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Clause 6
Commitment limits
Mr. Sainsbury : I beg to move amendment No. 17, in page 4, line 30, leave out from at' to end of line 33 and insert
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intervals determined from time to time by the Secretary of State with the consent of the Treasury and in accordance with principles so determined.'During the Standing Committee discussion of clause 6, it was proposed that the word "may" should be deleted and replaced with the word "shall." That was proposed as an amendment at several places in the Bill. In the debate the point was made that the Secretary of State has to determine principles for the conversion of foreign currency commitments into special drawing rights if he is to meet his other obligations under clauses 6 and 7. I agreed in Committee to consider the amendment further. The wording now proposed makes it clear that the Secretary of State is required to lay down principles for the conversion of foreign currency commitments into SDRs. He will do this whenever necessary and with Treasury agreement.
In Committee interest was expressed in the principles that the Secretary of State might be called upon to determine under subsection (5)(e). The principles usually relate to mechanical operations that may be subject to change over time and for which it is therefore difficult to make statutory provision. Perhaps I could give two examples. The first would be deciding the precise rate to be used for converting individual foreign currency into SDRs. The closing rate for the last day of the quarter, as shown in the Financial Times, is used. The second example would be how to convert currencies for which no SDR conversion rate is quoted in the Financial Times --say, Australian and Hong Kong dollars. The current practice is to convert them into United States dollars by taking the average of the buying and selling rates, as quoted in the Financial Times, and converting it into the United States dollar equivalent. Because of the need to deal with unusual situations, such as those involving Hong Kong and Australian dollars, it would be inappropriate that the precise conversion mechanisam should be spelled out in the statute. That would be unhelpfully inflexible. We have encountered this point on earlier amendments.
This is a minor technical change. I hope that the hon. Lady is listening when I say that we are grateful to the Opposition for drawing attention to this shortcoming in the text of the Bill. I have pleasure in presenting the amendment to the House.
Ms. Quin : We are grateful to the Minister for taking into account the points that we made in Committee and for his proposal to amend the Bill accordingly. Obviously, we shall not oppose the amendment. However, I should like to ask the Minister for some information. He referred to the principles that govern the conduct of the Secretary of State and the Treasury in dealing with the provisions of this part of the Bill. Will there be an opportunity for parliamentary scrutiny of the principles, especially if they change?
Mr. Sainsbury : The amendment with which we shall next deal concerns the reporting arrangements. This is the sort of issue that could well be covered in the annual reports if the principles applying to the same sort of currency conversion should change. Amendment agreed to.
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Clause 7
Returns
Mr. Sainsbury : I beg to move amendment No. 18, in page 4, line 43, at beginning insert
The Secretary of State shall prepare an annual report on the discharge of his functions under sections 1 to 5 of this Act. (1A)'.
Mr. Deputy Speaker : With this it will be convenient to consider Government amendment No. 19.
Mr. Sainsbury : During consideration of amendments Nos. 93 and 111 on 19 February in the Standing Committee, the view was expressed that there should be a statutory requirement on the Government to lay the ECGD's annual report and trading accounts before Parliament. During our discussions I drew attention to the high level of reporting to Parliament to which the ECGD, as a Government trading organisation, is committed. Already, annual trading accounts which are statutorily required under exchequer and audit legislation are laid before Parliament, as are annual estimates and appropriation accounts. Of course, the report of the Department of Trade and Industry itself, which, from this year, replaces the public expenditure White Paper, also refers to the work of the ECGD. Then there are the reports to Parliament, under clause 7, on ECGD commitments against statutory ceilings.
