House of Commons Hansard Debates for 6 Jun 1995

Mr. Jim Lester (Broxtowe): It is a pleasure to follow the hon. Member for Hemsworth (Mr. Enright) because he and I have many interests in common. However, I disagree totally with what he said about the purpose of the Bill. I would not be standing here to support it if I thought for a moment that it was designed to make the Crown Agents less effective and in any way to reduce our development effort. I also share with the hon. Gentleman the trust that he has in Baroness Chalker, which I think is widely shared. Indeed, I share that trust with my hon. Friend the Minister who introduced the Bill, who also has common interests.

I think that the hon. Member for Hemsworth was a little unkind about the Treasury, speaking about the hard-nosed Treasury. The Treasury and the Prime Minister have been foremost in the world in trying to relieve sub- Saharan debt. They have argued more strongly than anyone in the international forum for Trinidad terms plus. Indeed, the Chancellor did a tremendous job in Washington in proposing something that I know that he and I agree about--the relieving of debt--going as far as proposing selling International Monetary Fund gold, which is Oxfam's policy. It is hardly a hard-nosed Treasury that consistently and strongly proposes policies such as that.

When my hon. Friend the Minister introduced the Bill, he spoke about the many friends that the Crown Agents has. I admit, in my experience of development and on the Foreign Affairs Select Committee, those friends are a very select band. Most people would say that the Crown Agents is unknown, unsung and unrewarded for the efforts that the Minister described in such graphic detail and to which others paid tribute.

It might be a penalty for the Crown Agents that it has been in existence for so long--160 years--that its role has become lost in the sands of time. It has stayed in business because it has a reputation for integrity and impartiality and it has constantly adjusted to the changing circumstances in which it operates. As I see it, the Bill is another step in that direction.

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It is important to realise that, since the Crown Agents Act 1979, the Crown Agents has received no subsidies from Government and has repaid £15 million of its initial debt capital.

The hon. Member for Eccles (Miss Lestor) made great play of the difference between the Commonwealth Development Corporation and the Crown Agents and the reason why they are not treated similarly. It is obvious that the CDC has a totally different role from that of the Crown Agents. The CDC, as I have seen it all over the world, has the job of investing its own money for profit, but at profit margins smaller than those of the private sector. It offers long terms of repayment. It also has a role of encouraging further investment from the private sector in developing countries, especially countries that do not attract private investment.

I cannot imagine a private sector CDC being able to carry out that role because people would simply ask, "Why does it not invest directly?" It has a catalytic role, which is crucial. The Rothschild committee in Jamaica, which brought in many American business men to revive industry in Jamaica, did not work because they expected a return in three years, and Jamaican industries simply could not make a return in three years, although they could make a return in 10 years--and have done. That is why the CDC schemes in Jamaica have been so successful.

By contrast, the Crown Agents' main work has always been as agent of independent Governments and, increasingly, aid agencies. There is no role for Government in what are properly business decisions, so I strongly believe that the transfer to the private sector of the Crown Agents will enable it to meet the needs of customers such as by removing unnecessary restrictions.

As has been said, the Crown Agents is an international business, but with a social purpose. Of course it makes a profit. It is projected to make a profit in 1994 of £800,000. I am sure that the hon. Member for Hemsworth and I would want it to remain in profit, especially if the profits are given to a foundation to re-invest in development issues. The last thing that I would want is an unprofitable organisation, wherever the profits go, because if it does not make a profit, in the end it closes down. It is crucial that that is recognised, and it is important that the foundation is set up in a way that reflects that developmental need.

As we know, the Crown Agents operates in 150 countries with representatives in 38 and has orders worth more than $400 million world wide on behalf of clients, including the United Nations, the World bank, the European Commission and the Japanese Government. It is important to recognise that less than 30 per cent. of Crown Agents' income originates in Britain. As the hon. Member for Eccles said, although its activities are particularly helpful to small and medium-sized British firms that are trying to break into international export markets, the bulk of its business is generated world wide.

Mr. Enright: I am grateful to the hon. Gentleman for giving way. I wish to probe his previous point. I believe that the Bill is too skeletal and too limited in its outlining of the foundation. Therefore, it is a question of whether one trusts the Government. I accept that the hon. Gentleman trusts the Government and I hope that he will accept that I do not genuinely trust the Government. If he were in my shoes, would he agree with me?

