S. G. BROWN, LTD. (SALE) (Hansard, 22 June 1960)

§ 56. Mr. FAREY-JONES
To ask the Civil Lord of the Admiralty whether he will make a statement on the future employment prospects in the firm of S. G. Brown, Limited.

57. Mr. LEE
To ask the Civil Lord of the Admiralty whether he will make a statement on the sale of S. G. Brown, Limited.

§ The Civil Lord to the Admiralty (Mr. C. Ian Orr-Ewing)
With permission I will now answer Questions Nos. 56 and 57.
In accordance with the decision announced in the House on 8th June, 1959, the Admiralty has agreed to sell S. G. Brown Ltd. on 30th June.
417 We received a number of offers for the company. We decided that the offer made by de Havilland Holdings Ltd. most satisfactorily meets the considerations attached to the sale which were stated to the House in last year's debate. De Havilland Holdings Ltd., a member of the Hawker Siddeley Group, are for this purpose associated with American Bosch Arma Corporation. De Havilland Holdings will retain the controlling interest.
The Admiralty has obtained from de Havilland Holdings Ltd. assurances of their confidence in maintaining the existing level of employment of skilled personnel at S. G. Brown Ltd. and of their intention to seek a basis for expanding the company's activities. The Admiralty believes that this arrangement provides the best prospect of developing this company.

Mr. Lee
Is the hon. Member aware that there was never any question of problems about employment at S. G. Brown Ltd. until the Government began their interference with its very successful career? Have there been a number of applications from British firms for the whole of the holding in S. G. Brown? For our part, we thoroughly disagree with the view that there is need to interfere in this nationalised business. But if there have been offers from a large number of British firms, why have they been turned down and preference given to a company which includes the Bosch Arma Corporation of the United States? What is the selling price which the Government have obtained? What apportionment of the shares is to be given to the de Havilland Company and the Bosch Arma Corporation?

§ Mr. Orr-Ewing
We received offers from other British companies, but this was the best offer which we received. It is not unusual to be associated with a licensing agreement with another company, in this case an American company. This licensing agreement had already been in force since 1957, and it is quite understandable that it should continue if the company were to continue the manufacture of the same products. It is not usual in negotiations of this sort to give the price, and I do not want to give one at the moment. As for the apportionment of shares, the de Havilland Company will 418 retain a 51 per cent. controlling interest in this company.

§ Mr. J. Griffiths
On a point of order. The Minister said that he does not propose to give the price. This is the House of Commons and we are responsible for public money and public property. May I ask you, Mr. Speaker, therefore, whether the House has not a right to know from the Government at what price public property, for which we are responsible, has been sold?

§ Mr. Speaker
The right hon. Gentleman knows very well that it is not a matter for me. I cannot require the Minister to answer something if he does not wish to answer.

§ Mr. Orr-Ewing
These dealings are confidential. That is why I do not desire to give the price at this juncture. But if there are strong feelings—and I agree that there is a special case—I will approach the buyers of this company to see whether they have any objection to the price being given. [HON. MEMBERS: "Oh."] When you undertake confidential negotiations it is normal to consult the other member as to whether you can reveal the price. I will certainly approach them and see whether this price can be revealed. I would add that it is not only the price which we should reveal, but also the liabilities, including a very large bank overdraft.

§ Mr. J. Griffiths
I should like to ask the Leader of the House to answer this question, as protector of the rights of the House. When public property is disposed of—and we may have other examples, such as Richard Thomas and Baldwins, in the near future—this House is entitled to know the price, whether the other parties consent or otherwise. Will the Leader of the House deal with that question?

§ The Secretary of State for the Home Department (Mr. R. A. Butler)
If my hon. Friend, in his answer, had said, "It is quite impossible under any circumstances to give the price," I should understand the right hon. Gentleman's indignation, but what my hon. Friend said is that he will approach the parties concerned, obtain the correct figure and give it to the House. I think that to get an exact answer it would be advisable 419 to give my hon. Friend the time to do this and then to give a proper answer to the House.

§ Mr. Gordon Walker
Is not the right hon. Gentleman saying that a private concern is to be given a veto over whether the House of Commons should have this information?

§ Mr. Butler
No, Sir. I am glad that the right hon. Gentleman raised the point with that inflexion. That is not what was in my mind. What was in my mind was that my hon. Friend should give the answer, which he has undertaken to give. I will give an undertaking on his behalf and on behalf of the Government that that answer will be given.

§ Mr. Farey-Jones
Mr. Speaker, since Question No. 56 was down in my name, I cannot understand why further supplementary questions were asked by a number of hon. Members opposite before I was given the usual opportunity to ask a supplementary question.