However, I recognise the merits of supplementing the existing reporting requirements with a statutory obligation on the Secretary of State to submit an annaul report. In Committee, I undertook to consider the feasibility of finding the right words for such a provision. The purpose of the amendment is to put into effect the wishes expressed by members on both sides of the Committee. It requires the Secretary of State to submit to Parliament an annual report on the discharge of his functions under clauses 1 to 5. Amendment No. 19 is consequential. It places on the Secretary of State a statutory duty to produce a report. Although final decisions on the precise form and content of the new statutory report have not yet been taken, my basic intention is that the existing annual report--there is no statutory responsibility to table the existing report, but it has been placed in the Library--should represent the starting point for the new statutory report. Changes will be necessary to reflect the ECGD's changed role after the privatisation of the Insurance Services Group, and, indeed, with the new powers conferred by the Bill, particularly those provided for in clause 3. The annual report--the one which we do not have statutory responsibility to table but which is placed in the Library--covers various topics. These include a review of the year's activities of the various groups and divisions, detailed reports and accounts of trading operations, a brief report of the non-trading operations--the public expenditure programmes operated by the ECGD, such as the fixed rate export finance scheme, to which I referred earlier--and developments within international forums, such as the OECD and the European Community's policy co-ordination group.
As new activities permitted by the Bill come on stream, provisions will need to be added to cover financial management activities authorised under clause 3--bond issues, cross-currency and interest-rate swaps, which were referred to during the Committee stage--and services that
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might be provided by the ECGD for a fee, as authorised by clause 5. In addition, it may be possible for the annual report to contain an expanded section on the non-trading operations of the new ECGD, possibly building in elements currently contained in the public expenditure report of the Department of Trade and Industry. The report might contain also a summary of returns made under clause 7 of commitments logged against the statutory ceiling. It is my intention also that the separate annual report required in relation to investment insurance activities should be subsumed into the new report.I hope that the House will accept these amendments, which reflect the wishes expressed in Committee. They will further improve the already quite extensive reporting arrangements for the ECGD.
Ms. Quin : These amendments are not controversial. They go a little way towards meeting some of the concerns that we expressed in Committee. Parliamentary accountability is a theme that we raised several times during the course of the debate. Since the legislation as a whole is controversial, we are concerned to ensure that the ECGD, in its new form, will be properly scrutinised by Parliament, just as we are concerned that Parliament should have some involvement in how the privatised company--the new ISG--operates. We welcome the extra commitment that these amendments represent.
The Minister did not say anything about the timing of the presentation of the report and the returns. Of course, the Bill provides that they should be made as soon as practicable after 31 March each year. I should like the Minister to confirm that that is the situation. In Committee he said that in the first year it would be difficult to meet the deadline of 31 March but that the Government's aim in subsequent years would be to present the report and the returns very shortly after that date. I hope that the Minister will be able to give us a clear commitment on the matter. We take very seriously the issue of parliamentary accountability. We shall certainly want the maximum information on the operation of the continuing ECGD. It is well known--we have highlighted the issue already this evening- -that exporters are very concerned about how the continuing ECGD and the privatised company will operate. Especially in the early days, we shall want to scrutinise very closely the practical implications of these changes for exporters. For that reason, the information given to Parliament will be very important. We shall need to be in a position to debate the information, having had access to it in good time.
Mr. Cousins : I do not want to detain the House unduly, but it would be churlish not to welcome the Minister's remarks and his commitment to use the annual report as an important source of information to the business community and to members of the public who are interested. This is something that many of us on the Standing Committee suggested. We welcome the proposal to deploy the annual report to some degree as a means of engaging in the continuing debate about the direction of the remaining activities of the Export Credits Guarantee Department. To that end, following the Minister's suggestions as to what the annual report might contain, can he tell us whether it will contain an area-by-area analysis? By that I mean areas of the world. The annual report for 1986-87 contains an interesting breakdown of
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area-by-area exposure in different country groups. I hope that that helpful feature will continue to appear in annual reports. The Minister mentioned some changes that he proposed to make in the work of ECGD in regard to the assurances he gave in our previous debate. Can he assure us that the annual report will rehearse and repeat the way in which those undertakings are borne out in practice, and that any intention to review the continuation of political reinsurance on a national interest basis, as the Minister said might happen, will be flagged up clearly in the annual report so that there will be plenty of time to consider its implications?7.30 pm
Mr. Sainsbury : On the timing of the report, as the hon. Member for Gateshead, East (Ms. Quin) said, it will be as soon as practicable after 31 March. As I said in Committee, those words mean exactly what they say. After the first report, which obviously carries certain difficulties, it is our intention to meet that deadline or improve on it. If we did not do so, and if there were any unreasonable delay, because those words will be on the statute book, a Secretary of State could be got at for failing to discharge his statutory
responsibilities. That is the value of including those words in the statute.
