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Mr. David Lidington (Aylesbury): I support the Bill on principle because, where Government can do so, they should disengage from the management of activities that are essentially commercial and free organisations to go out and seek customers untrammelled by Treasury rules or the risk of political interference, which is inevitable when an industry is part of the state.
I bear in mind Opposition Members' points about the nuclear review but hope that this will be the first stage of greater private sector involvement in the nuclear power industry, which I hope will follow from the results of the review. I hope that the hon. Member for Ellesmere Port and Neston (Mr. Miller), during his Industry and Parliament Trust fellowship with Nuclear Electric, studied fully the reasons why that company is pushing strongly for its privatisation as soon as possible.
Mr. Miller: I do not know whether the hon. Gentleman attended the interesting debate that took place in the Select Committee on Science and Technology a couple of months ago, when the only common ground between John Collier and Greenpeace was their desire to privatise the company. I think that they are both wrong. May I make it clear to the hon. Gentleman that I was studying the total quality management systems on which the company is embarking, which could provide some important lessons to the Government? Perhaps some TQM principles should apply to Ministers here.
Mr. Lidington: I was grateful for that response, not least because it showed that, when it comes to privatisation, "one-sided ideology", to use the hon. Gentleman's phrase, seems to be the property of the Labour party, whereas we have a rainbow coalition in support of greater private sector involvement in the nuclear power industry. I support the Bill in principle and because on the doorstep of my constituency is Amersham International, a successful business employing a number of my constituents. It is an excellent example of a business that is not dissimilar to AEA Technology and that has made a tremendous success of its life in the private sector.
I support the Bill because I see privatisation as the best way to secure customers and, therefore, the jobs of the workers who, as hon. Members on both sides of the House have agreed, are the mainstay of AEA Technology's reputation and expertise.
My hon. Friend the Member for Wantage (Mr. Jackson) drew attention to the diminishing customer base of the domestic nuclear industry. The reports and accounts of AEAT highlight the new commercial world within which the business is having to operate. In 1991-92, for example, the company's sales to overseas customers amounted to £43.7 million. Two years later, the total had risen to £66.5 million. The story is similar for AEAT's sales to United Kingdom private sector enterprises. In 1991-92, some £40.5 million worth of sales were made. In 1993-94, the figure was £63.5 million. It is the private sector and
Column 747foreign markets for the ancillary services, which were originally developed as a sideline to the main nuclear business, on which the future of the company and, therefore, the security of the jobs of its employees will increasingly come to depend. It seems to me that we have a real prize in AEAT. We have an enterprise that is forging a lead in some of the technologies and services that will be in great demand throughout international markets in the decades ahead. Reference was made earlier--I think by my hon. Friend the Member for Brentford and Isleworth (Mr. Deva)--to the work that is already being done by AEAT in helping to clean up the environmental devastation in eastern and central Europe, wrought by a socialist energy policy, which operated there for many years. AEAT, we know, is already actively involved in Slovakia and has contributed to the work of making good the devastation wrought by the Chernobyl disaster. We must look globally at the future nuclear business of AEAT and not confine ourselves to discussion of the future of the United Kingdom nuclear market. I do not believe that developing countries will be able to deliver to their populations the standard of living that those people rightly want to see without using an increasing amount of nuclear power as well as power generated by the burning of fossil fuels. We see from recent reports that China is now either planning or is building 24 new nuclear reactors. In Japan, the institute of energy economics has predicted that Japan will need a significantly larger nuclear capacity if it is to succeed in its declared objective and, indeed, its treaty commitment, of curbing carbon dioxide emissions to their 1990 level.
There are international nuclear markets for AEAT to go out and win, and I do not think that we should be so pessimistic as to assume that the fate of the elderly reactors left with the remnants of the United Kingdom Atomic Energy Authority is the sole determinant of the business for the future. Freed to go into the private sector, I have every confidence that AEAT will be able to go out and win that international nuclear business for this country.
Mr. Ronnie Campbell (Blyth Valley): The hon. Gentleman has just reminded me that I was thinking about watching "The Simpsons" on Sky Television, which of course is an American programme. Homer works in a private nuclear power station, and we see the disasters that happen from time to time. Does the hon. Gentleman envisage that happening in this country?
