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Mr. Bayley: Does the hon. Gentleman accept that it is by no means a one-way street in terms of public attitudes to BT? Earlier this week, I received a letter from one of my constituents, who complained that the telephone
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directories are no longer published promptly. He had been looking for the number of a company in my constituency. He was unable to find it and so was unable to get in touch with it to offer it business, because the latest telephone directory for my constituency is now 18 months old.Mr. Luff: I am looking rather nervously at you, Mr. Deputy Speaker, and wondering what you will make of this diversion into the ways of BT. As I have started, I think that I had better finish.
I am glad to say that I have had no such similar complaint. Telephone directories in the Worcester area are a great improvement on the old directories. The business pages are now separate from the residential pages. That, again, is another example of the enhanced responsiveness that privatisation brings to organisations such as British Telecom and will, I am sure, to the Crown Agents.
Mr. Jacques Arnold: On the matter of telephone directories, is not the problem, perhaps--
Mr. Deputy Speaker: Order. Telephone directories are nothing whatever to do with the Bill. We should get back to the debate on the Bill.
Mr. Luff: Bearing in mind that ruling, I shall not refer to the vast improvement in public payphones that has resulted from the privatisation of British Telecom. It is important to remember that privatisation can put organisations into a world-class position. I am sure that that is a position that Crown Agents already enjoys, but I am sure that that position will be enhanced if this process continues.
I was interested to read--I shall make this very brief comment, Mr. Deputy Speaker--that BT is now about to become
"the first operator to abolish unit charging across its entire network, increasing almost threefold the number of telephone lines"--
Mr. Deputy Speaker: Order. The hon. Gentleman is trying my patience now, whether he is being brief or not. He must get back to the Bill.
Mr. Luff: I hear what you say, Mr. Deputy Speaker, and of course I shall respect your ruling, but the point is that privatisation of the Crown Agents will bring benefits to the organisation, the staff and its customers. Every privatisation that we have so far had in this country has shown precisely that pattern, and the pattern will be repeated when the Bill is enacted.
I see no problem whatever with moving the Crown Agents into the private sector, but I have some questions to ask the Minister about the structure of the privatisation that is envisaged, not in the Bill, as has been made clear, but in the process that will follow after enactment--the transfer of Crown Agents to the foundation. I have heard it suggested that one of the principal reasons why the Government have followed this proposed route of privatisation is because the Japanese Government, the second largest customer of Crown Agents, were unhappy about the prospect of a full-blown privatisation and then having to deal simply with another private sector organisation. I do not know whether that is right, but the foundation's structure, which has been set up--not in the Bill but in ministerial speeches that have accompanied the Bill--is novel, to say the least.
I share some of the reservations that have been expressed about the absence of detail, and particularly about the absence of memoranda and articles of
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association of the new Crown Agents. I hope that the novel structure does not represent a loss of confidence in privatisation itself. Given the success of privatisation, I am sure that we would not want to send that message to our constituents.Where does the idea for the foundation come from? Has it come from the Crown Agents? It seems to me, from reading some of the material in preparation for this speech, that Crown Agents has introduced the idea of a foundation, or was the idea driven by the Government? Will the foundation that the Government promise be sufficiently commercial?
The Financial Times described the foundation as having a structure
"similar to the Wellcome Foundation, the health insurance groups PPP and Bupa, the motoring organisations the AA and the RAC and the British Standards Institute."
An official at the ODA, to which the Crown Agents answers, said that it will be entirely commercial in its approach and will be expected to make a return, but profits will be ploughed back into the agency. It will answer to a board of directors, which will be selected from a cross-section of its users, including foreign aid agencies and exporters. By not exposing it to the pressure of shareholder interests, it will be able to act more easily in its own interests and in the interests of clients in the developing world. One of the advantages of privatisation is that companies become responsive to shareholder interests. I worry that perhaps the Government have not gone far enough in this particular privatisation.
The board of the Crown Agents said, in its 1993 annual report, that it recognised that the preponderance of non-UK clients
"might make it more desirable for the ownership of the Crown Agents to reflect a wider base than that of UK Government. As an alternative, the Board therefore recommended that the business and assets of the Crown Agents should be transferred to a specially formed foundation."