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Mr. Lester: I have always been a very trusting person and I have not been let down too often. I trust not only this Government but a subsequent Government to bring to the House the changes in the Bill and to uphold the tradition of the foundation. We must ensure that the Crown Agents' energies and efforts continue to culminate in a profit--which is a measure of its success--so that the money can be reinvested, through the foundation, in things in which the hon. Member for Hemsworth and I are interested.

We have talked about the range of issues and projects in which the Crown Agents is involved. Perhaps not everyone knows that it has improved municipal finances in China and assisted with tax computerisation in Nigeria. Many hon. Members have mentioned its significant involvement with convoys in the former Yugoslavia. I know from my own use of the know-how fund in the former Soviet Union that the Crown Agents played a vital role in that area.

The Minister referred in passing to the Crown Agents stamp bureau which provides, on an agency basis, high quality stamp programmes and design, procurement and marketing services for more than one quarter of the world's postal administrations. Perhaps the stamp collectors of the world do not fully appreciate the Crown Agents' achievements in that area.

The Foreign Affairs Select Committee has taken a continuing interest in the Crown Agents and the Government have undertaken to prepare a paper to present to the Select Committee. They are willing to look at other means of providing information about Government proposals. The Foreign Affairs Select Committee acts increasingly as the House's monitor on a whole range of issues. We are constantly concerned about a variety of matters, such as the Commonwealth Development Corporation and the Crown Agents, and I am sure that the Select Committee will jealously protect the Government's promise to keep the Select Committee informed about the many issues that have been raised in the House.

What would the foundation do, and how would it change the present system? The foundation could expand its own right business, and some examples have been given of how that could be achieved. The foundation could accept contracts from private sector clients, which it is currently unable to do in Britain, and it could accept contracts from public sector bodies in the United Kingdom other than the Overseas Development Administration. That is a valuable development for the Crown Agents.

The foundation may also take investment decisions which presently require ministerial consent, including entering into partnerships and appointing directors of subsidiaries which will free the foundation's operations. Most importantly--of course, if hon. Members do not trust the foundation, it is not as significant--it will be free from financial controls imposed by the Government. I support what the hon. Member for Eccles said about privatisation having a positive effect on British companies. I think that the foundation will be in a far better position, as it will be stronger and better able to attract overseas customers on behalf of British exporters.

The ODA has a very important interest in the success of the Crown Agents because it undertakes about 95 per cent. of ODA finance procurements. Of the procurement done by the Crown Agents for the ODA in the past three years, about 45 per cent., by value, in each year has been

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in core countries. It should be recognised that the ODA has a keen interest in ensuring that the Crown Agents continues to work on its behalf. I do not believe that the disaster relief committee could have operated effectively without the Crown Agents' expertise in delivering humanitarian aid which has expanded enormously. I am sure that the Bill will make a great deal of difference in that area in future.

All hon. Members recognise that the real value of the Crown Agents lies not in its physical assets, but in its personal assets--the people, the traditions and the concepts under which it operates. It has undergone major restructuring in recent years and costs have been cut. I welcome the Minister's response to my hon. Friend the Member for Carshalton and Wallington (Mr. Forman) that there are no plans for any further redundancies. It is now a matter of expanding on the present basis.

It is also important to recognise that important key clients, such as the World bank, the European Union and the Japanese, in particular, are satisfied that the Crown Agents' business will continue to be viable once it has changed.

As I said earlier, more than 70 per cent. of the Crown Agents' business is derived from developmental sources other than Britain. It is a remarkable achievement for a British agency to attract that degree of support, and it bodes well for the foundation's future. It has satisfied its clients that the confidentiality of its relationships with them will be fully respected.

In conclusion, I turn to the question of pensions. Whenever there is a change in status of a body--particularly one as involved as the Crown Agents--it is extremely important to reassure those who have given and who continue to give their services to the agency about their pension provision. I accept the Minister's assurance that the assets of the current pension funds are well ahead of what is needed in order to support the current pension base. There are no plans to change the present pension arrangements. The value of a pension surplus is a very important part of any transition and it is vital to hold together the people who have such a successful track record. I support the Bill. We must ensure that the foundation has a very clear developmental role. We must also make sure that, when the Crown Agents is released from government control, it will continue to have a developmental impact and to give its expertise freely throughout the world. It must use the resources that it generates to continue to perform the valuable work of a foundation which has a long-term social developmental objective.

6.27 pm

Mr. Menzies Campbell (Fife, North-East): The hon. Member for Broxtowe (Mr. Lester) speaks with great authority and from a considerable reservoir of knowledge about developmental matters. It is a matter of genuine regret that I do not find myself of the same cast of mind as him this evening.

