HL Deb 17 March 1975 vol 358 cc520-38

4.5 p.m.

The MINISTER of STATE, DEPART-MENT of INDUSTRY (Lord Beswick)

My Lords, it may be for the convenience of the House if, with your Lordships' permission, I repeat the Statement being made in the other place by my right honourable friend. The Statement is as follows:

"With permission, I will read the Statement on the Government's proposals for the public ownership of the aircraft and shipbuilding ship-repairing and marine engine industries. A Bill containing these proposals will be brought before the House shortly after Easter. I am circulating in the Official Report and have made available in the Vote Office a full statement of the Government's proposals for the ship-building industry, following discussions with many interested parties on the discussion paper which I published on 31st July 1974. I am grateful to all those who sent in comments on the discussion paper and took part in the consultations.

"Turning now to the aircraft industry, I have received a number of comments on the consultative document which I published on 15th January 1975 and I am still considering some aspects of these. I can, how-ever, now announce that the Government have decided, in the light of representations made to me, to alter the criteria governing the scope of public ownership to include companies with a turnover, including that of subsidiaries, of over £7½ million instead of over £20 million in the relevant year. The effect of this will be to include Scottish Aviation Ltd.

"Next, I wish to outline the proposals for compensation which the Government intend to put before the House in the forthcoming Bill, in respect of aircraft, shipbuilding, ship repairing and marine engine companies. Compensation will be determined by reference to the value of the securities of the companies to be acquired. Securities quoted on a recognised stock exchange will be valued at their aver-age price during the six months ending 28th February 1975, subject to any necessary adjustment to take account of rights or capitalisation issues. The value of unquoted securities will be determined as if they had been quoted during the same period, by agreement between the Secretary of State and a stockholders' representative or in de-fault of agreement by arbitration. No deduction will be made from the values so determined in respect of Government aid given before 28th February 1974. The value of the securities may be held to depend in part on expectations about future Government aid of a discretionary kind. Such expectations will not be taken into account in valuing for compensation unless the terms of the aid had been settled with the company by the 28th February 1974.

"There will be separate provision for debts owed by any company to be acquired to companies or persons closely associated with the company; that is, inter-company debts. These will be treated in appropriate cases as securities and valued accordingly. Genuine short-term inter-company debts will be compensated in full. An appropriate deduction will be made from the compensation if a company's assets have been dissipated in anticipation of nationalisation between 28th February 1974 and 17th March 1975. A deduction may also be made for reductions in inter-company debt after 28th February 1974. The Secretary of State will be open to receive representations from interested persons whether share-holders or other about the value to be placed on securities under the legislation and in the event of arbitration may bring such representations to the attention of the arbitrator.

"Finally, I am circulating in the Official Report and have made avail-able in the Vote Office a summary of the provisions which will be in the Bill to safeguard the assets of the aircraft, shipbuilding, ship repair and marine engine companies to be taken into public ownership in the period up to vesting day. No company will be penalised as a result of action taken in the normal course of business and in good faith, and commercial contracts including those with the Government, will remain binding on the new Corporations. The Government reserve the right to strengthen these provisions in the event of serious dissipation of the assets of companies to be nationalised or the adoption of other devices to frustrate the manifest objectives of nationalisation. Any such strengthening may be retrospective in its effect.

"My Lords, that is the end of the Statement.

Following are the documents referred to.

"PUBLIC OWNERSHIP OF SHIPBUILD-ING, SHIPREPAIR AND SLOW SPEED DIESEL MARINE ENGINE INDUSTRIES

THE SCOPE OF PUBLIC OWNERSHIP

1."The Government have decided that the objectives of public ownership will be achieved by nationalising companies incorporated in Great Britain which meet the following definitions. A list of the companies which meet each of the definitions is annexed to this statement.

i. Shipbuilding Companies

Companies which on 31st July 1974 were entitled, either alone or together with another company which was then a member of the same group of companies, to an interest in possession in a shipyard which on that date was being used for the construction of ships and in which in the period of three years ending on that date were completed ships the total tonnage of which, when aggregated with the total tonnage of ships completed in the same period in shipyards in which any other company in the same group was entitled to an interest in possession, exceeded either:—

