HC Deb 27 July 1976 vol 916 cc341-77

'An Arbitration Tribunal shall have power to order the making of an interim payment in respect of the compensation for any securities if so requested by the relevant stockholders' representative.'—[Mr. Trotter.]

Brought up, and read the First time.

Mr. Neville Trotter (Tynemouth)

I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Oscar Murton)

With this we are to take New Clause 6—Value of Subsidiary Company.

We are also to take the following amendments:

No. 230, in Clause 36, page 48, leave out lines 35 to 42, and insert: '(6) Where after the date of transfer, a person submits a claim in writing to the Secretary of State for compensation to be paid to him under this Act, the Secretary of State shall within six months of that date make a provisional estimate of any compensation so payable and compensation stock equal in value to 90 per cent. of that amount shall forthwith be issued to, or at the direction of that person or his successor in title. (7) Where the amount of compensation stock issued to a person under subsection (6) above is found to be less or more than the net amount of compensation falling to be paid under section 35 above, the deficiency shall be supplied to, or the excess repaid by, that person.'. No. 294, in Clause 38, page 52, line 20, leave out from beginning to 'the' in line 22 and insert: 'the arbitration tribunal, in determining the base value of the company's securities in accordance with subsection (1) above, may have regard to'.

8.15 p.m.

Mr. Trotter

The importance of arbitration arises because of the complexity of the compensation terms in so much of the Bill. The Secretary of State told the House when first introducing his nationalisation proposals nearly two years ago, on 31st July 1974, that there was to be fair compensation, yet we have before us provisions which are complex and which must inevitably be basically unfair, because they are based on an unsound foundation related to the value of quoted public companies when there are practically no quoted public companies being nationalised.

Of the four aircraft companies not one is quoted. Of the 12 ship repair companies, not one is quoted. Of the five marine engine builders, not one is quoted. Of the three training companies, not one is quoted. Of the 19 shipbuilders, one, the smallest, is quoted. Out of these four industries the only one small shipbuilder is a quoted company and none of the other companies is quoted at all. We have a completely artificial basis applied to the valuation of these great industries, a basis which is bound to give rise to great difficulty and great uncertainty.

The unfairness of the whole principle can be seen from the fact that the hypothetical Stock Exchange values upon which this is supposed to be based relate to small transfers of shares and not to the takeover of a whole business. A company like Vosper Thorneycroft estimates that the compensation it might receive under these proposals could be as low as £4 million, despite the fact that its assets have a value of £12 million and its annual profit is running at a rate of £4 million.

Who has ever heard in a fair society of a company being taken over on a basis of one year's profits. It may well be that my hon. Friends will wish to quote some examples in other parts of the country. One thinks of Yarrow (Shipbuilding) Ltd. and of Austin and Pickersgill Ltd.

My researches show that between 1973 and 1975 in 19 typical takeovers in the City the purchasers had to pay 48 per cent. more for the businesses taken over than the quoted values of the shares at the time. Thus one can say as a generality that on a takeover it is necessary to pay a 50 per cent. increase, or half more, for control of the business being acquired.

We have here, therefore, a hypothetical and basically unfair system which will lead to much argument and delay, and inevitably arbitration. I suggest that the arbitration provisions of the Bill are more important than have been the arbitration provisions in any previous nationalisation measure.

There is the possibility of deductions under Section 39 for disposition of assets, onerous transactions and all sorts of other evil transactions conjured up in the mind of the Government. In this Bill the Government have given greater length than in any previous nationalisation measure to sections aimed at closing any posible loophole that their ingenious minds could foretell. I believe that they will find no such cases of attempts to escape the effects of the Act, because I believe that however much the controllers of the companies contest disapprove of nationalisation, they will not wish to break the law in this way. If any such allegations were made, however, I am sure that this would be another matter to be referred to arbitration under the procedure in the Bill.

Again, under section 21 it is possible for the Government to allege that inter-company debts are to be treated as though they were securities. The effect of that is that the parent company would lose part of its assets. If there were any intent to bring about such a situation, I am sure that that would be a matter the company would wish to refer to arbitration.

All the way through the Bill we come across instances of the way in which this matter is being handled that will inevitably give rise to a very large number of arbitration cases. There will be much complexity and much delay. Indeed, the Minister of State himself told the Committee that it is inevitable that, even with the best will in the world, it will be some time before all the settlements are reached…The negotiations will be complex."—[Official Report, Standing Committee D, 9th March 1976; c. 1600.] The Minister appreciated the situation. It came to light at about that time in the Committee's deliberations that the Government had appointed an eminent firm of chartered accountants to ferret through the books of these 43 companies. I shall not prolong proceedings too long tonight by repeating the very lengthy arguments we had on this subject, because for some reason the Minister of State seemed to wish to make this into a great mystery. It was not possible for us to discover what instructions had been given to this eminent firm of accountants, or what was likely to be the time-scale for the examination.

What is clear, I believe, is that the affairs of all 43 companies to be nationalised are to be cleared by the accountants acting for the Government before there can be a final settlement. I take it that that is so, as the Minister has not corrected me. We do not know how long that will take. Obviously, the company which is the last to be dealt with by this eminent firm will have to suffer a very long delay, indeed. This is a procedure that will add considerably to the delay in the payment of the already far too low compensation.

The shareholders, in all but one shipyard and in all the aircraft companies and all the ship repairing concerns, are parent companies. They will be wishing to continue to trade, and they will be seeking to lay their hands on the compensation so that they can invest it in other productive assets and obtain alternative occupations for the future, as well as providing jobs for the future in other ways. It is true that they will receive interest from vesting day, but it is not the interest they want: it is the capital. I hardly need remind you, Mr. Deputy Speaker, of the way in which the value of the pound is continually declining. They want their money now to reinvest as soon as possible in alternative real assets.

It is, therefore, very difficult indeed for any of these parent companies to plan. I know this from having spoken to the managements of some of the largest of these concerns. There is great uncertainty both as to the amount of compensation they will receive and as to the time-scale in which they will receive it. Certainly they all believe that they will be unfairly treated. The valuations will be on a 1973–74 basis. They could not be paid out before 1977–78. There seems to be little doubt of that. Indeed, if there is much delay in the ferreting through the books and the witch-hunting, it might well be 1979–80 before they are paid out.

The value of the pound has fallen by over one-third since the Government came to power. We know what effect this will have on the purchasing power of the pounds that will be received in compensation. Valued on the 1973–74 basis, the sum will be worth only two thirds of its real value at the time that the nationalisation proposal effectively sterilised their businesses.

We must take into account the fact that when the owners replace the assets taken from them by nationalisation with an alternative business, they will be faced with paying a 50 per cent. mark-up to obtain control—the 50 per cent. mark-up which the Government did not pay and out of which the Government have cheated these people. Faced with inflation—ignoring the tax problems—the owners will be lucky if they can in real terms replace their shipyards and aircraft factories with real new assets worth only a third of what they had before. Yet that is what Government spokesmen describe as fair compensation. I do not believe that it would be regarded as fair in any other Western democracy. If a foreign Government took over the assets of a British company on those terms, the company would be entitled to claim against our Government for compensation for the assets expropriated by the foreigner.

This is the first occasion that a Socialist Government have made an excursion into manufacturing industry. There are wide implications. The Labour Party's policy, emerging through the usual channels of the national executive and the party conference, is to spread State ownership and nationalisation to a vast area of British industry and British institutions. The unfair treatment of compensation in the Bill bodes ill for future compensation terms that may effect more and more people as the march of Socialism advances.

