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Column 774the privatised body? If so, the costs of putting scientific skills out to grass and the huge loss to the United Kingdom economy will be more than the Government want to make from the sale. That must be economic nonsense.
As has been mentioned, AEA Technology includes the National Environmental Technology Centre which came out of the merger with Warren Spring Laboratory. It is worth recalling that fewer staff from Warren Spring transferred to AEA Technology than was promised. According to the written evidence presented by the IPMS to the Science and Technology Committee,
"Only half the staff and functions moved to the AEA, and they have been dispersed within the AEA rather than merged with one particular unit--the NETC as promised. A few staff have been moved to other posts in the DTI and the rest have gone on either voluntary or compulsory redundancy."
In other words, given our experience so far, the omens are not good.
Much valuable environmental related work has already been lost in what should be a vital area within our economy. The Department of Trade and Industry's record on research and development is appalling. On the very day that the science White Paper "Realising our Potential" was published, the DTI closed down the collaborative research programme with the Science and Engineering Research Council at an estimated loss of £40 million to research and development from public funds. The record of the Department of Trade and Industry is not good.
Many hon. Members have asked--we shall listen with interest to the Under- Secretary's reply--how the privatisation will be carried out. That is still not clear. Barclays de Zoete Wedd, which carried out the Government- commissioned consultancy study, at one point recommended contracting out the United Kingdom nuclear fusion research programme. There was then a suggestion that the fusion programme be transferred to the research councils, but that was dropped.
In answer to a parliamentary question on 17 February 1994 on the future of the AEA, the Minister for Energy and Industry said: "Decisions on the form of privatisation will be taken in due course, but there is no presumption that this should follow the present structure. The decisions taken will be based on the performance in the market place and the extent to which the various options would meet customer requirements, enhanced competition, help to improve United Kingdom competitiveness and maximise the return to the taxpayer."--[ Official Report , 17 February 1994; Vol. 237, c. 923 .]
That tells us very little. As the hon. Member for Caithness and Sutherland (Mr. Maclennan) pointed out, if Ministers are not prepared to say how AEA Technology is to be privatised, we should not even be discussing the Bill.
This is one of those enabling Bills. It is simply saying, "Give me, the Secretary of State, power to do what I want." It contains what are described as
"largely standard form privatisation provisions".
Going on current form, we know what that means, and it is not welcome. It is not good enough simply to claim that a variety of options will be left open for the exact method of AEA Technology's privatisation. Employment cuts have already been made with the short-term aim of satisfying the City analysts who have been softened up to buy the concern from the Government.
According to the Minister, we do not know whether the company will be sold as a whole or in parts, by the authority of the Secretary of State or by flotation or trade
Column 775sale; we do not know whether it will be incorporated or unincorporated; we do not know whether it will be wholesale. Barclays de Zoete Wedd had no evidence of a single purchaser in the wings, despite what Conservative Members have suggested. A management buy-out was suggested, but the chief executive, Sir Anthony Cleaver, is reported as saying in July 1994 that a management buy-out was "not being discussed seriously". The options are first put up, and then knocked down.
On 8 April 1993, The Engineer suggested that finding a large enough prospective company would prove extremely difficult. There is not a big enough buyer out there to take over the company lock, stock and barrel. All that is really on offer is its fragmentation into separate businesses--a form of cherry picking that will undermine its activity. That is as rational a science policy as ringing up Mystic Meg: the driving force behind it is revenue collection. It is driven by ideological short-term impulses to cash the business in because the Treasury needs to balance the books. This is a Treasury-driven Bill, which--as my hon. Friends have said throughout the debate--has nothing to do with a science policy initiative.
The irony is that, although hon. Members on the opposite Benches call themselves Conservatives, throughout the last 15 years of Conservative government we have seen "Conservatives" who conserve nothing. They tear things up: they are the great dismantlers of our time. They destroy what is working well, defying the classic advice, "If it works, don't fix it." In this case, it is, "Simply fit it up for privatisation." It will be much harder to piece together the necessary experience and expertise once it has been broken down. In its report to the DTI, BZW referred to
"deriving maximum benefit from synergies";
but the Bill undermines the meaning of the word "synergy". It is a fragmenting Bill. The Government have a fetish about privatisation: the Bill exists because they did not manage to privatise the Royal Mail. If it moves, privatise it; if the Government cannot privatise one concern, they find another to privatise.