  1. a. 750 standard displacement tons in respect of warships, or
  2. b. 15,000 gross tons in respect of other ships, or
  3. c. 500 standard displacement tons in respect of warships and 10,000 gross tons in respect of other ships.

ii. Shiprepair Companies

Companies which: —

  1. a. on 31st July 1974 were engaged in the business of repairing, refitting, converting or maintaining ships; and
  2. b. on that date were entitled to an interest in possession in a dry-dock or graving-dock ; and
  3. c. whose turnover for the relevant financial year when aggregated with the turn-over for the relevant financial year of all their subsidiaries or fellow subsidiaries engaged in the business referred to in sub-paragraph (a) exceeded £3.4 million. For this purpose relevant financial year in relation to a company means that one of the company's financial years, within the meaning of the Companies Act 1948, for which accounts were last laid before it in general meeting before 31st July 1974.

iii. Slow Speed Diesel Marine Engine Manufacturers

Companies which on 31st July 1974 were engaged in the business of manufacturing diesel engines:—

  1. a. designed for use for the main propulsion of ships ; and
  2. b. designed to deliver continuously at a crankshaft speed of less than 160 revolutions per minute, a power output greater than 4,000 horsepower as measured under the operating conditions specified in the British Standard Specifications published on 19th February 1958 under the number BS649:1958 (specification for the perfor-mance of reciprocating compression— ignition (diesel) engines, utilising liquid fuel only, for general purposes).

iv. Training Companies

A company which on 31st July 1974:—

  1. a. was engaged in the business of training persons in any of the skills required for the repairing, refitting, conversion, maintenance and construction of ships; and
  2. b. was a member of a group of companies of which another member fulfilled the criteria in paragraph i or ii above.

EFFECT OF PUBLIC OWNERSHIP ON COMPANIES

2. "The Bill will provide for the establishment of a public corporation, to be called British Shipbuilders, in which the shares of the companies to be nationalised will be vested. This means that the companies will be nationalised as going concerns.

ORGANISATION UNDER PUBLIC

OWNERSHIP

3. "The Secretary of State will appoint the Chairman and other members of the public corporation numbering between seven and twenty. After the Second Reading of the Bill it is intended to set up an Organising Committee consisting of the Chairman Designate and a nucleus of other members of the new Corporation which will work in close consultation with the Government, the manage- ments and the trade unions in preparing detailed plans for vesting and for the initial organisation.

4. "It will be for the Organising Committee and the Corporation to propose the detailed structure of the organisation in close consultation with the representatives of those who work in the industry and with its customers. The Corporation will be able to adapt its organisation in response to changing conditions. At the same time the Government and Parliament must be concerned with the main features of the organisation of a big publicly owned industry. The legislation will therefore require the Corporation to submit from time to time to the Secretary of State reports on the broad structure of its organisation after full consultations with the representative organisations of those working in the industry. These reports will be laid before Parliament. The Secretary of State's approval will be necessary to implement the proposed initial organisation or any subsequent major change. The Secretary of State will also have powers to give the Corporation specific directions on the main features of its organisation. The Government feel sure that the Organising Committee and the Corporation will give full weight to the view of many on both sides of industry that individual shipyards should be given as much responsibility as is consistent with the discharge of the Corporation's functions.

5. "The headquarters of the Corporation will be in an assisted area with a tradition of shipbuilding.

INDUSTRIAL DEMOCRACY

6. "The Government attach great importance to developing industrial democracy in the ship-building, shiprepair and marine engine industries. The comments on the Government's discussion paper of 31st July 1974 have shown that those working in the industry have import-ant and constructive ideas on how this development can be brought about. The flexible arrangements for the organisation of British shipbuilders will provide scope for the natural and organic growth of industrial democracy taking into account the views and proposals put forward by management, workers and trade unions concerned. The Government will consider provisions in the Bill to encourage and assist this growth.

