§ 2.39 p.m.
§ Lord ORR-EWINGMy Lords, I beg leave to ask the Question which stands in my name on the Order Paper. I think it would be right to declare an interest as I have 200 directors' qualifying shares in one of the 40-odd companies concerned.
§ The Question was as follows:
§ To ask Her Majesty's Government why they have failed to carry out the 169 ministerial undertaking made during the passage of the Aircraft and Shipbuilding Industries Bill that compensation payments would be "early and substantial" and whether they can now estimate the total of cutback in investment and jobs lost as a result of the failure.
§ Lord WINTERBOTTOMMy Lords, the Government have carried out their undertaking. Payments on account of compensation have been made in respect of all companies nationalised under the Aircraft and Shipbuilding Industries Act 1977. The payments are substantial in relation to the Government's preliminary view of their likely negotiating position and the great majority were authorised within nine months and seven months of the respective vesting dates for aircraft and shipbuilding companies. The compensation payment is used in whatever manner the recipients decide and does not necessarily affect employment or capital investment.
§ Lord ORR-EWINGMy Lords, is the noble Lord aware that in March, 1976, during the deliberations of Standing Committee D in another place, the right honourable Gerald Kaufman said:
Payments on account should be substantial and should be made at the earliest possible moment".—[Official Report.—Commons, Standing Committee D, 9/3/76, col. 1600.]In reply, does the noble Lord consider that the disbursal of £28 million among 43 companies, in view of the fact that the global total is probably nearer £550 million, is a really substantial payment, and is it honouring the promises given by Ministers in both Houses?
§ Lord WINTERBOTTOMMy Lords, the House may remember that I repeated the formula originally stated by my right honourable friend in another place. Whether or not it is substantial is a difficult question to answer. As I said in my reply, the Government's view is that the payments are substantial in relation to the Government's preliminary view of their likely negotiating position.
Lord CAMPBELL of CROYMy Lords, is the noble Lord aware that payments so far to Vickers Limited have been described by its chairman, the noble Lord, Lord Robens, as derisory, and that formal discussions on compensation have 170 not yet even started? Why are the Government causing that company's investment programme to be reduced by one-third at a time when investment in manufacturing industry and jobs are badly needed? Is the noble Lord also aware that Britain has had reason to complain in the past about the expropriation by other countries of British assets without prompt and adequate compensation? Are not the Government now failing to live up to those words?
§ Lord WINTERBOTTOMMy Lords, I am aware of the chairman's statement. What happens in other countries is not, I think, directly relevant to our problem today.
§ Lord DENHAMWhy not?
§ Lord WINTERBOTTOMBecause I am not responsible for other countries, my Lords. I agree it is essential that this matter should be settled as soon as possible, but as to what is happening in areas of expropriation—and Her Majesty's Government will not expropriate any company; compensation will be paid on an agreed basis—I cannot agree that comparability with other countries is relevant to our discussion today.
§ Lord ROBBINSMy Lords, if the noble Lord—whose honourable intentions no one in this House would call in question—were in charge of other people's money, would he not be looking for other countries where similar treatment is not meted out to the legitimate owners of shares?
§ Lord WINTERBOTTOMMy Lords, the noble Lord is correct in that capital flow for new investment goes to those countries where it is secure.
§ Lord DRUMALBYNMy Lords, does the noble Lord recognise that in this matter the Government's credit is involved? Is he aware that, while the word "substantial" is obviously a relative term, the word was used without qualification, and certainly nobody had in mind that it was going to be qualified in the way in which the noble Lord has been told to qualify it today? It was said that payment would be substantial in relation to a preliminary view of the Government's negotiating position. This situation will do great damage of British credit.
§ Lord WINTERBOTTOMMy Lords, I am as jealous of the Government's credit as I am of my own.
§ Lord CARRINGTONMy Lords, does the noble Lord realise that the whole House will regard his answers as unsatisfactory? What are the Government going to do about paying their debts and acknowledging that they made promises which they have not kept? Will the noble Lord tell the House when it is expected that all this money will be paid to those people who actually have it owed to them?
§ Lord WINTERBOTTOMMy Lords, we are in an unhappy position where obviously a major bargaining operation is in progress. The Government have one view—that is the preliminary view of the value of the shares. There are other views of the value, one of which was stated in a letter to the Financial Times, I think yesterday. I feel that everyone in the House would wish that the negotiations could start as soon as possible, as well as be completed as soon as possible. I would have hoped that the finer points of negotiation were dropped, so that we could get down to the hard business of final figures.