All hon. Members agree about two things: first, that warm and generous tribute should be paid to the Crown Agents for its past and continuing work; and, secondly, that we should propose the early canonisation of Baroness Chalker. No doubt to her considerable alarm, she seems to have attracted uninhibited support and congratulations from both sides of the House.

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I doubt that the House has been asked on many previous occasions to approve legislation that has been drawn in such exiguous terms. Perhaps we should congratulate the Minister on managing to get through his speech without showing any of the embarrassment to which the saintly Baroness Chalker admitted from time to time during the debate in the House of Lords when she was quite properly pressed about matters of detail and found herself unable to answer the questions.

The debate would inevitably have been better informed had we all had access to the Coopers and Lybrand report. I understand that it has not been given a wide circulation, nor indeed has it been leaked in the past 24 hours on the grounds of commercial confidentiality. Of course, commercial confidentiality is a proper basis for the restriction of circulation of documents, but it normally applies to financial matters.

I cannot understand why a report, which no doubt contains important sections on structures, could not have been released, at least in respect of the structures. It would have been a matter of great interest to all right hon. and hon. Members to know precisely what Coopers and Lybrand said about the foundation and the relationship between the company which is to be formed and the foundation. It is a matter of regret that we have not seen the report, even in a bowdlerised form which would have allowed us to make a more informed judgment about the nature of the proposed structures.

The structures are extremely unusual. We have passed the arid debate over whether or not it is a privatisation. It is now generally agreed that it can be described as a privatisation. It is a pretty unusual one, however, because, so far as I know, none of the others have been accompanied by the creation of a foundation.

In the light of the events in the past week or so, it takes a certain amount of nerve to refer to the gas privatisation as a paradigm of privatisation and something to which we should all aspire. Considering the matter from a structural point of view, it is notable that when the gas industry was privatised, no one found it necessary to create a foundation in advance of the privatisation.

Mr. Jacques Arnold: The hon. Gentleman talks about the paradigm of British Gas and its good works. Would not the environmentally friendly development of gas in Kazakhstan be a particular example of those good works? Would not the massive improvement to the urban gas network in Buenos Aires and to pipelines elsewhere in Latin America represent other good works which would never have happened in the bad old nationalised industry days?

Mr. Campbell: The hon. Gentleman believes in the gospel according to privatisation, but those who attended the British Gas annual general meeting last week took a rather different view. It takes a particular courage in the House this week to suggest that everything that happened in the name of the privatisation of the gas industry has been perfect.

I return to structure. The fact that it has been found necessary to introduce that intermediate step is in itself an acknowledgement that the privatisation is rather different in character from any of the others. Ultimately, it comes down to a question, as some have said, of trust and, as others have said, of belief.

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I do not believe that the legislation has provided the House with sufficient detail about the disposal of the business and the future character of the foundation. That was clearly part of the rather concerted, and some might say successful attack mounted by the Opposition in the other place.

There will be no parliamentary scrutiny of the transfer to the successor business. I understand that an amendment was proposed in the other place which was not accepted and which would have allowed for scrutiny at that time. I cannot imagine why the House could not consider such an issue at that stage, but no doubt we may be told why in due course.

One is left with the overwhelming impression that what we have here is enabling legislation--admittedly, so described--that provides inadequate details of precisely what may result in the end. One is drawn to the conclusion that it would almost be better to have a privatisation such as the gas privatisation as that would force the Government to come clean about precisely what they intended to do and there would have to be legislation setting out all the details that we are now denied. In those circumstances, we would have to have the very detail being denied to us at the moment.

I shall not detain the House any longer. I do not doubt the sincerity of the Minister, but he is asking the House to take too much on trust, and for that reason I shall certainly advise my colleagues to vote against the Second Reading of the Bill. 6.34 pm

Mr. Peter Luff (Worcester): The debate has at least two characteristics in common with the debate on the Bill in another place. The first is that it has been an opportunity for general expressions of admiration for my noble friend Lady Chalker. I am delighted that the hon. Member for Hemsworth (Mr. Enright) paid tribute to her, as did the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), my hon. Friend the Member for Broxtowe (Mr. Lester) and, most recently, the hon. and learned Member for Fife, North-East (Mr. Campbell). That was one characteristic of the debate in another place.

Mr. Enright: May I emphasise the fact that in the present bunch of Ministers Lady Chalker shines out like a beacon?

