I beg to move,
That this House severely censures the Government for its gross mishandling of its dealings with Rolls-Royce since the bankruptcy of the Company in 1971; and demands the acquition at a fair valuation under the Rolls-Royce (Purchase) Act 1971 of all the assets of the company from the Receiver so that it can continue to make its full contribution to the national economy from within the public sector, and thus safeguard the jobs of those workers whose skills and dedication are its only real assets.
In moving the motion I have 10 specific charges of malpractice and maladministration to make against the Government for their handling of Rolls-Royce over the last two years, each of which will require a full and complete answer from the Secretary of State. I have also drafted and listed a number of important questions which require to be dealt with authoritatively in the debate.
Before I come to those, let me tell the House what the debate is not about. It is not about a threat of confiscation of private property—[Interruption.]—made by me or any other member of the Labour Party. It is not about some change of policy by the Labour Party on the nationalisation of Rolls-Royce. It is not an academic or a legal argument about the status of Rolls-Royce Motors. Let me deal with these issues first. The Labour Party, as the Conservatives very well know, has never advocated or threatened confiscation.
However, what we will not have is the selling off of profitable parts of the public assets in such a way as to allow private profit to be made at the expense of the taxpayer. As for the profitable air routes handed over to British Caledonian, we shall take them back without any compensation, for they belonged and they still belong to the State airlines from which they were confiscated by the Government without any recompense to public funds.
In our motion we demand a fair valuation for Rolls-Royce Motors and if it falls to us later to see that valuation made we shall see, as I made clear in my statement, that there will be no quick or easy profits when Rolls-Royce Motors is brought into the public sector. No one should be surprised that the Opposition intend the nationalisation of Rolls-Royce Motors. We moved an amendment to the Bill in 1971 as the right hon. and learned Member for Gloucestershire, South (Sir F. Corfield) will remember very well. We voted on it and that has been on the record ever since for everyone to sec.
The hysterical reaction to my statement, stirred up by the City and by Ministers, was intended to obscure what is happening, namely the sale of valuable public assets simply to make a profit for the City and others.
I am intrigued by the right hon. Gentleman's classification of Rolls-Royce Motors as presumably one of the commanding heights of the British economy—
Presumably therefore the right hon. Gentleman will be seeking to nationalise British Leyland, Ford and General Motors as well.
I had supposed, foolishly for a moment, that the hon. Member would make a serious intervention. I should know him well enough to realise that it would be near impossible for him to do that.
An attempt was made last week to confuse the issue by suggesting that Rolls-Royce Motors had never been nationalised, but that was not and is not the issue. Rolls-Royce is a public asset because the public has paid for Rolls-Royce over and over again in the last 10 years. The company lived off defence contracts for years and when Concorde was launched it moved over to a cost-plus basis on the civil side, too. Perhaps I may give the figures to the House.
Before Concorde was launched—and the figures were published yesterday by the Minister—from 1960–61 through to 1962–63 Rolls-Royce was actually paying more money to the Government in repayment of levies than it was receiving from the Government. It paid nearly £1 million in 1960–61, £219,000 in 1961–62 and £700,000 in 1962–63. However, with Concorde, all that changed. I invite the House to consider the figures from 1963– 64 to 1972–73 of the amount of Government money going in. I have rounded the figures off. For those 10 years they are £1 million; £2 million; £10 million; £15 million; £20 million; £24 million; £19 million; £20 million; £24 million and £19 million. The total was over £158 million, and all that went into Rolls-Royce as a result of the Concorde contract. If the shareholders at Rolls-Royce had had any of their money at risk in the Olympus as they had in the RB211, Rolls-Royce would have bankrupted in 1964.
Of course, it was not only money for Concorde that was going into Rolls-Royce. I have quoted the £158 million for Concorde, but there was also £13 million for Concorde production, £9 million for other research, launching aid over the 10 years of £172 million—and a total of public money going into Rolls-Royce of £354 million. And this was not for purchase of aircraft on Government account over that 10-year period—
I am listening to the right hon. Gentleman's argument with great care. Is he suggesting that any company that receives public money is therefore apt to be regarded as being a public asset? Will that in future apply to British Leyland, GEC, and all the other companies that received aid from him when he was a Minister?
The argument about public funds is a very powerful argument. When a company lives entirely on Government money, whatever else one calls it, one cannot call it private enterprise or private assets. The argument will become a little stronger when I read the next figures published by the Ministry of Defence yesterday.
In the last two years, according to the Ministry of Defence figures, £448 million has gone into Rolls-Royce under the Government account. It is not clear to me, because the Minister said that he could not answer this question in the time available, whether there is any overlap between the £354 million over 10 years and the £448 million over two years, but there is no question that Rolls Royce has been bought by the British taxpayer over and over again.
If one adds the cancellation charges for aircraft in the fifties of £11 million, the IRC loan of £10 million, the Government purchase of patents amounting to £20 million, there is no question but that Rolls-Royce is a public asset and has to be looked at as such. It had a golden crutch given it with Concorde, a golden stretcher with the RB211, and now the tomb is to be robbed by permission of Her Majesty's Government.
Rolls-Royce Motors benefited, like every other division of the company, from those massive injections of public money—the engineering, the management, the world-wide organisation. The goodwill alone would have been worth all the profits attributed to the sale of cars, not to mention the lucrative subcontracting that the motor division did and still does for the aero-engine side.
As the right hon. Gentleman knows, I have a special interest in the worker shareholders, particularly at Derby. Is he suggesting that, because of his argument, there should be no entitlement to any compensation whatsoever by the worker shareholders of Rolls-Royce? If so, why did he not announce this when he was in office?
I shall be dealing with the worker shareholders very fully, having read every speech that the hon. Member has made on this subject since the collapse of Rolls-Royce.
On 27th March 1968, when Sir Denning Pearson finalised the launching aid agreement of £47 million for the RB211, he knew that it was a fixed Government investment and that the whole extra risk was to be carried by his own shareholders, and Rolls-Royce in 1968 pledged all their assets to the RB211 to meet the Government help that was given.
Now let me formulate the charges that we are levelling against the Government for the handling of their relations with Rolls-Royce.
The first charge is that the Government have deceived Parliament and the public by seeking to deny that Rolls-Royce is a public asset. Second, the Government are actively encouraging the sale of a profitable part of these public assets. That is what the flotation of the shares in the motor company is all about.
Third, the Government themselves are responsible for the bankruptcy of Rolls, which they brought about deliberately and needlessly in 1971—[Laughter.] If the hon. Member wants to know the reason for the bankruptcy of Rolls-Royce, he should look at the statement made by the Rolls board on 4th February, which said,
… the costs of launching the engine will exceed by a wide margin the earlier estimates on which the company sought additional facilities of £60 million last November. None of this money has been paid; its availability from the Government and Banks was made conditional on a satisfactory report. …
The Government withheld the money for the RB211 in February 1971 as a calculated political decision to ram home the fact that they were serious about their lame duck policy and to kill off the RB211 in order to make possible the merger of a truncated Rolls-Royce with a European aero-engine company. Everyone who has followed the story knows that to be true.
After all, the Prime Minister himself made a joyful speech about Rolls-Royce which was quoted in The Times on 8th February:
It is of the greatest importance that this lesson should be learned and acted on by us all: it is that for too long much of our apparent prosperity has been based on illusions.
We cannot expect to build a sure prosperity until we rid ourselves of these illusions.
The Prime Minister carried through the bankruptcy of Rolls-Royce and the right hon. and learned Member for Gloucestershire, South, however reluctantly, made in the House two speeches in which certain references could only be interpreted as an attack upon the RB211 engine. He said:
The right hon. Gentleman the Leader of the Liberal Party equated the name with engineering excellence and both he and the right hon. Gentleman the Member for Bristol, South-East (Mr. Benn) held the preservation of the RB211 to be essential to our engineering and commercial credibility. The point was made, too, that this project was thought to be a last chance for Britain to remain in the aero-engine league.
I believe both those propositions to be questionable.
The right hon. and learned Gentleman said later:
Certainly, in Europe, the RB2ll was coming to be regarded not as a great advantage to Rolls-Royce but as a project that was gradually sapping both its resources and its energy.
He went on:
I am replying to the idea that there is an enormous potential market for this engine. I do not believe that there is now."—[OFFICIAL REPORT, 8th February 1971; Vol. 811, c. 98 100.]
The Prime Minister and the then Minister for Aviation Supply used the Rolls-Royce crisis as a chance to develop, first, their attack on so-called lame ducks, and. second, their European policy.
Does the right hon. Gentleman really think, looking back over what is now nearly 2½ years, that his estimate was more accurate than mine? If so, he is living in cloud cuckoo land. Second, does he really think that, at that time, when there was no certainty at all that the RB211 could be carried on, it would have been sensible for any Minister—I do not know whether he would have done so; he might have done—to say to the workers in Rolls-Royce, "You have no hope unless this project, which we cannot guarantee, goes on, and therefore you are starting on a new operation with no future at all."? Is that what the right hon. Gentleman is saying?
The right hon. and learned Gentleman knows what I proposed at the time, because I have the record here— that Rolls-Royce should have been acquired by the Government under the Industrial Expansion Act, in which case, every worker shareholder would have been safeguarded, there would have been —[Interruption.] When I asked the right hon. and learned Gentleman, why not use the Industrial Expansion Act and acquire it, he said that I was "probably right", that it could be done.
Had the Government acquired Rolls-Royce in that way, there would have been none of the loss of faith, none of the tarnishing of the engineering reputation of Rolls-Royce and the problems of the worker shareholders or creditors would never have arisen in that form—[Interruption.] This is what this debate is about —that if the Government are to come out of this with credit, they have to explain, looking back over the two years, why they bankrupted this company when, in the end, they had to pick up the whole cheque and guarantee the RB211 without limit up to the first 555 engines.
Of course the hon. Member is right, but when that Congressman or senator came in at the last minute the Government were allowed to underwrite every engine up to 555 of an engine that had been attacked by the Minister and a company that had been bankrupted by the Government.
The fourth charge—and this is a grave charge, too—is that the Government have concealed from Parliament and the public their relations with the receiver. On many occasions Ministers have shielded behind the receiver and have declined to answer questions. The only firm evidence I have about the Government's relations with the receiver came from a correspondent who attended a lecture given by the receiver at the British Institute of Management in Birmingham on 18th January 1972 when he spoke on the functions of the receivership. My correspondent said:
When answering a question relating to the actual time at which a receivership comes to an end, Mr. Nicholson said that there was a school of thought which believed that when
the debenture holders had been settled the receivership ends. However he did not subscribe to this view and had recently sought two separate legal opinions on the matter. Both had said that the receivership ends when, and not before, the receiver himself is satisfied that he fulfilled the job he was assigned to. And this was not necessarily at the time that the debenture holders had been settled. He then remarked that "—
this is Mr. Nicholson—
' this point was important where there was political pressure on the receiver'.
I wrote to the right hon. and learned Member for Gloucestershire, South immediately I received that letter and asked how he saw the function of the receiver. He replied on 11th February last year:
The receiver is a party to the heads of agreement for the sale of the aero-engine division of Rolls-Royce Ltd. to Rolls-Royce (1971) Ltd. and can therefore be expected to remain in office at least until the price payable for those assets has been agreed. I am not able to say when that will be.
Did Ministers put pressure on the receiver to sell off Rolls-Royce Motors? Of course they did, and I will tell the House how they did it. They did it by making it absolutely clear, as they did to the receiver about Carbon Fibres, that they were not prepared to buy it. Those were the political pressures. [HON. MEMBERS: "No."] Of course they were. They bankrupt the company. There is a receiver there. There is legislation that allows them to buy up the company and its subsidiaries. They then say that they will not use the legislation Parliament has given them and they force Rolls-Royce Motors on to the public market. That is what happened, and the Government now have to explain why they declined to use the Act that they asked Parliament to give them, which would have brought Rolls-Royce Motors into the public sector.
The fifth charge is that the Government have also allowed the Rolls-Royce suppliers to suffer. The hon. Member for Hastings (Mr. Warren) asked a question about this in which he pointed out that there were suppliers of Rolls-Royce who supplied before the collapse and whose enginers were later supplied to the Government for use. And when the Minister who is to reply to this debate answered, he said:
That is a matter for Rolls-Royce (1971) Ltd. and the Receiver of Rolls-Royce Ltd. … The Government are not a direct party to it." [OFFICIAL REPORT 13th November 1972; Vol. 846, c. 13–14.]
Now I come to the sixth charge. The Government have betrayed the Rolls-Royce workers, and the gravest charge of all is that the Government have deliberately abandoned the Rolls-Royce workers who had shares in the old company. There were about 9,500 of them and the total value of their shares was, I believe, under £2 million. These represented small investments, often made for pension purposes, by men who had devoted a lifetime of service to the company. Under the terms of workers' shares the company promised to buy them back at any time. But from November 1970— three months before the company collapsed—it refused to honour that pledge. Ordinary shareholders were able to sell in the critical three months before the collapse. Worker shareholders were not. They were locked in to the Rolls-Royce Company, and they have lost everything.
I have had a number of very tragic letters, as have other hon. Members, about this. One was from a widow who wrote to me when she knew this debate was to take place saying that her late husband died after being 50 years with the company and left her with 1,500 Rolls-Royce ordinary shares worth £3,500 and also some workers' shares, which are lost. Another letter was from a foreman who retired last summer, who told me a similar story.