Mr. Lidington: I think that the whole House is grateful to the hon. Gentleman for his explanation of new Labour's energy policy for the future of this country. He has probably come about as near to it as his Front Bench representatives did this afternoon.
There are other important markets in which AEAT will be able to seek customers. The hon. Member for Caithness and Sutherland (Mr. Maclennan) referred to the descaling of oil and gas pipelines. That was developed initially as an ancillary service to the nuclear business, and there are a number of ways in which AEAT is already involving itself in the oil and gas industry. That, again, is an area that seems to offer considerable scope for business development in the future.
There will be opportunities in oil reservoir management. The company has already developed computer models to examine how oil and water flow
Column 748through a well drilled in a particular geology, and such as service is of real commercial benefit to oil companies in helping them to determine how best to go about exploiting the hydrocarbons that their geologists find in a particular field.
Mr. Miller: Does the hon. Gentleman agree that such technology, which has no direct connection with the atomic energy industry, emerged as a spin-off resulting from the diversity of the activities in AEAT? Does he not agree that there are risks that the potential for such exciting future technology will be damaged if there is a cherry-picking operation?
Mr. Lidington: Although I have not studied the subject in detail, and I found the argument made by my hon. Friend the Member for Wantage compelling, when the Government decide on the mode of privatisation they will wish to consider that argument carefully. The key consideration is that once AEAT is in the private sector there will be a commercial incentive for the board and for the management to seek out those opportunities wherever they arise, rather than to wait for them somehow to be handed down by departmental initiative. Environmental services are another enterprise in which there is scope for new development. I have seen an estimate--I think it was published by AEAT--that there are some 60,000 tonnes of toxic munitions on the bed of the Baltic sea alone. I know that the company feels that it can become involved in the clearing up of chemical wastes, including chemical munitions. It is already involved in the removal of particulates from diesel exhausts, and that is bound to be a growing market. At the moment, quite rightly, there is much concern in the developed world, where we already enjoy a high material standard of living, that the drive to greater prosperity in the Pacific rim and Latin America will bring in its wake great environmental problems. But the peoples of those countries, as they achieve a higher material standard of living, will also want a better quality of life, and therefore there will be a demand from newly developing countries for environmental services of the sort that AEAT will have to offer. Again, that is not something for Governments to seek out. It is not for Governments to direct companies as to how they should find new business opportunities. That opportunity will come from boards and managers looking for customers wherever they can find them in different parts of the world.
Earlier we had an illustration of what my hon. Friend the Member for Wantage called the schizophrenia of the modern Labour party. On the one hand, the hon. Member for Ellesmere Port and Neston, the very image of new Labour, who took pride in saying that he had no fixed ideology and who I am sure sat up all last night committing to memory the new text of clause IV and would qualify as one of the pink guards of the cultural revolution going through the Labour party at the moment, admitted--I am sure that those on the Opposition Front Bench closed their ears at this moment--that at least he had seen the merits of greater private sector involvement in at least some areas of activity of the Office of Population Censuses and Surveys which had hitherto been entirely the property of the state sector.
Earlier the hon. Member for Kirkcaldy (Dr. Moonie) not only attacked the privatisation measures in the Bill but raised before us in a nostalgic vision a shade of Lord Kearton himself, harking back to the elysian days of
Column 749BNOC and a majority Government shareholding in BP. The hon. Gentleman is no longer with us. He has probably been summoned for a self-criticism session in Islington even as we speak.
Sometimes I wonder where Opposition Members have been. It is partly a question of Treasury rules; it is partly a fact of life that state-owned businesses are either given an unfair subsidy by the Government of the day- -in effect, underwritten by the Government to the disadvantage of private sector competitors--or, as my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) pointed out, they are always last in the queue behind the politically attractive priorities of health, schools and pensions.
There is also the wider question of political interference. The hon. Member for Kirkcaldy was somewhat dismissive of BP. He said that it was fine when there was a majority state shareholding in it, but companies that have a state shareholding, particularly a majority one, are inevitably subject to the risk--
Mr. Lidington: I am sure that my right hon. Friend will be prepared to answer that question if the hon. Gentleman wishes to put it to him. I do not think that the hon. Gentleman was listening to what I was saying. I was talking about the risk of political interference.