That seems to suggest that the drive for this has come from the Crown Agents itself.
I worry about the details that we have so far about the foundation. We read that it will have a two-tier structure with the foundation being the sole owner of the operating company. Does that mean that the foundation will be able to purchase other organisations with broadly similar objectives to Crown Agents?
I worry whether Crown Agents will indeed be able to register as a charity, and whether that is the right route if trading is the major activity. I know that that issue was discussed in another place, but I do not think an entirely satisfactory answer was given. I welcome the fact that the memorandum and articles of association are to be tightly drawn up to reflect and build on the social, ethical and developmental principles on which the Crown Agents business is based, but those have not yet been published. I also read among the conditions of the new foundation that the operating company will be able to pass its profits to the foundation. The foundation will not distribute dividends but will use any profits in the Crown Agents business in pursuit of its overall objectives. Does that
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mean that such profits can be applied to activities outside those of the Crown Agents in new companies, new organisations or other kinds of activity?I would also appreciate more clarification on the members of the foundation. We read that they are not to be appointed by Ministers in order to guarantee the independence of the organisation. I presume that that means--I think that I understood my hon. Friend the Minister to say this in his opening remarks--that the current members of the board of Crown Agents will appoint the new members of the foundation.
Mr. Baldry indicated dissent.
Mr. Luff : I see my hon. Friend shaking his head so I must be wrong, but I should like to know how the members of the foundation will be appointed. We know who will not do it, but who will do it? If anything, although the Bill might go far enough, the follow-on procedures do not. I, unlike the hon. Members for Eccles (Miss Lestor) and for Hemsworth, would have preferred a full-blown trade sale of the organisation to a reputable body with a carefully drawn memorandum and articles of association, perhaps, as a quid pro quo, with a golden share for the Government lasting rather longer than the five years envisaged as part of the foundation treatment. That would give the Crown Agents the true freedom that it needs to win the battles in the world.
The Bill is much better than the status quo and I have no hesitation in supporting it in the Lobby tonight. However, I hope that we are giving the Crown Agents a sufficiently free rein. 7 pm
Mr. Nigel Evans (Ribble Valley): I am extremely grateful for the opportunity to take part in this important debate. I declare my interest as a former stamp collector. No doubt, at some stage, I too managed to collect stamps from around the world which were purchased and provided by Crown Agents. In addition, I do not intend to be the only one this evening not to give my support to Baroness Chalker for her fine work in bringing forward this valuable and important legislation.
Much has been said this evening about the concept of privatisation. My hon. Friend the Member for Worcester (Mr. Luff) referred to the theory going around that the legislation has been brought forward because of the lack of such legislation for the Post Office. That is arrant nonsense. Even to compare the two privatisations is ridiculous. I, like many of my hon. Friends, would have far preferred to see the privatisation of the Post Office, with certain provisions for rural areas, to allow it to prosper and flourish in the private sector. That is not to be, but the privatisation of Crown Agents has nothing to do with the attempt to privatise the Post Office. It has been brought forward on its own merits and should be supported on its own merits.
Much has also been said this evening about the profit motive and about whether an organisation such as Crown Agents should be allowed to make a profit and, if so, what it should do with that profit. It is vital that we encourage Crown Agents to be as profitable and businesslike as possible. As has already been said, its profits will be reinvested in the good work of the organisation. Baroness Chalker said in the other place that no dividends would be given to shareholders per se, but that the money would be reinvested in the Crown Agents' good work.
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Crown Agents has a long history. Before 1979 it was unincorporated. The current Act gives it a strong regulatory framework, following some misguided forays on its own account which came to light in the mid-1970s. Since 1979, Crown Agents has been profitable and has received no Government subsidy. There is no good reason for it to remain in the public sector. It is a truly international organisation with a fine reputation, as we have heard. We must ensure that, whatever changes are made, that reputation remains untarnished and its good work continues.The Overseas Development Administration is no longer the largest client of Crown Agents. As we have heard, it provides only 30 per cent. of its current business. Crown Agents needs greater freedom to take business decisions, while its clients, including the ODA, look to it to maintain the highest standards and impartiality for which it is rightly renowned.