POWERS AND DUTIES

7. "The main duty of the Corporation will be to promote the efficient and economical design, development, production, sale, repair and maintenance of ships and slow speed diesel marine engines and to promote related research using the skills and talents of all those working in the industry to the full. The Corporation will also be required to have full regard to the essential needs of national defence.

8. "The Secretary of State will have power to give the Corporaton directions, to approve annually its corporate plan, its capital investment and research and development programmes and its annual budgets, to monitor progress against annual budgets and to obtain information.

9. "To allow flexibility for the future, pro- vision will be made for some of the main powers and duties of the Corporation and the powers of the Secretary of State to be capable of amendment by statutory instrument subject to Affirmative Resolution in both Houses of Parliament.

10 "Finance will be provided by loans on normal terms from the National Loans Fund and by public dividend capital. The Secretary of State will set a financial objective for the Corporation.

11. "The Corporation will not be restricted by its formal powers from undertaking activities which would utilise its resources (including the skills of its workers) in the national interest and allow it to take favourable opportunities to adapt efficiently to changing economic circumstances. The Corporation will therefore have wide powers to diversify its activities, subject to the approval of the Secretary of State, where this does not conflict with its main duties.

12. "The Corporation will have power subject to the Secretary of State's consent to acquire by agreement shareholdings in other companies whether at home or overseas and to enter into partnerships. The Corporation will also have the necessary powers to provide technical assistance overseas.

13. "It will remain Government policy to allow shipowners to build and repair at home or abroad according to their commercial judgment."

"ANNEX

LIST OF COMPANIES MEETING THE DEFINITIONS

I. SHIPBUILDING COMPANIES

  1. 1. The Swan Hunter Group Limited's shipbuilding companies, which comprise:
  2. 2. Vickers Shipbuilding Group Limited.
  3. 3. Scott Lithgow Limited's shipbuilding companies, which comprise :
  4. 4.Cammell Laird Shipbuilders Limited (50 per cent. of the ordinary shares owned by Government).
  5. 5.Yarrow (Shipbuilders) Limited.
  6. 6.Vosper Thornycroft Limited.
  7. 7. Austin & Pickersgill Limited.
  8. 8. Robb Caledon Shipbuilders Limited.
  9. 9. Drypool Group Limited.
  10. 10. Brooke Marine Limited.
  11. 11. Hall Russell & Company Ltd.

12. Sunderland Shipbuilders Limited (100 per cent. Government owned).

13. Govan Shipbuilders Limited (100 per cent. Government owned).

14. Appledore Shipbuilders Limited (100 per cent. Government owned).

II. SHIPREPAIR COMPANIES

15. The Swan Hunter Group Limited's shiprepair companies, which comprise:

16. The P&O Steam Navigation Company's shiprepairing companies which have an interest in the possession of a dry dock:

17. The Humber Graving Dock and Engineering Company Ltd.

18. North East Coast Shiprepairers Ltd. (100 per cent. Government owned).

19. The Laird Group Limited's shiprepairing companies, which comprise:

20. Bristol Channel Ship Repairers Limited.

21.The London Graving Dock Company Ltd.

22. Scott Lithgow Drydocks Limited.

III SLOW SPEED DIESEL MARINE ENGINE MANUFACTURERS

23. Scotts' Engineering Company Limited.

24. Doxford Engines Limited (a wholly- owned subsidiary of Sunderland Shipbuilders Limited, at 12 above).

25. John G. Kincaid & Company Limited.

26. George Clark & NEM Limited.

27. Hawthorn Leslie (Engineers) Ltd.

28. Barclay, Curie & Company Limited.

IV TRAINING COMPANIES

29. Swan Hunter Training and Safety Company Limited.

30. Yarrow (Training) Limited.

31. The Scott Lithgow Training Centre Limited."

" SAFEGUARDING PROVISIONS FOR THE AIRCRAFT, SHIPBUILDING, SHIP-REPAIRING AND MARINE ENGINEER-ING INDUSTRIES

The Bill will contain provisions to establish two corporate undertakings to which the securities of companies in lists A and B respectively will be transferred on a date to be specified as the vesting date in the Bill. The effect of the provision outlined in paragraph 6 below is that the securities of a company other than one in lists A or B may be transferred to the relevant Corporation and they may be transferred at a date later than the date specified in the Bill. The following provisions apply not only to companies whose securities are transferred to the relevant undertaking but also to the wholly owned subsidiaries of those companies which subsidiaries effectively come into public ownership when the securities of those holding companies are transferred to the relevant Corporation.

