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Lord Fraser of Carmyllie: My Lords, I compliment the noble Lord yet again for his ingenuity in tabling an amendment in order to prise out of me information on a matter which, despite what he said, is not directly related to the privatisation proposal contained in the Bill; indeed, the purpose is essentially to draw from me what our plans are in relation to nuclear generators. I do not think that the noble Lord will be surprised when I tell him that I have little to add to what I said in July. Work towards a sale for nuclear generators in the course of the next year is proceeding to plan. Our proposals were fully debated last May following the publication of the nuclear review White Paper and the Government have no plans at present for a further debate.

So far as concerns AEA Technology, I have already made clear to your Lordships that the Secretary of State would propose, given the direction under Clause 1(1), making a scheme providing for the early transfer of the activities of what now constitutes AEA Technology to a single successor company owned by the Secretary of State. Both AEA Technology and the UKAEA Government Division are keen that the transfer should

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take place as early as practicable so that they become independent legal entities able to deal with each other on a fully commercial basis. The proposed amendment would prevent that and produce renewed uncertainty for all concerned, not least the employees of both organisations. When the noble Lord said that he agreed that there were arguments which went both ways, I have no doubt that the prospect of a period of uncertainty for the employees was one of the factors that he had in mind.

I should point out that the sale of AEA Technology has no implications for the sale of the generators, except that AEA Technology may well be able to offer a wider range of competitively priced services once it is freed from the shackles of public-sector control. The generators are not dependent on AEA Technology, in the same way that AEA Technology is not beholden to them.

Last week I had the opportunity to visit Harwell and see something of the range of activities being undertaken. If the noble Lord has not done so himself, I commend it to him. I am sure that he will be hugely impressed by the real range of scientific expertise which is available. Indeed, some of that expertise has gone a long way from its early origins in supporting our nuclear industry.

Lord Peston: My Lords, I should like, first, to follow the Minister's final remarks. The Atomic Energy Authority has been one of the great triumphs of this country. Our contribution to nuclear science is something about which we can be extremely proud. I have not visited Harwell recently, but if I can find a break and if the pressures of being an Opposition spokesman are not too great, I shall try to follow the noble and learned Lord and visit the people involved. I usually watch such things completely open mouthed when I see what those people do and how bright they are. However, that is by the way.

Of course, I did not expect a great deal more from the Minister. However, I believe that I ought to point out en passant that we never really debated the nuclear power White Paper in your Lordships' House. Indeed, that was one of the things we all moaned about because there did not seem to be any way of persuading the usual channels to organise a debate. However, as the passing of the Electricity Act allows the privatisation of nuclear generators to take place without any more ado, in theory—and, possibly, in practice—we may not get a chance to debate that ever again. That is something that I complained about some time ago.

My main point is that it must surely still be true that the nuclear generators are important customers of AEA Technology. That aspect of the matter was on my mind. However, I fully appreciate that there are limits to what the Minister can say. I certainly have no desire that anything I say today should add to uncertainty in any way. Of course, the uncertainty of employees is of great importance. But we are discussing an asset which currently belongs to the nation. Even if I do not favour its privatisation, if one is to sell it I favour getting the

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largest possible price for it. That was partly what I had in mind. Having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

3.30 p.m.

Lord Clinton-Davis moved Amendment No.6:

After Clause 1, insert the following new clause—

Authority assistance towards management buy-out

( " .—(1) If it appears to the Authority that any persons employed by the Authority, or by any subsidiary of the Authority, are taking steps towards—
(a) the submission of such a tender as is mentioned in Schedule 2 below; or
(b) the making of an offer for any part of the Authority's undertaking or for any shares of any subsidiary of the Authority;
the Authority may provide assistance to those persons for the purpose of defraying, in whole or in part, any expenses incurred or to be incurred by them for the purposes of the submission of the tender or the making of the offer.
(2) The Secretary of State may give the Authority directions with respect to the provision of financial assistance under this section.
(3) Without prejudice to the generality of subsection (2) above, any such direction may, in particular—
(a) specify a limit on the total amount of the financial assistance which may be provided under this section or on the amount, or the total amount, which may be so provided—
(i) in cases of any particular class or description in the direction; or
(ii) during any period or periods so specified; or
(b) require the provision of any such financial assistance by the Authority subject to conditions, including conditions as to repayment.").

The noble Lord said: My Lords, it will be for the convenience of the House if I speak also to Amendments Nos. 23 and 25. I do not intend to speak to Amendment No. 12 which goes much further. I see no point in pursuing that route. In moving the amendment I return essentially to the points that I raised on Second Reading and during the Committee stage of the Bill. I then referred to the fact that at Section 141 of the Railways Act 1993 the Government made specific provision to assist management-employee buy-outs. I hasten to add that I questioned whether that was in conformity with the competition rules of the Treaty of Rome. However, the Government said that I was wrong about that. Therefore I make the assumption that the Government are correct as a matter of law. If that is the case, it seems to me that for the sake of consistency—Ministers have frequently said how much they would welcome management-employee buy-outs in this connection—they should follow a similar route to that provided in the Railways Act. That is what I sought to do in the amendments. They may be deficient in some respect but I think that the Minister will concede that that is the effect of what we seek to provide.

When the matter was before the Committee on 17th July the Minister, after saying that he did not wish to be bound to follow a similar precedent, or to regard the Railways Act as a precedent—or indeed any other privatisation schemes for that matter—said, after I had intervened,

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    "I say to the noble Lord—and I hope that this will satisfy him—that I shall be prepared to examine the scope for offering assistance, which is somewhat in the nature of the language to which he made reference".—[Official Report, 17/7/95; col. 91.]

I do not think that that would be sufficient. If the Government found it necessary to make specific provision in relation to the privatisation of the railways for management-employee buy-outs, there seems to me no good reason why it should not be done with regard to this provision. It is not just a matter of giving a general approbation to the idea; it is a case of giving the management-employee buy-out team the wherewithal to go ahead with its submission. These matters are never easy to undertake; they involve some considerable element of cost. I suggest that the Government should have discretion. I do not say that they must act in this way, but that they may do so. They may give the authority directions with respect to the provision of financial assistance under the clause. Subsection (3) of the proposed new clause enables the Government to limit the amount of money that would be available for such assistance. It is desirable that that should be so.

I should have said that I shall not speak to Amendment No. 23. I do not propose to move Amendments Nos. 12 and 23. Amendment No. 25 follows on logically from Amendment No. 6. It follows a similar pattern to Section 141 of the Railways Act. I hope that the Government will respond affirmatively to this provision. I do not believe that it is sufficient simply to say, as they have said on numerous occasions, "We will do our best to encourage management-employee buy-outs". There has to be some substance to that. I have invited the Government to provide that substance in the form of this amendment. I beg to move.

Lord Haskel: My Lords, in supporting my noble friend Lord Clinton-Davis in these amendments I point this out to the Minister. The assistance which my noble friend suggests should be given could be recouped by the Government many times over. That is because the value put by the City on businesses which engage in research and provide technical services is usually low. A management-employee buy-out may well be the best sale route as the sense of partnership among the employees will give financial backers more confidence that the people in this "people business" will not then depart. I suggest to the Minister that the route proposed by my noble friend Lord Clinton-Davis could enable the Government to obtain the most money from the sale.

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