"I am writing to confirm to you my decision to retire on 31 July 1995 shortly after my 65th birthday. Following 37 years in the Diplomatic Service, I have been uniquely privileged to spend a further 6 years in the service of the House of Commons. It has been a period of far-reaching change, as the House has taken control of its own administration and finance and also embarked on the rapid expansion of the accommodation available for Members and their staff. I owe a very great debt of gratitude to all who work in the Serjeant at Arms' Department, including the Parliamentary Works Directorate, without whom none of the achievements of these years would have been possible. I would also wish to pay special tribute to the Metropolitan Police, on whom we rely so heavily for the safety of these buildings and of all those who work here.
Finally I wish to record my deep appreciation of the kindness and consideration shown to me by all Members of the House which have made my tour of duty such a happy and rewarding one."
There will be an occasion later to pay formal tributes. Meanwhile, consultations on the recommendation for a successor to Sir Alan Urwick are taking place through the House of Commons Commission.
Mrs. Gwyneth Dunwoody (Crewe and Nantwich): On a point of order, Madam Speaker. Has there been any request from the Secretary of State for Transport to come to the House this afternoon to make a statement about the Transport Research Laboratory? A written question is being put into the Library of the House at this moment, the contents of which are not known to me, but it concerns a highly important and quite unique research facility which has contributed over many years to the protection of many of our citizens, and if it is to be privatised or abandoned without the House getting the chance to debate it, it will be a crying and unacceptable shame.
Madam Speaker: As the hon. Lady is aware, provided that an announcement is made to the House, it is for the Minister concerned to determine the method of that announcement, and I have not been informed by any Minister that the Government are seeking to make a statement on the matter raised by the hon. Lady.
Mr. Andrew Rowe (Mid-Kent): On a point of order, Madam Speaker. During Question Time, the hon. Member for Worsley (Mr. Lewis) accused my hon. Friend the Member for Bolton, West (Mr. Sackville) of sitting on his fat backside. Given the implication that there is something superior about having a thin backside, is that not so politically incorrect as to constitute unparliamentary language?
Madam Speaker: The entire House knows what I feel about the custom of our exchanges. I have cautioned Members on this from time to time, but I get weary of repeating my views. All hon. Members know that good language is the essence of our exchanges here.
Mrs. Helen Jackson (Sheffield, Hillsborough): On a point of order, Madam Speaker. Could you advise me whether the Secretary of State for the Environment has requested to make a statement to the House about the astonishing cuts in the environmental protection budget published yesterday --£16 million next year and then £32 million? In view of the constant statements to the House and our Select Committee about increasing concern for air pollution and the environment, it would be proper for him to explain that matter to the House.
Madam Speaker: That is not a point of order but a question about next week's business, which the hon. Lady might put to the Leader of the House. In case any other hon. Members wish to ask me whether a Minister will give a statement today, let me tell them that the answer is no. If a statement were to be made, it would be shown on the Annunciator.
Mr. Quentin Davies (Stamford and Spalding): On a point of order, Madam Speaker. Do not the workings of the House and its reputation outside depend to a large measure on the assumption of personal trustworthiness and honour between hon. Members? Were not those principles seriously threatened yesterday when one hon. Member appeared to have purloined papers belonging to another and read extracts from them to the House? Will you launch an investigation into the matter or assure us
Column 695that it will not happen again? If not, none of us will ever be able to assume the security of our papers, briefcases or offices in future.
Madam Speaker: I am not aware of the case to which the hon. Gentleman refers. If such a case occurs, it is as well to come directly to my office rather than wait a day and raise it on the Floor of the House. My office is always open; I live here, work 16 hours a day and am always willing to see hon. Members about any issue as serious as that.
Mr. Paddy Tipping (Sherwood): On a point of order, Madam Speaker. I understand that the Secretary of State for Education would like to make a statement on nursery education expansion, but I am told that the Prime Minister wants a different statement--
Mr. David Shaw (Dover): On a point of order, Madam Speaker. Column 583 of yesterday's Hansard shows that an hon. Member admitted to handling the stolen property of a Minister of the Crown. It is an incredible state of affairs in which an hon. Member stole papers from a civil servant, admitted that he did so and then used the papers in a debate.