The "relevant date" where occurring in paragraphs 1 to 11 is 31st July 1974 for those companies in list A and 4 November 1974 for those companies in list B. The "relevant date" where occurring in paragraph 12 to 19 is 17th March 1975 for all the companies in lists A and B.

"THE CORPORATIONS' POWER TO DIS-CLAIM LEASES OR AGREEMENTS

1. The Bill will contain provision enabling the relevant Corporation within 6 months of the date of transfer of a company coming into public ownership, to direct the company to disclaim any lease or agreement made or varied on or after the relevant date by the company where it considers that the making of the agreement or its variation was not reasonably necessary for the business of that company or imprudent regard being had in either case to the circumstances at the time and, except where there is a reference to arbitration in accordance with paragraph 2 below, such disclaimer will become effective two months after the other parties to the agreement or lease have been notified of it.

2. " It will be provided that any person who is party to the lease or agreement which is subject to a disclaimer may, within two months, refer the matter to arbitration under the Bill, and the tribunal will confirm or revoke the disclaimer. If the disclaimer is confirmed, it will become effective at the date of its con- firmation by the tribunal. The tribunal will also have exclusive power to determine any claims resulting from the confirmation of any disclaimer referred to it, with respect to the period before the disclaimer becomes effective.

3. " These powers will not apply where the Secretary of State has approved in writing the making or variation of the lease or agreement, whether before or after its making or variation.

TERMINATION OF RIGHTS TO ACQUIRE SHARES OR APPOINT DIRECTORS

4. " The Bill will contain provision such that an agreement with a company coming into public ownership will, insofar as it entitles another person to acquire securities in the company or to appoint a director, cease to have effect as from the date of transfer of that company. The agreement will otherwise remain effective so that, if the agreement also pro- vides for the lending of money to the company, such money will remain repayable in accordance with the terms of the agreement.

5. " Any person who suffers loss by reason of the termination of a right to acquire shares in a company or to appoint a director will be entitled within 12 months of the date of transfer of the company to claim compensation from the relevant Corporation the amount of which will, in default of agreement, be determined by arbitration. This right to compensation will not apply where the right in question is conferred by an agreement made on or after the relevant date without the approval in writing of the Secretary of State. Nor will it apply where the right in question arises from the holding of securities which vest in the relevant Corporation since the general compensation pro- visions of the Bill will apply in the case of such securities.

POWER OF SECRETARY OF STATE TO AMEND LIST OF COMPANIES TO BE TAKEN INTO PUBLIC OWNERSHIP

6. " The Bill will contain provisions enabling the Secretary of State, up to three months after the date specified as the vesting date, to take steps to acquire the securities of a company not included in List A or List B below as though it had been originally included, if:

  1. "(i) the company in question has acquired rights of ownership in or to the user of the whole or a substantial or essential part of a works which, on or after the relevant date, were owned or operated by a company included in List A or List B below or by a subsidiary of such a company ; or
  2. (ii) the company in question was. on the relevant date a wholly owned subsidiary of a company included in List A or List B below but had subsequently ceased to be so

The above provisions will not apply where the Secretary of State has approved in writing, either before or after they have taken place, all the transactions resulting directly or indirectly in the changes outlined above. In addition, any company which has acquired a works in the circumstances outlined in (i) above, will be prohibited from disposing of that works after the Bill receives Royal Assent until three months after the date specified as the vesting date or until any question of the subsequent acquisition of that company has been resolved.