Mr. Bayley: I am sure that the hon. Gentleman did not intend to mislead the House when he said that the British Government were no longer the Crown Agents' biggest customer. They are, of course, the Crown Agents' biggest customer, but no longer its only customer.
Mr. Evans: I am extremely grateful to the hon. Gentleman. I obviously would not wish to mislead anyone. I simply put it on the record that 30 per cent. of ODA money will go through Crown Agents. The interests of clients and aid programmes would be well served if the organisation could operate with greater freedom than the Crown Agents Act 1979 allows. Therefore, it should be accepted on both sides of the House--I was surprised to hear some of the reservations expressed tonight--that the 1979 Act is out of date and needs to be changed along the lines suggested by the Minister.
As we have heard, Crown Agents is a major international supplier of procurement, financial management and technical services to clients in some 150 countries, including bilateral aid donors and multilateral agencies such as the World bank, the United Nations and the European Union. It plays an important role in assisting the Overseas Development Administration to implement the bilateral aid programme. Crown Agents is a vital aspect of developing the third world. Its agricultural assistance--crop storage and
development--energy advisory service, power generation distribution and water supply and sanitation systems all add up to a highly proficient package for those who need it.
That sterling work includes the safe delivery of emergency aid in Bosnia and Rwanda. The Library research paper documents clearly some of the excellent work done by Crown Agents. I was in Croatia in December and I went to Pale in the previous January to see some of the work being done there. I am sure that the House knows of the devastation currently being visited on that region. We all wish that the peace process was more constructive, and we must be realistic about the problems faced in that region. We should applaud the work of Crown Agents in that regard because it is one of the unsung heroes of the conflict. Everyone talks about the work of other agencies, but Crown Agents is rarely mentioned. Its work in ensuring that aid gets through is vital. I wish that it did not need to be there in the first place.
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From what I have heard today, it is clear that Crown Agents is a good organisation which needs to be freed up, but freed up in such a way that it fulfils the important social and developmental objectives that we all share. As we know only too well, today everyone has to pay his or her way and it is right that Crown Agents should do so, too; it should trade fairly and profitably. We must accept that this is an era of rapid change in world trading patterns. My hon. Friend the Member for Worcester referred to the way in which the world has changed and other countries' privatisation policies, and Crown Agents must square up to that. There are new challenges to be faced throughout the world.One need think only of the finalising of the Uruguay round and the establishment of the World Trade Organisation to realise that there has been a phenomenal change in world trading patterns in recent years. It is the Government's duty to see that Crown Agents is in a position to benefit from those changes and to improve its commercial activities. That is what the Bill does. It is an enabling Bill, in effect transferring Crown Agents to an independent foundation. The Bill provides enabling powers for the Secretary of State to vest the corporation's assets, rights and liabilities in a Government-owned share company and, in time, to an independent foundation. The company will thus be transferred. The present statutory corporation will be dissolved once its remaining functions have been satisfactorily discharged. That seems perfectly reasonable to me. The new way forward for Crown Agents appears to be commercial, although not in a revenue-raising sense; the £2 million of outstanding debt is likely to be paid off, but little else will be. That is why the suggestion that this is the privatisation to replace that of the Post Office is ridiculous. The Crown Agents will answer to a board of directors, which will be selected from a cross-section of its users, including foreign aid agencies and exporters. That, too, strikes me as a fine idea.
Throughout the discussions on the future of Crown Agents, I have been as delighted by the attitude of my right hon. and noble Friend the Minister for Overseas Development as everyone else. She has heeded two key aspects when changing the structure of the organisation: consultation and flexibility. The consultation process has been comprehensive. The Minister announced her intentions back in August 1993, giving plenty of notice to interested parties who might wish to contribute to the mechanics of the Bill. The Bill clearly allows for considerable flexibility in its implementation--which should be welcomed, rather than subjected to the criticism offered by Opposition Members.
The changes advocated by the Bill will maintain the "honest broker" status of the organisation. I hope and expect that the Crown Agents' 18 overseas offices and UK-based marketing force will continue to provide their splendid monitoring service of central tender boards. That is best done via a broadly based organisation. No doubt the agency will continue its role in eastern Europe and the former Soviet Union. I recently visited both Moscow and the republic of Azerbaijan--not, I hasten to add, with the Select Committee on Welsh Affairs, but under other auspices--and I saw the gains to be made from the training of staff in procurement agencies in those states. I saw definite benefits for agriculture, energy, health and transport.