It is all very well for hon. Members thinking of the next election, to say "they are not at this time the policy of the Government". If the Prime Minister was correctly quoted, however, he has argued that they are the long-term aspirations of them all. A party with those longterm aspirations and with the unfair record of this Government on compensation should never be returned to a position where it may impose its will again on this country's industry.

New Clause 5 attempts to ameliorate the problems caused for parent companies by the delay in the payment of compensation. Its effect is to give to the arbitration tribunal power to make an award on account of the final sum.

It is true that under the Bill the Secretary of State already has power to do that. But will the Secretary of State use his power? There can be no guarantee that he will do so. He will constantly receive reminders from the Treasury of the need to save money. We gather from recent developments that there is extreme pressure in that direction just now. There will be no sense of urgency on the part of the Minister to pay out more money under nationalisation.

Even if he is paying out at a poor rate for the assets acquired, it is still money that must be raised. I should have thought that in view of the pressures coming from our overseas creditors and those that will come shortly from the International Monetary Fund, there would be extreme internal pressure from within the Government to hold up the payment of compensation money for as long as possible.

There is a natural fear that the Government will be inclined to feel that the parent company whose subsidiary was being nationalised would be likely to settle sooner for less, as it would fear that the longer the delay, the less the real value of the pounds it would obtain as a result of continuing inflation.

It would be fairer to all if the arbitration tribunal, as well as the Secretary of State, had the power to provide for payment on account towards compensation. It would not be obliged to use that power. I believe that it would be fair and right for that power to be included.

The Arbitration Act 1950 includes a provision for an arbitrator, in the normal arbitration where that Act applies, to have the power that I seek in the clause. The Government have incorporated some sections of the Arbitration Act 1950 into the Bill, but they took care not to include the section containing this power. My clause seeks to correct that omission.

In Committee the Minister of State said: I shall look into what the hon. Member for Tynemouth (Mr. Trotter) said and see what can be done."—[Official Report, Standing Committee D, 9th March 1976; c. 1621.] If I remember correctly the Minister said that that might take a little time. I think he said on that occasion that he might introduce a provision on Report. Nothing has been done in the meantime, despite the fact that some little time has elapsed. Despite the fact that more than 200 Government amendments have been submitted to this shabbily drafted, shabby Bill on Report, none of them covers this fair point, to which the Minister did not show himself unsympathetic in Committee.

New Clause 6 provides that the arbitration tribunal should not regard itself as being bound by the value of the parent company of a group. With only one exception the companies being nationalised are the subsidiaries of parent companies with continuing groups. It is possible for a group to contain good parts and bad parts. It is possible for the overall quoted share value of a group as a whole to reflect so much the bad part of the group as to be less than the value of the good part which is to be nationalised. In that case an unfair figure may be arrived at, more unfair even than would normally be arrived at under the provisions of the Bill. New Clause 6 seeks to remedy that defect by providing that the arbitration tribunal shall not be bound by the value of the parent company's shares in the calculations.

A classic example is Sunderland Shipbuilders Ltd. On 1st July 1974 the Secretary of State announced the terms on which Sunderland Shipbuilders was being purchased from the bankrupt Court Line, which was in the hands of the receiver. From time to time I act as receiver and I know that receivers are not in the strongest positions when it comes to the sale of assets. In that case there was not a strong argument for paying an inflated price, and yet the price paid was £16 million.

On the basis of the Bill it would have been possible in that case for the arbitration tribunal to rule that the value of the assets should be taken as nil, because by that time the value of the parent company's shares was most certainly nil. I cannot help reflecting what a pity it is that the basis which the then Secretary of State thought was fair for the nationalisation and acquisition of Sunderland Shipbuilders does not apply to other companies which are being taken into State ownership under the Bill.

I wonder by how many times the ultimate compensation that will be received by Austin and Pickersgill Ltd. would have been increased had the same terms been applied as were applied to the company's neighbours on the other side of the river. Austin and Pickersgill is a much more sophisticated and productive yard than was Sunderland Shipbuilders at that time, yet Austin and Pickersgill will obtain only a fraction of the compensation that was paid to Sunderland Shipbuilders, whose parent company was bust.

I believe that New Clause 6 will help to bring some justice into a very unfair method of compensation as provided in the Bill as it stands.

8.30 p.m.

Mr. John Cope (Gloucestershire, South)

I should like to amplify what has been said by my hon. Friend the Member for Tynemouth (Mr. Trotter).

The hon. Member for Bristol, North-West (Mr. Thomas) who, unfortunately, has just gone out of the Chamber, said earlier that in Committee we spent most of our time talking about compensation and related provisions. That is rubbish, as will be seen from the record. Half the clauses in the Bill are concerned with compensation, arbitration and related provisions such as safeguarding. It would not, therefore, have been surprising if we had spoken for half the time on compensation-related matters, which are some of the most important and complex provisions in the Bill.

New Clauses 5 and 6 help to alleviate a grossly unfair position in respect of compensation. They do not go as far as we would like, nor as far as we propose in Committee, but they go some way towards alleviating that grossly unfair position.

It is important to make clear why we believe that the position is so unfair in general terms. It is grossly unfair to the shareholders of the companies concerned. The hon. Member for Nelson and Colne (Mr. Hoyle) earlier tried to make out that Vickers was virtually owned and financed by Lord Robens personally. That is absolute rubbish. The vast majority of the shareholders in Vickers, as in other holding companies affected by the Bill, are institutional shareholders, such as life assurance and pension funds which own the shares through their insurance societies.

It is a matter not of argument but of record that there are more people in this country with life assurance policies and, therefore, with an interest in shares, than there are members of unions affiliated to the TUC. The facts are fully documented in Lord Diamond's Report.

These Government securities, with one exception, will not go to individual shareholders, whether they be institutional investors or individuals. They will for the most part go to the parent companies which bear some of the great names in British industry. Those companies will use the money that is left over—the one-third, as my hon. Friend suggested, and I do not think that he is far out—to reinvest in British industry. I have no doubt that they will use the money better than the Government would use it if they retained it.

The compensation provisions seem to me and my hon. Friends to be based on a ridiculous set of assumptions. That contention is supported by articles in various newspapers which were quoted at length in Committee. The amendments go some way to correct the compensation provisions but, even so, there will still be an almost Alice-in-Wonderland method of arriving at the value of the unquoted shares.

The first thing that has to be done is to pretend that these shares, virtually all unquoted, are in fact quoted. Then we have to pretend that they were quoted in 1973–74 and wonder what a pretend investor would have paid for the pretend shares on the basis of information which the companies might have disclosed had they been quoted and the dividends they might have paid had they been quoted at that time. But the information which actually was disclosed by these companies in 1973–74 is not necessarily at all the same as would have been disclosed if they had been quoted, and the dividends which were paid to parent companies are again not at all necessarily the same. Indeed, they are certain to differ from the dividends which would have been paid had those companies been quoted at that time.

Therefore, one has to use this pile of guesses and pretence to start arriving at a figure of compensation. Even though one may be making these guesses and doing these calculations today, it will in fact be done in a year or two's time, and one has to speculate what the investor would have thought the performance of an individual company was to be in 1974, 1975 and 1976, and maybe 1977 and 1978, by the time this sum comes to be done. One is not allowed to look at the actual performance of the companies concerned. An amendment to allow this to be done was specifically voted down by the Government. One has to guess what a pretend investor would have thought the performance was to be in those years.

