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Ferranti Limited

Volume 986: debated on Wednesday 18 June 1980

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4.30 pm

I beg to move,

That this House, recognising the signal achievements of the work force, technicians and management of Ferranti Limited since it was rescued from insolvency by the action of the Labour Government and the National enterprise Board, believes that any sale of the Board's holding in the company which threatens the well being of the company and the security and future employment prospects of its 17,000 employees would be contrary to the national interest.
In the current edition of Ferranti News, Mr. Alun-Jones, the managing director, has this to say :
" You will all have been aware of the Government's instruction to the NEB to disinvest from Ferranti Limited."
So everybody knows that it is the Government's instruction. Apparently everyone does not know that that is so, because in reply to a question from my hon. Friend the Member for Edinburgh, East (Mr. Strang) on 10 June 1980, the Prime Minister said :
" The NEB and the previous Labour Government assisted Ferranti during a very difficult period. Ferranti no longer needs that assistance. The NEB wishes to sell the shares and to obtain the best possible price. It must be free to do that."—[Official Report, 10 June 1980; Vol. 986, c. 300.]
Of course, the truth of the matter is that the NEB is about as free as a dog on a chain. It is the Government that dictate the sale of Ferranti shares, not the NEB. If evidence of that were required, one has only to turn to paragraph 9 of the draft guidelines for the NEB dated 11 December 1979, which runs as follows :
" The Board shall exercise their powers with a view to disposing to private ownership as soon as practicable all of their securities and other property."
Futhermore, it is the Secretary of State who, under paragraph 11 of the draft guidelines, decides who the NEB may dispose to and whether it can dispose at all. The Government themselves admit this; in their amendment to the motion, they talk of "the Government's intention" that the shareholding should be sold. Perhaps someone should tell the Prime Minister.

The Labour Government brought the NEB into existence because they realised that the failure of manufacturing industry in our country was primarily due to its need to modernise and to re-equip and to the lack of investment that had taken place. The present Government, on the other hand, believe in the lottery of the market place. They say so quite distinctly. The Secretary of State has many times said this. He says it again in the draft guidelines to which I have referred. He says in paragraph 2:
" The Board's relationship with their subsidiaries and other companies and persons will be conducted on normal commercial principles."
There is no question there of the national interest; it is purely "normal commercial principles."

There could hardly be a more classic case than that of Ferranti to test these two philosophies : are we in favour of public investment or are we in favour of market forces? Here, after all, is a company with a long history of advanced technological achievement, starting nearly 100 years ago—in my own constituency of Deptford. It is a company with a large and continuing series of Government contracts, and a company with perhaps the most skilled work force in the whole country, and the likelihood of expansion in its major areas of the Northwest and of Scotland, and indeed, of many other areas throughout the country. Therefore, here is a test.

What actually happened? When Ferranti got into difficulties in 1974—with all the advantages that I have expressed—this was a splendid opportunity for the private entrepreneur of whom the Secretary of State is so proud. What happened? First, the City and financial institutions were approached. They listened, and looked the other way. Then that great private entrepreneur, the National Westminster Bank, heard bravely of Ferranti's troubles, and promptly called in the overdraft. It reminds me of Samuel Johnson's letter to the Earl of Chesterfield in 1775:
" Is not a patron, my Lord, one who looks with unconcern on a man struggling for life in the water and when he has reached ground encumbers him with help?"
That is the early history of Ferranti, and it is the history of Ferranti today.

No. I do not mean to be discourteous, but this is a very short debate and I have very little time; otherwise, I would be delighted to give way. There will no doubt be other opportunities for the hon. Gentleman, and he can make his speech.

When the Ferranti family and their shareholding interest were faced with this position—with the fact that there was nowhere else to turn—they turned in desperation, no doubt hating themselves for doing it, to a Labour Government, and they asked that Government for help. What happened then was that the Government and the workers in the industry rallied round. They are the real entrepreneurs.

The Government and later the NEB, when it took over, brought in the finance and the new management required. The work force and the technicians brought in their skill and expertise.

Even the present Government, in their somewhat feeble amendment, recognise the effect that the work force and the technicians had. They say so in the amendment. Yet the work force and technicians are the only people not to be consulted by the Government.

The result today is that the company has expanded with enormous benefit to the whole country. The Ferranti family shareholding has increased in value, some say by as much as £10 million. The banks, the City and the financial institutions are buzzing away like bluebottles around a honey pot encumbering the company with help and offers.

It is against that background that the Government have decided that there must be a sale. What the Prime Minister tells us is that the sale has to be at "the best possible price." It is worth analysing that for a moment. What do we mean by "the best possible price"? All sorts of candidates are willing to offer a very good price indeed. Suppose that the best possible price in money terms were to come from foreign companies. Would the Government instruct the NEB to take that offer? Is that what it is about? Suppose that that were not so and that, instead, it were to come—as it well could come—from a large combine such as GEC, whose name has been mentioned rather frequently in this connection. Would the Government accept that as the best possible price?

I find it rather hard, in view of the Chancellor's Budget speech such a short while ago, to believe that that ought to be the Government's attitude, because the Chancellor said :
" I believe that there are cases where businesses are grouped together inefficiently under a single company umbrella. They could in practice be run more dynamically and effectively if they could be ' demerged'… and allowed to pursue their own separate ways".—[Official Report, 26 March 1980; Vol. 981, cc. 1484–85.]
If so, this would not exactly be a case of demerging. On the contrary, a very large combine would be increasing in size. It would certainly not be an encouragement to demerging. What the work force and the Opposition fear is that it would be an encouragement, instead, to closures and to redundancies. That is what we are prepared to fight.

One has to ask what would be the best possible price in the "real world" which, I believe, is the current phrase. The truth is that the best possible price has already been paid by the public. The issue of Ferranti News from which I have already quoted carries a report by the Scottish general manager telling of the enormous possibilities for further expansion by Ferranti. What is true in Scotland is probably equally true in the North-West and in other parts of the country. The expansion could well take the form of far greater participation in civil contracts. Expansion is possible. The company is healthy. It has been brought back to that state of health by the public, by those who work in it, and by the NEB.

The question arises of how the NEB achieved this situation. Why was it not achieved by the financial institutions and the banks?

That is not what has been stated. The hon. Gentleman can make his own rather curious speeches in his own rather curious way. The truth is that the financial institutions—in other words, the United Kingdom capital market—set the wrong priorities. One needs only to contrast the valuation of manufacturing companies—I assume that no hon. Member denies that manufacturing industry is required in this country—on the Stock Exchange with the valuation of property and finance companies. The evidence exists. The Economist on 10 May identified the 25 highest rated shares in terms of price-earnings ratios, excluding property companies. It found that almost one year—that was the period it took—after the present Government came to office, the highest valued company was the Savoy Hotel.

The Financial Times on 31 May found that the property companies in the Financial Times share index were valued on the Stock Exchange at about £3¼ billion—a figure comparable with the whole of the mechanical engineering and metals sectors. Therein one sees the truth of the matter and the priorities. It is a question of either public investment or market forces. Market forces have failed and will continue to fail.

In the Opposition's view, public investment should be expanded, not curtailed. In particular, the National Enterprise Board holding in Ferranti should be preserved, not simply in the interests of the long suffering tax payer, although it is in his interests, not simply in the interests of the jobs, the work force and the industry, although, again, it is in their interests, but, above all, in the interests of the health, and the possibility of expansion, of industry for the whole country. It is in that spirit and with a re-affirmation of our belief in the value of public investment and public enterprise that we have tabled the motion.

4.44 pm

I beg to move, to leave out from "Limited" to the end of the Question and to add instead thereof :

" in restoring the company to prosperity, welcomes the Government's intention that the National Enterprise Board's shareholding should be sold as soon as practicable, having regard to the interests of the company, the taxpayer and such other considerations as the Government may draw to the Board's attention.".
I shall go into more detail than the right hon. Member for Deptford (Mr. Silkin) did, because it is my purpose to explain some of the implications of the various options facing the Government. As the right hon. Gentleman has explained, it is the Government's policy that the National Enterprise Board should sell its assets. That is a summary of the position. It is a question of choosing times in the interests of the company concerned and the taxpayer. In the case of Ferranti, the National Enterprise Board has asked the Government for their advice.

If the Bill now going through the House, and due to receive further consideration this evening, passes into law, the Secretary of State for Industry will have powers, within what is lawful, to direct the NEB in the sale of its assets. Moreover, the consent of the Secretary of State is required for the NEB to sell any of its assets. The Government have not yet decided what advice to give to the NEB in connection with Ferranti, and this debate therefore comes at a fortunate time. My right hon. Friends and I will take careful account of the arguments advanced from both sides of the House. I regard it as my duty to set out some of the implications of the options that are before us.

I wish first, to pay ungrudging tribute to all concerned with the recovery of Ferranti. It has been a remarkable performance by the management at all levels and by the work force, of every skill and discipline. The House must be united in its delight at the success that has been achieved.

I accept that the decision by the Labour Government at the time to intervene in the case of Ferranti has come right. It was not a decision of the National Enterprise Board. At that time the NEB was not in legal existence. The actual negotiation was done by Lord Ryder in his then capacity as industrial adviser to the Department of which I am now Secretary of State.

I should not like the House to believe that support by the Government was the only way in which Ferranti could have risen from what appeared, at the time, to be its ashes. As my hon. Friend the Member for Knutsford (Mr. Bruce-Gardyne) has rightly reminded the House, the problem with Ferranti at the time was almost entirely connected with the transformer division. The then management of the company now accepts that it probably did not act quickly enough in rationalising the transformer division, which was pulling the company down towards insolvency.

It may have been thought at the time—I do not dispute my hon. Friend's comment—that had the company sought to rationalise the transformer division and so rescue itself the then Government might not have allowed it to do so. Whatever the views of the then Government, when the NEB came into possession of the shares of Ferranti, over the following years it allowed the transformer division to be run down and the transformer work to be replaced with other work. I make no comment or criticism, except to point out that if the worst had happened and Ferranti had gone into insolvency, a number of parts of Ferranti, I am confident, would have been acquired by other parts of the private enterprise sector and might have done as well as they have since done. It does not follow that the intervention of the previous Labour Government was the only way in which to achieve the results that we welcome today.

For the bulk of Ferranti's new life, since the Department of Industry passed its shares to the NEB, the board has studiously avoided interference. I make no criticism of that—on the contrary! The successful top management was brought in by Lord Ryder. The NEB wisely adopted a policy of benign detachment from the affairs of Ferranti because the management was so good. The credit for Ferranti's performance is wholly due to the management and the work force, and we welcome it wholeheartely.

In general, we are much in favour of independence. We are in favour of the dispersion of ownership, of competition and of freedom of choice. It is not always easy to reconcile those four objectives. One option only do the Government rule out, and that is the option of leaving Ferranti with the National Enterprise Board. We do not believe that that is in the interests of the company or of the taxpayer. We think that the taxpayer's money was risked, although it has turned into more money. We think that, at a time when the highest priority is to reduce the public sector borrowing requirement, the contribution to be made by the sale of NEB assets cannot be neglected.

We do not think that it is sensible to freeze the ownership of a company, even a company that is as successful as Ferranti. Some hon. Members might ask "Why not sell just half of the NEB's assets, leaving 25 per cent. of the shares in the NEB's hands?". The ownership of 25 per cent of the shares by the NEB is no guarantee of the independence which the management and work force of Ferranti have sought so earnestly to persuade us is right.

Some hon. Members might say that if the sale of half the shares will not preserve the independence of Ferranti—although it is not independent now, since half are owned by the NEB—why not sell the NEB's shares in two stages? It might be suggested that half should be sold now and half six or nine months later, thus creating an intended obstacle to the result that some people in Ferranti fear. However, that would not guarantee any desired result and would simply prolong the uncertainty which is already a great worry to all concerned.

I am trying to explain that, having made the decision that the NEB should dispose of its assets in the national interest, the options have certain repercussions.

Order. Sedentary observations are out of order.

Some of my hon. Friends might say that they are in favour of the NEB selling its shares but that they would like Ferranti to have a couple of years' more protection from the market and then for the company to take its chance. Taking that wish seriously, I must now discuss some of the implications of the options that might be thought likely to achieve such a purpose. I shall have to discuss various aspects of the possibility of imposing conditions upon the sale.

The Government propose to apply one condition—and this is a direct answer to the right hon. Member for Deptford. Because of the importance of Ferranti Ltd. as a United Kingdom defence contractor in terms of the United Kingdom manufacturing industry, the Government are not prepared to contemplate its passing into foreign ownership. Under the Industry Act 1975 the Secretary of State has powers to prohibit control of important United Kingdom manufacturing undertakings passing into foreign hands. I hope that it will not prove necessary to use the powers, but they are available if necessary. Because of the importance of the company to United Kingdom defence interests, the Treaty of Rome will not inhibit the use of Industry Act powers.

I turn to other aspects of conditions. When the Opposition tabled their motion we examined it carefully, as any Government would, to see whether it was acceptable. At first sight I thought that it might be tactful for me to correct one or two of the mistakes in it—and I am not seeking to quibble about them. I thought that it might be possible to explain to the House that no Government could guarantee the continued, unqualified security of every employee for ever. That is what the motion seems to seek. I might have explained that that could not be guaranteed, but that, subject to that understanding, we would accept the motion. However, I was afraid that there might be a misunderstanding of our acceptance of a motion which calls for what appears to be a permanent guarantee of employment for each member of the Ferranti organisation. Therefore, my right hon. Friends and I preferred to table an amendment that makes plain what we propose.

It is true that Ferranti is a successful company, but it operates in a high-risk business. No one can guarantee the permanent security of everyone employed in it. That is implied in the motion, which reads :
"believes that any sale of the Board's holding in the company which threatens the wellbeing of the company and the security and future employment prospects of its 17,000 employees".
That implies a guarantee of employment [HON. MEMBERS : "Nonsense."] I think that it might be misunderstood. I am seeking to avoid any disingenuous response to the motion. That is why we tabled our amendment.

