HL Deb 24 February 1972 vol 328 cc756-64

7.30 p.m.

LORD SANDFORD

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Lord Sandford.)

On Question, Motion agreed to.

House in Committee accordingly.

[The VISCOUNT GOSCHEN in the Chair.]

Clause 1[Disposal of assets by, dissolution of and grants to the Transport Holding Company etc.]:

LORD DIAMOND moved Amendment No. 1: Page 1, line 10, after ("power") insert ("otherwise than to a public corporation").

The noble Lord said: May I make two short prefatory comments? The first is that I hope your Lordships will forgive me if I speak very shortly on these Amendments because I take it that the wish of your Lordships is that, as it is a Thursday, we should finish a minute or two earlier than we did this morning. The second comment is that these Amendments are put forward at a stage when it is really more important to decide the meaning than the wording, and there will be ample opportunity at later stages of the Bill, if necessary, to make the wording precise. Therefore, the noble Lord, Lord Sandford, will forgive us if our Amendments do not subscribe to the best and highest standards of draftsmanship.

The first Amendment, which I beg to move, is really very moderate. It seeks to give power to the Transport Holding Company to dispose of the assets with which the Bill is concerned to a nationalised industry or a public corporation, without troubling the Minister. I have carefully read the contents of the Bill, the main clause and the Explanatory and Financial Memorandum, and it is perfectly clear that the main purpose of the Bill is to make sure that the Transport Holding Company is enabled to dispose of its assets—all of them. Nowhere in the Bill or in the Explanatory and Financial Memorandum is there any indication of any limitation on the—I do not know the correct title; would it be the "disposee"?—person to whom the assets are disposed. Therefore I am assuming that it would be within the objects of the Bill that these assets, which are assets of a nationalised corporation and which fit very naturally and suitably within the complex of nationalised corporations which deal with transport, should presumably in the first place be transferred to another nationalised corporation within this field, if the Transport Holding Company so thinks fit. But being very moderate, as we always are on this side, we do not seek to place this as an instruction but merely as an opportunity, an option, which the Company should have. I therefore beg to move, in the hope that the Government will make it clear that this is something which is within the intention of the Bill.

LORD SANDFORD

I am glad to respond to the noble Lord's suggestion that we should at this stage deal with this Bill briefly, and I am sure we can. I was not sure when I saw the noble Lord's Amendment whether it was a paving or a wrecking Amendment. I felt fairly sure that it was defective, and fairly certain that it needs to be resisted. I am now quite clear that it is in effect a wrecking Amendment, because, as the noble Lord knows perfectly well from the Second Reading, the intention behind the Bill is to make quite certain that the Transport Holding Company, with the agreement of the Secretary of State, has the powers to arrange for the sale of the remaining assets of the Transport Holding Company, namely, Thomas Cook and Company, into the private sector. I do not think any of your Lordships on this Committee would consider it otherwise than moving in exactly the opposite direction to that which we intend, if we were to amend the Bill so that the Transport Holding Company could, without the agreement of the Secretary of State, dispose of its assets to the public sector. As the Committee knows, the intention of the Bill is to secure that the Transport Holding Company has the necessary powers, with the agreement of the Secretary of State, to dispose of its assets into the private sector. For this reason I can- not do other than advise the Committee to reject this Amendment, if the noble Lord, Lord Diamond, decides to press it.

LORD DIAMOND

I am grateful to the noble Lord for a very clear answer. I regretted it extremely, but it was a very clear answer. I do not think the noble Lord was absolutely accurate in indicating to the extent he did that this puts any compulsion upon the Transport Holding Company to sell to another nationalised industry or to a public corporation. But I am grateful to him for making it absolutely clear that at this time in our affairs, when we are faced with great difficulties—to-day we had, for example, a special Statement on the development of restrictions in connection with electricity supply; we are much concerned with the problem of over a million unemployed and all those who are out of work because of the after effects (as I hope I may describe them) of the coal strike—the Government think it proper to devote the time of Parliament to a diversion of the assets of a business, big in itself but not large in relation to nationalised industries, from the public sector to the private sector, without one word—not one word—of justification in terms of the interests of the public, in terms of the interests of the taxpayer or in terms of the interests of the employees, some 5,000 of them, of Thomas Cook and Company, which is the asset in question.

All that was said on Second Reading was that the Government did not think it right to concern themselves with running this kind of business. The fact is that it has been run as a public corporation for 25 years very satisfactorily and profitably—during the whole of the period, for example, that the noble Lord, Lord Thorneycroft, was such an adornment to the Conservative Government. He did not spend, I hope, one moment of his valuable time in considering whether it was right for Thomas Cook and Company to be in the public sector or in the private sector. He got on with matters which engaged his time much more usefully and profitably in the interests of the nation. So I am sorry that we find ourselves in the situation where the Government have introduced this Bill which does not say one word about transferring this asset to the private sector. I should hardly call this lack of candour; I should call it, if I may say so, misdirecting the attention of both Houses as to the true purposes of the Bill.

