HL Deb 07 May 1975 vol 360 cc299-300

2.36 p.m.

The Earl of KINNOULL

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 will give an assurance that aircraft companies that come within the Government's plans for nationalisation will be guaranteed full compensation for any further investment made during the interim period in addition to the broad compensation terms already announced relating to a 1972 share price formula.

The MINISTER of STATE, DEPARTMENT of INDUSTRY (Lord Beswick)

My Lords, companies will be able to make new investments from internally generated sources without affecting compensation; where new securities have been issued or new loans made to finance the new investment, these will be brought into account at their full value in settling compensation, or repaid in full as appropriate.

The Earl of KINNOULL

My Lords, while thanking the Minister for that assurance, may I ask whether he is aware that, outside this interim period, there is deep concern in the country that under the present Bill for the nationalisation of the aircraft and shipbuilding companies Parliament will be asked to pass a new form of arbitrary compensation outside the normal principles of valuation of the companies? Can the noble Lord give any assurance that the Government have not totally shut their minds to receiving deputations on the form of compensation that will finally take place?

Lord BESWICK

My Lords, I do not accept that there is to be arbitrary compensation, unless the use of the word "arbitrary" is a variation of the word "arbitration". We have said that, where necessary, there will be arbitration, and it is not an unknown system that is intended to be applied. The system is quite well-known to the Inland Revenue authorities. So far as the representations are concerned if the noble Earl would care to write to me and tell me his exact fears I will endeavour to answer him.

Earl FERRERS

My Lords, if capital from outside is to be fully compensated—that which is introduced since The arrangements were made—will the interest on that capital also be allowable for compensation?

Lord BESWICK

My Lords, I should like to take advice on that point. It will be treated as an addition to the assets since 28th February 1974 and compensation will be paid in full. As to the interest, I will consider that point and let the noble Earl know.

Lord TREFGARNE

My Lords, is it intended to pay compensation in cash or will there be some form of bonds or other securities?

Lord BESWICK

My Lords, it will be in some form of bonds.