I have explained the Government's position on foreign ownership. Obviously there is another procedure that might become relevant. The degree, if any, to which any particular bid might justify reference to the monopolies and Mergers Commission would have to be assessed. There are severe limitations upon the Government in the options open to them, and they should be explained to the House.

We must balance the interests of the company with the interests of the taxpayer. The word "company" is shorthand for all people concerned with the company—investors, workers, pensioners, users of the company's products and suppliers to the company We must balance the interests of those groups with the interests of the taxpayer.

We must also bear in mind another set of people whose interests have not so far been mentioned in all the discussions about Ferranti. The NEB owns 50 per cent. of the shares in Ferranti. The Ferranti family and trusts connected with it own 19 per cent. of the shares. A total of 31 per cent. of the shares are owned by others, including the usual range of private individuals, pension funds, investment trusts and insurance companies. They are owned by the usual range, which now tends to be dominated by the institutional investors who hold the funds of the general mass of the population for pension or insurance purposes. We must bear their interests in mind. They have certain rights. It is against the rule of law, and the Companies Act, that they—a substantial quorum or small minority—should be oppressively treated by the majority. We must bear their interests in mind.

I have to discuss whether it would be sensible for the Government to declare that our prime purpose is not to obtain the highest price for the taxpayers. I have to discuss whether the purpose of the national interest would be best served by forgoing the highest price for the taxpayer. Would we, if our purpose was to achieve at least a temporary period of independence for Ferranti, achieve that purpose if we forewent on behalf of the taxpayer the pursuit of the highest price?

I do not say that that would, necessarily, be in the best interests of Scotland, the company and all who sail in her. Who can discern what is in the best interests of Ferranti and those who work in the company? Who can be sure that it is in the best interests of Scotland and of Ferranti that the ownership should remain precisely as now? No one can tell. The future depends upon the drive, the skills of management, technicians and the work force, the research and development and marketing divisions, general resources and all the other aspects of business success.

I shall now follow the options that lie before the Government. First, they could invite the NEB to disperse widely the 50 per cent. of shares which they own in Ferranti, by a share offer.

No. I am following the precedent of the right hon. Member for Deptford.

On a point of order, Mr. Deputy Speaker. No Opposition Back Bencher can be responsible for what Front Bench Opposition spokesman do. Therefore, we can only ask questions about Government policy. As the Secretary of State has made a series of assertions, for which we seek evidence, surely we are entitled to ask him questions and expect a few minutes' reply?

The Secretary of State is entitled to decide whether he gives way.

The first option that the Government could consider is an invitation to the NEB to disperse its shares widely by way of a share offer. That would, inevitably, tend to be below the market price, because why should people buy at a higher price man that at which the 31 per cent. of shareholders would probably sell their shares? If those 31 per cent. were on offer at a higher price, inevitably a share offer by the NEB would be at a lower price than the current market level.

The attractions of disbursing shares in this way would be obvious to all of us. A large number of people would have the chance of owning them and arrangements could be made for an advantageous offer of shares to employees of Ferranti. That would please all Conservative Members, and I hope that it would please a number of Opposition Members.

The dispersal of shares is, in itself, attractive, but the House must realise that the more dispersed the shares are, the more opportunity there is for a bidder to acquire control of the company. The first option, therefore, of putting the shares on the market for wide dispersal would in no way guarantee the continued independence of Ferranti, which is what we are asked to take intensely seriously by the Opposition and by those who have been lobbying us.

The second option is that we should invite the NEB to place shares without conditions. A placing of shares would, again, tend to be below the market price. That is the normal result of placing, as opposed to the sort of price that would emerge from bids for a company. If we invite the NEB to place shares the taxpayer would probably get less than be would if bids for the company were considered.

Let us suppose that we accepted that there would be a lower price for the taxpayer and advised the NEB to place the shares without conditions. The result would almost certainly be that, the shares having been placed below the price at which the market valued them, a bidder, or bidders, could come along and offer for the shares. In that case the taxpayer would not have the benefit from the higher price, and the independence of the company, which would have been the purpose of the exercise, would not have been preserved.

No, I will not. Therefore, there is no particular advantage, for the purposes of the Opposition, in following that course.

No, I will not give way. I am sorry, but I am not giving way. Let us suppose that the NEB were invited to place the shares, subject to conditions. Here we come up against another complication. If the shares were placed subject to conditions and assurances being sought that a single institution would hold the shares in Ferranti for several years, and a simple institution bought the 50 per cent. of shares from the NEB, under the rules of the Stock Exchange and the takeover panel the acquiring organisation would have to bid for the 31 per cent. of the shares remaining in the company.

The moment that an organisation had to bid for the remaining 31 per cent. of the shares we would, once again, be in the bidding situation and other bidders could come in. So, placing the shares subject to conditions with an institution would not guarantee the independence of Ferranti. Nor, moreover, would placing the shares subject to conditions with a group of institutions necessarily protect Ferranti's independence, because a group of institutions buying the 50 per cent. of shares from NEB would, perhaps—though the decision would be for the Stock Exchange council on the advice of the takeover panel—have to bid for the 31 per cent. outstanding non-NEB non-family held shares and others, and we would be back again in the bidding arena.

I leave aside at this stage the question of how binding any conditions would be and for how long those conditions would last. The more rigid the conditions that the Government advise the NEB to seek to impose upon any sale, the lower the price would tend to be. The lower the price, the more unhappy the 31 per cent. of shareholders would be, and the more unhappy they were, the more scope there would be for bidders.

Therefore, I have to tell the House that if, in order to protect the independence of Ferranti, we seek to avoid any bidding for the 50 per cent. of NEB shares and the 31 per cent. of other shares, the route through either an offer of shares or the placing of shares, with or without conditions, with a single institution or a group of institutions would not provide a guarantee of independence. I was bound, as quickly as I could, to spell out the implications of the options for the Government.

I now turn to another, and, I believe, even more important, aspect of reality. I am referring to the limitations, not upon the options facing the Government, but upon the options facing potential bidders. What is the perceived self- interest of potential bidders? Any organisation will not, surely, bid for Ferranti in the pursuit of trouble. What people value in Ferranti are its skills, its team work and the profits that those skills and that team work have created. Any potential bidder for Ferranti will be aware of the strong feelings that we have all witnessed among the management and work force of Ferranti. Any bidder will take those strong feelings very much into account. Any potential bidder will be aware that while only one-third of the Ferranti work force is employed in Scotland——

I am grateful to the hon. Gentleman for that correction. While 40 per cent. of the work force is employed in Scotland, about 50 per cent. of the profits are earned in Ferranti's Scottish activities. No potential bidder would ignore the importance to Ferranti of its Scottish operations and the morale of the management and the work force in all its operations. It is absurd to contemplate that any bidder would want to risk his company's money by bidding for a company that would be discouraged, disheartened or intimidated by its approach. It would have to make its approach and bid in a form to reconcile the management and work force to a new owner.

No. I am coming to the end of my speech. I want to sit back and listen to the views of the House.

I hope that right hon. and hon. Members will take seriously the implications of the alternatives. Our scope for securing any particular outcome rather than another is limited. The degree to which any option will achieve any desired outcome is literally unknowable. Rejecting the policy of the highest bidder in favour of some apparent alternative will not in itself guarantee the continued independence of Ferranti. The guarantee of jobs, prosperity, pride, expansion, harmony. competitiveness and job satisfaction lies in the skill and team work of the management and the work force. They have shown that skill and team work.

The Government will take intensely seriously the arguments put forward from both sides of the House. I hope that I have explained the implications of the options.

5.12 pm

This afternoon we have listened to a fascinating speech by the Secretary of State for Industry. He has posed a number of options concerning the sale of the National Enterprise Board's holding in Ferranti. However, he did not examine the option posed in the motion moved by my right hon. Friend the Member for Deptford (Mr. Silkin) that we should question the justification for selling the Ferranti shares.

The Secretary of State enjoined us to condition our attitude to the sale of the Ferranti shares with concern for the interests of the taxpayer, the company and the shareholders. That is an understandable argument for the right hon. Gentleman to advance. However, I hope that at some time in the debate concern will be expressed for the 17,000 employees in Greater Manchester, Scotland and Wales whose very future is tied to the success of Ferranti. I hope that their interests will be paramount in our approach to the question of the selling of these shares.

Of particular interest in the Secretary of State's speech was his effort to justify the changed political direction that the Government, through the Industry Bill, propose to impose on the NEB to divest itself of its 50 per cent. controlling interest in Ferranti.

The one redeeming feature of the right hon. Gentleman's speech was when he declared his ungrudging admiration for the contribution made by management and the work force to the success of Ferranti. He was right to express that admiration, which I think is reflected on both sides of the House.

The debate essentially is about a remarkable success story—the history of Ferranti since 1974–75 and the endeavours of its 17,000 employees. These people have transformed Ferranti from bankruptcy to profitability. They have translated an NEB investment of £7 million in 1974–75 to a current share value of £58 million if we are to believe the point made by Sebastian de Ferranti in his letter to The Times today. The cruel irony of this success story is that those who have made the greatest contribution to it—those whose lives are tied up with the future of Ferranti and have the most to lose—have received little or no consideration in the arrangements proposed by the Government and the NEB for selling the NEB's controlling interest in the company.

As my right hon. Friend the Member for Deptford indicated, many have done particularly well out of Ferranti's success. The NEB and the taxpayer have done well and the directors of the company have done particularly well. The success of Ferranti has meant a financial bonanza to the Ferranti family. All have done well, but the dedicated staff of the company have so far received nothing but a great deal of needless anxiety.

The Prime Minister never wearies of lecturing or hectoring British workers on what they need to do to achieve a secure industrial future. She has told them repeatedly—at the Conservative Women's conference and at the International Press Association lunch—that they must increase productivity and be competitive because British companies must export to survive. Ferranti's employees have done all that and more. Only recently the Prime Minister nominated the company for the Queen's Award for Industry because of its export achievements. What has that meant for the 17,000 workers who have contributed to Ferranti's success? In effect, it has meant a new anxiety which has been injected into their lives by the NEB's decision, under the Government's direction, to sell off its controlling interest in the company.

One of the most unfortunate facets of the NEB's relationship with the company and its work force is that it did not bother to consult either the management or the staff when it made the press statement at the end of May indicating that it proposed to sell its shares.

The motivation for the concern of Ferranti's 17,000 employees is the way that the NEB dealt with an almost analogous situation. I want briefly to refer to the NEB's handling of the sale of its interest in the Fairey Engineering Company. If the sale of its Ferranti shares goes anything like the sale of its holding in the Fairey Engineering Company, we had better watch out.

My justification is an article which appeared in The Guardian last Saturday, 14 June, under the heading :
" £24 million sale of Fairey to Pearson in doubt"
The article tells of the conflicting competition between the Pearson group and the Hambros' banking consortium for acquisition of the Fairey engineering Company. The Guardian's industrial correspondent, Jane McLoughlin, reported that the NEB failed to discuss the future of Fairey with its board, and ignored the firm's view of its commercial advantage. If that is to happen with the NEB holding in Ferranti, the Government have a duty to inform the House.

I was delighted when the Secretary of State reiterated to the House the undertaking that he gave to myself and other parliamentary colleagues who met him in his ministerial room last night. He said that he had an open mind. I hope that that is the genuine position. When I listened to him examining the options, he seemed to close almost every option.

The right hon. Gentleman is usually scrupulously fair in these matters. I cannot remember using the words "an open mind". I said that I would listen carefully to the debate today, and that the Government had not made their decision.

I hope that the Secretary of State will forgive me if I have misrepresented him. I withdraw any such implications——

Does my right hon. Friend agree that the statement made by the Secretary of State today was more depressing and disappointing than the statement that he made at our meeting last night?

Indeed it was. My hon. Friend is absolutely right. I interpreted the Secretary of State's remarks last night as indicating a genuine open-minded approach. He said that he would listen, and that he would reiterate that undertaking in his speech today—and he has quite rightly done so.

I shall have to defend myself. I do not think that I made a statement to the group of Opposition Members who saw me yesterday. I listened, and I heeded what they said. I made no statement, except to the effect that the Government had not reached a decision, and that we would listen carefully to the debate today.

It is encouraging to hear the Secretary of State reiterate that he is continuing to listen. But he has not much time to go on listening. He knows, as I know, that the annual general meeting of the Ferranti company is to be held on 24 June, and that a decision will have to be reached by that time. I hope that he does listen to the interests of the 17,000 employees at Ferranti.

I have indicated the area of my concern. The analogous position in the Fairey engineering firm is colouring the anxieties of the many people who are taking a continuing and genuine interest in the matter. It is factors such as these which are motivating the anxiety of the Ferranti employees. Not only are the Ferranti employees anxious; the Manchester city council, the Mayor of Oldham, and even the Church of Scotland have expressed concern about the further loss of manufacturing jobs in their areas.

I leave the Secretary of State with this thought—all the Ferranti plants and factories are located in assisted areas, geographical areas that were formerly assisted areas, or in special development areas. Those areas have already experienced a catastrophic decline in manufacturing jobs. I looked at the figures for the City of Manchester to see the drop in manufacturing employment. The only years for which I could obtain accepted statistics were 1961 to 1976, when the number of manufacturing jobs fell from 168,850 to 86,450. Those statistics are concerning the civic and local authorities. If the Secretary of State and the Government are indeed listening, that factor should be given close consideration.

The only companies that have the financial resources to take over in a block the controlling interest in Ferranti are GEC, Racal or a consortium of banking interests. The present management and work force, if Ferranti were left in the control of the NEB, could continue to build on the success and the expansion that they have demonstrated to date.

I hope that in the debate which is now proceeding the Government will not respond with—and I say this with some regret—what has become the feature of all debates involving the Secretary of State for Industry, namely, an almost daily confrontation and with closed minds. I hope that he will listen. I hope that he will take account of the interests of the employees of Ferranti. Quite frankly, despite the vote on this issue at 7 o'clock tonight, the management, technicians and work force at Ferranti are entitled to a vote of confidence, and not the proposals and directions that are being given by the Government.