Issues such as area-by-area coverage, which was mentioned by the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins), could certainly be included in the annual report and could even be expanded. He referred to national interest reinsurance. There are commercial and diplomatic reasons which I explained earlier for not listing the countries for which reinsurance is required, particularly as that could be damaging to the interests of exporters to those countries. We take it as a primary purpose of the report that nothing in it should do anything other than help, and certainly should not in any way hinder, British exporters. With that proviso, we shall seek to make the report as full as is reasonably possible.
Amendment agreed to.
Amendment made : No. 19, in page 5, line 3, leave out A return' and insert Reports and returns prepared".-- [Mr. Sainsbury.]
Clause 8
Scheme of transfer
Mr. Michael : I beg to move amendment No. 4, in page 5, line 28, at end insert--
(4A) A scheme under this section shall contain no provision which may force any person to cease to be employed in the service of the state.'.
Madam Deputy Speaker (Miss Betty Boothroyd) : With this it will be convenient to take the following amendments : No. 23, in page 5, line 35, at end insert--
(8) No civil servant will be transferred to the new organisation until such time as they have given their consent, in writing, for such a transfer to the Permanent Secretary.'.
No. 9, in clause 9, page 6, line 7, at end add--
(c) he shall be allowed, on his request, to re-enter the service of the state within two years of the commencement of his employment by a transferee.'.
No. 26, in clause 9, page 6, line 7, at end add--
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(4) No member of the executive, administrative and support staff shall transfer unless he or she has previously consented to do so in writing.'.Mr. Michael : These amendments raise issues concerning people who are now in public service and who are worthy of respect as civil servants. Despite what the Government appear to intend, they are not chattels to be despatched into the private sector with disdain and lack of consideration.
Amendment No. 4 addresses the fact that staff in the Insurance Services Group fear that so few of them will volunteer to join the privatised company that, to ensure its viability, management will try to compel them to transfer to it. One understanding of the Transfer of Undertakings (Protection of Employment) Regulations 1981 is that any employees occupying ISG posts at the time of the transfer to the purchaser must transfer to the privatised company. Even if the employment terms offered by the purchaser are, as the Government have promised, broadly comparable to current civil service terms, there are advantages to civil service employment that are unlikely to be replicated in the private sector. Not only is a fully index- linked pension scheme unlikely to be offered, but the security of employment in a large, nation-wide staffing pool cannot be available in a private company and that entails an increased potential for redundancy and a reduction in promotion and personal development prospects.
The amendment is intended to prevent any member of ECGD being compelled to join the new ISG insurance company or being made compulsorily redundant under the terms of the scheme established to convert it into a Government- owned company.
Amendment No. 23 addresses what many see as a disregard of the reasons for which people enter the civil service. Many of them chose to make a career in that sector and have given years of dedicated service to it. That should be respected. I am gravely disappointed by answers that I have received from Ministers at the Department of Trade and Industry, and particularly from the Minister responsible for the civil service, about protecting staff who wish to remain in public service. The amendment would ensure that proper consideration and respect is given to civil servants when they decide whether to join the new company.
Amendment No. 26 also emphasises the importance of choice. I should have hoped that all right hon. and hon. Members would
enthusiastically support that.
Amendment No. 9 would allow an employee to
"re-enter the service of the state within two years of the commencement of his employment by a transferee".
