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Mr. Mark Robinson (Somerton and Frome): Is it not fair to say that HMSO is a centre of excellence that will attract a prospective purchaser and that, far from wanting to destroy the business, any prospective purchaser will want to keep the management team together and build on that business?
Mr. Freeman: I agree with my hon. Friend. I take a constructive attitude to the future of any business which has built its success, albeit in a declining public market, on not only its integrity but its hard work and its skill in obtaining business from Government and Parliament and discharging its function satisfactorily.
Mr. Patrick Thompson: I am grateful to my right hon. Friend for giving way again, but, as he is referring to the hard work and the skill of the staff of HMSO, many of whom live in Norwich and the surrounding area, will he respond to the particular point I made earlier about the importance of maintaining a strong base for HMSO in Norwich? That is traditionally so and I believe that it should continue. Can my right hon. Friend make a commitment to that?
Mr. Freeman: As I said to my hon. Friend earlier, I cannot make any forecast about how a business is organised into the future. However, having visited Norwich
twice--I intend to do so again to discuss the future with management and representatives of the staff--it is clearly the sensible headquarters of the business and I know of no reason why there should be any change in that regard. I cannot forecast how the nature of the business of HMSO will change the individual loadings of specific factories or depots in future. Norwich is clearly the centre, and I see no good reason why that should change.
Sir Patrick Cormack: I am particularly grateful for the assurance that my right hon. Friend gave me earlier, but surely any internationally based company could buy HMSO and produce from wherever it wished to produce and that is the blunt fact. I would not begin to impugn my right hon. Friend's good intentions or integrity, for which I have the highest possible regard, but he cannot guarantee it.
Mr. Freeman: Like many hon. Members, I spent the majority of my life in business in the private sector, subject to the rigours of the private sector. One locates businesses where that makes the most economic and business sense. I pay tribute to the management of HMSO for doing that and reorganising the business. Of course I cannot give my hon. Friend any assurance about where and how the business will be organised in future. I cannot do that with HMSO in the public sector, let alone the private sector. For the business to expand, it must be given the opportunity to compete for private sector business which I believe is available, and that must load its existing factories, if they are efficiently organised and located, which is clearly the case. That will enhance job opportunities.
Mr. Gerry Sutcliffe (Bradford, South): I recognise that the Minister is accepting interventions; but, to pick up the point made by the hon. Member for South Staffordshire (Sir P. Cormack), the right hon. Gentleman cannot give guarantees, yet he has tried to do so in letters to Madam Speaker and to the work force of HMSO. The Minister has also accredited and applauded the workers and management of HMSO. Does he expect a management buy-out?
Mr. Freeman: No. There is no sign of any interest on the part of the management and staff, I suspect partly because of the size of the operation. It is a significant industrial operation and one would not normally expect a management buy-out. To return to the first part of the hon. Gentleman's intervention, I cannot give guarantees about the size of the work force of HMSO in the public sector and nor can the right hon. Member for Bishop Auckland (Mr. Foster), who leads for the Opposition and to whom I give way.
Mr. Derek Foster (Bishop Auckland): May I press the right hon. Gentleman on his statement that the public sector market is in decline? He says that the central Government market is in decline, and that may well be the case for the time being; but the public sector market is far wider than the central Government market, and the right hon. Gentleman has not yet been able to privatise the entire public sector.
Does the right hon. Gentleman take account of the fact that we now talk in terms of the public sector's being the whole European market? As I understand it, HMSO has done little in the way of marketing throughout Europe. Will the right hon. Gentleman bear that in mind when he makes statements in the future?
Mr. Freeman:
The right hon. Gentleman is right. The public market, as broadly defined, is enormous. However, private sector companies could bid, for example, to print the journals and other documents of the European Parliament and the European Commission; bidding is not restricted to HMSO. I should like HMSO in the private sector to compete vigorously for that business. As a matter of policy, I do not want a public sector body, funded and ultimately guaranteed by the taxpayer, to compete for business outwith the United Kingdom public sector when other companies can compete with that business. I am confident that, given its reputation and expertise, HMSO will be able to expand its business into the European public sector when it is privatised.
