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 whether they believe that acquiescence in the virtual confiscation of the assets of certain naval shipbuilders under the provisions of the Aircraft and Shipbuilding Industries Act 1977 is compatible with traditional Conservative principles.
My Lords, as I explained to your Lordships in May, it would be wrong to describe the compensation provisions of the 1977 Act as "virtual confiscation", although we accept that they were unfair in respect of some companies. As has been explained in another place on 7th August, it was only with very great regret that we concluded that there is no satisfactory way to alter the 1977 compensation terms. It is no part of traditional Conservative principles to remedy one unfairness by creating new ones.
My Lords, I thank the noble Viscount for his reply, although I must say that it does contradict what many of his colleagues said four years ago. Is he aware that shortly before the Recess nearly every Conservative Back-Bench MP, together with the Ulster Unionists and nearly all the Liberal MPs including Mr. David Steel, voted for a Private Member's Bill which would have effectively led to fair compensation being paid to these companies, and that this Bill was only narrowly defeated because of abstention by the Conservative Front Bench? Is he further aware that failure by this Government to remedy the injustice will give a perfect excuse to a future Government of the extreme Left to nationalise every public company in Britain, and every private company too, virtually without compensation?
My Lords, as I have told the noble Lord before, we are fully aware of the pressure and the criticism about the compensation terms, and we share the view that they have been unfair to a number of companies. I really cannot add to what my right honourable friend the Secretary of State said on 7th August, and I must draw the noble Lord's attention to another principle which is equally important. It is that of "retroaction"—a terrible word. But if we are to start altering statutes passed in 1977 and based on values—which is the problem—in 1973 and 1974, based on an announcement in March 1975 after which there have been both many settlements under the Act and many share dealings in company shares and in parent company shares—if we are to go back on all that, we are bound to create much more unfairness and to set a precedent that retroactive tampering with previous Acts is also a permissible affair. That is just as big a problem.
My Lords, at a convenient date and with due notice will the noble Viscount tell us what are traditional Conservative principles? I have never believed that there were any.
Everything good, my Lords!
My Lords, can the noble Viscount explain why it is considered perfectly all right for Labour Governments to reverse what they consider to be bad Conservative legislation but quite wrong for Conservative Governments to reverse bad Labour legislation?
My Lords, I do not think that I have said it is right for any Government to reverse or tamper with Acts that have been passed. To pass totally new Acts for the future is another question. But here we are talking about a nationalisation Act that was passed through Parliament with certain terms which the outside world—reluctantly in many cases—had to accept and act upon. The noble Lord is not pressing us to bring in new privatisation legislation, which we are trying to do whenever we can, but he is pressing us to go back and alter the terms of an Act passed a long way back. Any Government that does that will receive criticism from these Benches.
My Lords, perhaps my noble friend can answer this question. How long, in fact, did it take to pay the amounts of compensation due, or whatever you like to call it? What were the delays and what was the amount of interest that was paid in the meantime on the outstanding amounts due? That is one form of retroaction that would always be approved, where there is undue delay in payment and interest has not been paid.
My Lords, I can tell my noble friend that interest has been payable since vesting day; that is, between vesting day and the date of settlement for the individual company's case. For interest to go back before vesting day, bearing in mind that the Act became law only on vesting day, would I think be a principle that has not previously been followed. Therefore, interest has been payable between vesting day and the date of settlement.
My Lords, I declare an interest, in that I am a small shareholder in the Vosper company. Will not the Minister agree that it is a basic principle of Conservatism that where a gross unfairness is recognised the Government have a discretion to give relief in such a circumstance?
My Lords, I do not think—this may be an unpopular remark to make—that any Government is capable of preventing unfairness as it turns out after the event. Although we criticised very heavily, and would still do so, the party opposite for nationalisation at all in this area and for the terms of that nationalisation, they did not set a new precedent in naming a particular period for trying to assess the value of companies concerned. The problem arose in the length of time between the announcements and the Act finally becoming law. During that period a number of companies did substantially worse and a smaller number of companies did substantially better than they had been doing in the reference period. It is, of course, the latter which in retrospect one can see have been treated extremely unluckily to the point of unfairness.
My Lords, do I understand that the noble Viscount's remarks apply to companies that have been literally robbed of their assets, such as Yarrow?