That change would make it possible for all staff currently in the ECGD who join the new ISG insurance company to return, if they wish, to the civil service at any time up to two years after they start work in the new company. It is not open-ended ; it is time-limited and it is reasonable. It would mean that staff who, perhaps for domestic reasons such as children at school or a spouse at work in Cardiff, have no choice but to join the new company would have the right, for a limited period, to rejoin the civil service. That might be when the children have left school or their spouse is able to find a new job elsewhere. The amendment would guarantee a return not specifically to the ECGD, but in general to public service. There has been disappointment at the failure of Ministers to respect and protect the position of civil
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servants, whose choice to remain in public service should be protected by the House. In recent years, the Government have sought to undermine public service and to discredit it publicly just as they have sought to discredit local government service. That is both sad and wrong. It is greatly to the credit of civil servants generally that so many of them continue to display such dedication and integrity in their work. It is greatly to the credit of the civil servants to whom I refer that the Insurance Services Group is so highly respected. Without exception, those who have made representations to us during the passage of the Bill have paid tribute to its efficiency and effectiveness. The tributes have come from employers in the private sector and those involved in our export industry. For that reason, I hope that the Minister will join the Opposition in protecting, and respecting, those who have chosen to make a career in the public service.Mr. Morgan : I support what my hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael) said about our attempts to beef up the protection of the staff affected by clauses 8 and 9 and to strengthen the rights given to employees under the scheme of transfer and the regulations in clause 9. My hon. Friend put his finger on the button when he said that there was something Orwellian about the Government's attitude to the public sector. It is a matter of "public bad, private good". They do not analyse the particular circumstances or consider the people involved because they have a straightforward ideological belief.
As Members of Parliament for Cardiff, we meet the real people involved. One cannot tell those civil servants who have been involved--perhaps on a life- time career basis--and dedicated to their work, some nonsense about the public sector being bad and the private sector good. It does not fit in with reality.
Our constituents who are ECGD staff generally fall into three broad categories. The junior staff have generalised skills in administrative, clerical, financial and personnel work and can transfer to other Departments without too much difficulty because there is not much difference between administrative or clerical work in the ECGD and in other Departments. There are other civil service Departments in Cardiff, Newport and elsewhere to which they can transfer--the Business Statistics Office, the Welsh Office, Companies House and the Inland Revenue. They employ thousands of people and junior staff may get jobs there when they are trawled under the civil service transfer procedures. We are anxious to enable people with such generalised skills to be given the time that they might need to make their choice.
The most senior category of people have highly specialised skills, but they nevertheless think of themselves primarily as civil servants. They may have joined the service at 16 or 18 years of age and may have gone through 10 promotions to reach the position of great responsibility that they now hold in the ECGD. They are probably 50 years of age or over and are beginning to think of themselves as life-time career civil servants. They might not find it very attractive to transfer, because within seven, eight or nine years they will draw their civil service pensions. Their functions are highly specialised and we should consider whether it is fair to push them into the private sector company when they have little time in their life-time careers to adjust to the idea of being employed by Trade Indemnity or Assicutazioni Generali. When they are
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asked at the golf club or down the pub, "What do you do for a living?", they have always said that they were civil servants. Suddenly, they would have to say that they worked for Assicutazioni Generali, and they do not want that. They are too old to be able to absorb such a change. They are used to the idea of being able to draw a civil service pension at 60 or, if they have worked for 40 years, a little sooner--as is common these days--and they do not want to transfer.What should we do for such people, because they are very important to the organisation? If they have been with ECGD for 20 years or more, they are probably in responsible positions and without them the business will be in difficulties. If they feel that they are being treated like chattels, as my hon. Friend the Member for Cardiff, South and Penarth said, the transfer scheme will be heading for big trouble.
The middle group of people are those who have worked for perhaps 10 years for ECGD and have what might be called executive
responsibilities. Their jobs are also fairly specialised and we have attempted to cover them by saying that they may be willing to give Assicutazioni Generali from Trieste a reasonable shot if it is the successful bidder. They may be willing to join the company, but it might not suit them and they might find that Triestino ways of working are not those of Cardiff or of Britain. If, after two years, they decide that it is no good, they may beg, "Can I please be given a chance at the Inland Revenue, Companies House or BSO or a transfer to London?" They may have come from London 11 or 12 years ago. What can we do for them? Apparently, the legislation will mean that they are forced to go and have no choice. If they do not like it, they are out and must accept redundancy. They will be treated like the GCHQ trade unionists and, if they hold out, they will receive redundancy, a bit of a premium and a goodbye. Is that the attitude that the Government want to communicate to civil servants who, the Government say, provide an A1 service to exporters through their commitment to the job and to advancing technology in the job?
