Government Trading Funds Bill

Part of New Schedule – in the House of Commons at 12:00 am on 19th June 1973.

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Photo of Mr Edwin Wainwright Mr Edwin Wainwright , Dearne Valley 12:00 am, 19th June 1973

I should have liked to have slightly longer notice of being asked to serve on the Committee. I was informed only at the weekend and I thought it rather uncharming.

I cannot understand why the Government always give the impression that every system of nationalisation is a failure and therefore we must do something to improve its management and techniques. They do not seem able to prevent themselves from criticising the nationalised industries. I am not certain that the Bill will give the tremendous fillip to the six organisations referred to in it. We are not changing personnel. The same teams are to run the activities. Therefore, we should consider the team running the system at present.

When one compares the productivity of other nations with that of this country, one realises that there is something wrong in private enterprise as well as in the public and nationalised industries. To improve management we have to do more than we are doing at present, and I am not sure that the Bill will do that. It has too much of the dead hand of the Treasury upon it.

My hon. Friend the Member for Stoke-on-Trent, Central (Mr. Cant) spoke about the efficiency of some of the nationalised industries. For instance, if throughout private industry there were the same efficiency as in the coal mining industry undoubtedly this nation would be in a better financial position than it is. However, unfortunately, when coal was in short supply and demand exceeded supply, the Government of the day prevented the National Coal Board from increasing the price of coal, which private enterprise would have done had it been in charge. It is estimated that even that industry was run short of capital of £2,000 million because of the stranglehold that the Government had upon it. I know the answer which is given to that, namely, that if the board had increased the price of coal it would have been priced out of the market sooner. Nevertheless, in spite of its tremendous capital investment, and in spite of its upsurge of productivity, the NCB has always been looked down on by the nation.

Every nationalised industry we have talked about has been controlled by the Government—Labour as well as Conservative Governments. The only time the Government wish to denationalise an industry is when they talk about hiving-off the more profitable sectors of it. We have to look at the industries independently and not compare them with private enterprise which is often done because they are at a disadvantage. I agree there could be greater efficiency among management than we have at present. But would it give impetus to the organisations we are discussing?

I had to smile when the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) talked about 1 per cent. going to management. Some very small private companies run efficiently and magnificently in what is termed de luxe accommodation. But it is not always there that one can encourage efficiency because one can say, "There's a nice office up the road. I will put you in if you can make your organisation more efficient." We should be very careful when we start talking about office equipment.

In passing, let me say that probably the inflow of personnel into the Civil Service has come from a certain section of the community, yet they are supposed to introduce business ideas to the nation. There are likely to be many people who could develop ideas and make an organisation more efficient, but because they have come from a certain section of the community they have not been allowed to do so. I agree that the Civil Service has widened its ambit of recruitment but it must widen it more in future.

I should like the Minister to explain the provision in Clause 2(4): …limits in force in respect of all trading funds shall not exceed £250 million at any one time. Why is it £250 million and not £500 million? Will the Minister say a few words about that when he replies? In Clause 4(6) we see signs of the power of the Treasury. How can a business organisation be run efficiently and commercially when over it is the dead hand of the Treasury? Clause 4(6) states: The Treasury shall appoint an accounting officer for the fund, with responsibility for keping its accounts and proper records in relation thereto… —not just for the accounts, but to have a tremendous influence on the running of the organisation's finances, and to make certain that, although the capital invest- ment is a bit too high, no matter how much investment means to the efficiency of that organisation and to the ideas of the personnel responsible, someone will say, "No, you must not do that; the cost is too high". Therefore, the ideas of the personnel responsible are stultified by the dead hand of the Treasury.

The clause goes on to provide that the annual statement of accounts shall be in a form approved by the Treasury and contain such additional information with respect to financial results in the previous year as the Treasury may require to be provided for the information of Parliament;". That is the usual phrase and I have often seen it in Bills, but why does it say just "additional information"? Will there be some attempt to restrict information? When a phrase like that appears, I am worried that it means something different from what it says. The additional information might be restrictive information. I hope that the Minister will be able to convince me that I am putting a wrong interpretation on that.

There is another point on which I should like the Minister to comment. In his statement he mentioned the organisation investing its cash, and I think he meant its surplus cash. I thought he was referring to the reinvestment of capital, but as he went on I was left with the impression that there was the possibility of a restriction being placed on surplus funds. With the Treasury's hand upon the organisation and saying that its pricing is too high and that it is making too much profit, the organisation will be lucky to have funds to invest.

But if organisations are to invest, what kind of investments will they make? Will it be in equity shares? Will they loan to the Government with a cheap rate of interest? Or will they be allowed to make the best of a monetary surplus? I think the Minister should be more forthcoming on this issue.

I hope that this Bill will eventually improve the efficiency of the six organisations named in it. If it does, it will receive the blessing of the Opposition. But I think that when the public accountability takes place we shall find that the Bill needs amending to ensure efficiency in these organisations. Unless we make certain that personnel are better trained in management, we cannot expect the success which we ought to be having in any kind of nationalised industry. When Members of the Government talk of management personnel in the nationalised industries, I wish they would look more to private enterprise. It is there that 80 per cent. of the wealth of the nation is produced and it is there that management is lacking. When the Government criticise management in the nationalised industries I hope they also think about current failures in private enterprise.