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It is plain that the core of the Crown Agents' business is buying, and that its other activities ultimately support the buying activity. Surely that is an ideal set-up for the kind of changes that the Bill will bring. Greater autonomy will allow the multi- disciplinary nature of Crown Agents to blossom--in particular the technical services, which allow the work of the aid programme to flourish.I fully support the Government's aim to recreate Crown Agents as an independent foundation with a social purpose and continued developmental objectives. In addition, Crown Agents will no longer be limited to serving aid agencies and other public bodies as its present constitution dictates: in fact, newly established private corporations in the developing world, which used to be Crown Agents' clients when it was Government-owned and would like to continue to be supplied by Crown Agents but are prohibited by its present constitution, will be able to become its clients again when the Bill is enacted.
Many of the Crown Agents' former trainees now occupy positions of great importance for UK exports, including directorships--or their equivalent--of Government supplies in countries as diverse as Sri Lanka, Malawi, Saudi Arabia and Papua New Guinea. I am sure that their loyalty will continue with the new agency. I have been fortunate enough to visit both Malawi and Sri Lanka--although, again, not with the Welsh Select Committee--and have observed that the wisdom of Crown Agents is vital to the development of those countries' infrastructure.
I was in Malawi last summer, just before the general election there--the first election held in Malawi for more than 30 years. It was a great pleasure to see democracy rolling across the country. There is no doubt that Malawi is not only one of the poorest countries in Africa but one of the poorest in the world. The work of Crown Agents has ensured that supplies get through as quickly as possible, particularly when the area is devastated as it was during the recent drought, and that the maximum number of lives are preserved. I hope that last year's elections and the change of Government in Malawi will give the country a shot in the arm, and the chance to develop in the way that is best for it rather than a way imposed on it from outside or, indeed, from within by powers acting for their own ends.
Malawi has great tourism potential. Other parts of Africa have been able to benefit in that way, but so far Malawi has not. Perhaps its past character has been part of the problem. I hope that the new democratic Government will be able to open its doors to many more tourists, particularly from the United Kingdom. Many tourists visit Malawi because Crown Agents has been there and ensured that the country has not suffered, although it could easily have done so. I hope that tourism, alongside aid, will ensure Malawi's future. It is easy for us to think that the fact that a country such as Malawi is in receipt of aid in itself constitutes a long-term future. That patently is not true. People living in Malawi need something a bit more secure: they need a future outside aid from countries such as the United Kingdom. I believe that it can benefit from tourism, just as South Africa did as a result of a change of Government and the opening of its doors--and that country has also benefited from the work of Crown Agents.
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Crown Agents has given Malawi other aid: for instance, the local government development project in 1994-95, Malawi fisheries training in 1993, the Lake Malawi fisheries research vessel and the evaluation of ODA fisheries programme in 1988.Mr. Jacques Arnold: Will my hon. Friend give way?
Mr. Evans: I should be delighted to.
Mr. Arnold: Is it not significant that the Crown Agents project was funded by the World bank--by a foreign rather than a specifically British donor? Is it not even more significant that Crown Agents was seen as a channel to bring local government experience from Britain to bear in Malawi?
Mr. Deputy Speaker: Order. The hon. Gentleman's only relevant point was contained in the two words "Crown Agents".
Mr. Evans: It was Crown Agents that was able to facilitate the programme to which I referred.
Mr. Deputy Speaker: I have been patient, but the hon. Gentleman has strayed from the Bill. He has persisted in using the words "Crown Agents", which has enabled me to remain in my seat, but I hope that he will return to the Bill.
Mr. Evans: Thank you, Mr. Deputy Speaker. I shall leave the subject of Malawi, but I felt that it was important to give a specific example of a country of which I have some experience, where I have seen the work that is going on. [Hon. Members:-- "Done by Crown Agents."] Yes. Thank you.
