§ 2.34 p.m.
§ LORD HALEMy Lords, I beg leave to ask the Question which stands in my name on the Order Paper and to inform the Minister that I am the holder of shares in this company and have therefore a notional or fictitious interest to declare.
§ The Question was as follows:
§ To ask Her Majesty's Government what arrangements have been made for taking over the assets of Court Line Limited, what is the nature of the assets acquired and what are the figures of the liabilities assumed, and upon what terms.
§ LORD LOVELL-DAVISMy Lords, may I first commiserate with my noble friend for his misplaced interest in this subject. Court Line's shipbuilding, ship-repairing and associated interests were acquired on September 19 by the purchase for £16 million of the entire ordinary share capital of Appledore Shipbuilders Limited, Sunderland Shipbuilders Limited, and North-East Coast Ship Repairers Limited. These companies are shipbuilders in Devon and Sunderland and ship repairers on the Tyne, Wear and 1017 Humber. In addition they own a number of subsidiary companies, including a house-building company in Devon, a steel works in County Durham and marine engineering companies in Sunderland and Newcastle. The contract under which the purchase was made does not impose any additional liability on the Government. Almost all of the purchase price was applied to discharge debts owed by Court Line to the companies which the Government acquired, or to meet liabilities, under guarantee given by those companies, of Court Line's obligations.
§ LORD HALEMy Lords, with the leave of the House may I congratulate the noble Lord on making his debut at the Dispatch Box, and also Her Majesty's Government on the accession of strength which they have acquired? It is sad to have to add that, despite the clarity of his statement, it did not appear com pletely on the modest screen of my own mind with the clarity that it deserved.As I understand it—
§ SEVERAL NOBLE LORDS: Question!
§ THE LORD PRIVY SEAL (LORD SHEPHERD)My Lords, I was hoping that my noble friend would have heard one or two cries of "Question!" Will my noble friend please put the question to my noble friend Lord Lovell-Davis?
§ LORD HALEMy Lords, with the greatest pleasure in the world. What I want to ask my noble friend is, whether he can clarify the situation in relation to this company and in relation to questions? Is he aware that on Monday apparently, there is to be a liquidation, some sort of Department of Trade inquiry which has not been explicitly made known, and some sort of Departmental inquiry into holiday bookings and their compensation? Is the noble Lord aware that each of these involves considerations of the right to comment on quasi-judicial investigations and the limitations on our right to make reference to the efforts of this company quite suddenly to take advantage of all the commercial opportunities of the expanding universe?
§ LORD LOVELL-DAVISMy Lords, I do not know whether I fully caught all the questions of my noble friend. As my noble friend must be painfully aware, the affairs of Court Line and its sub 1018 sidiary companies are in the hands of the liquidator. There are at the moment two investigations being carried out; one by the inspectors appointed by the Department of Trade under Section 165 of the Companies Act who are investigating the affairs of Court Line companies to see whether there is any breach of the Companies' Act; and the other is the Parliamentary Commissioner's investigation into the question of whether there was any maladministration on the part of the Department of Trade and Industry. I am of course aware of the liquidation, and the situation to this very day, I believe, is that there is a meeting of the Court Line creditors.
The Government are unable to say what payments will be made to creditors or whether any money will be available to the shareholders. It depends on how successful the liquidator is in realising Court Line's other assets in ships, hotels and aircraft. But the main effect of this purchase was to reduce Court Line's liabilities by £10 million so that money realised from the sale of these other assets would benefit the other creditors, and perhaps the shareholders, proportionately more. If the shipbuilding companies themselves had gone into liquidation, their liquidators would have claimed the £10 million from the Court Line liquidator, and of course the break-up value of the shipbuilding and associated assets would have been a lot less than £16 million.
§ LORD SHINWELLMy Lords, can my noble friend say whether the shipbuilding assets which have been taken over are likely to prove viable; whether they are still in operation, and how many men are employed?
§ LORD LOVELL-DAVISMy Lords, the companies will continue to operate as commercial concerns under the existing management. One of the primary reasons why Her Majesty's Government took over these companies was, of course, that the purchase protected approximately 9,000 jobs in development areas. I will not bore noble Lords with a list of the companies involved, but there are in fact 18 employing, as I say, 9,000 people. The biggest employer among the 18 companies is Sunderland Shipbuilders, which employs just over 4.000 people, and the Middle Docks and Engineering Company 1019 Limited in South Shields, employing over 1,000. The rest employ considerably fewer than this number.
§ LORD BLYTONMy Lords, is the Minister aware that the residents in South Shields are very pleased that the Government took over the shipbuilding and the ship-repairing side? Is he further aware that a great development is taking place now, in that the workmen are being taken into consultation in the running of the shipyards?
§ LORD TREFGARNEMy Lords, can the noble Lord confirm that the principal shipbuilding companies were all solvent at the time they were taken over, that they are now trading profitably and that there will be no continuing liability to the taxpayer to subsidise these firms?
§ LORD LOVELL-DAVISYes, my Lords.
§ LORD SLATERMy Lords, could my noble friend confirm that when a subsidiary of a parent company goes into liquidation (or, as we say in County Durham, it goes down) then the parent company evades all responsibility so far as its subsidiaries are concerned?
§ LORD LOVELL-DAVISMy Lords, I would require notice of that question. I am not at all sure; but if the noble Lord really wishes to press this matter, I will gladly write to him.
§ LORD SLATERMy Lords, is my noble friend aware that one of the reasons why I asked that particular type of question is that we have many of these subsidiaries coming into our areas, that they are built up by their parent companies and that, as I see and understand it, the parent company ought to carry the responsibility for any of its subsidiaries if it gets into difficulties.
§ LORD LOVELL-DAVISMy Lords, this is a matter of company legislation, and I am afraid I am not fully aware of it; but I will certainly look into the matter.
§ LORD WALSTONMy Lords, if we may move to another activity of Court Line, could my noble friend inform us what steps are being taken to ensure the continued operation of the two important hotels in St. Lucia, bearing in mind 1020 particularly the importance of those two hotels to the economy of the island?
§ LORD LOVELL-DAVISMy Lords, perhaps my noble friend would be good enough to put down a Question on the matter. I think it is beyond the scope of the Question set down to-day.