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Lord Redesdale: I wish to speak in favour of Amendments Nos. 1 and 3, not because we on these Benches think that the Crown Agents' natural position should be in the public sector or the private sector, but because we are keen to ensure that the Crown Agents are in a position to act in the best interests of those whom they serve.

However, the problem we face with the Bill is that it seems to have been brought forward in a hasty manner and there is little to it. It is just a crude enabling Bill with little safeguard that Parliament would be able to see the final results of the changes and agree to them.

Amendment No. 3 is another amendment which follows the Delegated Powers Scrutiny Committee's resolutions on which I shall speak later. I support the amendments.

Baroness Elles: I regret that the noble Lord, Lord Judd, is still fighting his rearguard action for retaining the Crown Agents in the public sector. I thought that the overwhelming feeling during the Second Reading debate—certainly on this side of the House—was that we should support the Government in releasing the Crown Agents from the public sector. They should be privatised and be able to carry out full commercial activities for the benefit of both their own company, which would be formed, and of their clients as they increased throughout the world.

I suggest that Amendment No. 1 is a damper on any possibility of the Crown Agents benefiting from the Bill in order to carry on their new task as a privatised commercial company. I strongly urge my noble friend totally to reject Amendment No. 1, as I am sure she will.

I have some sympathy with Amendment No. 3. We shall wait during the proceedings on the Bill to hear more about the future status and framework under which the Crown Agents will operate. During the course of the Second Reading debate, the Minister undertook that through the proceedings of the Committee and Report stages and Third Reading we would be informed of further details about the future of the Crown Agents and their statutory framework. If we are not so informed, at some stage we must look for further debate in Parliament. I have always held that a vast amount of secondary legislation—whether it be European or British legislation—goes by without any democratic or parliamentary scrutiny. Thus I have a certain sympathy for the principle expressed in Amendment No. 3. I shall look to the Minister to give us the information that is required so that the amendment will have no justification, nor will it be needed in any way.

Lord Elton: There are two levels of parliamentary scrutiny for delegated legislation: the affirmative and the negative procedures. The affirmative procedure is more stringent than the negative procedure because with it matters have to be debated, whereas with the negative procedure a matter is only debated if required. I merely intervene to say that it seems odd that the noble Lord, Lord Judd, should rest so much weight on the report of

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the Delegated Powers Scrutiny Committee, of which I have the honour to be a member. He then put down Amendment No. 3 which attracts to a transfer of ownership—a lesser decision than the construction of the new company—a higher order of scrutiny for the initial formation than is proposed, even in Amendment No. 4 which, oddly, is not grouped with these two. It seems to me that, because he lays such weight on the report, he would have followed the advice of the Committee. I hope that my noble friend will bear that in mind.

Baroness Chalker of Wallasey: In responding to the proposal in Amendment No. 1 by the noble Lord, Lord Judd, my noble friend Lady Elles was absolutely right. The amendment strikes right at the heart of the Bill. I thought I explained carefully at Second Reading why I believe that it would be wrong for the Government to retain ownership of the Crown Agents. The Crown Agents' main work—of which we are all rightly proud—has always been as agents of the now independent governments and increasingly the aid agencies. The noble Lord, Lord Judd, used a quotation from one of my Second Reading speeches.

Governments of all parties have been careful not to interfere in Crown Agents, and I have been most careful as a Minister not to interfere, but to keep a watchful eye on what they are doing. Because they knew that I was keeping a watchful eye, I did not need to interfere. However, there was always the risk that one day I might interfere with Crown Agents.

The noble Lord, Lord Judd, made some play of the discussion at Second Reading and subsequent stages of the CDC Bill in another place. He sought to put CDC and Crown Agents in exactly the same category. Perhaps I may explain to him why I do not believe that the same situation applies. The Crown Agents and CDC have different histories. Their roles are very different. Legislation recognises the distinctive identity and purpose and provides for continued growth into the future for each of them. The job of CDC is to act as a catalyst for private sector investment in developing countries, showing others that they can invest profitably in poorer countries so as to energise the private sector to follow and make investments of its own.

The private sector CDC would be bound to take a very different attitude to profit and risk which would be incompatible with developmental objectives which the Government have set for it. So in that sense, if in no other, I think that I have explained the difference. As I said, Crown Agents' main work is as agents of now independent governments. The present Act still requires us—and would do, if the noble Lord had his way—to involve ourselves in business decisions. Therefore we have proposed the transfer to the private sector in order to strengthen Crown Agents' ability to meet the needs of their customers by removing unnecessary restrictions.

Crown Agents have spent a relatively brief period as a public corporation. I shall not go back to the pre-1979 situation—though I can if noble Lords require it. The regulatory framework of the 1979 Act was established to meet the problems and circumstances that were

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specific at that time. Things have now changed, and there is no reason why Crown Agents should continue to be owned by government.