The Crown Agents' report shows that good work is being done in other countries, however. Sri Lanka is an example. As I said earlier, I had an opportunity to go there. The problems of such countries cannot be overestimated. In Sri Lanka, the war involving the Tamil Tigers is unfortunately still going on, even following last year's change of Government.
Reform of Crown Agents is long overdue. It will bring a breath of fresh air to a successful organisation that is currently being stifled. At the same time, I see no reason why it should not retain its reputation for impartiality in advising the cheapest and most effective way of supplying projects. This evening, the word "privatisation" has been bandied about as something for which we should apologise, but I am not apologetic--not in this case, or in the case of the other 47 industries that we have privatised since 1979. Each of those companies are far better privatised than they would have been in state ownership.
The same refreshing attitude as is visible in the industries that we are discussing is possible in this context. By no stretch of the imagination can they be described as perfect, but they are far better privatised than they would be if they were run by the state. When the Bill is enacted, Crown Agents will be given the same impetus. 7.19 pm
Mr. Jacques Arnold (Gravesham): When I first saw the Bill emerge from the House of Lords on to our Order Paper for consideration, my heart sank slightly. I thought, "My goodness, here we go again. Do we really have to stir a pot totally unnecessarily?" I looked at the Bill with some trepidation because of the recent immense rows
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about certain privatised industries and wondered whether we were unnecessarily letting ourselves in for further trouble.I therefore made it my business to listen to what was said by our right hon. and noble Friend Baroness Chalker of Wallasey, the Minister for Overseas Development, because both Houses have great respect for her work for overseas development over many years as a Minister both in this House and in the other place. She has terrific experience of international affairs and overseas development, especially in Africa, where much of the work of Crown Agents takes place. In going in some detail through her comments on the Bill and its related privatisation, it gave me considerable encouragement to see the advantages that could flow from the Bill's proposals. My hon. Friend the Member for Carshalton and Wallington (Mr. Forman) spoke earlier and we will shortly hear from my hon. Friend the Member for Sutton and Cheam (Lady Olga Maitland), if she catches your eye, Mr. Deputy Speaker. As Crown Agents is based in its home borough of Sutton, I take it that considerable anxieties would have been expressed by my hon. Friends if there was deep unease among the staff of Crown Agents. In fact, that has not been the case and, apparently, there has been much talk of opportunities for the future.
I first heard of Crown Agents, as did some of my hon. Friends, through my collection of postage stamps. That is, of course, a principal business of Crown Agents. It carries on wide-scale procurement of those wonderful articles that in the past taught me geography, history and goodness knows what else.
The other point at which I became aware of Crown Agents was the news of its disastrous performance in the 60s and 70s--decades of great moment to our socialist friends opposite, whose imprudent banking brought this proud institution almost to its knees. During the 80s and 90s--one might say, the Tory decades--the work of Crown Agents has improved out of all recognition. It has built up a proud record of work, but it has become increasingly clear that the restrictive constraints within which it operates as a Government entity are becoming an ever-increasing restraint on its development. It is interesting to note that Crown Agents has been restructured considerably over recent years and has generated significant surpluses.
A constituent has represented to me his concern that there is no provision specifically and as such for the foundation within the text of the Bill. In considering that, I note particularly the assurances of my right hon. and noble Friend the Minister for Overseas Development that the company would indeed be a foundation and established as a company limited by guarantee. If there is one thing that we have learnt in this House, it is that our right hon. and noble Friend is extremely honourable, and I have no doubt that the necessary structures will be followed through under the Bill's provisions.
A foundation is a highly appropriate way in which to establish the organisation. Not far from me in Gravesham in Kent is the Wellcome Foundation, which is structured in a very similar way to that proposed in this case. We know of the examples of the Automobile Association, the Royal Automobile Club, the British Standards Institution, BUPA and the PPP health care organisation, all of which operate under such structures.
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The House should pay due heed to the considerable vote of confidence which has been given to the proposals in the Bill by a number of organisations which have expressed interest in becoming members of the foundation. The British Consultants Bureau, the British Chamber of Commerce, the International Chamber of Commerce and various chartered institutes, notably the Chartered Institute of Building, have shown considerable interest in participating. That can only strengthen the Government's proposals to widen the scope of participation in the important work of Crown Agents.The business in which Crown Agents is engaged is steadily changing. In 1954, when the name was changed from Crown Agents for the Colonies to Crown Agents for Overseas Governments and Administrations, most of its business was based in the Commonwealth, the colonies and in countries that had had a close relationship with Britain, especially in respect of their administration.
