree of public ownership. Where companies remain publicly owned, the Government are seen to be standing behind them. In that circumstance the Government have their ever-continuing obligation to protect the taxpayer's interest in such companies. That being so, it is less likely that they will have the free commercial rein that may be desirable.

There are no provisions in the Bill that relate specifically to special shares, on the view that none is necessary. The policy question as to whether a special share should be retained by the Secretary of State will be considered in the light of developments, in particular, should customers have any anxieties—and particularly government customers—as to the future ownership of the purchased entity.

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I was asked a direct question and must offer a qualification. There are sets of qualifications which the noble Lord has, in a sense, teased out of me which I am not reluctant to give, but I would not want to indicate that behind all this we have a series of proposals which we are declining to reveal. The noble Lord asked the question and I must explain that these are options that are available, albeit that it is our view that at the present time they look remote. Certainly they are sets of suggestions which seem to be going well away from the first amendment that the noble Lord suggested was the right way forward if AEA Technology is to be privatised.


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