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Coal Imports
3.32 pm
Mr. Geoffrey Lofthouse (Pontefract and Castleford) : I beg to move,
That leave be given to bring in a Bill to prohibit the import of coal into the United Kingdom ; and for connected purposes. The purpose of the Bill is to end inconsistency and to give British Coal a chance to hold its markets. We know that, when current contracts run out, the chairman of National Power, the largest coal user in the United Kingdom, is planning to import 50 per cent. of the coal needed to run its power stations.
On 14 January, The Daily Telegraph reported that Mr. Baker is planning to seek international tenders for all National Power's coal needs shortly after it is privatised. Another report in the Financial Times on 4 January suggested that National Power would be investing in three new coal import facilities on Teesside, Humberside and Milford Haven.
The special report published by the Committee considering the Associated British Ports (No. 2) Bill asked the Government to take whatever steps were necessary, in the overall national interest, to protect the coal industry. That has not happened, and the Government seem willing to overlook activities that are detrimental to the coal industry.
The Committee considered two private Bills--the Associated British Ports (No. 2) Bill and the North Killingholme Cargo Terminal Bill. The latter was withdrawn because it was amended by the Committee. The Chairman of the Committee, the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), said that, in the light of advice from Speaker's Counsel,
"We unanimously decided that we wished to see further provision made to regulate any possible future sale of the proposed North Killingholme facilities, over and above the provisions of the existing general law."
He went on :
"We therefore unanimously agree that clause 26 of the Bill should be amended with wording along the lines that the installation cannot be sold for 10 years after the passing of the Bill, and thereafter only with the express consent of the Secretary of State."
The issue was not addressed during the proceedings on the Associated British Ports (No. 2) Bill, for two possible reasons. First, in introducing the Bill to the Committee, Sir Frank Layfield indicated that the major improvements to the port at Immingham "were not specifically designed in any sense of the word for coal purposes. They depend specifically upon general industrial and other consumers' current needs and the need to eliminate present existing wasteful difficulties and practices."
Secondly, Sir Keith Stuart, chairman of Associated British Ports, told the Committee that Associated British Ports did not intend to go to the capital markets to raise the finance for the Immingham project. He said :
"The company's ability to generate the cash required for its investment in its ports is such that for our foreseeable needs we are expecting the business itself to generate sufficient capital for investments of this kind in terms of the initial cash input." It is hardly surprising, therefore, that it did not occur to the Committee that a company as profitable as Associated British Ports would seek finance for its proposed new
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Humber terminal. But that is precisely what it has done. The Financial Times of 15 January reported that the terminal, with a capacity of 12 million tonnes of coal, is to be financed and run as a joint venture between PowerGen and National Power, and that the generating companies plan to take a 40 per cent. stake each in the company, with ABP holding the remaining 20 per cent. The Financial Times report pointed out that that was at the centre of the generating companies' plans to reduce dependence on supplies from British Coal.There could have been nothing but sharp practice by the sponsors of the Associated British Ports Bill. The House should understand that the Committee, which was dealing with two Bills at the same time, threw the Killingholme Bill out because it included an amendment giving the right to sell. The Associated British Ports Bill was allowed to proceed because there was never any suggestion in Committee of an intention to sell ; indeed, the contrary was the case. It is not beyond the bounds of possibility that the Committee would have taken the same decision on it had it included such an amendment. Now we find that National Power and PowerGen are to own 80 per cent. of the company.
Following that, there is an announcement from Mr. Baker, chairman of National Power, that he intends to import 50 per cent. of his coal from abroad after the end of the 1993 contracts. What the company did in deceiving the Committee and, in effect, the House, was tantamount to sharp practice. Without that sharp practice, I am sure that it would not have received permission from the House to go ahead with the development.
My Bill would give the Secretary of State power, through the House, to control imports of coal. The Secretary of State would be required to base his or her judgment on the national interest and not on short-term commercial interest. The Secretary of State would control people in powerful positions, elected by no one, and prevent them from taking decisions which could destroy the country's reserves of coal for short-term benefit, resulting in the United Kingdom being at the mercy of foreign competitors in meeting the national demands over the medium and longer term.
