§ 44. Mr. Blenkinsopasked the Secretary of State for Industry whether he will make a statement regarding the position of Court Line Ltd., in particular in relation to its ship repair undertakings in South Shields.
§ Mr. BennIn my statement on Wednesday I told the House that Court Line had approached the Government for assistance.
The financial arrangements between the members of the Court Line Group and the difficulties of Court Line put into jeopardy the operations of a number of important undertakings in the group connected with shipbuilding, ship repairing and marine engineering situated in the assisted areas. I have reached the conclusion, therefore, that the best way of assisting these undertakings to escape from this position is to purchase the entire shipbuilding, ship repairing and marine engineering interests of Court Line as represented by Court Shipbuilders Ltd.
Following further discussions with Court Line the Government have agreed in principle to purchase outright the share capital of Court Shipbuilders for a consideration of £16 million. Court Line owes Court Shipbuilders £8 million. Court Line will repay £4 million of this debt to Court Shipbuilders immediately. We have decided to allow the balance of £4 million owed to Court Shipbuilders by Court Line to remain with Court Line for a short period. The National Westminster Bank has also agreed to make a parallel loan to Court Line Ltd. of a further £4 million. The terms and conditions of these two loans will be identical. A further condition will be that the assets of a number of the undertakings concerned which had been charged to meet the debts of Court Line Ltd. will be released from these charges.
The board of Court Line Ltd. has agreed to these arrangements which, it is confident, safeguard its holiday operations.
The Government's primary concern in these arrangements has been to safeguard the employment of nearly 9,000 people employed in the assisted areas by Court Shipbuilders and its subsidiaries. Existing management will remain.
8WA major modernisation scheme is in progress at Sunderland Shipbuilders Ltd., a wholly-owned subsidiary of Court Shipbuilders, and these arrangements will also allow this to continue without disruption. Court Shipbuilders Ltd. and its subsidiaries form a viable and profitable group and we intend that it should continue to be managed as a commercial operation.
The arrangements for the acquisition of Court Shipbuilders Ltd. in the circumstances provide necessary financial assistance for undertakings in the Court Line Group in the assisted areas. Consequently, I will be using for this purpose the powers in Section 7 of the Industry Act 1972.
I should add that the time-scale did not allow formal consideration to be given at the time these arrangements were made by the Industrial Development Advisory Board.
§ Mr. Tom Kingasked the Secretary of State for Industry whether he has appointed, or intends to appoint, an outside company to advise on the terms of acquisition of the shipbuilding interests of Court Line Limited; and, if so, what daily rate of remuneration he has agreed for its assistance.
§ Mr. MeacherNo.
§ Mr. Bruce-Gardyneasked the Secretary of State for Industry what estimate he has made of the cost to public funds of taking the shipbuilding enterprises of Court Line Limited into public ownership; what steps he is taking to ensure that there is no resulting subsidisation, whether direct or indirect, of taxpayers who choose to increase the balance of payments deficit by holidaying abroad by taxpayers who choose to stay at home; and if he will specify the precise section and subsection of the Industry Act under which he proposes to operate in this instance.
§ Mr. BennI would refer the hon. Member to the statement I have made today in reply to my hon. Friend the Member for South Shields (Mr. Blenkinsop).