Once one has guessed what the performance might have been, one has to look at the parent companies' own quoted price and to adjust one's pile of guesses in accordance with how one thinks it might be affected by the actual quoted price of the parent companies at that time. This question of the parent companies' quoted price is important and is the subject of New Clause 6. It was specifically mentioned in the Bill—the one factor which is mentioned. The Minister of State or his colleague went to some trouble to tell us in the discussion on another amendment in Committee that any factor which was specifically mentioned as having been taken into account by the arbitration tribunal would override any others in importance. So this parent companies' quotation is of fundamental, indeed overriding, importance in arriving at the valuation. This, of course, affects the pile of guesses and it is a nonsense, as my hon. Friend the Member for Tynemouth has pointed out.

But even when we have made this set of guesses we have to wait—and they will already have waited for two or three years —until vesting day. We have then to pretend that Government securities were issued at that stage. and there will certainly be arguments, in all probability for a year or two, over this heap of guesses and pretence. At the end, the compensation in the form of Government securities is paid to the parent companies.

After all that, when the Secretary of State has finished and has paid out the money, the Financial Secretary to the Treasury comes with the new tax which he has introduced, in the Finance Bill, to take back a large section of the compensation, subject to a lot of complicated provisions which we discussed in connection with the Finance Bill the other day. My hon. Friend was quite right to point out that the compensation, such as it is, if arrived at on this basis is strictly on the basis of individual shares and small parcels of shares, whereas in fact the Government are buying and the parent companies are selling not small parcels of shares but control of these companies. It is a fact of life that control is more valuable than the sum of the parts and the individual shares which make it up. That fact is recognised by the Government, not only in the case quoted by my hon. Friend but in the case of Felixstowe Docks where the Government paid 60 per cent. over the share price for control—but in this Bill they are paying nothing for it.

This way of proceeding is hopelessly contrary to both the spirit and the letter of the Takeover Code. The terms of compensation would be regarded by the Export Credits Guarantee Department as expropriation if they were applied to British assets by a foreign Government. There was considerable discussion of this matter in Committee, but the Government were unable satisfactorily to argue that the ECGB would not regard the terms as expropriation.

I hope that the Minister will deal with a point left outstanding in the long Committee discussions. The Government declined to say whether they would allow the international arbitration machinery attached to the World Bank to arbitrate on these terms if a foreigner owned shares and used his right to go to the international centre for the settlement of disputes of this kind.

The international centre has the power to arbitrate only if the Government, as the party paying the compensation agree. The Government should say tonight that they will allow the centre to arbitrate if a foreign national wants to go to the panel.

The damage done by the compensation terms and the way in which they have been drawn is not limited to parent companies, individual shareholders of quoted companies or shareholders of parent companies. It extends to all companies threatened by nationalisation. As soon as there is the threat of nationalisation, even from such a distinguished body as the Labour Party Home Policy Committee, the industry concerned is immediately affected with a sort of nationalisation blight. These terms and the shabby way in which they have been prepared increase the blight on any threatened industry. Any company which is threatened must look even more carefully at how it invests in its activities. As a result of the compensation terms imposed in the Bill, that applies as long as the terms remain unaltered, even if the Bill is defeated.

These companies should be valued as. other companies are valued when they are bought and sold by the Government or in the private sector. The amendments do not go all the way to achieving this aim, but they go some way and should commend themselves to the House.

8.45 p.m.

Miss Harvie Anderson (Renfrewshire, East)

I am glad that the hon. Member for Glasgow, Garscadden (Mr. Small) is back in the Chamber. He said earlier that another company on the Clyde shared the view of Bristol Channel Ship. Repairers Limited on this Bill. Unfortunately, the hon. Member did not mention the reasoning behind this attitude—and that is at the heart of what we are discussing. The reason companies wish to be left out of the Bill is that when they are prosperous and when the workers have job security, no one in the firm willingly wants to make the future uncertain. This is a particularly important factor for the Clyde firm because it has already been absorbed into a large amalgam of shipbuilding companies. It has actually experienced what we are now proposing to do to this company for the second time. The result was devastating on the employees of that company and on its profitability.

The Minister of State knows very well, and I have said repeatedly, that he will regret the day that this company is taken into public ownership through nationalisation, because there will be the same sorry story to tell a few years after the implementation of the Bill if, indeed, it ever gets on to the statute book.

In respect of that company one ought to record the fact that following its re-emergence from the amalgam in 1971, its turnover increased from £12½ million in 1971 to £27 million in 1974. Profits turned round from a f2i million loss in 1970 to a modest pretax profit of £300,000 in 1971 and £7 million in 1974. A particularly important fact, at a time when there are 165,000 unemployed in Scotland, is that the numbers employed rose from 3,500 in 1971 to 4,500 in 1974, and continue to grow.

It seems to me that it is for a very good reason that the company does not want to be drawn within the terms of the Bill. Its performance now, and its performance for the successive years, is the point on which the compensation should be judged. The great tragedy is that the compensation figures proposed are so unfair that it will be quite impossible for the parent company to get sufficient money to reinvest in order to provide the additional jobs which are so badly required.

The hon. Member for Bristol, North-West (Mr. Thomas) made reference to the compensation clauses on the assumption that many of us on the Conservative side of the House were primarily concerned that the shareholders should get back some money. Most certainly we are concerned that those who take the invest- ment risk—a risk it is, as I know well from my own experience of the shipbuilding industry—should be adequately reimbursed. Unless that compensation is paid they will not be adequately reimbursed and there will not be the job opportunity created which ought to arise from adequate compensation.

In passing, it is interesting to note that out of some 3,000 columns of recorded debate in Committee, the compensation clauses took about 380 columns. That does not seem to me an undue amount when we consider the importance of the subject. Arbitration accounted for a further 300 columns. That does not seem an unduly high proportion, although it is quite right that consideration is spread in other ways.

We have had an interesting comment in respect of the dogma of nationalisation. All those who support the Government think that compensation is simply for the benefit of the shareholders. What they are believed to do with it goodness knows, but it must be remembered that people who invest once tend to do so again. That is a thought that many people are only too happy to overlook at the present time. The hon. Member for Bristol, North-West, and other hon. Gentlemen opposite, totally failed to relate nationalisation to jobs. But until we relate it to jobs, we do not get to the heart of this whole matter. Some certainly do not begin to understand the degree of opposition which many of us feel about this Bill on the grounds of employment alone.

The hon. Member also referred to the new dimension which would develop when worker participation entered this area. I was reminded—perhaps only a few of us here tonight are old enough to remember this with clarity—of the little notice which went up on every coal pit on nationalisation in 1949: This pit belongs to the people"— great day. Wonders were going to happen. I do not see a single notice of that order left standing today. Nor do I see great successes for the job prospects which were then offered in the mining industry. About 23,000 jobs have been lost in that industry. I am therefore much less sanguine than is the hon. Member.

Mr. Burden

I do not know whether my right hon. Friend was present when the Prime Minister, referring to the Bill in answer to a question of mine, said that there would have to be rationalisation after the Government had taken the industry over. Rationalisation undoubtedly means closures or cuts in some areas.