Madam Speaker: I have no knowledge of the case that the hon. Gentleman raises with me. The copy of Hansard has just been passed to me. I shall look immediately at the matter as soon as I leave the Chair.
Mr. Mike Hall (Warrington, South): On a point of order, Madam Speaker. You will be aware that, yesterday, the chief executive of the Student Loans Company was sacked because of financial irregularities in that company which have caused students great hardship. That is in direct contravention to evidence given to the Public Accounts Committee two years ago and I feel that the House has been misled. May we have that matter brought to the Floor of the House?
Madam Speaker: This is a matter for the Leader of the House and the Opposition through the usual channels. I am sure that hon. Members who came in at the last election are well aware of how the usual channels in the House operate. I advise the hon. Gentleman to raise the matter with the shadow Leader in the first place so that arrangements might be made with the Government for such business to take place.
Column 696Mr. George Foulkes (Carrick, Cumnock and Doon Valley): On a point of order, Madam Speaker. You may recall that, some time ago, I asked you whether oral statements could be made following important meetings overseas so that Ministers would be directly accountable to the House. Last week, the world summit on social development was held in Copenhagen and a statement has been made by means of written answer No. 122 to the hon. Member for Vale of Glamorgan (Mr. Sweeney). It is a matter of great importance to this country and the third world. Will you take the opportunity to talk to Ministers to get those statements made orally to the House instead of being hidden away in written answers?
Madam Speaker: I dislike repeating myself and taking up the time of the House, but I shall do so and inform the hon. Gentleman and the House that, provided that an announcement is made to the House, it is up to the Minister making that announcement to determine whether it is done by written answer or oral statement. I have no authority in such matters.
Mr. Nicholas Winterton (Macclesfield): On a point of order, Madam Speaker. I am not sure whether this matter has been drawn to your attention, but this morning there appeared to be some rather loud activity on the Thames, in close proximity to the Terrace wall. I have the honour and privilege to be chairing the Standing Committee that is considering the Finance Bill, and the proceedings of our Committee were inconvenienced. Indeed, Members raised points of order with me to say that they could not hear what was going on because of the activity of speedboats and, apparently, water-skiers, in close proximity to the Terrace wall. Not only because of the inconvenience to the Committee's sitting but because of the security of this place, I wonder whether you had been told about it, and if not whether you will investigate it.
Madam Speaker: I shall certainly investigate it. The hon. Gentleman knows where Speaker's House is. I had all the windows open on this beautiful morning, and I thought that it was a wonderful sight to see those speedboats on the Thames; in fact, I was rather envious. I thought that I should have been in one of them--but not on the skis. However, if the hon. Gentleman feels that it was damaging to the fabric of this building, I will examine the suggestion that they may have been too close to the wall.
That leave be given to bring in a Bill to provide for the publication to local planning authorities by the Civil Aviation Authority of the receipt of applications for the grant, revocation, suspension or variation of air transport licences and of any decision made by the Civil Aviation Authority in relation thereto. My interest in the area arises indirectly from events in my constituency that led to a public inquiry into the proposals by British Aerospace plc to turn an airstrip into a full commercial airport, but I am not here today to debate those particular matters, which await a decision jointly by the Secretaries of State for Transport and for the Environment.
In preparing the evidence that I gave to the public inquiry, it transpired that the company concerned had perfectly legally and properly been applying to the CAA for various licences to operate an airport since 11 October 1988, but the first opportunity that any member of the public had to learn of those proposals was not until 5 February 1993, when the company announced that it had obtained various licences. My objection to the procedure is not that the company was doing what it considered proper for its own business but that the whole procedure of discussion and documentation of activities, which might conceivably have a great bearing on the lives and environment of my constituents, was going on in entire secrecy. It transpired, when I investigated the matter, that the only requirement on the CAA--it is, of course, an agency set up by Government-- in connection with the publication of any grant revocation, suspension or variation of an air transport licence, is to publish the granting of the licence in a number of highly obscure publications, which are, by and large, received only by airlines and others who are directly connected with the operation of civil aviation. I do not believe that that is sufficient and my Bill therefore proposes one modest additional requirement on the CAA, on any occasion when a licence is granted, revoked, suspended or, indeed, applied for--that it should notify the local planning
Column 698authority of the area in which the airfield or site of the proposed activity is situated, so that the local planning authority can decide what, if anything, it needs to do to publicise the application that it has received or granted.