It appears that some hon. Members were not in the House when Mr. Speaker made his appeal for brevity. I wish to remind right hon. and hon. Members that there are about 19 Back-Bench speeches to be fitted in in not much more than an hour.

5.27 pm

I shall heed your words, Mr. Deputy Speaker, and make a short speech. I hope that my right hon. Friend the Secretary of State will stick to his statement that he will listen carefully to the views expressed during the debate. I am sure that he realises that many of my hon. Friends have a sense of disquiet about the whole business.

My reason for intervening in the debate is that I have a large number of constituents who are employed by Ferranti. Over the past two weeks I have received many letters from them, and last Thursday a number of them came to the House to lobby me on this issue. They put their case fairly and reasonably. Their fear was that the NEB would sell its 50 per cent. holding in one block. I must be honest and say that their anxiety was that that block would be sold to GEC, which would lead to the closure of several Ferranti plants with the inevitable redundancies that would ensue.

One of the ladies who came to see me said that she had worked for Ferranti since she left school. I did not give her the stock political answer that that must have been only last year, because the lady was not young. She felt that if GEC took over Ferranti shares, and if that meant redundancy, she would be one of those who would be made redundant. She was concerned that at her time of life there would be little or no hope of finding another job. I have a feeling that that is the viewpoint of many who are employed by Ferranti. Therefore, it is a matter of human concern.

It is true that Ferranti was rescued from the brink of collapse about six years ago. Since then, there has been a complete transformation. The appointment of the managing director was a stroke of genius, because in him Ferranti found a man with the talent of managing diverse operations, and with a healthy respect for cash control. We have seen the results of that improvement over the years. From a 1975 pre-tax loss of £500,000 on sales of £86·3 million, in 1976 the company achieved a profit of £4·1 million, and continued to increase profit levels by 49 per cent. in each of the subsequent two years. The result was that by the summer of 1978—three years after the Government had injected £15 million into Ferranti in the form of equity and loan capital—Ferranti had reported a pre-tax profit of £9·1 million on a turnover of £156·9 million. Because of that record, the NEB was able to reduce its holding from 62·5 per cent. to the 50 per cent. that we are debating today. Because of the success of Ferranti over the past two years, those who are employed there are now worried about losing their independence.

I realise that taxpayers' money is involved and that it was used to save Ferranti. But the current market value of the shares held by the NEB is in excess of £50 million. So the company has been saved, jobs have been safeguarded, and the taxpayer has shown a profit on the deal. I should have thought that that was most satisfactory.

It is crystal clear that Ferranti is anxious that nothing should be done to end the company's independence. It therefore proposed to the NEB that the shares should be disposed of to a large number of separate buyers and that some of the shareholding should be made available to employees on reasonably advantageous terms. This point was mentioned by my right hon. Friend the Secretary of State, and he welcomed it. I was surprised by the lack of response from the Labour Benches. Labour Members seemed to show no joy in the prospect of employees being able to buy shares in the firm for which they work.

For some reason, the NEB refused to countenance the proposal. I must warn the Government that, if they put the shares out to the highest bidder, irrespective of the wishes of Ferranti, they will have proved that they know the price of everything and the value of nothing. Therefore, I shall vote for the Government's amendment tonight because of its pledge that the Government will pay regard to the interests of the company. But I must warn my right hon. Friend that if that pledge is not kept I shall, when this matter is debated in the House again, vote against the Government without fear.

5.31 pm

Perhaps I may take up only one point made in a courageous speech by the hon. Member for Altrincham and Sale (Mr. Montgomery) and that concerns the sale of shares on advantageous terms to employees of the company. There may or may not be merit in encouraging employees to hold shares in the company for which they work. It is unnecessary for us to go into the merits of that tonight. But it is an illusion to hold that out to the work force as a solution for safeguarding the independence of the company. Even if every employee of Ferranti found £1,000 to invest—and that is most unlikely—the employees would between them be able to purchase only about 15 per cent. of the shares on offer. Plainly, therefore, that solution offers no way out of the difficulty we face tonight, which is to safeguard the independence of the company. I am happy that on that at least I appear to be carrying the Secretary of State with me.

The Secretary of State made a remarkable speech. He gave us an illuminating stream of consciousness. I compliment him on having totally demolished the case for selling any of the shares held by the NEB. He made perfectly plain the dangers of a takeover which would arise from any way in which those shares are disposed of. He was understating one of the options to some extent. If he is to go ahead with the sale—I would prefer that he did not sell even one share— there might be merit in exploring the possibility of placing parcels of the controlling interest with different pensions institutions. Those bodies tend to look for a long-term return, not for a quick killing on a speculative purchase, selling out subsequently for a takeover. I offer that thought for the options that the right hon. Gentleman described. I must take on board the full force of his argument that any disposal of these shares will create a situation in which the company is vulnerable to a takeover by one of the other predatory companies in that sector.

I compliment the Secretary of State on accepting that the responsibility for what we are discussing rests with him. I respect him at least for not seeking to hide behind the pretence that we are debating a decision of the NEB. It would be difficult for him to pretend that, because the chairman of the NEB has made it clear that the Board is selling the shares at the "express wish" of the Government. The chairman put a particularly harsh passage in the NEB's recent annual report in which he pointed out that the financial duty laid upon the NEB by the Government cannot be fulfilled if the Government insist that the NEB disposes of every asset once it becomes profitable.

Since the Secretary of State has accepted responsibility for what has happened, perhaps I may put it to him that by frogmarching the NEB in the direction of a compulsory sale he is fundamentally altering the nature of the NEB. It was chosen in 1974 by the Labour Government as the instrument to rescue the company. It is one of tonight's ironies that had the right hon. Gentleman been in power then not only would we not be having this debate but we might well have had no Ferranti to discuss. Since the NEB was chosen as the rescuing instrument it is now left with a controlling interest in the company. If the Secretary of State obliges the NEB to dispose of that controlling interest at one go to a single bidder, he is converting the NEB from an instrument of rescue to a take over vehicle. If anyone on the Labour Benches in 1974 had suggested that we were rescuing this company in order to facilitate its takeover by one of its rivals there would have been spontaneous indignation from the Tory Benches. However, that is exactly the logic of what the right hon. Gentleman is doing.

The Secretary of State has lectured us countless times on the virtues of nonintervention. I remind him, therefore, that his approach is one of intervention. He is intervening in the stable framework that has enabled this company to expand over the past six years. No one is asking him to intervene. One of the other ironies of the debate is that the Government have achieved that unity of purpose between the workers, the management and even the shareholders which the Government tell us is the objective of their industrial policy. All three groups are united, but in opposition to what the Secretary of State wants to do to them. If he truly cares about the strong feelings of the work force and about its morale he will not push through this proposal which is greeted with the united opposition of everyone in the company. All those in the company are opposed to it because they know that they have made a success of the last six years.

Let me outline the success story that we have witnessed in Scotland in the six years since Ferranti was rescued by the last Labour Government. Ferranti has created 2,000 new jobs in Scotland. It has increased its factory space by 50 per cent. It at present has five separate building projects of new factories or signifificant extensions. It has plans to employ 500 more people in Scotland. Very few companies are expanding in Scotland at present, and we cannot afford to jeopardise the prospects of one of the few companies that are.

There are also few companies in Scotland with anything like the same concentration of high technology and skill that we need if we are to survive as a manufacturing nation. In Scotland alone Ferranti employs 900 graduates and 3,000 draughtsmen or skilled craftsmen. It also employs 430 apprentices. That is exactly the kind of investment that we need to make in our future. These are the real assets that are up for sale. These are the people who have contributed to the success of Ferranti over the past six years and who now face the cruellest paradox of all. The paradox is that, if they had not contributed their creative skills to that success, if they had not cooperated in the rescue, they would not now be faced with the logical cones- quences of their actions, which is the creation of an attractive investment for takeover which calls their survivial into question.

Given that record and the importance of the company to the Scottish economy we are nervous indeed about the prospect of a takeover. We are nervous because we have experience of what happened in these circumstances before. In 1969 the numerical control division of Ferranti was taken over by Plessey. I am not making a party point, because the takeover was facilitated by the Industrial Reorganisation Corporation under the Labour Government. Plessey transferred the division from the Lothians to Alexandria. It transferred the division and the work force on a firm commitment that it would expand on the site in Alexandria.

Within one year the plant was closed, and the machinery was shipped to Poole. But the tale does not end there. The transplant did not work. The numerical control division did not succeed in Poole, and Plessey closed it down. Britain does not now have a numerical control capacity. Hon. Members have only to go into any sophisticated machine shop to see how desperately dependent we are on imports for numerical control. That is why we are nervous about the possibility of takeover. We have seen what has happened in the past, and we are concerned that it will happen again in the future. That is why a variety of Scottish organisations, including the Scottish Council for Development Industry and the Church of Scotland, are opposed to the Secretary of State's proposal.

I ask the Secretary of State to recognise the reality of the market forces about which he continually lectures the House. It may turn out that whoever purchases the company will have different interests. If GEC purchases the company it will be in the interests of Arnold Weinstock to rationalise and slim down production, to close some of the lines and eliminate the competition which is at present depriving some of his subsidiaries of work. But that will not be in the interest of the nation, which will lose the valuable capacity. It will not be in the interest of the regions, which will lose jobs. We must remember that Ferranti is mainly concentrated in the North-West and Scotland, which were development areas until the present Secretary of State came into office. It will not be in the interest of the clients, who will lose because of competition. The Government are Ferranti's biggest single client. About 60 per cent. of the production of Ferranti goes to the Ministry of Defence. Whatever the Government gain in added premium by selling to a single bidder they will lose within two years because of added prices on defence contracts.

Six years ago the taxpayer put some risk capital into Ferranti. The taxpayer is now entitled to benefit from the revenues. They should not be returned to the private sector. If the Secretary of State consulted any stockbroker for professional personal advice, he would be advised to hold on to his controlling interest. But if he must sell, if he is determined, because of ideological prejudice or a deep psychological interest, to go along this irrational road, I beg him to do so in a way that does not compromise the independence of the company. We have already lost a substantial amount of industrial capacity in the last year, as companies have been squeezed by higher interest rates and an unrealistic exchange rate. We cannot afford to gamble with the future of one of the few companies that is thriving, despite the millstones that the Government have hung around the neck of the British industry.

5.43 pm

I am grateful for the opportunity to intervene briefly in this important debate. While Ferranti is a United Kingdom company, it has great implications for Scotland, because nearly one-third of its work force is employed in Scotland. As a Member representing part of Edinburgh, I have a particular interest, because most of the work force is centred on that city.

I welcome the Government's amendment, and I thank my right hon. Friend the Secretary of State for his speech. He set out the options, and he has undertaken to listen to views from both sides of the House. My right hon. Friend's speech and the amendment make it clear that the interests of the company and the other considerations are balanced with the taxpayer's interests. It is argued that in one sense those are synonymous, as the promotion of a strong, viable and expand- ing company with good productivity and export potential is ultimately in the best possible interests of the taxpayer and lies at the heart of our hopes of economic revival and success.

I do not think that there is any real argument on this side of the House about whether the NEB holding should be disposed. I understand that the company management does not oppose it, and to do so would be to fly in the face of economic common sense. Labour Members who oppose it do so as part of their attraction to the old shibboleth of State control and public ownership. The real anxiety in this debate is about how the shares are disposed and the possible—I say "possible" because this must be speculative—effects that the various methods of dispersal might have on the company.

The background to this debate must be that we are not dealing with a lame duck or a public liability. We are dealing with a viable company with a sound and reasonable future. We are therefore talking about the best way in which to dispose of these holdings with a reasonable return to the taxpayer, and in a way that has the best hope of securing a viable future for the company and security of jobs for those who work in it, who are loyal supporters of the company.

As I understand it, there is no disputing that this firm is back on its feet again and is prospering. As I further understand, it is doing so in an area of business—the electronics industry—and in an area of the country, so far as the Scottish part of the company is concerned, where it is the Government's declared intention to encourage such enterprise as the basis for building the industrial economy of the future. Its value in Scotland can be seen in its declared intention to expand by another 500 jobs—which are badly needed. Yet all this must depend on its being able to innovate and to expand according to its own business needs.

The present anxiety of the company is that a disposal of shares could prevent innovation and expansion. By bid, the shares could be acquired by a company which was not innovative and which would frustrate the present undoubted dynamic of the company and lead to a loss of the younger elements on which much of its future depends.

An even greater anxiety lies in the possibility that, by bid, Ferranti could be acquired by a company with which it was in competition, leading almost inevitably to rationalisation, when jobs would be lost and momentum slowed, down. That anxiety is particularly great in Scotland because, for geographical and logistical reasons, rationalisation so often starts at the Scottish end. I cannot emphasise strongly enough that Scotland cannot afford to lose a company of the sort that Ferranti provides in terms of technology, job prospects and a basis for an expanding foot in the undoubted market of the future. I am sure that my right hon. Friend will take that firmly into account in reaching a decision.

The effects of any disposal must be largely conjectural. There is a real anxiety in the company about a takeover by GEC. I am in no position to judge the basis of those fears, but I have heard nothing in connection with GEC that would lead me to believe that those fears were groundless.

On that basis, I fear that a disposal to the highest bidder is not the answer, and I am not convinced that a marginal increase in the return to public funds warrants the possible consequences to the company, its employees and the community in which it operates. I can, however, see less objection to the disposal by direction to a company that is not in competition with Ferranti, and which would regard it more as a garden to be watered than as a crop to be harvested.

Ideally, I should prefer the maintenance of the independence of the firm. The options have been described. I should like to comment on the option that the holdings could be disposed of in two phases, one-half now, and one half in nine months, within the financial year, thus satisfying the PSBR requirements. My hon. Friend said that that would lead to uncertainty. However, that option is favoured by the Scottish management of the company, and I do not believe that it would seriously affect the price to the Government, particularly as the firm is getting stronger. I feel that it would create a sufficient challenge of intent to ensure that the shares were bought by a promoter of Ferranti's future rather than by an intended destroyer of the company.

