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Imperial Chemical Industries And Courtaulds

Volume 655: debated on Thursday 15 March 1962

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11.

asked the President of the Board of Trade whether he will now refer the production of man-made fibres to the Monopolies Commission.

40.

asked the President of the Board of Trade whether, in view of the large shareholding in Courtaulds Limited being acquired by Imperial Chemical Industries Limited, he will refer the man-made fibres industry for examination by the Monopolies Commission.

On the information at present available to me, I do not propose to refer man-made fibres to the Monopolies Commission.

In view of the fact that Courtaulds already holds 83 per cent. of the capacity in this industry and has just, by the skin of its teeth, escaped being absorbed, does not my right hon. Friend think that there is a prima facie case for such a reference in case another take-over bid occurs?

No. One has to have regard to the reasons for making references to the Monopolies Commission. We have not received any suggestions so far that the monopoly conditions are being abused.

If my right hon. Friend will not refer the industry to the Monopolies Commission, will he at least secure from the board of I.C.I. an undertaking, similar to that which he got from the board of the Imperial Tobacco Company, in respect of its holding in Courtalds? Does he not agree that the relationship of I.C.I. to Courtaulds will be very similar to that between the Imperial Tobacco Company and Gallahers?

The relationship will be rather different. In any case, I will not answer that supplementary question, because I.C.I.'s shareholders are to be addressed by their chairman tomorrow.

As the I.C.I. holding in Courtaulds is exactly the same as that of the Imperial Tobacco Company in Gallahers, why not ask I.C.I. for similar assurances?

I do not see that the evidence produced so far by right hon. and hon. Gentlemen opposite and by my right hon. and hon. Friends shows any reason for me to go rushing around asking for these assurances.

Besides his limited statutory duties and powers, surely my right hon. Friend also has responsibility for what I might call the general health and competitiveness of British industry?

Certainly, and I shall, therefore, follow the proceedings of tomorrow's shareholders' meeting with the greatest interest.

My right hon. Friend is doing his job and Mr. Paul Chambers is doing his. Why does my right hon. Friend try to hand his job over to Mr Chambers?

12.

asked the President of the Board of Trade in view of the new circumstances created by Courtaulds' promises in response to the take-over bid of 65 per cent. increase in distributed profits this year and a 105 per cent. increase in such dividends next year, which conflicts with Her Majesty's Government's policy for continued restraint in profits and dividends, as set out in the White Paper on Incomes Policy: The Next Step, why he is not prepared to reconsider his decision not to order a public inquiry into the proposed merger of Imperial Chemical Industries and Courtaulds.

19.

asked the President of the Board of Trade if he has studied the new promises made in response to the threat of a take-over bid by Courtaulds for increased dividend payments in the next two years; and, in view of the fact that these new proposals are contrary to the policy of Her Majesty's Government on profits and dividends, as set out in the White Paper entitled Incomes Policy. The Next Step, if he will reconsider his decision not to hold a public inquiry into the proposed merger of Imperial Chemical Industries and Courtaulds.

The proposals announced by Courtaulds do not, in my view, constitute any grounds for changing the Government's decision, the reasons for which I explained to the House on 14th February.

Is the right hon. Gentleman aware that at a meeting held today in another part of this city the Chancellor's White Paper on Incomes Policy was torn to shreds and thrown into the wastepaper basket? Is there not something grossly indecent in the Government doing down the railway workers and the university teachers to a miserable 3 per cent. increase after two years' waiting, while doing nothing about these fantastic and flaunted increases in distributed profits?

I refer the hon. Gentleman to what my right hon. and learned Friend said about profits and dividends. He made it clear that there was no intention of limiting the profits of individual industries or dividends paid by them, but that, as part of the long-term incomes policy, appropriate corrective action would be taken if aggregate profits showed signs of increasing excessively compared with wages and salaries.

Is it not the case that Courtaulds, in order to survive, has had to make the most lavish promises of dividend increases not only for this year but for next year? Is not this an open defiance of the Government's policy of income restraint? Does the right hon. Gentleman expect to plan the economy by holding wages down while allowing private industry to snap its fingers in the face of the Government? What is he going to do about it?

I remind the hon. Lady that the profits of many firms and industries are falling—and dividends with them.

Is my right hon. Friend aware that Courtaulds would not have made these promises if he had done his duty and had stopped I.C.I. from making this bid? Is he aware that ordinary workers feel that it is grossly unfair to put restrictions on them and then, because of his inactivity, force the directors of Courtaulds to promise dividends that they did not wish to pay? Will he do something about this?

I think that I made the position of the Government clear during the debate on this issue.

Is the increase in dividends now to be given by Courtaulds in line with Government policy? If it conflicts with Government policy, what will the right hon. Gentleman do about it?

16.

asked the President of the Board of Trade if he will exercise his powers under Section 165 of the Companies Act, 1948, to protect minority interests of shareholders of Courtaulds affected by the offer made by Imperial Chemical Industries.

That is fortunate for the country, but not due to my right hon. Friend's inaction. Is he aware that his inaction is giving the impression that he is putting private gain in front of the public interest—[HON. MEMBERS: "Hear, hear."]—and since he asked the tobacco people not to use their 37 per cent. minority vote to impede the action of the directors running the tobacco company, why cannot he ask I.C.I. to give the same guarantee to Courtaulds?

But we have not had an answer to it, Mr. Speaker. I regard it as of great importance in the national interest.

It is not in order to go on asking the same question because one does not get an answer. It is out of order. The early part of this is a different matter.

With your permission, Mr. Speaker, I beg to give notice that I will raise this matter at the earliest moment on the Motion for the Adjournment because of the unsatisfactory nature of the reply.