We ask the Government to take seriously our attempts to strengthen the rights of employees, because that will help them to make the employees believe that the Government really care about them and that the Government realise that it is people-oriented business. It is all about computers and a lot of valuable people. If the people walk out of the job, the transfer scheme will not work and British exports will suffer.
7.45 pm
I look forward to hearing from the Minister, not the usual waffle about the amendment not achieving the objectives or the wording not achieving what the Opposition hope, but genuine respect for the people for whom we are legislating. If he does not show that respect, the Government do not deserve to have the Bill passed or to be able to effect a successful transfer to the privatised sector.
Mr. Sainsbury : I can say straightaway that we recognise and pay tribute--as I did on several occasions in Committee--to the skill, commitment and calibre of the work force of ECGD. I am sure that everyone will recognise that the calibre of the staff is one of the most--if not the most--important aspects of any business. In the world of financial services, which we are talking about,
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it is especially important and we have heard many tributes paid to the quality of ECGD staff. I hope that we shall be committed to providing a first-class service to British exporters after privatisation--or an even better service than is provided now. We must consider the amendments against the background not only of our commmitment to the staff and our respect for their calibre and what they have given to the business, but of the importance that we attach to their commitment to the success of the Insurance Services Group. We shall expect the buyer of the new company to show an immense commitment to the success of the ISG and, as a purchaser, he will expect a similar commitment from his staff. Against that background, the amendments would not be helpful.Amendments Nos. 4, 23 and 26 would limit the staff to be transferred to the new company to volunteers only. It is possible that the number of volunteers will not accord with the business requirements of that company. The ECGD privatisation is unlike some others in that only about half of the total organisation--measured by the number of staff--will be privatised. That gives much more scope than is normal for meeting the preferences of individual members of staff. My right hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) stated as long ago as 18 December 1989 that all ECGD staff would be asked to express a preference on whether to join the new company and that
"ECGD will use its best endeavours to meet their wishes where these are consistent with the business needs of ECGD and the company."--[ Official Report, 18 December 1989 ; Vol. 164, c. 23. ]
I hope that the Opposition will accept that that is perfectly reasonable.
They have spoken about the need to support British exporters and that is one aspect of that need. On Second Reading, my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh)--the Under-Secretary of State for Industry and Consumer Affairs--reiterated what my right hon. Friend said. The terms and conditions on offer to the staff will be one factor that the Government will take into account in assessing the bids. I should expect the terms and conditions on offer to staff transferring to the new company to be at least as good as those that they enjoy now.
It is not unreasonable to expect staff to transfer on a permanent basis, because it is only by doing so that they would demonstrate the commitment to the business that we would expect the purchaser of the Insurance Services Group to show. Anyone who considers the position will recognise that if staff were able to walk out of the business at any time in the first two years for whatever reason--or for almost no reason--an effective organisation could not be built up. It would make the business's position extremely uncertain and would damage the interests of exporters.
Amendment No. 9 suggests that everyone who transferred to the new company would do so on secondment. That would be an unsatisfactory position not only for the company and for exporters but for the Government. One would not know how many people--if any--would want to come back. One would hope that
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there would be none. Such a possibility would be uncertain and unsettling. If many people exercised that option, it would be difficult to find them employment.Both hon. Members for the various bits of Cardiff--the hon. Members for Cardiff, West (Mr. Morgan) and for Cardiff, South and Penarth (Mr. Michael) --implied that people would want to stay in Cardiff. However, there are not many jobs available at any one time in the civil service in Cardiff.
Mr. Morgan : To cope with what I anticipated would be the Minister's reaction, I split the staff into three categories. Much of what the Minister has said does not apply to one third of ECGD staff who have common skills which could be used in other branches of the public service. They include administrative, personnel, establishment and finance staff who are not specialists in insurance.
