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Shipbuilders' Nationalisation Compensation

Volume 387: debated on Thursday 17 November 1977

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3.9 p.m.

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government when they expect to start honouring their undertaking to make "a substantial and early" payment on account in compensation to nationalised ship-building firms.

My Lords, the Government intend to authorise a payment on account for all companies during January in the light of a preliminary view of their likely negotiating position.

My Lords, is the noble Lord aware that it is good to hear that the Government are contemplating paying something? Will he keep in mind that procrastination in agreeing these payments on account can only delay the reconstruction of the businesses concerned, which carries with it vital hopes of helping to ease the unemployment problem? Will the noble Lord also keep in mind that to use this application of payment on account as a weapon to secure an unfair final settlement on the total account would be contrary to the Statement made by the noble Lord himself and by his right honourable friend in another place? To do that—and it has been suggested in some quarters that it is at present happening—would be verging on sharp practice.

My Lords, it was the Government's recognition of the need for an interim payment that brought about the inclusion of such a provision on account of the Aircraft and Shipbuilding Industry Act. I think the noble Lord is imputing future misbehaviour to the Government which is not the case. I think he is condemning us in advance for something that we are not likely to do.

My Lords, is the noble Lord aware that 18 engineering companies are concerned and that they do not know where they stand at the moment? Can he assure the House that conditions will not be laid down about the degree of the final settlement before this payment—this substantial and early payment—is made?

My Lords, I cannot give an exact assurance on that point, but I can say that if there are unforeseen delays a second interim payment may be made.

My Lords, can my noble friend state how much the payment on account involves and where the money is coming from?

My Lords, it depends entirely on what my noble friend means. The payment on account, of course, comes from the issue of Government stock. Noble Lords will have noted that I have answered the point relating to an early payment but not to "substantial payment". There are two aspects involved here, and I should like to make an important point on this which may clarify the situation for my noble friend. Noble Lords will appreciate that, especially where the vesting companies formed a large part of the group, indications of percentages could influence Stock Exchange prices for the parent companies concerned. That implication has been recognised by a number of the stockholders' representatives. I would say, simply, that the size of the payment will be related to the provisional valuation placed on each company.

Apart from that, my Lords, is the noble Lord aware that the answer he gave to my noble friend was in direct conflict with the rather optimistic answer that he gave to me? Can he give a clear statement that there is no question of the final payment of the total being tied to their asking for a payment on account? To suggest that they have to accept a payment on account, and in doing that commit themselves to a final payment which they have not felt fair or, as yet, agreed, would be very wrong and would verge on sharp practice. The answer to my noble friend is not quite so clear as the rather optimistic one which the noble Lord gave to me.

My Lords, can the noble Lord say how far the views which he has now expressed are satisfactory to the shipbuilders? Coming, as I do, from an area where shipbuilding has been one of our major industries, I consider it very important that they should have fair and just treatment and I am not satisfied at the moment, in view of the noble Lord's answer, that they will get it.

My Lords, there is machinery for arbitration if they consider that they are not receiving fair and just treatment.

My Lords, is the noble Lord aware that it is now over eight months since the Royal Assent to this Bill, and that no large sums of money are involved? There is one company which does not know whether it is going to get £5 million or £25 million in compensation. Do the noble Lord and the Government not realise that this uncertainty is leading to a situation in which reinvestment and restructuring cannot take place, and consequently new employment is not forthcoming?

My Lords, Her Majesty's Government are well aware of that; hence the interim payments. Of course, it is not eight months. I seem to remember that the undertaking which I gave to the noble Lord, Lord Orr-Ewing, was six months from 1st July. In point of fact, the interim payment is only three to four weeks longer than that forecast which I gave at the end of July.

My Lords, is my noble friend aware that it is not fair to himself, if I may say so with respect, that a Department to which he applies in order to be furnished with an appropriate reply to the Question on the Order Paper is not able to tell the House how much is involved?

My Lords, this is an extraordinarily complex subject. It is absurd, I grant you, but bloody difficult, as the parrot said. May I make this point: The Government's accountant advisers, Whinney Murray and Company, are preparing assessments and valuations of the unquoted acquired companies. These will be completed progressively during December to February and will enable the Government's opening position to be formulated, after which negotiations can proceed. Whinney Murray have also been working on inter-company debt to be deemed security. This will be reported to Ministers shortly and it is hoped that all parent companies, except Vickers Limited in respect of shipbuilding, will be informed during November of their position under Section 21.

My Lords, I wonder whether the noble Lord will allow me to say that I agree from the answers I have heard that it is a very complex subject? Beyond that, will he perhaps inform his colleagues, and help to strengthen their view, that there are in many areas of Scotland—there is one fairly close to me—a large number of firms that have been nationalised? Irrespective of our views about nationalisation, we all hope that they may be successful in increasing employment, but, so long as this complex situation continues, there is a vast potential for new employment—and, my goodness! we need it—which is being held up. Cannot a substantial payment be made quickly and without too much fuss?

My Lords, I cannot go too far into the future. The Government agree completely with what the noble Lord has said. It is a value judgment, and by mid-January we hope that payments will have been made, and we can then discuss whether or not they are substantial.

My Lords, as the good faith of the Government is involved in this matter, can the noble Lord perhaps use his influence with his noble friend the Leader of the House to have this matter debated rather quickly? It is worth it, because of its complexity and because of the importance behind it.

My Lords, Members are quite entitled to conduct a cross-examination, but I think that we have had enough of this subject.

My Lords, noble Lords can come back in their own way, if they wish. I am just thinking that we have now been on this Question for 10 minutes, and we do not want speeches.