I re-emphasise the role of Ferranti in Scotland, and especially in the community of Edinburgh. It has for years played a leading role within the city as an employer and leader within the community. That, too, has a value. I hope that it will be regarded by my right hon. Friend as a consideration that must be taken into account. It would be a bitter blow if any decision were taken which caused this expanding firm to diminish its role within the community. As far as I can judge, it will not need to do so independently. I ask my right hon. Friend to ensure that any other form of disposal upon which he might decide will, as far as possible, insure against doing either. We in Scotland look to him for that.

5.51 pm

Ferranti is the second biggest employer in my constituency. This debate is, therefore, one of major importance for me as a Member of Parliament and for very large numbers of my constituents and their families. It is my constituents in the past five years who, among others, have turned a public investment of less than £7 million into one which, according to Sebastian de Ferranti in his letter to The Times this morning, is now worth in the region of £58 million. Some might think that it could be worth very much more in the near future.

The story of the past five years is one of conspicuous success both for the management of Ferranti and its workpeople. As Mr. J. D. Alun-Jones, the managing director, said in a letter to me on 4 June, the firm's success since the intervention of the NEB is indeed one that owes everything to the high level of confidence and co-operation which exists between the firm's management and employees. Working together, Mr. Deputy Speaker, they have taken the firm from the intensive care unit of five years ago to the remarkably strong trading position of today. To harm the firm now would be a gross betrayal of management and workpeople alike.

Last week, as the House has heard, representatives of the Ferranti work force came here to plead for the continued independence of their extremely successful enterprise. I am sure that every right hon. and hon. Member who met them will agree that they were very well informed and argued their case both with dignity and restraint. It was a compelling case and they deserve our support in this debate.

Mr. Alun-Jones went on to say in his letter to me on 4 June :
"The overwhelming majority of employees, the executive and the board are united in their conviction that the sale of the 50 per cent. NEB share to one company, which would then effectively control Ferranti Limited, would jeopardise existing jobs, the creation of new jobs and our ability to react to rapidly developing technology."
That statement alone should persuade the House of its responsibility, indeed of its bounden duty, to ensure that Ferranti remains independent. When I drew the letter that I received from Mr. Alun-Jones to the attention of the Secretary of State, he replied very quickly, and I am grateful to him for his help in doing so. In his reply he said :
"… the draft NEB guidelines … require that the board should dispose of all its securities as soon as is practicable, having regard to the interests of the company and the taxpayer, and such other considerations as I may draw to their attention …"
That is an important statement. For who is the best judge of the company's interests? Is it the Minister aided by his civil servants? Or are the best judges the employees, the executive and the board of the firm, who are all united in their view that it must remain independent? Surely they, having done so well for the taxpayer over the past five years, are entitled to pride of place in any judging competition about the future of their enterprise. Therefore, if the NEB should attempt to ignore the best interests of the company, as everyone who works there sees those interests, will the Secretary of State refuse his consent? There is need for a much clearer statement of Government policy before this debate ends and I hope that the Minister of State, in winding up, will be much more specific than was his right hon. Friend.

Will the Minister of State say when he expects that a definitive ministerial statement about the future of the public holding will be made? Will it be in three weeks, four weeks, five weeks, or when? One other straight question to the Minister of State is whether, if GEC were to be allowed to acquire the company, that would constitute an unacceptable further move towards monopoly.

I have referred to the achievements that have flowed from the excellence of the understanding there has been at Ferranti between the management and employees. I take some pride, as his Member of Parliament, in the outstanding contribution to this outcome of my friend Councillor Griff Berry, the convener of the Ferranti factory in Wythen-shawe and chairman of the Ferranti trades union committee. Griff Berry, who, with Peter Morton and other trade unionists, has achieved so much in fostering good industrial relations at the firm, said when he came to Westminster last week :
" It is ironic that most lobbies of Parliament arise because of some form of failure. The Ferranti lobby is based on total success."
He was right to emphasise that Ferranti is now in danger of becoming a bizarre victim of its own success. The public holding is an asset on which many who would have allowed Ferranti to die in 1974–75 have fixed their attention. They are rubbing their hands at the prospect of a "Sale of the Century" from which they can profit. That is why this House should speak out loud and clear today in support of those who saved the firm and have made it so successful since.

I should like to quote from another of my constituents who wrote to me this week about her fears for the future of the firm. She is Mrs. Maureen Taylor, of 52 Calve Croft Road, Peel Hall, Manchester, 22, and she said—[Interruption.] The hon. Member for Knutsford (Mr. Bruce-Gardyne) sniggers and smiles at my reference to the views of the workpeople. This is not a laughing matter. It is one of deadly seriousness for the 17,000 workpeople whose very future is tied up with the outcome of this debate. My constituent said :
" The relationship between ' management' and ' workforce' is extremely good and this has the effect of being with a ' family concern ' and not working for ' faceless moneymakers' although the final results are equally profitable."
She went on :
" There is enough unemployment in the country today, especially in the North-West, so it would be catastrophic to encourage any further possible loss of employment on a large scale. I therefore ask you to do your utmost to prevent any form of sale of the NEB shares in block as has been suggested."
That, Mr Deputy Speaker, is typical of a great many letters that I have received from constituents. Their view is one that deserves respect in this debate and is one that I am sure many other right hon. and hon. Members will reflect in their speeches.

The mass media never tire of telling us about all the strife in British industry. What the media hardly ever do is to point to success based on mutual understanding between management and workers of the kind achieved at Ferranti. I hope that after this debate the achievements of people like Griff Berry, Mr. Alun-Jones and Mr. Peter Morton, among many others, both in the Ferranti management and work force, will be given much more attention than they have been given so far. Even before then, I trust that the Minister of State will go further than his right hon. Friend in reassuring those who have achieved so much for their company and for the taxpayer.

5.59 pm

I am delighted to speak after the right hon. Member for Manchester, Wythenshawe (Mr. Morris), who strongly advocated the virtues of family companies and free enterprise. In common with many other hon. Members, I have received strong representations from my constituents to the effect that the 17,000-strong work force at Ferranti Limited wish their company to remain independent.

It is an axiom that the Government are the custodians of the national interest. I believe that the Secretary of State's decision to dispose of the State's holdings in Ferranti is right. At a time of economic constraint Governments are tempted to secure a premium on the disposal of those shares—which might be as much as £10 million or £20 million—by selling their controlling share in the company to the highest bidder. The Secretary of State would do well to forswear any siren voices that urge him to tread in that direction.

At heart, Ferranti is still a family firm, with a fierce sense of pride and independence that extends throughout the work force. It is a world-beater in many areas of high technology, especially in the military sphere, where its head-up displays and lasers have regularly wiped the floor with competition from Britain and abroad. Ferranti happens to be the only British company that has designed, and is currently manufacturing, its own microprocessor. For the past two years it has sustained a viable microprocessing business, and has a £30 million turnover, with a 20 per cent. return on invested capital. Although the GEC has linked with Fairchild, it has yet to get to the starting post. Thanks to the previous Labour Government's insistence on reinventing the wheel, the NEB has achieved nothing beyond providing outdoor relief for a tiny handful of scientists in Texas, at a cost of about £25 million.

There are three reasons why the Government should insist that Ferranti remains independent. Not only should the Government persuade the NEB; with the nod-and-wink procedure that we well understand they should persuade the Monopolies and Mergers Commission about Ferranti's future. As many hon. Members have said, the management is strong and efficient and enjoys as good a relationship with its work force as can be found anywhere in the United Kingdom. That asset should not be denigrated.

Secondly, in view of Ferranti's importance as a defence contractor with the Government, I am convinced that it would be contrary to the public interest if a near-monopoly were to be created in high-technology electronics.

Thirdly, to take away Ferranti's independence would be contrary to all the tenets of the Conservative Party's philosophy of free and fair competition. I trust that that is dear to my right hon. Friend's heart, as he is its undoubted champion. For those reasons, the Government should be well content with the seven——

I am grateful to my hon. Friend for giving me a chance to intervene, a little belatedly. I am anxious that it should not be thought that I accept my hon. Friend's reference to a "nod-and-wink" relationship between the Government and the Monopolies and Mergers Commission. It is far from a "nod-and-wink" procedure. There is a formal process. The Monopolies and Mergers Commission is not the creature of any Minister or of the Government.

I am sure that the House and country will be reassured by what my right hon. Friend said. For the reasons that I have advanced, I believe that the Government should be well satisfied with the sevenfold or eightfold return on the £7 million investment that was made on behalf of taxpayers. That return should be amply sufficient to satiate the greediest of Treasury mandarins or the fiercest Cabinet guardians of taxpayers' interests.

If the Government allow themselves to be seduced by the prospect of securing an additional £10 million or £20 million premium by sacrificing the independence of Ferranti Limited, they will repent that decision at their leisure. That decision will gravely prejudice the public interest, because it will end all competition in defence contracting. Any short-term gain will be more than outweighed by higher prices for defence and other Government contracts. I trust that my right hon. Friend will instruct the NEB that the long-term interests of the nation require that Ferranti should retain its independence.

6.5 pm

I understand the need for brevity, and I shall make my points quickly. I shall not deal with the company's past. It is more important that those of us who catch your eye, Mr. Speaker, should deal with Ferranti's future during the four or five minutes given to us. However, the past has been one of success. The company's success is not due to the NEB. I am glad that the Secretary of State is indicating his agreement. I hope that he will also agree with my reasons for saying that. The management and work force achieved that success. It is true that that success was built on the fact that the NEB sank money into Ferranti. As management and workers have achieved that success, is it unreasonable to take their views into account when deciding what should happen? In addition, the Government should reward their efforts and enterprise.

Obviously, the workers are concerned about their future. This is a constituency issue as well as a political issue. In my part of the world, textile mills are continually closing. Those who live among the textile workers can see what is happening. They are concerned about the future of their jobs. That is a perfectly natural phenomenon. Those workers can see what is happening in other industies in the area.

The Secretary of State cannot guarantee the company's future independence. No one in his right senses would say that he could guarantee independence, but the Secretary of State can ensure that it is less likely that independence will be eroded as a result of the sale. His actions in determining how those shares are disposed of are important.

I hope that the Government are concerned about maintaining our manufacturing base. We must not simply become a servicing nation. We must maintain and develop our manufacturing bases. If the shares are sold to the wrong company or to the wrong purchasers, part of our manufacturing base may be destroyed. Our first consideration should be to ensure that those bases are maintained and that the sale of shares will not prejudice that end.

I previously pointed out that much of Ferranti's success was due to the efforts and skill of its management and work force. The Secretary of State was kind enough to indicate his agreement. Therefore, the first thing that I suggest is that the Government should not be afraid to reward that skill by creating some kind of trust fund out of the money that they will gain. A percentage of the shares could be invested or given—I use that word deliberately—by the National Enterprise Board to a trust fund organised by representatives of the workers of the company. I see no reason at all why 5 per cent., or even 10 per cent., of those shares could not be given to a trust fund. Such a fund could then have the opportunity, from the future profits that would accrue from those shares, to purchase more shares in the company. Certainly there should be a legal right to do so.

The hon. Member for Stretford (Mr. Churchill) said something about being satisfied with five, six or seven times the amount invested. Even if the Government were to give away 5 per cent. of the 50 per cent. invested in order to create a workers' trust, that would be a mere drop in the ocean in terms of the total amount of money that they will get from the sale of the other 45 per cent. of shares. That would be a step in the right direction in the disposal of shares, and also a step along the road to worker participation in this industry. That would be imaginative—a step to be encouraged. Perhaps it would give the lead for the future organisation of companies in this country.

I should also like to see the right of employees to purchase shares. I accept the point that even if everyone invested £1,000 it would amount to only 15 per cent. of the shares. I am not arguing that this would guarantee the independence of the company; all I am saying is that while the Secretary of State considers how these shares should be disposed of the priority rights of employees to purchase shares should not be lost sight of. Certainly, that is the direction that should be given to the NEB.

Thirdly, I turn to the disposal of the rest of the shares. I remember that some years ago, when I was in the Labour Party in Rochdale, a leading Conservative gave me a little lecture on the purchase of shares. He told me that if ever I went in for buying shares I should never be afraid to leave a little bit for the other fellow. That is very sound advice for the Government as well. They really do not need to be concerned about extracting the maximum possible price for these shares, because what they lose as a result of not selling to the highest bidder they can save as a result of not having to pay higher prices for defence contracts, or not paying people on the dole. I hope that the long-term implications of maintaining the independence of this company will be taken into account.

I hope that we shall ensure that these shares—I do not object to their sale; I am concerned only with the question to whom the shares are sold—are disposed of in such a way as to safeguard the future independence of the company. Therefore, the shares should not be sold to competitors of the company, whose object in purchasing them might be to stifle and kill the competition from Ferranti.

I urge the Government to take great care in the sale of these shares and, above all, to understand that while some of us are not opposed to the selling of shares by the NEB we would be prepared to support that policy only if we could be satisfied that the Government had taken all reasonable steps and had given all reasonable directions in order to maintain the independence of the company as a consequence of the sale.

6.15 pm

Like other hon. Members, I shall try to be brief. I was a little disappointed with the speech of the right hon. Member for Deptford (Mr. Silkin). He concentrated on the history of the company and the role of the National Enterprise Board. He did not dwell at all on the regional and industrial aspects involved, and the strategic interests that may result from the sale of these shares. One of the significant things that we remember Ferranti for in Scotland is that one of the one-time managers of that company, Sir John Toothill, was responsible for the whole theory and practice of growth centres in relation to regional development. That is the role that Ferranti has played in Scotland and that is why there has been such an outcry from within Scotland about the danger of the sale of shares.

