§ The Earl of KINNOULLMy 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 what restrictions are now imposed by Clause 31 of the Aircraft and Shipbuilding Industries Bill (which it is now proposed to introduce next Session) on the investment policies and decisions of directors of companies affected by the Bill.
§ The MINISTER of STATE, DEPARTMENT of INDUSTRY (Lord Beswick)My Lords, the purpose of Clause 31 is to prevent transactions which seek to dissipate the assets of companies before vesting. It is certainly not intended to restrict investment and other commercial decisions taken in the normal course of business and in good faith. We have made clear our willingness to discuss any particular difficulties with the companies concerned.
§ The Earl of KINNOULLMy Lords, I thank the Minister for that assurance. Will he agree that as the clause is worded at present any directors of the companies involved who take an investment decision lay themselves open to subsequent claims under this clause? Will he confirm that point? And if it is not the intention of the Government to take such action, and, indeed, to have talks, can he indicate whether the Government will make a Statement?
§ Lord BESWICKMy Lords, I have made it clear—and I hope that we made it clear elsewhere—that any investment decision, taken in good faith, which does not dissipate assets does not lay anyone 458 open to anything. But if there is a borderline case about which there is any doubt, we are always ready to discuss it.
§ The Earl of KINNOULLMy Lords, again may I thank the Minister for his reply? However, it seems to be one thing for the Minister to make it clear in this House now, and another thing to look at Clause 31 and see how it is worded. The two do not seem to be parallel. Could the Minister also say what are the Government's intentions regarding the timetable for introducing this Bill in the next Session?
§ Lord BESWICKMy Lords, on the first part of the noble Earl's question, what is intended by Clause 31 has been made clear in this House and also in discussion with the companies concerned. If the noble Earl has reason to believe that they are under any misapprehension, I shall be glad if he will tell me which case he has in mind. So far as the timetable is concerned, it is intended to introduce this Bill at the beginning of the next Session.
§ Lord SLATERMy Lords, is it not a rather strange procedure that Questions relating to a proposed measure that is to be introduced in both Houses of Parliament can be tabled before it is debated: that is, after the First Reading but before the Second Reading? Therefore, I should like guidance from my noble friend if that is at all possible.
§ Lord BESWICKMy Lords, I greatly appreciate my noble friend's anxiety to protect me, but the fact is that this Bill has had a First Reading. Therefore it is open for discussion. May I also say that we have taken special care to ensure that it is properly discussed.
§ Lord HARMAR-NICHOLLSMy Lords, does the noble Lord suggest that the wording is not sufficiently specific so that we cannot tell exactly where we stand in thinking of investment? To talk of "borderline cases" and "in good faith" inhibits what I consider to be a fair decision about what one's future investments will be. It is this kind of uncertainty which makes it very difficult for people to enter with confidence into the investment which the nation needs.
§ Lord BESWICKMy Lords, if every Act of Parliament were so clear that the 459 noble Lord opposite and myself could understand it, there would be no work for the lawyers to do! The intention is as clear as it can be made, but if there are difficulties we are perfectly prepared, as I have said, to discuss them.
§ Lord STRATHCONA and MOUNT ROYALMy Lords, can the noble Lord tell us what he means by "good faith"? "Good faith" towards whom—towards the Government or towards the shareholders?
§ Lord BESWICKMy Lords, if it came to that it would be a matter for issue in the courts.
§ The Earl of KINNOULLMy Lords, is the Minister aware that there is worry about the compensation payments in the Bill? This is a worry not only to the directors but to the shareholders, and, indeed, to the banking world who have to put up the investment money. Can the Minister say whether the Government have powers to underwrite certain investments during this twilight period?
§ Lord BESWICKMy Lords, the compensation proposals are as fair as we can possibly make them, although different people may have different ideas about what is fair. Nevertheless, we believe that we have struck the right medium. So far as the second part of the noble Lord's question is concerned, it would be possible to do what he suggests.