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Mr. Keith Mans (Wyre) : I am pleased to speak about this important measure. I have spent a considerable amount of my life living in buildings which have been well or badly built, or modified, by the Property Services Agency and its predecessor, the Ministry of Public Building and Works.
I shall dwell on two aspects of the Bill. They relate to the Opposition's two main arguments why it is not a good idea to privatise the PSA. First, they argue that security will be compromised, particularly in military establishments, if in future the PSA does not have the same ability to look after security matters. Opposition Members, particularly the hon. Member for Hammersmith (Mr. Soley), are wrong to suggest that the reservoir of knowledge about security matters resides in the PSA and that, if it is privatised, security will be compromised. That argument is fundamentally flawed.
The major point about good security is that people, not organisations, are important. It is to ensure that those who carry out security exercises and checks on buildings are themselves checked properly and have the necessary expertise. The mere fact that they happen to be members of the PSA or its predecessor or that they work in the public sector does not necessarily mean that the task will be carried out competently. One of the problems has been that security has been judged good or bad according to the organisation rather than the people. In the eyes of many, membership of the PSA seems to have been sufficent to judge that security has been adequate. In the past, that has often not been the case.
Security, rather than arguing in favour of keeping the PSA in the public sector, is a good reason for ensuring that client Departments, particularly the Ministry of Defence, take greater direct responsibility for the many aspects of security that have resided in the PSA. In that way we could look forward to better security in future in many areas, particularly buildings, than there has been in the past.
Some remarks made by the hon. Member for Hammersmith about married quarters and accommodation for serving personnel in the three services are way off the mark. The weaknesses in the Opposition's arguments against these proposals are shown by his resort to such tactics. The vast majority of service men live in private accommodation. In the past the PSA advised on the security aspects of new buildings. Now it is not a case of building many more married quarters. The main emphasis now is, and in future will be, on selling them. That, then, is not a good reason to keep the PSA in the public sector.
The other argument advanced by the Opposition, and specifically by the hon. Member for Hammersmith, is that the PSA is running smoothly in the public sector, so why privatise it? One could turn that argument on its head by asking, why keep it in the public sector? People should not have to make an argument to put things into the private sector, but the argument for retaining anything in the public sector needs to be extremely good.
Although we might accept arguments for keeping the PSA in the public sector, its record does not stand up to close scrutiny. More than 10 years ago a senior civil servant wrote an incredibly good book on the sort of mistakes made by the PSA and, before that, the Ministry of Public Building and Works. It was entitled "Your Disobedient Servant". He listed in great detail the shortcomings of the PSA--the overmanning, inefficiency,
Column 398lack of objectives and total lack of project planning, which my hon. Friend the Member for Basingstoke (Mr. Hunter) also mentioned. During the latter part of the 1960s and the early part of the 1970s, the author sought to put some of those deficiencies right. I read that book many years ago and I reread it a few days ago. I am certain that the author, if nobody else, could appreciate the need to move the organisation into the private sector to improve its performance. In fact, the PSA's performance is considerably better than it was 10 years ago. In the past, the PSA suffered from a considerable number of shortcomings.
Mr. Allen McKay : The hon. Gentleman has just admitted that the PSA has overcome the shortcomings from which it suffered 10 years ago. He has admitted that the problems of the PSA have been solved. Recently the PSA has given value for money and has proved better than any private sector organisation against which it operated. It has given the service required. If one gets value, service and quality from the PSA, why change it?
Mr. Mans : The hon. Gentleman has not quoted me correctly. I said that the PSA's performance had much improved on what it was 10 years ago. That improvement has been achieved because more commercial pressures and greater commercial judgment have been brought to bear on the PSA by the present Government. Such direction was sadly lacking during the Labour Administration. A great deal more, however, can be done and the only way in which to achieve that is to move the PSA into the private sector.
I welcome the idea of client Departments taking more responsibility for the buildings they occupy. The responsibility for the fabric of a building has been left to the PSA. The Ministry of Defence, for example, has not taken responsibility for the fabric of its various service installations. The client Departments will not only be able to use the PSA for the necessary work but will be able to approach other, more competitive organisations. That is a move in the right direction.