Secondly, it is scandalous that there do not seem to be any winding-up speeches on either side from Scottish Members, despite the 40 per cent. of jobs that exist in Scotland in Ferranti. That is most unfortunate.

When one considers the whole concept of the sale of shares one must be ready to agree with the arguments of the Secretary of State. He settled the issue quite clearly that these shares should not be sold, because if they were there would be a potential danger to the company. Even if the shares were sold in a dispersed fashion, there would be a danger of takeover bids occurring thereafter. The shares could be gobbled up and the Secretary of State foresaw that that could lead to the control of the company passing. If that is so, there is a strong argument that the shares should remain in the possession of the NEB. As far as I am aware, there is no criticism of the fact that the company has recovered in the last six years under the umbrella of the NEB, with substantial private holdings still in the company. If that is so, it is reasonable to let well alone. I would have thought that that was in keeping with the Government's own industrial practices.

The Secretary of State is committing another grievous sin. One of the problems facing United Kingdom industry is insufficient investment. That is because people can derive better profits from investing in property or in banks. They prefer to put their money into those areas rather than into manufacturing. Here we have an example of the Government themselves taking their money and interest out of manufacturing industry and putting it towards the reduction of their indebtedness to the public sector borrowing requirement. If that is so, all that they are doing is giving a guide to other sections in the financial community to keep clear of manufacturing industry, because there is a better profit in leaving the money in the bank or reducing indebtedness. That is the flaw in the Government's practice.

I not only represent the Scottish National Party in this matter : I have a constituency interest. Many Ferranti workers live in my constituency. Dundee has a factory with about 650 employees. That factory has existed for about 15 years and has grown steadily over that period. At a time when jobs in Dundee are vanishing—the jute mills are being closed down, engineering workshops are retracting, and the carpet industry is in difficulty—it is good to have one company that is expanding at the rate of 10 per cent. a year without any problems.

There is fear amongst the workers about the future. They have almost unanimously signed a petition, which they sent to me and which I have sent to the Prime Minister. The petition outlines their worries. They make six points. I shall quote two. They say :
" We have worked hard and co-operated with management to secure our future and independence for the company. We expect the Government to reward enterprise and achievement, not simply sell out to the highest bidder regardless of the consequences."
They go on :
" The present book value of the NEB investment is less than £7 million and we do not see why the NEB cannot retain the company holding. But if they must sell the shares they should be sold in such a manner as to retain independence for the company and still realise a return for the taxpayer. We have worked hard to realise a sound NEB investment."
Those are the comments of the work force, contained in a petition organised by the AUEW in the factory.

As has been said by the hon. Members for Edinburgh, Central (Mr. Cook) and for Edinburgh, South (Mr. Ancram), Ferranti is in a strong position. Although it has been controlled from outside Scotland, it has performed its role in the high technology area with maturity and re- sponsibility. It is still a family company, and is regarded as such by the work force.

The Secretary of State says that the Government are determined to sell. From the arguments put forward by the Secretary of State I do not see why. If the company is retained, the taxpayers' investment will grow. Dividends accruing to the NEB from this successful company will benefit the taxpayer. It is unacceptable that a company such as the GEC is waiting in the wings to snap up Ferranti. The machine tool industry has been rationalised, not necessarily to its betterment. In Scotland there are innumerable examples of companies that have been taken over and factories that have closed down. The GEC has already been taken to the Monopolies and Mergers Commission on two occasions, which is significant.

Does the hon. Gentleman agree that the GEC has one of the finest records for closing down companies that it takes over? Sir Arnold Weinstock has perhaps received a peerage for the finest record in creating redundancies. People may wonder why he received that honour.

I have already agreed with one opinion advanced from the Conservative Benches. The hon. Gentleman must make his own speech.

Have the Government decided to sell all the NEB's shares, or only some? If only some are to be sold, will the residue be left with the NEB or will the Government consider transferring, say, 40 per cent. of the shares, representative of the Scottish work force, to the Scottish Development Agency? That would keep a significant shareholding in public control to protect the independence of the company. However, if the Secretary of State is determined to sell all the shares, they should be sold in small tranches and over a considerable time, as has been said. I support the suggestions of the hon. Member for Rochdale (Mr. Smith) regarding a trust fund and giving the work force an opportunity to purchase shares, if people wish to do so.

6.22 pm

In my constituency and in neighbouring constituencies surrounding the Royal Naval base at Portsmouth there are Ferranti offices, and Ferranti has a permanent presence in the Royal Naval dockyard.

I refute the suggestion made from the Opposition Benches that within Ferranti there is "united opposition" to the sale of the NEB holding. In a statement to management and union conveners the managing director said :
"The Board has never sought to oppose in principle the departure of the NEB as a shareholder".
Last week I was lobbied by workers from my constituency and neighbouring constituencies and by Ferranti workers from the North of England. They wanted to talk to a Tory Member of Parliament. They made the point that they did not wish the issue to be seen as a party political squabble. Among the groups that visited me were those who wanted to see the NEB holding maintained and those who were strongly opposed to it. However, the workers are united in wanting provisions to ensure the continued independence of the company if the shares are to be disposed of, and given the political climate we can assume that they will be.

With respect, there is not sufficient time.

There is nothing inconsistent with the private enterprise system——

On a point of order, Mr. Deputy Speaker. It is a courtesy in the House that when an hon. Member refers to——

The principles on which the Government were elected and are operating are not incompatible with orderly marketing. The disposal of the NEB holding in Ferranti should be an example of that. The shares should be sold to ensure the widest dispersal of ownership. Steps should be taken to ensure that Ferranti employees have the opportunity to obtain and develop a holding in the company. I agree with my right hon. Friend that employees' holdings are not a solution to the company's problems, but they can be part of the solution. A strong worker ownership of shares would help the morale of the company and ensure its essential independence.

The Government tonight should give the firmest possible warning to potential monopolists that they regard it as their duty to draw to the attention of the Monopolies and Mergers Commission, not by a nod and a wink, but by formal representations, procedures that appear to reduce the competitive element in this section of industry.

My right hon. Friend helpfully listed the motives that a potential purchaser of a controlling interest might have. There were two motives which he did not list and which might be significant to anyone prepared to pay a premium for a controlling interest. First, there is the reduction of competition in an especially competitive area. Secondly, there is the reduction of capacity, which would inevitably involve a reduction in employment opportunities for skilled people. In the years to come we shall need everyone who has skill, enterprise and initiative—management, middle management and shop floor workers—in this sector, where we can foresee expansion. The Government's policies should be geared to the expansion and prosperity of a successful industry, and the maintentance of an independent Ferranti operation.

6.29 pm

At the conclusion of the debate one is even more entitled to ask why Ferranti is for sale. Every speaker has asked the Secretary of State for a guarantee of the future independence of this company. I hope that those outside following the debate will have been impressed by the tone and manner of the speeches. They cannot fail to conclude that the Government have brought the problem upon themselves for no good reason.

It is especially interesting to note that in all the speeches, including those from the Government Benches, there has not been a single call for the untrammelled forces of the market to decide the outcome of any Ferranti sale. The conclusion that one draws from this is that people really want to have intervention by another name.

It is worth asking this question for several other reasons. There is no doubt about the NEB view. I quote from a letter from the chairman of the NEB to my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman), in which he said :
" I note your own strong view that the NEB should not be disposing of its Ferranti shareholding at all. We are, of course, doing so at the express wish of the Government as part of its overall efforts to reduce the public sector borrowing requirement."
That in itself cannot be a very good reason for creating this dilemma. The sale of Ferranti in toto could make a reduction of about half of 1 per cent. in the public sector borrowing requirement. It could hardly make a massive impact on the PSBR. If that is the best reason the Secretary of State can find for thus instructing the NEB, he really ought to go away and think again.

Is it in the taxpayers' interest? We have heard the taxpayers' interest quoted. I remind the Secretary of State of what The Scotsman said on 9 June :
" But if Margaret Thatcher really did apply her financial beliefs to Ferranti there would be no sale at all; holding on to the shares almost certainly would be the advice she would get from any stockbroker. That may be irony enough but a sharper one is that, had she been in Downing Street six years ago, there would be no Ferranti at all now—and no opportunity for the Government to make a profit out of the sale of its shares."
So it is not really in the taxpayers' interests either.

Is it good commercial practise? It can hardly be good commercial practice to have an enforced sale of shares against the wishes of the united board of the company involved and against the wishes also of the NEB. Hawking the shares around in this way can hardly be described as good commercial practice. The precedents under this Government—for example, their dealings most recently with Fairey Holdings—hardly give ground for confidence that the outcome will be successful. From what we read in well-informed newspapers, near and far, something very wrong has happened in that deal, which we were told was being pursued in the taxpayers' interest.

Are small investors to gain from the sale? Apparently not, if we follow the examples of Fairey and ICL. Not one small investor participated or gained in those sales.

What about the Budget strategy, which the Secretary of State mentioned, on the de-merging of companies? Is it not likely that the sale will produce the opposite effect and, far from de-merging, will produce an even greater concentration, as many speakers have said, less competition, and less choice for the Ministry of Defence in highly specialised and very expensive public ordering contracts? That again is hardly in the national interest or in the taxpayers' interest. There are no good grounds under any of those headings for having this sale.

During the passage of the Industry Bill—which, of course, is not yet law, and under the provisions of which the Secretary of State is forcing the sale—we had a great debate about industrial reorganisation. The Secretary of State is removing the powers of the NEB to reorganise industry, but will not one of the effects of the sale be that the private sector will rationalise industry, that GEC or ITT—perhaps notwithstanding his guarantee about foreign companies—or Racal will buy Ferranti and rationalise it, closing down factories and creating more unemployment in Scotland and perhaps also in the North-West?

As many people have said, Ferranti is one of the few firms expanding at the moment. Its story of success has also been a story of job creation in the Northwest and in Scotland. The hon. Member for Dundee, East (Mr. Wilson) made a sarcastic comment about my right hon. Friend the Member for Deptford (Mr. Silkin). Let me tell the hon. Member that if he had not participated in bringing this Government to office Ferranti would not be in jeopardy.

Is the reason for the disposal of Ferranti industrial growth? That is hardly so, because it is growing at the moment as an independent company under the auspices of the NEB. As I have just said, Scotland and the Northwest in particular have benefited greatly from that position.

From all sides the Secretary of State has been told that the sale will bring closures. It will bring less choice for the MOD. It will bring no major or lasting gain to the PSBR or to the taxpayers.

What then, do we conclude is the real reason for the sale? It is one of dogma. It is a doctrinaire decision, not supported by any rational argument, and least of all supported by the Secretary of State's own speech, which seemed to be riddled with inconsistencies—a kind of public agonising about the difficulties that he faces, which are all of his own making.

One of the other significant points made in the debate by several hon. Members is that British industry is fed up with being a kind of political football. What could be a worse example of British industry being kicked around and mucked about against its wishes—for no industrial or commercial advantage to itself—than this one? Perhaps when the Minister of State replies he will answer that and some of the other questions that I have posed.

Who supports this forced sale, apart from the Secretary of State, the Treasury and, no doubt, the Prime Minister? The Prime Minister's support for it is very odd, in view of her recent speech about our industrial dilemma. She was reported as saying that
" trade union leaders had to decide whether to work with economic forces for the benefit of their members, or whether to use their industrial muscle to secure a short-term gain at the cost of making this worse for those they represent in the long run."
Is not that exactly what her Secretary of State for Industry is now indulging in—a decision to make a short-term gain against our interest in the long run? That is exactly the position described in the Prime Minister's own speech.

I wonder whether the Secretary of State is supported in his decision by the Ministry of Defence. I wonder whether he is supported by the Scottish Office or the Department of Trade—or, indeed, by anyone other than the Prime Minister and the Chancellor of the Exchequer.

There is no doubt that it must be against the interests of the Ministry of Defence and the Scottish Office, and it must at least embarrass the Secretary of State for Trade that his right hon. Friend is almost inevitably forcing him into the position of having to make a referral to the Monopolies and Mergers Commission of the decision of his own Cabinet colleagues. That really is standing reality on his head.

Although he may have support in the Lobby, on this decision the Secretary of State is not really supported by many friends in his Administration, so far as we can tell. He certainly does not have the NEB's support.

What guarantees are people entitled to expect or to request? I hope that the Government will not take the view that no one is entitled to ask for guarantees, because, on the other side of the coin, buyers of the NEB assets are asking for guarantees. S. Pearson is asking for guarantees about Fairey Holdings' future profitability, so why are not the Government, in the national interest, entitled to ask for guarantees when sales are being arranged? Are any guarantees to be given to the management and the trade unions of Ferranti?

The chairman of Ferranti wrote to The Times today asking for the independence of his company to be guaranteed. I say to him that his best guarantee of independence is for these shares to stay exactly where they are—in the NEB.

The Secretary of State acknowledged in his speech that the NEB had not sought to interfere with the management of Ferranti in any material way——

and apart from doctrinal claptrap about the NEB from Right-wing windbags who write for The Sunday Telegraph, the NEB position vis-a-vis Ferranti is the best guarantee that the chairman and his directors can have.

In this forced sale, no national interest at all is being served. No industrial interest and no Ferranti interest is being served. No employment interest is being served, either.

It is significant that successive speeches from Conservative Members, all lukewarm about the sale in the first place and all falling far short of open support for what the Government are doing, have contained some feeling about jobs in their constituencies. None of these things is guaranteed by what the Government are doing. The hon. Member for Altrincham and Sale (Mr. Montgomery) made a brave speech but said that he would vote for the Government this time but not on a future occasion. He had better recognise that he will not get a second chance on this issue.

I ask two more questions about the Secretary of State's attitude in this matter, which perhaps the Minister of State will answer. I should like to contrast the Secretary of State's attitude in this dilemma with his attitude towards the NEB and Rolls-Royce. On that occasion he justified at some length to the House his support for the chairman of Rolls-Royce against the NEB. He said that for all sorts of governmental reasons—non-intervention against the NEB, and on commercial grounds—he had to accept the judgment of the chairman of Rolls-Royce. Why is it that on this occasion the Secretary of State has swapped horses and is now backing the NEB and telling it that is must go ahead with this proposal against the commercial judgment of the chairman of Ferranti Limited?

