Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Clinton-Davis: My Lords, I am obliged to my noble friend for his remarks. I forgot to refer to the amendment which deals with consultation. I do not ask the Government to say more about this issue as a matter of law. However, it is important that the Government give an undertaking that they will talk to the unions about employee participation in AEAT. It is important in terms of preserving the independence and integrity of AEAT. As my noble friend said, that will benefit the Government. I hope that the Minister will say something specific about consultation.

Lord Fraser of Carmyllie: My Lords, I am slightly baffled by the noble Lord's observations. I certainly understood that there was a set of amendments about

23 Oct 1995 : Column 902

consultation, beginning with Amendment No. 8. If those were the amendments to which the noble Lord intended to refer, it may be better if I refer to them when we reach that separate group of amendments.

When we considered the matter at Committee stage, the noble Lord and I had a fairly lengthy exchange on the issue of management-employee buy-outs. At that point I hope that I satisfactorily assured the noble Lord that not only would the Government seriously consider any MEBO bid for the business, but that I should also be prepared to examine what scope the Government had to offer assistance to a MEBO. As I indicated at that time, I have considered the case of AEA Technology compared with that of the railways, to which the noble Lord has drawn my attention. While what he had to say about the railways was factually absolutely correct—I make no remark as regards any small defects that there may be in the drafting of his measure—the significant point is that the situation is rather different. I shall explain why I take that view.

Statutory provision was necessary in the case of the Railways Act because of the special circumstances of the BR sale, in particular the fact that BR itself was the vendor and the number of businesses being sold—some 80 to 90, which is in sharp contrast to what is being proposed in the measure we are discussing—meant that it was far easier for BR to offer financial assistance than for the Secretary of State to offer such assistance direct. As I have indicated, in the case of AEA Technology shares in the successor company will be held by the Secretary of State. The sale will therefore be made in the name of the Secretary of State. The relevant model is not therefore rail privatisation but the sale of British Coal's mining operations, where the relevant assistance to MEBOs wishing to bid was given by the Secretary of State. He already has powers to provide assistance to MEBOs. That is why there was no need for provisions in the Coal Industry Act along the lines of Section 141 of the Railways Act and why these amendments are similarly unnecessary. Even if the sale were ultimately undertaken by the authority, the assistance could still be made available by the Secretary of State under his existing powers.

Similarly, I can assure the House that any request for assistance from an AEAT management-employee consortium would be considered and appropriate assistance provided on the same basis as for other privatisations.

I should make it clear, however, that the assistance that is available is limited to the specific purpose of allowing staff to construct a business case before approaching financial institutions for support. It is not available for other purposes. Once bids have been made MEBOs must compete on an equal footing with other bidders.

I hope that with that brief explanation the noble Lord will accept that we are not trying to exclude assistance and that it will be available. I understand entirely the approach he has adopted in respect of the Railways Act, but I hope that he will be satisfied that a parallel with the Coal Industry Act is more apposite in the circumstances and the way in which we intend to proceed to privatisation.

23 Oct 1995 : Column 903

Lord Haskel: My Lords, before the Minister sits down perhaps he can say whether, when he was at Harwell last week, the matter of a management—employee buy-out was discussed.

Lord Fraser of Carmyllie: My Lords, a wide range of matters were discussed, including what the attitude of employees and management might be. We did not sit down and have a discussion on the specific issue of a MEBO. However, I certainly took it from the discussions that I had that what I have said to your Lordships about the availability of assistance was something that should have been well known to the management, and I hope is now also well known to the employees.

Lord Clinton-Davis: My Lords, I am obliged to the Minister for that reply, which was forthcoming. It justified the position that we have taken during the course of these debates. If we had not raised the matter the issue would not have been aired. It is important from the point of view of management and employees who are interested in such a buy-out, which has been much encouraged not only by the Government but also by the Financial Times and others. It will have given them some comfort.