Is the message not getting through to the Government yet? The public are fed up to the back teeth with privatisation. This is a classic move of short-termism--the short-termism that has characterised the Government's approach to research and development. If anything could be described as the hallmark of the present Administration--their characteristic trait--it is that short-termism: that interest only in what can be sold today. If something cannot be marketed immediately, it is of no value.
That is not the attitude to research that our country needs. It is not a view that invests in the future. The Government push near-market research all the time at the expense of basic research, with the result that Britain falls further and further behind. In recent years, Britain's research and development have declined, and Government spending has declined proportionately. It is down every year. We are not arguing that the Government should fund all research and development, but the worrying trend is going in the opposite direction to that in all our competitor nations. Where it is successful, we should be supporting research rather than simply flogging it off. The Bill has no rationale. We should reject this bit of unthought-out privatisation.
In the White Paper "Realising our Potential", the Government stated:
Column 776"careful consideration will need to be given to holding the level of any such capacity to the minimum necessary to meet the Government's statutory responsibilities and other essential requirements".
The decision to sell the Department of Trade and Industry's best integrated research and the best international research that we have speaks volumes. We urge the Government to think again. They should start to focus on our country's long-term strategic scientific interests. It is against the national economic interest to press ahead with the Bill. It is a fag end of a policy at the fag end of the Conservative Government. It is time that they were out. The Bill deserves to go no further. We will oppose it tonight.
The Parliamentary Under-Secretary of State for Industry and Energy (Mr. Richard Page): I thank the hon. Member for Leeds, West (Mr. Battle) for his kind words at the start of his speech. From then on, however, it went downhill. When I heard that this would be a full day's debate, I must confess that I was slightly worried that I would have to make a winding-up speech lasting three quarters of an hour or an hour. But I forgot one of the Peter principles: that work expands to fill the time available. I should like to thank all hon. Members who have made my task so much easier- -it is much appreciated. I should like the House to recognise that, contrary to what many Opposition Members have said, the Bill that places AEA Technology in privatisation mode is not dogma driven, but sheer common sense. [Interruption.] I hear them laugh, but they should wait and see. AEA Technology can achieve its huge potential only in the private sector. Every examination that we have had points that way. My right hon. Friend the Minister of State reminded us that the Monopolies and Mergers Commission said that the company
"rests uneasily in the state sector".
The Barclays de Zoete Wedd report came out the same.
The Bill gives the Labour party a golden opportunity to show whether its clause IV road to Damascus conversion, or rather its road to Inverness conversion, is real. As the minutes tick away, it still has a chance to repent, to come over to the Conservative side, and to make the words of the right hon. Member for Sedgefield (Mr. Blair) a reality. But what do I hear and see? Moans and groans and the shaking of a head. As I suspected, whatever the packaging, old Labour is a little like old Adam--it is still lurking underneath.
Enough of that; let us get on to the business ahead. The Bill is not dogma driven.
Mr. Page: When I have finished, the hon. Gentleman will be convinced. I want to spend some time telling hon. Members about AEA Technology. I want to show them why it needs to be in the private sector to achieve that potential. We should consider AEA Technology--
Mr. Page: We are going to. That is the purpose of the Bill. If we consider AEA Technology, an image is conjured up of white coats, scientists and nuclear reactors. That does not have much to do with the man in the street
Column 777or the man on the proverbial No. 9 Clapham omnibus. AEA Technology is not like that. Let me suggest that it stands not for Atomic Energy Authority but for advanced engineering applications. That is AEA Technology's business. It applies leading-edge science and engineering skills to enhance industry's products, to improve its performance and to make it safer and more environmentally friendly. One or two hon. Members asked what the core is of AEA Technology. I suggest that that could be a core mission statement.
I must confess that AEA Technology is not a title that trips off the tongue. If another name could be devised that retained the links with its parent while being a little more user-friendly, I would not stand in its way.
AEA Technology provides solutions to everyday problems that face businesses in one way or another and affect us all. As the world becomes more and more environmentally conscious, the opportunities for AEA Technology will grow. That is the reason behind the debate. We want to set AEA Technology free to grow and develop.