No one outside the democratic forum of the House should be allowed to take major decisions to destroy a great industry that supplies the main source of our energy when, in years to come, we shall need that energy ; otherwise, we shall be in the hands of foreign competitors. Therefore, I ask the House to support the Bill.
Question put and agreed to.
Bill ordered to be brought in by Mr. Geoffrey Lofthouse, Mr. Kevin Barron, Mr. Allen McKay, Mr. George J. Buckley, Mr. William O'Brien, Mr. Alan Meale, Mr. Peter Hardy, Mr. Alexander Eadie, Mr. Eric Illsley, Mr. Frank Haynes, Mr. Don Dixon and Mr. Joe Benton.
Coal Imports
Mr. Geoffrey Lofthouse accordingly presented a Bill to prohibit the import of coal into the United Kingdom ; and for connected purposes : And the same was read the First time ; and ordered to be read a Second time upon Friday 1 March and to be printed. [Bill 84.]
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British Technology Group Bill
Order for Second Reading read.
3.42 pm
The Minister for Corporate Affairs (Mr. John Redwood) : I beg to move, That the Bill be now read a Second time.
The Bill paves the way for the privatisation of the British Technology Group. BTG combined the National Research Development Corporation and the National Enterprise Board. Except for one remaining semi-dormant subsidiary, all the investments in the NEB portfolio have been sold, put into receivership or liquidated. Therefore, BTG's operations are now those of the NRDC, focusing on technology transfer.
BTG has 188 employees and a turnover of £30 million. It obtains new ideas and inventions from universities, Government research establishments, private companies and individuals. It funds their development to a stage where they can be globally patented. It licenses the resulting intellectual property rights to industry worldwide, gaining an income in the process. Its United Kingdom turnover is only £10 million, which puts its size into perspective in an economy of about £600,000 million. Its investments have included such international successes as cephalosporin antibiotics, pyrethrin insecticides and magnetic resonance imaging technology, used in hospital scanners.
Until 1985, BTG had the right of first refusal to exploit research in the public sector. Since 1985, universities and other public sector organisations have been able to exploit their own scientific advances, often through industrial companies. Despite that, the flow of inventions from universities to BTG has increased since 1985. Today, it is involved with 1,600 inventions, 8,500 patents and nearly 500 licences.
BTG's profits tend to depend on a few projects, making BTG's resulting profit trend uneven. But during the past five years, BTG's operating profits have averaged more than £4 million per year, rising to £6.8 million in 1989-90. BTG has been self-financing for almost 20 years. It has paid dividends to the Exchequer--a total of more than £18 million in the past six years. Transferring BTG to the private sector would rid it of restrictions on borrowing powers, obligations to submit investments for approval by the Department of Trade and Industry and remove the requirement that the salaries of its chairman and chief executive should be agreed with my Department and the Treasury.
BTG wants to develop its activities as an international organisation. It already derives 70 per cent. of its licensed income from outside the United Kingdom. Preliminary steps have been taken to expand overseas, with investments and agreements in the United States, India and several European universities. The original NRDC duties appear increasingly inappropriate for such international developments, and their removal would facilitate BTG's expansion.
Mr. Gordon Brown (Dunfermline, East) : The Minister of State mentioned that BTG supports the privatisation. Is he aware that the company has spent £75,000 on commissioning a public relations campaign to persuade
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Members of Parliament? Is he aware that page 4 of the document that I have been given, "Communication Programme for British Technology Group" states :"BTG has the opportunity to have a parliamentary friend on the Standing Committee of the Bill."
Will the Minister tell the House whether his Department has authorised the expenditure of £75,000 of our money to lobby Members of Parliament? Has any Minister, or anyone representing a Minister, informed BTG that it has
"an opportunity to have a parliamentary friend"
on the Committee discussing the Bill?
Mr. Redwood : BTG has many parliamentary friends, and I am sure that its case will be put strongly by those who support it and who think that the management's wish for privatisation is a good idea. I do not know whether any money has been spent in the way that the hon. Gentleman described. I shall look into that, and see whether it is true. I do not know where he has obtained that information.