Ministers have expressed regret and shed crocodile tears, but compare that with the way in which the top management has been treated. When Hugh Conway left the board of Rolls-Royce 18 months ago he was given £35,000, and he could have been employed by Rolls-Royce (1971) Ltd., for a period of only about six months. It can be seen from the prospectus which the Rolls-Royce Motor Company has now put out that they have arranged that the 10 directors of the new company, many of whom are part-time, will receive £79,000 a year. That is just under £10,000 per person.
Twelve thousand Rolls-Royce workers were sacked after the liquidation, and it is typical of the double standard the Government have adopted throughout this that the present Secretary of State should have intervened personally on the Rolls-Royce question only when investors' interests were affected. That was the first statement he made on the subject. The workers in Rolls-Royce have no legal rights in the matter. They have not been consulted about the sale of Rolls-Royce Motors. When the flotation is completed and the shares change hands, Rolls-Royce Motors can be sold over their heads again and again and Ministers will get up and say that it is nothing to do with them, although they forced the company on to the market.
I wonder why the right hon. Gentleman is shedding such crocodile tears for the workers of Rolls-Royce when he admits that in June 1969 he wrote to Upper Clyde and told them to slim their labour force by several thousand men or there would not be one further penny of money from the Government to support them?
The hon. Gentleman is broadening the debate a bit. I never said that the Government would decline to give further money to Upper Clyde and he knows that very well.
If the hon. Gentleman would sit down it would be a great help to the debate in all sorts of ways.
The next charge I make against the Government is that they have allowed a flotation of the company at a cost of £2 million in City fees, which is more than the workers' shareholdings were worth. If the hon. Gentleman cares to read the City Press on 10th May on this he will find that Rothschilds, the underwriters, the bankers, the accountants, and the lawyers are getting £2 million for floating this company, which is exactly what the workers' shareholders have lost. I would go further and say that the Government have been party to a deception of the small investor by the flotation of this company at values which The Times, the Financial Times and others warned was above the real market price.
Can we get this point clear? In view of all the right hon. Gentleman has said and since his sympathy with the workers is perfectly acceptable and understandable, how does he square that with his philosophical programme and his suggestion for his own party that they should acquire similar assets to these without any compensation in the future in respect of any enterprise whatsoever?
The hon. Gentleman did not hear the beginning of the debate because he came in late. I dealt with his point at the beginning and he can read my reply in HANSARD.
I come to the ninth charge, which is that the Government are allowing Rolls-Royce Motors to make their profit out of sub-contracting to the nationalised Rolls-Royce (1971) Ltd. It is quite clear from the prospectus that they are selling Rolls-Royce Motors on the basis of at least £6 million annual turnover—and with whom? With Rolls-Royce (1971) Ltd. One of the managers of Rolls-Royce, Crewe, who has access to the figures, tells me that next year and the year after and in 1975 in one component alone there will be sales of £1 million to Rolls-Royce (1971) Ltd. by the denationalised Rolls-Royce Motors.
Thus the taxpayer is being milked through a nationalised company living on public money and the profit will end up in a phoney private enterprise firm called Rolls-Royce Motors. It is a fraud on the public Exchequer that such an arrangement should be permitted. As the House may know, even the factory at Crewe is owned by the Ministry of Defence, which is desperately trying to sell it.
I come, then, to the final charge. It is that the Government are planning to sell off the aero engine business—Rolls-Royce (1971) Limited, the nationalised company—as soon as they can. This is what the issue is about. The Minister of Aviation Supply made this clear twice on 11th February when he said:
… it is not the Government's intention that Rolls-Royce should remain indefinitely in Government ownership…
Later he said:
It would be the Government's intention to bring in the maximum private participation as soon as is practicable."—[OFFICIAL REPORT, 11th February 1971; Vol. 811, c. 822 and 946.]
If the Government get away with the sale of Rolls-Royce Motors the way will be clear for them to move to the next stage of the operation and to sell off the central asset which the nation has bought over the years.
The Secretary of State has four main questions to answer. First, on what principle of public policy is it proper to sell public assets for private profit? Second, did the Government put pressure on the receiver in such a way as to force him, as I believe to be the case, to sell off Rolls-Royce Motors? Third, what justification can there be for cheating the worker shareholders of £2 million and paying the City the same amount to float the company off when, if the company had been bought by the Government, the creditors would have got exactly the same amount of money but, instead of the City getting its £2 million, the worker shareholders would have got their £2 million? Fourth, do the Government still intend to sell off the nationalised aero engine business and, if so, when?
The issues raised by this story are very much wider than can be contained within the case of Rolls-Royce. The electoral strength of members of the Conservative Party has always depended upon their pretence that they are the friends of working people, the best custodians of the public purse and the real patriots in defending the national interest. They have spent millions of pounds on political propaganda to try to get this message across and to conceal the truth, which is the exact opposite.
The story of Rolls-Royce has stripped away that deception and revealed the Conservative Party, this Government and their Ministers as men ready to rob the taxpayer, to sacrifice the workers and to betray the national interest to please the rich and powerful men with whom they are allied.
The scandal of Rolls-Royce—
Since it is clear that the right hon. Gentleman has completed his main points, it has also become clear that he has shifted his ground from the main accusation which he made in his statement. His original charge was that there was a lack of consultation with the people concerned and that the employees were treated like cattle. Can the right hon. Gentleman now give us a better answer than that which he gave to me about the measures of consultation that he had taken, about whether he denies the charge made by the chairman of the works council that he should have kept his mouth shut, and about whether he sticks by the partial answer which he gave that because there was so much national money in the company the workers had no right to be consulted.
The hon. Gentleman discussed these matters with me on Thames Television. He cannot try to remedy the thrashing which he got then by making the points again in this debate. He knows perfectly well that the Rolls-Royce workers, now that they are sold off, can be sold again and again with no consultation. He also knows that the Rolls-Royce workers themselves, by every possible demonstration of opinion that can be gathered, wish to be with the public sector and that there is no question about that.
The scandal of Rolls-Royce for which the Government are entirely responsible will be seen by the public alongside Lonrho, Vehicle and General, North Sea oil and other great business scandals which are making the public aware of the abuse of business power.
It is not a few long-haired students at the London School of Economics who ultimately will bring down this Government. It is the middle-aged manager, like the one who sent me details of his dealings with the main company, fearing the sack when the asset stripper takes over. It is the quiet hospital ancillary worker watching on television and hearing that the right hon. Member for Streat-ham (Mr. Sandys) voted for the Counter-Inflation Bill to keep down her wages. It is the skilled engineering draughtsman who reads the Financial Times and realises what is going on. It is people such as that who will undermine the position of this Government. These people and their families are slowly awakening to what is happening at Rolls-Royce, at Lonrho, at Roche, and at Hill Samuel-Slater Walker, whose merger involving £1,500 million has not yet been referred to the Monopolies Commission.
Those of us who point this out expect abuse and will get abuse. But at bottom this is not a problem of financing companies of even of management or of high technology. It is not even a problem of high political ideology. It is a moral problem about how the community treats those who create our national wealth, how that wealth is divided and whether those with power are to be held accountable for the use that they make of it.
I warn the Prime Minister that when the British people get to learn the full truth about all the shabby dealings of his shabby Government, he and his Ministers will be swept from office for a generation.
It was interesting to try to discover which right hon. Member was speaking. Certainly it was not the right hon. Member who, for example, formerly had direct responsibility for Rolls-Royce. Presumably it was not the right hon. Member who in the three years during which he was the Minister responsible poured £114 million into Rolls-Royce and did not at any stage come to the conclusion that this industry should be brought into public control or nationalisation. In June 1970, neither locally in Bristol, where Rolls-Royce is a major concern, nor nationally did the right hon. Gentleman or any of his colleagues announce that they had concluded that so much money had been poured into Rolls-Royce by the Gentlemen in Whitehall that the time had come to bring it into public ownership. There was a complete silence about any such possibility.
If any Minister in any British Government is responsible for the difficulties of Rolls-Royce it is the right hon. Member for Bristol, South-East (Mr. Benn), as well as he knows. We all remember those great statements when the RB211 contract was landed. We remember, too, how within a matter of a few months the costs escalated. The right hon. Gentleman put in the IRC to look at it, and it decided that another £20 million of loans was necessary. Then, fortunately for the right hon. Gentleman, he went out of office and left us with a bad contract, badly negotiated, to which he personally had given enormous financial support.
I expected this line of argument to come. If the contract was bad and if the terms were bad, can the right hon. Gentleman explain why the then Secretary of State, the right hon. Member for Knutsford (Mr. John Davies), in November 1970 offered to put in another £42 million on the same terms and on the same contract and got it through this House?
Certainly, but, unlike the right hon. Gentleman, my right hon. Friend the member for Knutsford (Mr. John Davies) then arranged for a thorough and deep investigation to take place which revealed that there was a desperate and urgent necessity to renegotiate the contract. It was the right hon. Gentleman who made the first initial judgment on that. That proved, like most of the right hon. Gentleman's judgments, absolutely wrong.
Then it was a different right hon. Gentleman we heard, compared with only a few years ago when he was the Minister responsible. We heard yet a different right hon. Gentleman today from the one we heard last week. This is a quite remarkable circumstance because he says that at no stage has the Labour Party been in favour of nationalisation or renationalisation on the basis of confiscation. To compare that with the words he issued last week would be an interesting matter for the House to look at in a few minutes' time.
The remarkable thing about this debate is that it is connected only with the activities of the right hon. Gentleman last week. The motion refers to the changes which have taken place since the bankruptcy in 1971. Of course, the basic reason why the Government have taken over control of Rolls-Royce since 1971 is no different from that which was debated then. The assets which have been in the hands of the Receiver are no different from they were then. There is no difference in the performance of the company, other than improvement. In Rolls-Royce (1971) productivity has substantially improved. The export orders for Rolls-Royce (1971) are at an all-time high. They are at the moment trying to conquer new world markets with different engines.
As far as Rolls-Royce Motors is concerned, the only difference that has taken place in its activities is that its exports have gone up. Its production has gone up. There is no doubt at all that it is better managed than it was previously under its separate identity.
Just let us trace the really remarkable irresponsibility. The right hon. Gentleman talked in his speech about the misuse of power. Just look at the right hon. Gentleman's remarkable irresponsibility. In June 1972 it was announced that Rothschild had been appointed to
organise the official flotation of this company. At that stage neither the right hon. Gentleman nor the Labour Party made any comments. There was no statement of any description. On 21st March 1973 a prospectus was issued. It was announced that an attempt was to be made to see whether a tender was possible. or whether a public flotation should take place. Once again the right hon. Gentleman and the Labour Party were absolutely silent on this topic. On 26th March 1973 the right hon. Gentleman was actually involved in Question Time when this topic came up. He asked one of the Under-Secretaries of State from my Department,
Is the hon. Gentleman aware that that answer is not satisfactory? Rolls-Royce was acquired by the Government two years ago. The Government are the sole shareholders of Rolls-Royce, including the motor company, and it is for the Government to make it absolutely clear that the company should be retained in British ownership.
He was given the reply,
The right hon. Gentleman is wrong. The ownership of Rolls-Royce Motors is vested in the Receiver."—[OFFICIAL REPORT, 26th March 1973; Vol. 929, c. 899.]
That was the end of what took place in this House. No statement or comment was made afterwards by the right hon. Gentleman, nothing about renationalising at this stage. Still his silence continued.
Then on 29th April he at last made a comment. His comment was about whether it should be in British ownership or not. There was nothing about re-nationalisation or nationalisation.
On 3rd May public flotation was announced. Employees in Rolls-Royce were informed that they could apply for shares if they wished. There was considerable publicity. Again there was not a word from the right hon. Gentleman— no comment from the right hon. Gentleman.
What does the right hon. Gentleman make of the statement reported in the Financial Times on 30th April?
I have the statement of 29th April, but certainly on 30th April there was no statement in the Financial Times saying that he was going to confiscate the company's assets.
The first statement came from the right hon. Gentleman after the underwriting of the issue had been completed, when institutions—including pension funds and others, no doubt—had underwritten this issue. It came on the evening of 7th May, judged by the right hon. Gentleman as the moment it could do most damage, when it could cause the most difficulty for the company. That was the right hon. Gentleman's judgment, and of course he succeeded.
Then we come to the actual statement he made. This is the statement made by the right hon. Gentleman who, a few moments ago, told the House that the Labour Party would never nationalise or re-nationalise anything without paying compensation.
I will give the words the right hon. Gentleman used. This is on the night of the issue, never having commented before.
Those who are thinking of acquiring shares in Rolls-Royce Motors should take serious notice of the official policy of the Labour Party calling on the next Labour Government to renationalise without compensation public assets which are sold off by the present Government.
That statement was made by the same right hon. Gentleman the House has just heard say that this had never been Labour Party policy.
There then took place a great deal of anguish, not just on this side of the House. As the right hon. Gentleman knows, hon. Members on the other side of the House were annoyed, furious, and felt it was doing their party a great deal of harm. I am pleased to say that they were right.
That night we saw the Labour Party start to take some action to remedy the position. At about 9.30 that evening one realised that the Leader of the Opposition had started to move in on this deteriorating situation. The following words were issued on the tape:
will be to emerge with a formula which— without discrediting Mr. Benn—will soften the 'confiscatory' tone of his remarks.
We were all delighted that the Leader of the Opposition succeeded. After the
Shadow Cabinet, we had another remarkable statement, but this time from the Leader of the Opposition. It started with encouraging words. It said:
It is not the policy of the Labour Party that shareholders in the automobile sector of Rolls-Royce should be dispossessed of their shares without compensation.
"Hoorah", we said, "everything has been reversed." "But no", said the Leader of the Opposition, "it has not been reversed"—because he went on with this remarkable statement:
This was clear from the operative paragraph of Mr. Wedgwood Benn's statement.