It is perfectly true that the noble Lord, Lord Sandford, whom I acquit of any such suggestion, made fairly clear in his Second Reading speech how he interpreted and how the Government interpreted the Bill. However, there is not a word in the Bill which says that. The Government are going to achieve their purpose only by tying the sale of the assets to the consent of the Secretary of State, and the noble Lord is telling us that the Secretary of State will not agree to the sale unless it is a sale to the private sector. Not one word of justification has been produced. It is not in the Bill. I regret it extremely. That is all I can do about it.

THE DEPUTY CHAIRMAN OF COMMITTEES

Does the noble Lord wish to withdraw the Amendment?

LORD DIAMOND

Certainly not.

On Question, Amendment negatived.

7.40 p.m.

LORD DIAMOND moved Amendment No. 2: Page 1, line 10, at end insert ("which consent shall not be given in any case where such disposal is likely to lead to the lessening of competition in the travel industry").

The noble Lord said: When I look at the wording of this Amendment I see that there is a possibility of misunderstanding in that the "travel industry" is a short description of the "travel agency business", but I hope that the intention of the Amendment is perfectly clear.

In Committee we cannot alter the main purpose of the Bill but we can hope to improve it within the philosophy of the Government; and the philosophy of the Government, as has been made clear by the very fact that this is to be taken out of the public sector and put into the private sector, is that competition is what produces efficiency and the best result, and various Government Ministers have made many speeches to that end. If that is the case, I think it would be helpful to make it clear in the Bill that the Minister is to be restricted to giving consent to these cases where disposal is not likely to lead to the lessening of competition. This is most important because great anxiety has been expressed throughout the travel agency business as to the hands into which this uniquely large travel agency business of Thomas Cook and Sons is going to fall. It is extremely large, as everybody in your Lordships' House understands. Not only has it 5,000 employees; not only a very large turnover running into something like £300 million, taking all the aspects of the business into consideration (having something like 500 different establishments in something like 50 countries); not only is it very large and very international, it is uniquely large in that there is no other travel agency business of remotely the same size. Therefore, if this business were to go to another travel agency business and thereby lessen competition, it would be a mammoth organisation among a number of much smaller organisations, all of whom are very anxious as to how this giant would exercise its powers. Would it exercise them with care or would it exercise them brutally?

Therefore, I thought it right to table an Amendment to give the Government an opportunity of explaining, as I hope the noble Lord will be able to explain, that it is their intention to see to it that, according to their philosophy, competition in the travel agency industry is not reduced and that therefore there will be no question of allowing Thomas Cook & Sons to fall into other hands in the manner I have described. I beg to move.

LORD SANDFORD

I am glad to say that here, certainly in broad intention, there is no difference between the noble Lord, Lord Diamond, and the policy of Her Majesty's Government. It is certainly not our intention that Thomas Cook and Sons should be sold to anybody in such a way as materially to reduce competition in the travel industry. On the other hand, to accept this Amendment and to include it in the Bill would put too great a constraint on my right honourable friend in coming to his decision as to which bidders to allow to bid for this company, because it may well be that in order to secure the other criteria which we are coming to in the next Amendment, some slight reduction in competition in the travel agency business ought to be accepted in order to secure that Thomas Cook and Sons should be taken over and should continue to run as a going concern. Another factor is that Thomas Cook and Sons could not be sold, for instance, to one of the Air Corporations, which I understand to be one of the preferred solutions of the noble Lord, Lord Diamond, without there being a lessening in competition in the travel agency business.

So the precise form of this Amendment incorporated into the Bill would involve too much constraint on my right honourable friend's discretion. But I am glad to put on record that it is his intention so to arrange the sale that there is no undue reduction in competition in the travel agency business; and of course as a fall-back position there is the Monopolies Commission and the legislation relating to monopolies which would come into play were the reduction of competition to be on a serious scale. I hope that with those assurances the noble Lord will not feel it necessary to press his Amendment.

LORD DIAMOND

I am grateful to the noble Lord for what he has said. It may be proper to add a word or two on the Question, Whether the clause shall stand part of the Bill, but now with the permission of your Lordships I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

7.47 p.m.

LORD DIAMOND moved Amendment No. 3: Page 1, line 10, at end insert ("provided that the Secretary of State shall not give his consent to the disposal of any such securities unless he is satisfied that those to whom disposal of such shares is proposed intend to maintain the business of Thos. Cook and Sons as a going concern").