Mr. Luff: She is one of the many causes for celebration about the Government, and another is my hon. Friend the Under-Secretary of State for Foreign and Commonwealth Affairs, who opened the debate and who will reply to it.

Another characteristic of the debate, as in another place, is that it is clear that the activities of the Crown Agents command widespread and universal support. There was a mood both here and in another place that nothing should be done to inhibit it from continuing to perform its valuable role and that it should be encouraged to develop and expand that role.

I first became aware of the Crown Agents through my interest in stamp collecting, as you probably did, Mr. Deputy Speaker. During the recent recess I browsed through the collections of my father and grandfather and wondered how many stamps in those albums had been procured as a direct result of activities of the Crown Agents.

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We have been reminded on a number of occasions that the Crown Agents remains responsible for the stamps of about one quarter of the word's postal administrations. Perhaps that simple fact led a number of journalists to jump to the wrong conclusions about the Bill. We read in The Times on 12 November 1994:

"The scrapping of the Post Office plans"--

the plans to privatise the Post Office--

"prompted the Prime Minister to back down his earlier opposition to proposals to privatise the Crown Agents. Plans to allow the Crown Agents to leave the public sector were shelved earlier this week after Mr. Major and Cabinet colleagues decided that it would provoke damaging opposition. However, last week's Post Office decision revived calls from senior ministers . . . to let the Crown Agents go into private hands."

That is a bizarre conspiracy theory by any standards. The article continued:

"The plan to privatise the body will prompt fears that Britain will lose some of its international influence, and in particular lead to a decline in foreign investment in Britain."

However, quite the opposite is true. The Bill is necessary to enable the Crown Agents to continue to perform its excellent work. The Daily Telegraph fell victim to the same conspiracy theory: "A scheme the plan to privatise the Crown Agents has been revived by the Government after the collapse of plans to sell the Royal Mail".

I do not understand how any serious journalist can sustain that argument. My hon. Friend the Minister made it clear that the privatisation is not one from which any revenues will flow to the Exchequer. In no sense can it be construed as enabling us to fund tax cuts--not that I accept that as an argument for privatisation. It is a privatisation strictly on the merits of what freeing up an organisation will enable it to do.

The Crown Agents currently operates at no cost to the taxpayer, and since its incorporation in 1979 it has received no subsidy either. How many of the current privatised industries could say that? It has paid about £20 million in capital and interest to the Government and the only modest cash flow resulting from privatisation is the repayment of some £2 million in debt. The privatisation is being carried out because it is right for the organisation.

The Crown Agents is a crucial part of the aid programme. It may be true, as a number of hon. Members made clear, that about 70 per cent. of its business comes from foreign principals and only about 30 per cent. from the British Government. But the Crown Agents' role within the British aid programme is still crucial. It must be allowed to flourish and continue to perform its role to the best of its abilities.

We know that the British aid programme is one of the most effective in the world; that can certainly be said of our bilateral aid programme. The United Kingdom is a member of the development assistance committee of the Organisation for Economic Co-operation and Development. Part of the departmental report of the Foreign and Commonwealth Office reads:

"The Development Assistance Committee periodically reviews the aid programmes of its members. In 1994, the UK aid programme was reviewed, and was commended on its highly concessional, business-like bilateral aid programme largely oriented towards the poorest developing countries."

The Crown Agents is extremely important to that aid programme.

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Three bodies are especially important--I may have overlooked others--each of which the Government are wisely treating slightly differently. Apart from the Crown Agents, there is the Commonwealth Development Corporation and the British Council. The council, which often seems to be simply an education organisation, has an important role to play in the aid programme. I shall quote again from the Foreign Office report. It states:

"In 1994-95 ODA will provide some £33.7 million for the British Council and the grant-in-aid arrangements. These resources are being used to implement programmes in developing countries that achieve objectives central to British aid policy. Priority has been given to human development, environmental protection, health and population activities, open and accountable government and economic policy reform."

The British Council operates on essentially a non-commercial basis with grant in aid from the Government.

The week before last, I was in Barcelona as a member of the Select Committee on Welsh Affairs. I am delighted to say-- [Interruption.] I can assure the House that I and other members of the Select Committee were there for good reasons. I learned in Barcelona that the British Council's language teaching operations are paying for the cost of its overall activity. The council may not be a strictly commercial organisation but it is performing well.

