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Baroness Chalker of Wallasey: This is an interesting debate. I hope that I can set at rest the fears, worries and conjecture of the noble Lord, Lord Judd. I understand that he must probe these matters. However, I have made it quite clear on all occasions when we have discussed thisboth privately and at Second Reading how important the pension arrangements are to the Crown Agents' pensioners. I have told many who have asked that the past contribution made by the Crown Agents' pensioners is safe. The pension funds are held in trust and there is no way in which I believe there should be any reduction in the assets that are held by the trustees when the business transfers. What I think is perhaps being overlooked in the debate on these issues is that the Bill already provides for continuity of treatment of employment for pension purposes. That is most important and I am delighted that it is there on the face of the Bill. The Crown Agents have no plans to alter their present pension arrangements. The security of the trust-based schemes will be further protected by the provisions of the Pensions Bill which has now completed its passage through this Chamber.
The other matter that the noble Lord was concerned about was the value of the pension surplus to the business in allowing a contributions holiday. Of course that will be taken into account in our decision to ensure value for money for the taxpayer from the transfer. But that does not mean that there will be some great raid on a pensions fund, as the noble Lord seemed to think. Of course he has at the back of his mindas I well know from Second Reading and other exchangesthe situation that obtained towards the end of the 1970s before the Crown Agents Bill was made law in this country. Of course there were lessons that we learnt from that inappropriate capital structure. I can assure the noble Lord, Lord Redesdale, and my noble friend Lord Oxfuird that we are determined to give the new Crown Agents a fair start. That is most important. I would not be standing here today if I thought that this Bill would do anything different. I can agree with the noble Lord, Lord Judd, that the Crown Agents should not begin their new life overburdened by debt. We want the new company to have the capacity to invest, to grow and to produce benefits for the foundation. I would say to the noble Lord, Lord Redesdale, that I do not think that if the foundation decides to become a charity there would be any conflict of interest. We have already discussed the memorandum and articles of association that are likely to be those of the foundation, although they are not finalised yet, as the Committee is aware. But there is no way, given that the social and developmental purposes of this foundation will be written into the memorandum and articles, that that would be at variance with what charity trustees would expect from the foundation were it to be made a charity.
When looking at this question of dealing with debt, of course all governments have to consider questions of value for money for the taxpayer. But it would be premature to take a decision now on what the right balance would be. I certainly would not be in favour of enshrining this in legislation. As my noble friend Lord Oxfuird said, we want a strong balance sheet. We want to reinforce the position of the Crown Agents. Therefore I can see no worries such as have been alluded to by Members of the Committee in this short debate.
Certainly there are no arguments of principle as to why Crown Agents should not have debt in the balance sheet. Very few companies would be in that position. But the decision about all of this must really turn on the needs of the business. We are taking professional advice on this and indeed on the make-up of the new Crown Agents' capital. We shall certainly take the views of the current board fully into account in arriving at this decision. I think the Committee will have realised that the board has an influential voice already. Its members are certainly the closest to the business. While the Government as the owner would have to have the final say, there is no way that I shall not listen with the greatest of care to, and probably take the advice of, the Crown Agents.
A number of other detailed questions were asked. Perhaps I may say to the noble Lord, Lord Judd, in answer to his question about how the government would keep reserve powers, that in a sense he has misunderstood the clause. If it were thought necessary
The noble Lord, Lord Redesdale, asked me some detailed questions. He asked what penalty there would be on the repayment of the National Loans Fund debt. I said at Second Reading that that would be at a fixed rate of interest. Certainly, the loan that remained in Crown Agents in 1989 was understood to be then and remains now at that fixed level of repayment. However, the actual amount will depend on the difference between the interest rate on Crown Agents' debt to the National Loans Fund and the National Loans Fund's lending rate on the day appointed for the vesting of the new company. Therefore I cannot be as definite as the noble Lord would like me to be at this point because I do not know when the vesting day will be. I shall not speculate on interest rate movements between now and the appointed day. However, I can say that if the vesting day was now, the penalty repayment would be approximately £200,000. I am advised that that is a rough indication of what the penalty would be.
I spoke at Second Reading about the possibility of charitable status. Nothing has changed since we discussed the issue at Second Reading. It is not a matter solely for the Government. It will be a matter for the foundation. I made that clear at that time. If the foundation wishes to seek registration as a charity, it must look very carefully at forms of regulation. That is a matter that we are looking into with advisers at present. However, nothing has changed since we last discussed the matter some weeks ago.
In moving the amendment, the noble Lord said something which struck me as strange. Perhaps I misunderstood him. I do not believe that we could transfer the successor company or find new owners in the form of a foundation unless it were financially viable in the broadest sense. That is why I can give the assurance that my noble friend Lord Oxfuird sought. However, that is not something for which one can legislate. I believe that on reflection noble Lords will understand that. Obviously, viability will depend on the efforts of the management in taking advantage of the new opportunities which the change of status offers. That is a matter on which we shall have further discussions between now and Report stage.
Regarding Amendment No. 9, I have already said in answer to earlier debates that the period of government ownership of the successor company will be limited. That is why, as we have already discussed, the Secretary of State needs special powers over the company in connection with the vesting which takes place on the appointed day. It is not right that those powers should
I do not believe that the Government should retain ownership of the successor company. The setting up of the foundation is a means to an end. We have already been over the arguments earlier today, and we certainly did so at Second Reading.
Members of the Committee may wonder why I am unwilling to accept their amendments; but they have said that they are probing amendments. I believe that Amendment No. 9 is intended to give the Secretary of State special rights in the successor company, even when it is not wholly owned by the Crown. I am not sure what that would achieve or what it was intended that it should achieve. It is unlikely to be acceptable to the new owners such as the foundation, which will have a wide range of membership.
I hope that I have quietened the fears and answered the questions of the Committee. I shall consider again the comments made by Members of the Committee. However, I do not believe that Amendments Nos. 6, 7 and 9 are necessary. Amendment No. 8 is of course consequential on Amendment No. 6.
I repeat that we are determined to give the new Crown Agents a fair start and to give the foundation a good start in order to produce benefits for the work that it does in line with its social and developmental purpose. I hope that in the light of what I have said the noble Lord, Lord Judd, will not press his amendment.
Lord Judd: Of course I am grateful for the characteristically considerate way in which the Minister responded to the amendments. At the risk of tedious repetitionalthough I do not believe that this is a matter on which we can be tediousI say again that on this side of the Chamber we have no doubts about the intentions and good will of the Minister. We take at face value all that she says she wants to see the Crown Agents go on to achieve and the role she wants to see them fulfil. However, as I have said in other debates today, that is not the point. The point is that we are not discussing the Minister; we are discussing the Government and the arrangements that are laid down in legislation concerning the future of the Crown Agents.
Perhaps I may deal briefly with some of the points that have been raised in this interesting exchange. First, all the members of staff will be immensely reassured and will place great weight on the categoric assurance that their pension fund is safe and there is no question of it being interfered with in any way. That is certainly reassuring news for them, although it could be argued that that could not have happened anyway because of new legislation. It was good to hear the Minister emphasise that point.
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