That is a fairly amazing turn-round. Even allowing for the fact that there may be some agreement between the NEB and himself about the sale, it is certainly not wholeheartedly with him. That also deserves an explanation.

At present, the trading prospects of Ferranti are good, but they are being damaged. About 40 per cent. of Ferranti's production goes in exports. Those prospects are being damaged. Morale is being undermined in the management and throughout the work force of the company.

This squalid squabble is demotivating people in the company from the top to the bottom. Anyone who has talked to anyone in the company at any level can have no doubt about that.

Why is it all happening? That is the central question of the whole debate. Shall we gain in any material way? The answer to that is a resounding "No." It is happening because of a doctrinal attitude towards the NEB. The only thing in this whole debate which has stopped Conservative Members from supporting the status quo is that the status quo happens to mean some public involvement. In other circumstances, Conservative Members would all support the status quo—but for being frozen in some political permafrost which prevents them from exercising the proper judgment in the interests of their constituents, of the company and of the wider success of British industry.

It is for those reasons that we shall be voting against the Government's proposals tonight.

6.45 pm

On a point of order, Mr. Deputy Speaker. Many Back Benchers have not had the opportunity to participate in this debate. Does the Minister appreciate that the Secretary of State refused to be cross-examined? That is contrary to basic justice in this House.

I think that this has been a useful debate, during which we have covered the subject fairly comprehensively. It has been hard-hitting in parts, but what the House ought to remember, first, is that the subject and the motion were chosen by the Opposition. What the House will then observe is that instead of putting down a motion that required the shares in Ferranti to be held by the NEB, the Opposition put down a totally different motion. If they had put down such a motion as that they would have discovered, as has been clear from the speeches of my hon. Friends, that all of my hon. Friends are in favour of the NEB shares being disposed of.

As my hon. Friend the Member for Edinburgh, South (Mr. Ancram) pointed out, the debate has essentially been about the manner in which the Government should dispose of their shareholding in this commercial organisation. In any situation this is complex and difficult enough, but I think that in the present case the problem is at its greatest.

This is a situation in which the Government's holding is a controlling one and if acquired by a single bidder would trigger off an automatic bid for the rest of the shares. It is a situation in which there are, or appear likely to be, a number of companies interested in the possibility of acquiring Ferranti because they see, in some cases, common products, and in some cases complementary products.

What has not so far been said in the debate is that it is not unreasonable to suppose that a larger company acquiring Ferranti would gain strength from doing so and would, therefore, increase its own internal, and particularly its own international, competitiveness. That is something that has to be taken into account with all the other arguments that have been put forward.

Then there is the important point—to which I shall return—that we have a situation in which an acquisition by a single bidder would almost certainly provide the taxpayer with a substantially better return than would any other route.

My right hon. Friend the Secretary of State spelt out logically and clearly the options before the NEB and the Government. He made it clear that his mind has not been made up. [HON. MEMBERS : "Oh!"] These points were argued and counter-argued by my hon. Friends and Opposition Members. Many hon. Members put the case with passion and eloquence for Ferranti remaining as an independent company. It is impossible not to be impressed by strength of feeling of hon. Members about what they think would be in the best interests of their constituents. That strength of feeling arises also out of the views of the members of Ferranti's management and work force.

I am sorry, but I cannot give way. There is insufficient time. I shall come to the matter that the hon. Gentleman wishes to raise.

The dilemma of the Government over the method of disposal has been underlined. It is probable, but by no means certain, that a decision by the Government to let the company go to the highest bidder would result in the company being acquired by another. Some would describe that as allowing market forces to operate. It might be argued that if the Government did not follow that route they would be behaving uncommercially. Others might argue that such Government action would be acquiescing in a takeover and therefore ensuring effectively that it came about. Those same people might argue for action that ensured the independence of Ferranti—again, a deliberate decision in industrial structuring. That is the dilemma. There is a strong political dimension. If an example is needed, it is that Governments make bad shareholders.

Some hon. Members have pressed the case for the shares to remain with the NEB. In that situation, as my hon. Friends have reminded me, the company is not independent but is subject to political interference and subject to being made a political football of the sort to which the hon. Member for Whitehaven (Dr. Cunningham) referred. The hon. Member for Edinburgh, Central (Mr. Cook), in what I thought was one of the better speeches, spoilt his argument by telling the House that the numerical control side of Ferranti had been ordered to be disposed of to Plessey by what was essentially a political body, the IRC. The result, as spelt out by the hon. Gentleman, was no more numerical control work in this country. It was a good example of political interference that arises eventually in any situation through having a Government agency at work.

I should like to deal with some of the points that have been raised. A number of my hon. Friends and also the hon. Member for Whitehaven raised the question whether the Government should be prepared to forgo the premium. My hon. Friend the Member for Stretford (Mr. Churchill) gave a figure of £10 million to £20 million. I do not know whether he is right. I suspect that the figure is somewhere in the upper range of those that he gave. Such a figure cannot be ignored, except for good reason, at a time when the Government are trying to cut the PSBR, reduce interest rates and combat inflation. My hon. Friends have spelt out some reasons that have to be considered.

It was suggested that the NEB might sell in two stages. This would continue uncertainty and give no guarantee about the independence of the company. A bidder could bid for the 25 per cent. when sold and bid for the other shares on the market.

The right non. Member for Manchester, Wythenshawe (Mr. Morris) raised the question of monopoly reference. The House is aware of the procedures that are laid down. The Office of Fair Trading has to come to a conclusion and make a recommendation to the Secretary of State for Trade. It is not a responsibility of my Department. A fairly strong degree of competition exists and is fairly well split in the industry.

I welcome the fact that the question of employee shareholding was raised by my hon. Friends and also by the hon. Member for Rochdale (Mr. Smith). This is a matter which I hope the National Enterprise Board will bear in mind.

I was also asked about the possibility of a statement. I wish to make the position clear. If, and I underline the words "if", it is a question of my right hon. Friend giving a direction under the 1980 Bill, which may or may not be law at that time, such a direction has to be laid before Parliament. I have no doubt that my right hon. Friend will, in any circumstance, wish to keep the House informed of what he finally decides to say to the NEB.

Will the House have an opportunity to vote on this issue when the Secretary of State has made up his mind? Conservative Members have been saying that they want this.

The House has had the opportunity today of a debate. We have the opportunity of a vote. The Opposition had the choice of the motion, this being a Supply Day. I have given the House a firm assurance that my right hon. Friend will keep the House informed of what he says on this matter.

The Opposition motion, on which I assume we shall have the opportunity of voting, is both hypocritical and unrealistic. It is hypocritical because the Opposition, as the right hon. Member for Deptford (Mr. Silkin) and speaker after speaker on the Opposition Benches have made clear, wish for nothing better than to acquire the remaining 50 per cent. of Ferranti shares. If they had followed that basic wish in the wording of their motion, they would at least have made clear to the House where they stand in these matters.

It is amazing—I am sorry that there is no chance to press the right hon. Mem-for Deptford—that the House has heard nothing about renationalisation without compensation. That cry has been heard in the House before, but not tonight. The more moderate voices have been heard. The House knows, however, that it is the avowed intention of the Labour Party to nationalise where it can. That is why I charge the Opposition with hypocrisy in putting forward this motion.

Will my hon. Friend confirm that if the Government decided to maintain the independence of Ferranti they could do so by making it clear that they would refer to the Monopolies and Mergers Commission any takeover that would bring about a monopoly situation?

The Government are not in a position to pre-judge this issue. The procedures are laid down. The Office of Fair Trading has to make its views known to the Secretary of State for Trade, who may accept the recommendation put before him. He may overrule it.

The motion is unrealistic because it looks for guarantees in security of employment. A guarantee of jobs cannot be decided by this House. That comes through the ability of a company to compete. It comes from products that can sell in the international market place and can sell profitably. It comes from a company that can maintain its financial strength. Employment prospects depend upon the efficiency and hard work of the employees, on the skills of its designers and technicians and on the special aptitudes of its managers. It is because of those aptitudes and skills that there can be confidence about jobs in the future, confidence about work on research and development and confidence about work on production.

The debate has been of immense value. It has highlighted the problems. It has produced many and often conflicting commercial, financial, political and human arguments. My hon. Friends have presented the views of their constituents. We have stated that a decision has not been taken. Our amendment acknowledges that recommendations can be made to the NEB. My right hon. Friend cannot ignore the speeches that have been made in this debate.

Question put That the original words stand part of the Question :—

Division No. 365]

AYES

[6.59 pm

Abse, LeoFoster, DerekMorris, Rt Hon John (Aberavon)
Adams, AllenFoulkes, GeorgeMorton, George
Allaun, FrankFraser, John (Lambeth, Norwood)Moyle, Rt Hon Roland
Alton, DavidFreeson, Rt Hon ReginaldNewens, Stanley
Anderson, DonaldFreud, ClementOakes, Rt Hon Gordon
Archer, Rt Hon PeterGarrett, John (Norwich S)Ogden, Eric
Armstrong, Rt Hon ErnestGeorge, BruceO'Halloran, Michael
Ashley, Rt Hon JackGilbert, Rt Hon Dr JohnOrme, Rt Hon Stanley
Ashton, JoeGinsburg, DavidOwen, Rt Hon Dr David
Atkinson, Norman (H'gey, Tott'ham)Gourlay, HarryPalmer, Arthur
Bagier, Gordon A. TGraham, TedPark, George
Barnett, Guy (Greenwich)Grant, George (Morpeth)Parry, Robert
Barnett, Rt Hon Joel (Heywood)Grant, John (Islington C)Pendry, Tom
Beith, A. JGrimond, Rt Hon J.Powell, Raymond (Ogmore)
Benn, Rt Hon Anthony WedgwoodHamilton, James (Bothwell)Prescott, John
Bennett, Andrew (Stockport N)Hamilton, W. W. (Central File)Race, Reg
Bidwell, SydneyHarrison, Rt Hon WaiterRadice, Giles
Booth, Rt Hon AlbertHart, Rt Hon Dame JudithRees, Rt Hon Merlyn (Leeds South)
Bottomley, Rt Hon Arthur (M'brough)Hattersley, Rt Hon RoyRichardson, Jo
Bradley, TomHaynes, FrankRoberts, Albert (Normanton)
Brown, Hugh D. (Provan)Healey, Rt Hon DenisRoberts, Allan (Bootle)
Brown, Robert C. (Newcastle W)Heffer, Eric S.Roberts, Ernest (Hackney North)
Brown, Ron (Edinburgh, Leith)Holland, Stuart (L'beth, Vauxhall)Roberts, Gwilym (Cannock)
Buchan, NormanHomewood, WilliamRobertson, George
Callaghan, Rt Hon J. (Cardiff SE)Hooley, FrankRobinson, Geoffrey (Coventry NW)
Callaghan, Jim (Middleton & P)Horam, JohnRodgers, Rt Hon William
Campbell, IanHowell, Rt Hon Denis (B'ham, Sm H)Rooker, J. W.
Campbell-Savours, DaleHowells, GeraintRoss, Ernest (Dundee West)
Cant, R. B.Huckfield, LesRyman, John
Cartwright, JohnHughes, Mark (Durham)Sandelson, Neville
Clark, Dr David (South Shields)Hughes, Robert (Aberdeen North)Sever, John
Cocks, Rt Hon Michael (Bristol S)Hughes, Roy (Newport)Sheerman, Barry
Cohen, StanleyJanner, Hon GrevilleSheldon, Rt Hon Robert (A'ton-u-L)
Coleman, DonaldJay, Rt Hon DouglasShore, Rt Hon Peter (Step and Pop)
Conlan, BernardJohn, BrynmorShort, Mrs Renée
Cook, Robin F.Johnson, James (Hull West)Silkin, Rt Hon John (Deptford)
Cowans, HarryJohnson, Walter (Derby South)Silkin, Rt Hon S. C. (Dulwich)
Crowther, J. S.Jones, Rt Hon Alec (Rhondda)Silverman, Julius
Cryer, BobJones, Barry (East Flint)Skinner, Dennis
Cunliffe, LawrenceJones, Dan (Burnley)Smith, Cyril (Rochdale)
Cunningham, George (Islington S)Kaufman, Rt Hon GeraldSmith, Rt Hon J. (North Lanarkshire)
Cunningham, Dr John (Whitehaven)Kerr, RussellSoley, Clive
Dalyell, TamKilfedder, James A.Spearing, Nigel
Davidson, ArthurKilroy-Silk, RobertSpriggs, Leslie
Davies, Rt Hon Denzil (Llanelli)Kinnock, NeilStallard, A. W.
Davies, Ifor (Gower)Lamborn, HarryStewart, Rt Hon Donald (W Isles)
Davis, Clinton (Hackney Central)Lamond, JamesStoddart, David
Davis, Terry (B'rm'ham, Stechford)Leadbitter, TedStott, Roger
Deakins, EricLestor, Miss Joan (Eton & Slough)Strang, Gavin
Dean, Joseph (Leeds West)Lewis, Arthur (Newham North West)Straw, Jack
Dempsey, JamesLewis, Ron (Carlisle)Summerskill, Hon Dr Shirley
Dixon, DonaldLitherland, RobertTaylor, Mrs Ann (Bolton West)
Dobson, FrankLofthouse, GeoffreyThomas, Jeffrey (Abertillery)
Dormand, JackLyons, Edward (Bradford West)Thomas, Mike (Newcastle East)
Douglas, DickMabon, Rt Hon Dr J DicksonThomas, Dr Roger (Carmarthen)
Douglas-Mann, BruceMcDonald, Dr OonaghThorne, Stan (Preston South)
Dubs, AlfredMcElhone, FrankTilley, John
Dunn, James A. (Liverpool, Kirkdale)McKay, Allen (Penistone)Torney, Tom
Dunnett, JackMcKelvey, WilliamUrwin, Rt Hon Tom
Dunwoody, Mrs GwynethMacKenzie, Rt Hon GregorVarley, Rt Hon Eric G.
Eadie, AlexMaclennan, RobertWainwrlght, Edwin (Dearne Valley)
Eastham, KenMcNally, ThomasWainwrlght, Richard (Colne Valley)
Edwards, Robert (Wolv SE)McWilliam, JohnWalker, Rt Hon Harold (Doncaster)
Ellis, Raymond (NE Derbyshire)Magee, BryanWatkins, David
Ellis, Tom (Wrexham)Marks, KennethWeetch, Ken
English, MichaelMarshall, Dr Edmund (Goole)Wellbeloved, James
Ennals, Rt Hon DavidMarshall, Jim (Leicester South)Welsh, Michael
Evans, loan (Aberdare)Martin, Michael (Gl'gow, Springb'rn)White, Frank R. (Bury & Radcllffe)
Evans, John (Newton)Mason, Rt Hon RoyWhile, James (Glasgow, Pollok)
Ewing, HarryMaxton, JohnWhitehead, Phillip
Faulds, AndrewMaynard, Miss JoanWhitlock, William
Field, FrankMeacher, MichaelWilley, Rt Hon Frederick
Fitch, AlanMellish, Rt Hon RobertWilliams, Rt Hon Alan (Swansea W)
Flannery, MartinMikardo, IanWilliams, Sir Thomas (Warrington)
Fletcher, L. R. (Ilkeston)Millan, Rt Hon BruceWilson, Gordon (Dundee East)
Fletcher, Ted (Darlington)Miller, Dr M. S. (East Kilbride)Wilson, William (Coventry SE)
Foot, Rt Hon MichaelMitchell, Austin (Grimsby)Winnick, David
Ford, BenMorris, Rt Hon Alfred (Wythenshawe)Woodall, Alec
Forrester, JohnMorris, Rt Hon Charles (Openshaw)Woolmer, Kenneth

The House divided : Ayes 240, Noes 307.

