§ Major Lyonsasked the President of the Board of Trade whether he can give any estimate of the varying sums paid as compensation from nucleus firms to those persons whose businesses have been concentrated therein; what, in general, is the basis on which the amount is reached; and whether, and on what determination, payment is made in respect of those concerns which, at the time of merger, were not profit yielding?
§ Captain WaterhouseThe amount of compensation paid to firms whose factories have been closed under the concentration policy is in general a matter for private negotiation between those firms and the nucleus firms with whom they are asso-1964W ciated. In the majority of cases the nucleus firm manufactures at cost for the firm with the closed factory and the latter continues to sell the goods so produced on its behalf. In these cases no question of compensation, as the term is generally understood, arises. In a few industries, however, a central compensation fund has been set up. In these cases the Board have examined the compensation schemes so as to ensure that the payments will be sufficient to provide for the adequate care and maintenance of the premises closed down, and that they will be applied in the first instance for those purposes. Neither in the usual case in which the compensation is a matter of private negotiation between two firms, nor in the exceptional case in which there is a central compensation fund, does the question of whether at the time of the concentration the closed firm was making a profit or not arise.