I made it quite clear at Second Reading that the most appropriate framework of control would be provided by a foundation in the private sector. That would give Crown Agents' international clients the assurances that they require. So long as the Government continue to bear ultimate financial responsibility, Crown Agents would continue to be subject to those unnecessary constraints of one sort or another. Therefore we seek to give Crown Agents the power to make their own business decisions, including borrowing in the future. Without such a freedom, that relationship, the ability to decide on their own borrowing, would be limited.

The noble Lord, Lord Judd, seems to think that the Bill is driven by ideology, given the way in which he phrased his amendment. It is not. It is a measured and practical response to the changing business needs of Crown Agents. That is why, to keep up with the times, we have suggested the transfer to the foundation. That would give the Crown Agents a complete, modern and constitutional framework in which we can all have confidence.

I have to say that Amendment No. 1, which makes the nomination of the company in which the assets of Crown Agents will vest on the appointed day subject to a delay of at least five years, really is an unsatisfactory and wrecking measure. I am surprised that the noble Lord has pursued it in this way. It would leave Crown Agents in limbo. They would not know what decisions they would be able to take at the five-year point or at some point thereafter, because the wording is "not less than five years". If the transfer of Crown Agents to the private sector is to be delayed for at least five years, as the noble Lord's amendment proposes, then we might as well not have the "not less than five years"; we might as well not have the Bill. That is of course exactly what the noble Lord wants.

I know that in the past Parliament has expressed concern about the control that can be exercised over companies in the public sector. But control over companies is less direct than the specific controls provided for by the 1979 legislation over the statutory corporation that the Crown Agents now is. That control, as the noble Lord, Lord Judd, rightly said, has to be exercised by the Minister through his shareholding and the other arrangements with the company.

All this is at one remove from Parliament and is less transparent. The same degree of control would be necessary while the company remained in public ownership, but the direct parliamentary control which Parliament normally thinks desirable just would not be there. Certainly, the provision of Amendment No. 1 would not give important customers like the Japanese Government the reassurance that they seek, and the reassurance which the foundation most clearly would offer. I cannot believe that this state of affairs is what the noble Lord had in mind when he tabled the amendment. But one never knows with the noble Lord. I join with my noble friends Lady Elles and Lord Elton: we should indeed oppose this amendment.

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Turning to Amendment No. 3, to which the noble Lord, Lord Redesdale, spoke in the main, and my noble friend Lady Elles, I understand the concern of noble Lords that we give Crown Agents the right start for a successful future while retaining their traditional standards of probity and impartiality. That is a common objective.

I also understand the desire to allow Parliament to look again at the details of the proposals for transfer. I have noted very carefully the report of the Scrutiny Committee on Delegated Powers. But as my noble friend Lord Elton said, it would have been much more logical had the proposals referred to the future foundation rather than the transfer in what is an enabling Bill.

I have considered very carefully whether an affirmative resolution procedure would be appropriate under Clause 1 of the Bill, but I do not believe that that is the right approach. We have taken the advice of government legal advisers, and they assure me that it would be quite unprecedented to proceed in that way. The Bill before us follows established precedents. The normal practice is to take enabling legislation when transferring organisations to the private sector. That approach is well tried and tested. It has been accepted by this House and the other place on every previous occasion. I do not believe that any of the arguments that have been put forward today convinced me that an exception should be made in this case. I shall be very open with noble Lords, as will the Government, throughout this procedure. Indeed, I can assure my noble friend Lady Elles that much more information about the intended ultimate owner will be available than would normally be the case with, for example, a trade sale, because there will be less commercial confidentiality.

As to the practical effects of the amendment, I believe that the practical effect of introducing an affirmative resolution procedure would be damaging to Crown Agents' interest. I believe it to be unnecessary. I have already assured the Committee that I shall keep Members fully informed, as indeed I shall Parliament as a whole, of our plans as we go forward. It is only fair to point out that privatisation negotiations are complex. Much of the information is normally commercially confidential and would not be disclosed in the way that has been suggested. But, because of pressures of other business, we know that obtaining parliamentary approval can be a long drawn out process. That could seriously hamper the proposed transfer. I would not want to put the future Crown Agents foundation in any jeopardy from that.

The main concern about this transfer of Crown Agents to the private sector was fully debated at Second Reading, and today we shall go through the amendments that are on the Marshalled List. I will consider the substance of the points during our negotiations on the transfer. But I am quite certain that it is not in Crown Agents' commercial interest for this House to sow the seeds of doubt or uncertainty about the Government's plans or the timing of when the transfer would take place. It is for those reasons that I urge noble Lords to reject Amendment No. 1 and, with it, Amendment No. 3.

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