AIRCRAFT AND SHIPBUILDING INDUSTRIES BILL (Hansard, 27 July 1976)

§ Mr. Teddy Taylor
Would not the Minister agree that the amount of money that has been given to the State-owned yards, plus Harland and Wolff, in discretionary grants during that 10-year period came to over £170 378 million, whereas the private sector got a total of £26 million? Would not the Minister agree that this shows that the nationalised sector has by far received the lion's share—about 80 per cent.—of the discretionary loans and grants available?

§ Mr. Kaufman
I apologise to the hon. Member for Cathcart. I was under the obviously erroneous impression that he was going to divide the House at 10 o'clock and that is why I made those remarks.
We must take into account that Harland and Wolff only recently became part of the public sector under the hon. Gentleman's own Government's legislation, and under that relentlessly nationalising Government of 1970 to 1974 to whom the hon. Gentleman gave his support.

§ Mr. John Evans
Would my hon. Friend accept that, no matter which set of figures one takes, the British taxpayer has bought the shipbuilding industry three times over?

§ Mr. Kaufman
My hon. Friend is extremely eloquent on this subject and, of course, I accept the general drift of what he says.
The hon. Member for Gillingham seemed to imply that nationalisation was a failure—

§ Mrs. Elaine Kellett-Bowman (Lancaster)
Hear, hear.

§ Mr. Kaufman
I am so glad that the hon. Lady the Member for Lancaster (Mrs. Kellett-Bowman) is back in the Chamber.
The hon. Member for Gillingham seemed to imply that the nationalised industries were unsuccessful because in the period that he quoted their prices had risen higher than prices had risen as a whole. He knows very well that nationalised industry prices rose faster during that period because, under the counter-inflation legislation of his own Government, those prices were held down artificially. That was one of the reasons why all of those nationalised industries went into deficit.
Another reason why their prices have gone up above average is that we are returning to realistic pricing for publicly owned industries. We are doing so at the 379 behest of right hon. and hon. Members opposite who, during the debates on the Statutory Corporations (Financial Provisions) Act, earlier in this Parliament, insisted that we do so. We are, therefore, carrying this out with all-party support except, of course, that Conservative hon. Members themselves will not accept what they are asking us to do when they can make capital out of it.

§ Mr. Burden
It would seem that I am not the only person who thinks that the nationalised industries are not a great boon and blessing to the country. I have found very few members of the general public who are overwhelmed with joy by them.

§ Mr. Kaufman
The hon. Gentleman must take his opinions where he finds them. I do not know whether others agree with him.
For example, one particular nationalised industry, which is one of the oldest in the country and which was referred to in the speech by my right hon. Friend the Member for Jarrow, namely Cable and Wireless, has been nationalised for 30 years, and it is one of the most outstanding examples of profitability and efficiency in this country. It has just been most fulsomely complimented by a Select Committee of this House on its operations. I had a most happy opportunity of visiting Cable and Wireless myself last week. It is an absolutely excellent concern and a credit to public ownership.
My right hon. Friend the Member for Jarrow and my hon. Friend the Member for Newton said that Conservative Members were weeping crocodile tears over shareholders. I assure my hon. Friends that they are not crocodile tears: they are real tears. They are the only tears that Tory Members shed. They do not shed tears about the workers but they are ready to devote—[Horn. MEMBERS: "What about the unemployed?"] But the Tories want far more unemployed. They are demanding immense public expenditure cuts which will produce hundreds of thousands more unemployed. They voted against what the Government did to save Alfred Herbert, British Leyland, Chrysler and all the other companies, votes which would have created hundreds of thousands more unemployed. They cannot have it both ways.
380 The hon. Member for Cathcart issued a challenge to the Government. In effect he said "Do not persist with the Bill. We have a private sector and a public sector in shipbuilding. Let them fight it out in fair competition." That might be a good idea if we agreed what fair competition meant. Do we transfer all the warship orders from private companies to public companies? Will that achieve fair competition?
When the hon. Member says that I have made damaging remarks about the shipbuilding industry by saying that certain companies are on the verge of disaster he should know that as I have gone around the country—"rushed" around the country, as the hon. Member for Tiverton (Mr. Maxwell-Hyslop) has called it—visiting shipyards, wherever I have gone, I have been grabbed hold of by workers and management alike[Interruption.]—No, they do not say that. They say, "Give us a Type 42 destroyer." That is what they want from the Government at Cammel Laird and wherever else I go—a Type 42 destroyer. As many of my hon. Friends will know, one reason that Swan Hunter is not in a parlous state right now is that we gave it a Type 42 destroyer and a through-deck cruiser as well. Without that work, private enterprise merchant ship building would be in a very bad position.
The hon. Member for Cathcart talks about the danger of talking down the Clyde, but Scottish Members know very well what the position would be in one shipbuilder on the Clyde today if the Government had not intervened.