§ Lord MONSONMy Lords, is the noble Lord aware that the rate of interest on the Government's stock to be issued in respect of the outstanding compensation payments will almost certainly be lower than the average bank overdraft interest rate over the period in question, and thus the companies concerned will be heavily out of pocket as a result of the Government's inexcusable procrastination?
§ Lord WINTERBOTTOMMy Lords, I do not accept that it is inexcusable, but there is no doubt that the passage of time devalues the value of money.
§ Lord BLYTONMy Lords, is the Minister aware that I hope that in negotiating a settlement for compensation we are not so stupid as to give what we gave to the mineowners and to the electricity and gas undertakings? That debt took about five years to wipe off in some cases, and in the case of the mines it took the miners almost 20 years to pay it. I hope that noble Lords on the 172 Benches opposite will remember that those industries were subsidised by public money before we took them over.
§ Lord WINTERBOTTOMMy Lords, the calculations are based upon a hypothetical Stock Exchange value at a date prior to the announcement of the Bill, and the Government are tied to this basis of negotiation.
§ Lord ORR-EWINGMy Lords, is the noble Lord aware that this morning we read that £8 million is to be given to Lucas to create jobs? Does he not realise that if the other 90 per cent. of the money was given to the 42 companies, that of itself would start to increase investment and increase job opportunities, not only in those companies but in the capital goods industries from which they are ordering? Is this not also a paramount reason why the Government should honour ministerial promises? If promises cannot be honoured, surely in this day and age, Ministers should resign.
§ Lord WINTERBOTTOMMy Lords, unfortunately this is not a very simple issue. We are talking about negotiations. Nevertheless, as I said earlier, I think it is highly desirable that an early settlement is reached so that the money which ultimately will go to these companies is used for constructive purposes. However, I should like to point out that not every company is thinking of investing in new plant; some are considering buying new companies.
§ Lord ROBBINSMy Lords, does the noble Lord remember that when there was debate in this House concerning the basis of compensation, and some of us were urging the Government to adopt the basis which in the City and in the knowledgeable outside world generally would have been regarded as fairer, the plea was made by him that the present basis would be expeditious, and he defended it on that ground?
§ Lord WINTERBOTTOMMy Lords, I remember a very long-drawn-out battle; I cannot remember the exact details. However, in the course of that particular debate I used the words "early and substantial", echoing what my right honourable friend had said in another place.
§ Lord CARR of HADLEYMy Lords, I should like to follow up the point made by the noble Lord, Lord Robbins, because I am sure that the noble Lord, Lord Winterbottom, will recall that he and I, from our respective Front Benches, took a leading part in the debates. Does he recall that one of the main factors which in the end persuaded this House, however reluctantly, to accept a form of compensation which we believe was not right, was his promise of "early and substantial" interim payments? His personal promise on that was, in my mind—and, I suspect, in the minds of many noble Lords—a major factor in persuading us to acquiesce, however reluctantly, in the scheme of compensation as proposed in the Bill. Really, in this matter the honour of the Government and of the noble Lord is at stake.
§ Lord WINTERBOTTOMMy Lords, this is the problem of the spokesman. I in fact said this in full belief that this would happen. There are, however, extreme technical difficulties. Nevertheless, I believe that early and substantial payments on account are desirable from the point of view of productive industry.
§ Lord AVEBURYMy Lords—
§ The LORD PRIVY SEAL (Lord Peart)My Lords, we have been nearly 14 minutes on this Question. I think the Opposition have had a good run, and have made their point. If noble Lords feel we should have another minute of questioning, I am prepared because I have the next Question.
§ Lord CARRINGTONMy Lords, if I may say so, I think the Leader of the House is always in a difficult position on these occasions, and even though I for one, and indeed all of us, feel very strongly about this matter, I do not think we should bend the Rules of the House too much just because we feel strongly about something. But would the noble Lord be prepared, at any rate, to tell the Prime Minister what everybody in this House feels about this matter, and how unsatisfactory they think it is?
§ Lord PEARTMy Lords, I think the noble Lord has made a point, and I must consider it, naturally. My noble friend who has explained matters has been 174 subject to searching criticism, and I understand this from the point of view of the Opposition. I will take note of what the noble Lord has said, of course.