Wrigglesworth, IanTELLERS FOR THE AYES.
Wright, SheilaMr. Hugh McCartney and
Young, David (Bolton East)Mr. James Tinn.

NOES

Adley, RobertEggar, TimothyLester, Jim (Beeston)
Aitken, JonathanElliott, Sir WilliamLewis, Kenneth (Rutland)
Alexander, RichardEmery, PeterLloyd, Peter (Fareham)
Alison, MichaelEyre, ReginaldLoveridge, John
Amery, Rt Hon JulianFeirbairn, NicholasLuce, Richard
Ancram, MichaelFairgrieve, RussellLyell, Nicholas
Arnold, TomFaith, Mrs SheilaMcCrindle, Robert
Aspinwall, JackFarr, JohnMacfarlane, Neil
Atkins, Rt Hon H. (Spelthorne)Fell, AnthonyMacGregor, John
Atkins, Robert (Preston North)Fenner, Mrs PeggyMacKay, John (Argyll)
Atkinson, David (B'mouth, East)Finsberg, GeoffreyMacmillan, Rt Hon M. (Farnham)
Baker, Kenneth (St. Marylebone)Fisher, Sir NigelMcNair-Wilson, Michael (Newbury)
Baker, Nicholas (North Dorset)Fletcher, Alexander (Edinburgh N)McNair-Wilson, Patrick (New Forest)
Banks, RobertFletcher-Cooke, CharlesMcQuarrie, Albert
Beaumont-Dark, AnthonyFookes, Miss JanetMadel, David
Bell, Sir RonaldForman, NigelMarland, Paul
Bendall, VivianFowler, Rt Hon NormanMarlow, Tony
Benyon, Thomas (Abingdon)Fox, MarcusMarshall, Michael (Arundel)
Benyon, W. (Buckingham)Fraser, Rt Hon H. (Stafford & St)Marten, Neil (Banbury)
Best, KeithFry, PeterMates, Michael
Bevan, David GilroyGalbraith, Hon T. G. D.Mather, Carol
Bitten, Rt Hon JohnGardiner, George (Reigate)Maude, Rt Hon Angus
Biggs-Davison, JohnGardner, Edward (South Fylde)Mawby, Ray
Blackburn, JohnGarel-Jones, TristanMawhinney, Dr Brian
Blaker, PeterGilmour, Rt Hon Sir IanMaxwell-Hyslop, Robin
Body, RichardGlyn, Dr AlanMayhew, Patrick
Bonsor, Sir NicholasGoodhew, VictorMellor, David
Boscawen, Hon RobertGoodlad, AlastairMeyer, Sir Anthony
Bottomely, peter (woolwich which)Gow, IanMiller Hal (Bromsgrove&Redditch)
Bowden, AndrewGower, Sir RaymondMills, lain (Meriden)
Boyson, Dr RhodesGrant, Anthony (Harrow C)Mills, Peter (West Devon)
Braine, Sir BernardGray, HamishMiscampbell, Norman
Bright, GrahamGreenway, HarryMitchell, David (Basingstoke)
Brinton, TimGrieve, PercyMoate Roger
Brocklebank-Fowler, ChristopherGriffiths, Eldon (Bury St Edmunds)Molyneaux, James
Brooke, Hon PeterGriffiths, Peter (Portsmouth N)Monro, Hector
Brotherton, MichaelGrist, IanMontgomery, Fergus
Brown, Michael (Brigg & Sc'thorpe)Gummer, John SelwynMoore, John
Browne, John (Winchester)Hamilton, Hon Archie (Eps'm&Ew'll)Morgant, Geraint
Bruce-Gar dyne, JohnHamilton, Michael (Salisbury)Morris, Michael (Northampton. Sth)
Bryan, Sir PaulHampson, Dr KeithMorrison, Hon Peter (City of Chester)
Buchanan-Smith, Hon AlickHannam, JohnMudd, David
Budgen, NickHaselhurst, AlanMurphy, Christopher
Bulmer, EsmondHastings, StephenNeale, Gerrard
Burden, F. A.Hawkins, PaulNeedham, Richard
Butcher, JohnHawksley, WarrenNelson, Anthony
Butler, Hon AdamHayhoe, BarneyNeubert, Michael
Cadbury, JocelynHeddle, JohnNewton, Tony
Carlisle, John (Luton West)Henderson, BarryNott, Rt Hon John
Carlisle, Kenneth (Lincoln)Heseltine, Rt Hon MichaelOnslow, Cranley
Carlisle, Rt Hon Mark (Runcorn)Hicks, RobertOppenhelm, Rt Hon Mrs Sally
Chalker, Mrs LyndaHiggins, Rt Hon Terence L.Osborn, John
Channon, PaulHolland, Philip (Carlton)Page, Rt Hon Sir R. Graham
Chapman, SydneyHooson, TomPage, Richard (SW Hertfordshire)
Churchill, W. S.Hordern, PeterParkinson, Cecil
Clark, Hon Alan (Plymouth, Sutton)Howe, Rt Hon Sir GeoffreyParris, Matthew
Clark, Sir William (Croydon South)Howell, Rt Hon David (Guildford)Pattern, Christopher (Bath)
Clarke, Kenneth (Rushcliffe)Howell, Ralph (North Norfolk)Patten, John (Oxford)
Clegg, Sir WalterHunt, David (Wirral)Pawsey, James
Cockeram, EricHunt, John (Ravensbourne)Percival, Sir Ian
Colvin, MichaelHurd, Hon DouglasPeyton, Rt Hon John
Cope, JohnIrving, Charles (Cheltenham)Pink, R. Bonner
Cormack, PatrickJenkin, Rt Hon PatrickPollock, Alexander
Corrie, JohnJessel, TobyPorter, George
Costain, A. P.Johnson Smith, GeoffreyPowell, Rt Hon J. Enoch (S Down)
Cranborne, ViscountJopling, Rt Hon MichaelPrentice, Rt Hon Reg
Crilchley, JulianJoseph, Rt Hon Sir KeithPrice, David (Eastleigh)
Crouch, DavidKaberry, Sir DonaldProctor, K. Harvey
Dean, Paul (North Somerset)Kershaw, AnthonyPym, Rt Hon Francis
Dorreil, StephenKimball, MarcusRaison, Timothy
Douglas-Hamilton, Lord JamesKitson, Sir TimothyRathbone, Tim
Dover, DenshoreKnox, DavidRees, Peter (Dover and Deal)
du Cann, Rt Hon EdwardLang, IanRees-Davies, W. R.
Dunlop, JohnLangford-Holt, Sir JohnRenton, Tim
Dunn, Robert (Dartford)Latham, MichaelRhodes James, Robert
Durant, TonyLawrence, IvanRidsdale, Julian
Dykes, HughLawson, NigelRifkind, Malcolm
Eden, Rt Hon Sir JohnLee, JohnRippon, Rt Hon Geoffrey
Edwards, Rt Hon N. (Pembroke)Lennox-Boyd, Hon Mark

Roberts, Michael (Cardiff NW)Squire, RobinWaldegrave, Hon William
Roberts, Wyn (Conway)Stanbrook, Ivorwalker, Rt Hon Peter (Worcester)
Ross, Wm (Londonderry)Stanley, JohnWalker, Bill (Perth & E Perthshire)
Rossi, HughSteen, AnthonyWalker-Smith, Rt Hon Sir Derek
Rost, PeterStevens, MartinWaller, Gary
Royle, Sir AnthonyStewart, Ian (Hitchin)walters, Dennis
Sainsbury, Hon TimothyStokes, JohnWard, John
St. John-Stevas, Rt Hon NormanStradling Thomas, J.Warren, Kenneth
Scott, NicholasTapsell, PeterWatson, John
Shaw, Giles (Pudsey)Taylor, Robert (Croydon NW)Wells, John (Maidstone)
Shaw, Michael (Scarborough)Taylor, Teddy (Southend East)Wells, Bowen (Hert'rd & Stev'nage)
Shelton, William (Streatham)Temple-Morris, PeterWheeler, John
Shepherd, Colin (Hereford)Thatcher, Rt Hon Mrs MargaretWhitelaw, Rt Hon William
Shepherd, Richard (Aldridge-Br'hllls)Thomas, Rt Hon Peter (Hendon S)Whitney, Raymond
Shersby, MichaelThompson, DonaldWickeden keith
Silvester, FredThorne, Neil (llford South)Wiggin, Jerry
Sims, RogerThornton, MalcolmWilkinson John
Skeet, T. H. H.Townsend, Cyril D. (Bexleyheath)Williams, Delwyn (Montgomery)
Smith, Dudley (War. and Leam'ton)Trippier, DavidWolfson, Mark
Speed, KeithTrotter, NevilleYoung, Sir George (Acton)
Speller, Tonyvan Straubenzee, W. B.Younger, Rt Hon George
Spence, JohnVaughan, Dr Gerard
Spicer, Jim (West Dorset)Viggers, PeterTELLERS FOR THE NOES :
Spicer, Michael (S Worcestershire)Waddington, DavidMr. Spencer Le Marchant and
Sproat, lainWakeham, JohnMr. Anthony Berry.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 32 ( Questions on amendments):—

The House divided : Ayes 305, Noes 239.

Division No. 366]

AYES

[7.13 pm

Adley, RobertButcher, JohnFinsberg, Geoffrey
Aitken, JonathanButler, Hon AdamFisher, Sir Nigel
Alexander, RichardCadbury, JocelynFletcher, Alexander (Edinburgh N)
Alison, MichaelCarlisle, John (Luton West)Fletcher-Cooke, Charles
Amery, Rt Hon JulianCarlisle, Kenneth (Lincoin)Fookes Miss Janet
Ancram, MichaelCarlisle, Rt Hon Marx (Runcorn)Forman, Nigel
Arnold, TomChalKer, Mrs LynaaFowler, Rt Hon Norman
Aspinwall, JackChannon, PaulFox, Marcus
Atkins, Rt Hon H. (Spelthorne)Chapman, SydneyFraser, Rt Hon H. (Stafford & St)
Atkins, Robert (Preston North)Churchill, W. S.Fry, Peter
Atkinson, David (B'mouth, East)Clark, Hon Alan (Plymouth, Sutton)Galbraith Hon T. G. D.
Baker, Kenneth (St. Marylebone)Clark, Sir William (Croydon South)Gardiner George (Reigate)
Baker, Nicholas (North Dorset)Clarke, Kenneth (Rushcliffe)Gardner Edward (South Eulda)
Banks, RobertClegg, Sir walterGarel-Jones, Tristan
Beaumont-Dark, AnthonyCockeram, EricGilmour, Rt Hon Sir Ian
Bell, Sir RonaldColvin, MichaelGlyn, Dr Alan
Bendall, VivianCope, JohnGoodhew, Victor
Benyon, Thomaa (Abingdon)Cormack, PatrickGoodlad, Alastair
Benyon, W. (Buckingham)Corrie, JohnGow, Ian
Best, KeithCostain. A. P.Gower, Sir Raymond
Bevan, David GilroyCranborne, ViscountGrant, Anthony (Harrow C)
Biffen, Rt Hon JohnCritchley, JulianGray, Hamish
Biggs-Davlson, JohnCrouch, DavidGreenway, Harry
Blackburn, JohnDean paul (North Somerset)Grieve, Percy
Body, RichardDorrell, StephenGriffiths, Eldon (Bury St Edmunds)
Bonsor, Sir NicholasDouglas-Hamilton. Lord JamesGriffiths, Peter (Portsmouth N)
Boscawen, Hon RobertDover, DenshoreGrist, Ian
Bottomely Peter (Woolwich West)du Cann, Rt Hon EdwardGummer, John Selwyn
Bowden, AndrewDunlop, johnHamilton, Hon Archie (Eps'm&Ew'll)
Boyson, Dr RhodesDunn, Robert (Dartford)Hamilton, Michael (Salisbury)
Brains, Sir BernardDurant, TonyHampson, Dr Keith
Bright, GrahamDykes HughHannam, John
Brinton, TimEden Rt Hon Sir JohnHaselhurst, Alan
Brocklebank-Fowler, ChristopherEdwards, Rt Hon N. (Pembroke)Hastings Stephen
Brooke, Hon PeterEggar, TimothyHawkins, Paul
Brotherton, MichaelElliott, Sir WilliamHawkeley Warren
Brown, Michael (Brlgg & Sc'thorpe)Emery, PeterRaynoe, Darney
Browne, John (Winchester)Eyre, ReginaldHelddel, John
Bruce-Gardyne, JohnFairbairn, NicholasHenderson, Barry
Bryan, Sir PaulFairgrieve, RussellHaseltine Rt Hon Michael
Buchanan-Smith, Hon AlickFaith, Mrs ShelllaHicks Robert
Budgen, NickFarr, JohnHiggns, Rt Hon Terence L.
Bulmer, EsmondFell, AnthonyHolland, Phllip (Carlton)
Burden, F. A.Fenner, Mrs PeggyHooson, Tom