This creates an interesting new situation in British politics. A member of the Shadow Cabinet issues a statement saying quite clearly that shareholders should be dispossessed of their shares without compensation. We are told the next day by the Leader of the Opposition that this was not the operative paragraph of the statement. Which was the operative paragraph? The middle paragraph is just explanatory on policy. The final paragraph says:
Let me issue a solemn warning so that there can be no possibility of any mistake on the part of those who think they are going to make quick and easy profits out of public assets on this deal.
Was that the operative paragraph? Perhaps the right hon. Gentleman could tell us which was the operative paragraph.
The right hon. Gentleman knows very well that the operative paragraph was the reference at the end of the statement. The first paragraph referred to the party conference and the TUC decisions, which are absolutely clear as a warning that there will be no compensation which will permit quick and easy profits. The right hon. Gentleman can have his fun, but the Labour Government will see that there are no profits made out of public assets.
The right hon. Gentleman might consider this irresponsibility as fun, but on the night of the public flotation of Rolls-Royce Motors he issued a three-paragraph statement, the first paragraph of which the right hon. Gentleman claims has nothing to do with the Rolls-Royce Motors issue at all, was just put in as an interesting aside, but which links completely with the other two paragraphs. If the right hon. Gentleman is adhering to the fact that when he made that statement he did not wish to give an impression that he was going to take over Rolls-Royce without compensation, all I can say is that he will have great difficulty in persuading anybody about his statements of any nature again. He knows full well that this was his attitude, and undoubtedly if he had had his way with the Shadow Cabinet it is what he would have been proclaiming at this Dispatch Box.
I am pleased to hear that after all the criticism.
Apparently, in the future we must find out whether in any statement made by the right hon. Gentleman a clause is operative, non-operative, or explanatory. Perhaps in future he will have green and red paragraphs so that we may distinguish which is which.
The right hon. Gentleman talks about requiring to know which paragraphs of documents are operative and which are not. Will he be kind enough to take up the Conservative Party manifesto for the election which stated that Government grants will be abolished, that there will be no statutory prices and incomes policy, and that there will be no interference with the steel industry, and will he also take up the Prime Minister's statement of 16th June which talked about abolishing prices "at a stroke", and tell us whether those statements are operative?
As we are told that the hon. Gentleman was responsible for the drafting of that famous phrase by the Leader of the Opposition, "This is not a promise lightly given, but a pledge," I should have thought that he was rather sensitive on these topics.
Let us turn to the important theme of workers' consultation. It would be interesting to know how many of the various mergers in British industry carried out under the IRC, when the right hon. Gentleman was responsible, were done purely because the workers on both sides agreed to them. The right hon. Gentleman was responsible for some of the biggest rationalisations and mergers in British industry. As far as I know, on no occasion did he call in the workers' representatives on both sides and say, "We are contemplating merging these two companies. What do you think of it?"
Regarding workers' consultation on this issue, I think that both the right hon. Gentleman and the Government could have heard the workers' views before he issued his statement. They made their views on this issue clear before the right hon. Gentleman made his statement. For example, Mr. Keith Standing, the Executive Secretary of the Association of Professional Executive, Clerical and Computer Staff, issued a statement which simply says:
We are delighted. Having discussed jobs safeguard for the employees with the Official Receiver, we welcome the decision to float the company publicly.
That was the staff side.
We then have the views of the AUEW. Mr. Carless, the district secretary of the engineering section of the AUEW, with 2,400 members in the factory, said:
This is what we wanted. It means that Rolls Royce Motors will remain under the same management and improve—two most important points.
Mr. Leslie Gallimore, the chairman of the factory works committee, said:
I am very satisfied with the outcome. I am sure the employees of that factory will be of the same frame of mind. The management and workers have co-operated to ensure that this company is viable. We are quite qualified to run this business.
So the views of the workers were known, as indeed were their views after the right hon. Gentleman made his statement, perhaps best summarised by the chairman of the shop stewards at the Crewe plant who, perhaps in a slightly undignified manner, said:
Mr. Wedgwood Benn would have done better to have kept his mouth shut. His remarks have been highly embarrassing and ill-timed to say the least.
If the right hon. Gentleman is interested in workers' consultation, I hope that he will do it more thoroughly in future.
Is the right hon. Gentleman aware that at the end of last week the executive of my trade union, the engineering and supervisory staff of the engineers, passed a unanimous resolution wholeheartedly endorsing what my right hon. Friend said last week? Is he further aware that I was in the Crewe and Shrewsbury area two weeks ago when the workers were very much in favour of nationalising Rolls-Royce?
It is interesting that a number of people have rallied to the right hon. Gentleman's first statement, but not to his second. I do not know whether the shop stewards were in favour of what he said earlier or later in the week. If they were in favour of what he said earlier rather than later in the week, they have some powerful allies. Mr. Jack Jones has said that he supports what the right hon. Gentleman said earlier in the week about no compensation. Mr. Clive Jenkins has said that he is in favour of nationalising with no compensation. Tribune, that little group, has said that it thought the right hon. Gentleman was right earlier in the week. That group must be disappointed in him by now. We therefore have an interesting situation.
As I gather that the right hon. Gentleman is to wind up the debate as well—I do not blame anybody for not wanting that job—perhaps he can tell us, if Mr. Jack Jones, Mr. Clive Jenkins and the Tribune group succeed at the coming Labour Party conference with what the right hon. Gentleman was saying earlier in the week, whether the democratic position and control of the Labour Party on this policy is likely to be changed? He certainly has some powerful allies in his former position, but plenty of enemies, too. There is no doubt, reading the local papers at Crewe and Shrewsbury, that the workers are strongly opposed.
There are other basic questions the answers to which the right hon. Gentleman, in pursuing this policy, must give the House. For example, one company was sold by the receiver to Shell. Does it mean that that company will be taken back and nationalised? Is that to come back into public ownership? Are the taxpayers to pay Shell a sum of money for that company?
Is Rolls-Royce Motors to be bought back, nationalised, and put back under the old aircraft company? Not many people at Crewe and Shrewsbury would want that. The workers in both factories are delighted to be on their own and not part of a major aircraft group. Is the right hon. Gentleman proposing to bring them back to that? There will be no Rolls-Royce aircraft company because, if the right hon. Gentleman gets back into power, as he has openly declared, he will nationalise the whole of the aviation industry. Therefore, presumably Rolls-Royce Motors will be a small adjunct to a massive nationalised air industry.
What of the future of Rolls-Royce under the right hon. Gentleman's proposals? I presume from what he has recently said on the redistribution of wealth that a Labour Government will eliminate the domestic demand for the product. I should think that, regarding our overseas prospects, there would be slightly less clamour for a British nationalised car being sold abroad than in the past, as far as Rolls-Royce is concerned.
We now understand that compensation is to be paid. This means that the Labour Party has taken a decision about a company which we know currently to be well managed, a company for which the shop stewards and works committees are happy about having a public issue and being owned in that way. For purely doctrinaire reasons—the one success that the right hon. Gentleman had in the Shadow Cabinet—if a Labour Government comes in, a cheque for £38 million, or more if the company improves its position, will be paid out by the British taxpayer to take it, against the wishes of its management and workers, into nationalisation.
Even more terrifying are the principles underlying the right hon. Gentleman's speech. He has outlined a series of new principles upon which nationalisation is to be based. The first principle is the safeguarding of jobs—the interests of the workers. This comes out in the motion. I suppose the answer is that nationalisation results in the safeguarding of jobs, But that was not so when the right hon. Gentleman was a member of the Labour Government. In the six years of the Labour Government there was less safeguarding of jobs in the nationalised industries than in any other sector. During their term of office no fewer than 404,000 jobs were lost in the nationalised industries. That is hardly a party to persuade workers that with nationalisation their jobs are safeguarded.
The right hon. Gentleman said that Rolls-Royce should be nationalised because of the volume of Government purchases and aid. When one of my hon. Friends intervened to ask whether it meant that if there are enormous orders and research projects there is a threat of nationalisation, the right hon. Gentleman, in about eight sentences, said "Yes". That is the principle upon which he is now working. Any firms which have a great deal of defence contracts or which tender on a large basis for Government contracts and any firms which get massive injections of aid in the regions are on the potential list for nationalisation according to the right hon. Gentleman. All that I can say is—[Interruption.] Hon. Gentlemen say, "They ought to be". Do hon. Members think that is in the interests of the British economy to dissuade British firms from tendering for major Government contracts because if they do they are liable to the threat of nationalisation? It is certainly not in the interests of the people of this country. No one would be more delighted by the remarks of the right hon. Gentleman this afternoon than the foreign suppliers at the potentialities that this opens up for them. Likewise, those firms which get massive injections in order to develop industries in the regions also come under this basic threat.
The next position is the whole question of power and size.
On the matter of the workers' feelings about being in a nationalised enterprise as opposed to a private enterprise and the record of the Labour Government in that respect, all intelligent workers realise that there has to be some change and that the pace of change is accelerating. But all of them in the trade union movement, without exception, feel far safer in respect of humane treatment in nationalised industries than they are ever able to feel at the hands of speculators such as Slater-Walker, bidding for the land assets, and so on, as in the case of Rockware and the Westland Aircraft Company.
The hon. Gentleman does not have much evidence that there is a great rush of people endeavouring to become employed by nationalised industries as opposed to the private sector industries. Recruitment has always been easier in the private sector than it has been in the nationalised sector.
As the right hon. Gentleman is now purporting to speak for workers, will he explain, as chairman of Slater-Walker until the last General Election, why there were workers in South Africa on starvation wages? Will he kindly reconcile what he has said with the practice of his business friends who, when there are not strong trade unions, are able to make profits at the expense of their workers?
I will. First, I was never the chairman of Slater-Walker. That is one inaccuracy. But besides that, perhaps I could ask the right hon. Gentleman why it was, when he was the Minister—[HON. MEMBERS: "Answer."] This is the answer. The right hon. Gentleman will not like it. Perhaps he could tell me why, in the year in which he was responsible for the steel industry, he did not inquire into the state of the workers under the poverty datum line employed by the nationalised British Steel Corporation's associate companies in South Africa? Is he in no way ashamed that daring the period when he was responsible for steel, a nationalised industry was doing the same thing as that of which he is now accusing Slater-Walker? The right hon. Gentleman can squirm. As he knows, the nationalised British steel industry remedied the situation disclosed by The Guardian as quickly as it could, and so did Slater-Walker. Let us not have this slur upon the private sector when an industry for which the right hon. Gentleman was responsible did exactly the same thing.
The other basis of the nationalisation outlined today is that of power and size. The right hon. Gentleman has committed a Labour Government on this matter.
Unless this was a speech and the clause which I am reading was non-operative as opposed to operative. But on 1st May, when the right hon.
Gentleman was rallying the workers to strike against the Government's phase 2 policies, he laid down the Labour movement's programme. He spoke of
the expansion of investment by greatly extending public enterprise and the effective public supervision of the investment policy of large public corporations.
The right hon. Gentleman nods his head. This is operative, presumably, and the Shadow Cabinet have approved this. So this is now official policy—
the expansion of investment by greatly extending public enterprise and the effective public supervision of the investment policy of large public corporations.
This is a fairly frightening policy. Presumbly, for example, the announcements made yesterday by British Leyland would have been supervised by the right hon. Gentleman. This would have alarming consequences. The way in which he supervises, as described by himself, is a frightening process. In an earlier debate on Rolls-Royce, when he was eager to claim his rôle in landing that splendid RB211 order, he described to us how he did so. He said:
At 5.30 on Wednesday, 27th March, Rolls-Royce came to me and said that Lockheed had decided to go ahead with only two airline orders, and it required another £20 million, which it must have five hours later if it was not to wihdraw altogeher from the race.
The right hon. Gentleman went on to say,
I have heard it said many times—I have heard it said by hon. Gentlemen opposite and seen it on television in "The Power Game" and "The Plane Makers"—that Governments arc very slow when it comes to major industrial decisions, that only business men can take big risks at critical moments.
The right hon. Gentleman also said:
Because my memoirs are not appearing in the Sunday Times, perhaps I can be allowed to give them to the House. In fact, 5½ hours later—I noted the time in my diary—at four minutes past eleven that night I rang Rolls-Royce and authorised a guarantee not for £20 million but for £9 million to carry it over that four-week period.
The right hon. Gentleman went on to say:
That is the reality of Government-industry relations."—[OFFICIAL REPORT, 23rd November, 1970; Vol. 807, c. 39–40.]
One can imagine yesterday the phone ringing and Lord Stokes being told, "Not £500 million but £300 million. That will cover you over the next two years."
The whole absurdity of the right hon. Gentleman's position is that at present Rolls-Royce (1971) has recovered from the position which he should have observed when he was responsible for it. Rolls-Royce Motors is successfully exporting, expanding, and providing good jobs for people. The private sector of British industry, which the right hon. Gentleman condemns and hates so much, is exporting more than ever before and expanding faster than ever, and providing better standards of living in this country than ever before. All that the Shadow Cabinet can do is to sit down for five hours, yesterday, to try to debate with the right hon. Gentleman the absurdities of his Left-wing policy.
I shall not attempt to follow the Secretary of State either in his selective quotations or in his rhetoric. It was entirely typical of him that he attempted at no stage to answer any one of the 10 points made to him by my right hon. Friend the Member for Bristol, South-East (Mr. Benn).