Mr. Brown : Is the Minister telling the House that BTG has or has not been authorised to spend £75,000 to promote its activities in pursuit of privatisation among Members of Parliament? Does he deny that the Department of Trade and Industry or anyone representing it have given an assurance that BTG will have
"an opportunity to have a parliamentary friend on the Committee"?
We need direct answers to those direct questions.
Mr. Redwood : I have already said that I will let the hon. Gentleman know when I have researched the matter. There is no point in me giving him a categorical denial before I am sure. That is not a question that I have asked. I shall ask it for him and let him know. My hon. Friend the Under- Secretary of State for Industry and Consumer Affairs will give him the answer at the end of the debate, when we have had a chance to go into the matter.
Mr. Simon Hughes (Southwark and Bermondsey) : Having been a parliamentary candidate for Peckham in his earlier political existence, the Minister will know that BTG is based in Southwark. When he addresses the issue, will he recognise that there is no overwhelming view in favour of the privatisation of BTG, the majority of the staff are against it, its track record is good and, as far as I am aware, there has been no criticism of its activities in the past? Does he accept that it is perceived that the Government are adopting the view put forward by the management, which is a minority view in BTG, and that that is a dogmatic, not a sensible or rational, way forward for BTG? Has the Minister a closed mind, or does he still have an open mind for the best way forward for this well respected and reputable group?
Mr. Redwood : We have an open mind on the exact style and form of privatisation, and I and my hon. Friend the Under-Secretary of State wish to hear the views of the House on the subject. But we are strongly advised by the senior management of BTG that they believe that it would be in the best interests of the group to pass into the private sector, for the reasons that I have already set out. They are good reasons, which will be welcomed strongly by Conservative Members. The management of BTG are running a commercial enterprise. There are certain restrictions on the group's conduct by virtue of its public sector status which the management would rather be rid
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of, because they believe that that would add to their success. I am happy to back that judgment. The Government back the BTG board's view.Mr. Brown : Will the Minister confirm that 75 per cent. of the staff have expressed opposition to the proposal to privatise the group, and that severe doubts have been expressed by the Committee of Vice-Chancellors and Principals, which says it has not even been consulted about the proposal? Will he publish the Coopers and Lybrand study commissioned by his Department some time ago, which he has never brought to the House or put into the Library but which I understand says that the difficulties of privatising the organisation are far greater than anticipated, and recommends that privatisation should not be proceeded with?
Mr. Redwood : I do not intend to reveal that study, because it has much interesting information that could only help those who might wish to negotiate the purchase of the group. It contains a lot of sensitive information about prospective values, which could only help those who would wish to get a finer deal as a result. But it is not right for the hon. Gentleman to assume something about the thrust of a report that he has not read. He expresses an extraordinary clairvoyance which is unwarranted in the light of the intricate details in the report. One thing that the report does draw attention to is the fact that it could damage top management morale if its clearly expressed view in favour of privatisation were ignored. The hon. Gentleman might like to think about that.
We have consulted the universities widely, and it is interesting to note that only 12 per cent. of those that have responded wish to keep BTG as it is. All the others think that there is a strong case for change. Some believe that a more commercial approach in the private sector would be exactly right for BTG.
My right hon. Friend the Secretary of State has said that he is interested in the views of employees ; that is something which I am sure will emerge from the debate and will be carefully read by my right hon. Friend and by my hon. Friend the Under-Secretary of State.
Dr. Keith Hampson (Leeds, North-West) : My question relates to the point raised by the hon. Member for Dunfermline, East (Mr. Brown) about the universities. Because the vice-chancellors feel that they were not consulted in the early stages of this process, they are in some doubt about existing arrangements, and I hope that my hon. Friend can now reassure them. BTG holds a large number of university patents, so may we have an assurance that those are not at risk and that the privatised company will offer the same opportunities for technology transfer and the use of university research?
Mr. Redwood : This is one of the important points that we wish to draw out from the debate. It is one of the important details surrounding the sale that have not yet been determined. That is why the Government have come to the House with an enabling Bill, and why we wish to sound out the opinion of the House.