Today, the work of Crown Agents is significantly different. If we consider the Crown Agents' annual report for 1994, we find that quite a bit of its business still concerns the overseas aid programme of the Overseas Development Administration and notably aid to India, South Africa and Zambia, all of which are now members of the Commonwealth. Indeed, Crown Agents has handled and managed the disbursement arrangements for 150 British bilateral aid agreements with a total value of £1.8 billion.
However, Crown Agents has spread its work wider. If we examine its programme, we can see how wide it has gone beyond the Commonwealth--to Ethiopia, for instance, where it carried out a programme of purchasing vehicles and equipment for the civilian police under the ODA programme. It has extended its operations to eastern Europe and on to Russia where it has continued its work alongside the Russian Government in managing a $350 million programme which is financed by a rehabilitation loan for imports to improve the agriculture, health, transport and coal sectors.
In view of the matters that have been discussed in the House in recent days, we should note that the Crown Agents' work in the former Yugoslavia, where it administers the convoys that deliver humanitarian aid and is responsible for recruitment, supplies, cargo movement, vehicles, vehicle workshops and logisticians involved in the World Health Organisation and the operations of the United Nations High Commissioner for Refugees, shows the significant broadening of its work.
The House should pay due heed to that expansion beyond these shores of the Crown Agents' work. For instance, the European Community now makes considerable use of Crown Agents for the introduction of its overseas development programmes. If one were to go to the almost unpronounceable countries of Uzbekistan, Kyrgyzstan and Tajikistan, one would see that Crown Agents has managed the inauguration of a regional bank training centre based in Uzbekistan.
In Poland, Crown Agents has provided technical assistance to the work-out department of the Bank Zachodni Spolka Akcyjna. All that was commissioned by the European Commission and the European development programme and was carried out by the Crown Agents. One could go further to the Crown Agents' assistance in Slovenia, where it is working on establishing a project co- ordinating the regional customs programme for all 11 PHARE beneficiary countries. In Syria, which is not in
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the Commonwealth, Crown Agents has carried out a programme on the proposed methods of financing and implementing the modernisation of the commercial bank and the central bank, as part of the European Commission's overseas aid programme.The work of Crown Agents goes wider still. It has won World bank projects in countries such as Angola, where it has supervised the infrastructural, economic and fisheries components of the ports rehabilitation study. Together with a number of colleagues, I visited Angola at the time of its first elections; the work concerned was proving immensely important. On behalf of the World bank, Crown Agents has carried out a procurement course in Fiji, assisted in the design of an improved system of tax administration in Hungary, and provided a procurement agency service for the population and family health projects in Nepal. We have already heard about the Crown Agents' work in Papua New Guinea, establishing a specialist unit to advise, finance and help with the planning of the Government's privatisation project.
It will not surprise hon. Members to learn that Crown Agents is active in the Caribbean, where is has been commissioned by the Caribbean development bank to prepare a study on road and bridge improvements in Dominica, in the Commonwealth West Indies. Crown Agents also executed the British component of the know-how fund in Romania and Belorussia.
It might be argued that Crown Agents could carry out all this work as a nationalised agency, as in the past, but it is rapidly developing into new areas and winning new business on the basis of its expertise and excellence. It is in these new areas that the agency needs the freedom to operate independently of Government. Some of its more recent contracts are relevant in this context. It has, for instance, won a contract from the Arab Authority for Agricultural Investment and Development to conduct a technical and financial evaluation of one of Egypt's largest land reclamation projects--a task demanding considerable expertise.
Elsewhere, the agency has carried out a joint project combining our overseas aid programme and Norwegian aid in Mozambique, a country devastated by civil war and just about everything else that could go wrong. Crown Agents has designed and implemented an aid monitoring system for the Bank of Mozambique, and has validated both Norwegian and British aid programme funds.