Mr. Mans: Does my hon. Friend agree that there has been a recent example of that, which the hon. Member for Ellesmere Port and Neston (Mr. Miller) clearly did not know about because he refused to answer the question that I put to him, and that is when the Central Statistical Office put BNFL accounts back into the public sector borrowing requirement.
Mr. Lidington: My hon. Friend puts his point well. The risk of political interference, whether it is to do with the siting of particular operations or investment decisions is there all the time, but so too is the risk of retaliation by a foreign Government that happens to disagree with the policies being pursued by the British Government of the day. It is impossible completely to insulate British companies from unjustified retaliation taken for political motives, but the risk is bound to be greater where a company is not seen to be based in a particular country and when the majority of its shares are owned by the Government with which the foreign Government is in dispute.
Through privatisation we shall ensure not just the survival of AEA Technology but the security of the jobs of those workers whose interests hon. Members on both sides of the House wish to protect today, and through privatisation we will ensure the developing prosperity of AEA Technology to the benefit of its employees and shareholders and of the nation.
Column 750excellent resume of the matter. If the Bill were not quite so spurious, it would have been a speech well worth hearing at another time.
I also pay tribute to the hon. Member for South Dorset (Mr. Bruce), who found himself with a somewhat ambivalent attitude towards the Bill. It is becoming clear why that should be so. The Bill is not about the science base or the development of technology but about finance and political expediency, and it is the worse for that. Not that a Bill should necessarily be troubled by the juxtaposition of finance and politics. They are not mutually exclusive ideas. They are often important to the development of a Bill by which we intend to achieve a certain aim. In this instance, both those matters have been rushed and insufficient thought has been given to the Bill. In support of my view that the Bill is neither about science nor about the development of technology but about finance and politics, I quote the evidence of the Institute of Professionals, Managers and Specialists to the Select Committee on Science and Technology on the proposed privatisation. It said:
"Firstly, it will remove from government a major pool of expertise on nuclear and other energy matters other than those related to decommissioning.
Secondly, there is a risk of early business failure for the privatised part of AEA, which would cause extra cost and difficulty for the Government. This is because increasing profit projections for Commercial Division rely on exploitation of monopoly situations that currently exist, for example in the areas of decommissioning and waste management. Without the guarantee of long term Government contracts after flotation, the future of the Division would be at risk. In addition many of the potentially commercial activities assigned to the Commercial Division risk failure since they are based on synergies with part of Government Division that would no longer be available to them."
I take that as an opening statement because it has a profound impact on the Bill.
The origins of the AEA, about which we heard much earlier, were in the depths of 1954 when, notwithstanding that a Conservative Government were in power, wiser counsels prevailed than today, when the Government are bent on unravelling the work which was put in place then and for which we have all had reason to be exceedingly grateful over many years.
My interest is clear. Hon. Members have been anxious to tell the House that they represent constituencies where activities related to the AEA are taking place, but I come from a west midlands seat, Wolverhampton, North- East, where we are totally dependent on the development of science, engineering and new technologies to earn our daily living. Without it, we will fade; indeed, we have already faded because of the underfunding of science, particularly "blue skies" science, and shortage of money for market opportunities.
Harold Macmillan was part of the Government in 1954, and subsequently became Prime Minister. When he retired from the House of Commons, he became a member of the other place. Speaking in his former constituency of Stockton, at a time of earlier privatisations, he used a phrase that is now embedded in the consciousness of the British public: he said that we were "selling the family silver". [Interruption.] If the hon. Member for Plymouth, Sutton (Mr. Streeter) wishes to intervene, he may. It is entirely a matter for him.
Although Harold Macmillan was referring to another privatisation at that time, his words are now etched in our consciousness, and we have reason to understand them
Column 751increasingly as each day passes--not least the recent fiascos involving the electricity industry. As I have said, however, wiser counsels prevailed in earlier days, and current developments are a travesty of what was then considered to be the right course for Britain to take.
In recent years, the AEA has deliberately separated its nuclear from its non-nuclear work in preparation for privatisation. Of course we knew that the separation was coming--it was almost a sucker punch--but it has happened by default none the less. AEA Technology has already divested itself of much of its work; much of it has been privatised. For some years, the management of the AEA have made no secret of their desire for the organisation to be privatised, but I wonder how much that has to do with the gravy train rather than what is good for the industry.