The move into the private sector will undoubtedly benefit not only the PSA and its staff, but those organisations for which it has worked in the past. Once the PSA is in the private sector it will be able to expand and to use its expertise. Judging from some of the remarks of Opposition Members, there is undoubtedly a huge market for PSA valuation expertise. According to the Opposition, the PSA can undercut the valuation fees of private companies by a large percentage. It is rather odd, therefore, for the Opposition to argue that the PSA should stay in the public sector, especially as it has the opportunity to expand its valuation services rapidly if it manages to keep its prices down to the suggested true levels it has quoted while operating in the public sector.
My right hon. Friend the Secretary of State talked about the way in which the PSA will be taken into the private sector. I fully approve of, and am encouraged by, his remarks showing that there will be a large measure of employee participation. That is a good direction in which to move. Judging from the experiences of the National Freight Corporation and the water research centre, it bodes well for the PSA if the employees can be persuaded to take part in the buy-out. It goes further than that. The hon. Member for Hammersmith was less than honest when he suggested that
Column 399the privatisation of the National Freight Corporation was the only previous privatisation to include an employee buy- out. The water research centre is another example, and in many previous privatisations huge percentages of workers have bought shares, despite pressure from their union bosses to do the contrary. Those examples include British Gas and British Telecom, in which more than 90 per cent. of the work force bought shares. Those work forces want the firms to be privatised, despite the advice not to do so given by their own union bosses.
Mr. Eric S. Heffer (Liverpool, Walton) : Why does the hon. Gentleman refer to the elected representatives of the workers as union bosses? Why does he call them bosses when they have been elected? Does he refer to the Prime Minister as his boss? [Hon. Members : "Yes."] He may do, but she is an elected representative. The term "bosses" is used by the hon. Gentleman and his hon. Friends to try to denigrate trade unionists.
Mr. Mans : I shall be quite happy to withdraw the word "boss" if it offends the hon. Gentleman so much. The union leaders--or whatever he wishes to call them--gave information to their members which those members did not take. The members voted with their cheque books and wage packets and bought shares in the companies that were privatised. Regardless of the type of privatisation that takes place in the PSA, I suggest that they will do precisely the same thing and show that they want their firms to be privatised.
So far, 29 state companies have been privatised, 45 per cent. of the public sector is now in private hands, and 800,000 former public employees are now employees of private firms. That is what has happened during the past 10 years. I welcome this latest privatisation proposal, and my only regret is that it has come at the end of this 10-year programme, not at the beginning.
Mr. William O'Brien (Normanton) : It is significant that we are again discussing privatisation. Doubtless Conservative Members will not agree that this is Tory party dogma. However, if we look at the history recorded in the research note by the House of Commons Library, we find that, since 1979, no fewer than 33 privatisations have been approved by the Government or are in the pipeline. Tonight, we are talking about the 34th privatisation scheme to have been brought forward--the PSA. The Crown Suppliers are included in the list in the pipeline. British Coal is also included in that list.
We have discussed privatisation twice this week. I cannot understand how Conservative Members can deny that Tories are obsessed with privatisation. That obsession is brought to the House and consideration is given to it before any consideration for the taxpayers or the people working in the industry.
The hon. Member for Wyre (Mr. Mans) and others have said that it is only Opposition Members who are trying to defend and retain the PSA and the Crown Suppliers in the public sector. That is not true. I remind hon. Members of a statement made on 25 July 1986 by the hon. Member for Ealing, Acton (Sir G. Young) who was then a Minister. He said that the review group employed
Column 400by the Department to review the issue of the PSA and the Crown Suppliers being brought into the private sector concluded, "on the information available to them, that whilst privatisation would be possible, it would not in their view, be in the public interest."
With all the information available to it and the fact that it accepted that it would be possible to include the PSA and the Crown Suppliers in the private sector, the review group believed that it would not be in the public interest. Therefore, it is not just Opposition Members who are saying that it is not in the country's or taxpayers' best interests that the Crown Suppliers and the PSA should be removed from the public sector. Conservative Members have been saying the same thing.
The same team of officers looking into the matter also recommended that
"the Crown Suppliers should be retained as a central purchasing agency in the public sector with rather greater autonomy in accounting and staffing matters."