Perhaps the most significant work that Crown Agents has done on behalf of foreign Governments--the crux of why the change has been structured in this way--relates to the major contract that it has signed with Japan to carry out Japan's aid programme in sub-Saharan Africa. Japan, now a major economy becoming increasingly involved in overseas aid, is casting around for people who know what they are doing to implement its aid programme with efficiency and integrity. Britain's experience as a colonial power in that area and as a member of the Commonwealth has resulted in bodies such as Crown Agents being admirably suited to carrying out such work. Already it has gained commissioned work from Japan to the tune of $720 million. Crown Agents has also won business from the Asian Development bank which, perhaps surprisingly, approached the British Government to administer a programme in Micronesia. The House will recall that
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Micronesia consists of Japanese islands which, after the war, came under the administration of the United States and only recently achieved independence. One might therefore expect the United States or Japan to manage its overseas aid programmes, but the ADB commissioned our Crown Agents to conduct a review of Micronesia's federal education system at national and state level.Further afield, the Swedish International Development Authority has commissioned Crown Agents to carry out its programmes in Vietnam. Financed by the Swedes and administered by the World bank, the programme was carried through by Crown Agents, enhancing the effectiveness and efficiency of the banking sector by means of a sustained programme of technical assistance and staff training. This shows the modernity of the world in which Crown Agents has to operate. It is not the old-fashioned world so beloved of the socialists, which is why the agency cannot continue as a Government entity. That would prevent it from effectively developing. The origins of, and trends in, the Crown Agents' revenue stream are significant. The last set of accounts published by Crown Agents show that 70 per cent. of its revenue now comes from overseas. I was fascinated to hear the magisterial rebuke delivered by the hon. Member for York (Mr. Bayley) to my hon. Friend the Member for Ribble Valley (Mr. Evans), who claimed that most of the revenue comes from overseas. I am afraid that the hon. Member for York was wrong--
Mr. Bayley: The hon. Member for Ribble Valley said that the United Kingdom accounted for most of the Crown Agents' business. That was incorrect--although the United Kingdom is its single biggest customer. The hon. Member for Ribble Valley acknowledged that that was true.
Mr. Arnold: The British overseas aid programme may be the biggest single customer, but our point is, and remains, that Crown Agents gets most of its revenue today from overseas sources. That underlines the importance of giving it maximum flexibility, as will be granted to it by privatisation.
Given the agency's in-house expertise and procurement capabilities, it is not surprising that most of its business comes in the form of advisory, financial and purchasing services. This expertise, built up over a long period, should be put to far wider use internationally. British expertise is renowned the world over, even if we are sometimes rather too modest about it.
A significant part of its business is the procurement of bank notes and stamps and vital secure documents. Britain's expert printers produce a great deal of such material. Crown Agents should rely on the excellence for which it is famous and should be free to be flexible.
I expected the debate to be incredibly boring and thought that everybody would take the view that this was a meritorious but low-key issue. But that is not the case. The hon. Member for Eccles (Miss Lestor), who spoke for the Opposition, immediately decided that this was privatisation. The red flag was raised and she charged into an extraordinary mode of opposition to the proposal.
Mr. Foulkes: I must spring to the defence of my hon. Friend the Member for Eccles. She may not be a noble Lady, but she is correct, impressive and powerful. On this occasion she is right, and it was not she who first said
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that it was privatisation; it was the Overseas Development Administration. That was said in ODA press releases and it has been said by the Minister. The hon. Gentleman must not attribute that comment only to my hon. Friend, who expertly exposed what the privatisation means in practice.Mr. Arnold: The hon. Gentleman makes my point. Immediately this was labelled as privatisation, the red flag was hoisted and hostility was the order of the day. It is immensely revealing about this wonderful, glossy, new, Blair Labour party that one has merely to mention the word "privatisation" and Labour Members go ape.
Miss Lestor: I go what? I do not understand what I went.