Such a measure would not involve any public sector cost, but would involve notifying earlier the people who would be intimately affected by any proposed airport operations, to consider what effect those operations would have on their lives, their environment and their property, and if necessary to make representations to the CAA on that matter.
At the moment there is no such requirement to publish and, in allowing such a situation to continue, the Government are not fulfilling the requirement that they have set out on many occasions that our society should become more open. My constituents should be able to comment on any decisions taken behind closed doors in the privacy of the Civil Aviation Authority which affect or can affect their lives.
This modest measure will create more openness in the work of the Civil Aviation Authority without any detriment to its operations because it will be up to the local planning authority to decide how much publicity to give to the information that it receives. The measure would be a modest step towards replacing the secrecy or opacity of the Civil Aviation Authority with rather more public scrutiny of the important operations that it conducts on behalf of the Government. I commend the Bill to the House.
Question put and agreed to.
Bill ordered to be brought in by Mr. Michael Stern, Sir Geoffrey Pattie, Mr. David Mellor, Mr. Nicholas Winterton, Mr. Phil Gallie, Mr. David Wilshire, Mr. Stephen Day and Mr. Nirj Joseph Deva.
Mr. Michael Stern accordingly presented a Bill to provide for the publication to local planning authorities by the Civil Aviation Authority of the receipt of applications for the grant, revocation, suspension or variation of air transport licences and of any decision made by the Civil Aviation Authority in relation thereto: And the same was read the First time; and ordered to be read a Second time upon Friday 14 July, and to be printed. [Bill 80.]
Order for Second Reading read.
The Bill will enable the privatisation of the commercial activities of the Atomic Energy Authority known as AEA Technology. It is designed to permit the sale of AEA Technology, but it is not designed to lead to nuclear privatisation. AEA Technology is not a nuclear operator. The Bill will not take any nuclear facilities into the private sector. It will allow AEA Technology to realise its full potential and it will enhance overall United Kingdom competitiveness. It will provide staff with new opportunities and new horizons. It may help the House if I explain something of the background. AEA Technology is an operating division of the United Kingdom Atomic Energy Authority. The authority started life in the 1950s as a nuclear research and development organisation. In those days, the authority was the UK nuclear industry. It designed and operated the first nuclear power stations in the country. It manufactured and reprocessed fuel. It undertook a wide range of nuclear activities. But it was primarily a research organisation. As the nuclear programme developed, it became the practice to transfer out functions which could be run commercially.
For example, fuel manufacture was transferred out to the company which subsequently became British Nuclear Fuels plc. Radioisotope production was transferred out to what is now Amersham International. Amersham has been successfully privatised. Both it and BNFL have become successful companies in their own right.
In the 1960s, it became clear that nuclear research was producing ideas and technologies which could be applied in non-nuclear fields.
Mr. Andrew Miller (Ellesmere Port and Neston): Before the Minister moves away from the history of some of the changes, will he outline the structural differences between companies such as Amersham International, particularly in the context of employee rights that exist post- privatisation?
Mr. Eggar: I shall address some of those issues, particularly pensions, which I think that the hon. Gentleman had in mind. I understand that the overwhelming majority of Amersham International employees have now voluntarily left the state pension scheme and have opted into the company pension scheme. I shall return to that issue and if the hon. Gentleman wishes to intervene again, I shall gladly extend the debate.
In 1965, the authority was authorised to begin work on non-nuclear research and development. From the outset, non-nuclear work was done on a commercial basis. The importance of that work has grown steadily since then.
In the past decade or so, nuclear technology has become a mature technology. New power stations world wide are being ordered at a slower rate, if at all; the pace of work on new reactor designs has slowed. Demand for the authority's traditional nuclear research and development services has declined with the decline in the overall
Column 700activity of the nuclear generating side. The authority has therefore had to place ever-increasing emphasis on the growing non-nuclear business.
