§ The Chancellor of the Exchequer (Mr. Selwyn Lloyd)
I will, with permission, make a statement about Fords.
I have had to decide whether Treasury consent should be given, under Section 9 of the Exchange Control Act, 1947, for the transfer to a non-resident purchaser, the Ford Motor Company of the United States of America, of such ordinary shares of the Ford Motor Company of the United Kingdom as the United States company does not already own. The Ford Motor Company of the United States of America already owns 54.6 per cent. of the ordinary capital of the United Kingdom company. Of the remaining 45.4 per cent., about 6 per cent. is owned outside the United Kingdom, and about 39 per cent. owned in the United Kingdom. That corrects the figures which I have previously given.
In taking my decision, I have had to have regard to a number of considerations. The House knows that the offer is to be one of 145s. 6d. for each £1 share. It is for the shareholders concerned to decide whether or not to accept this price. I make no judgment on it except to say that I am satisfied, after discussion with the Chairman of the United Kingdom company, that it is not outside the reasonable range of negotiation between a willing buyer and a willing seller. Therefore, I have decided that I would not be justified in withholding consent to the transaction because of the price offered.
A more general consideration is whether there is any appreciable risk that if this minority shareholding passes into the ownership of the American company our economy will suffer or the position 769 of those employed by or otherwise dependent upon the United Kingdom company will be adversely affected. The House will have seen the statements issued by the Ford Motor Company of America about the objectives which they have in mind in seeking to acquire complete ownership of the share of the United Kingdom company.
I have discussed the position with representatives of both the United States and the United Kingdom companies. As a result, I have been given the following explanations and assurances. The purpose has been described as to obtain greater operational flexibility and to enable Ford United States to co-ordinate better its American and European operations so that it may be able to compete more effectively in world markets. I sought some explanations as to what that meant. I was told that it meant that if the offer were to be accepted, their decisions—that is to say, the decisions of the American company—with regard to expansion, production and exports in Europe would not be affected by the fact that profits from activity in the United Kingdom would belong only to the extent of just over half to the parent company. When developments were being planned, the possibly limiting factor of the United Kingdom company being only 55 per cent. owned by the parent company would be eliminated.
I therefore formed the view that full American ownership would lead to a still more vigorous development of the Ford enterprise here and to even greater efforts in export markets, particularly inasmuch as the American company would have the incentive of having to secure a return on its heavy and extended investment here. Without full ownership of the United Kingdom company there might be a greater incentive for the United States company to concentrate efforts on the development of the German company, which is nearly 100 per cent. owned.
I have also received assurances on the following matters. I was told that the programme already announced of expansion on Merseyside, at Basildon, in Essex, and elsewhere, involving expenditure estimated at £70 million, would go forward. The United Kingdom company has always ploughed back a high proportion 770 of its profits for future development, and that policy would continue. I was assured that there would be continuity in management and employment policies. The majority of the members of the Board would continue to be British and would still be under the chairmanship of Sir Patrick Hennessy. There would be no change in employment policy and no intention to take control of that policy out of the hands of the Board of the United Kingdom company. The United Kingdom company already obtains nearly 100 per cent. of the components in the United Kingdom. That policy would continue and full American ownership would indeed put the United Kingdom company in a better position to compete in world markets for the sale of components made here.
I next have to consider whether this transaction, if completed, would mean that control of a large proportion of a major industry would be in foreign hands. That consideration, however, was not really relevant in this particular case, because control was already with the United States company, as it has been since the United Kingdom company started in 1911. Had it not been so, the company would never have come here and this huge industrial concern would never have been built up.
But I wish to make it clear that I have come to my conclusion upon the facts in this case only. In another one, the balance might point the other way. There may well be cases where proposals may seem attractive from a commercial point of view, but where, nevertheless, it may be necessary to refuse consent to transfer of control for reasons of national security or the significance of a particular firm or industry to our economic life.
I am satisfied, as a result of my discussions, that so far from our having anything to fear from this proposed transaction, its purpose is to strengthen the United Kingdom company and particularly to enable it to compete more effectively in world markets. The proposed investment of over £100 million in the United Kingdom is a sign of confidence in our country and it would, in my judgment, be a grievous mistake if the Government were to frustrate this by withholding consent for the transaction. 771 Accordingly, the Government have decided that approval should be given to the proposed transfer of shares if an offer is accepted by the shareholders.