Mr. Ronnie Campbell: My hon. Friend is dealing with an important subject. I joked earlier about Homer Simpson and his power station, but let me point out in all sincerity that many nuclear disasters have taken place in America and Russia, including Three Mile Island and Chernobyl. The private sector may not be able to exercise the necessary controls. There are serious ecological considerations. Given the general fear of nuclear disasters and all the safety hazards, should we be pushing nuclear power into the private sector now? I think that there is a long way to go before we get this right.
Mr. Purchase: My hon. Friend has made a good point, although I did not realise that he was joking when he referred to the debacle surrounding the Simpsons. As he says, much of the delay involving the Bill--which, of course, is still not timely--is due to the complexity of the process of separating a unitary body into two parts, one of which is to be sold. We do not know the nature of that sale; we do not know what route the Government will take. There is a hole at the heart of the Bill, to which others have referred. Indeed, the Conservative Members to whom I referred earlier spoke at length about the problems involved in the type of sell-off that will ultimately take place. Only when those complex problems are disaggregated can the sale proceed.
As I have said, parts of the AEA have already been privatised. Job losses have continued--surprise, surprise. Have not job losses always been the prelude to the privatisation of every industry? The aim has been not necessarily to put the company concerned into a better state but to put it into a better state in which it can be sold. The state has already met the redundancy costs; price rises have been allowed beyond inflation; the pig has been fattened for sale. That is a simple, straightforward policy that we could all understand. I suspect that the current position is no different. The Government introduced the Bill because they failed to persuade the House and the country that they could privatise the Post Office: there can be no other reason.
Mr. Clifton-Brown: In the 1960s, the AEA's forerunner employed 40, 000 people. The rundown in the number of employees happened long before the present privatisation--and, indeed, company splits took place then as well.
Mr. Purchase: The hon. Gentleman makes his point well. Of course that was a much larger organisation, fitted for a very different time. We are now dealing with the short term, however, rather than the long term to which
Column 752the hon. Gentleman reasonably refers--and in the short term the Government are determined to bring a privatisation to fruition. They want the money, and we know why: according to the Financial Times , AEA Technology is valued at some £200 million, although that will depend on how the sale takes place. It also has a work force of some 4,000. Oddly enough, the organisation's sales also amount to around £200 million per annum. I readily concede that the position is now very different.
The proposal was inserted into the Queen's Speech at the 11th hour and the 59th minute, because the Government had lost what they regarded as the jewel in their crown--the sale of the Post Office. Having interviewed the chairman and chief executive of the Post Office in a Select Committee, I can tell the House that they are bitterly disappointed men--almost, but not quite, as disappointed as the President of the Board of Trade. Their opportunity to achieve millionaire status had been taken away at the last second. They have a right to be disappointed, but they do not have a right to our money.
Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. The hon. Gentleman should not go too far down that path. We are not discussing the privatisation of the Post Office; we are discussing the Atomic Energy Authority Bill.
Mr. Purchase: I accept your ruling, Mr. Deputy Speaker. By modern standards, AEA Technology is quite a large company. Conservative Members have asked what Labour's policies are; I can tell them that our policy in regard to companies of this kind is to ensure that they prosper and contribute fully to the development of the British economy. We believe that AEA Technology could remain in the public sector and continue to make its contribution.
We heard earlier about the corset that Treasury rules tend to impose on opportunities for cash raising, but those arguments are spurious. It is within the gift of the Treasury and the Conservative party to change the rules if they so wish. They can do that at any time. The old arguments that we used to hear about public investment crowding out private investment have proven to be worthless. International capitalism is looking for a home for its money. [Interruption.] Who knows, the hon. Member for Wyre (Mr. Mans) may rise in a moment. Spring is arriving and the sap is rising too. I think that he is waiting for the opportunity.
The Government have the opportunity to change the rules, if they wish, in a satisfactory way. Money could be raised for this important enterprise, which belongs to the nation and is in democratic ownership. The benefits accrue to the nation. While it is in our control, we have the right to deal with it and to use it to benefit industry, commerce and every other sector that depends on the lifeblood of innovation and invention. Those are the stakes that we are discussing. I agree that this privatisation is not on the scale of the Post Office or water industry privatisations, but it is of that importance.
The Bill does not set up a new company which could then be sold off, with money being put into the Consolidated Fund. It talks about schemes. Other hon. Members have referred to the fact that the Bill offers no real understanding of just how the company will be privatised. We look forward to, and would welcome, an
Column 753answer on that. Unquestionably, the Committee's work will be hindered unless the basis on which the company will be privatised is understood.