In 1986, an important change occurred. The Atomic Energy Authority Act 1986 put the organisation on to a trading fund basis. From then on it was no longer Vote-funded, but was expected to secure all its income from contracts with customers. Since then the focus has been on how to assure the authority's commercial performance. The Bill now builds on the progress that was made as a result of those changes. The authority is now smaller than it was in the 1960s, but it remains a substantial organisation, employing more than 7,000 staff at six main UK sites. The largest is at Harwell in Oxfordshire: it has more than 2,300 authority staff. Harwell concentrates mainly on research and development. Culham is nearby in the same county; that site was originally developed for the UK fusion programme, and is host to the joint European Torus project. Fusion still accounts for the work of a significant proportion of the existing work force, but the site is now much more diversified. Last April it became the headquarters of the National Environmental Technology Centre, one of the world's leading centres of environmental expertise. About 900 authority staff work on the Culham site.
Risley is near Warrington. It consists mainly of office and laboratory buildings, and has no nuclear facilities. About 1,000 staff work there. Dounreay, near Thurso in Caithness, was the site for the development of experimental fast reactors. The main task there now is the decommissioning of the site's closed reactors. Dounreay has about 1,000 authority staff. Winfrith in Dorset was the site for several prototype reactors, most of which have now been shut down. About 900 staff work there. Windscale is an enclave within the BNFL site at Sellafield, and has about 400 staff.
Let me say a little more about why we are introducing the Bill. In recent years, a great deal of thought has been given to the question of the authority's future. In 1992, the Monopolies and Mergers Commission reviewed the services that it provided; it concluded that the authority's business activities rested uneasily in the public sector, and should be removed from it as far as practicable.
Mr. Llew Smith (Blaenau Gwent): On a rough count, the word "liability" is used 75 times in the Bill. The biggest Atomic Energy Authority liability relates to nuclear waste and radioactive contamination. Do the Government think it fair to sell off the profitable parts of the authority, on the basis of its high-tech engineering and environmental expertise, while leaving the taxpayer with the bill for cleaning up the nuclear waste left behind?
Mr. Eggar: Liability for the treatment of nuclear waste rests, of course, with the Government. The Bill makes no difference to that. Liability rests with Government division of AEA Technology, as I am sure the hon. Gentleman knows. It is the view and the experience of Government Division that an increasing arms length relationship with the various companies--including AEA Technology--that have the necessary expertise to deal with liabilities is the best way forward.
The latest estimate is that, in, I think, the next three years, the move towards an increasing arms length contractual relationship with companies that undertake decommissioning work will lead to a significant saving of
Column 701public money of about £50 million. Liabilities rest with the Government, but they must do everything possible to ensure that those liabilities are managed not only safely, in accordance with the necessary conditions that are laid down, but cost effectively, from the point of view of doing the utmost to safeguard taxpayers' money. In 1993, we asked Barclays de Zoete Wedd to consider the scope for privatisation. It advised us that the great majority of AEA's irradiated facilities should remain publicly owned--they should remain in what is now AEA Government division. But it also said that certain commercial activities were capable of being and should be privatised.
In September 1993, the authority's management announced a structural reorganisation, which reflected the themes emerging from the review work. Three separate divisions would result. UKAEA Government division would be responsible for managing UKAEA's sites and its nuclear liabilities. Commercial division, now known as AEA Technology, would take over the authority's commercial activities. The new services division would cover facilities management services.
The authority saw the creation of the services division as a temporary phase. Facilities services did not represent a core part of its business. It believed that those services could be offered more cheaply and efficiently by outside contractors. Agreement has been reached in principle for the sale of facilities services division. The intended buyer--Procord Ltd.--is a leading facilities management company. Its core business is facilities management. Its purchase of FSD will improve quality of service for FSD's customers. It will also create new career opportunities for current employees because they will be part of a much larger organisation that--this is important for their future--is committed to growing the facilities service operation. It is a good deal for all concerned, not least the taxpayer.
In my reply on 17 February 1994 to my hon. Friend the Member for Wantage (Mr. Jackson), I said that ownership of and responsibility for the safe management of AEA's nuclear liabilities, as well as certain other functions more appropriate to Government, would remain in the public sector. I can now confirm that those liabilities and other functions will remain with UKAEA Government division, which will remain in the public sector.