Those points may not matter very much to the Secretary of State or to those who will be reading the columns of the Tory Press, where his speech will no doubt tomorrow morning be hailed, again selectively, as a triumph. But those points matter a very great deal to my constituents and those of my hon. and learned Friend the Member for Crewe (Mr. Scholefield Allen), and those of others of my hon. Friends, who have had to live through the trauma of the last two or three years of Rolls-Royce and everything that has happened to that company.
I take it that at present we can still refer to Rolls-Royce as a company, but it is a company in receivership and now about to be divided into the assets of the aero-engine division and of the motor company. But still, in Crewe and Derby, the company is regarded as one company —Rolls-Royce. It is of that situation that I wish to speak briefly today.
I entirely endorse what my right hon. Friend said, that the bankruptcy of the company was of the whole company. The launching aid given to the company by my right hon. Friend was aid given to the whole company. When in 1968 Sir Denning Pearson and the Rolls-Royce board approached the then Government and asked them for aid—we heard today of the £47 million pledged then—on behalf of the Rolls-Royce board, he pledged that every asset of Rolls-Royce, down to the last radiator made in Crewe for its motor cars, would be put into the deal to back the RB211 engine. That is why the two are inextricably linked and why we cannot now simply look at the attempt to dispose of the assets of the motor company to private profit without looking at the history of the company, the aviation company and the motor company alike. My right hon. Friend was quite right to refer to that.
That bankruptcy was a very traumatic occasion for my constituents, the workers of Rolls-Royce in Derby. As a great deal of play has been made with the phase "operative statements", will the right hon. Gentleman or one of his right hon. or hon. Friends—perhaps the right hon. and learned Member for Gloucestershire, South (Sir F. Corfield)—tell us whether it was an operative statement to say that the RB211 engine was significantly below its competitors? Was that a way of making the renegotiation of the contract easy?
If we are to consider what is operative and what is not in the remarks of previous Governments and the present Government, I submit then that the right hon. Gentleman and his right hon. and hon. Friends should consider the remarks of those responsible for aviation policy at the time.
In the disposal of the assets of the company, the concern of my constituents —this is a matter which is brought constantly to my attention and to the attention of my hon. Friend the Member for Derby, South (Mr. Walter Johnson) as the wreckage and the debris of the crash passes before us—is that the disposal of the assets, which materially affects the worker shareholders and the ordinary shareholders as well as the creditors and the debenture holders of the company, has dragged on for over two years.
Many hon. Members have probably received several of the latest statements. The final statement of the Rolls-Royce Shareholders Action Group, which is led by Mr. Moloney, complains, as many of us have complained in the House— notably my hon. Friend the Member for West Lothian (Mr. Dalyell)—that the whole of the hearings into the disposal of the assets of the aero-engine company has been kept a matter of secrecy by the Government. The Government have consistently refused to reveal to the House anything of their relations with the receiver. They have consistently refused to admit to the House that when negotiations took place for the aero-engine assets the Government were taking part whilst wearing another hat.
Mr. Moloney, in his statement to the Rolls-Royce Shareholders Action Group, complains about the attempt even to advance security reasons for the greater part of the hearings before the independent expert, which are now going on, which began on 1st May and to which the Government have not referred, not taking place in public. He says:
This pretence about National Security reached its nadir at the recent Court hearing on the Tax losses when Counsel had to obtain the permission of the Ministry of Defence before revealing in Court the two figures of £33·5 millions offered by Rolls-Royce (1971) and the £162 millions asked by the Liquidators. Apart from the fact that these two figures were widely known, what possible reason could there have been for invoking the Official Secrets Act to prevent these figures being given?
Two years and three months since the bankruptcy on 4th February 1971, the hearings are still continuing. The Government and Rolls-Royce (1971) appear to have offered no more than £33 million for the aero-engine assets of Rolls-Royce. The receiver is asking for more than five times that amount. The worker shareholders and the creditors of Rolls-Royce are entitled to ask what on earth is going on and why the matter has taken so long. Might we not at some stage have at least an indication that the Government are not attempting to do anything with the assets of the motor company?
It is a fact that the Government could buy up the assets of the motor company from the receiver precisely as the motion which my right hon. Friend has proposed suggests—namely let them buy for a tender price the assets of the motor company and be retained within the company which is corporately known as Rolls-Royce. They should be retained for the company and for the public interest. My constituents are continually making the point that it is the public interest which should be served first. As so much public launching aid has already been given to Rolls-Royce over the years, such aid could also be extended to the motor division.
Many people feel that the continued performance of Rolls-Royce (1971), although they are very much heartened by the recovery of the RB211 project and what has happened since, has been bedevilled—this was one of the points which my right hon. Friend did not make —by the changes which the Government have from time to time appeared to force on the management of the company. Time after time in the last two years there have been changes in the management of the company. There was the shifting aside of Mr. Morrow, the removal of Mr. Geoffrey Fawn and now the enthronement of Sir Kenneth Keith —one of the highly paid group referred to by my right hon. Friend—as chairman. We read that Sir Kenneth is also to be tied up in the enormous merger between Hill Samuel and Slater Walker.
That was not a matter to which the right hon. Gentleman devoted much attention. That seems to argue, even for the aero-engine side of Rolls-Royce which has been retained for the moment for the public, that the Government are not concerned to see the company run properly and wholeheartedly by full-time executives. It appears that they are content to go back to the old principles of the market and to let people pick up whatever portfolio and shareholding they may wish to run this company and others.
When we see the enormous sums involved in the Hill Samuel—Slater Walker merger, my constituents and those working in Rolls-Royce are not at all happy to think that the management of the company may still be on only a part-time basis. My constituents are not happy that important matters should be considered on a part-time basis and that that management should control their destinies. They are not happy to think that it might be the intention of the Government—this is another matter to which the Government have not referred —eventually to sell back to private enterprise the assets of the aero-engine company. It might be said that the sale currently taking place of the assets of the motor company is no more than a trial run.
I shall now consider the disposal of the assets of the motor company. As my right hon. Friend has said, the two companies are still linked. They are linked in many ways because the shareholders of the one company are the shareholders of the other. Those who have been let down by the destruction of their shareholdings—those in the old Rolls-Royce company equally lament the passing of the motor side as the passing of the aero-engine side—feel that they stand to gain little from a disposal in which a new group of shareholders will now be invited to share the profitability, if there is profitability, on the motor side.
We are told, according to the latest figures for December, that profits of something in excess of £4 million may be expected from the Rolls-Royce motor division. But it is not good enough to say to the interested groups, be they workers or shareholders, that the public interest and public money can be repaid by public control only when there is a high risk element and that when there is a lower risk and a guaranteed profit that part of the company which was not the part which caused the exemplary bankruptcy two years ago should be hived off to private enterprise.
That is not good enough. The whole lot should be in public ownership. That is the basis of what my right hon. Friend has been saying. Further, I believe even more that that should be the case because of the intermingling of the work load at the Crewe factory. The Crewe factory and its subsidiaries contract work to the Derby aero-engine division in excess of £2 million annually. I regret that the increasing amount of work now contracted out by the Derby engine division to Crewe will at once remove £2 million of public money, which we are now asked to contemplate going out to private enterprise—something like one-third of the turnover of the company. It does not seem to us that that is a very good solution when so much public money has been involved over so long a period.
The right hon. Gentleman said that my right hon. Friend did not take much account of public enterprise when he was in charge. There might be something in that. I say this in all sincerity to my right hon. Friend. If we are speaking, not to various elements in our party but to the country at large, we should be clear not only about what we are saying we shall do with Rolls-Royce when we say we will bring Rolls-Royce Motors back into public ownership. We should also say that mistakes were made in the last Labour administration. We should say that we ought to have had much greater public control over those national assets into which public funds were placed on such a wide scale.
I do not believe that we can contemplate with equanimity giving £47 million in launching aid to Rolls-Royce without the slightest say as to how the company should be run and managed. I am glad that my right hon. Friend, by his nodded assent, agrees with that. We are not a party of expropriation. I welcome very much what my right hon. Friend has said. We are not a party which says that it will go out and wilfully or at random nationalise without any compensation any company purely upon a whim.
We have said that where the Government have pursued confiscatory policies, as they have in a number of areas, at least in their first two doctrinaire years, we might well retaliate in kind. We call in the motion for a fair price to be paid for the assets of the company. Let there be no mistake about that. We intend—it is certainly the intention of the workers and worker shareholders with whom I come into daily contact—that the Rolls-Royce Motor Company should be taken back into public ownership at a fair valuation.
Those of us who have been deeply involved in this crisis would accept that we are lost if we engage in internal party dialogue. What matters is what we are saying and not who first said it. It does not matter whether it is the national executive of our party or the annual conference or whatever. We are not a party of expropriation. We are a party of public ownership. We should say that loudly and clearly. We should have said it rather louder and more clearly at the time of the last General Election. Because we are saying it now loudly and clearly I believe that at the next election all those who have had to live through the last two or three years of the Rolls-Royce tragedy —for tragedy it has been—will be with us in taking full control of Rolls-Royce, in their interests and in the national interest.
I hope that the hon. Member for Derby, North (Mr. Whitehead) will forgive me if I do not follow his remarks at any great length. There are, however, one or two points he made which I would like to take up.
The hon. Member made the point, although I do not know where he got his information from, that Sir Denning Pearson had gone to his right hon. Friend —this was before the hon. Member came to the House, I think—and pledged every radiator of the motor car division in support of the Rolls-Royce share of the launching aid. One would think that that was hardly an association which could be greatly to the advantage of those making motor cars when the whole of their future lay in the success of what was virtually another company, at any rate another division.
The hon. Member criticised with perfect justification the time that is being spent by the receiver and Rolls-Royce 1971 in reaching a fair price over the valuation of the aero-engine assets. I hope that he will at least give me this point. I was particularly anxious that the formula should be one for fair compensation and I insisted on the insertion of the words between "willing seller" and "willing buyer" as being the words which I think have become almost as a matter of history the most authoritative way of conveying that a fair valuation is required.
I do not believe that any of us contemplated that it would take so long. It is taking a long time because the effort is to reach a fair valuation, which I understand from the motion is what Labour Members wish. To come here and say "Would it not be a good idea to subject the motor car company to this same long delay?" does not seem to help the situation, particularly bearing in mind that the Public Accounts Committee demands very different things from those required by underwriters in the City.
The hon. Member also commented on the fact that a large part of the profits of the motor car division were attributable to sub-contracting of aero-engine parts from the aviation division. This apparently was regarded as being in some way reprehensible. We have to remember that every aviation company throughout the Western world relies a great deal upon sub-contracting. It can only be reprehensible if it is alleged that the prices paid by the aviation division in the cross-accounting to the motor car division were in excess of market prices. If that is alleged I want to know why the right hon. Member for Bristol, South-East (Mr. Benn), during a much longer tenure of office than I had—and I had no suspicions about this—did not make an investigation into how those prices were calculated. If he was suspicious, he should have done that. If he was not suspicious, then he accepted that they were reasonable market prices. This is a typical type of contract of the aviation and engineering industries.
The hon. Member assured us, and we were glad of it, that his is not a confiscatory party. The fact is that the right hon. Member for Bristol, South-East stated that the Labour Party would confiscate or would take back this property without compensation. This appeared in practically every newspaper. I have a large supply of cuttings if the right hon. Gentleman would like to see them. I know how fascinated he is to see his name in print. There is no sign in any of them that he attempted to withdraw, deny or explain. That was what he said and it is that which we are entitled to debate today with regard to the effect it has had upon the issue of the Rolls-Royce shares.
The right hon. Gentleman and I have been constituency neighbours for over 18 years. We have profound differences of outlook, and in the heat of parliamentary debate we have debated with one another from our respective Front Benches, each in both opposition and government. Hitherto we have avoided personalities. I can only say that today I cannot acquit the right hon. Gentleman of malice. For example, he accused me of deliberate dishonesty. He said that 1 had come to the House and said that the Rolls-Royce collapse was inevitable, but that I had brought it about or connived at bringing it about by with- holding promised launching aid. He knows that is not true.
The right hon. Gentleman also knows, or ought to know, that under these contracts for which he was responsible the phasing of the launching aid is worked out most precisely. The precise date or period of engine development at which each tranche become due is carefully determined. Has he inquired of Rolls-Royce or anywhere else, and can he produce any evidence that there were any tranches due that were not paid? Of course he has not, because there is none. Yet he is prepared to make these irresponsible allegations of dishonesty against other people.
Then the right hon. Gentleman attacked me for saying that I had denigrated the engine. I stand by every word I said—
That is why the right, hon and learned Gentleman is on the back benches..
Perhaps it is the best place to be. I stand by what I said, for this reason. I know the right hon. Gentleman will find it difficult to understand this, but that was an honest, personal assessment, for which I do not blame my advisers in any way, of what I saw to be the difficulties of launching that engine in a climate in which the DC10 was already ahead of the 1011. If the right hon. Gentleman were honest—
The right hon. and learned Gentleman has returned to the point I raised. Does he now say that he stands by the remark he made in the House on 11th February of that year that the RB211 engine was significantly below its competitors? That is not a remark about the difficulties of launching. It is a remark about the capacity of the engine.
That is the statement to which I am referring. I do not rat on my statement. It is on the record. I said it and I believed it. If the right hon. Gentleman and the hon. Gentleman were absolutely honest and were to study the TriStar 1011—which is still the principal market for this engine, although there are prospects of marine adaptations and so on—they would have to admit that there is no other aircraft for which it has been selected. If the hon. Gentleman studies how those orders are going—and this was nearly two-and-a-half years ago—can he really say that the right hon. Gentleman was more accurate in referring to the colossal potential of the engine? God knows, I hope that I am proved wrong, but I have not been yet, and the right hon. Gentleman has certainly not been proved right.