Perhaps the Minister would like to respond to this point. I do not know whether there is complete consistency of approach in relation to other privatisations. I do not know whether they all followed a similar pattern to that which the Minister described today in relation to the Coal Industry Act—which in substance is set out in the amendments—as well as in terms of the nature of the assistance that is to be provided. I hope that the answer will be in the affirmative, although there will obviously be some disparities in each particular instance.

The support that needs to be given relates to the preparation of a scheme of this kind: seeking professional advice, making sure that people understand the perils of engaging in a MEBO—and there are perils—and making sure that people have the right kind of professional advice to enable them to mount a serious competitive offer in relation to other tenders which might be forthcoming. Those are difficult matters. The Minister may wish to intervene on that point.

Lord Fraser of Carmyllie: My Lords, I had better restrict my observations to the coal industry where, as I indicated, the parallel seems to us to be apt, whereas a comparison with the privatisation of the railways is not apt. Over the whole range of privatisations, I cannot tell the noble Lord whether there were other specific provisions. However, my understanding is that in the case of British Rail the situation was unusual, and therefore specific provisions were made. As I said, even in that case it may not have been strictly necessary for special statutory provision to be made. However, I can indicate to your Lordships' House that in this set of circumstances no specific statutory provision is necessary because the Secretary of State already has sufficient powers to offer assistance during the preparatory stages. As the noble Lord indicated, that is the appropriate stage for assistance to be offered.

Lord Clinton-Davis: My Lords, there was no strict necessity to embark on the Railways Act at all, but that is another matter. I am grateful to the Minister. He has set

23 Oct 1995 : Column 904

out the position to our reasonable satisfaction. I am satisfied that no specific power is required. My noble friends and I are also satisfied that the Government will give every opportunity and help to any MEBO in this particular regard. In those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

3.45 p.m.

Clause 2 [Powers of Secretary of State]:

[Amendment No. 7 not moved.]

Lord Peston moved Amendment No. 8:

Page 2, line 43, at end insert—
("( ) Before—
(a) giving a direction under subsection (1) above; or
(b) approving or declining to approve a transfer scheme; or
(c) modifying or making a transfer scheme;
the Secretary of State shall consult the trade unions and other bodies representing the employees of the Authority.").

The noble Lord said: My Lords, Amendment No. 8 is grouped with Amendments Nos. 13, 21 and 24. They all contain much the same general principle and they relate to some remarks made by my noble friends Lord Clinton-Davis and Lord Haskel with regard to the previous grouping.

It seems to me that in a matter of this kind it would be entirely reasonable for those who are concerned with changing the status of AEA Technology, and therefore changing the position in which the employees find themselves—namely, having been public servants in due course they will no longer be public servants—as a matter of good faith to consult the employees and their representatives.

It is not my view, and I do not believe that it is the view of the trade unions, that a veto power should be given to the employees. That would be most inappropriate. However, on the minimal grounds of fairness, I believe that your Lordships will agree that people who have devoted their lives to the industry—and we all agree that whatever value exists is largely attributable to them—should be asked for their views. I would go further. I believe that many will have an expert opinion on the matter which would be worth taking into account.

My noble friends and I present this matter to your Lordships in the form of an amendment to the Bill, because that is how we proceed. If you want to make a point you put down an amendment to a Bill in this way. However, the fundamental principle has nothing to do with whether or not the Bill is amended but the way in which the matter proceeds. The matter is not unrelated to the question which my noble friend Lord Haskel asked the Minister a few moments ago. I was not clear from his answer whether the Minister spoke to the employees and their representatives when he visited Harwell last week. I consider it appropriate that a member of the Government should talk to these people at some stage. It would also be appropriate for management, as distinct from employees, also to talk to the relevant people.

This is all part of the general question. The lives of a number of public servants are going to be drastically changed. As a minimum, they ought to be asked what they think and, more generally, they might be consulted on the

23 Oct 1995 : Column 905

best way to proceed. The purpose of the group of amendments is to allow noble Lords to comment and the Minister to give us his views. I beg to move.

Next Section Back to Table of Contents Lords Hansard Home Page