HC Deb 15 July 1974 vol 877 cc19-20
17. Mr. Rost

asked the Secretary of State for Trade whether he has yet had estimates from Rolls-Royce (1971) Ltd. and other companies of the cost of the compensation due to overseas customers as a result of contracts broken on the instructions of Her Majesty's Government; and what proportion of such compensation will be provided by Her Majesty's Government.

Mr. Shore

I have had no such estimates and the second part of the Question does not, therefore, arise.

Mr. Rost

Is that not a disgracefully unsatisfactory answer? Can the right hon. Gentleman quote any precedent for a British Government forcing the cancellation of a commercial contract between British companies and foreign Governments without offering full compensation both to the foreign Governments and the British companies? What possible benefit can this be to the British export trade? What encouragement can it give to people to place orders with British industry?

Mr. Shore

The hon. Gentleman has not been properly briefed. The answer to this is that on many occasions Governments have for one reason or another had to introduce export or import licensing, both of which have frequently led to breaches of contract. To the best of my knowledge no Government have ever paid compensation in such cases.

Mr. MacFarquhar

Is my right hon. Friend aware that apart from compensation for overseas customers in the panic winding-up of Rolls-Royce by the last Government there arose the question of compensation being administered on a niggardly level to a number of long-service employees, some of whom were my constituents? Is he further aware that this makes me suspicious that there was a breach of contract there? If such cases are brought before him will he undertake to look into them with great despatch?

Mr. Shore

I was not aware of that point but I can give my hon. Friend the assurance for which he asks. If he wishes to bring any particular cases to me they will be looked at with care.

Mr. Heseltine

If the Secretary of State has not received any estimates, may I ask what estimates he asked for from Rolls-Royce and what advice has he received from the company about the impact of the Government's decision on its overseas trading posture?

Mr. Shore

That information would be relevant only if it had been the practice and was to be the practice of Governments to pay compensation in such cases. This policy is so generally well understood, not only by the present Government but by all post-war Conservative Governments, that most traders have a force majeure clause in their contracts which protects them against the imposition of import or export controls.