After the schemes comes the possibility of disposals, which can take place without further reference to Parliament. Who knows, the companies or company, whichever it might be--we know not--could then be split into small parts. A typical trick employed in the market is to gather a company, to strip its assets and to sell it off.
Mr. Ronnie Campbell: I shall not talk about Homer Simpson again. My hon. Friend has got on to an important subject. In relation to the electricity industry, Trafalgar House has just tried to take Northern Electric to the cleaners. The regulator said he was having none of it. I wonder how that relates to the nuclear industry. Once it has been privatised, foreign companies might want to take its assets and use them in the same way as the Americans in "The Simpsons" on Sky Television.
Mr. Purchase: My hon. Friend makes a series of good points. I may have preferred them one at a time, but I had the lot together. We should especially recognise the real probability of AEA Technology, in whichever form it exists, being split up in the way that he suggests, and being owned by people who have no loyalty to this country. One must not think that they have that. We are patriots. Hon. Members in this Chamber believe that, first and foremost, we are interested in British interests. Of course we recognise that we cannot exist simply as an island in every sense of word. We must depend and co-operate worldwide; none the less, all our efforts should be directed towards the interests of the people whom we represent, no matter how much that depends on our international diplomacy and the work that we undertake.
Let me give a specific example to my hon. Friend of the way in which the Government have acted. I have mentioned the super-highway. I hope that you will allow me, Mr. Deputy Speaker, to proceed with that subject for a moment. The Government plan to allow the super-highway to be built by anyone except British Telecom and Mercury Communications. Their reason was that those two companies--
Mr. Purchase: I shall, of course, do as you wish, Mr. Deputy Speaker, but I owed a little debt to my hon. Friend the Member for Blyth Valley (Mr. Campbell), who had intervened. It may be inappropriate to talk about the way in which the super-highway has been constructed and about the fact that all the companies are American, but I am sure that you would let me make that point that the same thing could happen because of the Bill.
Under this measure, the technology, science, engineering and development sectors could end up in foreign hands. I do not say that as a xenophobe. Whatever the form of privatisation, it is important that we can keep control of what happens in the interests of the experienced, skilled and scientific employees in the industry.
Column 754You are not insisting, Mr. Deputy Speaker, that I should return to the Bill, but I do so voluntarily. It states:
"Clause 10 provides for a reduction in the minimum number of members of the Authority".
It removes the requirement that a certain minimum number of members should have relevant experience. That speaks volumes. I am not privy to Government thinking, but the general public will think that that paves the way for yet more political appointees to yet another quango. If the need for technical and relevant expertise is removed, one must seriously probe and question the Government about what they have in mind in relationship to membership of the body. I say that without malice. I hope that the Minister will be able to assure us, and to tell us what he understands clause 10 to mean and what his intentions are. I am sure that they are honourable, but the House is entitled to know what is in his mind.
There are issues that must be dealt with. The principles that the Government have used are the usual ones about the need for organisations to have freedom to manage their own affairs and to make the most of commercial opportunities. That is a spurious argument. The company can do all of those things right now. It simply needs the Government to accept that it is possible and sensible to keep it in the public domain and, at the same time, to allow the desirable objectives that I have mentioned.
After any sale, the Government may be left with a part of AEA Technology that requires constant public funding over many years, certainly until the completion of the decommissioning of nuclear assets. It is reasonable for the state to recognise that complementary sectors exist in a unitary body. They are part of the same asset base. We can ensure that the total cost of the activities, especially of decommissioning, is partly offset by the profitable activity of another sector of the company. It is reasonable to keep that critical mass--a scientific term that has been ripped off by the business management community and is now part of its jargon. That critical mass is exceedingly important if the company is to remain as a unitary body rather than one that is divided and is, therefore, weaker.
I hear talk about the form that privatisation will take. Rather than take a single cash sum from the sale, which would then go into the Consolidated Fund, the revenue stream from AEA Technology should be used to continue to contribute towards, for instance, decommissioning costs. More than that, it could be used to reinvest and invest again in the development of research expertise in the nation's interests.
On technology transfer and innovation the Financial Times said: "AEA contains a high class, probably unique, amalgam of expertise, which can be marketed to a wide range of companies."
