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Mr. Sutcliffe: My hon. Friend referred to loyalty and commitment. Is it not a fact that the whole privatisation episode is a betrayal of the work force, who are committed to providing the services that my hon. Friend is talking about? The work force were thought, in 1992, at the end of a commercialisation study, to need to be more effective and more efficient. The reality is that the seed was sown then for privatisation. People have been made redundant and they have not been shown the loyalty that they have given to the House through their service.
Mr. Mandelson: I strongly agree with my hon. Friend, and I pay tribute to him, because he has been an effective and doughty champion of the work force at HMSO, as his remarks have just revealed.
We know that, when the chips are down and market forces rule, and when the privatised HMSO inevitably has to face the rigour of competition, it will not be able to put its commitment to Parliament and our needs first. The Minister has praised the dedicated, cost-effective and high-quality service provided by HMSO at present, and he has spoken glowingly of the traditions and the culture of HMSO. In the light of those remarks and the light of all
the remarks made this evening about HMSO's tremendous contribution to the work of the House, we should not tamper or take risks with an organisation that works perfectly well as it is. There is no gain for us, no gain for Parliament and no gain for the public.
This is not an argument about the broader merits and demerits of privatisation. This is a debate about a specific privatisation proposal and its very real implications for the House. It is possible to be generally well disposed towards the principle of privatisation without supporting its application in this case, as the hon. Member for South Staffordshire (Sir P. Cormack) demonstrated in a very commanding speech. Where doubt exists--I think that much doubt has arisen as a result of the Minister's hollow words of reassurance and the well-meaning but ultimately unsatisfactory sentiments he expressed tonight--it would be better to pause for further thought.
The Parliamentary Secretary, Office of Public Service (Mr. David Willetts):
The first proposition that my right hon. Friend the Chancellor of the Duchy of Lancaster put to the House today was simply that HMSO could not carry on as it had for the past few years. HMSO has a problem in terms of its performance, its turnover and its market share. The figures--[Interruption.] I am about to give the figures which show the nature of the problem that HMSO confronts.
In 1990, HMSO had a turnover of £389 million. The figure steadily fell until, in 1994, its turnover was down to £350 million. Similarly, it has been reducing its staff; the trends are downwards rather than upwards.
Mr. Derek Foster:
Will the Minister confirm that the turnover for the current year is likely to be £369 million, rather up on the figure that he quoted?
Mr. Willetts:
I am not prepared to confirm or deny any of the figures that the right hon. Gentleman has quoted, either now or earlier in his speech. However, I will say that they are broadly in line with the draft accounts that we have seen.
The right hon. Gentleman has thrown around figures for HMSO's performance in 1995--for example, HMSO's losses. He was so excited about his leak that he forgot to consider the significance of those figures. That significance has nothing to do with privatisation. The figures for HMSO's losses were a consequence of the measures that it had to take simply to improve its competitiveness, so that it could continue selling its services to public sector purchasers who had a legitimate freedom to take their business elsewhere.It was nothing to do with privatisation.
As the previous chief executive warned in June 1994, before we embarked on privatisation, HMSO faced the prospect of losing 30 per cent. of its staff simply to meet
the competitive challenge of other organisations free to sell their services to the public sector. That is the challenge that HMSO faces.
We are told there is an easy option--to liberalise the regime under which HMSO currently operates so that it is no longer subject to the notorious Treasury rules that have been cited at various times in the debate. I assure the House that the Government have gone as far as is practicable to liberalise the regime under which HMSO operates, which is now far more liberal than it was just a few years ago. We have given it permission to sell its services to the public sector abroad. In the past year, we have allowed it to sell its services to the private sector where there is surplus capacity within the normal scope of its operations. However, that liberalisation goes absolutely to the limits of what is acceptable for a public sector body, and on its own will not bring HMSO out of the long-term decline that it faces.
We have heard various pleas to go further. The hon. Member for Littleborough and Saddleworth (Mr. Davies) made a series of suggestions on how HMSO could have greater freedom. For example, he wanted it to have an arm's-length relationship with Ministers and to be exposed to paying corporation tax so that it would be free to compete with the private sector. What I did not hear from him--or, indeed, from any other hon. Member who spoke in the debate--was what he would say to a private printing firm or office supplier in his constituency if that firm suddenly found that it had lost business, for which previously it had a clear commercial contract with another private sector purchaser of its services, to HMSO. What would he say to someone who went to one of his surgeries and said that his firm had been put out of business or had lost business as a result of a public sector body operating as a public sector trading fund?
Mr. Chris Davies:
If there were a level playing field, which is what my party wants to establish, the simple answer would be that that is the way that the market operates. The organisation may be publicly owned, but the shareholders happen to be the taxpayers.
Mr. Willetts:
The hon. Gentleman wants a level playing field. We can imagine what it would look like--the organisation would pay corporation tax; it would have a genuinely arm's-length relationship with Ministers; it would have no guarantees for its borrowings; it would be at genuine risk of going bankrupt; and there would be no ministerial intervention. Yes, that is a level playing field and it is called privatisation. That is how we achieve a level playing field. It is muddled thinking to believe that we can have all those things without privatisation.
Mr. Michael J. Martin:
The Minister says that privatisation is the level playing field. Why does he not introduce a Bill so that there can be scrutiny in Committee and thorough examination of the safeguards that all hon. Members want?
Mr. Willetts:
There is no legislative requirement for a Bill, but there are legitimate practical questions about the form of the privatisation. The hon. Gentleman made a significant but short speech with a large number of such questions.
Mr. Garrett:
Will the Minister give way?
Mr. Willetts:
I am sorry, but I must make some progress in dealing with the practical questions.
I shall first try to answer the questions of my hon. Friend the Member for Norwich, North (Mr. Thompson), who spoke on behalf of his constituents. If there is time, I will then try to answer the hon. Member for Norwich, South (Mr. Garrett).
Mr. Mandelson:
This concerns the constituency of my hon. Friend the Member for Norwich, South.
Mr. Willetts:
I am answering the points made by my hon. Friend the Member for Norwich, North. First, he asked when TUPE would apply and what its limits would be. I can assure him that TUPE will apply at the point of sale, the point when all terms and conditions of employment are transferred to the new owner. It is not time limited. All employers are free to propose changes to employees' terms and conditions at any time, but they must do so reasonably if they are to avoid liability for breach of contract or constructive dismissal.
Mr. Garrett:
Will the Minister give way?
Mr. Willetts:
Let me finish dealing with the point made by my hon. Friend the Member for Norwich, North.
A consultation period of 90 days is genuinely regarded by the courts as reasonable in this context. That has nothing specifically to do with TUPE, which applies at the moment the transfer takes place.
Mr. Garrett:
Now will the Minister give way?
Mr. Willetts:
Let me carry on with one more point.I am dealing with the questions raised by my hon. Friend the Member for Norwich, North. The hon. Member for Norwich, South must be patient.
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