Government division's mission is to manage down the cost of the nuclear liabilities, consistent always with the health, safety and environmental requirements that are laid down. I want to underline and emphasise the importance of safety. Safety is and will remain the highest priority both for the Government and for all those involved in the nuclear industry.
The nuclear site licences at AEA sites will continue to be held by UKAEA Government division. It will, therefore, retain ultimate responsibility for safety at all UKAEA sites. Where AEA Technology operates from those sites, it will have to comply with UKAEA safety requirements. Privatisation will not compromise safety in any way. Government division's focus on liabilities management has already achieved significant savings. Further savings will flow from increased competition and the injection of private sector expertise.
Column 702Government division announced yesterday that it has decided to appoint a site managing agent at Dounreay. That managing agency will consist of a management team seconded to Government division. Government division will retain ownership and overall control of the site. Government division will continue to be the site licence holder and will continue, therefore, to have full responsibility for safety.
Dounreay staff currently in Government division will continue to be UKAEA employees. They will not--I repeat not--become the employees of the managing agent. That arrangement will provide additional project management and commercial expertise. It will ensure that decommissioning and environmental restoration work at Dounreay is carried out effectively. It will also help in future development of the site, including the exploitation of non-nuclear opportunities.
Mr. Robert Maclennan (Caithness and Sutherland): This arrangement transfers practical managerial responsibility from managers who have been part of Government division to a firm or group of individuals who are apparently to be employed as a result of outside tendering. Does not that make somewhat fictional this concept of the responsibility for safety remaining with Government division?
Mr. Eggar: I understand the hon. Gentleman's concern and the importance of Dounreay to the economy in Thurso and all the far north of Scotland. Obviously, Government division has considered the matter carefully. It will not compromise safety in any way. The division recognises that the nuclear site licence rests with it and that ultimate responsibility for the site and for safety matters must continue to lie with the director of the site, as it does at present. The hon. Gentleman recognises that there is, at present, a need to look at Dounreay's role and, in particular, at the opportunities for other work that might come in as a result of the well-known and understandable rundown--although it is a gradual rundown--in the level of activity there.
Government division has come to the view that it does not currently have the expertise necessary to act as managing agent and, therefore, to look at diversification opportunities. It feels that the best way to obtain that expertise is to appoint a managing agent that will bring with it the necessary mix of skills, but remembering always that the managing agent answers to Government division and the director.
Mr. Maclennan rose --
Mr. Eggar: I will give way to the hon. Gentleman if he wishes, but I am sure that he will make a contribution later in the debate. I am sure that my hon. Friend the Parliamentary Under-Secretary for Industry and Energy will be able to take up his point.
It is important to have the Minister's answer on this point. My question related to the responsibility for safety. The Minister said that that lies with Government division and the director of the site. It appears that that responsibility is effectively being transferred to managers who are being brought in as part of a site management agency team and that the practical work involving safety
Column 703and the environment, which is crucial to the success of the establishment, is passing away from those who have experience of managing the site safely and in an environmentally non- hazardous way. It is true that, ultimately, the Minister is responsible for safety at the site and I would have thought that he would be unhappy to see such sensitive matters pass from those engaged in the nuclear industry to those whose objectives, even from his own description, are apparently quite different.
Mr. Eggar: This is a sensitive matter to which my hon. Friend the Under-Secretary of State for Industry and Energy and I have given considerable thought. Clearly, safety is paramount. It cannot be compromised in any way. If Government division were proposing an outside contractor coming in to take over all management responsibility for the site and, therefore, inevitably taking on the safety role, I would understand the hon. Gentleman's concerns and, frankly, I would express them. I am quite satisfied, however, that it will be possible to enable the managing agent to manage the site and bring his company's particular expertise to what is needed to be done, while ensuring that safety standards are maintained. I can tell the hon. Gentleman that if the Government come to the conclusion that that is not happening, we will revert immediately to the holder of the nuclear site licence--Government Division--and satisfy ourselves that the necessary safeguards are in place.
We have looked at the matter in considerable detail because, whatever our political views, we cannot afford to compromise the very high safety standards which have been a feature of the AEA. I would not do anything that in any way imperilled those standards. The system works and I ask the hon. Gentleman to consider it carefully and explore the implications in full detail. I hope that over the coming months before the managing agents are appointed--I understand that it is likely to be around October--he will have found that his concerns have been met.