The body commissioned to look into the privatisation of the Crown Suppliers thought that it should have greater autonomy in certain matters.
In reply to the hon. Member for Bristol, East (Mr. Sayeed), the hon. Member for Acton said :
"The Crown Suppliers have had another successful year's trading. Despite the fact that over 65 per cent. of their business is now untied and optional, they have more than met their financial objective for 1985-1986. They have achieved this by raising their level of service, speeding up deliveries, reducing resource costs."--[ Official Report, 25 July 1986 ; Vol. 102, c. 572. ]
Even when action was taken against the Crown Suppliers to untie it from the guaranteed market to which Conservative Members have been referring, it still had a successful year, increasing business turnover and making the business more efficient and acceptable to the people it was serving.
Mr. Holt : The hon. Gentleman has constantly referred back to a report in 1986. Of course, he has not referred to the Select Committee on the Environment that has been looking into the PSA for several years. A number of Labour Members on that Committee have subscribed to its report and there has been no difference of opinion on political grounds. It is notable that none of them is here today to say anything about the PSA, which was recommended for privatisation by the Select Committee.
Mr. O'Brien : A good number of Select Committees are sitting at the moment, and hon. Members on both sides are engaged in Committee business. I was not trying to elaborate on the proposals made by Conservative Members ; I was just saying that reports commissioned from independent bodies by Ministers have all stated that privatisation is possible, but not desirable.
On Monday of this week a report was brought to the attention of the House, stating :
"Britain's most secret military establishment, the Aldermaston atomic weapons establishment, is to be handed over to commercial management. This raises a fundamental issue of national security. The secrets of Britain's nuclear bomb designs are kept there along with many other American secrets, since the atomic weapons establishment is the main agency for Anglo-US collaboration on warhead development and testing."
The report calls this contractorisation, which is what the Tories now call privatisation.
My hon. Friend the Member for Hammersmith (Mr. Soley) firmly drew attention to security. It is not only
Column 401Opposition Members who point out the need for a secure system--the Americans and others who are involved with security are pleading for consideration of the dangers that might arise if everything were put in the private sector, as proposed.
Hon. Members have mentioned the qualities of the 34 privatisations that have been enacted or are in the pipeline. They have also mentioned the golden handshakes that accompany these privatisations. In this context, I draw attention to a recent report on water privatisation which was commissioned from Arthur Collins and Company, financial advisers, who estimated that water privatisation would cost the taxpayer £8.56 billion, and that the income derived from it would be £5.5 billion--a loss to the ratepayers of this country of about £3 billion. Not only taxpayers but a large number of ratepayers will suffer, therefore, because of the Tories' dogmatic atitude to privatisation.
The PSA is the largest Government department to be privatised so far. The Secretary of State said today that some of the reasons for bringing the Bill before the House were efficiency, customer service and a desire to bring the agency nearer to the people.
The Under-Secretary of State for the Environment, the hon. Member for Southampton, Itchen (Mr. Chope), who will reply to the debate, has served on a number of Committees on which I have served dealing with local government reorganisation. On those occasions it was the policy of Conservatives to take services away from people. We argued for hours in an attempt to retain those services in the domain of local government and to keep them closer to the people so that they could be more efficient and more accountable. However, the Secretary of State says that it is necessary to remove services from the public domain and place them in private ownership.
The Secretary of State said that each Department will be responsible for its own budget and that customer services will be commissioned from the PSA, if it continues, or from whoever is responsible for the PSA if the Bill is passed. I am sure that hon. Members who have served in local government realise that often, when cuts have to be made, the first thing to be cut is maintenance. We have seen that in education and in social services. When there are more important matters to be considered, the first thing to be cut is maintenance. If we accept the philosophy of the Secretary of State, many of the public services, including security, will be the first to be cut by many Departments. That is one reason for retaining the PSA in the public sector.
My hon. Friend the Member for St. Helens, South (Mr. Bermingham) admirably exposed the people who will benefit from this privatisation. Neither the workers nor the taxpayers will benefit, because the people who get their filthy hands on the privatisation will benefit most. My hon. Friend spelled that out quite clearly. The Government have given no reason for privatisation except that they believe that the best prospect for the future lies in making unimpeded progress towards privatisation and all the freedom that it can offer.
