HC Deb 06 July 1971 vol 820 cc1121-2
Mr. Speaker

Question No. Q1 to the Prime Minister—[Interruption.] Order. It is the convention of the House that when hon. Members have a Question to ask they rise to their feet.

Mr. Douglas

I apologise for the discourtesy, Mr. Speaker.

Q1. Mr. Douglas

asked the Prime Minister if he is satisfied with the coordination between the Department of Trade and Industry, the Department of Employment and the Scottish Office in assessing the economic effects of company liquidations.

The Prime Minister (Mr. Edward Heath)

Yes, Sir.

Mr. Douglas

Would the Prime Minister accept the view that the liquidation of U.C.S., which was threatened by the company in February, 1971, was avoided by the underwriting of guarantees by his Government and that the underwriting of the guarantees in February, 1971, was only given because the Government wanted to avoid the liquidation of U.C.S. and Rolls-Royce within a few days?

The Prime Minister

The arrangements which were made in February, 1971, were made because U.C.S. said that if these financial commitments were met, it would be a viable company. It was for that reason that we made financial resources available to Yarrow's, and also because it is a defence yard. This was not the situation on the last occasion in June.

Mr. Lawson

Is the right hon. Gentleman telling the House that he always takes account of just what a company says it thinks about itself when he has at his disposal full reports of the company over a series of months? Is it not for him and his Department to judge from those reports and not from any statement which may be made by a director of the company?

The Prime Minister

The hon. Gentleman and his colleagues have been told the full facts of the situation and they must draw their own conclusions about the management of this company. The management of the company did not know the situation until 7th June, and it reported to the Government on 9th June. Indeed, it was only because the S.I.B. director on the board of U.C.S. had inquiries put in hand that the report was made to the company on 7th June. In 48 hours the Government were told.