I ask the hon. Member for Derby, North also to bear in mind that that expression of opinion was made at a time when none of us knew whether Lockheed could survive to make the aeroplane for which the engine was designed. That eventually turned on one vote of Congress. The right hon. Gentleman knew as well as anyone, right from the start, of the possible financial crises which Lockheed might face. I cannot believe that the right hon. Gentleman or the hon. Gentleman would say that we should have gone on making that engine if there was no aeroplane to put it in. The ability of Lockheed to proceed was absolutely vital.
Even if I had not made what I believe to be an absolutely honest assessment— and I accept that the hon. Gentleman finds it difficult to respect that—what was the position? We were setting up a new Government-owned aviation company. Throughout his speech the right hon. Gentleman had said that without this engine the Rolls-Royce company had no future. As the Minister in charge, was I to say to the hon. Gentleman's constituents in Derby "If we cannot save this engine because it is not in our power to do so, your future is nil"? Is that the way in which to get a new company off the ground? It is a very odd way in which to do so. Had we adopted that attitude during the war, none of us would be here today.
As my right hon. Friend has rightly pointed out, the right hon. Gentleman's statement was made after the issue of the Rolls-Royce motor shares had been underwritten. Therefore, I suppose, whatever his object was, it could not at that time have affected the money coming to the receiver to help to meet the creditors.
It is a curious threat to have made, to try to sabotage the private investor in buying from the underwriters but to fail to give the same warning to the people
who did the underwriting. That may have been purely inadvertent. Perhaps the right hon. Gentleman did not understand that he was too late to sabotage the issue. That is an interpretation which is borne out by an article which appeared on 9th May in The Guardian, a paper which is regarded, I understand, as an authority by the right hon. Gentleman and his friends. Mr. David McKie of the political staff wrote:
Mr. Benn was not at all repentant because of suggestions that the offer might suffer after his intervention. In that case, the Government, he said, could always take the company into public ownership.
That comment hardly suggests that the right hon. Gentleman knew that it was too late to affect the sale. If he thought that his threat would affect the sale, one can only conclude that it was his deliberate intention to try to prejudice the interests of the creditors, for whom in this House he has purported to be so concerned, and, indeed, of the shareholders, who include the worker shareholders. If the right hon. Gentleman did not understand the position—and from his speech this afternoon one wonders how much he does understand—it is difficult to see on what ground it would be right to issue the warning to one set of potential investors and not to others. That distinction between the institutions on the one hand and the private investor on the other is every bit as reprehensible as the fact that the statement was ever made. Perhaps he wanted to see the institutions enticed into making a contribution to the creditors and then leaving them with £38·4 million outstanding to meet an obligation which the whole tenor of the motion suggests that he believes is the obligation of the Government.
Then there was the argument about nationalising and re-nationalising. The right hon. Gentleman quoted references to the repeated statements which were made from the Government Front Bench that the Government's purchase of Rolls-Royce assets was exclusively confined to the aero-engine divisions. In referring to that today, he spoke as if he regarded it as reprehensible that we had told him honestly and frankly what we intended to do and what was our policy. We were told that this was a wicked thing to do because, by saying that, we had told the receiver to go and sell the company. That is the inevitable consequence of the provisions of the Companies Act which govern these matters. I cannot see how anyone can be blamed for coming to the House and honestly stating the facts. I know it is rare, but it should be done rather more often.
Again, we have made the position of the receiver abundantly clear. We have said that he represents the creditors and the shareholders in that order. I am surprised that so much explanation has been necessary during these months. It is an alarming thought that the right hon. Gentleman, who has held high offices of State does not appear to understand these things. But I do not insult his intelligence to that extent.
I have no doubt that the right hon. Gentleman understands perfectly well. I have no doubt that he knows that the receiver is a trustee for the creditors, appointed by the creditors and not by the Government. I have no doubt that he knows perfectly well that the receiver in the current arbitration proceedings is entirely independent of the Government. Therefore, it follows that the right hon. Gentleman has deliberately misrepresented the situation.
Then there is the theory that we are hiving off the great profit centre. Does the right hon. Gentleman really believe that? Has he ever looked at the accounts? Why does he not look, for example, at the accounts given in the receiver's invitation to tender, issued in March? It is abundantly clear that up to 1968 the profit factor was fairly miserable, particularly when compared with the turnover which is to be seen in the column immediately above. If the right hon. Gentleman is pretending that this is the profit centre and that great surplus profits were being ploughed across into the aviation divisions to reduce the amount of Government aid that would otherwise be required, I suggest he takes a short course in accounting.
Again as both the right hon. Gentleman and his hon. Friend have said, by far the larger portion of the revenue into that company reflects the sub-contract work done for the aviation division. All the evidence is that the motor car division almost certainly suffered a disadvantage from being linked to the aviation company because of the voracious demands of the latter for every penny of capital it could get for the aviation interests. To the extent that this is a legitimate and likely view, it is strongly supported by the marked increase in the success of that company under the receiver since the divorce of the various divisions of the company took place.
Perhaps the final absurdity of all this is to nationalise the producer of possibly the biggest luxury in the world. Although we accept the hon. Gentleman's assurance that his is not a confiscatory party, it has not been unknown that Mr. Jack Jones has more influence on what the party does than do some Labour Members.
The motion, in my view, is nonsense, because it is no longer possible to buy these assets from the receiver. The idea that it is only in the public sector that the workers' future can be safeguarded does not correspond with the record of public ownership under the Labour Government, or under other Governments. For example, one of the National Coal Board's main functions has been to run down its employees, and one would hardly say that steel nationalisation has been a roaring success in terms of preserving jobs.
When I was a Minister I had the privilege of meeting a large number of Rolls-Royce workers, for whom I had great respect. I am the first to agree and support the proposition that the skill and dedication of many of these workers is a very vital asset. But, contrary to what the motion claims, the workers themselves would be the first to say that they were not the only assets. Other things matter in this context, not least morale, which stems from the dynamic management in the private sector which evidently Mr. Nicholson is able to give.
I conclude with two points. The first is that having been involved in this rather traumatic affair, which, as the House will not be surprised to know, I do not look back upon with any pleasure, I have on many occasions thought about the various steps that were taken. I know the right hon. Gentleman will not accept my words but I think that other hon. Members will. I have honestly concluded that what we did was the only sensible alternative at the time, in the context of the situation. It was inconceivable to me that the aviation divisions should not be rescued and in a way in which there was no gap between the collapse and the continuation under the Government. I simply do not understand the theory that, since because of an accident of history the motor car company is linked with this great international firm—admittedly competing with enormous Government subvention but in a market in which every other national aviation company competes with Government subvention—the motor car company should also be brought into the portfolio of the Labour Party's nationalisation.
I emphasised that, looking back, I believe that the action which was taken was right in the context of the circumstances ruling at the time. One cannot avoid a nagging doubt, however, when one looks at the complete change that has taken place in policy since then. The creditors of Rolls-Royce have been without their money for two and a half years, and it may be another year before they get the full amount. I think they have had about 60 per cent. We now have a policy which has switched virtually right the way round and by which people who are no more deserving than were Rolls-Royce can obtain subventions under a curious thing called the Industry Act. I find that situation a little unpalatable.
I look back on this affair as a fairly disagreeable experience. It had a few redeeming features. I hope that this will be my last speech on Rolls-Royce, and I want to take the opportunity of drawing attention to one of those redeeming features—namely, the intense loyalty I received from the people who worked for me in my Department. I am deeply grateful. Secondly, I remember a motion on this topic one Friday in which the hon. Member for Derby, North was involved. When I arrived I was confronted with no fewer than three highly critical articles from The Times. The other little tribute I should like to pay is to the representatives of the accepting houses whose members laid on an excellent lunch to assure me that they did not believe one word of the criticisms levelled at me in The Times.
I am grateful for the opportunity of recording those things which I remember and which I shall continue to remember with gratitude. The less pleasant aspects I shall forget, including the right hon. Member for Bristol, South-East.
I will remember the many occasions when the right hon. and learned Member for Gloucestershire, South (Sir F. Corfield) came to the House to give us the latest saga of the crisis in Rolls-Royce, because one of the major aero-engine factories is situated in my constituency. I recall that from time to time some of us had a good deal of sympathy with the right hon. and learned Gentleman. We felt that he was trying to persuade a somewhat reluctant Cabinet to do something more for Rolls-Royce, and we were sympathetic because on more than one occasion he returned to the House only to give us an unsatisfactory answer. We were aware that he had for the time being failed to convince the Cabinet.
The whole of the effort at that time owed a great deal to the assiduity and perseverence of a number of Members on both sides of the House who, in initiating debates, tabling Questions and keeping up the pressure, performed the House of Commons activity of possibly persuading the Government to change their mind to the extent that the Government produced the policy they did. Hon. Members on our side of the House were delightfully surprised when a Conservative Government decided to introduce one of the most ruthless pieces of nationalisation which had ever come from any Government.
It must also be remembered that my right hon. Friend the Member for Bristol, South-East (Mr. Benn) played an important part in this matter, particularly at the time when we were in such doubt whether the RB211 would be bought by the Americans and when the issue hung on a thread. That is now in the past.
I rise to my feet on this occasion mainly because I was provoked to do so by the remarks made by the Secretary of State for Trade and Industry. In the last two or three years we have seen the remarkable failure of the private enterprise party which now sits on the Government benches. We recall the failure to invest—though this is now picking up again and we may be in for a consumer-led boom; and we also know the dangers involved in that policy. We also look back at the high level of unemployment, and we have seen the Government forced to stand the Selsdon Park doctrine on its head and to introduce the Industry Act—an Act which the right hon. and learned Member for Gloucestershire, South sees as a rather uncomfortable reversal of Tory policy. Therefore, it is for the Government to justify their own attitude to the provision of subvention payments for private company boardrooms without ensuring an adequate social or economic return to the British people. The tenor of the argument today must be that the Government must justify themselves rather than that we should justify our intention to take into public ownership those companies which have succeeded in their policies only as a result of large injections of taxpayers' money.
The Conservatives have two attitudes to taxpayers' money, and they depend on what area of taxpayers' money they are dealing with. If they are dealing with injections of money into private enterprise—if it is money expended in connection with the lame duck policy, £15 million here and £30 million there, or indeed a sum of £150 million allocated to Rolls-Royce in the past—in the minds of the Conservative Party there is a total justification for taxation and, indeed, a need for increased taxation to enable those things to be done. But when one thinks in terms of helping the disabled, raising pensions and doing things for ordinary people, suddenly the Conservatives stress the impossibility of finding money for those purposes. There is total schizophrenia in the Conservative Party about its attitude to taxation according to what areas of activity the taxation will benefit.
When we look at the relationship between the public and the private sectors, we have to ask what is the service which the private sector, in so far as it is supported by public money, is rendering to the national economy. There are certain areas in which everybody, irrespective of party politics, wants to see the nation succeed, and to this extent there is a national will towards those ends. We all want to see exports thrive, a healthy balance of payments and effective job creation in the regions. As part of this progress we want to see a high level of employment; we want to see expansion and a higher level of industrial investment. These are national ends, and on the whole the nation will support the party which it believes is most likely to achieve these national objectives. The country will support the party which it believes can achieve those national objectives in fairness, justice and equity to everybody concerned.
But then the Conservative Party says "In terms of the public sector, we shall take out of it those parts which might be in danger of yielding a profit to the taxpayer". It says "We shall hive off the profitable parts of the existing publicly-owned industries". It does not say— and one wonders why in the light of some of the things said by the Secretary of State this afternoon—that it is demanding denationalisation of some of the other existing elements of the public sector. We do not hear any cries for the denationalisation of electricity, atomic energy, gas or coal. Why not? The answer is clear, and it is clearest of all to City boardrooms. The reason why the Conservative Party is not demanding wholesale denationalisation is that 20 per cent of the gross national product in the public sector is now that part of British industry which is largely of a service nature and which is not of its nature concerned with the expansion of production because it is not related to manufacturing it is in fact subsidising the private sector. This is why the Tories do not want to denationalise a major part of the existing public sector. This is why they are interested only in hiving off the profitable parts of the public sector.
When we come to look at the job that needs to be done in the economy, it is clear that the existing public sector is extremely limited in being able to offer to the nation those greater possibilities of employment and exports and meeting the other objectives which I have outlined. It is not in the service industries where expansion will take place, although if it is not limited by a Conservative Government, there are measures of diversification which can result. Industry can move here or there into little bits of productive industry, but in the public sector it is very limited indeed.
Therefore, it is to productive manufacturing industry that we must now look for greater exports and investment, employment and particularly job creation in the regions. The private manufacturing sector, in spite of all the exhortations of the Government and the tax incentives of government has not over the last 10 to 15 years come up to national expectations of increasing exports. Because of its performance, some of us are considering the need for an expansion of the public sector in order to meet national economic objectives, a view we did not take 10 or 15 years ago when we thought that, given governmental incentives and exhortations, the private sector would be able to succeed. It is now clear that it cannot.
We know that, according to a recent analysis, about 75 firms are responsible for the majority of British exports. We know that many private British firms which should be exporting are not doing so. They should be introducing techniques and methods which would allow them to export, but they are not. No amount of Government exhortation or direct assistance seems able to persuade them to become successful exporters. However, they are remarkably successful importers, and that is one of the problems of the balance of payments.
