HC Deb 09 December 1974 vol 883 cc17-9
11. Mr. Robin F. Cook

asked the Secretary of State for Industry when he expects to make a statement on future Government assistance to Ferranti.

Mr. Meacher

We shall make a statement on the form of future Government assistance to Ferranti after the various possibilities have been discussed with the employees and the management of the company. We hope to begin such discussions shortly.

Mr. Cook

I thank my hon. Friend for that reply. Has the Secretary of State received the report by Peat Marwick Mitchell and Co. on the finances of the company? If he has, how much longer does the Department intend to continue its investigations following that report? In particular, will my hon. Friend note the strong opposition of the work force in Ferranti to the take-over of any part of that company by GEC or Plessey because of their anxiety that this would lead only to redundancy?

Mr. Meacher

The initial accountant's report has been received, and a statement is being postponed only prior to discussions with both sides of the company, since both the divisional structure and the finances of the company are highly complex. I assure my hon. Friend that a statement will be made shortly. With regard to preservation of employment and the retention of the company as an integrated concern, these desires were strongly expressed at the original tripartite meeting held by my right hon. Friend with both sides, and they are considerations which we shall take fully into account in presenting our final proposals.

Mr. Tom King

Is the hon. Gentleman's Department the only one with a bottomless purse? In view of the urgent need for funds to sustain employment in certain areas such as Ferranti, is it not clear that the Department will be under such financial pressure that it can no longer afford to indulge such whims as the nationalisation of shipbuilding and the aircraft industry, and should not these be dropped forthwith?

Mr. Meacher

In the first place, there have been two General Elections in which those were part of the programme put before the electorate by the Labour Party. We received a mandate to continue with both those policies, and we intend to carry them out. As for the reasons for nationalising shipbuilding and the aircraft industry, I have already dealt with the question of shipbuilding, when I made perfectly clear that it was in the long-term financial and industrial interest of this country that these proposals should go forward. On the financing of Ferranti, all that has so far been committed is a guarantee to the company's principal banker under Section 7 of the industry Act 1972 that the day-today expenses of the company will be guaranteed until such time as a long-term solution is proposed.

Mr. Rose

Will my hon. Friend confirm that any injection of public capital into Ferranti will be accompanied by public accountability and public ownership in that part of the equity which is taken over? Will he undertake that there will be no hiving off in particular of the transformer division or any other division in the Manchester and Failsworth areas, and will he undertake that there will be full consultation with the staff and with the confederation?

Mr. Meacher

I can give my hon. Friend assurances on each of those points. I have made clear that there will be full discussion at a tripartite meeting with the confederation and the management and that we shall take full account of the strong desire to avoid hiving off sections of the company. As for taking a public stake, we shall be acting in accordance with the view we expressed to the electorate that where there is a large injection of public funds it is only right that a roughly commensurate public equity stake should be taken in the company. We regard it as one of the unsatisfactory faces of capitalism in this country that at present two brothers with 55 per cent. of the shares control no fewer than 17,000 jobs, and that is quite wrong.