MERSEY DOCKS AND HARBOUR [MONEY] (No. 2) (By Order) (Hansard, 21 June 1971)

§ The Minister for Transport Industries (Mr. John Peyton)
I beg to move, That, for the purposes of any Act of the present Session providing for the reconstitution of the Mersey Docks and Harbour Board as a Company and for the reorganisation of the capital of the Board, it is expedient to authorise—

(a) any provision of the said Act which, so far as the said Act distinguishes between loans made to the Board before 27th November 1970, and loans made later, treats loans made to the Board under section 11 of the Harbours Act 1964 in pursuance of any agreement made by a Minister with the Board before 27th November 1970 as a loan made before that date, irrespective of the date on which the loan is in fact made; and

(b) any provision of the said Act which enables a person who on 12th February 1971 held securities of the Board which have matured before the end of a moratorium period, being a person who has held those securities at all times since that date and who is for the time being entitled to income tax relief under sections 6 or 7 of the Income and Corporation Taxes Act 1970, to obtain the redemption of one-half of his holding up to a maximum payment to each such person of £500;

and that it is expedient to authorise any loss to public funds arising from the making of any such provision. This Money Resolution is necessary to meet the requirements of the Select Committee. In paragraphs 4 and 5 of its Special Report, the Committee stated its 1068 belief that the Amendments which it had itself been free to make did not go far enough and it suggested two more.
First, it suggested an Amendment to the effect that Government loans agreed to before 27th November, 1970 but actually made after that date should be subject to the same write-down as other debt existing before that date. Second, the Select Committee was concerned that the Board should be obliged to repay to any security holder entitled to small income tax relief up to 50 per cent. of the nominal value of his holding held at 12th February this year and due for redemption during the moratorium period, this being subject to a limit of £500. This Amendment could not be included in the Bill without a new Money Resolution because it was contrary to the terms of the old one.
The Money Resolution is proposed simply in order to meet the wishes expressed by the Select Committee.

§ Mr. Edmund Dell (Birkenhead)
Will the right hon. Gentleman give a further explanation of paragraph (b) of the Money Resolution? The Resolution enables payments to be made in certain circumstances to those entitled to certain income tax relief, but it is put down by the Government. Does that imply—or does it not have to imply, since it is put down by the Government—a preparedness on the part of the Government in certain circumstances to pay out this money?
My understanding may be wrong, but, surely, if the new company could pay out this money, or could be relied on to be able to pay it out, this would not be 1069 a requirement falling on the Government. If my interpretation of the matter be right, in what circumstances do the Government foresee their having to pay out this money, and, in that event, how many people do they think will be involved and how much money might be paid out?

§ Mr. Peyton
If I may speak again at this point, the Money Resolution is required only because the existing Money Resolution would not allow the Amendment to which I have referred and for which the Select Committee had asked. As there is a possibility that payments under the Amendment might diminish the sums which the Government could ultimately expect to receive in the way of repayment of that part of their loan which had been written down, it is necessary also in that respect. It means none of the consequences which the right hon. Gentleman has implied or suggested.