The value of this company is expressed almost exclusively through the people who work for it; unless the Government find a way to keep that body of people together, it will be a pig in a poke, it will be worthless. That has to be at the centre of our thinking.
The AEA is a flagship organisation. It plays a key role in United Kingdom technological development. We have already mentioned environmental technology, which is a growing area of concern the world over. The hon. Member for Brentford and Isleworth (Mr. Deva), who is no longer in his place, made a sensible intervention and talked about the need for decommissioning in the former Soviet Union countries and the safe disposal of the nuclear and hazardous waste that has accumulated over
Column 755many years. The whole aspect of environmental pollution controls is coming closer to the centre of the agenda for business development. In western Europe and north America the issue of emissions is critical to the future of the planet. Here we are with the opportunity to make a head start with this body, but we are throwing it away carelessly without thought for what will happen.
Mr. Ronnie Campbell: My mind is starting to boggle. My hon. Friend has been talking about the privatisation of the nuclear industry. Does he agree that the private sector is liable to take shortcuts on safety in the nuclear industry which would cause great danger to the areas in which the nuclear power stations are located? It will be frightening for those who live around them. Three Mile Island has already been mentioned and that is just one example. Is it not of great concern that the Government are not prepared to keep hold of the industry and develop it? Nobody is denying that the industry needs to be developed, but to give it away to private industry at this late stage is wrong.
Mr. Purchase: As ever, my hon. Friend has made a relevant intervention. That is another danger implicit in the Bill and it has been referred to by Conservative Members who have questioned whether the Treasury will relax the rules so that the company will be able to obtain the necessary investment.
One of the things that plagues the development of companies in this country is short-termism, which typifies so much of the work in the City and which has been to the detriment of our small, medium and even larger companies. Short-termism means that companies have to go to the market for money and have to show dividends that are out of kilter with the company's activities in order to satisfy their shareholders so that they will continue to hold the stock. That is a serious danger of privatising the AEA. Rather than an ordered, planned and proper approach to this important company, a scramble will take place and shares and the dividends paid upon them will become the only important matter. My hon. Friend the Member for Blyth Valley was right to make his point and I believe that it has been understood by many hon. Members.
The hole in the heart of the Bill is the form of sale. We must know what form it will take. The work of the Standing Committee will be in a vacuum. It cannot be constructive unless we have something around which we can discuss, probe and test in the best traditions of the Opposition. There are many Conservative Members who would want to know that before setting foot in the Committee.
I do not feel that it is necessary to rehearse again the arguments about pension rights, because there will be another opportunity to do that. However, it is important and my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller) spoke about it at some length. Many trade unionists and ordinary workers will be concerned about the way in which employment rights are expressed in the Bill. The Transfer of Undertakings (Protection of Employment) Regulations 1981 apply to the employment rights and we hope that the Government will make it clear that they will honour those regulations properly. This is a hasty and ill-thought-out Bill. It has no regard for the United Kingdom's science base. It is a hole in the heart and an example of political and financial expediency at its worst.
Column 7568.5 pm
Mrs. Cheryl Gillan (Chesham and Amersham): I extend a welcome to my hon. Friend the Under-Secretary. This is the first opportunity I have had to congratulate him on his new appointment. We served as officers on the Back-Bench Trade and Industry Committee for some time and I know that he brings to the House and the Department a wealth of knowledge and experience.
While there is another brief appearance of the hon. Member for Kirkcaldy (Dr. Moonie), I apologise for not being in the House during his opening speech. I had told him that I needed to be out of the Chamber at a Select Committee, but I should like to put on record the fact that I was extremely sad to have missed his contribution. We have heard some interesting speeches and I congratulate my hon. Friends on the contributions that they have made. However, I must confess to being rather sad at the doom and gloom that has been echoed in all the speeches from Opposition Members. I had expected a welcome for the Bill, but the speeches have only made up in length for what they lack in depth.
The hon. Member for Ellesmere Port and Neston (Mr. Miller) said that he can see the site of AEA Technology from his bedroom window. However, I was left unsure as to whether he had actually visited the premises. No doubt he will let me know later. He can rest assured that, during the privatisation, from his bedroom window he will be able to look at a company being developed and set free from the shackles of Government. I am delighted to welcome this Bill, which is long overdue.