7. " As a corollary, the Bill will also contain provisions enabling the Secretary of State, at any time before the date specified as the vesting date, to take steps to prevent any company included in List A or List B below from coming into public ownership if that company has ceased to own or operate the whole or a substantial part of any works owned or operated by it on the relevant date or if one of its subsidiaries has ceased to own or operate the whole or a substantial part of any works owned or operated by that subsidiary on the relevant date.

8. " It will be provided that the company in question may, within one month, challenge the Secretary of State's intention on the grounds that the conditions in paragraph 6 or 7 above are not fulfilled. Where agreement is not reached between the Secretary of State and the company, the matter will be resolved by arbitration under the Bill.

THE CORPORATION'S POWER TO RECLAIM RIGHTS

9. " The Bill will contain provisions enabling the Secretary of State, up to three months after the date of transfer of a company, where he considers that it is in the public interest, to take steps to cause the transfer into public ownership of any rights of ownership in or rights in respect of the user of any works, or any invention or design whether or not subject to statutory protection which the company may have transferred or granted to any person after the relevant date and before the date of transfer of the company.

10. " It will be provided that any person whose rights are sought to be acquired under paragraph 9 above may, within one month, challenge the Secretary of State's decision. Where no agreement is reached, the question will be settled by arbitration under the Bill. The date of transfer of the rights and the compensation therefor will be agreed between the relevant Corporation and the transferor or, failing that, will be determined by arbitration. The date of transfer of the rights will in any event not be earlier than the date specified as the vesting date.

11. "These provisions will not apply where the Secretary of State has given approval in writing to the transfer or grant by the company of the rights in question, either before or after it takes place, although such approval may include conditions, including conditions empowering the relevant Corporation to reclaim the rights.

LIMITATION OF INTEREST OR DIVIDEND PAYMENTS MADE BY COMPANIES

12. "The Bill will contain provisions defining the permitted level of interest payable after the relevant date in respect of the last complete financial year before the relevant date or any subsequent period on debenture or other loans by a company coming into public ownership in respect of any period before the date of transfer as the minimum necessary for the company to meet its obligations. No payments above the permitted levels will be allowed without the prior written approval of the Secretary of State.

13. "The Bill will also provide that no dividend will be allowed to be paid after the relevant date by a company corning into public ownership in respect of any period earlier than the most recent completed financial year of the company before the relevant date.

14. "Subject to paragraph 13 above the Bill will contain provisions limiting amount of dividend which may be paid in respect of any period before the date of transfer (hereinafter referred to as a " relevant financial year ") to the smaller of the following two amounts: —

  1. (a) the net revenue of the company for the relevant financial year as certified by the company's auditor,
  2. (b) the total amount of dividends paid before 29th October 1974 in respect of the most 530 recent completed financial year of the company in respect of which a final dividend was paid before the relevant date (hereinafter referred to as "the basis financial year") as adjusted in accordance with the rules set out in subparagraph (5) below or, if no final dividend has ever been paid, such amount as the Secretary of State may determine.

For this purpose—

  1. (1) An amount shall be deemed to have been duly certified by a Company's auditor as the amount of the net revenue of the Company for any period if the auditor has stated in writing that that amount gives a true and fair view of the net revenue for the company for the period,
  2. (2) any payment to members in their capacity as members out of net revenue shall be treated as a payment of dividend,
  3. (3) any payment of dividend made before 6th April 1973 shall be brought into account as the gross amount thereof, that is to say, the gross amount thereof before deduction of income tax and any such payment expressed to be made free of tax will be treated as a net amount paid after deduction of tax and will be grossed up accordingly,
  4. (4 ) any payment of dividend made after 5th April 1973 shall be brought into account as a franked payment, that is to say, the amount brought into account shall be the dividend when aggregated with such proportion thereof as corresponds to the rate of advance corporation tax in force at the date of payment of the dividend and
  5. (5) the total amount of the dividends paid by a company in respect of the basis financial year shall be adjusted in proportion to—
    1. (a) the amount by which the issued share capital of the company at the end of the relevant financial year exceeds, or is less than, its issued share capital at the end of the basis financial year, and
    2. (b)any difference in the length of the relevant financial year as compared with the length of the basis financial year.