Mr. Stern : The hon. Gentleman said that the only people to gain from the privatisation are those who will get their filthy hands on the privatisation. I hope that I quote him correctly. Some of my constituents who are ordinary working people in the PSA have already said that they
Column 402hope to take part in the buy-out that will result from the Bill. Does the hon. Gentleman wish to stand by his statement?
Mr. O'Brien : If the hon. Gentleman thinks that they are the people who will make the real killing out of the privatisation, he is living in cloud cuckoo land. The hon. Gentleman should look at the report in the Library on privatisation. It reveals in a startling way who makes the money out of privatisation. It is not the people who pick up a few crumbs. The hon. Gentleman should read the report, because it is worth reading.
The hon. Member for Romsey and Waterside (Mr. Colvin) expressed fears about the effects of the Bill in its present form on charities with which he is associated. The hon. Gentleman is not in his place. If he wants to protect those charities and is sincere in his concern about what the Bill will do to the organisations for which he pleaded, he should join us in the Lobby, because the only way to protect those charities is to vote with the Labour party.
I imagine that all hon. Members and many people outside the House have experience of dealing with the construction industry. It is not famous for its integrity, and we all know the problems that can arise. Government Departments have had the protection of the PSA safeguarding their interests. The Secretary of State and Conservative Members have suggested that each client Department could engage its own PSA--in other words, that there could be many PSAs duplicating services and wasting money--
Mr. Mans : Does the hon. Gentleman agree that the PSA's history shows that precisely the opposite is true, and that it did not look after its client Departments? Indeed, in many cases it was far too close to the very contractors in the construction industry about which the hon. Gentleman is now complaining. I am referring to cost overruns.
Mr. O'Brien : The hon. Gentleman should study the report, which refers to the Ministry of Defence and the work carried out on its behalf. It shows that there is protection for client Departments that engage the PSA. Hon. Members have said that client Departments can still engage the PSA to carry out their work. Therefore, the PSA is not so much being taken away as split into a number of PSAs. Services will be duplicated, and that will be a waste of money. No industry would have competition between the various sections within it. The hon. Gentleman is wrong.
It is not only Labour Members who continually plead for the PSA. In May 1972, the Prime Minister said that the inclusion--
"The inclusion of the Agency within the Department of Environment will ensure that the Government's practice as a builder and developer will remain in accord with its policies for the conservation and improvement of the environment."
That statement is as valid now as it was in 1972. We need to demonstrate a conservation and an improvement of the environment. The best way to do so is to engage the PSA.
Mr. Holt : It is apposite of the hon. Gentleman to refer to 1972, because there is a paragraph in the Environment Select Committee evidence headed "Changes since 1972". It shows that the number of people employed has declined
Column 403from 45,000 to 23,000. Of the work that used to be carried out in 1972, 85 per cent. of the planned maintenance and 100 per cent. of new construction work is carried out by private contractors. There have been vast changes, so it is silly to say that there have been no changes since 1972. The PSA has changed dramatically.
Mr. O'Brien : Let me remind the right hon. Gentleman what I said earlier--that the protection, conservation and improvement of the environment are as important today as they were in 1972. If the hon. Gentleman reads more of the report he will find that, although there are contractors carrying out work on behalf of Departments, the PSA is responsible for the preparation and supervision of the contracts. Despite the slimming down of staff, the PSA's protective influence remains. Not only Opposition Members but distinguished Tory leaders have pointed out the foolishness of that.
My hon. Friend the Member for Hammersmith (Mr. Soley) has exposed a weakness in the case on security--clearly a subject dear to the hearts of Conservative Members. If it is right for the PSA to provide protection for the Prime Minister and other Members of Parliament, how can it be wrong for the armed forces to receive the same service?
Hon. Members have mentioned the protection of staff. What protection will be given to the pension rights of those approaching retirement age? The Minister has been provided with a number of answers by his right hon. Friend the Secretary of State, and I hope that he will explain what will happen to those among the 23,000 staff employed by the two organisations who are worried about their pensions.
I appeal to Conservative Members who oppose the privatisation to join us in the Lobby to vote against it.