Mr. Peter Mandelson (Hartlepool):
I am grateful to the right hon. Gentleman for giving way again. He has been very patient.
May I pursue the point that the right hon. Gentleman made to the hon. Member for South Staffordshire (Sir P. Cormack)? He said that he could give no assurances about the location of production in the future. I wonder how that squares with his response to questions from hon. Members on 13 December, when he said:
Mr. Freeman:
I was referring to HMSO's entire business. Parliamentary business represents 10 per cent. of the total. When I was questioned about the parliamentary press, I said that the contract written by Parliament could stipulate that the work must be done at the parliamentary press works--which is, in fact, a misnomer: the press prints more than just documents for the two Houses of Parliament, but that is not inconsistent with--
Mr. Mandelson:
That refers to the location.
Mr. Freeman:
Yes, but I was making the point specifically in regard to the parliamentary business and the parliamentary press. If the hon. Gentleman is asking, by implication, whether the Crown--that is, various Departments--would wish to stipulate when writing contracts that certain documents must be printed in certain cities, let me tell him that I do not consider that appropriate. We would look for a contract with the stationery office that offered good value for money in comparison with the alternatives; how that was organised would be a matter for the stationery office. There is one exception, however. If the hon. Gentleman does me justice and reads all the evidence that I gave to the Select Committee on Finance and Services, he will realise that I was dealing with that specific problem. Indeed, I provided even more assurances in response to the intervention by my hon. Friend the Member for South Staffordshire (Sir P. Cormack).
Accordingly, I propose to invite offers in the new year for the whole business, apart from a small residual body to deal with necessary public responsibilities such as Crown copyright. I plan to make a written statement on Government policy for Crown copyright by early February. The sale process will allow full screening and
evaluation of all bids and consultation with customers, principally Parliament. It should also allow for legally binding contracts to be drawn up between customers and the privatised business.
However, as I confirmed in my statement last week, I am not setting deadlines. There is a prerequisite that Parliament be satisfied--although I am also anxious for the uncertainty to last no longer than is absolutely necessary. It would make little commercial sense for us to withhold any of HMSO's operational businesses from the sale. Many of them are mutually dependent, and all benefit from the independence and integrity of HMSO, which I am keen to preserve after the sale. In particular, however, I note the suggestion of some hon. Members that the parliamentary press should not be sold, and could perhaps be taken over by the House. I have already responded to the intervention of my hon. Friend the Member for South Staffordshire.
Hon. Members have also previously suggested that HMSO should be freed from all its current public sector operating constraints yet be retained in the public sector. The right hon. Member for Bishop Auckland advanced that argument, and I am sure that he will do so again this evening. The commercial freedoms that HMSO would need to compete with the private sector in new markets are incompatible with its continuing in the public sector. The first commercial freedom is the right to borrow without the burdens of public sector constraints. No Government could countenance the prospect of a public sector body's having normal commercial freedoms to borrow.
The second commercial freedom is the right to win customers in any market, public or private. If HMSO as a public sector body were allowed such freedom, its competitors in the private sector would be bound to suspect unfair competition, especially if HMSO were able to borrow money cheaply because its activities were thought to be underwritten by the taxpayer. It is far better all around, for both HMSO and its competitors, for business to be transferred to the private sector, where it can compete on equal terms and can have freer access to the finance that will enable it to expand.
The only sensible course is clearly privatisation of the bulk of HMSO as it is currently constituted. During such a process, customers will naturally want the maximum assurance that after the sale they will continue to receive the high-quality and cost-effective service to which they have been accustomed. At the same time, potential purchasers will wish to make their own estimate of HMSO's future viability, and to be sure that it will enjoy a reasonably secure level of business after transfer to the private sector. We propose to accommodate both those needs through legally binding contracts between major customers and the privatised business, wherever it is sensible to do so, and for that to come into force at the point of sale.
"We, as the customers--that is to say, the Crown and Parliament--can require the business to have a certain nature and structure . . . Parliament will be able to control the nature of the business that supplies the products."--[Official Report, 13 December 1995; Vol. 268, c. 993.]
Is the right hon. Gentleman not flatly contradicting what he said only last week?
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