" A company's share capital at the end of the relevant financial year shall be computed by taking its share capital at the end of the basis financial year and adjusting it—

  1. (i) by adding the amount or the value of any consideration actually received in the period between the end of the basis financial year and the end of the relevant financial year for the issue of share capital or on the payment up of issued share capital, and
  2. (ii) by deducting the amount or value of any money or other assets paid or trans-ferred by the company during the said period for the payment or redemption of any share capital,

15. "To the rules in paragraph 14 above there are to be the following qualifications:—

  1. (i) The rules will not apply to any payment of dividend made with the prior approval in writing of the Secretary of State or made in pursuance of an authority or recommendation contained in a resolution of the directors of the company passed on or before the relevant date, and
  2. (ii) Dividend paid in respect of any period may, where the figure at paragraph 14(a) exceeds the figure at 14(b) to the extent of that excess include dividend on cumulative preference shares in respect of an earlier period.

16." The Bill will contain provisions such that where a Company coming into public ownership makes payment without the prior written approval of the Secretary of State, which is not allowed by the rules stated in paragraphs 13 to 15 above, following a resolution of the directors passed after the relevant date and before the date of transfer, the directors party to that resolution will be made personally liable to the relevant Corporation for the amount of the payments so disallowed. Any claim by the Corporation against a company must be made within twelve months of the date of transfer and, if not settled by agree- ment, will be settled by arbitration under the Bill, and the tribunal will make such orders against the directors of the company in respect of their liability as it thinks fit.

POWER OF THE CORPORATIONS TO SEEK COMPENSATION FOR FINAN-CIAL LOSSES

17. "The Bill will contain provisions such that, where after the relevant date and before the date of its transfer a company coming into public ownership has without the approval in writing of the Secretary of State—

  1. (a) made any payments to its members for the purpose of reducing the share capital of the company otherwise than by the redemp-tion of any redeemable securities;
  2. (b) redeemed any securities which the company was not under any obligation to redeem before the date of transfer or made payments in respect of the redemption of any securities which exceed the minimum payments required to satisfy the rights existing on the said day of the holders of those securities;
  3. (c) made any other payment to the holders of its securities (in their capacity as such) out of capital moneys, or distributed assets other than money to the holders of its securities (in their capacity as such);
  4. (d) made to the holders of any of its securities any payment by way of special dividend thereon;
  5. (e) entered into any transaction the effect of which is that property or rights of the company are transferred or granted to any person, and the consideration for such transfer or grant is received by the holders of securities of the company or any of them (in their capacity as such); or
    6. 532
  6. (f) being the subsidiary of another company, effected (without consideration) a transfer to that other company or a subsidiary thereof of rights of ownership in any works ;

18. " The approval given by the Secretary of State for the purposes of paragraph 17 above may be given subject to conditions which may include the reduction of compensation for securities transferred to the relevant Corporation and the reduction of the total amount of dividends which may be paid in accordance with the provisions set out in paragraph 13 to 15 above.

19. "Similarly, provision will be included such that, where after the relevant date and before the date of its transfer, a company coming into public ownership has, without the approval in writing of the Secretary of State—

  1. (a) made any payment to any person without consideration or for an inadequate consideration ;
  2. (b) sold or disposed of any of its property or rights without consideration or for an inadequate consideration ;
  3. (c) acquired any property or rights for an excessive consideration ;
  4. (d) entered into or varied any agreement so as to require an excessive consideration to be paid or given by the company or;
  5. (e) entered into any other transaction of such onerous nature as to cause a loss to or impose a liability on the company substantially exceeding any benefit accruing to the company ;

List A

List B

4.10 p.m.