Let us consider the problem of job creation in the regions, an objective which has been accepted with varying degrees of sincerity in all parts of the House. All hon. Members would agree that one of the urgent needs of our economic situation is to correct the imbalance of industry as the older industries decline and the new technological industries, largely concentrated in the Midlands and the South East, and now probably concentrated much more in the areas of the country nearest to Western Europe, take over. In spite of all the various incentives, whether investment grants or tax incentives, successive Governments have not so far managed to give the necessary correction to regional imbalance and create the jobs which are needed in the regions.
British Leyland has announced its first major expansion for some years. It is to undertake a new major project in the car industry and we shall now witness a battle in the regions as to where that project should go, because it is so rare for private enterprise to provide anything substantial outside London, the Midlands and the South East. What is to be done? In 1964 the Labour Party manifesto said that where private enterprise coud not provide the jobs that were needed in the regions, public enterprise would have to move in and do it instead. We spent six or seven years discovering that, no matter what Governments did, private enterprise still failed to provide jobs in the regions.
What is now becoming clearer is that, if jobs are to be provided in the regions, it will have to be the public sector which provides them, and if it is the public sector it will have to be as the result of manufacturing firms coming within the public sector. It will have to be as the result of diversification into manufacturing and production by the existing nationalised industries. The private sector is clearly unable to do what is required. Similarly, the private sector showed itself utterly unresponsive to all the efforts of the Government to encourage investment when the nation needed it.
Not only is the private sector unresponsive to Government policies on these matters concerning the most urgent and basic questions of our economy, but it is so unresponsive that successive Governments have found it impossible to predict what will happen even a year ahead. As anyone who has been in government will know, the Treasury issues medium-and short-term assessments. These are proved all too often to be wildly wrong, so that after six months the Treasury comes forward with another medium-term assessment, admits that it was wrong in its original estimates, and hence the revised figures. A modern nation cannot be run on this kind of relationship, with the Government seeking to express national objectives which are beyond the private sector's ability to achieve. If it cannot be run in that way, as we now see, there must be a change in the balance between the private and the public sectors in those key areas where help can be given and where the Government have the capacity to determine what happens.
This is why it is essential that those key areas of the economy should be involved much more in the public sector. Of course, all the nonsense which has been talked this afternoon, all the jesting about the Labour Party's view of compensation is a nonsense. Let us hear no more about it. We have made it clear throughout the years that when we take new industries into the public sector, we pay compensation. However, we have now gone on to say that, because of the behaviour of the Government, because of the profit hunger of the Government for their City friends, where they denationalise a profitable part of the public sector we shall regard it as wrong that people should make a profit out of that denationalisation. I hope that is now clear to the Minister and that we shall have an end to some of the fun and games about this aspect of Labour Party policy.
Perhaps the right hon. Lady will comment on what happens where an asset is denationalised and the private sector increases the value of that asset after denationalisation. Presumably the increased valuation would be taken into account in any renationalisation terms.
Perhaps I could put it in much more simple terms. Where someone has acquired shares in a denationalised company—denationalised because it was held by the Tory Government to be a profitable part of the public sector— we do not regard it as right that a profit should be made out of that acquisition. Circumstances will vary and I do not pretend that I can spell out the precise formula for each different circumstance, whether for Thomas Cook or whatever else it might be. I say only that our intention is clear. We do not regard it as right that profit should be made out of a Tory policy of hiving off, and we shall make sure that a profit is not made out of it.
We are advancing an argument which goes back to pre-war days. It certainly goes back to the days when the first postwar Labour Government was bringing the basic industries of the country into public ownership—bringing them into public ownership because, unless they were publicly-owned and unless public investment went into them, the whole of the national economy would not survive. The mines had been neglected, as had the railways, and only with the injection of public money would it have been possible for the nation to survive that post-war period.
Time and the argument have moved on. If the Conservatives believe that they can conduct any longer in any meaningful way an argument about private versus public ownership without reference to national objectives, they are wildly out of touch with the way the nation is thinking. People are much more concerned today about how to get done the things they want to see Governments doing. If Governments show by the results of their policies that they are failing to get done what the nation wants to see done, the nation will be ready— and I believe it is ready—to look at the alternative ways of approaching the task, giving the Government a direct instrument of planning, something that will not be circumvented all the time by City boardrooms, giving the Government, on behalf of the people, a way to direct and control the economy in the national interest that will not be frustrated all the time by the inevitability of the private company, perfectly correctly from its own point of view, regarding the interest of its own shareholders as more important than the interests of the nation.
It is in this area that we shall now be debating this issue. I think that the country is ready to look with a clear mind at this idea. I have no doubt that, as it does so, it will recognise that what we are saying is the relevant thing to be said in terms of national needs. What the Conservative Party says in terms of Selsdon Park or the somersaults it has done afterwards are becoming increasingly irrelevant by comparison with the antics that my right hon. Friend referred to. These antics are becoming more exciting than the murders and sex stories in the papers. We have the latest antics in the courts, over Lonrho, and the latest antics in the boardrooms, like Slater-Walker. They are becoming fascinating to the public, who are beginning to have a much clearer insight into what matters in the City boardroom and what does not matter. They are beginning to see that the interests of the nation are not the interests that matter in City boardrooms.
The public must therefore be ready for the debate to enter a new phase, part of which is precisely the area raised by my right hon. Friend in the motion—the need to be sure that we do not consider the question of which parts of industry become publicly-owned and which parts remain privately-owned in terms of the interests of shareholders but that we determine these matters in the interests of the nation.
I hope that the right hon. Member for Lanark (Mrs. Judith Hart) will excuse me if I do not follow her fairly wide-ranging argument, but try, as we have only one-and-a-quarter hours left, to bring the discussion back to Rolls-Royce.
For many years before the war there trundled over the roads of Great Britain a vehicle known as the Sentinel steam wagon. This machine was built in my constituency, and when the steam wagon went out of fashion and out of use the company that manufactured it found that its progress became uncertain. It was never very bad but, equally, it was never very good. In 1956, however, the company which had then succeeded the Sentinel Steam Wagon Company, was taken over by Rolls-Royce, which has, under one name or another, remained the proprietor ever since.
Since 1956, the success story of the Rolls-Royce factory in Shrewsbury, which makes the diesel engines, has been steady and continuous. All those calamities and difficult things that happened to the factory in Shrewsbury had an air of unreality about them. Today, the Shrewsbury company produces about 20 per cent. of the whole group's output. In the last three years, that percentage has risen by 5 per cent., whereas, over the same period, the aero-engines side has decreased by about 15 to 18 per cent. Also, 30 per cent. of the diesel engine output goes for export.
Of the 8,000 employees of the company, over 2,300 are employed in Shrewsbury. The annual payroll going into that small area is over £3 million per annum, and involves the welfare of 7,000 of my constituents. So the future success of the company and this factory is vitally important to the welfare of my constituents.
Let us consider the future. As I understand it, the planned output of diesel engines by Rolls-Royce this year is up by about 28 per cent. on 1972, and over the next two or three years the company expects an annual increase of about 25 per cent. By the end of that period there will be employment for another 3,000 people in that factory. The future of the factory and the company is vital not only to those who work in the factory but to the town of Shrewsbury itself.
This is the point at which the right hon. Member for Bristol, South-East (Mr. Benn) walked in. He must have the biggest feet in the business; they always seem to be there. I do not want to argue about what he said. He may have said "without compensation". He may have meant it. He may have consulted the Leader of the Opposition, and he may not. He may have been misunderstood, or he may even have tried to sow doubts. The fact remains that neither I nor anyone on the Government side of the House believes that nationalisation is the answer, since there is no hope of nationalising one part of the motor industry without destroying all the competition in that industry. We see no hope of a nationalised company succeeding—
How does the hon. Gentleman equate that with the experience in France and Germany, where nationalised Renault and nationalised Volkswagen compete with private enterprise?
I will not go into the history of the way in which Volkswagen and Renault came to be nationalised. I do not think—and the experience of this country does not suggest—that there is any likelihood that a nationalised industry confronted with competition will succeed. I am saying no more than that.
This is an interesting point. Surely the closest analogy is Italy, where another high-performance car firm, Alfa Romeo, was taken over by the State holding company, IRI, was kept for many years, and was highly profitable, in direct competition with capitalist firms.
I have not come here to argue the needs of Italy, France, Germany, Russia or any other place. All that I am saying is that I see no prospect in this country of a partly nationalised motor car industry being successful in competition with the varying entities in the industry. Rolls-Royce Motors should no longer have its arm jogged, or be criticised, or argued about. All that it wants is to be left alone to get on with the job. The great disservice that the right hon. Member for Bristol, South-East did is that at the worst possible moment, psychologically, he chose to utter words which he must have known would have a near-disastrous— thankfully, only "near-disastrous"— effect on the events that took place.
What would the hon. Member and his hon. Friends have said during the last election if my right hon. Friend the Member for Bristol, South-East (Mr. Benn) had forecast that if the Tories were returned to power they would nationalise Rolls-Royce? They would have given the same answer as they have given today—that it would be unthinkable to nationalise Rolls-Royce Motors. But because of the failure of private interprise to run the Rolls-Royce engine division, they realised that nationalisation was the only way to save the company and the jobs involved.
I was not giving way: I had in fact sat down. On the hon. Gentleman's second point, of course we should have been surprised, but no doubt we should have been surprised to be confronted with the prospect of Rolls-Royce being bankrupt and not viable.
I will not take up all the arguments of the hon. Member for Shrewsbury (Sir J. Langford-Holt). I agree with much of what he has said, although he did not bring forward the most important argument against nationalising or re-nationalising the Rolls-Royce motor division. The motion is a non-sequitur; there is no connection between the first part and the second. I agree that the Government—not only this Government, and not only since the bankruptcy, but long before—have grossly mishandled their dealings with Rolls-Royce. But to proceed from that statement of the obvious, as the motion does, to the conclusion that the company should be nationalised, is to proceed without the benefit of logic or common sense.
Surely the very opposite is the correct and proper conclusion. If the Government have mishandled the affairs of Rolls-Royce they should not be allowed to do so again. They should be removed, so far as is humanly possible, from all non-essential contact with the affairs of that company. Force of circumstance, and nothing that one could call thoughtful or calculated or deliberate planning, has brought the Government into the affairs of this unhappy company. In my view, they have botched the job. They have made a masterful mess of their enforced intervention. Surely we cannot argue from this that the Government should therefore intervene even more, for ever and anon, as the right hon. Member for Bristol, South East (Mr. Benn) said was the Opposition's desire.
What Rolls-Royce has suffered from, over a long period, is not too little but too much intervention by both Governments. At every point at which the Government have intervened in its affairs, it has been an unmitigated disaster for the company, its employees, and its shareholders. With all this experience behind us, we can and must conclude that Rolls-Royce needs nationalisation like a hole in its cylinder head.
To prove this contention it is necessary only to retrace the steps of Government intervention, starting with the basic decision to build the RB211. Here was a great engineering company, a national institution, the very purr and roar of whose engines seemed to British sentimentalists of both right and left to be playing "Rule Britannia". Somehow or other, by hook or by crook, this company had to be carried into the next generation of aero-engines. If this could not be done, Britain would be out of the big time world aero-engine league for ever.
It is highly likely that if this company had been left to its own devices it would never have found the resources to build the RB211. The Government of the day therefore leaned on the company and encouraged it in a certain political direction. They leaned on it with all their political weight to build an uncommercial engine, and then, when the development costs had reached a point at which it could not be sold at a commercial price, the right hon. Member for Bristol, South-East, in his £ as Minister of Technology, leaned on it again to sell this engine at an uncommercial price, through a ruinously uncommercial contract, to the Americans.
I am sorry I was out of the Chamber when the hon. Gentleman began to speak. Would he kindly alter that statement? The plain truth is that the Economist said quite clearly in its comment that, far from the Government's leaning on Rolls-Royce in 1968, Rolls-Royce pleaded continually with the Government to support the engine. The Government—and I was the Minister speaking for them—made it absolutely clear to Rolls-Royce that it would get no support whatsoever for the RB211 unless it had a foreign partner and three launching orders. When Rolls-Royce accepted that, it pledged its total assets, and right up until after the 1970 elections on 21st July 1970, Sir Denning Pearson made it clear that in his view Rolls-Royce had all the resources it required to carry the engine through.
What the hon. Gentleman suggested, no doubt accidentally, is totally and completely inaccurate.
In fact, it was not at all an accidental comment, and it is not fair for the right hon. Gentleman to call in aid the Economist on one point. It must be the only occasion in his whole career on which the Economist agreed with him.
In the argument I was making before the right hon. Gentleman came into the Chamber I was apportioning blame equally. That is not very difficult to do. It is the view of the great majority of the British people that both Governments are equally to blame. The point I was making was that it was Government intervention that brought about the downfall of this company.
I am sure the hon. Gentleman would wish to remind the House of the statement by the right hon. Gentleman on 23rd November 1970, when he said:
The RB211 order was a product of co-operation between the company, my old Department and the civil servants working in it …"—[OFFICIAL REPORT, 23 November 1970; Vol. 807, c. 38.]
I think that that to a certain extent answers the point, but the basic answer to the point raised by the right hon. Member for Bristol, South-East is that this company would never have built this engine without Government intervention. Therefore, Government intervention has proved an unmitigated disaster to the company. Now the right hon. Gentleman wants to prolong Government intervention by nationalisation of the motor sphere as well as everything else, for ever and anon.
At that point the General Election intervened, and the present Government were returned with all sorts of preconceived political lunacies around their neck. It was in fact a Government determined to teach British industry a lesson, to purge the British people of their so-called weakness, and the Government were looking for symbolic acts by which to accomplish these aims.