§ Mr. Teddy Taylor
Which one?

§ Mr. Kaufman
If the hon. Member wants the name, he should approach the hon. Member for Dundee, East (Mr. Wilson) and ask him. The Scottish National Party knows very well that this British Government—[HON. MEMBERS: "Oh."]—this Labour Government saved that shipyard. Yes, this British Labour Government as distinct from the small-minded, anti-British Tory Party, which believes only in Britain and British industry provided that it is privately owned and publicly funded—

§ Mr. Teddy Taylor
rose—

§ Mr. Kaufman
Yes—it is the hon. Member's time.

§ Mr. Teddy Taylor
The Minister cannot go on making these damaging remarks. He has said again tonight that one Clyde shipbuilding firm faces serious problems. I have spoken to them all and none of them, apart from the nationalised Govan Shipbuilders, appears to be having acute problems. Let him name the firm he has in mind so that we can save the others from his sneering attacks.

§ Mr. Kaufman
I shall not do what the hon. Gentleman does—namely, bring to the fore the problems of any particular company by naming it. The hon. Gentleman is prepared to smear the company that the Tory Government nationalised and saved by nationalising it. If he is getting that kind of information, he is not getting the information that we are getting. Every time Scottish Tory Members speak down this Bill, they are speaking down jobs in Scotland. That is why the Scottish TUC has issued statements supporting the Bill and demanding its passage through the House.
After those few preliminary remarks, I should like to turn to the new clauses and the amendments. As I said, they were debated at length in Committee and the Comimttee came to a conclusion on them. I made clear in Committee that the Government intend to make payments on account as large and as quickly as possible consistent with the uncertainties surrounding the negotiations.
As has been mentioned by a number of hon. Members, of the 43 companies named in the Bill 42 are unquoted. In all those cases compensation will be determined under the provisions of Clause 38 by negotiation with recourse to arbitration. We intend to complete these negotiations as quickly as possible, but it is inevitable, as I said in Committee—I repeat the words quoted by the hon. Member for Tynemouth at the beginning of the debate—with the best will in the world that it will be some time before all the settlements are reached.
We recognise that shareholders could feel aggrieved if they have a long wait before they receive their compensation, even though, as has not been pointed out by the Opposition, interest on the stock will accrue from vesting date. Therefore, we feel it right to make provision in the 382 Bill for the Secretary of State to make payments on account on compensation stock.
I assure the House that if the provision is to be of any real value, payments on account should be not only substantial, but made at the earliest possible opportunity. A small payment on account only shortly before the final settlement would be of little benefit to shareholders.
The hon. Member for Tynemouth has acknowledged that the negotiations will be complex. It will be necessary to settle the base value for compensation and to establish, on the basis of a detailed investigation of the companies' records, whether there are any inter-company debts to be treated as securities under Clause 21 and whether there are any appropriate deductions to be made under Clause 39.
We intend to make payments on account within six months of vesting day, but the complications of the negotiations may be such that in some cases it might not be possible to reach a sufficiently definitive view in that time scale. New Clause 5 and Amendment No. 230 would reduce the flexibility of the position and could act against the interests of the shareholders where the negotiations are particularly complicated.
Clearly, we wish to avoid making either interim payments or payments on account which might, in the light of further negotiations, have to be reclaimed. That would be an unfortunate situation. However, I assure the House that Clause 36 will be operated in the best interests of the shareholders. It will be used to the fullest extent consistent with the progress of negotiations. That being so, I hope that the Opposition will not persist in either New Clause 5 or Amendment No. 230.
10.15 p.m.
There was a considerable discussion in Committee on the meaning of Clause 38(5), to which both New Clause 6 and Amendment No. 294 relate. Clause 38(5) provides that where a vesting company represents a substantial proportion of a quoted parent, the share quotation of that parent should be one of the relevant factors. However, I must emphasise that it will be only one of the relevant factors. The basic requirement on the tribunal is to take account of all relevant factors in 383 determining the notional share quotation of an unlisted company. The inclusion of Clause 38(5) ensures that the quote of a parent is not excluded from the considerations when it is strictly relevant.
The application of Clause 38(5) is strictly limited. It applies only where an acquire company represents a substantial part of a quoted group. [Interruption.]
Hon. Members seem to imagine that I ought to conclude fairly soon. I have given way a good deal.

