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Lord Peston: My Lords, I do not think the word "expenditure" passed my lips. If it did, it was to do with private expenditure and buying new computers; certainly no public expenditure. I would be fired immediately and the noble Lord knows that.
Lord Fraser of Carmyllie: My Lords, that was a fine effort at retrieval. The noble Lord indicated that there were vast areas of information which are presently covered by Crown Copyright and so on for which proper charges are made. He indicated, certainly a personal view, that it should be provided free to one and all.
I am conscious that this debate has gone on a long time. I am also conscious that there are a number of other matters that I have not commented on. I hope I have covered most of the issues that were raised. My noble friend Viscount Chelmsford mentioned the programme for business. This is a programme designed, as a partnership with business, to develop over its four years of operation in response to changing market conditions and business needs. It has a particular, but not exclusive, focus on the needs of smaller-use companies and works closely with a range of busy business intermediate organisations, particularly business links and trade associations.
There are two other matters I should try to deal with. First, my noble friend Lord Selborne and others made some reference to the issue of the National Health Service. In the area of healthcare, the electronic network known as NHS Net is already operating and will continue to develop and expand as take-up increases. It will enable GPs to make hospital referrals on line, provide access to information, libraries and electronic books and facilitate the dissemination of new health warnings.
We remain committed to introducing the changes necessary to allow GPs to keep records solely in electronic form. This is not an issue solely for Government, nor can we act unilaterally in all the areas where there are very real issues of security. From my time as a health Minister, I cannot think of any other area where that matter arises more acutely for individuals. Introducing this change requires detailed consultation with the BMA--a process which, perhaps not surprisingly, has taken longer than expected because of the wide agenda on primary care which has diverted the profession's attention away from some discrete action such as this.
In a related way, the noble and gallant Lord, Lord Craig, identified the importance of public confidence in the security of confidential information passing over advanced communications networks. He made reference to an article in a paper fairly recently which indicated that the United States Government had relaxed their position. I can confirm that the United States Government have allowed some liberalisation of their export controls over encryption equipment.
It has of necessity been something of a gallop through the many points that have been raised. If I have dispelled anything, I hope it is the notion that we are lukewarm to the report, to the contents of it and to the very valuable advice offered to the Government. Far from being indifferent to it, I hope that in the coming months a real, clear focus will be given to this area of activity.
I conclude by again recording my thanks to all those who have not only participated in the debate but also contributed to this most valuable of Select Committee reports.
8.47 p.m.
Lord Phillips of Ellesmere: My Lords, my first duty is to thank all those Members of the House who have made kind remarks about my role as chairman of this committee. I must say that the credit is entirely due to the members of the committee who made my task a pleasant one. It is one that I shall recall with great--and I hope it does not sound too conceited--satisfaction. I am also grateful to all Members of the House who contributed to this wide-ranging and interesting debate.
I am particularly encouraged by the wide degree of agreement that has emerged on all sides of the House in discussing the various topics that have come out in the debate. Being an incorrigible optimist, I am even somewhat encouraged by the response of the Minister, the noble and learned Lord, Lord Fraser of Carmyllie. I look forward to the further development of what the noble Viscount, Lord Chelmsford, described as the "sea change" in the Government's attitude to this area. It is not improbable that this rapidly developing area may again attract the attention of the Select Committee at some time in the future.
Finally, on a slightly different note, perhaps I may say that today is the anniversary of the birth of Andrew Carnegie, a person well known--at least in my early days--for his contribution to the development of the public library system in the United Kingdom. I hope that this report and this debate may in time be seen to have made contributions to the dissemination of information in the United Kingdom at least comparable to that made by Carnegie.
With my thanks to all those who have taken part in the debate, I commend the report to the House.
On Question, Motion agreed to.
ADAS
8.48 p.m.
Lord Carter rose to ask Her Majesty's Government what public benefit is expected to result from the privatisation of the agricultural advisory service and agricultural research organisations.