Earl FERRERS

My Lords, the House will be grateful to the noble Lord, Lord Beswick, for repeating that Statement. I am bound to say that we consider this to be a bad day for the Government, because the noble Lord will know that the contents of his Statement will not be met with any enthusiasm whatsoever on this side of the House. Indeed, in the Statement, the Government have shown their determination to go ahead with the nationalisation of these two industries, an action for which they have no mandate at all. As the Statement was made this afternoon and as it is the customary courtesy to allow the Opposition Parties to have copies of Statements after 3 p.m. and before 3.30 p.m., I am bound to say that I was surprised that the first copy that I received was at five minutes to four. This had been preceded by copies of Written Answers numbering 18 pages which one was supposed to digest between 2.40 and 2.45 p.m. I hope that the noble Lord will be able to provide an explanation of why this normal courtesy was not extended. I exonerate the noble Lord himself entirely, because I know that he would wish to have extended this courtesy if he could have done so.

One wonders whether the Secretary of State for Industry deliberately did not make this Statement available in order that it should be made first in Parliament by him. If that is so, perhaps the noble Lord could tell me how it was that the first intimation I got was a duplicated version of a Press release issued by the Secretary of State for Industry, saying what was going to be in the Statement. If a Press release was issued, it is an extraordinary thing that neither of the Opposition Parties had the Statement.

The Statement indicated the Government's desire to nationalise two great industries. As the noble Lord (of all people) knows, the aircraft industry is highly profitable; and this will eliminate the sources of competition. The Government asked for opinions to be given; and they were given. The only effect has been to drop the level of turnover above which a company should be nationalised. In the case of the aircraft industry, it was from £20 million to £7.5 million. I would ask the noble Lord: Why £7.5 million? What is so curious about this figure? Why not £7 million or £8 million? Is this figure supposed to pull in one particular company? In the ship-repairing industry any company with a turnover of over £3.4 million will be nationalised. Why £3.4 million? In the shipbuilding industry any company which, over three years, has produced an aggregate tonnage of over 750 tons will be nationalised. These are sweeping proposals; and I can only tell the noble Lord that we will fight them on every possible occasion.

I will content myself with questioning thus far today. There will be other occasions to seek clarification; but how on earth does the noble Lord think that this is going to help solve the economic situation with which the country is faced at the moment? Much will depend on the value of the compensation to be paid to these industries. Who will be the arbitrator? The arbitrator is mentioned in the Statement. Who is this going to be? Is he going to be the arbitrator only of the value of shares or will he also be open to arbitration on other matters? The noble Lord said that the Bill will be introduced after Easter. Do I take it that the Government hope to have the Royal Assent before summer? Or has the noble Lord a date in mind? Is the Secretary of State still open to per-suasion? May companies still go to him to try to persuade him to their point of view, or is he entirely closed to further representations?

Paragraph 9 of the Statement says that the Secretary of State will be open to receiving representations from interested persons, whether shareholders or others, about the value to be placed on securities. Who are the "others" mentioned in the Statement? Who would be so interested? We are grateful to the noble Lord for repeating the Statement. We do not like it one tiny bit and I do not think that the Government will be surprised that we do not like it.

Lord AVEBURY

My Lords, we too are grateful to the noble Lord for repeating the Statement made in the other place. We did not get a copy of the Statement until 3.45 or 3.50 p.m. either. There has been quite inadequate time for us to consider either the Statement itself or the extremely long Written Answer which was circulated a little earlier on. Is the noble Lord aware that we on these Benches believe that the plan of the Government to nationalise the aircraft, shipbuilding, ship-repairing and the marine engineering industries is utterly deplorable and that this will not add at all to the economic potential of the country? Indeed, we consider that at a time when so many other urgent matters require Government attention, it is a severe waste of Parliamentary time and of the effort of many talented people, that these particular industries should be taken into public ownership.

I should prefer to reserve comment for the detailed debate which no doubt will take place in the near future; but I should like to ask one question referring to the limits of £7.5 million in the case of the aircraft industry and £3.4 million in the shipbuilding and ship-repairing industry. Those apply to existing companies in the industry. Will the noble Lord tell us what would happen in the case of a company which falls below these limits and which subsequently improves its performance so that it comes above them? Will it then be taken into public ownership or will it be left in the private sector?