Mr. Alex Carlile (Montgomery) : So that we can understand the intellectual basis on which the Government are proceeding with privatisation, will the Minister answer this question? Did the Coopers and Lybrand study come
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to the conclusion that it was advisable that this proposed privatisation should not be proceeded with? Will the Minister answer that question with yes or no?Mr. Redwood : I have already made my comments on this complex study, which provided a lot of background information on the sale. There is no way that I shall be drawn further when there is a lot of price-sensitive information in that report, which could only help those who wish to buy the group more cheaply than they should.
Mr. Michael Grylls (Surrey, North-West) : Is it not a fact that one constituent part of the BTG, the National Research Development Corporation, has to get ministerial approval to borrow more than £250,000, which is peanuts in developing a business? Such restrictions stop BTG moving forward. It is a successful group, making good profits, and it could expand much more. I am sure that, if it were explained to the staff--perhaps better than it has been in the past--that when these embargos have been removed, the group can raise all the money it needs, provided that it has viable projects, and that its future will be much better in the private sector, they would be more enthusiastic.
Mr. Redwood : My hon. Friend is right. There is an investment limit above which it needs to refer to the Government. It would expedite matters if the group did not have that limit. The Opposition say that we should change all these rules, but this is a public sector body. It has to be accountable through the normal public sector devices all the time that it remains in the public sector. One cannot make one rule for the BTG and other rules for other bodies.
The House would rightly say that every penny of money going through BTG is a matter for public accountability, and there have to be rules. We say that there should be only commercial rules, because BTG is trying to be a commercial operation and therefore fit better in the private sector, in the way that BTG's senior management are suggesting.
Mr. Merlyn Rees (Morley and Leeds, South) : The Minister referred to the support of top management for this scheme. I have a question about integrity, independence and impartiality. I am informed that, two years ago, the council of BTG declared itself in favour of privatisation, subject to those three Is being guaranteed. Are they guaranteed?
Mr. Redwood : This is another matter that will be reviewed under the enabling powers in the Bill. I am grateful to the right hon. Gentleman for making those points. We wish to go away and to draw up, with our advisers, the detailed proposals for sale documentation, for whatever form of sale may be appropriate.
That is exactly the kind of issue, along with that raised by my hon. Friend the Member for Leeds, North-West (Dr. Hampson), that we shall have to work through, and the debate will be useful. The Opposition now say that they want a blueprint for every issue, but if we had that, there would be no point in the House debating the matter. We are bringing it to the House at an early stage so that we can take enabling powers to privatise BTG. There is an overwhelming case for privatising the enterprise, and we need to discuss the best way forward.
Mr. Gordon Brown : Will the hon. Gentleman give way?
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Mr. Redwood : I must make progress. The hon. Gentleman has already asked many questions.Clause 1 vests all the property, rights and liabilities of the corporation and the board in a newly created company. Clause 2 extinguishes the corporation's capital reserve and the board's public dividend capital, as these will be replaced by the Government's shareholding. Clause 3 provides for the creation of the initial Government shareholding in the successor company. Clause 4 enables the Government to acquire additional shares or securities in the successor company. This, for example, would enable the Government to maintain the proportionate level of their shareholding, if they retain one, in the event of new issues and rights issues. Clause 6 limits the Government's shareholding as a proportion of ordinary voting rights to the level at which it stands after privatisation. Clause 7 provides for the creation of a statutory reserve and for continuity in the accounts. Clause 8 provides that the Government may make loans to the successor company after vesting has taken place, but before privatisation. That would allow money to be lent if privatisation were delayed for any reason.
Clause 9 provides that any power entitling the Government to restrict the borrowing of the successor company shall be exercisable in the national interest. Clause 10 provides for the continuation of the corporation and the board after the establishment of the successor company to assist with completion of the transfer of assets. Clause 11 deals with the tax liability of the successor company, and clauses 12 to 17 contain various supplementary provisions.
Schedule 1 provides for the corporation and the board to do everything necessary to facilitate the vesting of their property in the successor company. Schedule 2 provides for the repeal of legislation which currently regulates or refers to the corporation and to the board. That is important, because it includes repeal of parts of the Development of Inventions Act 1967 and of part I and schedules 1 and 2 of the Industry Act 1975.
