§ 2.52 p.m.
§ Lord SHINWELLMy 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 any action is contemplated to prevent the Furness Shipping Line being taken over by a Bermuda company whose largest shareholder is resident in Switzerland.
1244§ Lord JACQUESMy Lords, purchase by Eurocanadian Shipholdings Limited of a substantial minority shareholding in Furness Withy and Company Limited falls within the scope of the merger provisions of the Fair Trading Act 1973. My right honourable friend the Secretary of State for Prices and Consumer Protection will consider whether a reference to the Monopolies and Mergers Commission would be appropriate in the light of any advice from the Director General of Fair Trading who is obtaining information from all the principal parties, including the trade unions, and others who may have a relevant interest.
§ Lord SHINWELLMy Lords, is my noble friend aware that the Eurocanadian shipping company has not infiltrated financially into Furness Withy, but into one of its subsidiaries, Manchester Liners? Is he also aware of the fact that Furness Withy—which is probably one of the largest shipping companies in this country and in the world—is of the utmost importance to this maritime country of ours, both in the carrying on of trade and from a security point of view? Will the Government treat this matter with the utmost urgency in order to ensure that this British shipping company remains British?
§ Lord JACQUESMy Lords, we are aware that the Canadian owned company has an interest not only in Furness Withy but in one of its subsidiaries. However, we need to have a report from the Director General, because it is not yet clear that it is a relevant case for the Monopolies and Mergers Commission. Much will depend upon the report which is given to my right honourable friend by the Director General of Fair Trading. In the meantime, there are precautions and safeguards against a takeover of either company. First there is the safeguard that exchange control permission would be needed for acquisition of a holding exceeding 29.9 per cent. Secondly, under the City Code on Takeovers, when a shareholding exceeding 30 per cent. is acquired, the holder is required to make a bid on the same terms for the rest of the shares, which would obviously take time. Thirdly, if and when a reference is made to the Monopolies and Mergers Commision, the Secretary of State has order-making powers to prevent any further acquisition of shares during the 1245 merger investigation. We believe that the position is adequately safeguarded.
§ Lord SHINWELLMy Lords, does the noble Lord realise that the answers to these questions savour of the utmost complacency? The attitude of the Government in matters of shipping indicates that they regard shipping as a Cinderella of our industries and services. Is he aware that this Eurocanadian company is a very mysterious affair and that there is no question about one fact; namely, that the principal shareholder is not in Bermuda or Canada but is resident in Switzerland and concerned solely with the financial interests? Will the Government take care that the British maritime industry is protected against infiltration of this kind, which cannot do the shipping industry of this country, or Great Britain itself, any good?
§ Lord JACQUESMy Lords, I have very good reason to believe that the Government are not complacent on this issue, and that, if necessary, they will take action, either under the Fair Trading Act or the Exchange Control Act. The Government know exactly what they are doing.
Baroness WARD of NORTH TYNESIDEMy Lords, may I ask the noble Lord whether official representation has been made to the Government on this issue? This is of the greatest possible importance before any action is taken by Her Majesty's Government.
§ Lord JACQUESMy Lords, there has been communication between Furness Withy and the Government; and the trade unions concerned have made it known that they are against the takeover. In the meantime, the Director General is getting detailed information from these and other parties.
§ Lord SHINWELLMy Lords, is my noble friend aware that these references which he has made to safeguards, the Fair Trading Act, et cetera, are not worth the paper that they are written on? Unless something is done about this the Government are in for a lot of trouble, and I am going to take part in that trouble.
§ Lord JACQUESMy Lords, from the footnotes on my brief, I know that the Government are aware that my noble 1246 friend is likely to make trouble on this issue. I will tell him that the Government are not only fully aware of that but are prepared for it, and they will be able to justify their position in the end.