Rolls-Royce fell into their lap—a lame duck ripe for the plucking. Since then, things have changed. A great deal of the taxpayers' money, for one thing, has been squandered unnecessarily and the Government have thrown their electoral philosophy overboard and packed their wildfowler in chief off to a duckpond in Brussels.
If ever there was gross mishandling by Government, this is undoubtedly it, and both Governments are guilty. Both sacrificed common sense and commercial judgment to the dictates of party dogma and election manifestoes. On this record, both ought to be banished from any further meddling in matters that they clearly do not understand.
Before I go on to the question of nationalisation and the Labour Party's threats, I want to deal very briefly with the question of the workers' shares, because it is a question which concerns my party very closely indeed, in that, for a long time, we have been identified with policies to encourage the participation of workers in the ownership of shares in the companies in which they work.
But the ownership of shares is part of a total policy for industrial democracy. It is not sufficient simply to invest money in one's firm and then hope the management will look after it. The management has to be made directly responsible to those who are investing the money —to the employees, to the members of the firm. This has to be done through a whole process of industrial democracy —workers' councils, and the election of directors to supervisory boards by the workers. But, at the end of the day, when that has been done and when a coach and horses have been driven through the present structure of British industrial companies, anyone who invests his money in a company must take the good with the bad. He must take the risk. I accept that this is implicit in our policy, and I would never dream of trying to hide the fact.
What, exactly, is the Labour Party's policy on nationalisation—revealed to us as a result of the events over the last week or so? We have the conference resolution—Resolution 14, on public ownership, passed at the 1971 Party Conference. It states that the Labour Party policy towards any assets denationalised is complete nationalisation without compensation immediately upon the return of the next Labour Government.
The right hon. Member for Bristol, South-East presumably thought, when he made his statement, that Rolls-Royce Motors came within that category, and was something that had already been nationalised by the present Government. Otherwise, why would he have made the threat? Moreover, he confirmed this when he questioned whether the fact that it was or was not in public ownership was a mere technicality. In today's speech he spoke of millions of pounds of public money being poured into the company. The implication was that this also made it in some way technically nationalised.
Now we are told that Rolls-Royce Motors will not be nationalised without compensation. We have been told that by the right hon. Gentleman today, when he spoke of the Labour Party as never having threatened confiscation, and in the statement of the right hon. Gentleman the Leader of the Labour Party, when he said:
It is not the policy of the Labour Party that shareholders in the automobile sector of Rolls-Royce should be dispossessed of their shares without compensation.
We therefore have a certain mix-up about the exact policy towards this motor company.
What, in fact, is the limit to the Labour Party's policy of nationalisation? I do not want to be doctrinaire about this, because, in my view, there are cases in which there is clearly an argument for nationalisation. I think water is an obvious case, although that may involve a mere transference within the public sector from local control to national control. Again, I agree that cases will inevitably arise in which there ought to be public ownership—whether it be at local or national level, I am not now concerned—of building land. On frequent occasions I have advocated a much greater use of compulsory purchase to bring this about, but I would want to take that argument further still.
Surely there is some limit, and surely the remark made from the Government side, in the course of the right hon. Gentleman's speech, about the commanding heights of the economy is to a certain extent relevant. Are we to understand that it is no longer part and parcel of Labour's policy that nationalisation shall be limited in any way by that phrase? Are we to understand that it is the policy of that party to nationalise not only the commanding heights of the economy but what the right hon. Member for Huyton (Mr. Harold Wilson) would, I am sure, call the candy floss of the economy as well?
I am not quite sure in which category Rolls-Royce Motors should be placed. Is it a car company, or is it a part of the expensive end of the fun-leisure market? Frankly, for my money it is the latter rather than the former. People are entitled to manufacture fun-leisure products, even very expensive ones, but let us suppose that Rolls-Royce had owned a subsidiary company which manufactured bingo tickets, or was, perhaps, the proprietary company of Men Only. Would the Labour Party be arguing that because it was part of a company which was now in total nationalisation the Government would not be right to sell Men Only, or the bingo tickets firm, or whatever, to private enterprise, but that it should somehow be considered as part of the commanding heights of the economy and that the public should retain ownership?
I cannot see that that could be argued. Should the Government have a direct interest—as they will if they nationalise Rolls-Royce Motors—in encouraging people to buy Rolls-Royce cars? Is the right hon. Gentleman sure that a future Labour Government will want to be in the position of trying to sell Rolls-Royce cars to the British people? How will that tie up with Labour's future taxation policies, with its expense account policies, and with its distribution of wealth policies? I would not wish to be any part of a Government whose need was to sell Rolls-Royce cars to the British people.
Part of the answer seems to be that millions of pounds of taxpayers' money has been poured into the company, and that this somehow justifies public ownership. It certainly justifies public interest, and a stake in the equity. I am only sorry that both Governments have not taken an equity share in those private companies in which they have placed taxpayers' money. But the more important question—and I ask this of the right hon. Gentleman, since he was to a certain extent responsible for pumping in a lot of money—is whether the taxpayer thinks he got good value for the money spent on Concorde or the RB 211. I suspect that the taxpayer thinks that his money was wasted in both cases, and that he is justified to a large extent in thinking so. Why did the Government not see to what use the money was being put?
There is no case for the nationalisation of the cars division. It is an irrelevancy. There is a curious contradiction in the new attitude of the Labour Party, expressed in its policy document, which is about to be published. There is a considerable passage advocating the greater decentralisation of Government decision-taking, with the encouragement of provincial or regional government and decision-taking nearer to the people. That is decentralising decision-taking. But the whole essence of free enterprise is that it decentralises decision-taking, and therefore there is no logic in saying, on the one hand, that one is in favour of decentralising Government decision-taking to the provinces or the regions while, on the other hand, one is not following the logic through into the economics.
The answer to all these uncertainties in the Labour Party's policy on nationalisation, and the reason why the statements made by the right hon. Gentleman have nothing whatever to do with what a Labour Government, if they ever come to power, will actually do, is that we all know, as he does, that no Labour Government are going to do any of the things contained in his speeches. No one believes it; he does not believe it himself. He is whistling in the dark, and if the Labour Party goes into the next election with a manifesto containing this sort of botched-up nonsense it will be a leaky sieve, as was the 1970 manifesto of the present Government, and the right hon. Gentleman will be pitching as much water out of that manifesto as the Conservatives have done out of theirs.
As Dr. Johnson said about women preachers, the surprising thing about this debate is that it is taking place at all. I thought that the right hon. Member for Bristol, South East (Mr. Benn) would approach the subject of Rolls-Royce with considerable humility, if not reticence. But that is not his way. I do not propose to follow his arguments or those of the hon. Member for Cornwall, North (Mr. Pardoe) on the troubled history of Rolls-Royce. I wish to concentrate on what I believe to be the main issue—whether Rolls-Royce should have been wholly nationalised at the time of its troubles in 1971. The right hon. Gentleman argues that the company should have been brought wholly within public ownership. That was his argument at the time, and that is his argument today, and it is expressed in the motion.
There could have been no question of the right hon. Gentleman's ignorance of the fact that part of Rolls-Royce— Rolls-Royce Motors—was not brought within public ownership at the time of the nationalisation of the aero-engine division. What is one to make of the right hon. Gentleman's extraordinary statement last week? He knew that Rolls-Royce Motors had not been brought within public ownership. Whatever he has said today about the enormous sums of money poured into Rolls-Royce is quite irrelevant to the plain fact that he knew at the time, and subsequently, that Rolls-Royce Motors had never been brought within public ownership.
The right hon. Gentleman said in his statement:
Let me issue a solemn warning so that there can be no possibility of any mistake on the part of those who think they are going to take quick and easy profits at public expense out of the deal.
Then he referred to the official policy of the Labour Party, that where public assets had been sold off by the present
Government renationalisation would occur without compensation.
I do not think the right hon. Gentleman will deny that that is what he said. I do not believe that he could conceivably deny that he knew, all the time, that Rolls-Royce Motors had never formed part of the nationalised concern. How could he have made that statement when he—none better—knew that it had never been nationalised?
One could put the right hon. Gentleman's statement down—to a momentary aberration—as one can with so many of his statements. But even that explanation will not do, because it was not a momentary aberration. The statement was made after the most careful consultation through all the usual channels. It had been discussed at length in the Shadow Cabinet. It had been disussed with the Leader of the Opposition himself on two separate occasions, and the Leader of the Opposition had made drafting amendments to the statement.
So we know that the right hon. Member for Bristol, South-East knew that Rolls-Royce Motors had never formed a part of the nationalised concern. Yet he said not only that Rolls-Royce Motors ought to be brought within public ownership, but that those who bought shares from the receiver in the offer of sale would find that those shares would be nationalised without any form of compensation. Whatever he may say now, that was also the attitude of the Leader of the Opposition, who saw the statement before it was made.
One can only conclude that both the right hon. Member for Bristol, South-East and the Leader of the Opposition knew the position, and that this was a deliberate statement. Of course, there has now been a change. We have had a new statement from the Leader of the Opposition. But if it is the position, as it was declared to be, that, in respect of those companies which ought to have been nationalised but were not, there would be no compensation, should it not also apply to all the other manufacturing concerns which the right hon. Member for Lanark (Mrs. Hart) told us today should be brought within public ownership? If Rolls-Royce Motors should be brought within public ownership without compen- sation, why should not the same fate apply to all the other manufacturing concerns on which the right hon. Lady has her eye? It is difficult to see any difference between those companies and Rolls-Royce Motors.
The right hon. Member for Bristol, South-East is not really concerned with the shareholders of Rolls-Royce Motors, or with the old shareholders of Rolls-Royce. One can understand his antipathy towards them, given his attitude. But he is not concerned with the creditors of the company, either. I do not believe that he has ever been, despite his protestations. He says in his statement:
Rolls-Royce Motors and their workers whose skill is the only real asset of the company should be retained within the public sector.
I wonder what the workers in Rolls-Royce and the industry itself think of the right hon. Gentleman, or what they would do if ever Rolls-Royce Motors were, unhappily, to be nationalised, when all that would happen would be that the profits of the company would go not to the shareholders but to the country, without any improvement in the workers' position. I cannot think that they would be materially comforted by that reflection. Happily, though, we have some guide to the attitude of the workers in Rolls-Royce Motors. Mr. Gallimore, the chairman of the works committee at Crewe, said last week:
Personally, I think Mr. Benn should have kept his mouth shut.
I do not agree. I think that Mr. Gallimore was wrong. The right hon. Member for Bristol, South-East should be encouraged to make statements every day of the week. However, he needs no encouragement. It comes very easily to him.
Now the official position is different. We have had a statement from the right hon. Member for Huyton (Mr. Harold Wilson) saying:
It is not the policy of the Labour Party that shareholders in the automobile section of Rolls-Royce should be dispossessed of their shares without compensation. This was clear from the operative paragraph of Mr. Benn's statement.
One cannot help wondering which was the inoperative paragraph of that statement. However, that is for the Leader of the Opposition and the Labour Party to work out.
If the proposals of the right hon. Member for Bristol, South-East and his party for nationalising further manufacturing concerns were to be carried out. I cannot help wondering how they would be paid for. Let us assume that they carried this policy into practice. If they are genuine in saying that there should be fair compensation, the only way in which shareholders can be compensated is by the issue of Government securities. However, the right hon. Member for Bristol, South-East will know that there are no Government securities of any long-term date which can be sold to the public at less than an interest rate of over 10 per cent. If the Opposition were ever, unhappily, to return to power, the position would be that they would have to issue Government securities on which the taxpayer would have to pay an interest rate of over 10 per cent. in order to acquire assets which then, and probably long into the future, paid less. How could the deficit be made up?
There are other parts of the programme which we shall shortly find revealed to us. Judging by the way the Press seems to be leaking the manifesto of the Labour Party every day, we shall be conversant with all of it by the end of next week.
How would the Labour Party propose to pay for the deficit—the amount to be raised by the taxpayer in paying interest on gilt-edged securities compared with the value of the assets and the return on them? One suggestion is by means of a wealth tax. That is a very interesting suggestion. If all wealth over £50,000 was confiscated and distributed to everyone in the country, we should each be £150 better off. I do not know how long Opposition Members think that that sum would last—
I am sorry to distract the hon. Gentleman from his argument about Rolls-Royce, but is he now saying that he is in favour of 80 per cent. of the country's wealth being owned by 10 per cent. of the people?
I am saying nothing of the kind. I should be delighted to join the hon. Member for Glasgow, Gorbals (Mr. McElhone) in an argument about a wealth tax, and who owns what. However, if the Labour Party thinks that it can meet this deficit by means of a wealth tax, it is quite wrong.
Perhaps the Opposition would try to pay for it by taking in tax all incomes above £5,000 a year, net. If they did that, we should all be worth an extra £3·60 a year.
The Opposition's proposals are a complete charade. There is no way by which they can possibly finance their proposals, and they know it. They are just trying to impose an impossible and fruitless policy on the country, and they will fail, as they always have.
In all this the Leader of the Opposition has been playing his customary role of keeping the party together and following every horse. There was once a well-known racing character known as Prince Monolulu. The Leader of the Opposition has some of the characteristics of Prince Monolulu, who had a horse for every race. It was sometimes suggested uncharitably, that Prince Monolulu had every horse in every race. The distinction between Prince Monolulu and the Leader of the Opposition is that the right hon. Gentleman never appears to have a successful horse. One has only to consider some of his recent statements. In Czechoslovakia he said that the events of August 1968 were best forgotten. On Rolls-Royce he said—
I apologise, Mr. Speaker. I am about to conclude my remarks.