Miss Harvie Anderson

I am grateful to my hon. Friend for re-emphasising this point, on which we feel so strongly. There can be little doubt in the mind of anyone who faces reality that there will be redundancies. With the present unemployment rate, this is a tragedy which, above all else, we should seek to avert. When compensation is considered, it must be in terms of reinvestment. The parent company must therefore get sufficient reinvestment to make new jobs.

Two other matters are particularly important in connection with compensation. It is difficult, because we know that he is not a stupid fellow, to make the Minister of State confess that the recent cuts have had an additional and devastating effect on industry, which makes anything. If one introduces what is in fact a payroll tax on industry, one still further reduces the resources with which employment can be created and developed. It is important to add to the difficulties which limited compensation brings the difficulties which will be found in the spring of the coming year when this additional payroll tax has to be found.

The other important matter is the effect on the management of these companies. Successful companies are successful largely because of the leadership and capability of the management. It is true that in many cases management has considerable investment in these companies. it is equally true, I should have thought, that the Government and the new shipbuilding board would wish to use the expertise of that management. This again is something that I am afraid that I have said before in Committee, but if the expertise is required it seems unlikely that it will be willing to continue if the compensation received for its investment—in every sense—is to be as unfair as most of us judge it will be.

The compensation, because of the dates on which it is to be based and the way in which it is to be calculated, is grossly unfair. But added to that is the long delay emphasised by my hon. Friend the Member for Tynemouth (Mr. Trotter). The new clauses seek to alleviate the delays and the void which will occur while the compensation is being argued. It would not be appropriate to go into detail on how the compensation will be calculated. However, it is well known by all who served on the Committee and by many throughout industry that a Herculean task has been imposed upon one professional firm which, in the view of many, could not possibly fulfil that task within an acceptable number of years.

First, we have the bad judgment of accepting compensation based on a limited period, the results of which are known to be less good than they became later. We then have the appalling fall in the value of our currency in the intervening period, to which must be added the delay which will be occasioned by the proposed arbitration procedure. There-fort, if we can do anything at this late stage to improve upon a Bill, which I still sincerely hope will not become law, we must support the new clauses. We are seeking to ensure employment where it already exists and to offer some hope of being able to extend that employment. Therefore, I support the new clauses.

Mr. John Evans

I listened with interest to the right hon. Member for Renfrewshire, East (Miss Harvie Anderson). The right hon. Lady suggested that nationalised industries are to be equated with redundancies and rationalisation. I wonder whether the Opposition will ever understand that that is why Labour Members have constantly argued that the State should take over not only bankrupt, rundown industries in declining regions but profitable sectors of British industry to prove conclusively that, given an even chance, the nationalised industries can be better run and made more efficient and prosperous than industries in the private sector. Until a Government accept that premise, we shall not be in a position to point to the parallel. Unfortunately, we have to work on the assumption that the Government's duty is to take over rundown industries.

The right hon. Lady referred to the rundown in the mining industry. The overwhelming reason for the rundown of that industry was that the pits ran out of coal. Was the right hon. Lady suggesting that the miners should have been allowed to dig stones instead of coal? There was a savage rundown in many areas, such as that in which I was brought up, not because of nationalisation but because the pits ran out of coal.

Miss Harvie Anderson

I think that the hon. Gentleman may have missed the point of my argument because I did not name the firm whose fate I described. Yarrow (Shipbuilders) Limited on the Clyde is one of the most profitable private enterprise shipyards in the country. That company was brought to near total destruction when it was dragged into a consortium of similar pattern to that into which it will again be dragged through nationalisation.

9.0 p.m.

Mr. Evans

I accept the point that the right hon. Lady has made. Perhaps she missed what I said in the last debate. I pointed out that I had worked in the industry since I was 15 years of age and that I knew something about the industry in which I worked.

The major reason why Yarrows has been one of the most prosperous and successful firms in the shipbuilding industry is that it exists almost entirely out of Government orders. On Tyneside, where I worked all my life, we often pointed to Yarrows and other yards and asked why the Tyne yards could not have their fair share of shipbuilding orders, which were always placed in areas of unemployment. I shall not repeat such matters tonight.

This is a classical case of the Tory Party at its best or worst, depending on where one stands politically. Once again the Tories are arguing the case of the privileged shareholders. Once again they are weeping crocodile tears on behalf of these privileged people. Once again they are suggesting that a Labour Government are taking industries without paying the proper compensation.

After giving most of my life to the industry and working with men and women who have given most of their lives to the industry, I believe that it should be confiscated and there not be one penny of compensation. I should like the Minister, in his reply, to outline to the House every penny that shipbuilding companies in Great Britain have received in the past 25 years in Government grants, regional employment premia, and policies to aid employment. If we put that on the other side of the balance sheet, we end up with their having to pay the State money for the State to take them over. They owe the taxpayers a great deal more than we owe them. That is true of the shipbuilding industry.

It could be argued that the ship repairing industry is in a somewhat different position. Many of the ship repairing firms are tied up with and part of shipbuilding concerns. There are many instances—certainly Swan Hunter, where I worked for many years—where the repairing side is tied hand in glove with the building side. Part of the reason for the prosperity of the repairing side was that it was able to transfer workers into the repairing section as and when necessary, when ships came into the Tyne. Unfortunately, in the past few months this has not happened often enough.

It is essential that the Government give us this balance sheet. It is essential that we find out exactly how much each company has received in the various grants that have been available over the past 25 years. It is no secret that I believe that one of the issues which has devastated the British shipbuilding industry is not the amount of capital investment in the industry but the lack of capital investment in the industry.

In many of the yards in which I worked, we were working with cranes and equipment which were put in during the last war, when they were also put in with Government money to build warships for the Government. Very few yards throughout Britain have had private investment. What little investment there has been has come from the taxpayer. Successive Governments have poured millions of pounds into the industry.

The right hon. Lady referred to the last reorganisation of the industry. When we look at what happened there, in the Geddes Report there was a total, complete and utter condemnation of the management of British shipbuilding. The Government of the day made it clear—and the industry accepted this—that they would have to amalgamate if they were to survive. Some of us at that time—I was not then a Member of Parliament—were arguing that that would not succeed and that the only hope for the future of the industry was for it to be taken into complete public ownership. After many years have elapsed and hundreds of millions of pounds of taxpayers' money has been poured down the drain, finally we have reached that stage at which we shall take the industry into public ownership.

Turning to the question of rationalisation, given the world order book as it exists today and the rundown situation of British shipyards, the lack of modern equipment, and the lack of the ability to compete on an international plane, undoubtedly there will be redundancies on a large scale. One thing that I expect from the Government, certainly the present Labour Government, is for them to be at least humane in their approach, and far more humane than the attitudes that existed throughout the shipbuilding and ship repairing industries for many years until the comparatively recent past, in the days when we were given 24 hours' notice of the termination of a job and spent perhaps six or seven weeks tramping Tyneside looking for another one, constantly being rejected. The workers in the industry supported the Labour Party in two General Elections in 1974 because they wanted this industry taken into public ownership.

As regards compensation, we must put into the balance sheet the people who have given their lives or their limbs in the industry. Many have been crippled with arthritis and many have been deafened by the noise in the shipbuilding industry. They also have a right to be considered. When I hear Tory Members talking about the rights of shareholders, I must speak on behalf of the workers in the industry. If the Government draw up the balance sheet properly and tell the public exactly how much public money has been poured into the industry, we shall be able to see who owes what to whom.

