HL Deb 19 July 1984 vol 454 cc1652-4

5.2 p.m.

House again in Committee on Clause 1.

Lord Lloyd of Kilgerran had given notice of his intention to move Amendment No. 3: Page 1, line 10, after ("liabilities") insert ("other than intellectual property and rights or liabilities relating thereto").

The noble Lord said: The purpose of Amendment No. 3 and of Amendment No. 4, was to prevent the Government committing another folly in relation to this matter, to use the phrase used by my noble friend Lord Diamond in speaking to a former amendment. Since I prepared to submit some matters in relation to this amendment the whole scenario and the whole background have been changed by the two remarkable defeats suffered by the Government this afternoon. In the circumstances, I should like to examine the effect of those defeats on the Government this afternoon and reserve what I have to say, if anything, for Report stage.

[Amendments Nos. 3 and 4 not moved.]

Baroness Vickers moved Amendment No. 5: Page 2, line 15, at end insert— ("() A scheme shall provide that the Articles of Association of any prescribed company shall include the draft Article set out in Schedule (Limitation on Shares).").

The noble Baroness said: In speaking to Amendment No. 5, I should like to make it clear that this Bill was not in the Conservative Party manifesto and so I consider that I can speak as freely as I like. Also, I have no connection with the armaments firm of Vickers; I thought that I ought to make that completely clear.

My connection with the Royal Ordnance Factories was during the war when I visited the factories on behalf of the Ministry of Supply in connection with the welfare of the women working in them. Whether they were men or women, the people there were doing extremely fine work. I shall never forget how at nights—particularly in Woolwich, for example—they put up with the air raids and so on and still carried on with their work.

Following what has been said by the noble Lord opposite, I consider that this is an enabling Bill and I would ask the Minister again, as I did on Second Reading, whether he can tell me what is the hurry about this Bill. The amendments to which I am speaking today were put down because we were worried about the future of our armed forces and whether they would have adequate supplies. Also, this development may affect the jobs of 20,000 people. I should like to have some information from the Minister that is not quite so vague as the information we have previously been given.

One of the points about this amendment of mine is that it may not prove as helpful as the articles of association drafted by the Government, because I understand that they cannot be challenged, but the importance of the issue of foreign control should be included in this Bill.

The amendment is also important because it goes to the heart of the problem of acquiring control of the ordnance factories, if and when they are sold off. Again, there is nothing in the Bill about acquiring control. In my opinion, there should be cast-iron guarantees preventing ordnance factories from falling into foreign control. The draft article imposing a limitation on shareholdings is in the schedule and I am not going to discuss that now. I should just like to point out to my noble friend that this amendment is based on that; it does provide some guarantee and confers on the Secretary of State certain powers, as stated in the schedule.

The principle behind the articles of association is that the company is required to maintain a register of shares, or any interest in shares, held by people not of British origin; in other words, who are not British citizens. The number of shares to be held must be entered in a register and must not exceed, I understand, 15 per cent. of the total issued share capital of the company.

The issue of foreign control is of the utmost importance in the privatisation of the Royal Ordnance Factories, and, in the interests of national security, the articles of association should be enshrined in legislation. When replying to the debate in another place, the Minister said that the Bill, if given these articles of association, would not be as flexible as the Secretary of State might require. Once a Bill becomes an Act, any change in the articles of association would require amendment to the Act. I therefore suggest that this amendment is of national importance. I can see no reason why the Secretary of State should not come to Parliament to seek consideration of an agreement to any change. This is very important and should be included. It is Parliament and not the Treasury which should control the future. I hope therefore that my noble friend the Minister will take an interest in this and give a satisfactory reply. I beg to move.

Lord Trefgarne

I had understood that it might be for the convenience of the Committee if we take Amendment No. 14 with my noble friend's amendment, together of course, with Amendment No. 38—which I believe she agrees is linked with it. Amendment No. 14: Page 3, line 22, at end insert ("and () each transferor company and each transferee company is required under its Memorandum and Articles of Association to issue to the Secretary of State a single share of a nominal value not exceeding £1 giving the holder the right to veto any changes in the structure of the company or of its business."). Amendment No. 38: After Schedule 3, insert the following new Schedule—

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