This is the first step towards releasing the remaining shackles that were imposed by the Treasury on a group of individuals whose talent and capabilities have grown out of the development of nuclear power. This privatisation will be the second successful operation to spin off from our original investment in the nuclear industry. The first was Amersham International, which I am sure that hon. Members know is based in my constituency. Amersham International has set a pace that I hope AEA Technology will match. Developing as they do from UKAEA, they both represent a commercial payback for this country from our investment in science and fundamental research.
Some of the speeches have left doubt in the minds of those outside who listen to these debates who may believe AEAT to be part of the nuclear power industry. AEA Technology is not a nuclear energy business, although it builds its expertise and reputation by servicing the nuclear industry, among others. Today, only about half AEA Technology's revenue comes from customers in the nuclear industry and it does not own any nuclear facilities or generate electricity. Some speeches have not made that absolutely clear. AEA Technology's own vision is to become a UK flagship science and engineering services business, creating a strong new British competitor in world markets and delivering--
Column 757I was saying that AEA Technology has a vision which I think that every hon. Member should endorse. It wants to be a flagship science and engineering services business, creating a strong, new British competitor in world markets and delivering a competitive edge to all its customers. I am sure that that stated aim is welcome. Since privatisation in 1982, the business of the first flagship science company in this field, Amersham International, has grown more than sixfold. Its turnover has risen from £48.5 million in 1980, the year before privatisation, to £324.2 million last year and the company's profit before tax has grown even more significantly from £4.1 million to £43.5 million--almost 10-fold. I hope that hon. Members will listen to that and understand the success of Amersham International as proof that privatisation has truly worked.
Mr. Gary Streeter (Plymouth, Sutton): Will my hon. Friend make sure that she has her facts entirely right? I recall that, in the early 1980s, Labour Members were moaning and groaning about the privatisation of Amersham International and suggesting that it was going to be a disaster. Can it really be such a success story in view of what Labour Members said 10 or 14 years ago?
Mrs. Gillan: I thank my hon. Friend for that intervention. Labour Members were opposed to the privatisation of Amersham International. I shall repeat its success. Amersham's turnover rose from £48.5 million in 1980 to £324.2 million last year.
From reports of his speech, I understand that the hon. Member for Kirkcaldy is especially concerned about the erosion of the science base and the reduction in the number of employees. Perhaps he would like to know that the number of staff of Amersham International has grown from some 2,000 employees in 1980-81 to just under 3,500 in 1993-94. The measure of Amersham International's success may be seen in the fact that more than half its staff are employed overseas, where it does almost 90 per cent. of its business, making the company one of the country's top overseas earners. It contributes more from overseas earnings than the whole of the rest of the British nuclear industry. The rigours of open international competition, when compared with the task of a public utility addressing a domestic market, makes that achievement even more remarkable.
Amersham International has founded its commercial success on applying its scientific and technical expertise in health care and fundamental research into the processes of life. The company's products have significantly enhanced the ability of the medical community worldwide to diagnose brain disease and heart disease and have brought relief to many thousands of sufferers of certain forms of cancer. Those applications provide the most dramatic evidence of the benefits of nuclear medicine arising from the application of very small amounts of short-lived radioactivity at molecular and cellular level. The nuclear industry is often seen as exclusively connected with power generation and, in earlier days, weapons. Amersham International's achievement should remind us that there is a third sector to the industry which has applied fundamental understanding of nuclear science to products and methodologies of outstanding social benefit and commercial success.
Column 758This sector of applying such fundamental skills is new and deserving of every encouragement from all hon. Members. We on the Conservative Benches have every confidence that AEA Technology will demonstrate the same success as Amersham International. I hope that Opposition Members will also demonstrate their confidence in AEA Technology to work more in industrial applications, but essentially to apply its depth of skill and expertise.
Privatisation will give AEA Technology a clear commercial remit and submit it to the discipline of the market place. To meet that challenge, it must be able to operate from a secure platform and in a predictable political and regulatory climate. As I have said in previous speeches on the subject, it will need to demonstrate to potential investors that the sector that it is joining is secure from maverick political pressure, which may affect lines of supply, freedom of international trade, and the ability to attract investment and secure publicly acceptable disposal routes for waste. The Government are currently reviewing many of those areas, as hon. Members have said. I see this as an opportunity to ensure that Amersham International and the newly privatised AEA Technology are founded in an atmosphere not of over-regulation but of cautious regulation.