Mr. Burden

I was extremely interested in the passionate way in which the hon. Member for Newton (Mr. Evans) spoke. I was also very interested when he said that he had served in many shipyards. It seems rather surprising that a man should serve in many shipyards. I am sure that the House would be interested to know in just how many shipyards he has been employed.

Mr. John Evans

I do not know whether I shall be boring the House, but if I start on Tyneside and work my way through Wearside and Teesside, will that satisfy the hon. Gentleman? Will it satisfy him when I say that in one year, 1958-59, I worked in no fewer than seven shipyards and repair yards? Some of my comrades on Tyneside often worked in 14 or 15 different yards in one year. We were lucky if we got two or three weeks' work at a time. That is how many yards I have worked in.

Mr. Burden

I find it surprising that anyone who has worked in as many as seven shipyards in one year can know very much about any of them.

It surprises me that the Labour Party and the Government say, on the one hand, that we must have a thriving mixed economy, when, on the other hand, hon. Members such as the hon. Member for Newton and many other Labour Members make it perfectly clear that they want nothing of the sort. They want a purely Socialist economy and the complete elimination of capitalism. The Government have created a situation in which, despite their lip service to the need for a thriving mixed economy, they are looking out for something else and are now in the process of nationalising the shipbuilding and aircraft industries.

This threat has been hanging over the industries for a very considerable time. Because of this threat, with all the uncertainties that it has created, there is a full-out effect upon other industries. Particularly is this so when it appears that there is unjust compensation that comes very near confiscation, which Labour Members below the Gangway have suggested should be the Government's action.

One does not have to think very deeply before understanding the effect that this has on a whole range of private industry. Why should industries consider investment at current rates when a Government might come along and take them over, and then, as in one case—only one of these companies was quoted—on a notional valuation three years old, compensating on that basis? This is confiscation rather than compensation. It is a monstrous injustice.

The best way in which I can illustrate the monstrosity of the injustice is by referring to a Question tabled by my hon. Friend the Member for Norfolk, North (Mr. Howell) who asked: what was the percentage rise in the general level of prices of (a) each nationalised industry and (b) of all nationalised industries together between 31st March 1975 and 31st March 1976. The Financial Secretary to the Treasury stated that the rise in the price of domestic coal was 22 per cent. in that year and that industrial coal rose by 15 per cent. He said that electricity prices in England and Wales rose by 33 per cent., British Gas Corporation prices by 20 per cent., telecommunications by 80 per cent., posts by 22 per cent., British Airways Board prices by 20 per cent., British Rail passenger fares by 48 per cent., freight by 29 per cent., parcels by 27 per cent., British Transport Docks Board uncontrolled charges by 72 per cent. and its controlled charges by 56 per cent., British Waterways Board charges by 27 per cent., and National Bus Company fares by 40 per cent.

The Financial Secretary added: The retail prices index for goods and services mainly produced by the nationalised industries rose by 33 per cent. between April 1975 and April 1976. He concluded: It is not possible to give a single overall figure. The average list prices of BSC's main product groups increased within the range of 0–27 per cent."—[Official Report, 23rd July 1976; Vol. 915, c. 620.] That illustrates more clearly than anything that I can say that this is confiscation rather than compensation.

Mr. E. Fernyhough (Jarrow)

I find it remarkable that the hon. Member for Gillingham (Mr. Burden) should read out a list of prices relating only to nationalised industries. It was, for instance, noticeable that he did not include land in the price increases that have occurred over the last few years. Millions of pounds more have been made out of land in the last five years than have been made by industry. Millions have been made by racketeers and property dealers. Everybody knows how property prices have increased, and yet the hon. Member did not include the prices of land and buildings which have risen most. By and large land and buildings are still in the hands of private enterprise.

I have been present when every major nationalisation measure, since the war has been introduced. I have listened to the same heartfelt pleas in behalf of the shareholders by Conservative hon. Members in relation to Bills to nationalise coal, railways, the steel industry, Cable and Wireless. They made the case that they have made tonight on behalf of those who hold shares in the shipbuilding, aircraft and ship repairing industries.

Mr. Burden

These figures affect the value of an industry being taken over. These are the rises in costs in one year —and they are official figures issued by the Labour Government, not my figures.

9.15 p.m.

Mr. Fernyhough

I am not disputing the figures. I am merely saying that those increases are nothing like as large as the increases in land prices. Industry cannot function without land. Without that commodity one cannot build a single factory or a shipyard. The hon. Member for Gillingham failed to mention that the largest increase we have seen in postwar years has occurred in land prices and the costs of housing and other buildings.

Mr. Burden

Rubbish.

Mr. Kaufman

The House might like to know that in the period of office of the Conservative Party the price of private houses rose by 119 per cent.

Mr. Fernyhough

I repeat that I have listened to every debate on nationalisation in post-war years and heard all the pleas by Conservatives when seeking compensation in respect of the owners of coal, railways, Cable and Wireless and other industries. However, when the Conservatives were in power between 1951 and 1964 they did nothing to rectify the wrongs which they contended we had committed between 1945 and 1951. They did not take a single step to put right what they called our confiscatory measures. When the Conservative Government sought to deal with Rolls-Royce, they did not shed many tears for those shareholders. For once they had to put Britain's interests between their own party's selfish interests.

The right hon. Member for Renfrew-shire, East (Miss Harvie Anderson) drew attention to the situation in shipbuilding and ship repairing. There was a ship repair yard in my constituency which was profitable and which belonged to Vickers. In 1970 we decided to keep it open. But three months afterwards, when the electorate decided to return a Conservative Government, the right hon. Member for Knutsford (Mr. Davies) decided to close the yard. We were intent on keeping the Vickers yard open, but the then Tory Government closed it.

The right hon. Lady talks about jobs being lost through nationalisation, but we have experienced job losses as a consequence of the Conservatives not being prepared to use the very Act they introduced—the Industry Act 1972. The ship repair yard in my constituency could have been saved by their legislation, but they let go 750 jobs in my constituency because they would not use the Act.

Mr. John Evans

Would my right hon. Friend confirm that when this repair yard closed, 750 men lost their jobs, but when the yard was at the peak of production about 2,000 men were working in it?

Mr. Fernvhough

I accept that, but there were 750 employed when the Conservatives made their wonderful statement about no help for lame ducks. The lame duck in my constituency was the first to be crushed by their lack of charity and understanding.

Mr. Heseltine

I am not sure where this argument is leading. Would the right hon. Member explain the difference between the repair yard in his constituency and the Greenwells yard, which has just been closed by the nationalised company which owns it?

Mr. Fernyhough

I am not saying that there is any difference, but the right hon. Member for Renfrewshire, East said that nationalisation meant closure. All I am saying is that there have been closures by private enterprise all through my lifetime.

The yard in my constituency was closed not because it was not viable but because Vickers decided to get out of heavy industry. If it was not viable then, Swan Hunter Shipbuilders has found it to be viable since, because when that company took over it made the yard a going concern, and Swan Hunter is not that much more efficient. [Interruption.] If hon. Members opposite wish to interrupt me, would they do so one at a time? At my age I cannot cope with hon. Members all shouting at once.

Mr. Heseltine

What exactly is the right hon. Member complaining about? Is he complaining that his yard was closed by private enterprise Vickers, or is he complaining because it was rescued by private enterprise Swan Hunter?