Let me now turn to describe AEA Technology. AEA Technology is the trading name, as I have said, for the authority's commercial activities. It is an international science and engineering services business, it employs some 4,000 people and has a turnover of £250 million. AEA Technology is represented on all six of the authority's sites, but the largest concentration of staff is at Harwell. Some 1, 700 of the total 2,300 employees there work for AEA technology, but, as hon. Members will know, considerable numbers of staff also work at Risley, Culham and Winfrith.
AEA Technology serves a wide range of markets in, for example, manufacturing, transport, oil and gas, defence energy supply, chemicals and health care. It operates in four closely related areas: plant and process performance optimisation, product improvement, safety and risk management and environmental and waste management. Its business, in short, is identifying problems and finding solutions based on the know-how that has been built up over the past 40 years, during which it has been involved in leading-edge science and engineering.
Some 40 per cent. of AEA Technology's business now comes from Government and a further 18 per cent. from the UK public sector. In volume terms, however, the UK domestic Government markets are of diminishing importance.
Mr. Ian Bruce (South Dorset): Does my right hon. Friend intend to say anything about the nuclear review? Many of my constituents are worried that the whole privatisation is a sell-off of the liabilities of the nuclear industry and that the Government may believe that there are no future nuclear requirements. I and many of my hon. Friends believe that there is a great future for the nuclear industry. We would like to hear from the Government that the nuclear review will be published and that the results will be available to us before any sell-off. I hope that Labour Members will tell us what the Labour party will do to assure the future of the nuclear industry.
Mr. Eggar: I recognise the concern about the issue felt by my hon. Friend and by his constituents. He raises a number of different strands and I shall address them in turn. His first point relates to liabilities. AEA's liabilities have been calculated to be in the range of £8 billion, on a discounted basis, in a range from £6 billion to £12 billion depending on a number of assumptions. Those liabilities remain with the Government division and, therefore, with the Government.
The question that a number of people are getting at is how the nuclear review, when it is completed, is likely to affect the demand for the nuclear services that AEA Technology can provide. An assumption seems to have developed that if the nuclear review decided that new nuclear stations should be built, that would automatically be good news for AEA Technology. The reality is that almost whatever the decisions of the nuclear review, considerable work is likely to be available to AEA Technology, if it competes effectively for it. AEA Technology has more expertise than any other entity in the world in the older nuclear stations because the Magnox stations were the first commercial stations in the world. Naturally, the issue of decommissioning and the issues raised towards the end of a station's life have been faced first by the United Kingdom. AEA Technology has undoubtedly developed considerable expertise in those matters. Regardless of whether the nuclear review comes up with a decision to build new nuclear stations or not, there will be a continuing work load. Any decisions taken on the future of the Magnox stations may have a bearing on the work load, although issues relating to the life of the Magnox stations will, of course, be essentially a matter for the nuclear installations inspectorate rather than for the nuclear review.
All that is a rather long way in which to say to my hon. Friend the Member for South Dorset (Mr. Bruce) that at the moment, I cannot tell him when the nuclear review will be published--
Mr. Eggar: The hon. Gentleman says that it will be published in the fullness of time. I am much blunter than that. I have made a number of predictions previously on the timing of issues related to the nuclear review and I have never yet been right. This time, I shall not give any idea of the timing of the publication of the nuclear review because that would be tempting fate and my fate is already too near for me to risk any further estimates.
The concern of my hon. Friend the Member for South Dorset is noted. It will take some time for the Bill to go through the House. It is only an enabling measure for
Column 705privatisation. It is unlikely--I go no further than that--that full privatisation will take place before we have had some idea of the outcome of the nuclear review.
Mr. Miller: Before the Minister leaves that issue, does he not think that, given the quite proper overlap between some of the work undertaken by AEA and by Berkeley technology centre, which I know that he has visited, it would be better to hold back the Bill until after the nuclear review, so that we can properly determine, in a rational debate covering the whole spectrum, which issues should fall into which camp?
