§ 2.43 p.m.
§ The Question was as follows:
§ To ask Her Majesty's Government when they propose introducing legislation to amend the Aircraft and Shipbuilding Industries Act 1977 so as to 910 ensure that certain shipbuilders nationalised under that Act are not compensated on almost wholly confiscatory terms, particularly in view of the United Kingdom's international obligations.
The MINISTER of STATE, DEPARTMENT of INDUSTRY (Viscount Tren- chard)
My Lords, the present Administration are not responsible for the 1977 Act, and strongly criticised its proposed provisions when in opposition. None the less, ownership of the nationalised companies was effectively transferred to the Government from 17th March 1975— the date of the previous Administration's safeguarding statement— and the Act related compensation to Stock Exchange prices in a six-month reference period ended 28th February 1974. In the light of this, it would be wrong to call the terms "almost wholly confiscatory", however unfair the terms later became for certain companies. The Government have great sympathy with stockholders who consider that they were treated harshly on this account, but I fear that retroactive amendment of the compensation terms would raise very difficult issues, produce a host of new unfairnesses, and further delay the final settlement of compensation.
§ Lord MONSON
My Lords, I thank the noble Viscount for his reply, although I must say that it was very far from satisfactory. Is the noble Viscount aware that for the State compulsorily to acquire people's property for less than one-fifth of the market value and for less than one-fifth of the asset value is not only totally Marxist, but also contravenes subsection (2) of Article 17 of the United Nations Universal Declaration of Human Rights, together with Protocol 1 to the European Convention on Human Rights, and the Washington Convention?
Is the noble Viscount further aware that a great many of his noble friends, including several Ministers and former Ministers, have in this House described these terms as tantamount to expropriation, farcical, glaringly unfair, derisory, a serious inroad into freedom, dangerous to democracy—
Several noble Lords: Reading!
§ Viscount TRENCHARD
I am aware of all those matters, my Lords. Certainly the Government still believe what Members of the Government said in Opposition: that the compensation terms based on the six-month period and on market values of that six-month period have proved very harsh on a number of companies. There is no doubt about that. But we are dealing with a date which was a long time ago, and since then many share transactions have taken place on the basis of the law as it was then enacted and as per the announcement and the six-month period which ended on 28th February 1974. One really would create enormous numbers of unfairnesses if, after more than five years of share transactions on the basis of the law as established at the time, one then changed it. One also has problems in regard to the fact that 14 out of the 24 companies have already settled under the terms of the Act. So the problems of such a degree of retrospection are really extreme.
§ Lord KALDOR
My Lords, may I ask the noble Viscount whether the principles applied in settling the terms of compensation were any different from those applied in earlier cases of nationalisation; or did the difference arise only because that happened to be a period of low Stock Exchange prices? If the second point is the case, can the noble Viscount also tell the House in what way this is different from the case of Burmah Oil, in regard to which shares of BP were taken over by the Bank of England at a time when the share price was at the very bottom? Would not that case be analogous to the case which the noble Lord, Lord Monson, raised?
§ Viscount TRENCHARD
My Lords, I believe that I am correct in stating that more than one basis has been used for compensation of assets on nationalisation. I believe that in some cases in the past vesting date has been used, and in this case vesting date was not until 1977. I believe that there has been more than one basis, but this basis was used in this case. With regard to comparison with the Burmah Oil case, I leave it to Members of the House to make their own comparisons on moments which are of good value or bad value in terms of assets.
§ Lord ORR-EWING
My Lords, docs my noble friend recall that Labour 912 Ministers assured both Houses that the terms would be fair and equitable? Does he also recall, despite his earlier reply, that only 10 per cent. of those firms nationalised actually had share quotations, and that therefore there was no true market value? If, as is understood, it is difficult to rearrange matters and bring in a new Bill at this stage, because of what had already been done, cannot my noble friend hasten the sale back of these companies who have not settled at the value which has been determined on these rather artificially low bases?
§ Viscount TRENCHARD
My Lords, I think that my noble friend is aware from my earlier answers that Members of this Administration are quite clear that they believe now, as they believed then, that there have been some unfairnesses. I was not aware that only 10 per cent. of the companies had a market quotation at that time— I am educated by my noble friend— although I have no reason to doubt that the market valuation in relation to those companies, which was probably related to the companies that did have a market quotation, was arrived at according to the Act, and probably fairly accurately. I think that the question of sale back in relation to these companies does not yet arise. I have no doubt that as and when it does arise we shall study my noble friend's remarks.
§ Lord GISBOROUGH
My Lords, can the noble Viscount say whether it is the Government's opinion that it would be better for these companies to remain in public ownership, or whether the jobs involved and the economic prosperity of some of them would be better served by a return to private ownership?
§ Viscount TRENCHARD
My Lords, the position on that separate question has been stated in this House previously. The Aerospace Bill has passed through your Lordships' House, and I will not explain the provisions of it; and, in relation to shipbuilding, we have made a statement that the time is not yet right, although we intend, as soon as it is, to maximise private ownership in that area, too.