Mr. Fernyhough

It was closed by a private enterprise firm which would not have existed without Government orders. Vickers at Barrow lives on Government orders. If it lost Government orders for naval vessels, Vickers would collapse.

Mr. Burden

Would not the right hon. Member agree that the only way shipyards can be kept open is by giving them ships to build or repair? If yards are not competitive in the world and cannot build ships in competition with other countries, the only alternative is for the Government to order ships. Are the Government going to order shins? If so, what are they going to do with them?

Mr. Fernyhough

If the hon. Member wants to know what the Government are going to do, he will have to wait until they announce their plans. They will do so when they get their legislation through. Opposition Members would complain if the Government took powers unto themselves which the House had not yet given them. When the Government get this Bill through, they will take steps to make the industry much more efficient and viable.

One of the enterprises to which I can point is Thomas Cook Ltd. That was a thriving industry while it was nationalised. It had not made a loss since it was taken into public ownership in 1947. But what happened under private enterprise? The company's record under private enterprise does not compare with its record when it was nationalised. Another example, is the Carlisle brewery and its pubs. That is a fine example of private enterprise expanding and sustaining jobs!

Our debate has witnessed the usual crocodile tears by the Conservatives on behalf of shareholders, the tears we have seen over every nationalisation Bill since I came into this House, and that is a long time ago. The Conservatives could put to the men in the yards on the Tyne, the Clyde and the Mersey the arguments they have put to Bristol Channel Ship Repairers, but they would not get the same answer. I am satisfied that the overwhelming majority of labourers and craftsmen, technicians and designers in the shipbuilding and ship repairing industries are anxious for those industries to be taken into public ownership. Many of the top management would be dismayed if the Bill did not get through.

The Conservatives are making their usual last stand on behalf of the shareholders. It is a stand similar to those that they have made on every major nationalisation Bill over the last 30 years. It will not stop the Bill going through. If they should ever happen to get back to power, which God forbid, they will no more denationalise these industries or turn the clock back than they have with regard to the railways, Cable and Wireless, the coal mines and many other industries, and they know it.

Mr. Teddy Taylor

I hope that my hon. Friend the Member for Henley (Mr. Heseltine) will immediately deny the suggestion by the right hon. Member for Jarrow (Mr. Ferneyhough) that the Conservatives will retain these industries in public ownership. I hope that he will say that we shall want to review the whole situation in the light of circumstances then prevailing. There can be no suggestion that the Conservatives will not denationalise. I hope that we shall and that we shall do a lot of it in the interests of the country.

The right hon. Member for Jarrow confused the issue by bringing in the question of the State pubs. They are not normal pubs. They are on the Scottish border and they are subject to a different situation from other pubs. The pubs in England are open on Sundays, but Scottish pubs are not. Because the State pubs in Carlisle are on the border, Scotsmen who are ill judged enough to want to drink on a Sunday have to cross over. The accounts of these pubs are distorted because of the peculiar circumstances. If the right hon. Gentleman cares to stay in the House later this evening he will see whether the present happy situation in Scotland remains.

The clause does not relate directly to compensation. It simply says that if compensation is to be paid, the owners of the yards should have a reasonable guarantee that they will get some of their money within a reasonable period of time. The points advanced by my hon. Friend the Member for Tynemouth (Mr. Trotter) are relevant in this regard. The Minister commented on the points raised by the hon. Member for Newton (Mr. Evans) concerning State money put into the shipbuilding industry. If the Minister is honest he will try to differentiate betweeen the money going to State-owned of partially State-owned firms and the money going to the private sector of the industry. If he does that it will be clear to the hon. Member for Newton that by far the greater part of the State cash which has gone into the shipyards by way of loans or grants has been paid to the nationalised side of the industry.

The hon. Member for Newton, with his long experience of working in shipyards, seemed to believe that nationalisation would improve matters. I am sure he believes it. However, I think he will accept that there are some Opposition Members who, like myself, have experience of working in shipyards. We take the view that the Bill will make things worse.

9.30 p.m.

Surely there is an ideal situation in the shipbuilding industry to test these matters. That is because half the industry is nationalised and half is not. Surely it would be sensible to let the two fight it out to see which part of the industry emerged the stronger and more viable. On the Clyde the exercise has been carried out to some small degree. The integration of Yarrows was tried within a nationalised firm and it almost went bust.

Mr. John Evans

Does the hon. Gentleman accept that the comparisons he is drawing with firms such as Vickers and Yarrows are not fair? Vosper has subsisted for years as it has been able to build Government warships and Ministry of Defence ships. The other yards have had great difficulty in getting such orders. Any fool in the industry knows that if a yard has contracts from Governments to build warships, supply ships or ammunition ships, it is on to a good thing as they are contracts that will make a fat profit. However the yards that have to try to get orders elsewhere, especially on fixed contract prices, run into difficulties. Many of those difficulties are due to rank bad management.

Mr. Taylor

I can assure the hon. Gentleman that to have Government work is no guarantee of making a profit. Let us remember the experience of the Fairfield yard. That company built many naval vessels, but although it had those contracts it not only failed to make money but went bust. It is nonsense to say that under the present tight arrangements for negotiating Government contracts there is a guarantee of profit.

I hope that the hon. Gentleman will accept that he is being unfair to Vosper. The majority of its work does not stern from Government contracts. As he will be aware if he has studied the accounts and looked at the order book, the majority of its work comes from obtaining naval orders from foreign countries. That means that it has to engage in competition with other companies. That is not an easy market.

Mr. John Evans

I did not refer to the British Government. I said "Governments". I was careful about that because the point was raised with me in a private debate.

Mr. Taylor

If poor old Vosper has to look for work from foreign Governments in competition with others and with restrictions placed on it by this Government, which limit the countries for which it can build ships and which leave us out of a large market, and if it has to do so at a time when there is a shortage of shipbuilding orders, it shows that it must be a pretty efficient undertaking if it can survive in that climate.

We could argue about these matters until the cows come home. I am sure that the hon. Gentleman thinks that matters will improve with nationalisation, whereas I think the situation will become worse. As I have said, we have a grand opportunity of testing that to a conclusion. That could be done if we had fair competition between the private sector and the State-owned sector. I hope that the Minister will make it clear just how much State cash has gone to the nationalised sector by comparison with the private sector.

We are talking about the need to have a fair settlement of compensation as speedily as possible. The Minister of State may well point out that under Clause 36(6) he can, if he so desires, agree to the making of interim payments of compensation. That depends on the Minister. I appreciate that he considers himself to be an important member of the Government, but he is subject to Treasury control in these matters. In present circumstances, in which the Chancellor is having to borrow £9,000 million and to issue Government stock, how is he to respond to the Minister if he knocks at the Treasury door saying "Please, may I issue £100 million of Government stock tomorrow to those who own the shipyards as I want to make an interim payment to them?" How can that happen when in my constituency we cannot even get borrowing consent for the conversion of some houses for a social work department for the largest housing scheme in Europe because the Government cannot allow the issuing of any more money? It is clear that it will not be easy to make an interim payment. The Minister might find that to be difficult.

There is no guarantee that interim payments will be made at a reasonable time. That would not be so had if the compensation were excessive, but I think it is generally accepted by all reasonable people that while compensation in respect of some firms is not wholly unreasonable, in the case of other firms it is sharp-dealing robbery, nothing more and nothing less.

