HC Deb 29 July 1976 vol 916 cc892-6

4.18 p.m.

Mr. Kevin McNamara (Kingston upon Hull, Central)

I beg to move Amendment No. 220, in page 21, line 3, at end insert— '(4A) Where a company named in Schedule 2, of whose property a receiver has been appointed, the Corporation shall purchase from the receiver its existing assets at a value to be determined by agreement between the Corporation and the receiver as on the date of the coming into operation of this Act'.

Mr. Speaker

With this we are to take the following amendments:

No. 221, in page 21, line 10, leave out paragraph (c).

No. 222, in Schedule 2, page 75, line 5, at end insert 'Drypool Group Ltd.'.

Mr. McNamara

We have spent a long time discussing other parochial matters in this Bill. We have had a major row on a constitutional issue concerning one local company—namely, Bristol Channel Ship Repairers Limited. I make no apology for raising a matter of vital concern not only immediately to the constituencies of myself and my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) but to the general prosperity and well-being of industry generally on North Humberside and of the shipbuilding and ship repairing industry in particular.

We had a short debate on this topic in Committee. In that debate I rehearsed the arguments why my hon. Friends and I felt that the Drypool Group should be back within the Bill. Originally, when we fought an election on Humberside, we fought it for the nationalisation of the aircraft and shipbuilding industries. We fought it for the nationalisation of Brough and Drypool.

In the first Bill, which was published on 30th April 1975, the Drypool Group was included in the provisions for nationalisation. However, following the change at the Department of Industry, when the present Secretary of State replaced my right hon. Friend who is now Secretary of State for Energy, a second Bill was published, from which the Dry-pool Group was excluded.

We have to ask why the Drypool Group was excluded. The answer is that it went bankrupt and brought in a receiver. However, if that alone were the case for not nationalising or taking into public ownership any industry, there would have been no help given to Rolls-Royce, to Chrysler, or to many other nationalised industries that have been taken into public ownership.

The company went bankrupt. Immediately the announcement was made, my hon. Friends and I spent a considerable time lobbying Ministers, who expressed great sympathy for the situation, but did nothing other than to say that they would not now nationalise Drypool and that it would be far better for what was left of the group to be taken into private ownership and sold off by the receiver rather than be taken into public ownership.

I must say that that augurs well for those other parts of the shipbuilding industry that are said to be in a very precarious position. Some of them would not exist if they did not have the benefit of help from the Government, which was denied to Drypool and other shipbuilding industries on Humberside.

We were then left with a situation in which the Government recommended that the companies should not be nationalised. Supported by some of my hon. Friends, I tried in Committee to get that position reversed. I was not successful, and since that time a number of the companies within the Drypool Group have been sold off to private industry, including the Selby Yard and the Beverley Yard.

Therefore, we are left with what, in a parochial sense, is the core of the whole problem for me and my hon. Friend the Member for Kingston upon Hull, East—in other words, the yards in our constituencies, which still employ about 300 men, to whom we gave an undertaking, both on the hustings and since, that we would press for the nationalisation of their yards, which undertaking we are carrying out now. I can assure the House that this is no part of any sham exercise.

We have the situation, theerfore, that parts of the Drypool Group have been sold off. Other parts have not been sold off. Though I regret to have to admit it, obviously it would be unsatisfactory if we tried to bring back into the ambit of public ownership those parts which have been sold off already to private industry. I concede that point, though I regret having to do so.

But there are the parts which are left, which are in my constituency and that of my hon. Friend, the Member for Kingston upon Hull, East. Those are parts that have not yet been sold off. Therefore the amendment has two objectives. It seeks to meet the changed situation of the Drypool Group, and it seeks to meet the situation in terms of the major argument which the Minister of State advanced in Committee that because of the period of time taken as the average over which compensation should be paid to shareholders, it would involve the payment of compensation to shareholders in a bankrupt company.

On that occasion I put it to the Minister that, if that was the substance of his argument against accepting my amendment, surely it was not beyond the wit of man, though perhaps it was beyond that of the Government, to find a way round the difficulty, as had been shown to be possible by the right hon. Member for Sidcup (Mr. Heath) when he was Prime Minister and was dealing with Rolls-Royce.

In my view, we could say that in the case of a company which was bankrupt the Government would merely pay the value of its assets. Therefore, the amendment seeks to say that where a receiver has been appointed—as has happened in this case—the corporation shall purchase from the receiver its existing assets held by the receiver at the time of the coming into operation of the Act at a value to be determined by agreement between the corporation and the receiver.

That is what the amendment says. It says nothing that could conflict either with public policy or with what is contained in the Bill. It contains nothing to conflict with public policy because we are not confiscating. We are paying compensation, and paying compensation for fixed assets.

I put it to my hon. Friend that he has an opportunity between now and the coming into operation of the Bill either to ensure that the jobs of the men concerned are protected, and that the industry is protected on Humberside, in my constituency and that of my hon. Friend, by being sold to some private industry—which I should find difficult to accept from a Labour Government—or to say that, from the date of the coming into operation of the Bill, the assets will be taken over by the new corporation.

Mr. Tom King (Bridgwater)

As I understand Amendment No. 220, the hon. Gentleman is proposing that the corporation shall purchase from the receiver the assets of the company at an agreed fair market valuation. Does he think it would be right that the same principle should be applied to all the companies being acquired and that in each case the assets should be purchased at a fair price?

Mr. McNamara

Every company in bankruptcy which is taken over—[Interruption.] This company is bankrupt. I should hate to make the Bill a hybrid. I am dealing with only one class of company at a time. If a company is bankrupt, let us pay for the assets. We want the creditors to be treated honourably. I am after no quick buck and no confiscation. Let the creditors be treated honourably.

I am grateful to the hon. Member for Bridgwater (Mr. King) for enabling me to make this point, because it drives home that the hon. Gentleman supports my view that we should compensate the creditors fairly on the face value of the company's assets.

4.30 p.m.

My amendment will still give the Government time to do what was originally envisaged when the whole exercise of nationalisation was first thought of. It was envisaged that on Humberside, in an area of very high unemployment and with few opoprtunities of skilled work for school leavers and where we had had a number of body blows to our economy, for which the Government had done very little to compensate—the closures of Thorn Electrics in my constituency and of Imperial Typewriters in East Hull, the threatened close-down of Humber St. Andrews, partly in my constituency and partly in that of my hon. Friend—here was an opportunity for the Government to say to Humberside, "We appreciate your need for skilled work and here on Humberside we can build a small boats division of the new shipbuilding corporation." That is what we were after. It is still possible. There are still being taken into public ownership the shipyards at Goole. There are still being taken into public ownership the ship repairing facilities of Humber Grading.

It is still possible for the Government to have a strong and viable nationalised shipbuilding sector on Humberside based upon the yards that are there. At this stage my right hon. Friend the Minister could say that what this party undertook as part of its policy, and what was its policy until the publication of this Bill, to the extent that it can be honoured, will be honoured and that he will take these parts of the industry into public ownership.

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