The noble Lord said: My Lords, in opening this debate I should declare an interest as president of the British Institute of Agricultural Consultants. I should point out at the outset that the debate deals only with the proposal for the privatisation of the ADAS consultancy
business, the ADAS research centres and the Wolverhampton laboratory. It is a serious matter of considerable importance to the agricultural and food industries and I trust that the Minister will spare us the performance we had last week with the starred Question of the noble Lord, Lord Mackie of Benshie.There will also be an opportunity to debate the merits or otherwise of privatisation generally in the debate on December 4th in the name of my noble friend Lord Haskel. I shall therefore restrict myself to a series of questions about the proposed privatisation. The Minister may not have time to answer them all, so perhaps he will write to me in respect of those questions he does not answer tonight and put his reply in the Library.
The first question is one that I asked last week; namely, why the rush? We understand that it is hoped that the privatisation will be completed early in the new year. The original intention was to ensure that ADAS should achieve 100 per cent. cost recovery by 31st March 1997 and the sale would then take place at some time through the summer or autumn of 1997. The research centres were excluded from the statements which were made in 1995 on the subject, but now they are included. I understand that Mr. Michael Heseltine has pressed for this early sale. I think we all know why: because of the general election in the spring.
There is a fundamental aspect of the proposed sale which is causing grave concern throughout the agricultural industry and for all those concerned with the matter. I studied with care the privatisation documents from PA Strategy and nowhere is there any mention of protocols concerning impartiality, objectivity and freedom from commercial interference and requiring such undertakings from prospective buyers. My honourable friend Mr. Gavin Strang, the Opposition spokesman on agriculture in the other place, sent a letter to Mr. Douglas Hogg, the Minister responsible on 5th November last saying:
- "Will ADAS simply be sold to the highest bidder regardless of any conflict of interest with the independence and objectivity of scientific advice? What view do you take, for example, of the prospect of a large feed compounder, or fertiliser or seed company buying ADAS? Will you publish the full terms under which the privatisation is intended to be carried out?".
In his reply the Minister carefully did not answer that vital question. He said:
- "I am not sure what you mean by publishing the full terms under which the privatisation is intended to be carried out. Clearly I am not going to publish anything which might weaken the vendor department's negotiating position in the sale process. I have already published the objectives of the privatisation. We will pursue a competitive sale process. The criteria for evaluating bids will reflect the published objectives".
When I read that last sentence, especially the reference to "a competitive sale process" and the
- "criteria for evaluating bids will reflect the published objectives",
I had the feeling that Sir Humphrey is alive and well and living in Whitehall Place. It would indeed be an irony if ADAS is sold to a commercial concern and thereby the largest agricultural consultants in the UK would not be able to meet the exacting criteria, for example, of the British Institute of Agricultural Consultants requiring,
- "objectivity, impartiality and freedom from commercial interference".
A further question arises. We know that there is talk of a management buy-out. If successful, presumably that would protect impartiality and objectivity at the outset. But what happens if ADAS is later sold on to another buyer? Do the Government intend to protect objectivity in the protocols of the sale by including restrictive covenants to cover this in a sell-on by the first buyer or buyers?
As I understand it, ADAS and its research centres are not allowed to make a profit out of work carried out for government departments or agencies, such as the MLC or the HSCA. They can recover only 100 per cent. of costs but no more. Will that continue to be the position after privatisation? Alternatively, will the new owner or owners be able to build in a profit margin on the contracts that they negotiate with the Government?
If we turn to the documentation itself, I must say that it is an extraordinarily flimsy basis upon which to offer for sale a major government asset. It consists of three very thin pages containing hardly any information regarding the privatisation prospectus. When ADAS or the Government come to work out their figures, I hope they will be a little more careful than those who compiled the ADAS report of 1995-96, which has been sent to all prospective buyers. I say that because on the second table which appears on page 6 regarding commercial consultancy cost recovery, there are two glaring errors. It seems that 100 per cent. cost recovery by ADAS does not extend to proof-reading.
The Government say in their statements regarding the sale that it will be,
- "on the best available terms--that is, terms which optimise the risk adjusted net benefit to the taxpayer".
What on earth does that mean? Can the Minister tell us in layman's language the meaning of the words,
- "terms which optimise the risk adjusted net benefit to the taxpayer?".