The second group of whom the Minister has failed to take note, although I tried to draw his attention to them, is the one quarter of staff at ECGD- ISG in Cardiff, half of whom are in executive and administrative positions, who joined ECGD in London. They were persuaded to move to Cardiff in the public interest on civil service terms. They might say, perfectly reasonably, "I accepted a move down to Cardiff in 1978 because I was persuaded that it was good for me, as a civil servant, to move in the public interest and on public service terms. If I am not going to work for the ECGD as a civil servant I would rather move back to London. I was never completely sold on the idea of coming to Cardiff, so given that it will not be a civil service ECGD, I may want to move back to London because that is where my mother, brother and sister live." Does not the Minister accept that it is perfectly reasonable for people to feel like that? They were willing to accept a move in the public interest, but they are not willing to accept the move if they are not civil servants.
Mr. Sainsbury : Having heard the hon. Members for Cardiff, West and for Cardiff, South and Penarth speak at some length on the merits of Cardiff, I am astonished to hear the hon. Member for Cardiff, West suggest that there could be even one person who would want to leave Cardiff for anywhere else. However, it is a possibility. Equally, staff might not wish to leave the town in which they work and I am sure that the hon. Gentleman will be familiar with that position. It can create considerable difficulties in finding alternative employment. The objective will be to avoid a position in which redundancy may occur. However, amendment No. 9 would make that more rather than less likely. We would not want to have to make people redundant because its provisions were included in the Bill. I appreciate the understandable concern that the hon. Members for Cardiff, West and for Cardiff, South and Penarth have shown for their constituents, but they must take into account the reasonable needs of the staff and the Government's assurance, which I repeat, that the terms and conditions on offer to staff will be one factor which we shall consider when assessing the bids because we are aware of the value and importance of the staff, and of their skills and the importance that is attached to them by exporters. In the light of that, I urge the hon. Member for Cardiff, South and Penarth not to press the amendments. They would not be in the overall interests of the staff, of exporters or of the continuing, privatised Insurance Services Group.
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Mr. Michael : I assure the Minister that on occasion, family reasons may lead people to leave even the delights of Cardiff. That is a rare occurrence and is not to the detriment of our fair city. My hon. Friend the Member for Cardiff, West (Mr. Morgan) and I represent some parts of Cardiff, but two Cardiff constituencies are represented by Conservative Members. We sincerely hope that that will be the case for only a short time longer. I point out to the House the failure of those hon. Members to be present for this debate. Clearly, they are not here to support the Minister, but neither are they here to support the interests of their constituents, as we seek to do. As both of them are in the House at present, it is sad that they are not in the Chamber to participate in or at least to listen to our debate. I express some surprise at that.The Minister quoted the words of the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley) with surprising approval. It is clear from the right hon. Gentleman's words that people's wishes come second to the interests of the business. That may be the way in which the Minister seeks to run the public service, but I do not think that it is right. I believe that one has to take people with one in attempting to build a good service.
The Minister referred to the importance of the calibre of staff. I am glad to know that the Minister has heard as many tributes as we have heard to the calibre of the staff now working for ISG. The Minister has confessed that he wants them to transfer even if it is against their will. That would take away choice. It is clear from the Minister's response that the Government are against choice. The motivation of staff is important, as is their ability. Clearly, the Government do not have the confidence in their own proposals to depend on persuasion to take people into the privatised company which they wish to create. What happened to the free market? It is not free for individuals who have given their lives to the public service ; it is not free for employees.
I referred earlier to a question that I put to the Minister of State, Privy Council Office. I asked him whether he would make training opportunities and career development opportunities available to people within the Insurance Services Group so that they could, if they wished, fit themselves for jobs in the public sector and thus stay within the civil service. I did not receive a positive answer. We have had today a far from positive answer to the interests and concerns of people within the civil service whose careers and prospects may be damaged by this measure, which should carry a Government health warning.
At this stage, we will ask leave to withdraw the amendment. I am certain that our proposals will be discussed further in another place and I am also certain that civil servants, not only within ISG but generally, will have heard the Minister's sad message in this short debate. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mr. Cousins : I beg to move amendment No. 5, inpage 5, line 28, at end insert--
(4A) A scheme under this section shall make provision for the functions so transferred to be made available through services in each standard planning region of the United Kingdom.'.