Mr. Foulkes: The House needs to know--those of us who are sitting through this long debate will find it fascinating to know--why the Select Committee on Welsh Affairs was in Barcelona. I hope that its members, especially those who are Conservative Members, took on board how successful devolution has been in Spain, as it has in other countries. It is--

Mr. Deputy Speaker: Order. This is all extremely interesting but the hon. Member knows that he is going wide of the debate.

Mr. Luff: Much as I would like to respond to the hon. Gentleman's intervention, Mr. Deputy Speaker, I do not want to stretch your patience.

Another organisation that plays a crucial role apart from the Crown Agents is the Commonwealth Development Corporation, which essentially provides concessional loans to enable the private sector to develop within the developing world. The Government have said--in my view, rightly--that such activity should not be privatised. It is important to remember, however, that the Government have said that the CDC's activities should be market tested.

The Crown Agents falls into a third and distinct category from the two other organisations that I have mentioned. The Financial Times has described the Crown Agents as one of the world's "biggest purchasing organisations". It has a considerable role in aid delivery. In the 1993 annual report, the managing director of the Crown Agents stated:

"Increasingly, as aid becomes subject to a more detailed cost-benefit scrutiny than in previous cycles, we find ourselves able to demonstrate our effectiveness on several levels. Our cost effectiveness in the actual spending of aid is self-evident. Yet we can also monitor the aid process, interfacing between donor and client to provide surety to each that their money is being well spent, and we can manage and train recipients to handle effectively and accountably the funds made available to them."

I am not one of those who believes that the quantum of the aid budget is the sole measure by which we should establish whether the Government have a responsible

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attitude to the developing world. My hon. Friend the Member for Broxtowe reminded us of the excellent work that is being done by my right hon. and learned Friend the Chancellor of the Exchequer and my right hon. Friend the Prime Minister on debt relief issues, especially in sub-Saharan Africa. The International Monetary Fund has been called upon to dispose of part of its gold stocks. A significant aid budget is, however, an important part of our contribution to the developing world. It is crucial that our constituents should feel that the money is well spent.

One of the most important factors that would undermine the support enjoyed in the country as a whole for the aid budget would be any feeling that the moneys directed to it were being badly spent. We have already heard that the OECD regards the British overseas aid budget as well spent, and a crucial role is played by the Crown Agents in ensuring that the moneys are well spent. We must not undermine that activity.

The Crown Agents is an extremely large organisation; it is much larger than most people realise. It serves about 150 different countries and provides a range of services to aid agencies beyond the British Government--for example, the United Nations, the World bank, the European Union and, especially, Japan. It has carried out work for many large public sector organisations throughout the world. I have talked to one or two representatives of those who have benefited from the services of the Crown Agents. I have been delighted to hear of the support that its work enjoys among many organisations and of the strong feeling that the organisation represents excellent value for money.

A bewildering range of projects is pursued by the Crown Agents, which ranges from bank training in Tashkent to humanitarian relief in Macedonia. Its work is expanding into banking. In the 1994 annual report, the managing director, Peter Berry, stated:

"Through Crown Agents Financial Services Ltd . . . we are developing and expanding our role as a recognized specialist provider of banking financial advisory services relating to the disbursement of development aid and the financial control of development projects."

As I have said, Crown Agents is a bewilderingly large organisation. Most of its activities are closely related to the private sector. Indeed, it has a close and intimate relationship with the privatisation process itself. In the 1994 annual report, an entire page is dedicated to its work on privatisation and commercialisation. In the context of the Bill, it is worth examining what it is doing in more detail. We read that lecturers of the Crown Agents are delivering a series of courses at the Moscow Institute of Privatisation and Management

"to train the Institute's own trainers in passing on further instruction."

We read too that the Crown Agents' "legal advice" is helping "in setting up privatization trust funds in Kenya, Tanzania and Uganda".

We read also that the

"Administrative Staff College of Nigeria is in the forefront of enhancing the professionalism of that country's management cadre." The Crown Agents has a close involvement in that work.

The business sector review tells us that the Crown Agents has been

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"engaged in a major economics consultancy project for Japan's OECF to assess the progress of privatization in Ghana, for which we formed an Anglo-Japanese team."

It is active also in Sarawak with its economic development corporation.

Mr. Nigel Evans: Does my hon. Friend find it bizarre and ironic in many ways, especially in the light of the debate and given some of the remarks of Opposition Members, that all the countries that he has mentioned can recognise the benefits of privatisation? It seems that only Opposition Members are unable to do so.