My Department has appointed Price Waterhouse to advise on the options for sale. The choice of option will be influenced by the interest shown by prospective purchasers during the coming months. The Government have made no decision yet about the method of sale and will listen carefully to the views expressed within the House by management, employees and other interested parties before deciding on the final option. I hope that Opposition Members will participate constructively in this debate, rather than giving endless press conferences attacking the whole idea.
The British Technology Group is making money. It has backed some good projects and it now needs the self-reliance of the private sector to go about its business. The Bill abolishes the National Enterprise Board and removes from the statute book the power for more such Government meddling in business.
The hon. Member for Dunfermline, East (Mr. Brown) will doubtless launch a tirade against these changes, as he did earlier this morning in a press conference. He will stand and fall as an advocate of "back to the 1960s and 1970s" failure. He may have cast off his 1960s drainpipe trousers and cut his 1960s student hair, but his ideas are still fixed in 1960s mode. He will conjure up images of the great days of the National Enterprise Board, to be transformed by 1990s high tech and training. We will hear
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the usual cascade of invective. He will say it, he will say it again and then he will bellow it. He will say it with repetition, with deviation--although not usually with hesitation.I hear that the hon. Member for Dunfermline, East once wrote an original speech. Unfortunately, we have had to listen to dozens of versions of the same thing ever since.
I have three questions for the hon. Members opposite. Labour say that the Government need to intervene to increase investment in Britain. My first question to them is, how much taxpayers' money would they want to spend on such an enterprise? I shall happily give way to the hon. Member for Dunfermline, East if he wishes to give the House some real information for a change. But no--he does not seem to want to.
Are the Opposition aware that total investment in the United Kingdom now runs at £100,000 million each year, and that the BTG, by the way, invests just £11 million? Do they have a sense of the significance of those figures? To have any decent impact on the national total of investment, Labour must be planning for Government to spend at least an extra £10 billion, which the market does not provide--and that would still be less than 2 per cent. of GDP, although it is around 1,000 times the figure that the British Technology Group currently spends.
Will the hon. Member for Dunfermline, East confirm BTG would need at least as much as that in his scheme of things according to his analysis of the situation? Is he aware that many of his hon. Friends--I wish more of them were here today--believe that the last two Labour Governments' investment plans were ruined by a shortage of cash?
Ms. Marjorie Mowlam (Redcar) : Is this relevant?
Mr. Redwood : This is the key to the argument. The Bill will remove the damaging powers from the statute book which Labour used in the past and says that it would want to use again. The hon. Friends of the Member for Dunfermline, East feel that, if the Industrial Reorganisation Corporation and the NEB had had more money and made more investments, they would have done better. How does he answer them? Or is the shadow Treasury going to act as the bad nanny, by taking the Socialist toys away again?
My second question is this : why should we believe that the Opposition, with all the talents that are arrayed before us, will be able to spot investments that the private sector has missed? The hon. Member for Dunfermline, East is indeed a talented man--a temporary lecturer at Edinburgh university, a lecturer in politics at a college of technology and a journalist with Scottish Television--but he has never run a factory or made anything to sell in his entire life. And this is the hon. Gentleman who thinks that he could spot all the winners.
The hon. Member for Newcastle-upon-Tyne, North (Mr. Henderson) was a trade union official ; the hon. Member for Gateshead, East (Ms. Quin) has lectured in French at two universities ; the hon. Member for Kirkcaldy (Dr. Moonie) is a medic ; and the hon. Member for Redcar (Ms. Mowlam) was an administrative officer at a college. Not one of them has ever managed a business or made a substantial investment, and none of them has had to rely on clients or customers to pay their wages. Where is the magic ingredient?
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Mr. Alex Carlile : When has the Minister ever worked in a productive industry?Mr. Redwood : For some time, I chaired an industrial company which was deeply involved in industrial life up and down the country. As a Minister behind a Government desk, I would not venture to spot winners, because I know from my business experience how difficult it is and how much it needs the commercial background of the private sector.
Mr. Carlile : Given all his experience as a banker, and his understanding of the City, can the Minister confirm that the most difficult thing for any entrepreneur or new business to obtain is free venture capital, and that the British Technology Group is one body from which it is possible to obtain such capital?
