§ 18. Mr. J. Griffithsasked the Chancellor of the Exchequer if he will make a statement on the reasons why, and the terms upon which, the Iron and Steel Holding and Realisation Agency have sold the Llanelly Steel Company (1907), Ltd., to Messrs. Duport, Ltd.
§ The Economic Secretary to the Treasury (Mr. Anthony Barber)The Agency has a statutory obligation to dispose of its present holdings in return for adequate consideration. The price realised for the Llanelly Company was 2560 £1,750,000. In view of the company's revenue position in recent years I am satisfied that this price was adequate.
§ Mr. GriffithsIs the Minister aware that there is deep concern—I hope, on all sides—that this means that £1½ million of public money has gone down the drain? If he recalls the row which his side of the House made about Gambia eggs, this loss is more than the loss on Gambia eggs. Is the hon. Gentleman telling the House that for a public investment of well over £3 million, the best offer he had was £1¾ million and that, therefore, because of the policy of the Government in proceeding with denationalisation, the public and the taxpayer have lost £1¼ million? Does the Minister propose to give us the full facts of all this, including all the offers that were made and the reason why the Agency has lost £1½ million of public money on this transaction?
§ Mr. BarberThe fact is that since the Iron and Steel Act, 1953, the offer by the purchasers, Messrs, Duport, Ltd., has been the only firm offer received by the Agency. I should have thought that it was generally agreed that what a company is worth, apart from its break-up value, is governed by what it can earn. The undoubted fact—the right hon. Gentleman will know the figures—is that over recent years the company's profit-earning capacity has been most unfortunate. Indeed, over the last seven years its average profit after depreciation but before interest and taxation was only just over £19,000 and in both 1958 and 1959 it made losses, in the first year of £176,000 and in the second year of £53,000.
§ Mr. GriffithsI will not dispute that Duport's, a reputable firm, has paid what it thinks is a fair and full price for the purchase, but that does not absolve the Minister from being responsible for the fact that over £3 million of public money was put into this concern and that, therefore, we have lost £1½ million. Does the hon. Gentleman propose to give us a full report of how this money came to be lost?
§ Mr. BarberCertainly, if the right hon. Gentleman has any further specific questions to ask, I will do my best to answer them. The fact is that the purchase price was governed largely by 2561 the trading profits and losses in the last two years of the company. I should have thought that this was one of the main factors to be taken into consideration.
§ Mr. MitchisonIs the hon. Gentleman aware that there is grave public anxiety about the adequacy of the consideration not only in this case but in other recent cases? Ought he not to publish the considerations and any advice which have led him to suppose that the price accepted was adequate? At present, there is a general opinion that public assets are being sold at a loss simply to get rid of them.
§ Mr. BarberWith due respect to the hon. and learned Gentleman, that last statement is absolute nonsense. If the price which was agreed in respect of the sale had not been adequate, I should have thought that we would have had at least one firm offer in excess of it during the seven years since 1953.
§ Mr. GriffithsBecause of the public importance of this matter and the fact that the House is entitled to have a full account of how the public have come to lose £1½ million, I propose to raise the matter on the Adjournment.