My right hon. Friend the Leader of the House has asked me to say that it will be agreeable to the Government for a debate to take place this evening. We hope that the necessary Government business can be obtained in order that the debate upon my statement may begin not later than 7 o'clock, when we would propose to move the Motion for the Adjournment of the House.
I am, for the convenience of the House, arranging for a number of copies of this statement to be available in the Vote Office forthwith.
Mr. H. Wilson
As we shall debate this matter this evening, it would be more convenient to the House to leave the general issues until then. The Chancellor claims to have obtained the facts which he did not have when he spoke to us last week. Apparently, the fact which has moved him most relates to the substitution of 100 per cent. for 54 per cent. control. In view of his suggestion that 54 per cent. of control might mean that the American company was half-hearted about development in this country, is the Chancellor suggesting that the company has been half-hearted about development here while it has had only 54 per cent. control? If not, what is the necessity for this major transaction? Secondly, in his negotiations with the Ford Company last week, did the Chancellor secure any assurances about the shipment of Ford cars from this country into the American market?
§ Mr. Lloyd
I am not suggesting for a moment that the Ford Company has been half-hearted in its developments in this country so far. My considerations have been rather about the future and the development of other markets overseas. I have had no discussion about the import of motor cars from this country to the United States, because that is not a matter which would be affected by this transaction at all.
§ Mr. de Freitas
Is the Chancellor aware that many of us are still suspicious of his words "operational flexibility"? Does he realise that the future of small engineering cities such as Lincoln, referred to in any Question No. 58, 772 is already being determined more and more by decisions made by large companies, perhaps in the City of London, which have no local interests at all? That is bad enough, but it is terrifying if decisions are made, which affect cities such as Lincoln, in a foreign country by a foreign company which, in this case, regards Lincoln as just the name of another motor car and has not the slightest interest in the city.
§ Mr. Lloyd
I am well aware of that anxiety and it is one of the matters which has been in my mind, but that sort of decision can already be taken in a foreign country, because they have control. The whole point which I think the hon. Member should consider from the point of view of his constituents is this: is it to the advantage of the people making components at Lincoln that future developments should take place in another country where the subsidiary is 100 per cent. owned?
§ Mr. Speaker
Order. The time which we have to debate this subject will depend on our reaching it as early as possible. It is in the common interest to stop this process of questions now.
§ Mr. S. Silverman
On a point of order. Arising out of the statement just made by the Chancellor of the Exchequer, you will remember, Mr. Speaker, that in the middle of or towards the end of last week, my hon. Friends sought your leave to move the Adjournment of the House under Standing Order No. 9, and you said that as there was no Ministerial responsibility you were not able to grant their request. As I understood it, what lay behind that decision was that until an application had been made the Minister was not responsible for dealing with it. The information then was that there had been no such application.
It now appears from the Chancellor's statement that he has been in negotiation with the Ford Company over this past week, and I think it is probably an unfair inference to say that he did not begin to consider it until Thursday or Friday. He has had conversations with the British company, he has had conversations with the American company, and the indications are—because he used the word "Government"—that the matter 773 on the basis of that information has been considered by the Cabinet, which has reached a conclusion about it.
In those circumstances, is it not clear that the right hon. and learned Gentleman had responsibility on the day when my hon. Friends sought to raise it? If that is so, it is of some importance to the House, because today we shall be considering the matter on the basis of a fait accompli, whereas if we had been able to debate it last week we could have debated it in circumstances in which the argument might still have influenced the Government to come to another decision.
§ Mr. Speaker
I am obliged to the hon. Member. I do not want to have a post mortem on my Rulings. It would be quite false to assume that the sole ground on which I did not allow the Adjournment of the House under Standing Order No. 9 was the view which I put, that at that time there existed no Ministerial responsibility. If anybody will look at the Motions which were offered, it is manifest that they were not within the Standing Order. I doubt whether it is worth bothering much more about it now.