Mr. Batesasked the Secretary of State for Industry if he intends to change the basis for valuing shares for compensation purposes set out in the Aircraft and Shipbuilding Industries Bill.
§ Mr. VarleyNo. But the Bill will contain a new provision to deal with the specific case of companies which are saved from receivership or liquidation by Government financial assistance in the period before vesting. Clearly it would be inequitable to spend public money in rescuing companies from collapse and then to pay more public money to shareholders on the basis of a valuation made during a past period when the companies were viable. The new provision will operate only where the Government provide selective financial assistance to rescue a company after 6th November 1975 and before giving the assistance I am of the opinion that in the particular circumstances of the case and had the assistance not been given the company probably would have become insolvent within the foreseeable future. Where the provision operates compensation will be reduced either to 5 per cent. of the amount which otherwise would have been payable under the Bill or the amount the shareholders would have received had the aid not been given and the company wound up. The choice will be for the stockholders' representative of an affected company to exercise within three months after the relevant vesting date.