Mr. Redwood : I was trying to draw the House's attention to the sums involved. The hon. and learned Gentleman obviously was not watching last week, when the Department of Trade and Industry announced one part of a new programme of support for the type of investment that he is talking about. We shall be announcing expenditure of £30 million over three years for just such a purpose ; that is more than the BTG is offering on its past annual figures. I agree that there is a need ; the DTI is meeting it. Overall, the research and development allocation, and the other money available through the DTI, far exceeds what is available through the BTG. My third question to the Opposition is this : why should the nation believe that the policies will be any different next time? It is not as though we were being offered anything new. The names may have changed, but the institutions proposed in Labour's documents look horribly familiar. Labour wants an NIB : that is one of the reasons for their opposition to the Bill. What does NIB stand for? "Normally Invested Badly"? "Nationalised Institution for Bankruptcy", perhaps? I think that those would be better characterisations than "National Investment Bank".
The National Enterprise Board, in its heyday, was a loss maker that hastened many of its investments to the liquidator. The House should remember the enthusiasm with which the NEB identified that "office of the future" market as one with boundless opportunities. It was right : many private-sector companies have done well by selling fax machines, xeroxes, electronic mail and the like. The final cost to the NEB and the taxpayer of those boundless opportunities in a high-growth, high-tech market were losses of £34 million.
The NEB also had to write off £6.8 million from its United States investment in software--a marketplace in which many others coined fortunes and supplied good products. So much for Labour's chant that next time it would be different, because it would concentrate on electronics and software. That was yesterday's story, and yesterday's disaster for the taxpayer.
Nor was the NEB much better in other sectors. Alfred Herbert, BTB (Engineering), Technalogics Computing Ltd., Microform Communications, Vicort, Mollart Engineering, Momex, QI (Europe), Gemspar, Sandiacre Electrics, Hilton Products, Preformed Road Markings, ASR Servotron and many others all went under. Holdings in Brown Boveri, Consine International, Negretti and Zambra and Energy Equipment, to name but a few, were sold at losses. The losses in tanning and clockmaking were
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as spectacular as they were predictable. The NIB, with branches in every major city, would be a sure-fire loser. There might be more noughts on the cheques, but they would go down the same old drain. Labour also seeks a BTE. "Better Try Everything"? This morning, a sneak preview on the "Today" programme revealed a name change to BTC-- "Britain Taking Chances", perhaps. In Labour's public bar all the investments would be on the rocks, and most of Labour's planned subsidies would be illegal under the treaty of Rome.The British Technology Company could not do anything that the privatised British Technology Group cannot do. BTG has worked with companies pioneering new communications equipment, new farming systems, a more efficient combine harvester and a variable transmission system for cars. It is an important discipline that money should be committed only when there is a prospect of returns. That is the discipline which Labour still has not learnt, or cannot accept.
The hon. Member for Dunfermline, East is, I hear, having a few problems with his right hon. and learned Friend the Member for Monklands, East (Mr. Smith) and his hon. Friend the Member for Derby, South (Mrs. Beckett). Naturally, they do not like him always muscling in on the economy whenever there is a chance of media attention. He really should concentrate on the job he has now.
They are understandably even more worried about the hon. Gentleman's spending habits--thankfully, only shadow ones at the moment, and for a long time to come. There is his passion for regional investment--£10 billion?--and research and development--another £5 billion to make a splash? Perhaps the hon. Gentleman will tell the House how much money he wants to spend on regional investment and research and development. He tells us time and again in his speeches that the core of his proposals is that more money should be spent upon them, through the public sector. Why cannot he tell us how much he would spend and what he would spend it on?
Then there is training. That must be another £2 billion or £3 billion to have any impact. I hear that the shadow Treasury team has said that it would like the hon. Member for Dunfermline, East to be the Member for Duninvesting, Duntraining and Dunresearching as well, for the sums do not add up.
