§ 3.8 p.m.
§ Lord AucklandMy Lords, I beg leave to ask the Question standing in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government what criteria they will use in considering the bids submitted for the Vickers shipyard at Barrow-in-Furness and Cammell Laird at Birkenhead.
§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth)My Lords, the Government have made it clear that they welcome bids from all interested parties who have the necessary skill, finance and commercial attributes to make a success of the business. Commercial considerations of this sort will be critical in the assessment of bids for Vickers Shipbuilding and Engineering Limited.
§ Lord AucklandMy Lords, I thank my noble friend the Minister for that helpful reply. Does he not accept that worker participation in share ownership is becoming more and more important these days? Will he encourage this particular shipyard, which is very important, to follow that line of thought, and will he encourage generally industries of this kind to go in that direction?
§ Lord Lucas of ChilworthMy Lords, I can assure my noble friend that in principle Her Majesty's Government do encourage the widest possible ownership of shares in all British industry.
§ Lord GrimondMy Lords, in view of the Minister's last reply, that Her Majesty's Government encourage the widest possible ownership by workers, what priority will he give to the bid that has been put in by the workers and management, which the Government must surely think will be a highly desirable outcome for this country?
§ Lord Lucas of ChilworthMy Lords, it is not for me to dictate to British Shipbuilders and Vickers themselves as to the weighting that they give to the respective elements that would be contained in any bid.
§ Lord Taylor of BlackburnMy Lords, is the Minister aware of the prospectus that was sent out yesterday by the management/workers' participation consortium? If he is so aware, will he congratulate the consortium on their initiative in getting such a prospectus out so quickly?
§ Lord Lucas of ChilworthMy Lords, I am aware that a prospectus was issued. All I can say to the noble Lord, Lord Taylor, is that the information that that contains will be taken into account in assessing the relativities of the various bids that have been made.
Lord Bruce of DoningtonMy Lords, the noble Lord referred specifically to Vickers in his reply. Is he aware that in the past two years Vickers have made a profit of some £38 million, and will he explain to the House 1161 the reasons why it is being disposed of? Will he explain what advantages to the taxpayer lie in this disposal? Is the noble Lord aware that the mere inclusion of items like this in the Conservative Party manifesto does not automatically ensure that such a disposal is in the national interest?—quite the reverse.
§ Lord Lucas of ChilworthMy Lords, I am quite sure that the noble Lord, Lord Bruce of Donington, will have at the back of his mind the announcement that was made to Parliament on 25th July 1984 by my right honourable friend the then Secretary of State for Trade and Industry, who announced at that time that it was the intention to sell the warship yards by 31st March 1986. In subsequent debates the reasons for doing so were given to Parliament and were accepted by Parliament at those times.
§ Lord CarverMy Lords, can the noble Lord assure the House that this important shipyard will not fall under foreign control?
§ Lord Lucas of ChilworthYes, my Lords.
§ Lord MottistoneMy Lords, is my noble friend aware that when I had the privilege of commanding HMS "Ajax" I took her away from Cammell Laird, who were the builders? They were then under private ownership and made a first-class job of building that ship. But is my noble friend also aware that at that stage, some 20 years ago, there were already signs that there was no proper cohesion between the management and the workforce, which later became more obvious, and that the opportunity of having a consortium which is owned by the workforce and the management would be wholly beneficial in this case?
§ Lord Lucas of ChilworthMy Lords, I was not aware that my noble friend had made such a sound judgment; neither was I aware that his sound judgment at that time was so well rewarded. I hope that those who have the responsibility of assessing the relative bids will take my noble friend's point into account.
§ Lord Cledwyn of PenrhosMy Lords, will the noble Lord clarify this matter beyond peradventure? Is he saying clearly that there will be no purchaser except a British purchaser?
§ Lord Lucas of ChilworthMy Lords, I did not say that, and that was not the question that was addressed to me. The question addressed to me was whether I could give an assurance that the yard would not fall into foreign hands. I said that I could give that assurance and I repeat that assurance.
§ Lord DiamondMy Lords, for clarification on that very point, could the noble Lord the Minister be kind enough to say by what method he can control that assurance? Does he mean by that that there will be no foreign shareholder or only a number below a certain percentage? In close connection with that, can he tell us yet whether he has found out who are the anonymous shareholders of Westland?
§ Lord Lucas of ChilworthMy Lords, since the yard is one of the defence contractors and there are implications on defence issues and national security, the Government, through the Ministry of Defence, have assured themselves that the yard will not fall into foreign ownership—
§ Lord Lucas of ChilworthHow, my Lords? When the bids are assessed in the light of what I have said, some may be disregarded because that criterion has not been met. So far as the second question of the noble Lord, Lord Diamond, is concerned, he will, I think, appreciate that it is a little wide of that which is on the Order Paper.
§ Lord ShepherdBut, my Lords, in the event that the yard has been privatised, as in the case of Westland, how do the Government ensure that after privatisation that company will not fall into foreign hands?
§ Lord Lucas of ChilworthMy Lords, in much the same way that we can ensure it through the Companies Act, the Fair Trading Act and another Act whose name escapes me for the moment. We have sufficient powers under those Acts to ensure that that does not happen.
§ Lord Taylor of GryfeMy Lords, will the noble Lord look at this proposition? The exercising of the golden share, which is applicable in other companies that have been privatised, retains power in the hands of the Government by the possession of one share to control the future destiny of this company.
§ Lord Lucas of ChilworthMy Lords, the question of a golden share occurs from time to time. At this present time, it would be wrong for me, while the various bids are being assessed, to speculate as to the necessity or otherwise of using that device.
Lord Bruce of DoningtonMy Lords, is the noble Lord aware that we cannot leave this matter where it is now? This is a matter which is already, as he said, in the bid stage. He really does not know exactly how the Government are going to maintain British interests in the matter. Why does he not say so?
§ Lord Lucas of ChilworthMy Lords, I do know, and I have given assurances that regard will be taken of that point. I very much regret that I forgot for the moment that the other Act is the Industry Act, which gives us power to assure those things which we wish to assure, which goes alongside the assurance that I gave to the noble Lord sitting on the Cross-Benches.
§ Lord TordoffMy Lords, is it not the case that, when the question of these various Acts was raised the other day, it was quite clear that the only people who could precipitate the use of those Acts were the companies themselves, and that the power does not rest with the Government to initiate that procedure?
§ Lord Lucas of ChilworthMy Lords, that is not so. I fear that the noble Lord has misunderstood. The Government can use powers under the Companies 1163 Act, the Fair Trading Act and the Industry Act. I am not prepared this afternoon to explain further why, in the case to which the noble Lord referred, the company took the action open to it under the Companies Act in preference to the Secretary of State.
§ Lord Cledwyn of PenrhosMy Lords, in view of the considerable uncertainty which remains on this issue, would the noble Lord be good enough to ask his right honourable friend to make a Statement in another place, which can be repeated here, so that we may clarify this matter beyond doubt?
§ Lord Lucas of ChilworthMy Lords, I am quite prepared to draw my right honourable friend's attention to the point that the noble Lord the Leader of the Opposition makes.