Mr. Luff: My hon. Friend is exactly right. The Crown Agents is one of the many forces involved in exporting Britain's most successful product- -privatisation--around the world. The process has been emulated by virtually every country on the globe.

I return to the review from which I was quoting. The Crown Agents is active in Romania. The review reads:

"We organized in-country seminars for the Romanian State Ownership Fund, covering the creation of a market for stocks and shares".

An organisation that is so closely committed to privatisation surely deserves to be privatised itself. I believe that the process would richly enhance the organisation's work.

It is important to remember that Crown Agents is not an organisation that deals only with commercial issues. It has a crucial role to play in humanitarian assistance in former Yugoslavia and elsewhere. It is part of the United Nations emergency response to the flight of over 1 million Rwandan refugees across the border of Zaire. The Crown Agents review tells us that its

"logisticians and equipment were airlifted to Zaire to help with . . . operations and transportation."

It has been involved also in Croatia and Malawi where it "handled the procurement through our Durban office of maize for drought-affected Malawi, funded by the ODA."

It has been active in Angola

"on behalf of the Japanese government".

The review tells us that it

"purchased major medical equipment and ambulances for Uzbekistan."

Technical assistance was provided in the Philippines. The Crown Agents has been working in Bosnia and humanitarian aid has been delivered to Macedonia. It is interesting that it is involved with the ODA in a major project. I shall quote again from the 1994 annual report:

"We ended the year in discussions with ODA about plans to provide a full- time emergency response unit, based in Sutton but on permanent standby ready to deliver an immediate logistics response anywhere in the world, with full head office back-up."

Many hon. Members have, rightly, drawn attention to the principal asset of the Crown Agents--its staff. That is certainly the case and the country has every reason to be proud of them as well. As Baroness Chalker reminded the House of Lords on 28 February, over the past year, some 11 members of staff of the Crown Agents have been honoured for their work in both Rwanda and the former Yugoslavia. We can say with confidence that, had it not been for the work of the Crown Agents, many more lives would have been lost in both those countries.

I am a little surprised not to have had an intervention yet from an Opposition Member to ask, "If it is so successful, why change the basis on which the

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organisation works?" I believe that it is important to do so for two separate but important reasons. First, I believe that it needs a greater independence than it enjoys at present. Secondly, I believe that it needs to be made more responsive to the needs of its customer base, which privatisation always achieves.

Let us take the issue of independence. We have heard that some 70 per cent. of the work of the Crown Agents is now conducted for non-United Kingdom principals. We have heard that the use of Crown Agents by the ODA has declined but remains very important in the delivery of its aid programme.

In the Financial Times , though, Mr. Peter Berry, the managing director of the Crown Agents, said, on 26 August:

"When you need ministerial consent to do anything materially different from the act that governs us, then there is `a stop in the mind' against doing it. It will be very different going back to a board. There will be no disincentive to be pro-active,"--

I apologise to the hon. Member for Hemsworth for the use of that word, but it is in a quotation from Mr. Berry.

Mr. Berry continues:

"Accountability will be closer to home. It will also be easier to demonstrate to doubters that it is independent of government pressure to `buy British'."

We have heard a great deal from Opposition Front Benchers about the role of the Crown Agents in encouraging a "Buy British" policy. I fully acknowledge that, being based in Britain, and with a large number of ex-British colonies, with members of the British Commonwealth among its client base, there will be a strong tendency to buy British, but, nevertheless, with about 70 per cent. of its business coming from non-British sources, foreign Governments want an assurance that there is not an excessive bias in the Crown Agents work to British suppliers. The independence that privatisation will bring to the organisation is hugely important and will help the organisation to flourish again.

What about responsiveness? A very interesting point indeed, which, I am glad to say, was raised by the Opposition Front Bench, is the ability of the organisation, as a result of the privatisation, to start to provide services within the United Kingdom. I think that that will be an extremely healthy development indeed. Other important United Kingdom purchasing organisations have need of the services of an organisation such as the Crown Agents. That is extremely important. We know that privatisation brings responsiveness to the customer.

Opposition Members have laughed and sneered at some of the examples of privatisation, but that is simply unfair. Only this week in my postbag I received a publication from BT, in which it told me: "On average, a BT customer is now unlikely to experience a network fault more than once every five and a half years, or experience more than one inland call in 200 failing because of the network."

We do not have to cast our minds very far back to remember the old state- owned BT, and remember what a radical transformation there has been of the particular organisation.

What about public payphones?

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