I know that many Opposition Members and many of my hon. Friends have mentioned what AEA Technology is doing now. It is the world's largest safety and reliability consultancy, with expertise based on 30 years or so of involvement in nuclear plant safety. The techniques used to meet the safety standards demanded by the nuclear industry are directly applicable to transport, to which my right hon. Friend the Minister of State referred in his opening remarks. I shall not talk in detail about what it is doing, but it is working in partnership with British Rail and London Underground. It is helping to design stations to minimise the risk of fire and make them much safer places. It has pioneered a holistic approach to aircraft testing, designed to ensure that inspection routines pick up any structural defects before they become potential hazards.
Let us take paint, or more precisely fireproof paint. Fire can be just as damaging-- [Interruption.] Opposition Members do not worry about businesses. They do not worry about earning and making a profit. Their casual remarks about their satisfaction with the profitability currently being achieved by AEA Technology are staggering and I might refer to that later.
Fire is just as much a threat to commercial activity as it is to human life. A business and the jobs associated with it cannot go on if the factory, warehouse or office are damaged, gutted or require extensive repair. AEA Technology developed a fireproof paint for structural steelwork which, I am told, is easy to apply, because I have not applied any. More importantly, it envelopes the metal in a protective layer of foam at temperatures above 250 deg C. By delaying the buckling of the steelwork--it is hard to believe that RSJs buckle like sticks of plasticine, but I have seen it happen--the paint increases the chances of a building surviving intact and getting back into action much sooner.
Column 778Let me come back to paint--not whitewash. The paint is used in many buildings, particularly by the British Airports Authority. As the House will know immediately, the mention of airports will bring me on to artificial limbs. The House will see the immediate connection. Aircraft and artificial limbs have two common characteristics. They must be lightweight and capable of withstanding high levels of stress. AEA Technology worked with the manufacturers to produce an artificial leg that is very light, but extremely strong and capable of supporting the heaviest and most active of customers. Over 10,000 people a year benefit directly from its skills.
I should like to stop talking in general terms and concentrate in more detail on one of the specific things that goes on at AEA Technology--the National Chemical Emergency Centre. The centre provides immediate expert advice and support 24 hours a day and 365 days a year to the emergency services and others faced with incidents involving potentially dangerous chemicals. One of the first jobs that I undertook as soon as I found out that I had become a Minister was to visit Harwell and Culham. I sat in the control room at the centre and saw it at work. I shall give the House a few real-life examples of what goes on there to show how its skills operate.
There is an overturned tanker on the motorway and chemicals are leaking on to the road. Through radio and computer technology, within minutes the fire officer in charge has full information on the chemical and knows how he should deal with it to avert potential danger. The Army ordnance corps in Bosnia rings up on a Sunday morning. A lorry is in a ditch, riddled with bullets and leaking cyanide-based chemicals from damaged drums. The men on the ground need advice quickly on how to respond and protect themselves. Even though it is Sunday, advice is available within a few minutes.
Mrs. Jacqui Lait (Hastings and Rye): I am delighted to hear that my hon. Friend is such a supporter of Hazchem, which, as he so rightly mentions, is a staple of the chemical industry. Will he tell the House a little more about how successful it has been in establishing European Union standards for hazardous chemicals?
Mr. Page: My hon. Friend makes the point that the centre has led the way in introducing uniform signs, especially on the backs of lorries, so that throughout the European Union--[ Laughter. ] Hon. Members may laugh, but they should know from travelling on roads that on the backs of lorries signs tell them what chemical is carried. My hon. Friend is absolutely right in making the point that we have succeeded in leading the way in bringing about that form of harmonisation.
Mr. Frank Cook: I am afraid that I must correct the Minister. The Hazchem system--standing for hazardous chemicals--was devised on Teesside, between Cleveland county council and Imperial Chemical Industries plc. Let us have the record straight, please.
The last example that I shall give the House is of a jumbo jet landing at Heathrow. It has a leaking drum in its hold. The documentation on the load shows that the contents are relatively harmless, but the labelling on the drum indicates the presence of something altogether nastier. The centre is asked to send people to the airport
Column 779to find out what the chemical is and deal with the situation. On arrival, they confirm that the drum contains a dangerous chemical--toxic, corrosive, flammable and exactly the wrong sort of substance to be sloshing around the hold of a trans-Atlantic jet. The centre's team immediately supervises the decontamination of the aircraft. Yes, it is a routine enough job for the centre, but the consequences of what may have happened if that aircraft had taken off do not bear thinking about.