§ Mr. Michael English (Nottingham, West)
First, I thank the Minister for bringing forward this Money Resolution. One does not look a gift horse in the mouth, but I must make two points about it. I shall not speak now about the main issues raised by the Bill, but the very reason why the Money Resolution has to be moved is that it widens the previous Money Resolution. What the right hon. Gentleman did not explain, however, is that it is somewhat unusual to have a Government Money Resolution so strictly controlling the contents of a supposedly Private Bill.
One of the points which I shall hope to make later is that this Bill should have been not a Private Bill but a Hybrid Bill. The very fact that this Money Resolution has to be moved illustrates that.
Second, although the Department of the Environment and the Treasury have kindly taken up the point made by the Committee, and although all four members of the Committee, including two loyal members of the Government party, would have gone this far, two of us—as we showed on a Division—would have gone considerably further. In the event, the Department has taken up the minimum view, the view that not even two loyal members of the Conservative 1070 Party were prepared to reject. Hence the Special Report.
First, this Money Resolution provides that the Government do not have priority for about £1.2 million, which in the Bill as drafted and presented to the Committee they were, in effect, asking for through the Board. The reason for that is that they were asking for priority not for money which they had voluntarily lent after 27th November, 1970 but for moneys which they were contractually obliged to pay to the Board under agreements dating from before the highly relevant date when the Board, in effect, wanted to liquidate itself.
I must comment on the appalling arrogance—as I described it in Committee—of the Report by the Secretary of State for the Environment on this point. In paragraph 8, it was said that the Government were prepared to relinquish the priority of ranking referred to in paragraph 6. There was no priority of ranking. There is no priority of ranking until this Bill is passed by both Houses. The Government were prepared to relinquish at the beginning of the Committee stage a priority position as a creditor which, frankly, they simply had not got and which they would never have had, had they not, in effect, forced the Mersey Docks and Harbour Board into coming to the House with this Bill putting the Government in that special position. For that reason, I shall say that it would have been better had the Bill been a Public Bill or, no doubt, a Hybrid Bill, under which the Minister would have been forced to come to the House and explain the reasons for the decision.
I accept that the Minister is merely carrying out the decision, as I believe it to be, of the Government as a whole, but the fact remains that we have this highly unusual situation necessitating this Money Resolution. Among other things, at the time the Bill was drafted the Department of the Environment was arguing for a position as a priority creditor for monies which it was obliged to pay. I do not know whether that was done intentionally or by pure mistake. Whichever it was, the Department has certainly speedily rectified it, but it illustrates the dangers of using a private Bill, using a second party as it were, to put forward what is in fact the Government's position. It would have been better if the Government 1071 had done it themselves and avoided what at least must have been a mistake.
My second point concerns paragraph (b) of the Motion. My colleague, my hon. Friend the Member for Sunderland, South (Mr. Bagier) and I divided the Committee on this matter, and we would wish to go further. The concession made is very paltry and piffling. Security holders of the Board are being deprived of a certain portion of their capital assets without compensation and with hardly any consultation. That is the frank position of the Bill. We shall discuss the principal of that later. The Committee as a whole felt that although those people would eventually, after the moratorium period under the Bill, get part of what they are now entitled to, if the Bill were not passed, and an equity to the extent of the remainder, at least the people with small income relief should be entitled to the half that they will eventually get at an earlier stage during the moratorium period. In other words, there is no avoidance of the reduction of their capital.
We are talking of people with small incomes, not the biggest shareholder, Barclays Bank, innumerable banks, the Methodist Church, which also happens to be a shareholder, nor of any of the other bodies and corporations, and not even of the private individual as a whole. We are talking merely of the limited number of people who are entitled to small income relief for income tax purposes. The Motion will give them no change in their position. It will be no different from that of other security holders. Their capital is going irrevocably and without their consent. The only thing is that to the minimum extent they will be able to get an advance on the money which, even under the Bill, they will ultimately get. It is a very tiny concession. The only difference is the amount of interest that it represents. It is hardly a concession that costs anybody anything.
In my view, and I believe in the view of my colleagues on the Committee, those people at least should have been entitled to receive the full amount of the assets which they thought they possessed. They invested in a public trust, in a trustee security. They are precisely the people 1072 who can least afford to have their capital taken away from them.
The Motion should have gone further than it does. It should not have taken the minimum view of the Committee, decided by two members and the casting vote of the Chairman. The Minister should have considered a little more deeply whether in the circumstances of the Bill it was desirable to go a little further towards helping these poorest people. I, and I am sure other hon. Members, have had letters from innumerable people. One of those that I have received begins: My brother of 92 and I invested in this as a trustee security. That is perfectly true. There are thousands of people of this character.
At this late stage it is still possible, if the Minister wishes, to go a little further still. I have no wish to oppose his Motion. As I have said, one does not look a gift horse in the mouth. But the right hon. Gentleman could go a little further still to help the poorest people affected by the Bill.