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6 Nov 2000 : Column 86


Mr. Deputy Speaker (Sir Alan Haselhurst): We now come to the motion on privatisation. I should announce to the House that Mr. Speaker has selected the amendment in the name of the Prime Minister.

7.31 pm

Mr. Don Foster (Bath): I beg to move,

I am not surprised that Mr. Speaker chose to select the amendment in the name of the Prime Minister because--disappointingly, given that the Conservative party was responsible for many of the problems through its dogmatic approach to privatisation--it has not even bothered to table an amendment to defend its record. We tabled the motion because the privatised railways are in chaos at present and we are concerned that, if the Government follow their current proposals, we shall end up with exactly the same chaos in the London Underground and National Air Traffic Services.

When the Conservative party introduced many of its privatisation proposals, the Liberal Democrats warned it that privatisation simply was not the cure for all ills. At that time, the Labour party in opposition entirely agreed with us. The Labour party would accept that both our parties were correct in expressing our concerns. However, it appears that, in office, the Labour party has changed its spots. We are now in danger of seeing a Labour party introducing its own dogmatic approach to privatisation and the real possibility of putting lives at risk with its proposals for the part privatisation of NATS and the underground. It seems that the new Labour party has developed its own form of privatisation dogma.

The Liberal Democrats are certainly prepared to acknowledge that the private sector and the public sector can benefit from each other. We acknowledge that some of the privatisations that have occurred in recent years have had positive outcomes. Even if British Telecom has some way to go, the liberalisation of the telecommunications industry has undoubtedly brought significant benefits. We also acknowledge that the privatisation of gas and electricity has been instrumental in improving the standards of service offered, even though we were unhappy with the way in which and the price at which that was done.

It is interesting that some rather bizarre side effects have resulted from those privatisations. I suspect that the Conservative party did not anticipate that the electricity powering the lights in Parliament would come from an electricity company owned by the French Government. Therefore, rather bizarrely, given the views of the Conservative party, any profligacy on our part in this building will lead to a reduction of taxes in France--not what the Tories wanted.

There has been a growing acceptance that, in certain circumstances, some public services can be delivered by or in partnership with the private sector. A good example is the Government's recent announcement of the concordat between the NHS and the private health care sector. That seems to be a sensible form of partnership between the two sectors.

Mr. Gerald Howarth (Aldershot): Will the hon. Gentleman bring pressure to bear on the French

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authorities to privatise those moribund state organisations in France to ensure that British companies are allowed reciprocity so that they can buy French companies in France?

Mr. Foster: That is the most bizarre intervention that I have heard for a long time. It is extremely bizarre for the hon. Gentleman, whom I have heard speak passionately against our integration into Europe many times, to express any concern whatever about how industry is organised in France. I hope that the hon. Gentleman, who supports a party that was so passionately committed to privatisation, is prepared to acknowledge that privatisation has involved many problems. I hope that he accepts that, where privatisation involving selling off the family silver and putting money into the Treasury coffers, very often the organisation was sold off far too cheaply and the nation sold short.

Mr. Paul Keetch (Hereford): Would my hon. Friend care to comment on the Government's proposals to sell off the Defence Evaluation and Research Agency? Given that that sell-off has few friends in the Ministry of Defence or the American Department of Defence and, indeed, no friends at all on the Select Committee on Defence, is it not another case in which the only friends of the sell-off appear to be in the Treasury?

Mr. Foster: My hon. Friend is absolutely right. It is interesting that that case follows the pattern of the way in which the Labour Government are now pursuing privatisation. Having opposed the way in which the railways were privatised, with massive fragmentation, the Government are proposing to split DERA in two and flog off three quarters of the total package to the private sector. That has implications not only for public safety, but for national security.

As we look back on privatisation, I hope that hon. Members on both sides of the House accept that many mistakes were made, details were often not properly thought through and long-term consequences were often ignored for short-term gain. Many such examples abound. We have only to consider the way in which employees lost out, especially in early privatisations. For example, when local government services were privatised, it was ludicrous that the employees who worked in the public sector ended up doing exactly the same job as before, but their wages were lower and they had poorer pensions and conditions.

Protection was rightly introduced under the Transfer of Undertakings (Protection of Employment) Regulations 1981. However, equally bizarrely, transferees are protected, but new employees of the privatised service provider have poorer conditions, so there is a two tier system, which is not likely to raise morale.

Mr. John Bercow (Buckingham) rose--

Mr. Foster: The hon. Gentleman is desperate to intervene, so I shall give way to him.

Mr. Bercow: Desperate is scarcely the word. The hon. Gentleman refers to the undervaluation of assets at

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flotation to the private sector. Would he care to cast his mind back and concede that the significance of the privatisation of the bulk of the state industrial sector was that industries which, in public ownership, were costing the Exchequer £50 million a week under the previous Labour Government now contribute tens of millions of pounds a week to the Exchequer?

Mr. Foster: I certainly do not accept the hon. Gentleman's suggestion. How did the Conservative Government manage to sell off the railway system? Their first act was to pay off £1.6 billion in debt. They ensured that the company's assets were widely spread, and they took various steps to make the company more attractive. If the hon. Gentleman examined the figures for many privatisations--the railways are a good example--he would appreciate that more state money is being put in to subsidise the various services than previously.

Mr. Geoffrey Clifton-Brown (Cotswold): The hon. Gentleman appears to criticise the privatisation of the railways. I wonder whether he is aware that the right hon. Member for Yeovil (Mr. Ashdown) asked:

Does the hon. Gentleman agree with his right hon. Friend?

Mr. Foster: I hope that the hon. Gentleman will acknowledge that his point is a bit of a damp squib. I had been warned in advance by several Conservative Members that an exocet missile would be coming at me--I was told that a former leader of my party totally disagreed with the way in which the Liberal Democrats, and our predecessor parties, voted on the privatisation of the railways. Fortunately, I took the opportunity to check the record, which showed that my right hon. Friend voted in the same Lobby as the rest of my colleagues.

Mr. Clifton-Brown: So the right hon. Gentleman said one thing and supported another?

Mr. Foster: No. If the hon. Gentleman studied my right hon. Friend's comments, he would appreciate that my right hon. Friend suggested the possibility of a state-run sector becoming involved within the market. We have no problem with that--we have discussed it on several occasions. It is sad that the hon. Gentleman precisely illustrates my concern about the dogmatic approach that the Conservatives adopt in this context.

Mr. Clifton-Brown: Will the hon. Gentleman give way?

Mr. Foster: No. I want to make progress.

Many examples show that the involvement of the private sector in the delivery of public services has not been very smooth. For example, during the early days, Group 4 ran our prisons, and, more recently, there were failures in the administration of housing benefit.

Mr. Bercow: Group 4 was seven years ago.

Mr. Foster: I gave a more recent example. Even more recently, the private sector attempted unsuccessfully to

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turn around failing schools. The allegedly incomparable business skills and entrepreneurial flair of the private sector have not, frankly, been a huge benefit. I suspect that few of us support the continued use of the skills and flair of, for example, Connex South Central. The tragedy of the Hatfield rail crash threw the dangers of inappropriate privatisation into stark relief.

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