When we look at some of the firms and their balance sheets, it is clear that the Government are, in some cases, buying a large mountain of cash, which is almost equivalent to the full compensation price. We have also to look at the fact that the positions of some of the firms have deteriorated to some degree since it was first decided to nationalise. Much of that deterioration is due to the threat of nationalisation, which has made it difficult for them to plan and to borrow, and almost imposible to invest.

The Minister should not discount the fact that, in the repeated remarks he has made throughout our Committee stage and since then, he has brought about a position in which a number of firms are on the point of collapse. He was always very careful never to specify them. He once went as far as to make the monstrous suggestion that a firm on Clydeside was in danger of collapse. He must know that this is not the case, but general smears of this kind about the state of the industry, as he must know, do a great deal of damage to firms which are trying to provide security of employment.

In all these circumstances, the least we are entitled to instead is that the Government will make some arrangement that some of this money will be paid at a reasonable time. There is no guarantee at present. All we have is the suggestion, in Clause 36(6), that the Minister may agree to an interim payment if he so desires. That is not good enough. In the new clause we suggest that the arbitration tribunal shall have the power to make an interim payment in respect of compensation. If we do not have this it may be several years before these matters can be sorted out.

In the acute state of the Government's finances and in the acute state of the economy, with so much unemployment and so much more about to be created, we are certainly not in a position where there is any incentive for the Government to pay out money quickly.

There has been yet another indication of the crisis only today. We have seen on the tape that there is a plan to get rid of 65,000 civil servants. This is a drastic step for a Government to take when we have 165,000 unemployed in Scotland alone—the highest figure post-War. In these circumstances, will it be easy for any Minister, even if he wants to do so, to say that he will make an interim payment?

Unlike the hon. Member for Newton, I believe that it is utter madness to spend this money on nationalisation at a time when we need the money so desperately in other fields. On the other hand, if there is to be nationalisation, we must have some fair play for those in the indus- try, particularly bearing in mind that the money will not go to greedy capitalists or to individual shareholders. I hope that the hon. Member for Newton appreciates that. In the vast majority of cases the money will go to foreign firms who, like Yarrows, want to invest the money in something else. The money is not for the purposes of bingo halls or casinos or holidays in the Bahamas. It is for the creation of more jobs.

All our experience is that the people who have owned the shipyards have, in their other spheres of activity, had considerable success in creating jobs and in achieving growth. That is the case with Yarrows, which has expanded its labour force and increased its profits, thereby making considerable contributions to the Treasury in many ways.

Mr. Ian Lloyd

When I listened to the speeches of the right hon. Member for Jarrow (Mr. Fernyhough) and the hon. Member for Newton (Mr. Evans), and heard the right hon. Member for Jarrow saying that he had listened to a succession of nationalisation debates, and what he described as the stereotyped Conservative defence against nationalisation, I sought vainly for an analogy that would demonstrate to the House how I reacted.

The only effective analogy I could think of was that of a man who is tempted by a very low price to buy a very old boat, and does so without taking the elementary precaution of getting a survey. He acquires this wonderful new possession, which he regards as a great bargain. It looks fine until he starts to scrape off a few bits of old paint.

When he has scraped off the nrst few bits, he finds that the surface wood looks rotten. He then takes off some of the surface wood, thinking that he may only have to take off a little of it. He finds that he has to take off the whole of the surface wood. He gets a little further and finds that some of the frames are rotten. He thinks that he should take out some of the frames before he puts back the surface wood and starts to paint. After he has taken out parts of the frame, he finds that there is rot in the keel as well. That is the way in which I react to the economic nonsense spoken time and again when the subject of nationalisation comes before the House.

Mr. Fernyhough

Does not the hon. Gentleman think that anyone who sells a boat of that kind should be prosecuted under the false descriptions legislation?

Mr. Lloyd

There is an answer to that—caveat emptor. Another answer is that the buyer should first commission a survey.

I admit that there has been insufficient investment in the shipbuilding industry. Let me illustrate why.

I should perhaps declare an interest. I am an adviser to a major British liner company. However, I have no interest in shipbuilding as this company builds few ships at the moment. Fifteen years ago we built a large number. We owned and controlled a shipyard on the Clyde.

At that time a policy decision had to be taken whether we should invest in the shipyard and restructure it, or do something else. At that time I visited virtually every shipyard in the Western world, including those in the United States, Scandinavia and Japan. I came back and made a report—and it was valid. I reported that the most modern shipbuilding techniques in the world were to be found in Sweden, especially in Kockums and Go Taverkeno. I proposed that the techniques employed in Kockums should be brought to the Clyde.

That proposal was seriously examined. In the early 1960s it would have cost about £8 million or £9 million to bring our shipyard up to a state where it had the slightest hope of competing not with Japan—at that stage the Japanese industry was a small cloud on the horizon—but with the best techniques in Britain. That proposal was turned down. Why? It was turned down because there was no possibility of a reasonably effective rate of return on the investment.

Every investor in this country—shipowner, investment institution, insurance company or pension fund—must go to those to whom he is answerable for the investment funds and say "Amongst the alternative competing investments available to me is a shipyard. If I invest £9 million in that undertaking, we shall receive a return of X per cent." In this case the X per cent. was distinctly less favourable than that from many other forms of investment.

That is the pattern of investment in the Western world. Hon. Gentlemen's pension fund managers may say "We have not invested in the top opportunities that are available to us. We put all the money into ailing shipyards from which the return is 3 per cent." Would hon. Gentlemen be pleased if that occurred?

Mr. Robert Hughes (Aberdeen, North)

The hon. Gentleman said that such an investment would not bring in a good return. Does he therefore say that there should be no shipbuilding capacity in this country?

Mr. Lloyd

No. The incident to which I referred took place a long time ago.

The answer is simple. When the sums were done, the net return on the capital invested would have been far inferior to what might have been obtained in other ways. If that is true of that shipyard, with a proper rational analysis based on the comparison of modern techniques all over the world, I suggest it is true of most of the remainder in this country, if not all.

If there has been insufficient investment it is because the general climate of private investment in this country since the Second World War has been so devastatingly hostile that people responsible for investment have become more and more discouraged. Therefore the private sector has deteriorated.

Mr. John Evans

Does the hon. Gentleman accept that from 1945 to about 1951 the shipbuilding industry in this country had a free run in the world? The world queued up for ships built in Britain because the shipbuilding capacity of the rest of the world had been almost destroyed. Does the hon. Gentleman accept that the years from 1952, when the Conservatives were in power, were the years when no investment took place in the British shipbuilding industry?

Mr. Lloyd

In the years immediately after the war most foreign shipyards had been destroyed and, therefore, British shipbuilding had a free run. From 1952 onwards there was considerable investment, but not enough, for the reasons I have given.

9.45 p.m.

Mr. Kaufman

For those who served on the Standing Committee this has been quite like old times. We had the great pleasure of listening to the hon. Member for Tynemouth (Mr. Trotter) deploying his expertise in accountancy rather more in sorrow than in anger, supported by his hon. Friend the Member for Gloucestershire, South (Mr. Cope) more in anger than in sorrow.

We have had once again the always delightful opportunity to listen to the right hon. Member for Renfrewshire, East (Miss Harvie Anderson). One slight and to me rather depressing and hurtful variant is that the hon. Member for Glasgow, Cathcart (Mr. Taylor), with whom I got on so well in Committee, seems to have turned a little sour on me, but I shall have to live with that.

