HC Deb 25 January 1966 vol 723 cc23-4
39. Mr. Frank Allaun

asked the Minister of Power if, as the circumstances at the time of nationalisation will, following its postponement, be different from those envisaged in the White Paper, he will reconsider the compensation terms so that they do not result in £120 millions being paid to the steel owners in excess of the Stock Exchange valuations of the shares at the date of publication of the White Paper.

Mr. Frederick Lee

I would refer my hon. Friend to the reply I gave to my hon. Friend the Member for Nottingham, West (Mr. English) on 21st December, 1965.

Mr. Allaun

As share price movements have shown that these terms wildly exceeded the expectations even of the shareholders themselves, will the Minister consider, in the new circumstances, laying a less onerous burden on the industry?

Mr. Lee

The Government have already said that they regarded the compensation terms proposed as absolutely fair. They had been taken over a period of about five years. If, of course, there is any change in circumstances within the industry, this will necessitate looking at them again.

Mr. Mikardo

Is my right hon. Friend saying that there has been no rethinking on this matter in the light of the reactions of the market since the White Paper was published? Did he read the comment of one City editor the other day that, as the prospect of nationalisation recedes, shareholders have to fall back for their expectations on the results of the companies? Does not that mean anything to him?

Mr. Lee

I know that the methods by which we determine values in this country are somewhat peculiar, but if one takes a period, not only as regards the economics of the steel industry but as regards questions of the Gallup Poll, one finds that values change sometimes by a considerable amount. We, therefore, took as a basis the whole of a 61-month period which included the cycle of the economics of the industry as well as of political forecasts.