HL Deb 29 April 1986 vol 474 cc134-6

2.51 p.m.

Lord Bruce of Donington

My Lords, I beg leave to ask the first Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether they propose to withdraw the immunities extended to the International Tin Council under S.I. 1972/120.

Lord Lucas of Chilworth

My Lords, as hosts to the International Tin Council, the United Kingdom is bound by the headquarters agreement to accord the immunities set out in that agreement.

Lord Bruce of Donington

My Lords, does not the noble Lord realise that the existence of the International Tin Council and indeed the validity of its corporate entity depends upon the degree of integrity of the member governments comprising it? Is the noble Lord aware that the default of most of the members of the International Tin Council has left the British creditors of the ITC in a very sorry condition—a condition in which, owing to the terms of the statutory instrument granting the immunities, there are three kinds of creditor: the first, a series of creditors who arrived at private agreements with the ITC agreeing to a waiver of their immunity; the second, those who had concluded a contract subject to arbitration; and the third, unsecured creditors? Is the noble Lord aware that owing to the refusal of the Government to eliminate the immunity, the provisions of the Insolvency Act relating to the fair distribution of assets among creditors has ceased to have any effect whatever? What do the Government intend to do to redress the unfairness that has arisen?

Lord Lucas of Chilworth

My Lords, I listened with interest to the comments that the noble Lord, Lord Bruce of Donington, made. In answer to the questions that he asked, I would say, first, that the Government are not satisfied, on the basis of breach of the tin agreement or otherwise, that there is any legal justification for withdrawing the immunities. Secondly, that there may have been arrangements between the ITC and some creditors is a matter between the ITC and those creditors. It is certainly not one for Her Majesty's Government.

In regard to the Insolvency Act, the headquarters agreement, as the noble Lord and indeed all your Lordships will know, is the usual agreement when international bodies take up office in any country so as to avoid those provisions. Lastly, in so far as other creditors are concerned, since there are a number of legal actions about, I do not think that it would be helpful for me to make any comment that might prejudice the position of both the Crown and others in any legal proceedings that may flow from that collapse.

Lord Molloy

My Lords, will the noble Lord the Minister not agree that what is causing grave irritation in the tin mining industry in Cornwall is that those involved—management and workers—realise that because of this country sticking to its own SI and to the agreement with the ITC, all that we derive from such honourable adherence is unjustified punishment?

Lord Lucas of Chilworth

My Lords, the noble Lord should, I think, address the first part of his question to me when I answer the second Question on the Order Paper in the name of the noble Lord, Lord Bruce of Donington. As to the wider issue, it was certainly regrettable that some ITC countries refused to participate in the proposed settlement made in March. That is a matter of some regret to ourselves.

Lord Williams of Elvel

My Lords, is the noble Lord able to tell us today exactly what are the obligations of individual member governments under the International Tin Agreement; whether the obligations are joint and several, or merely several; and what is the total potential liability of the United Kingdom Government under that agreement?

Lord Lucas of Chilworth

My Lords, I regret very much that I cannot answer the question of the noble Lord, Lord Williams, with regard to joint and/or joint and several responsibility, since the various advices that Her Majesty's Government have had are not totally in accord. There are different views with regard to that point. The Government's liability is restricted under the agreement to 4 per cent. of the amount involved. Again, at this stage I am not able to tell the House what those liabilities may total since all claims have not yet been registered.

Lord Paget of Northampton

My Lords, does the noble Lord agree that an immunity that can be withdrawn after the event but before implementation is a little bit like an umbrella being let subject to it not raining?

Lord Lucas of Chilworth

My Lords, in 1982, when we entered into the sixth agreement, it seemed the right and proper thing to do. I do not think that it would be helpful were I, with hindsight, to suggest what we might or might not have done, because events themselves have dictated this position.

Lord Bruce of Donington

My Lords, can the noble Lord give the House some indication what further steps the Government propose to take towards persuading those other governments in default to honour their obligations?

Lord Lucas of Chilworth

My Lords, I understand that discussions through diplomatic channels continue in this matter.

Lord Broxbourne

My Lords, in regard to the difficulties of interpretation and the differences arising out of the answer to the noble Lord, Lord Williams, can my noble friend say what is the machinery for resolving these matters? Does it go to the International Court of Justice or is there some built-in procedure for arbitration? What is the machinery?

Lord Lucas of Chilworth

My Lords, the determination of the machinery is in the hands of the litigants.