Mr. Eggar: The short answer is no, it would not. But since the House seems to want long answers, I shall expand somewhat on that. Clearly, if we were talking about a direct relationship between the management of AEA's nuclear liabilities and the nuclear review--which we are not--there would be a case for linkage. But of course the Bill has nothing to do with the liabilities; they are clearly put on one side. The Bill is about AEA's commercial activities, and we must remember that roughly 50 per cent. of all AEAT's present activities are not nuclear related. Everybody agrees that the future of AEA rests with a determination to expand and to compete effectively in the non-nuclear aspects of its activities.
That is nothing new. I pay tribute to the 1965 Labour Government--
Mr. Eggar: I am talking about 1965. The Labour Government recognised at that stage that there had to be some diversification away from the core nuclear business into non-nuclear business. That has been a continuing trend, and no serious commentator who knows and is involved with AEAT fails to recognise that its future lies in developing the extraordinary expertise that it has accumulated over the past 40 years and reorienting that to more commercial activities.
One of the more interesting aspects of my connection with AEA over the past two or three years has been the extent to which other United Kingdom companies have not recognised the full extent of its expertise, and the way in which those that have worked with AEAT have been excited by the level of that expertise and the opportunities that have arisen as a result of joint ventures of one kind or another. That is not merely a domestic United Kingdom view; several interesting joint ventures have taken place between Japanese companies and AEAT, and the company has a good reputation throughout the world in the nuclear sphere, too.
That is where the emphasis should lie. However neat and tidy it may seem, it would not be in the interests of AEAT, nor even relevant to the nuclear review, to delay the Bill and wait for the results of that review.
As I said, AEA's growth markets are the United Kingdom private sector and the overseas market, also largely private sector. The United Kingdom private sector already accounts for 18 per cent. of its turnover and overseas markets for 23 per cent. Both those markets are expected to grow this year by no less than 40 per cent.,
Column 706and further substantial growth is expected next year. Privatisation will of course provide further impetus for that process.
Mrs. Cheryl Gillan (Chesham and Amersham): I hope that while my right hon. Friend is talking about the figures, he will say something about AEA's projected profit of £10 million for this year. I understand that the figures for next year look even better. It is important to re-emphasise the great success and the tremendous potential of the organisation.
Mr. Eggar: The figures mentioned by my hon. Friend are right, and there is no doubt that AEA Technology has come a long way during the past few years and that it has built on the trading fund status that it was given by the Atomic Energy Authority Act 1986. There is a lot of potential out there for additional work, but the work is highly competitive. There is no area in which AEA Technology has an absolute worldwide monopoly. In most sectors, it has competitors within the UK and elsewhere in the world, and it is very much a worldwide business.
AEA Technology will thrive if it can bring to bear the expertise that it has established from the tremendous residual effect of 40 years of high- class science engineering and apply that in a more rigorous way to the commercial opportunities that exist. I re-emphasise to my hon. Friend that the future lies predominantly in the expansion of non-nuclear, rather than nuclear, business.
Mr. Mike Hall (Warrington, South): Is the Minister aware that the improvements in AEA Technology's profitability in the past 12 months have been borne on the back of 400 redundancies--some 10 per cent. of the work force? Will he assure us that after privatisation--when the terms and conditions of employees in the current company will be divested--the employees will have their incomes, pensions and entitlement to redundancy payments protected, and that they will get more than just the minimum amounts offered with regard to the Transfer of Undertakings (Protection of Employment) Regulations?
Mr. Eggar: I shall address those issues later in what is already quite a long speech, if the hon. Gentleman will forgive me. I have been involved in a number of privatisations and I can say as a matter of principle that the Government seek to protect the rights of public sector employees who move to the private sector. We shall certainly do everything we can in terms of TUPE and with regard to pensions, to make sure that a fair and just arrangement is reached. I shall refer at a later stage to those matters, and I shall willingly give way again to the hon. Gentleman if he wishes.
AEA Technology has profited by its experience and expertise in the nuclear field. It has won significant contracts for work at Chernobyl. AEA Technology scientists are currently working on plans for the decommissioning of Chernobyl units 1, 2 and 3. AEA Technology is also a leading member of an international consortium carrying out a feasibility study for a new shelter over unit 4.
Other significant export contracts include a study for the European Commission on the safety of Chernobyl-type RBMK reactors in the former Soviet Union. AEA Technology is also involved in work to clean up the Maralinga test site in Australia.