Lord BESWICK

My Lords, I am grateful to both noble Lords for their comments. I recognise the difficulties under which they made them. I am sorry about the fact that the Statement did not reach the spokesmen of the Benches opposite; but it is usual in the case of Statements which have, or could have, an immediate effect on Stock Market values that there is an extra restriction on them. It was this which led to the apparent discourtesy which was not intended.

I was asked by both the noble Earl, Lord Ferrers, and the noble Lord, Lord Avebury, about the cut-off point in the case of the shipbuilding and the aircraft industries. The £7.5 million is a precise figure. It was there precisely because it is the figure which will bring in Scottish Aviation. Scottish Aviation is brought in as a result of representations which were made both by the men and by the management of the company. They asked whether the original decision could be reversed as a result of consultations and representations which they made; and this change was made, but it was a change made to achieve a particular objective; namely, the inclusion of Scottish Aviation.

So far as the criteria for shipbuilding is concerned, again the figures have been carefully considered and fixed in order to bring a particular category of companies into the orbit of the Bill. What one needs to avoid in this sort of case is a hybrid Bill. I think it can be shown that these figures will mean that there is no doubt about who is "in" and who is "out" and that there can be no question of arbitration. I was asked by the noble Lord, Lord Avebury, what would happen in a particular case where the turnover in-creased. Of course, these figures are the figures which apply at this time. Any increase (if there should be one) in expectation of, or spurred on or stimulated by, the hope of nationalisation would not affect the position so far as the takeover is concerned.

Lord AVEBURY

My Lords, what I meant was that if a company had a turn-over of £7.4 million and therefore was not nationalised under the Bill and if, in future years, the turnover rose to £10 million, would it then be taken into public ownership?

Lord BESWICK

No, my Lords. The same applies to that case. The figures are the figures as of now. Any change in the future would not affect the definition so far as the Bill is concerned.

I was asked about arbitration and what would happen in the event of disagreement as between the parties. In that case the matter will go to arbitration and the arbitrators will be a tribunal to be appointed by the noble and learned Lord the Lord Chancellor. I was asked about the date of Royal Assent. Obviously, I cannot give a particular date, but the intention, and the firm belief, is that it will be within the lifetime of this present Parliament—

Lord MOLSON

Of this Parliament, my Lords?

Lord BESWICK

This Session of Parliament, my Lords; I thank the noble Lord for his intervention. I was asked whether companies can still go and discuss the issues open to either the Minister or the organising committees which would be more relevant after the Second Reading. The answer is that they will be welcome to continue discussions, but of course the principle of inclusion or exclusion will not be a matter open to discussion by the organising committees, or indeed by the Minister, although I would have to add that the Bill still has to go through the two Houses of Parliament and of course one cannot exclude the possibility of Amendments.

I was asked about the meaning of "other" in paragraph 9. The noble Lord rightly pointed out that paragraph 9 said that "shareholders or other" can make representations to the Secretary of State. If he turns to paragraph 7 he will see that there could be others, including any closely associated with the company who may be owed inter-company debts, who are affected by devaluation of assets, and they can make representations. I was asked the reason for this. It is that in the case of shipbuilding there is no doubt at all that this country has not held its place in the world shipbuilding league. There have been enormous public subsidies. They have not achieved the result which we would expect, and we hope that, with the kind of strength that can come from restructuring, they will benefit from the public monies that from now on will be put into the industry.

So far as the aircraft companies are concerned, again I think the argument will be deployed at length when we get the Bill; but there is a strong feeling on this side of the House that there can be improvement by restructuring. No one doubts that there can be benefits if the two big companies are brought together; and if they are brought together and there is a monopoly position in this country, then I would expect the Liberals, at any rate, to recognise that a public monopoly can be preferable to a private monopoly. As for the kind of competition that has to be met, that competition will be among the world air-craft industry. It would be wasteful if it were competition as between one British company and another.