HC Deb 12 July 1976 vol 915 cc3-6
2. Mr. Lipton

asked the Secretary of State for Trade whether he has now completed his consideration of the report on the Lonrho Company.

26. Mr. Teddy Taylor

asked the Secretary of State for Trade if he has yet completed his consideration of the report on the Lonrho Company.

Mr. Dell

The report was published on 6th July. I am considering any implications of the report for the reform of company law.

Mr. Lipton

Is it not quite scandalous that while they are under police investigation these tarnished tycoons of Lonrho should be considered fit to receive £5 million of taxpayers' money as a loan free of interest for the purpose of rescuing Brentford Nylons?

Although they may be experts in feathering their own nests, is it not possible to find someone of more repute to take over Brentford Nylons, to save the company from destruction?

Mr. Dell

That is a point for my right hon. Friend the Secretary of State for Industry. I am sure that he is concerned with saving jobs.

Mr. du Cann

I realise the difficulties that Ministers always have in regard to inquiries of this sort, and the decision whether to publish, but will the Secretary of State give the House an undertaking that the further inquiries that we understand are proceeding in respect of this company will be expedited as far as possible, so that the company can get on with its constructive work on behalf of people in Great Britain and overseas?

Is the Secretary of State further aware that I have in my hand a letter from the trade unions in Newcastle welcoming the participation of Lonrho in the affairs of Brentford Nylons, and that when I was there on Friday I had a better reception than I have ever received from any audience in my political lifetime?

Mr. Dell

If the right hon. Gentleman is referring to the inquiries being made by the Director of Public Prosecutions, that is a matter over which I have no control.

I take the opportunity of telling the right hon. Gentleman that my Department gave no assurance about the amount of notice that would be given to the company before publication of the report. I deeply resent the fact that the right hon. Gentleman should have decided to lift the confidentiality that his company was asked to observe before the report was published.

Mr. Wrigglesworth

Will my right hon. Friend tell us whether the company opposed the publication of the report?

Mr. Dell

Normally, I would have to tell my hon. Friend that the representations made by the company are confidential, but as on Friday it issued a statement indicating that for certain reasons it thought publication was injudicious at this point, the answer to my hon. Friend turns out to be a public fact.

Mr. Taylor

Does the Minister agree that there is a great deal of unfairness in this kind of private inquiry, when inspectors can make allegations without legal redress and when they can publish whatever documents they select? A great deal of mud has been thrown at Lonrho, rightly or wrongly. Therefore, will the Minister at least agree that Lonrho has made a considerable contribution to British overseas earnings, to the British Exchequer, and to British influence in Africa?

Mr. Dell

On the last occasion when the hon. Gentleman raised this matter he told me that it would be unfair to Lonrho if the report were not published. The inquiry was conducted with conspicuous fairness, in accordance with the rules and guidance laid down by Lord Denning in the Pergamon Press case. I am absolutely aware of the contribution made by Lonrho to this country's economy; but I do not regard economic success as justifying any kind of behaviour.

Mr. Madden

Will the Secretary of State tell us what assurances Lonrho has given in return for the £5 million loan, particularly in regard to the maintenance of employment and the future disposal of assets?

Mr. Dell

These are questions that my hon. Friend should raise with my right hon. Friend the Secretary of State for Industry.

Mr. Higgins

Is the Secretary of State aware that our wholehearted support for the free enterprise system and the profit motive is balanced by a determination that company law should protect the public interest? The Secretary of State says that he is contemplating whether changes are necessary. Will he therefore say whether this will be in time to amend the Companies (No. 2) Bill?

Does the Secretary of State agree that the results of the inquiry fully justify its establishment by the previous Conservative Government under Section 165(b) of the Companies Act?

Concern has been expressed at the fact that not all the documents produced in evidence have been published. Will the Secretary of State undertake to place these documents in the Library?

Mr. Dell

Taking, first, the hon. Gentleman's point about documents, I am afraid that I do not know to what the company is referring in the allegations that it makes. Obviously, the inspectors had a vast quantity of documents which they saw or photo-copied in preparing their report. But in the preparation of any such report they would have to make a selection. I know of no document that has not been referred to the Department.

I do not know whether the results of any consideration of implications of the report for the reform of company law will be in time for the Companies (No. 2) Bill, which is at present before the House. However, the duties of directors, which is a major issue raised by this report, are a subject that is likely to be covered in the legislation that will flow from the Bullock Report, and that is to be introduced next Session.

I have no ministerial responsibility for the decision to refer this company under Section 165. However, in the light of the report, I do not dissent from the decision to do so.