Amendment made: No. 51, in page 11, line 4, at end insert
' "Subsidiary" has the same meaning as in the Companies Act 1948'.—[Mr. Michael Marshall.]
I beg to move amendment No. 52, in page 11, line 12, after 'may', insert 'not'.The reason for this amendment is that we did not want to give the Secretary of State permission to change his mind after he had nominated the company that was to become the successor company under Clause 1. Our difficulty is that we do not have the articles or the memorandum of association of the publicly quoted company, but we thought that we could pin down the Secretary of State by inserting the word "not" after "may". If the Minister can give some guidance on how he sees the transitional period, it is possible that we shall be convinced that the word "not" is not required. We look forward to hearing his remarks.
It may be helpful to spell out the amendment indetail. We consider that it is extremely unlikely that it will be necessary to vary or revoke an order nominating a company or appointing a day. We already know in what company we intend the undertakings of British Aerospace to vest. British Aerospace Ltd. was set up on 31 December 1979 as a private limited company for that purpose, known as the "shell" company to many of us who served on the Standing Committee. We shall not appoint a day until very close to the time when we are sure that a flotation will be feasible very shortly afterwards. However, there are hypothetical circumstances in which it may be necessary to vary or revoke an order.Perhaps first and most important, clause 1(2) provides that on the appointed day, the company nominated as thesuccessor company must be a company limited by shares which are wholly owned by the Crown. If on the appointed day it was found that the company did not meet that criterion, vesting under the Bill could not go ahead. If it was impossible to nominate a new company, and to appoint a new day, the vesting could never take place. In practice, it is inconceivable that the company will fail to meet the criterion since the Government, as 100 per cent. owner, will be able to ensure that it does. Nevertheless, it is a theoretical possibility and must, therefore, be provided for. Secondly, the subsection is a safeguard lest it be discovered that the company nominated under clause 1 is not a "clean" company for the purposes of flotation. The hon. Member for Nuneaton (Mr. Huckfield), with his deep knowledge of the subject, will immediately appreciate the significance of the clean company for the purposes of flotation. It could perhaps have incurred liabilities which might jeopardise the public issue. Again, this is inconceivable in practice since the Government will ensure that the company does not engage in any business at all, as has been made clear on many occasions when we were asked about the activities of the shell company. Therefore, it should not incur any kind of liability whatever before vesting. Again, this is a theoretical possibility which should be dealt with. Finally, it is conceivable that between the order appointing a day and the day itself there could be some financial disaster which made an early flotation impractical. In those circumstances, we might well wish British Aerospace to remain a nationalised industry until a flotation was possible, and, therefore, temporarily to revoke the order appointing a day. I do not want to buoy up the hopes of Labour Members, but I have to say that this is a highly unlikely eventuality. Apart from anything else, I would expect the interval between the order appointing a day and the day itself to be very short indeed. Nevertheless, subsection (2) would enable us to deal with the situation if it arose. Clearly, those arguments are put forward for the avoidance of doubt, and in the light of that explanation I hope that the hon. Gentleman will withdraw the amendment.
My hon. Friends and I concur with the hon. Gentlemen in his search to find a clean company. That is something that we would certainly endorse. In view of the fact that he admits that there is a possibility that the clause as it stands may permit a 100 per cent. Government ownership of the new company—I am glad to hear him say that that could happen—that is something which we would like to leave open.I accept that there probably is a technical need for the facility that the Minister has illustrated. We understand the kind of circumstances in which the Government may need to change their mind. Provided that it is that kind of circumstances that the hon. Gentleman seeks to facilitate, and not the kind of circumstances which sometimes my hon. Friends and I fear, I think that we can accept what the hon. Gentlemen says. We shall, of course, look carefully at what he has said about the flexibility which is now permitted, if so desired, for this company to be 100 per cent. Government owned. Having said that, and again noting that we always seem to make better progress when the Minister of State is not saying anything, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.