The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope) : There have been two notable features of today'sdebate. First, it has featured high-quality and, normally, good- humoured speeches. Secondly, it has been the privatisation debate in which the Opposition ran out of speakers--which shows, I think, that it is they who are running out of steam, while the Government are moving forward with a vigorous, radical programme. No Back-Bench speech was of higher quality than that of my hon. Friend the Member for Eastbourne (Mr. Gow). All who were present will treasure for a long time the unscripted and unrehearsed exchange between him and the hon. Member for Linlithgow (Mr. Dalyell). My hon. Friend reminded us of his long-standing belief that the proper place for the PSA is in the private sector, supporting eloquently a proposition in which Conservative Members all believe--that organisations should be in the private sector unless there are compelling arguments against it. There are no compelling reasons why the Crown Suppliers and the Public Services Agency should be in the public sector.
There have been positive and constructive contributions from many of my hon. Friends. My hon. Friends the Member for Bristol, North-West (Mr. Stern) and for Cardiff, North (Mr. Jones) have constituency interests ; a number of their constituents are PSA employees. They
Column 404stressed the positive approach that many of their constituents have adopted towards that privatisation and the opportunities that it will provide for them with the widening of the market. Important contributions were also made by my hon. Friends the Members for Basingstoke (Mr. Hunter), for Wyre (Mr. Mans), for Romsey and Waterside (Mr. Colvin) and for Birmingham, Hall Green (Mr. Hargreaves). I shall do my best to reply to their points and to those that have been made by Opposition Members.
I am sorry that the contribution by my hon. Friend the Member for Ealing, Acton (Sir G. Young) was so brief. His ministerial experience in the Department of the Environment made him an enthusiastic supporter of these privatisations. It was he who decided in 1986 to seek the advice of an outside financial institution on the feasibility of privatising the Crown Suppliers. In so doing, he helped to lay the foundations of the Bill.
Debating points were made about the reports on the privatisation of the Crown Suppliers. They were published before 1986. The problems connected with privatisation that worried the writers of the reports have been overcome by restricting sales to the commercial parts of the Crown Suppliers. The reports did not take fully into account the potential impact of untying on the Crown Suppliers. It is a commercial organisation. We are strongly of the opinion that it will operate much more efficiently and effectively in the private sector. That has been confirmed by independent outsiders.
The speech of the hon. Member for Hammersmith (Mr. Soley) was predictable. It relied heavily on the tendentious briefing document from the National Union of Civil and Public Servants. The hon. Gentleman resorted to irresponsible scaremongering, particularly when he referred to security.
Opposition Members are absolutely right to emphasise the importance of security. I categorically assure the House that national security will not be prejudiced in any way by these privatisations. A very few activities, not just those related to Ministers and Parliament, will be excluded from the sale and are not covered by the Bill. The vast majority of both the PSA and the Crown Suppliers services that are covered by the Bill are already commonly carried out for the Government by private firms.
Mr. Dalyell : Will the Minister explain clearly why he is so certain that privatisation is all right for security elsewhere but is not all right for the House of Commons and the royal palaces? We shall be accused, whether he likes it or not, of double standards. People will say, justifiably or not, that the House of Commons takes a very different view when those who sit on green Benches are affected.
Mr. Chope : I do not understand the hon. Gentleman's point. Much of the work in the House of Commons, the House of Lords and the royal palaces is carried out by the private sector. There is nothing wrong about that. There is adequate security. The same procedures will be followed in the future as have been followed in the past.
Column 405Mr. Heffer : The private sector is now active in the House of Commons. Is the Minister aware that the House of Commons is filthy compared to what it used to be when it was cleaned by ladies who came in regularly and who were employed as a public service to look after the House. [ Hon. Members-- : "Talk about security."] I am not talking about security, but about the whole principle. The House of Commons is dirty. Hon. Members should look at it. They will find that that is because private enterprise has been brought in.