The noble Lord said: This Amendment provides that the Secretary of State shall not give his consent to the disposal of these securities unless he is satisfied that those to whom disposal is proposed intend to maintain the business of Thomas Cook and Sons. There is the technical problem, to which I referred at the outset, that of course the assets are shares and what we are really talking about is the underlying business of Thomas Cook and Sons. Therefore, I hope that instead of going into a long and detailed Amendment which could have been phrased to give the precise meaning, the Government have understood what the intention is behind this Amendment.

From what has been said previously and what the noble Lord indicated on the previous Amendment, we are not very far apart in the purpose of this Amendment. This Amendment is designed to make it clear to those who have anxiety about the future of Thomas Cook and Sons (and they are many) that this is not a stripping operation but is a transfer of a business, regrettably as we think, out of the public sector into the private sector, but nevertheless the transfer of a business with a view to maintaining and running that business.

The reason why we are bound to put stress on this is that the business of Thomas Cook and Sons is quite a varied business and consists of really severable businesses. The financial side is fairly distinct from the travel side, although in my view, and I hope in your Lordships' view, they are complementary to one another. But it is conceivable that a finance house or a group of finance houses which are concerned solely with the financial side of Thomas Cook and Sons might acquire the business solely with a view to retaining the financial side and hiving off, stripping or whatever other phrase might be appropriate, the rest of the business, ignoring the benefits of a balanced and combined business of the kind that exists already, and ignoring the proper concern of the staff. Therefore this Amendment has been tabled in the hope that the Government, if they are not able to incorporate it in the Bill itself, will be able to affirm that it is their intention, so far as they reasonably can—and one has not included here a period of years because I think that is a difficult thing to do—to ensure that the Minister, who is the responsible person, is satisfied that before he consents to the disposal of the business of Thomas Cook and Sons it is established that those who are going to acquire that business are acqiuring it with a view to running it as a whole, and for as long as they can reasonably foresee at that time in all good faith. I hope the Government will be able to confirm that that is their view. I beg to move.

LORD SANDFORD

I am grateful to the noble Lord for giving me the opportunity to do what he asks, namely, to confirm that it is the Government's intention that Cook's will only be sold as a going concern to somebody who will maintain the business. That is the first factor on which any potential purchaser will have to satisfy my right honourable friend. To obtain this assurance purchasers are being asked two specific questions: the minimum period for which they are willing to undertake to hold the shares of the company; and whether it would be intended to dispose of any major assets, activities or companies or to close down any major part of the Group's undertaking. They have to answer those specific questions in the course of their negotiations. But once again I think the noble Lord would agree that the matter on which he has invited me to give this assurance is one for commercial judgment rather than statutory control. It may well be that in order to keep Cook's as a going concern and to comply with monopolies legislation—not perhaps in this country but in some other country—it will be necessary to make some small adjustments to the wide spectrum which at present comprises Thomas Cook's. It is conceivable that there would be small adjustments of that kind, and that is the reason why one cannot accept an Amendment as precise as this and the reason why this kind of assurance cannot be incorporated in statutory form. But I am glad of this opportunity to repeat the assurances which have been given all along in the course of the passage of this Bill.

LORD DIAMOND

That is a very clear assurance indeed, and in those circumstances I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 1 shall stand part of the Bill?

LORD DIAMOND

There are two matters which arise on Clause 1. The first is not a question, but a criticism. It has now become absolutely clear that the purpose of the Bill is not the purpose described in the Bill, and I am bound to say that this is an unfortunate and un-candid way of legislating. The noble Lord, Lord Sandford, has made it absolutely clear that it is the Government's intention—and the Government are entitled to have their way so long as the Opposition have their say—to transfer Cook's from the public sector to the private sector. If that is so the Government should stand on their philosophical beliefs and say so in the Bill. There is not one word in the Bill which says that. So I regret that the Bill is as lacking in candour as it appears to a layman like myself to be. That is the comment.

The question to the noble Lord is, can we have his view, and I hope his assurance, that the transferee of the shares will be a body or individual which is British? I hope I am not giving the wrong impression. It is very important indeed, where you have a business which handles something between £90 million and £100 million a year in travellers' cheques, which is of such interest to our balance of payments, which is so essentially a matter of credit and good faith, that it should remain, if not in 100 per cent. British hands, completely and undeniably under British control. There are already provisions and regulations under our Statutes which would ensure its continuance in that way. I hope the noble Lord can give that assurance.

LORD SANDFORD

I think the noble Lord will recall that at Second Reading I virtually gave that assurance. It certainly will be the intention that Thomas Cook's will remain in British hands. I do not rule out the possibility that among the bidders there might be a consortium which would contain foreign elements, and that might in all the circumstances be better. But I am certainly glad to give the assurance that it is the hope and intention of my right honourable friend that Thomas Cook's should remain in British hands and British control.

Clause 1 agreed to.

Remaining clauses agreed to.

House resumed: Bill reported without Amendment; Report received.