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Neb: Disposal Of Holdings

Volume 415: debated on Wednesday 10 December 1980

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2.50 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 whether they are satisfied with the National Enterprise Board's progress in disposing of its holdings.

My Lords, the NEB has made satisfactory progress in carrying out its disposals function. During the last 12 months it has sold its holdings in eight companies for a total of £118 million.

My Lords, while thanking the noble Viscount the Minister for that Answer, may I ask whether he can say whether the impending change of directors may result in any change of policy in the future and, in particular, with a speed-up of disposals?

My Lords, my right honourable friend has recently made clear that there is no change in the roles of the NEB, that the resignations of Sir Arthur Knight and other directors are all for outside reasons and that he does not anticipate any difficulty in filling their positions.

My Lords, may I ask the noble Viscount whether he is aware that so far there has been no satisfactory explanation in the other place or in your Lordships' House, or through the press media, of why several able, talented and prominent people have resigned from the board? Why has there been no explanation? Can it be that they dislike the process of disposing of what might prove to be, if left untouched at the present time and in the foreseeable future, a most valuable asset in the future in the mechanism of the National Enterprise Board?

My Lords, the Question bears on the number of holdings that have been sold, which I have already revealed was in line with what I told the House a year ago the approximate level of sales would be. So far as the wider question of the NEB is concerned, we shall shortly have the Industry Bill in this House, when no doubt these matters will be discussed again; but Sir Arthur Knight has said publicly—and my right honourable friend in the other place has drawn attention to it—that his resignation is not only for personal reasons, but that there is no difference of opinion on policy. Sir John King has agreed to take the chairmanship of British Airways and Sir Robert Clayton's very important functions in one of our largest engineering companies do not leave him with adequate time.

As my right honourable friend has recently said, it is of some gratification that the formidable board that came together a little more than a year ago has in fact produced people who are going on to take major opportunities elsewhere, and we do not anticipate a change in the very important roles of the NEB for the future.

My Lords, would the noble Viscount take this opportunity to agree that if there is to be a continuing role for the National Enterprise Board, as the Government acknowledge that there should be, what the board needs is as much support and encourage- ment as it can be given, particularly in relation to its commercial judgment?

My Lords, I do not think that those questions are at stake or have been at stake. I think the board is performing according to the revised roles in an excellent way.

My Lords, is the Minister aware that if the Government give a little discouragement to the NEB for disposing of its holdings, it would show a glimmer of consensus which would be welcomed by moderates in all parties?

My Lords, I think in my original Answer I made clear that we are very satisfied with the degree of disposals at this stage. Of course, the NEB still has a portfolio of some 60 companies—in all conscience a very big task for any holding company.

My Lords, is the noble Viscount aware that when I asked my previous supplementary question I had no intention of criticising the policy of the Government? They have been elected democratically and they are entitled to proceed with their policy; but would it not be wise to exercise some caution, some prudence in a matter of this sort? Is it not possible that these assets might prove beneficial in the future?

My Lords, I think Her Majesty's Government have acted with extreme prudence and in a very pragmatic way. The number of disposals of shares is of eight companies. We did not in fact press the NEB to dispose of them at an inflexible rate. In February of this year I made clear to your Lordships that in fact we were not pressing a particular detailed plan and timing. However, the board has managed to achieve good sales of eight companies, and I believe that it will continue in an orderly way as and when it is possible to dispose of more shares to enable those companies to prosper in the private market-place.

My Lords, should it not be the policy of the Government to encourage the NEB to keep shares which are profitable so that it is less dependent upon Government finance?

My Lords, I think in this House we have been through the arguments as to whether the NEB should have a broad-ranging, positive role. There will be another chance when the latest Industry Bill comes to this House after the Christmas Recess, and I do not believe that I should be drawn into these wider questions today.