Heseltine warned by minister over jobs: Leaked letter voices Welsh fears about civil service reforms

A MINISTER has warned Michael Heseltine, President of the Board of Trade, of serious job losses if he presses ahead with controversial plans to privatise or contract out Department of Trade and Industry agencies.

The advice is contained in a leaked letter, a copy of which has been passed to the Independent, from Sir Wyn Roberts, Minister of State at the Welsh Office, to Mr Heseltine.

Unions and the Opposition last night said the letter was proof of ministerial unease about the extent of the Government's civil service reforms, many of which are being driven at the DTI by Mr Heseltine.

They also said it gave the lie to government claims that privatisation and contracting out did not lead to redundancies and raised questions about the value to the taxpayer of relocating civil servants from Whitehall to areas such as South Wales, when those jobs were clearly now at risk.

The letter was sent last month, following a visit to Sir Wyn from Paul Flynn, Labour MP for Newport West, and representatives from the civil service trade unions. They were concerned about the future of three DTI agencies: the Patent Office, Companies House and the Accounts Services Agency, which together employ 2,140 people, mostly at centres in South Wales.

On 14 February, Sir Wyn wrote to Mr Heseltine: 'Although decisions have been reached (on the Account Services Agency) I believe that you are still considering possible options for the other two agencies and you will wish, therefore, to have a brief report of the discussions.'

Sir Wyn said the delegation 'was concerned that any form of privatisation or contractorisation would lead to the loss of good quality jobs in Wales'. He said they pointed out the agencies were among the largest employers in the area under the Government's regionalisation policy and were particularly worried about jobs moving away.

The minister said their points 'were strongly made'. He was impressed by their acceptance that efficiency gains needed to be made and their willingness to explore alternatives to privatisation, such as allowing the agencies to bid for a wider range of work. Sir Wyn pleads with Mr Heseltine to 'bear in mind the criticism there will be if substantial numbers of jobs were to move away from South Wales'.

Mr Flynn welcomed the letter, which he said should come as some relief not just to the 31,000 government employees in Wales, but to civil servants everywhere. 'At last it seems common sense is prevailing and a government minister has moved away from the ideological position that privatisation is good and the public sector is bad . . . Until now the Welsh Office has always said privatisation is a matter for the DTI, which has adopted a macho and aggressive stance. For the first time a Welsh minister has taken our side and decided to intervene in a matter that falls outside his own department.'

It was a nonsense, Mr Flynn said, for the Government to have recently moved the Patent Office from London to a new headquarters in his constituency at a cost of pounds 25.5m, when it was clear those jobs might now disappear.

Equally, he said: 'What is the point of the Government spending pounds 250m a year on the Welsh Development Agency and other bodies to attract jobs to Wales when its own policies are causing jobs to be lost from Wales and other parts of the UK?'

The Welsh Office said last night: 'The minister was passing on the unions' views. He was ensuring the DTI were aware of the economic implications of any decisions.'