Mr. Chope : That is a point for the Select Committee on House of Commons (Services). It is stooping a bit low for the hon. Gentleman to attack the staff who work in the House. Most of the construction work that is commissioned by the PSA, including that for the Ministry of Defence, is already contracted out to the private sector. Up to 70 per cent. of the design of new projects is already undertaken for the PSA by consultants in the private sector and it includes a large proportion of work with a high security content. The Ministry of Defence is already familiar with contracting out the manufacture of sensitive defence equipment. On the Crown Suppliers side, secure document delivery and vehicle hire are already carried out for some Departments by private firms. The Ministry of Defence estate will remain in MOD hands, and therefore under the control of the MOD.
Mr. Chope : I am not going to be drawn--[ Hon. Members :-- "Answer the question."] I am amazed by the irresponsibility of the hon. Gentleman. I shall not be drawn into saying what arrangements will be made for the vetting of staff. All I can say is that it would be unthinkable for this Government of all Governments to do anything that jeopardised or undermined national security or the personal security of individual citizens, whether or not they work in the armed forces. Conservative Members can say openly that we must be trusted. If the hon. Gentleman wants to bring security matters out into the public domain, I can only say that it is regrettable.
Mr. Soley : I charge the Government with being careless about security, as I have on a number of occasions. We know, and it is common knowledge, that the PSA vets staff. The Minister cannot hide behind security. If he is saying that vetting will be carried out by the security services, that is fine, but he must recognise that the manpower consequences of that decision would be enormous. The logical position is to leave vetting with the PSA. I suspect from the answers that he has not even thought about the question, which is a damning indictment of the Government's policy.
Mr. Chope : I shall say no more about that. The hon. Gentleman may want to develop the point further in Committee, but I hope that after consideration, he will realise that it is not appropriate to discuss security vetting in the House.
The hon. Member for Hammersmith and others made points about the work for the United States forces. The relationship with the United States Air Force is valued by both sides and it is the subject of a Government-to-Government agreement. A study has been put in hand to examine how the formalities of the relationship will be
Column 406affected once the PSA has been privatised. Whatever the conclusions of the review, I am confident that the unique range of skills developed by the staff to meet the specialised requirements and procedures that are demanded by the client will make it possible for the agency to retain a substantial proportion of the business of the United States forces.
The greatest asset of the PSA and the Crown Suppliers is their work force and, rightly, much of our debate has concerned the staff. I pay a warm tribute to the skill and dedication that all staff throughout PSA and the Crown Suppliers bring to their work. As the Minister with day-to-day responsibility for the PSA for the past three years, I have got to know many of the PSA employees all over the country, and I have also been able to witness the high esteem in which they are held by their clients. There has been a period of considerable change in Government organisation which has put a premium on loyalty and commitment. I am proud of the loyalty and commitment that has been shown by the staff.
The chief executive and second permanent secretary of the Department of the Environment, Sir Gordon Manzie has been mentioned several times during the debate, and it is appropriate that I should pay a special tribute to him, as he will be retiring from the Civil Service early in the new year and as his work has been an important factor in bringing the PSA to its present successful position. The staff of the PSA and the Crown Suppliers are civil servants. Privatisations involving civil servants give rise to particular issues, and I know that hon. Members will want to examine carefully the proposals that we have and the assurances that we shall be able to give to the staff. Staff of both the PSA and the Crown Suppliers are members of the principal Civil Service pension scheme, which includes provisions relating to redundancy.
That has two important consequences. First, because the staff cannot remain members of the Civil Service scheme when the PSA and the Crown Suppliers are sold, they would, unless special measures were taken, become technically entitled to the redundancy compensation provided for in the scheme. It would obviously not be right to expend substantial sums of public money on redundancy compensation to staff who have retained their jobs. As I have said, their employment will continue with the new owner on the same terms and conditions.
The second consequence is that the redundancy terms are not passed automatically to the new employment, because they were part of the pension scheme. Therefore, special measures will need to be taken to ensure that equivalent redundancy terms are offered to the staff to give them continued protection in future.
Mr. Allen McKay : I have never before seen anything like clause 2. It sets a precedent. In the past, all redundancies resulting from privatisation have been as the Minister described. But now the Government are selling the people with the jobs, which is wrong in any case.
Mr. Chope : If the hon. Gentleman had been here to hear the opening speech given by my right hon. Friend the Secretary of State he would have heard the answer to his question. In fact, such provision has been made in almost every privatisation Bill that has come before the House.