§ Mr. Speaker
I am sure that the hon. Member will understand my difficulty. One question was asked by a member of the Opposition, who had put down one of these two Questions, and there then arose not a supplementary question, but a point of order. That was the difficulty.

§ Mr. Farey-Jones
In view of the questions and replies, may I ask my hon. Friend whether he will make this point clear to the House: that the fact that the de Havilland Company, an excellent company, retains control, and that the agreement is with the Bosch Arma Company, with its fantastic technical contribution to this problem, represents an agreement likely to be very conducive to the prosperity and the excellent future of this company, and that if this precedent is followed, both in defence and other industries, it could be a very remarkable thing for this country?

§ Mr. Orr-Ewing
I thoroughly endorse the remarks of my hon. Friend the Member for Watford (Mr. Farey-Jones), who represents the 1,000 employees in this company.

Mr. Lee
Does the Minister agree that the logic of that statement is that we should sell out about two-thirds of British industry to the United States?
420 May I return to the need for the publication of the price? The Minister agreed that a large number of British firms tendered. The only thing that we have heard is that the Government have accepted the best offer. It is important, in the interests of all concerned, that the firms which tendered shall know that the tender which has been accepted is a better offer than those which they submitted.
Is it not also the case that it is almost treachery to the British nation to sell out a first-class business of this sort to any sort of foreign capital—and I am not being anti-American about this—when we have the complete "know-how" and have produced a fine gyro compass which is equal to anything in the world? It is selling the employees down the drain.

§ Mr. Orr-Ewing
That is not the opinion of the people who have bought this company, nor is it the opinion of informed hon. Members in the House. Many British companies have very greatly benefited from licensing agreements and technical "know-how" derived from other overseas companies. Perhaps I may point out to the hon. Member that Vauxhall Motors and Standard Telephones and Cables are both American-owned companies, but they are still extremely efficient and I should have thought that their employees were among the best-paid in this country.

Mr. Lee
They were not publicly owned.

§ Mr. Nabarro
Will my right hon. Friend respond to two further points? If, in due course, he publishes the purchase price paid by this consortium, will he also publish with it the audited reports and accounts of this company since it was expropriated in 1942, so that the whole House may then judge whether the Government have received the proper price for the assets?
Secondly, will he bear in mind that the entire Conservative Party, which has a majority in the House, warmly endorses the decision that he has announced today?

§ Mr. Orr-Ewing
I think that what the House would like is an early notification of the price received. As I said earlier, it is only fair that one should also see what the liabilities are, including the 421 very large bank overdraft. I have to clear this with the bank and with the purchasers, because the negotiations were confidential. That is why I asked permission to do that before publishing the price. I do not know at this moment the figures of the overdraft and liabilities. I should like to clear that. The House debated this very thoroughly last June. It is significant that my hon. Friend the Member for Watford (Mr. Farey-Jones) who represents this company doubled his majority at the General Election.

§ Mr. Shinwell
Am I right in saying that the primary determination in this transaction was not so much the price? That presents a difficulty to the Civil Lord and will subsequently present a difficulty in order to ascertain whether the highest tender was accepted. Was not the primary determination to bring an American company into this affair? Was not that the sole consideration?

§ Mr. Orr-Ewing
No. Our desire was to dispose of this company, which needed further taxpayers' capital if we were to carry it on in Admiralty ownership and, at the same time, produce increased technical "know-how" by an agreement of this sort. The Bosch Arma Corporation has already had a limited licensing agreement with S. G. Brown Ltd. for the previous three years. Therefore, the object was not to get that Corporation involved, but it was helpful that it was involved and could thus carry on with the "know-how" which had been built up in recent years.

§ Mr. John Morris
Is there any prohibition against the control of this company passing to American or foreign hands in the future?

§ Mr. Orr-Ewing
The hon. Gentleman has asked a very good question. I thought that it would probably be asked. De Havilland Holdings Ltd. will retain a controlling interest in S. G. Brown Ltd., and special safeguards have been agreed with the purchasers to ensure continuance of British control. These will take the form of a special clause in the articles of association providing against the transfer of more than 49 per cent. of the share capital to foreign interests. This article, in turn, will be protected by an undertaking on the part of the purchasers not to alter it without the consent of Her Majesty's Government.

§ Mr. C. Osborne
Is my hon. Friend certain that the workers in this firm will be treated as well as the average workers in Anglo-American companies in this country, who have done extraordinarily well and are, on the whole, better treated and higher paid than people employed by British firms?

Mr. Lee
Will not the Civil Lord agree that we are reaching a rather fantastic situation when the hon. Member for Kidderminster (Mr. Nabarro) pledges the whole Tory Party as being behind a sale of British assets to a foreign country, while the hon. Member for Louth (Mr. C. Osborne) tells us that good conditions cannot be obtained in Britain unless foreigners are persuaded to come here?