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Madam Deputy Speaker : With this it will be convenient to take amendment No. 27, in clause 10, page 6, line 39, at end insert-- (c) transfer any shares held on behalf of the Crown in any vehicle company unless he has made provision for that vehicle company or its subsidiaries to continue to operate through a regional network which assures an office in each standard planning region of the United Kingdom.'.Mr. Cousins : The amendments are an attempt to secure within the privatised part of ECGD, which is the main subject of the Bill, a strong and continuing commitment to a regional organisation. When the need to retain a regional organisation in the project group was discussed in Committee, the Minister spoke about the continuation of regional offices in the part of ECGD that is to be privatised. He said :
"After privatisation the regional offices will be the responsibility of the new owner of the insurance services group. They will be committed to providing a first-class service to the customers. I suspect that their judgment will be, as it has been, that the regional office network is an important part of providing that first-class service. We cannot, however, commit them by writing it into the Bill, as they will not be part of the ECGD, what regional offices they will have. I am convinced that they will wish to keep a close contact with their customers, because that is a good way to do business."--[ Official Report, Standing Committee H,
7 February 1991 ; c. 96.]
The Minister emphasised the importance of retaining regional offices for the short-term work of the ECGD. The purpose of the amendments is to ensure that the network of regional offices remains after privatisation.
8 pm
The present network of regional offices, of which there are nine, does not extend to each of the standard planning regions of Britain, but the amendments would ensure that there was a regional office in each standard planning region, alongside the regional offices of the Department of Trade and Industry.
It is obvious from the annual reports of the ECGD and from elsewhere that answering the flood of inquiries is an important part of the work of regional offices. The Minister referred to the importance of people being able to seek advice and information from regional offices. The hon. Member for Surrey, North-West (Mr. Grylls), who has considerable knowledge of small and medium-sized business, mentioned the importance of a one-stop shop where advice on export credit insurance could be given. The purpose of the amendments is to ensure that the network of face-to-face contacts in regional offices continues.
Regional offices deal with many inquiries, most of which relate to the short-term work of the ECGD, the part which will be privatised. That emphasises the importance of the amendments. About 250,000 inquiries are dealt with by those nine regional offices, which are important because they offer advice on export credit to small and medium enterprises that may be exporting for the first time. The Government increased the grant of the Northern Development Company by almost 30 per cent. this year. That company made it perfectly clear to me that when it sets up a trade mission or receives an inquiry from a small company it is essential that it can immediately refer that business to an easily accessible regional office where face-to-face advice can be offered. That is particularly important in regions of Britain where, for historical reasons, small and medium-sized enterprise is not playing
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the part in the economy of those regions that it should. The growth of those small and medium-sized enterprises does not depend solely on the passing of the amendments, but were they passed it would be an important assurance to those enterprises that a one-stop shop in their region will be able to deal with their inquiries and that they will be able to continue to rely on somebody being at the end of a telephone or in an office to deal with their complicated problems. In Committee, the Minister said that he expected those arrangements to continue. Surely it is not too much to ask him to accept the amendments and ensure, rather than expect, that that network of regional offices survives.Ms. Quin : Before the Minister replies, I should like to say a few words in support of the amendments.
Earlier, we spoke of sending signals to exporters, but we must consider the importance of sending signals to the regions on the privatisation of ISG. In Committee, we tabled an amendment to ensure that the regional network of offices continues. The Minister said that that was not necessary because the project business of the ECGD is best located in London and that exporters had become used to that system. We said that we were asking not for a huge organisation to be set up in the regions but for the contact point that my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) suggested. The amendments refer to the Insurance Services Group, which shortly will be privatised. We are concerned about the likely service to the regions. We should be interested to hear whether the Minister intends to ensure that the services of the privatised ISG are properly available in all parts of the United Kingdom.
The principle of regionalisation and regional access to services figures highly in the Labour party's policy review document. The regionalisation of the services of the Department of Trade and Industry, including the ECGD, and the availability of regional services, even if they are in the private sector, are important to our chances of economic success. Perhaps it is no coincidence that the Opposition Members who considered the Bill in Committee represent constituencies outside the south-east and therefore understand the importance of regionalised services.
Mr. Sainsbury : Labour does not have many Members of Parliament in the south-east.