The hon. Member for Bridgwater (Mr. King), in winding up the previous debate, said words which will apply to a great deal of what we say in our debates tonight and during the next two days—"we have covered that in Committee". Yes, we covered in Committee almost everything that has been said by Opposition Members.

On the other hand, certain speeches made by my hon. Friends, including in particular the powerful and moving speeches made by my hon. Friend the Member for Newton (Mr. Evans) and my right hon. Friend the Member for Jarrow (Mr. Fernyhough), are major additional contributions to our debates and give me oportunities which I shall take to give additional information to the House which I am sure will be of use to it in considering the new clauses.

With your permission, Mr. Speaker, I shall not pursue yet again the ECGD hare which the hon. Member for Gloucestershire, South chased in Committee. I had the feeling by the time we had done with it that it was satisfactorily casseroled. There is little more to be said about that runner as it has been proved to the hilt that it had no basis.

I am glad that the right hon. Member for Renfrewshire, East is not here at the moment because sometimes in Committee I had to disagree with her and, because of the very great respect and regard in which we all hold her, that was difficult and disagreeable for me. That being so, I am glad that it will not be necessary for me to say various hurtful things to her about the basis of the existence of Yarrow, because I know that Yarrow is dear to her heart.

The right hon. Lady referred to the "devastating" cuts which my right hon. Friend the Chancellor of the Exchequer announced last week. I know that many of my right hon. and hon. Friends agree with some comments that have been made about those cuts, and my right hon. Friend said that he was not at all happy at having to make that statement. But those cuts are as nothing compared with what right hon. persons on the Opposition Front Bench have asked for. As soon as my right hon. Friend the Chancellor of the Exchequer sat down, the right hon. and learned Member for Surrey, East (Sir G. Howe) said that they were too little and too late.

The right hon. Lady, with whom I have a great deal of sympathy, unique as she is in so many agreeable ways, is also unique in opposing the cuts while the rest of her party demand far more cuts, deeper cuts and cuts that will cause far more unemployment. So, while there is very little that we shall not take from her because of our regard for her, we shall certainly take none of it from other hon. Gentlemen.

In moving the new clause, the hon. Member for Tynemouth, in the highly agreeable way in which he always spoke in Committee, seemed to imply—I am sure inadvertently—that I had given some commitment on this matter when it was debated in Committee. The hon. Gentleman will recall that in reply to his hon. Friend the Member for Bridgwater on this very matter I said: I undertake to consider the matter. I shall certainly do that. The way in which I respond, and whether it is appropriate to come back, will depend upon the consideration. But I give the hon. Gentleman my assurance that I shall consider seriously what he said. Those were my words.

The hon. Member for Tynemouth who spoke to that particular subject in Standing Committe, did not find what I said satisfactory. He said, referring to me: If the hon. Gentleman had said that he would think again and come back with an amendment giving a guarantee, I should have been happy to withdraw my amendment. But he has not suggested that, so I shall press the matter."—[Official Report, Standing Committee D, 9th March 1976; c. 1626.] The hon. Gentleman forced a Division on this because I had not given a commitment, and we defeated him by 13 votes to nine.

That being so, as I always respect what the hon. Gentleman has to say, I hope that he will not imply that because the Government have not tabled an amendment, I have not followed up that discussion and have not. in some way, followed through a commitment which I never gave.

My hon. Friend the Member for Newton, in an extremely moving and impressive speech dealt with, among other things, Opposition claims that public ownership was not a profitable sphere of activity. I really should have thought that after the announcements which have been made during the past few days of large profits being declared by one publicly owned industry after another the canard of hon. and right hon. Gentlemen opposite that nationalisation cannot be profitable has finally joined the ECGD hare in the casserole; because of course we are proving, as we always said we would, that public ownership can be profitable.

The British Steel Corporation was referred to in an extremely agreeable contribution from the hon. Member for Gillingham (Mr. Burden), an old and happy sparring partner of mine. This comes back to the question of Government control of prices, to which I shall refer in dealing with the speech of the hon. Gentleman. But, of course, if we are dealing with steel and the reason why steel has lost money, the reason for that, in addition to the world recession, is the absolutely crippling price control imposed upon the corporation by the Conservative Party, from which it was released through the large price increases which Opposition Members now deplore when we became subject to the rules of the European Steel and Coal Community, against which many of my hon. and right hon. Friends voted when hon. and right hon. Members opposite took us into the European Common Market at the beginning of 1973.

So it is the Conservative Party, with the exception of the hon. Member for Cathcart, who freed the British Steel Corporation from the price control which was destroying it under the right hon. Member for Sidcup (Mr. Heath); and the corporation is now being allowed to raise its prices so as to be able to compete. That is one of the reasons why after a very serious deficit in the current year, the British Steel Corporation hopes to move into equilibrium in the next financial year and into profitability in the following financial year.

Mr. Trotter

May I draw the hon. Gentleman's attention to column 3121 of the Official Report of a later meeting of the Standing Committee, covering the statement that we made?

Mr. Kaufman

I am obliged to the hon. Gentleman. My hon. Friend the Member for Newton asked an extremely pertinent question and was buttressed by the hon. Member for Cathcart. My hon. Friend asked about Government aid to the shipbuilding industry over a period of years and the hon. Member for Cathcart asked whether we could break up that figure between the public and private sectors.

I have not had as much time as I should have liked to obtain for my hon. Friend the information in the form in which he sought it, but he may be satisfied with the information that I gave the House on Second Reading. It is for a finite past period and is as valid now as when I gave it. I said: It is the same with the shipbuilding industry. In the past 10 years it has received £299 million in Government loans, grants and equity capital. That does not include investment grants, development grants and regional employment premium. There is so much of that under so many headings, that it is impossible to add it all up."—[Official Report, 2nd December 1975; Vol. 901, c. 1575.] For the reasons that I gave on Second Reading and the inability to extract all the information because of the many headings involved, I cannot go across the whole field, but the hon. Member for Cathcart and his hon. Friends will be satisfied if I quote as a very good example, with which they cannot disagree as they were responsible for it, the aid given under the Conservative Government's Industry Act 1972.

This is a very good Act that we have been able to use to great advantage. Under Section 11 a total of £42 million was paid out in construction grants to the shipbuilding industry up to 1975–76, with nothing asked in return. I am sure that the hon. Member for Cathcart is an enthusiast for the 1972 Act. It will be useful to him and for the benefit of the House if I provide the relevant information in reply to his good and fair question

Of the £42 million in construction grants paid out under the 1972 Act, which was passed with the minimum of opposition from the Conservative Party and none from my party, 34 million has gone to privately owned companies. I have not brought my English-made electronic calculator, but I reckon that is about 80 per cent. of the total.

Of those grants paid out under the Act introduced by the right hon. Member for Knutsford (Mr. Davies) and the Government of which the hon. Member for Cathcart was a member, about 80 per cent. went to private enterprise and 20 per cent. to public enterprise.

Mr. Teddy Taylor

Will not the Minister agree that construction grants, like investment grants, were sums to which every shipbuilder was entitled for every ship built and that therefore the more ships that were built, the larger the amount of grant received? Did not the hon. Member for Newham (Mr. Evans) ask not about construction grants but about Government grants and loans?

It being Ten o'clock, the debate stood adjourned.