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Messrs Short Brothers

Volume 388: debated on Wednesday 31 March 1943

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asked the Secretary of State for Air what types of civil and military aircraft and flying boats have been designed and produced by Messrs. Short Brothers; and whether the Air Ministry has been satisfied with the types produced?

The types of aircraft designed and produced by this firm which are now in use are the Sunderland flying boat and the Stirling bomber in the military category and the "C" class and "G" class flying boats in the civil category. These types have given satisfaction as have others for which the firm has been responsible.

Is it not a fact that this firm has been established for 35 years and was responsible for producing the finest types of flying boats in the world on which all our civil aviation before the war depended?

Questions about the productions of the firm should be addressed to my right hon. and learned Friend the Minister of Aircraft Production.

They are asking this Question to prepare the way for the next.

Is any recognition to be given to Mr. Oswald Short, the head of this firm, for his great work for the Admiralty in the last war, his great work for the General Post Office before the war in the Empire flying boats, and his great work in this war?

All the subjects mentioned by my hon. and gallant Friend lie outside my responsibility.


asked the Minister of Aircraft Production what steps he is taking to ensure that the shareholders of Short Brothers receive their shares back at the end of the war?


asked the Minister of Aircraft Production whether it is intended immediately after the war to restore to the firm of Messrs. Short Brothers, Rochester, their full rights of ownership and private enterprise, recently taken from them?

The shares of Short Brothers were acquired by me under the provisions of the Defence Regulation No. 78. This Regulation provides that, if it appears to the competent authority expedient that all the shares in the company should be held on behalf of that authority the competent authority may by order made with the consent of the Treasury transfer the shares of the company to his specified nominees. The Regulation contains no provision for the return of the shares to the shareholders at the end of the war or at any other time, but provides that the shares so transferred shall vest in the transferees free from any mortgage, pledge or charge.

The price to be paid for the shares is to be fixed as between a willing buyer and willing seller, and there is no provision whereby that price can be varied as a result of any special condition attached to the transfer of the shares. It would not, therefore, be competent or proper for me to take any steps to ensure the return of the shares to the shareholders after the war.

The policy of the Government at the end of the war as to the disposal of shares acquired by them under the Defence Regulations will fall to be decided in the light of the circumstances then ruling. There is nothing in the existing position as I have stated it which would preclude the Government of the day, should it so decide, from making some fresh provision as to the repurchase of shares by the original shareholders in companies dealt with under the Regulation.

Is the Minister aware that while nobody wants to hamper his work in dealing with a purely temporary wartime difficulty, there is the gravest disquiet at the thought that he may be trying permanently to nationalise civil aircraft [Interruption]; and is it right to use a purely temporary difficulty in production to make a permanent change by the back door?

I am afraid that I am limited by what Parliament has decided, and I can only act within the ambit of Parliament's decision.

Does my right hon. and learned Friend realise that while very large numbers of people are not taking any exception to what he has done, they view with the greatest concern his reply to-day to this Question, because of the precedent which it is setting? Will he not be able to give a greater assurance to the House that what individual firms are sacrificing in the national interest during the war, and all the sacrifices for freedom which they are making, will be restored to them after the war?

I am afraid that Parliament has decided the steps which should be taken in such cases as the present, and unless other and new decisions are taken, I must operate within the ambit of these Regulations.

May we take it that the price which is paid as between a willing buyer and a willing seller will not be more than the price quoted on the Stock Exchange on the day this firm was taken over? Will the right hon. and learned Gentleman bear in mind that in the case of a previous transaction the country paid much more than that?

I do not of course decide the price. In the event of dispute, that is decided by arbitration. That has not taken place.

Will the Minister bear in mind that much of the capital is watered capital?

May I repeat to the Minister of Aircraft Production my Question that I put to the Air Minister? Will he see that suitable recognition is given to Mr. Oswald Short, the head of this firm for his great air work?

Is my right hon. and learned Friend aware that the action of the Ministry in dealing with vested interests has had a heartening effect on production all over the country?

Arising from the Minister's reply to the effect that these shares would be vested in the Government, free of all mortgage or charge, how is it proposed to deal with the bank loans of over £1,500,000? Are these to be paid off by His Majesty's Government? Secondly, will he say whether the main reason for taking over the shares of this company was a financial consideration?

The answer to the second part of the hon. Member's supplementary question is in the negative. So far as the first part of his question is concerned, I should have to have notice of that.


asked the Minister of Aircraft Production why he has found it necessary to take over the whole share capital of Messrs. Short Brothers; will the concern be restored to private ownership after the war; and will the existing shareholders be given the option to repurchase?

As regards the first part of the Question, it was in my opinion necessary for the purpose of securing effective control of the undertaking, that all shares of the company should be held on my behalf. As regards the second and third parts of the Question, I would refer the hon. Member to the reply already given to the hon. Member for East Fulham (Mr. Astor).

Arising out of the answer to the first part of the Question, may I ask the Minister whether he does not consider he could have attained the objects he had in mind by requisitioning the company at an agreed rental without taking over the share capital?

No; I am quite convinced that that method would not conceivably have worked in this case.

In view of the importance of this matter, can the Minister give the reason why this method would have broken down compared with the method he has chosen, in view of the controversy which has arisen?

The power as regards requisitioning does not extend to the business, but only to the physical assets, and it is not possible to take over the physical assets without taking over the business.