The British Technology Group needs a new future in the private sector. The United Kingdom taxpayer needs to be reassured that the power to back losers through the National Enterprise Board has been removed from the statute book. I commend the Bill to the House. 4.5 pm
Mr. Gordon Brown (Dunfermline, East) : I intend to deal with the substance and detail of the Bill. The Bill is ill-considered and irrelevant to the huge technology gap that Britain has to close with our competitors. It does nothing to achieve the Government's stated aims for privatisation-- to increase mass shareholdings, to create greater competition and to remove Government subsidies. The implications of the Bill are potentially destructive for the British Technology Group. The Bill provides no guarantee that BTG will remain British, at the forefront of technology, or even intact as a group. With no better
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explanation for it than that given today by the Minister, it is in the end, I am afraid to say, privatisation for privatisation's sake. The first impression made on anyone listening to the debate and hearing the Minister's speech must be one of surprise--indeed, astonishment. Industry faces one of its worst recessions for years. Output has fallen faster than at any time, with the sole exception of 1980, during the past 60 years. There has been a record number of bankruptcies and closures, even of high technology companies. Nevertheless, the Department of Trade and Industry, with its wide responsibilities for both trade and industry, has introduced its second privatisation Bill in as many weeks. It has followed up its unwanted and unpopular privatisation of export credit insurance last month with this unnecessary proposal to privatise the British Technology Group.Is it not the case that, as the public expenditure White Paper revealed on its publication only a few minutes ago, that the Government's withdrawal from the British Technology Group is the latest in a line of reductions in Government support for investment in technology? There has been a 25 per cent. underspend on regional innovation grants, a £42 million underspend on industrial research and development, a cut of 40 per cent. on research and development by 1991 and a cut of 34 per cent. on technology transfer by 1992. Even with the addition of the SPUR scheme--support for products under research--which the Minister mentioned at the end of his speech, support for innovation will fall, in real terms, in the coming year, according to the White Paper. The total cuts in the DTI's budget over the next three years will be of the order of £370 million. I can think of no other Government in Europe who have simultaneously cut their training and industry budgets in the run-up to 1992 but have spent their time instead on privatising national assets that they can ill afford to put at risk.
Mr. Redwood : How can there have been a reduction in support for technology when the British Technology Group has been financing itself for 20 years and has paid dividends to the Government?
Mr. Brown : I am referring to the total technology budget--the budget for technology transfer and for research and development. I am also taking into account the much-publicised announcement--it has been announced five times during the last two months--of the SPUR scheme. At a time when recession faces industry, and when all our European competitors are preparing for 1992, this Government are cutting support for technology.
Let us be clear about the purpose of this Bill. Its main and most immediate effect is to wind up the National Research Development Corporation as a first step towards privatising the national technology organisation--a body that has enjoyed all-party support for four decades ; was set up in 1949 to fill a gap in the market place ; grew under the Conservative Government of the 1950s ; expanded under the Development of Inventions Act 1967 in the 1960s and the 1970s ; and developed yet again to suit the conditions of the 1980s. Now that body is to be abandoned to the vagaries of the marketplace, with--as the Minister confirmed today--not a single guarantee about who will run it or from where it will be run, or for the interests of
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whom and, as was confirmed in the Minister's answer earlier, not one guarantee about its integrity, about its impartiality or even about its independence.Mr. Patrick Nicholls (Teignbridge) : The hon. Gentleman speaks with great passion. Obviously he is totally against the principles of this Bill. Will he confirm that a Labour Government, should there ever be one, will renationalise BTG? If he is not prepared to give that commitment, there cannot be very much sincerity in what he is saying.
Mr. Brown : I can give an assurance that we shall not spend public money renationalising the British Technology Group. I have made it clear-- if the hon. Gentleman had followed events, he would know this very well-- that we shall set up a British technology enterprise and shall work with the universities and other organisations, many of which are directly opposed to this measure.
Mr. Nicholls : The hon. Gentleman, on behalf of the Labour party, has just announced another initiative. Can he tell us exactly how much money will be invested in it, and whether this will be another priority area?
Mr. Brown : The hon. Gentleman cannot have been listening to remarks made earlier by his Minister for Corporate Affairs. The British Technology Group actually makes a profit. What is being privatised is a profitable group. I have no reason to believe that, operating in the public sector, and working with the patents of universities, our British technology enterprise will not itself make a profit. The purpose is to fill a gap in the marketplace that would not otherwise be filled and to take a long-term view that a private-sector company might not take. I have no reason to believe that the universities will not want to work with us in this enterprise.
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