Hordern, PeterMonro, HectorSims, Roger
Howe, Rt Hon Sir GeoffreyMontgomery, FergusSkeet, T. H. H.
Howell, Ralph (North Norfolk)Moore, JohnSmith, Dudley (War. and Leam'ton)
Hunt, David (Wirral)Morgan, GeraintSpeed, Keith
Hunt, John (Ravensbourne)Morris, Michael (Northampton, Sth)Speller, Tony
Hurd, Hon DouglasMorrison, Hon Peter (City of Chester)Spence, John
Irving, Charles (Cheltenham)Murfd, DavidSpicer, Jim (West Dorset)
Jenkin, Rt Hon PatrickMurphy, ChristopherSpicer, Michael (S Worcestershire)
Jessel, TobyNeale, GerrardSproat, lain
Johnson Smith, GeoffreyKeedham, RichardSquire, Robin
Jopling, Rt Hon MichaelNelson, AnthonyStanbrook, Ivor
Joseph, Rt Hon Sir KeithNeubert, MichaelStanley, John
Kaberry, Sir DonaldNewton, TonySteen, Anthony
Kershaw, AnthonyNoll, Rt Hon JohnStevens, Martin
Kimball, MarcusOnslow, CranleyStewart, Ian (Hitchin)
Kitson, Sir TimothyOppenheim, Rt Hon Mrs SallyStokes, John
Knox, DavidOsborn, JohnStradling Thomas, J.
Lang, IanPage, Rt Hon Sir R. GrahamTapsell, Peter
Langford-Holt, Sir JohnPage, Richard (SW Hertfordshire)Taylor, Robert (Croydon NW)
Latham, MichaelParkinson, CecilTaylor, Teddy (Southend East)
Lawrence, IvanParris, MatthewTemple-Morris, Peter
Lawson, NigelPatten, Christopher (Bath)Thatcher, Rt Hon Mrs Margaret
Lee, JohnPatten, John (Oxford)Thomas, Rt Hon Peter (Hendon S)
Lennox-Boyd, Hon MarkPawsey, JamesThompson, Donald
Lester, Jim (Beeston)Percival, Sir IanThome, Neil (llford South)
Lewis, Kenneth (Rutland)Peyton, Rt Hon JohnThornton, Malcolm
Lloyd, Peter (Fareham)Pink, R. BonnerTownsend, Cyril D. (Bexleyheath)
Loveridge, JohnPollock, AlexanderTrippier, David
Luce, RichardPorter, GeorgeTrotter, Neville
Lyell, NicholasPowell, Rt Hon J. Enoch (S Down)van Straubenzee, W. R.
McCrindle, RobertPrentice, Rt Hon RegVaughan, Dr Gerard
Macfarlane, NeilPrice, David (Eastleigh)Viggers, Peter
MacGregor, JohnProctor, K. HarveyWaddlngton, David
MacKay, John (Argyll)Pym, Rt Hon FrancisWakeham, John
Macmillan, Rt Hon M. (Farnham)Raison, TimothyWaldegrave, Hon William
McNair-Wilson, Michael (Newbury)Rathbone, TimWalker, Rt Hon Peter (Worcester)
McNair-Wilson, Patrick (New Forest)Rees, Peter (Dover and Deal)Walker, Bill (Perth & E Perthshire)
McOuarrie, AlbertRees-Davies, W. R.Walker-Smith, Rt Hon Sk- Derek
Madel, DavidRenton, TimWaller, Gary
Mariand, PaulRhodes James, RobertWalters, Dennis
Marlow, TonyRidsdale, JulianWard, John
Marshall, Michael (Arundel)Rifkind, MalcolmWarren, Kenneth
Marten, Neil (Banbury)Rippon, Rt Hon GeoffreyWatson, John
Mates, MichaelRoberts, Michael (Cardiff NW)Wells, John (Maidstone)
Mather, CarolRoberts, Wyn (Conway)Wells, Bowen (Hert'rd & Stev'nage)
Maude, Rt Hon AngusRoss, Wm. (Londonderry)Wheeler, John
Mawby, RayRossi, HughWhitelaw, Rt Hon William
Mawhinney, Dr BrianRost, PeterWhitney, Raymond
Maxwell-Hyslop, RobinRoyle, Sir AnthonyWickenden, Keith
Mayhew, PatrickSainsbury, Hon TimothyWiggin, Jerry
Mellor, DavidSt. John-Stevas, Rt Hon NormanWilkinson, John
Meyer, Sir AnthonyScott, NicholasWilliams, Delwyn (Montgomery)
Miller, Hal (Bromsgrove & Redditch)Shaw, Giles (Pudsey)Wolfson, Mark
Mills, lain (Meriden)Shaw, Michael (Scarborough)Young, Sir George (Acton)
Mills, Peter (West Devon)Shelton, William (Streatham)Younger, Rt Hon George
Miscampbell, NormanShepherd, Colin (Hereford)
Mitchell, David (Basingstoke)Shepherd, Richard (Aldridge-Br'hills)TELLERS FOR THE AYES :
Moate, RogerShersby, MichaelMr. Spencer Le Marchant and
Molyneaux, JamesSilvester, FredMr. Anthony Berry.

NOES

Abse, LeoBuchan, NormanDavis, Clinton (Hackney Central)
Adams, AllenCallaghan, Rt Hon J. (Cardiff SE)Davis, Terry (B'rm'ham, Stechford)
Allaun, FrankCallaghan, Jim (Middieton & P)Deakins, Eric
Alton, DavidCampbell, IanDean, Joseph (Leeds West)
Anderson, DonaldCampbell-Savours, DaleDempsey, James
Archer, Rt Hon PeterCant, R. B.Dixon, Donald
Armstrong, Rt Hon ErnestCartwright, JohnDobson, Frank
Ashley, Rt Hon JackClark, Dr David (South Shields)Dormand, Jack
Ashton, JoeCocks, Rt Hon Michael (Bristol S)Douglas, Dick
Atkinson, Norman (H'gey, Tott'ham)Cohen, StanleyDouglas-Mann, Bruce
Bagier, Gordon A. TColeman, DonaldDubs, Alfred
Barnett, Guy (Greenwich)Conlan, BernardDunn, James A. (Liverpool, Kirkdale)
Barnett, Rt Hon Joel (Heywood)Cook, Robin F.Dunnett, Jack
Beith, A. JCowans, HarryDunwoody, Mrs Gwyneth
Benn, Rt Hon Anthony WedgwoodCrowther, J. S.Eadle, Alex
Bennett, Andrew (Stockport N)Cryer, BobEastham, Ken
Bidwell, SydneyCunliffe, LawrenceEdwards, Robert (Wolv SE)
Booth, Rt Hon AlbertCunningham, George (Islington S)Ellis, Raymond (NE Derbyshire)
Bottomley, Rt Hon Arthur (M'brough)Cunningham, Dr John (Whitehaven)Ellis, Tom (Wrexham)
Bradley, TomDalyell, TarnEnglish, Michael
Brown, Hugh D. (Provan)Davidson, ArthurEnnals, Rt Hon David
Brown, Robert C. (Newcastle W)Davies, Rt Hon Denzll (Llanelli)Evans, loan (Aberdare)
Brown, Ron (Edinburgh, Leith)Davies, Ifor (Gower)Evans, John (Newton)

Ewing, HarryLewis, Arthur (Newham North West)Sandelson, Neville
Faulds, AndrewLewis, Ron (Carlisle)Sever, John
Field, FrankLltherlend, RobertSheerman, Barry
Filch, AlanLofthouse, GeoffreySheldon, Rt Hon Robert (A'ton-u-L)
Flannery, MartinLyons, Edward (Bradford West)Shore, Rt Hon Peter (Step and Pop)
Fletcher, L. ft. (Ilkeston)Mabon, Rt Hon Dr J DicksonShort, Mrs Renée
Fletcher, Ted (Darlington)McCartney, HughSilkin, Rt Hon John (Deptford)
Foot, Rt Hon MichaelMcDonald, Dr OonaghSilkin, Rt Hon S. C. (Dulwich)
Ford, BenMcElhone, FrankSilverman, Julius
Forrester, JohnMcKay, Allen (Penistone)Skinner, Dennis
Foster, DerekMcKelvey, WilliamSmith, Cyril (Rochdale)
Foulkes, GeorgeMacKenzie, Rt Hon GregorSmith, Rt Hon J. (North Lanarkshire)
Fraser, John (Lambeth, Norwood)Maclennan, RobertSoley, Clive
Freeson, Rt Hon ReginaldMcNally, ThomasSpearing, Nigel
Freud, ClementMcWilllam, JohnSpriggs, Leslie
Garrett, John (Norwich S)Magee, BryanStailard, A. W.
George, BruceMarks, KennethStewart, Rt Hon Donald (W isles)
Gilbert, Rt Hon Dr JohnMarshall, Dr Edmund (Goole)Stoddart, David
Ginsburg, DavidMarshall, Jim (Leicester South)Stott, Roger
Gourlay, HarryMartin, Michael (Gl'gow, Springb'rn)Strang, Gavin
Graham, TedMason, Rt Hon RoyStraw, Jack
Grant, George (Morpeth)Maxton, JohnSummerskill, Hon Dr Shirley
Grant, John (Islington C)Maynard, Miss JoanTaylor, Mrs Ann (Bolton West)
Hamilton, James (Bothwell)Meacher, MichaelThomas, Jeffrey (Abertillery)
Hamilton, W. W. (Central Fife)Mellish, Rt Hon RobertThomas, Mike (Newcastle East)
Harrison, Rt Hon WalterMlkardo, IanThomas, Dr Roger (Carmarthen)
Hart, Rt Hon Dams JudithMillan, Rt Hon BruceThome, Slan (Preston South)
Hattersley, Rt Hon RoyMiller, Dr M. S. (East Kilbride)Tilley, John
Haynes, FrankMorris, Rt Hon Alfred (Wythenshawe)Tinn, James
Healey, Rt Hon DenisMorris, Rt Hon Charles (Openshaw)Torney, Tom
Heffer, Eric S.Morris, Rt Hon John (Aberavon)Urwin, Rt Hon Tom
Holland, Stuart (L'beth, Vauxhall)Moyle, Rt Hon RolandVarley, Rt Hon Eric G.
Homewood, WilliamNewens, StanleyWainwright, Edwin (Dearne Valley)
Hooley, FrankOakes, Rt Hon GordonWainwright, Richard (Colne Valley)
Horam, JohnOgden, EricWalker, Rt Hon Harold (Doncaster)
Howell, Rt Hon Denis (B'ham, Sm H)O'Halloran, MichaelWatkins, David
Howells, GeraintOrme, Rt Hon StanleyWeetch, Ken
Huckfield, LesOwen, Rt Hon Dr DavidWellbeloved, James
Hughes, Mark (Durham)Palmer, ArthurWelsh, Michael
Hughes, Robert (Aberdeen North)Park, GeorgeWhite, Frank R. (Bury & Radcliffe)
Hughes, Roy (Newport)Parry, RobertWhite, James (Glasgow, Pollok)
Janner, Hon GrevillePendry, TomWhitehead, Phillip
Jay, Rt Hon DouglasPowell, Raymond (Ogmore)Whitlock, William
John, BrynmorPrescott, JohnWilley, Rt Hon Frederick
Johnson, James (Hull West)Race, RegWilliams, Rt Hon Alan (Swansea W)
Johnson, Walter (Derby South)Radice, GilesWilliams, Sir Thomas (Warrington)
Jones, Rt Hon Alec (Rhondda)Rees, Rt Hon Merlyn (Leeds South)Wilson, Gordon (Dundee East)
Jones, Barry (East Flint)Richardson, JoWilson, William (Coventry SE)
Jones, Dan (Burnley)Roberts, Albert (Normanton)Winnlck, David
Kaufman, Rt Hon GeraldRoberts, Allan (Bootle)Woodall, Alec
Kerr, RussellRoberts, Ernest (Hackney North)Woolmer, Kenneth
Kilfedder, James A.Roberts, Gwilym (Cannock)Wriggleaworth, Ian
Kilroy-Sllk, RobertRobertson, GeorgeWright, Sheila
Kinnock, NellRobinson, Geoffrey (Coventry NW)Young, David (Bolton East)
Lamborn, HarryRodgers, Rt Hon William
Lamond, JamesRooker, J. W.TELLERS FOR THE NOES :
Leadbitter, TedRoss, Ernest (Dundee West)Mr. George Morton and
Lestor, Miss Joan (Eton & Slough)Ryman, JohnMr. Austin Mitchell.

Question accordingly agreed to.

Main Question, as amended, agreed to.

Resolved,

That this House, recognising the signal achievements of the work force, technicians and management of Ferranti Limited in restoring the company to prosperity, welcomes the Government's intention that the National Enterprise Board's shareholding should be sold as soon as practicable, having regard to the interests of the company, the taxpayer and other such considerations as the Government may draw to the Board's attention.