Hon. Members have spoken about AEA Technology as a world leader in computational fluid dynamics. This is not the hour to go into computational fluid dynamics or to explain it to the House-- [Hon. Members:-- "Go on."]--even though I can see that one or two hon. Members are burning to know about its advantages. Essentially, it deals with fluid flow and heat transfer problems. The technology was originally developed for nuclear purposes, but it has wide-ranging uses across industry.
AEA Technology, as all hon. Members recognise, has many strands of activity that are applicable throughout the world to safety and the environment. I am absolutely convinced that without the spur and the opportunity of moving into the private sector, AEA Technology will not be able to take full advantage of its potential. Any business needs a chance to develop, a chance to expand. It needs to market its products; it needs to tell the world just how good we are in that particular area. That is why AEA Technology currently has overseas offices in Tokyo, Seoul, Hong Kong, Prague, Bratislava, Budapest, Brussels and Washington. All those offices, except the one in Washington, are new offices that have opened in the past year.
Much as I am enjoying myself, as time is running out, I shall refer to some of the comments made by hon. Members. I respond first to the hon. Member for Kirkcaldy (Dr. Moonie), who opened the debate on behalf of the Labour party. I was surprised by the first part of his speech, because I thought that he was talking about the Post Office; I thought that I had gone into the wrong debate. He then moved on to other matters and he was joined by the hon. Member for Ellesmere Port and Neston (Mr. Miller), who ran the tired old plea of saying that having commercial activities in the state system bankrolled by the taxpayer and then second-guessed by the politician was the way forward. Has the Labour party not yet realised, through all the successes of privatisation, that that is not the way forward? The way forward is to let commercial managers dealing in the real world make the decisions. We should let them go forward and provide jobs, opportunities and expansion.
If Labour Members want a classic example of what they are advocating, I remind them of the National Enterprise Board. Politicians went out picking winners. How many hundreds of millions did that cost the taxpayer? More than enough. That is exactly why the industry should be allowed to make its own decisions and that is why it should not be second-guessed by the experts on the Opposition Benches.
Column 780I take issue with some of the remarks about the decision-making process behind Procord. I found them distasteful and inaccurate, and they were full of innuendo. I am glad tonight to be able to give the lie to some of the comments made. I am fresh to this job, so I do not carry any particular baggage. I have seen the figures connected with Procord. I cannot tell the House the figures because they are commercially confidential, but I can give hon. Members an absolute assurance that the decision to choose Procord was clear cut because its offer was far ahead of any other offer. Not to have taken that offer would have been ridiculous. As my right hon. Friend the Minister of State said, Sir Anthony Cleaver left the room and was not involved when the decision was made. Some of the remarks made were absolutely disgraceful. One of the other reasons for choosing Procord is that it wants to develop a business and to build and expand on that. That was a further opportunity for the staff.
Many hon. Members contributed to the debate; I shall not be able to accommodate all of them. My hon. Friend the Member for South Dorset (Mr. Bruce) made a careful speech. He remarked on the need for flexibility by the work force at Winfrith. He said that those people must change their focus and extend their non-nuclear work. I can confirm to my hon. Friend's constituents his assiduity in promoting the future activities of Winfrith. I suggest that he is one of my more regular correspondents; he was certainly one of my predecessor's regular correspondents.
The hon. Member for Caithness and Sutherland (Mr. Maclennan), my hon. Friend the Member for Wantage (Mr. Jackson) and four other hon. Members made the same point. They all wanted a firm commitment to the method of privatisation which, in effect, would close off freedom of choice. There was some suspicion that there was a hidden Government agenda to which we were secretly working. I assure the House that there is no secret Government agenda. All we want is to give AEA Technology the chance over the next year to develop its plans and then to choose the best method to move it forward. Of course, I am aware of the number of hon. Members who want it to be moved into the private sector as one unit on a flotation. I hear and understand that message, but hon. Members will understand that it would be wrong of me either to accept or to deny it tonight.
