HL Deb 03 July 1975 vol 362 cc329-33

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether they have read the reports in the Sunday Telegraph of 1st June that GEC and Vickers and a third engineering company all made approaches to the Government in an effort to help the Ferranti company to solve its difficulties and that these approaches were strongly discouraged.


My Lords, I am obliged to the noble Lord for calling my attention to that newspaper report and for giving me this opportunity of saying that the report did not correctly represent the facts. No viable proposals were made by the private sector which would have secured for Ferranti Limited a future as a single entity, and it follows that none was dismissed by the Department of Industry in the manner suggested by the noble Lord on 14th May and by the newspaper report of 1st June.


My Lords, the noble Lord in his reply is saying that no proposals were made. Is he denying that any inquiries were made at the Ministry from Vickers, from GEC, and from another electrical giant? Obviously, firm proposals cannot be framed until some acquiescence and willingness is shown by the Ministry. Are we clear that there is no possible foundation for these reports that inquiries were made at the Ministry by these responsible companies?


Yes, my Lords. I am saying that the newspaper report to which the noble Lord has called my attention is not accurate. While it is perfectly true, as I told the noble Lord at the time, that there were inquiries, there were never any proposals and there was certainly never the kind of behaviour on the part of my officials which the noble Lord indicated.


Yes, my Lords, but I make the point that the Industry Act 1972 lays down that taxpayers' funds cannot be used to assist a firm if there is any alternative. Obviously, no alternative can be submitted unless some willingness to accept it is shown by the Ministry. Is it not very important that Government Ministers—in this case, Mr. Wedgwood Benn—should not try to bend past Acts to suit their philosophies, but should act with the utmost discretion and integrity?


My Lords, I absolutely agree with the noble Lord: we should all act with discretion. That is the course I was advising him to take at the time we had the other exchanges. As for the inquiries, may I remind the noble Lord of what was said in that Sunday Telegraph article? It said: In a notable and painful interview Mr. P. A. Matthews, the managing director of Vickers, was ' warned off ' by the Department of Industry ". The managing director dismisses this as a nonsense, and he has permitted me to quote from the speaking brief which he issued from Vickers the following day, which said: We were approached by Ferranti, but this was very late in the day. We certainly would not have wished to take over the whole of the Ferranti business and we decided not to become involved ". In my judgment, the newspaper had no right to print what they did in the light of the facts.


My Lords, for clarification can the noble Lord tell us, if the newspaper reports are wrong, whether he is in fact saying that no approach was made by other companies to come to the rescue of Ferranti?


My Lords, what I am saying, and what I repeat, is that no viable proposal was made. Of course there were inquiries; of course there were discussions. These discussions were never followed and there was never any viable proposal for taking over Ferranti as a whole.


Oh no, my Lords! The noble Lord is now beginning to wriggle on this one, because of course you cannot—

The LORD PRIVY SEAL (Lord Shepherd)

My Lords, would the noble Lord permit me to intervene? It seemed to me that the noble Lord was entering into debate. The purpose of Question Time is to put questions. When he puts his point, will he please put it in the form of a question and not in the form of a debating point?


My Lords, I bow to the noble Lord and I am glad to have his correction. Is the Minister aware that it is impossible for any industrial concern to offer a firm proposal unless discussions take place within the Ministry and they have an opportunity of framing some proposals regarding the money which may be available? Should not the Ministry lean over backwards to give these opportunities to industrialists who come forward from such companies as GEC—who did not even get an answer to their letter when they made a proposal to try to help Ferranti? This is surely not the way for a Ministry to act with responsibility.


My Lords, if the noble Lord will permit me to say so, he is now floundering. He is making hopeless accusations, none of which could be justified. It is not possible for me to enter into all the discussions that took place, but I assure him that there was never any question of anybody being "choked off", which is what he originally suggested.


My Lords, would my noble friend agree that it is the consistent and enthusiastic practice of those officials in the Department of Industry who advise the Secretary of State and are responsible for advising the Industrial Development Advisory Board, to make the maximum effort to get the involvement of private firms in helping other firms in difficulty on every occasion? May I say that I speak with experience?


My Lords, would the noble Lord consider this point? All his remarks have been in the negative. Is it utterly impossible that an account of what actually did happen should be published?


My Lords, I have considered that and it is not possible—and I have written to certain noble Lords explaining why it is not possible—to go into all the details. For example, some proposals were put forward by another company which involved the acquiescence of Ferranti, but the Ferranti company would not go along with them. Therefore, those proposals lapsed, not because they were "choked off" by the Department of Industry, but because Ferranti did not pursue them. I am sure noble Lords will appreciate that the details are confidential and that it is not, therefore, possible to publish them.


My Lords, it was the Opposition who nationalised the Rolls-Royce industry because they failed, and if Ferranti is part of our defence system and no help was forthcoming, then I think the Government did well to take it over.


My Lords, the last words of the noble Lord's last answer but one referred to proposals for taking over Ferranti as a whole. Was it a condition made by the Government that any proposal must involve taking over Ferranti as a whole?


My Lords, this was never laid down. In fact, the particular proposals to which I referred—we are now talking about separate proposals, not the ones from Vickers—would have dealt with Ferranti as a whole. Those proposals did not go through, because the Ferranti shareholders themselves would not agree with the financial terms involved.


My Lords, if the report in the Sunday Telegraph is wrong, has the Ministry asked that newspaper to publish an apology stating that it was wrong?


No, my Lords. Personally I would not pursue it with the Press. However, I would have expected the Sunday Telegraph to check their facts before publishing this story.


My Lords, we have a long debate before us and eight minutes on the first Question is long enough. Perhaps we could move to the next Question.

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