HL Deb 08 June 1964 vol 258 cc688-91

3.30 p.m.

THE CHANCELLOR OF THE DUCHY LANCASTER (VISCOUNT BLAKENHAM)

My Lords, with your Lordships' permission I will now make the Statement which was foreshadowed earlier this afternoon. I should like to bring to your Lordships' notice a Private Notice Question on the acquisition of shares in the Rootes Group by the Chrysler Corporation and the Answer which my right honourable friend the Chancellor of the Exchequer has just made in another place. The exact words are:

"Mr. James Callaghan: To ask Mr. Chancellor of the Exchequer if he will make a Statement about the extent to which the acquisition of shares in the Rootes group by Chryslers will transfer control of policy of the Rootes Group out of the United Kingdom."

Mr. Maudling: I understand that this deal will not involve transfer out of the United Kingdom of control of policy of the Group."

LORD SILKIN

My Lords, while thanking the noble Lord for that Answer, is he aware that this affords no guarantee whatever that in the future, possibly even in the very near future, control will pass, or could pass, out of the United Kingdom? Is the noble Lord in a position to give an assurance that before any such thing takes place the Government will at any rate give Parliament an opportunity of expressing an opinion?

VISCOUNT BLAKENHAM

My Lords, I think the noble Lord is probably aware that the actual application has not yet come to my right honourable friend. Of course, when he receives the application through the Bank of England, where it will go, he will naturally study its terms and it will then be more possible to answer the sort of questions the noble Lord has put to me.

LORD LATHAM

My Lords, has the noble Lord read the article in the centre page of the Financia1 Times to-day in which the possibility of control is adumbrated? The proposal is received in that article not with any pæan of praise, but with great apprehension as to what may be the effect on other motor manufacturers concerned in this country.

VISCOUNT BLAKENHAM

My Lords, I think that is a hypothetical question. The actual application, as I understand it, although it has not yet come to my right honourable friend the Chancellor of the Exchequer, is that Chryslers will acquire a 30 per cent. interest in the ordinary voting shares of Rootes and a 50 per cent. interest in the "A", nonvoting, shares; so there is no question of control passing into the hands of Chryslers at this juncture.

LORD SILKIN

My Lords, may I ask whether, in fact, the answer indicates that the Chancellor of the Exchequer is in a position to say "Yes" or "No" to this application?

VISCOUNT BLAKENHAM

My Lords, under Section 30 of the Exchange Control Act, 1947, any act involving the passing of control of a company from residents of the United Kingdom to non-residents is caught under that section. The present application must come to the Chancellor of the Exchequer for his consent.

LORD MOLSON

My Lords, do I understand aright that what the noble Lord has just quoted applied to control passing, and he has just told the noble Lord opposite that as only 30 per cent. of the shares are being transferred, control would not pass?

VISCOUNT BLAKENHAM

My Lords, this present transaction would not be covered by the general consent given under Section 9 of the Exchange Control Act. This transaction has to come to my right honourable friend the Chancellor of the Exchequer.

LORD LUCAS OF CHILWORTH

My Lords, do I understand from the noble Viscount that there is no action the Government can take to stop the present arrangement from going through? Is that understanding right?—because if it is I should like to ask the noble Lord a supplementary question to that.

VISCOUNT BLAKENHAM

No, my Lords; that is not right. As I have explained, this transaction has to come to the Chancellor of the Exchequer for his consent.

LORD LUCAS OF CHILWORTH

My Lords, why has it to go to the Chancellor of the Exchequer, since control is not involved? His right honourable friend the President of the Board of Trade has said the contrary.

VISCOUNT BLAKENHAM

My Lords, I think again, with respect to my noble friend, I have answered that point. Any transfer of shares from a resident of the United Kingdom to a non-resident requires exchange control consent under Section 9 of the Exchange Control Act, 1947. For ordinary dealings through the Stock Exchange a general consent has been given. The present transaction would not be covered by this general consent, and therefore requires specific consent by the Treasury.

THE EARL OF SANDWICH

My Lords, has my noble friend received any representations from the Labour Party that the total American investment in Esso Petroleum in this country, together with the Ford Motor Company, should be repatriated and that £1,000 million of British investments in the United States should likewise be repatriated? Does that not follow from the objections taken to the proposal by the Party opposite?

VISCOUNT BLAKENHAM

My Lords, am not in a position to argue with my noble friend; I think he knows the answer to the question which he has put to me. To be fair to noble Lords opposite, they have not in this House so far been objecting to this proposal. I expect that they will agree with me that we want to see a strong and viable motor industry able to compete in world markets.

EARL ALEXANDER OF HILLSBOROUGH

My Lords, I should have thought that the Ministers' Bench would understand clearly from our experience in 1945, when we took over a country that internationally, in relation to finance, was practically bankrupt after the enormous expenditure during the War, that by 1947 the need for the Act which was then passed to regulate exchange was recognised and the legislation had to be passed. I think perhaps we had better await further decisions of the Government, either by the Chancellor of the Exchequer or in collaboration with the President of the Board of Trade, on this application before we make further comments.