I am fortunate enough, unlike the hon. Member for Ellesmere Port and Neston, who can only see it from his bedroom window, to have visited AEA Technology in the past year to see at first hand some of its work. Its existing worldwide markets are very impressive and we have heard a long list of what they cover, including aerospace, defence, electricity, health and safety, the oil and gas industry, the pharmaceutical industry and research laboratories. Indeed, its skills base is almost as impressive as the markets that it serves and I shall highlight some of the projects in which it has been involved to show the variety of the organisation.
AEA Technology is often the first port of call for expertise in a crisis. When the oil tanker the MV Braer broke up on the coast of the Shetland islands, AEA Technology teams were called in to advise on oil spillage control and the use of dispersants. Local authorities frequently turn to AEA Technology to support fire and other emergency services at major accidents involving toxic chemicals or hazardous cargoes. It was perhaps not highlighted enough, but following the Piper Alpha accident in the North sea, AEA Technology became the leading consultancy contractor in helping offshore operators with health and safety. It quickly saw a market and set up a company in the Netherlands to serve the Dutch sector, where, incidentally, it now leads the field.
Safety, economy and environmental impact studies are also in the company's remit. Several major safety assessment studies have been carried out for London Underground and British Rail, including a project which is of particular importance to my constituency, the crossrail project. I very much hope, on behalf of my constituents in Chesham and Amersham, that crossrail will not be another project that is consigned to the dustbin of history and that we shall press forward with it as soon as possible.
I have been reading AEA Technology's research highlights and it appears that diamonds are not just a girl's best friend, but have been used in some of the company's front-edge technology and research and development work. The surface sciences and the diamond-like carbon
Column 759coatings give a tremendous performance showing an order of magnitude less wear. That technology is of special significance to hip replacements.
Dr. Moonie indicated assent .
Mrs. Gillan: I see that the hon. Gentleman is familiar with that exciting innovation. It will alleviate much pain and suffering. AEA Technology has also reacted well to international markets. As we have heard, it has extensive offices in the United States, Slovakia, Korea, Belgium, the Czech Republic, Hungary and Japan. Indeed, two employees were seconded to Japan to Dodwell and Co., under the excellent "Engineers to Japan" scheme. The scheme has been much understated. It is funded by the Department of Trade and Industry and administered by the Royal Academy of Engineering. The DTI funds up to 50 per cent. of the total cost of secondment up to a maximum of £35,000. AEA Technology and two of its employees have taken full advantage of the scheme. They have made significant breakthroughs and they have improved contacts and sales in the Japanese market.
The international dimension of AEA's business leads me naturally on to space, an area in which, as my hon. Friend the Under-Secretary of State for Industry and Energy, the Member for Hertfordshire, South-West (Mr. Page), appreciates, I take a particular interest. Space is an area of increasing international co-operation. It is, perhaps, not surprising that AEA Technology can make an important contribution to space technology as both nuclear and space activities take place in a hostile environment involving radiation problems. While on the subject of space, we can see plenty of space on the Opposition Benches at the moment.
Since 1972, AEA's European space tribology laboratory at Risley has been the European Space Agency's laboratory for friction, wear and lubrication problems, serving all space industries in Europe. It has an unrivalled reputation as a centre of excellence for its capabilities, services and products. Similarly, the nuclear fusion work carried out at the Culham laboratory has established a leading expertise in radio frequencies and particle beam technology. Those capabilities are being used for spacecraft antennae and for the development of the next generation of environmental and earth observation satellites.
The AEA Technology portfolio ranges from research and development and consultancy right through to the manufacture of flight hardware and the provision of testing facilities for industry. Its customer base here is both civil and military. It has customers not only in the United Kingdom, but in Europe and elsewhere. Its customers include NASA--the National Aeronautics and Space Administration--the Department of Defense and United States aerospace companies. We should all support international co- operation in space, not least today when, following in the footsteps of our own astronaut Helen Sharman who went to the Russian space station Mir, we have seen the successful launch of the 18th mission to Mir, carrying for the first time an American astronaut who will spend three months on the station.
All United Kingdom space industries are in the private sector. Surely it is appropriate that the capabilities of AEA Technology should join them.