Mr. Maclennan: Part of the point of the message from the hon. Member for Wantage (Mr. Jackson) and myself, which the Minister may care to address now, is the fact that we want the House to be informed about the method that has been decided upon and then to consider the aptness of that method in the circumstances. Will the Minister undertake to bring the matter back to the House before a decision is taken? [Interruption.]
Madam Deputy Speaker (Dame Janet Fookes): Order. Before the Minister continues, I must tell hon. Members that I am growing rather tired of hearing running commentaries and private conversations in the House. I should like a little more quiet, so that I can hear the Minister without straining.
There is nothing unusual in the process that we are employing, and it will not be necessary to bring the matter to the House. Obviously, the House will be informed about what is to happen, but if the Opposition feel so enthusiastic about discussing it, they can use a Supply day to do so.
Column 781The hon. Member for Caithness and Sutherland also said that the proposed appointment of a site managing agent at Dounreay might have some effect on safety. As the House knows, for the Government safety is of paramount importance, and the hon. Gentleman's idea that the appointment of the agent will affect safety is an incorrect assumption.
Dounreay's safety regime will continue to be governed by the legal responsibilities under the nuclear site licence and by the nuclear installations inspectorate's regulatory regime. Those legal responsibilities will remain with UKAEA. It will continue to exercise them by issuing corporate safety instructions. Implementation of the UKAEA safety regime at Dounreay will remain the responsibility of the Government division site director. The managing agent will report to him and operate under his direction. The only difference from the present arrangements will be the presence of a stronger management team, which will enhance rather than diminish safety.
My hon. Friend the Member for Aylesbury (Mr. Lidington) spelt out the virtues of privatisation and the need to develop new markets, especially overseas. He also drew attention to areas of positive advantage and, like my hon. Friend the Member for Chesham and Amersham (Mrs. Gillan), said that the proof of the pudding was in the eating.
Indeed, the closest parallel to AEA Technology is Amersham International, and my hon. Friend the Member for Chesham and Amersham delivered one by one the hammer blows of the success of that company. Employment is up from 2,000 to 3,400, turnover is up, and profit--a dirty word to the Labour party--is up from £4.1 million to £43.5 million. Yet the Labour party would deny AEAT the chance to deliver the goods and to emulate Amersham International.
I shall bring my remarks to a close by mentioning again the concerns that some hon. Members, including the hon. Member for Caithness and Sutherland, expressed about safety. Whatever we want to do in such an area, the safety aspect must be paramount, and AEAT is similarly committed to maintaining the highest standards of health and safety. Whether it is in the public or the private sector, it will follow safety procedures fully consistent with those that apply within UKAEA as a whole. The suggestion that a privatised AEAT would cut corners on safety is arrant nonsense and does no credit to the House. Indeed, it is an affront to the dignity of the people in AEAT.
Hon. Members have described UKAEA as a national asset, and I agree. It has one of the highest--if not the highest--concentrations of graduates and skilled manpower in the country, and it has specialist facilities for staff to utilise those skills. It is essential that, as a nation, we get a good return from those skills, and that is what privatisation is all about.
AEA Technology has the potential to become a world-class player in the international science and engineering market. It has the skills and technology to compete successfully in the markets and to secure business for itself and for other British firms. That is what the Bill is about. It is the only way forward, and I commend it to the House.
Question put , That the Bill be now read a Second time:--
Column 782The House divided : Ayes 290, Noes 250.
Division No. 102] [9.59 pm
Column 782Ainsworth Peter (East Surrey)
Aitken, Rt Hon Jonathan
Alison, Rt Hon Michael (Selby)
Allason, Rupert (Torbay)
Arnold, Jacques (Gravesham)
Arnold, Sir Thomas (Hazel Grv)
Atkinson, David (Bour'mouth E)
Atkinson, Peter (Hexham)
Baker, Rt Hon Kenneth (Mole V)
Baker, Nicholas (North Dorset)
Banks, Matthew (Southport)
Banks, Robert (Harrogate)
Beresford, Sir Paul
Body, Sir Richard
Bonsor, Sir Nicholas
Bottomley, Peter (Eltham)
Boyson, Rt Hon Sir Rhodes
Bright, Sir Graham