In the statement regarding the sale the Government say that,
- "to ensure that the services provided to MAFF and the Welsh Office from the private sector can be delivered continuously, economically, efficiently and effectively".
There is nothing there about objectivity and impartiality. The statement goes on,
- "to provide for a clean break between government and the privatised organisations or, failing that, to minimise any contingent liabilities falling on the Government".
- "minimising any contingent liabilities falling on the Government"
mean? Is there any question of the sort of dowry from the taxpayer which has featured in other privatisations to assist with the costs of pensions and the takeover of employee contracts?
After privatisation I understand that the Government expect that 50 per cent. of the work of the new body will be for the Government or their agencies. How will that actually work out in the case of something like BSE? The expertise is very specialised. Let us suppose that the private owner of ADAS does not like the BSE research contract that the Government are suggesting?
What happens then? The Government cannot go elsewhere to get it. It is clear that the effort to get ADAS to charge for its services which began in 1990 has undoubtedly resulted in a reduction of advice to individual farmers, and particularly to smaller farmers. As a private agricultural consultant, I am well aware of the relative profitability of advising one client for £5,000 compared with 10 clients at £500 each.What will be the relationship of the BBSRC and the NERC to the new bodies? How will this relate to the work of the new FRCA and where will the FRCA get its research done?
I turn now to the important work that has been carried out on Technology Foresight which identified the function provided by the public sector research establishments as strategically important to wealth creation and quality of life. It emphasised the need for internally competitive science, focused on long term strategic objectives. The Technology Foresight Steering Group made it clear that British industry cannot take foresight forward alone. A clear commitment to a long-term partnership between government, industry and academia was underlined. It is very hard to see how the privatisation of ADAS will fit in with that.
Investment of public funds in basic and strategic research is necessary to maintain the necessary infrastructure, both physical and scientific, to ensure that such investment will maintain a critical mass of staff, facilities, expertise and maintain a reputation which is essential for attracting collaboration with commerce. Loss of investment of public funds will inevitably lessen the amount of basic and strategic research undertaken in the UK. Too high a proportion of short term applied research and a restricted breadth of research will have serious consequences for the UK agri-food industries. Without sufficient investment in basic and strategic R&D the UK will cease to be at the forefront of sustainable, economic and innovative food production.
The other important crucial question is: what is the role of MAFF within UK R&D? I believe its position has been seriously weakened. While that was in part to be expected, given the serious funding cut-backs which have occurred, it was in no way inevitable. MAFF is no longer providing the lead which is so crucial if we are to maintain our agricultural importance within Europe. Instead, ADAS appears to be prepared to allow UK scientists to compete among themselves for funding until the competition becomes totally unhealthy and counterproductive.
It is not that long ago that we emerged from the nonsense over near-market research and public good research. I know that the noble Baroness, Lady Trumpington, who is present this evening, will remember the discussions that we had on the matter. I recall that the noble Baroness gave the only definition of near-market research which made any sense. When I asked her to define it, as I am sure she will remember, the noble Baroness defined it as being something which, "if you want it, you will pay for it; but if you do not want it, you will not pay for it." I believe I observed at the time that that was the Cynthia Payne approach to public expenditure.
I conclude by returning to what I believe to be the central question which the Government must answer. They are clearly determined to get the ADAS consultancy business, the research centres and the Wolverhampton laboratory off their hands before the election. If indeed the R&D part of ADAS is sold off either as part of the sale to a single buyer or separately, the buyer or buyers will have control of the intellectual property rights of the R&D and, through commercial confidentiality, will be able to restrict access to that R&D to benefit that buyer or buyer's commercial objectives. What is now known as "lock-out technology" could have disastrous effects on the British agricultural and food industries if ADAS ends up in the wrong hands. I hope the Minister will give a clear and unequivocal answer to that crucial question.
Will any buyer or buyers of ADAS or any part of it be required to give cast-iron guarantees regarding the impartiality, objectivity and freedom from commercial interference of future ADAS services? Will such a guarantee be further reinforced by restrictive covenants controlling a sell-on by the original buyer or buyers? If the Minister is not able to give that assurance, then we may be sure that ideology has triumphed over a proper regard for the public benefit and the national interest.
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