Mr. Arnold: I think that it is called estuary English. As I say, the Opposition go ape and there is the usual hostile tirade against anything that is dubbed privatisation. That is highly unconstructive when debating the future of one of our great expert organisations. The reasonable tones of the hon. and learned Member for Fife, North-East (Mr. Campbell), who spoke on behalf of the Liberal Democrats, were delivered in the usual honeyed way. The hon. and learned Gentleman ended by saying that his party would oppose the Government. That is about par for the course for Liberal Democrats, who have not looked properly at the facts of this privatisation. Privatisation is not a simplistic monolithic approach. All privatisations are different and could be categorised. Many of them are straight privatisations of independent companies which many Conservative Members would say should perhaps never have been privatised. Companies such as British Airways, British Steel, the bus companies, Amersham International and British Petroleum were all separate companies in the same way as Crown Agents.
Those of us who were in business used to travel frequently with British Airways when it was nationalised. We did that out of loyalty to the flag which was stuck on the aircraft, but there was a certain amount of embarrassment about the standard of service provided. When BA had the freedom, the scope and the competition of the marketplace and was unable to put its hands in the taxpayers' pockets it turned itself into the world's favourite airline. The same is true of British Steel in terms of quality. I could go through the gamut, but I fear that I am starting to make you restless, Mr. Deputy Speaker. I shall deal with privatisations that contrast with the one that we are debating. The House gets steamed up about the utilities, but there is also privatisation by means of franchise. The train operating companies were privatised in that way, and by no stretch of the imagination are they comparable with Crown Agents. We are debating a privatisation--let us be proud of the phrase, Conservatives certainly are-- that is a transfer to an independent foundation. It will bring together many interested organisations and bodies, non-governmental and international organisations and a variety of institutions which will participate to oversee and ensure that the excellence of what Crown Agents offers is expanded, extended and developed in a way that could never happen under direct Government control.
The world is developing fast, and flexibility is essential if one is to succeed in delivering a wide-ranging service in the way that Crown Agents has always done. We should never underestimate the fact that Britain is a great international player. It is a permanent member of the
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Security Council of the United Nations, one of the great powers of the European Union and a leading nation in the Commonwealth and in the G7. I could continue with the list of our contributions. In debating the subject of Crown Agents, we are also considering some of the outstanding work throughout the world that is carried out by some of our non-governmental organisations. They have a proud record of service, especially in the third world where many of them work with Crown Agents. Those organisations serve well not because they have been born and bred of Government but because they are independent. Many organisations based in the United Kingdom do exceptionally good international work. By supporting the Bill, we shall take a great organisation with a great history which embodies the expertise for which Britain is world renowned and place it alongside the NGOs. They will work with Crown Agents, which will build on the past and develop in the future in a way of which the House can be proud.7.47 pm
Mr. Hugh Bayley (York): I had not planned to speak in the debate and I apologise to the Minister and to my hon. Friend the Member for Eccles (Miss Lestor) for missing their speeches. I was at a meeting of the Standing Committee which is examining the Pensions Bill. However, listening to the debate has prompted me to intervene and I shall start by declaring an interest. Last year I went to Japan for a series of meetings with officials in the Japanese Foreign Ministry. I was a guest of the Japanese Government who paid my fare and my accommodation. I shall speak later about the Japanese overseas aid programme.
The Minister confirmed in clear terms to my hon. Friend the Member for Hemsworth (Mr. Enright) that the Bill proposes to privatise the Crown Agents. As a supporter of the new Labour agenda of my right hon. Friend the Member for Sedgefield (Mr. Blair), I do not take the crude view that everything in the public sector is necessarily good or that private sector provision is necessarily bad. I take a pragmatic view, and the pragmatic question about the Bill is whether the privatisation of Crown Agents will make it more efficient or more effective.
Crown Agents is held in high public regard in this country and abroad. That is reflected in the size of its portfolio--the number of countries that come to it for its services. It is one of the oldest institutions in the British public service. It is far older than the Overseas Development Administration and it is older than most of the Departments of State which have Ministers who report to the House. There has been some sentimentality, especially from Conservative Members, about Crown Agents. Until this debate, I had not realised that being a schoolboy stamp collector was an essential requirement for a Conservative candidate.
Mr. Baldry indicated assent .
Mr. Timothy Wood (Lord Commissioner to the Treasury) indicated assent .
Mr. Bayley: I see the Minister and the Government Whip nodding their heads. I did not realise that the first question at a Conservative selection conference was, "What colour was the 4 cent stamp for the West Indies
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