Ms. Quin : That is true, but we have an even spread throughout the rest of the United Kingdom, with representation from Scotland, Wales and the north, and we were all concerned to ensure a balanced regional structure.
Despite the good efforts of the ISG, the present balance of regional offices is not satisfactory. We pointed out in Committee that there are not offices in every standard planning region, which is why the amendments, and the amendment that we moved in Committee, specifically refer to the standard planning regions. We are worried that the spread of offices could be worse after privatisation, which is why we believe that this point is so important.
I am sure that the Minister is aware that export activity is not evenly spread throughout the United Kingdom. I am sure that he has seen the recent survey of exporters carried out by Barclays bank--it appears in its second quarterly survey--which shows a variety of export activity from one region to another. In particular, some of the older
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industrial regions, which are dear to the hearts of many of us on this side who served in Committee, do not have as much export activity as other regions. In the survey the export ratio of the old, industrial, English regions of the north, the north-west, Yorkshire, Humberside and the east and west midlands was below average. I wonder whether the Minister has examined those figures closely and drawn any appropriate lessons from them.The figures are important as they show that priority needs to be given to Government efforts, including those of the ECGD and, I hope, the privatised Insurance Services Group, to improve the export services to firms in the regions. That will encourage to export firms that may previously not have thought of exporting. I am sure that the Minister will appreciate that, even if only 10 per cent. of the firms that do not export decided to do so, it could make a dramatic difference to our trade balance. We want to ensure that all measures are taken, including measures for the regionalisation of the ECGD and the privatised ISG, to enable would-be exporters fully to take advantage of the export opportunities which may be open to them. For all those reasons, I strongly support the points made by my hon. Friend.
Mr. Sainsbury : I fear that the amendment reflects both a continuing misunderstanding of, or perhaps a reluctance to consider, how private industry operates and the long-established, always recurring phenomenon of Labour party interference with, intervention in, and excessive regulation of the private sector. In this case, the amendment would lay down where a particular company should have its operations.
The Labour party ignores how the private sector works. It assumes that a private company has no regard for the interests of its customers and that in a mysterious way it can make profits without either having or attracting customers. I assure the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins), as I had to in Committee, that that is not how private industry works. It succeeds by satisfying its customers and giving them what they want. It seeks to do so continually and is in general a great deal more successful, more flexible, and faster to change and respond to customer needs than nationalised industries. That is one of the many reasons why privatisation has been so successful.
The way in which the amendments have been proposed reflects a failure to appreciate the relationship between an exporter and a regional office of the ECGD. We should not object to--indeed, we should welcome--any exporter who called at a regional office, but regional offices are more a base from which ECGD members of staff visit exporters than the other way round. The large number of inquiries to which the hon. Gentleman referred are largely by telephone or, these days, by fax. It is not as if many people are queuing at the door wanting to make export inquiries when the office opens in the morning. That is not what happens.
We share at least one objective--the wish to help and encourage investors-- but there are many better ways to do so than by trying to regulate in statute where and how many regional offices the privatised insurance services business should have. As I said in Committee, I am confident that the new owners of the ISG will wish to keep a network that reflects both its needs and those of its
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customers, and developments in business communications. I hope that hon. Members will at least recognise the speed at which business communications have changed and are likely to continue to change. It would be unreasonable and unhelpful to impose on a private company--which, incidentally, is in competition with other private companies--a statutory requirement about where it should have its regional offices, and how many there should be. The regional offices and their staff will be among the assets transferred on the privatisation of insurance services. The present locations are of long standing. They were chosen to provide a balance between the needs of insurance services customers for local service and contact, and the costs of running a widespread regional network, which would have to be funded by the premiums paid by exporters.8.15 pm
The regional office network has never been entirely consistent with the United Kingdom standard planning regions and there is no particular reason why it should be so. The factors determining the locations are not regional in the sense of standard planning regions, but relate to the needs of customers and the balance between the costs of the network, the methods of contacting customers, the modern communications used and what assessment is made by the new owners of the base from which they wish to send out their representatives to contact customers.
I urge the House to reject the amendments which, once more, show a failure to understand private business. They would unnecessarily interfere with and intervene in such business, certainly not to the advantage of its customers.
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