§ Mr. Michael McNair-Wilson
rose—

§ Mr. Kaufman
I hope that the hon. Gentleman will forgive me if I do not give way, because the annoyance of his hon. Friends would turn on him and he would not like that at all.

§ Mr. Michael McNair-Wilson
I spoke on the Northern Ireland Appropriation Order on Friday and I raised the question of Harland and Wolff. At that time, in his reply the Minister said, There will be an opportunity to discuss the future of the firm on amendments to the Aircraft and Shipbuilding Industries Bill next week. That would be a good time to debate this subject. Further in his reply he said, Either the Secretary of State or I will reply to the debate on the Harland and Wolff amendments if present business arrangements are maintained."—[Official Report, 23rd July 1976; Vol. 915, c. 2416.] Can you tell me, Mr. Speaker, whether it will be possible to debate those amendments, in view of the very serious situation facing Harland and Wolff, and as the Secretary of State is sitting on the Government Front Bench?

§ Mr. Speaker
Order. All that I can say is that we shall debate matters as we come to them. I can say nothing more.

§ Mr. Kaufman
My right hon. Friend the Secretary of State for Northern Ireland—

§ Mr. Michael McNair-Wilson
As Northern Ireland has the highest unemployment of any region of the United Kingdom, are not the amendments in relation to Harland and Wolff of crucial importance and do they not deserve to be taken rather than the speech to which we are now about to listen?

§ Mr. Speaker
I have no doubt about the importance of the amendment, but the hon. Gentleman will understand that it is beyond my power to control the way that events go.

§ Mr. Kaufman
The fact is that my right hon. Friend the Secretary of State for Northern Ireland is in attendance specifically to discuss this matter, but Opposition Members have made a large number of speeches on this grout) of amendments and I am doing my best to reply to the amendments. If hon. Members do not believe that their amendments should receive a reply, I cannot understand why so many of them made speeches on the subject. I have only a little further to go. Provided I am not interrupted I can get it over with fairly quickly. However, I think that it is necessary for the House that I reply to the speeches of Opposition Members.
What I have said is that Clause 38(5) will apply only where the activities of the acquired company are clearly a major factor in determining the quotation of the parent. It is not our intention to apply Clause 38(5) where the activities of the acquired company are less than major in determining the share price of the parent.
Secondly, it is clearly stated in Clause 38(5) that the provisions of that subsection define only one of the relevant factors. This has a direct bearing on the new clause. It is not provided that Clause 38(5) should be the overriding factor. Any other factor relevant to the valuation of an acquired company will also be taken into account. The significance of Clause 38(5) in any particular case—

§ Mr. Robert J. Bradford (Belfast South)
rose in his place and claimed to move, That the Question be now put.