The measures that we are taking to ensure that the staff's interests are protected as regards pensions and redundancy are worth explaining in more detail. When
Column 407invitations to tender are issued, we shall draw prospective purchasers' attention to the terms of the Civil Service pension scheme, as regards both pensions and redundancy. We shall make it clear that we expect them to offer broadly comparable terms for pensions. The terms that they offer will be subject to analysis by the Government actuary. If the pension terms offered by the chosen purchaser are not assessed as being as good as the Civil Service scheme, some means will be found to ensure that the staff are not disadvantaged in terms of the overall terms and conditions of service.
The position on redundancy will be slightly different. We shall ensure, by means of the contract for sale, that the staff will be provided in the private sector with redundancy compensation that mirrors what they have now.
Sir Peter Hordern (Horsham) : If the present pension scheme is to be transferred to the private sector, does not that mean that it will in future be a funded scheme? The Government will be liable to pay a large sum to set up that scheme. Will my hon. Friend tell the House roughly what his estimate is of the sum that will be transferred into a funded pension scheme?
Mr. Chope : My hon. Friend draws attention to the difference between the pension arrangements in the public and the private sectors. The job of providing pensions in the private sector will be the responsibility of the purchasers of the organisation, and they will have to take responsibility for providing a fund. At the point of sale all the contributions that have been made so far will be preserved. The money that is available in the public sector to enable the pensions to be paid will be called upon in the future when the pensions become payable in respect of service carried out prior to privatisation.
Mr. Soley : The Minister is clearly getting into difficulty again. I am here to help him although I appreciate that he does not always see it that way. The hon. Member for Horsham (Sir P. Hordern) asked quite rightly about the amount of money and how it would be transferred to ensure that pensions do not fall below what staff receive at the moment. There must be some transfer of funds. That was the question : Will the Minister answer it?
Mr. Chope : I have answered the question. The employees will retain their existing pension entitlement until the point of sale. Thereafter, the responsibility for their future pension entitlement will be taken up by the new owner. That is perfectly clear and I am sorry that the hon. Member for Hammersmith does not understand it. My hon. Friend the Member for Romsey and Waterside (Mr. Colvin) raised an important point about Enham Industries and Papworth village. As he said, I have written to him about that. I am sure that the points that I have set out in my letter will reassure the employees in Enham Industries. As my hon. Friend suggested, I will take up the issue with my hon. Friend the Minister of State for the Armed Forces. As I have said, privatisation does not alter the position of the priority suppliers scheme. Therefore, the Bill is in no way bad news for Enham Industries.
Column 408manufacturers have done pretty well out of the Crown Suppliers' buying policy over recent years? Will my hon. Friend talk to other Ministers ? If preferential treatment is not maintained, the Housing Corporation, the county council social services committees and the Department of Social Security are likely to be burdened with additional costs. My hon. Friend the Minister should alert his colleagues to that eventuality.
Mr. Chope : There will not be additional costs for Departments. The priority suppliers scheme will continue as it is now, but the Crown Suppliers will no longer necessarily be the intermediary. I believe it was the hon. Member for Hammersmith, although I am not sure, who wanted to know how we were going to ensure that the privatisation would be fair. He drew attention particularly to the sale of Wellington house. I can assure the House that Wellington house will be valued carefully prior to sale because it is one of the largest assets belonging to the Crown Suppliers. That sale will be on a competitive basis, thereby ensuring the very best value for money to the taxpayer.
Mr. Chope : I will not give way, because I have only three minutes left. We have had a long debate and, as I have already explained, Opposition Members were not present to take their turn and we heard a series of speeches from Conservative Members.
The PSA is basically a major building and estate consultancy. The Crown Suppliers is basically a furniture supplier. Neither has a natural place in the public sector. They are commercial organisations which will operate best in a fully commercial environment. The Government will ensure that adequate safeguards are put in place to ensure that the staff who are transferred have equivalent conditions under the new employer.
This is a radical Bill, which will bring major benefits. It facilitates privatisation. In that way, it offers a major benefit for employees because for employees the Bill is a springboard for further success.
Mr. Campbell-Savours rose --