The Opposition know that they are in complete disarray on Rolls-Royce, on nationalisation, and on every other aspect of their policy.
If I might return to Prince Monolulu for a moment—he always had a slip of paper to show what his view was. That was more than the Leader of the Opposition had on the May Day strike—when he abstained. That is the difference between the right hon. Gentleman and Prince Monolulu.
The Opposition are in complete disarray. They have a bundle of policies for which they can never pay, and the country will see through them every time.
When I came into the Chamber today I had no overmastering desire to speak. I have sat through the whole debate, most of the time deeply interested in it. However, it has hardly been a debate. My right hon. Friend the Member for Bristol, South-East (Mr. Benn) addressed the Secretary of State quite seriously, and a string of questions remain unanswered. The Secretary of State had his brief well polished by Tory Central Office or one of his civil servants. Then the fun and joke book came out. We had a skit on something which my right hon. Friend was alleged to have said last week. I say "alleged to have said" because the right hon. Gentleman could not quote it. All that he was able to do was read the brief before him. He did not attempt to rationalise what my right hon. Friend is supposed to have said.
Several questions have been asked today, and I hope that the Minister for Aerospace and Shipping will be able to answer them. We expect to hear answers.
The first question concerns the principle of public policy on which it is proper to sell public assets for private profit. When this Government came into office they were determined to rescue no lame ducks. What killed that more than anything else was Rolls-Royce. When we read headlines to the effect that Rolls-Royce had gone bust a great deal of alarm went through the country. It was not only about the thousands of people in Derby that we were concerned. The "R-R" symbol on a car radiator is even better known abroad than the Royal Coat of Arms. The Rolls-Royce crash was taken almost as a national disaster.
The right hon. and learned Member for Gloucestershire, South (Sir F. Corfield) had to react. I had some sympathy with him today. He seemed like a good man struggling with adversity. However, he was not to know that the Government would change their policy. They did so at the time under the force of circumstances, because they dared not do anything else. In much the same way their policy collapsed in face of the miners later on. The only excuse that the right hon. and learned Member for Gloucestershire, South has is that he did what he thought right at the time. That was inherent in his speech. He did not know that the Government would change their policy.
We have therefore had this afternoon a debate in which questions were put to the Government side, and we have received no adequate answers. One would not think that there was any crisis within capitalism in this country at the present time. One would not have thought that thousands of people throughout the country ever depended upon serious consideration by the Government. We were often accused of being doctrinaire, but we were never as doctrinaire as the Conservative Members. As a matter of fact, when one considers the obscenities that we have heard in the Law Courts in the last few days, one could never claim that the members of my trade union—which is the principal trade union in Rolls-Royce—are the most rapacious people in this country. The right hon. and learned Member for Gloucestershire, South might have come up with different answers if he had known what the policy was to be. He did not know what it was going to be. He was manipulated and thoroughly got at. Everybody knows that.
What are we to do now? There is no doubt that public money was involved. The company was kept going by public money year after year. When it was announced that Rolls-Royce had secured the contract for the RB211, it was considered to be a great national triumph. It was only afterward that matters were turned round and the whole thing condemned.
I know that the present Government did not want to take the line they did, because that was an outrage against the mandate on which they were elected. They found themselves in a situation and they reacted to it. Now, they sell assets as cheerfully as they can.
What about the other questions on which we are entitled to answers? What justification can there be for cheating the worker shareholders of £2 million and paying the City the same amount to float the company off on to the market? What about that?
Those are the sort of things which have occurred in the last few days. I have great regard for the right hon. Member for Streatham (Mr. Sandys) but his name was linked recently with a matter which, however innocent he might be, can do no credit to his name and no credit to the institutions of the City of London or the great firms that operate there. The workers throughout the country will look at that and then will look at the recent struggle in which the hospital workers were practically starved into submission. They are a most deserving section of the community, but their case was not considered on its merits. It was used to vindicate a policy of the Government. The Prime Minister was going to be as tough as he boasted he was. He does not come as tough when he has to face up to the big boys. He would not have been tough with the miners if their policy had been different. He simply caved in.
This has been a discreditable debate, because the Government have made no attempt to reply to the case as it was put to them this afternoon. They merely rolled off on a silly lot of personalities that do no credit to the House and its stature in the country.
I agree strongly with what my right hon. Friend the Member for Leeds, West (Mr. C. Pannell) has just said. It certainly allows me to be brief in winding-up the debate. The Secretary of State simply did not address himself to any of the questions. I am sorry he did not do so, because when the cheers of his supporters are forgotten his words in HANSARD will be looked at to see whether they give any clue to what the Government's attitude should be towards the worker shareholders who will be left absolutely out of account and what his attitude might be towards public assets.
The right hon. Gentleman confined himself to pressing me on Labour's policy on future nationalisation, when he is a member of a Government which has changed every major item of policy several times during the three years they have been in power.
It is not my wish to make this conclusion of mine different from my opening comments. I want to make this a serious conclusion, as I did in my earlier remarks. If I may come back to what I have said about public assets, we shall see to it that no profits are made where public assets are hived off for private gain. How we shall do it will depend upon the circumstances. In the case of the airline groups, they will be taken back. In other cases, we shall not expropriate or confiscate—such a thing was never said —but we shall see that nobody makes a profit out of what the public has built up by taxpayers' contributions.
The right hon. Gentleman has described Rolls-Royce as obligated, although this side of the House would not agree. He says that no profits are to be made when he renationalises. Does this mean that when and if his party gets back to power and it renationalises, it will do so at today's valuation?
There will be no profits made by those who have acquired Rolls-Royce Motors as a result of this quotation. Hon. Gentlemen who talk about the resolution for no compensation should remind themselves that it was passed not only by the Labour Party conference but also by the TUC, which includes many unions not affiliated to the Labour Party. Concern to safeguard the public sector is widely felt by local government officers, by teachers and other unions not associated directly with us.
I now turn to the real issues which were dealt with by my hon. Friend the Member for Derby, North (Mr. Whitehead), the right hon. and learned Member for Gloucestershire, South, my hon. Friend the Member for Lanark (Mrs. Hart) and my right hon. Friend the Member for Leeds, West. To turn our minds to what is the essential question, how should Government and industry interact in areas where, without the taxpayer, private enterprise cannot function? The hon. Member for Cornwall, North (Mr. Pardoe) talked about intervention by the Government being a wicked thing.
Without intervention by the Government, no advanced work would be done in our society. The question is, if private enterprise cannot do it, and Government and industry side by side or at arm's length run into these difficulties, how should it be organised?
I have some sympathy with the right hon. and learned Member for Gloucestershire, South, to whom I meant no personal malice. I would say to him that in my judgment, with the present policy of the Government, wholly different from what it was in 1970, Rolls-Royce would not have been bankrupt. Can anyone honestly believe that, after the money they have put into BSA and all these other companies, under a wholly different policy, if at this moment Rolls-Royce were to go bankrupt the Government would let it go? Of course they would not. The bankruptcy of Rolls-Royce is a monument to the folly of the cabinet.
When the RB211 was supported by the Labour Government, what did the Secretary of State for Social Services—then the industrial spokesman of the Conservative Party—say in a Conservative Central Office handout on 7th February 1970? He said:
Labour is doing no more for the RB211 than the Conservatives did for the Olympus and the Spey.
I have only a few minutes. The hon. Gentleman will have an opportunity of replying. The fact is that where Government and industry are as intimately concerned as this, public ownership is right. I accept the rebuke of my hon. Friend the Member for Derby, North that the last Labour Government did not do it. It was not in our programme in 1964. We did carry through the public ownership of the aircraft industry. We are now debating in the party what our policy should be about public ownership. We very much hope that when that debate comes to a conclusion, my hon. Friend's views will be seen to have been taken on board.
I now come to the other question. For how long do the Government believe that working people are prepared to see the crude pursuit of profit while they lie under a statutory policy with their wages controlled and industrial action made illegal? When the hon. Member for Cornwall, North speaks about capitalism being decentralised and about the decentralisation of power, of course the plain truth is that 100 companies now produce 50 per cent. of our national output and that by 1985 they will produce 60 per cent. of our national output. Private enterprise, far from decentralising power, is concentrating it. The people of this country will soon have to learn that if they are not prepared to take command of those commanding heights, those commanding heights will take command of us.
The question that right hon. Gentlemen on the Conservative side are always putting about who governs Britain— whether it is the trade unions or the Government—is the wrong question. The question is whether this country can preserve any kind of democratic freedom while the concentration of industrial power continues as it does. This is the question raised by the multi-national company, by Roche, by V and G, by IT and T and by the vulgar and cheap abuse of power on the Lonrho board, about which we shall be hearing a great deal more.
I raise another central issue with which the debate is concerned and which, candidly, reflects back on the policy of all Governments, including that of which I was privileged to be a member. For how long will workers be prepared to accept that the firms in which they work are transferred over their heads without any formal consultation? The Secretary of State quite rightly said that that happened under the Labour Government. It has also happened under the present Government.
The Companies Act still, in 1973, makes no provision for workers' interests to be considered as a legal duty of a receiver or the board of a company when there is a transfer of ownership. That is no longer acceptable. Whether right or wrong—right hon. and hon. Gentlemen opposite may think it right; I think it wrong—what matters is that it is acceptable no more. If there is a real lesson to be learned—I hope that it has been learned by Opposition as well as by Government politicians in the last three years—it is that this is not acceptable.
The importance of Upper Clyde was that a group of workers said, "We will not accept it." The miners would not acept another form of oppression by Government policy. The dockers would not accept unemployment due to con-tainerisation. Those workers fought back and changed public thinking on these matters. The hospital workers did the same.
This debate on Rolls-Royce will be remembered long after the immediate issue is forgotten, because it symbolises absolutely the policy of this Government, which is to make quick profits for their allies at public expense, to be absolutely silent about the worker shareholders, to squeak only when they think that their own investing friends may be affected, and to try to carry this through by a diversionary attack upon the policy of the Labour Party which is emerging and will be successful. [Interruption.] The Secretary of State has changed so many times. He should not be too quick to criticise. There is not a single item in his election address, which I read this morning, which he would now dare to present publicly to the people of Worcester. If, at the time of the last election, he had told them what he has done since, he would not even be a Member of the House of Commons.
This debate has been well worth while. I strongly urge right hon. and hon. Members on both sides of the House to support our motion of censure.
This debate has ranged over a wide number of matters. Until the right hon. Member for Bristol, South-East (Mr. Benn) replied, I thought that at least we would get away from the great harm that he hay done to the Rolls-Royce car company. But during his winding-up speech, he did a considerable disservice to the people employed by that company. He has said, in a totally imprecise way—vague and damaging because of it—that no one who has bought shares in Rolls-Royce will make a profit out of them. I ask him to consider—because I am sure that he has not done so—the effect of that statement upon those who have now bought shares. Apparently, if they invest more money in that company, if they expand that company, if they sell more through that company, if the exports of that company go up, and if more jobs are created within that company, not a penny piece is to be made by the people who now own it. I want the people employed by that company to understand that if there is hesitancy—
I want the people employed by that company to understand that if there is hesitancy it is because the right hon. Gentleman has created it tonight—[Interruption.]
The next line of attack is that my friends in the City will be put off by this debate. I wonder about the impact of the right hon. Gentleman's statement on employees who have invested their savings in buying shares in their company and have now been told that there is no possibility of profit for them as a result of this flotation.
I should like to deal with the point on which the right hon. Gentleman was unwilling to give way to me when he spoke about the responsibility for this matter being in the hands of the members of the last management of the company. Without the slightest doubt, they bear responsibility. The point that the right hon. Gentleman was trying to make by quoting and praying in aid my right hon. Friend the Secretary of State for Social Services is that he—the right hon. Gentleman—was not involved in these matters; that in some way his responsibility was only for things which went well, and that the management of the company was responsible for things which went wrong.
The House will recall, no doubt as clearly as the right hon. Gentleman, his
speech on 23rd November 1970, in which he said:
The RB211 order was a product of cooperation between the company, my old Department and the civil servants working in it, the civil servants who worked as engineers and scientists in the research and development establishments, the British Ambassador and the Embassy in Washington, and the taxpayer who picked up the bill."—[OFFICIAL REPORT, 23rd November 1970; Vol. 807, c. 38.]
For the right hon. Gentleman to believe that he was not involved in that matter is for him to miss the point of the whole area of responsibility for different matters.
One point that the whole House will welcome is that the right hon. Gentleman both opened and wound up this debate on behalf of the Opposition. Certainly his presence on both occasions has given a consistency to Opposition politics which has been lacking for a long time. The right hon. Gentleman succeeded in opening a debate which everyone knows is based entirely upon his error of judgment in making the statement that he did, and by throwing out 10 spurious challenges to the Government for the responsibility he claims that they bear. Let us look at some of the most important of those challenges.
The right hon. Gentleman said that we had let down the suppliers. What would have happened if we had not moved in in the way we did to support the situation that had developed? The suppliers would have suffered to a vastly greater extent.
The right hon. Gentleman suggested that we should have taken over the shares of Rolls-Royce. When that possibility was canvassed it was not certain that the RB211 project could go on—not for any reason to do with the company, but because it was late—and it was not certain that the Lockheed company could stand the extra delay that would follow. Nor was it certain that the airlines would not cancel their options for the airliner. If we had followed the right hon. Gentleman's proposal we could have bought all the shares and then found that the project was unable to proceed—and the British taxpayer would have been left with the responsibility for the cancellation charges and no project to save. That is the devastating answer to the question why we were not prepared to move forward with the acquisition of the whole shares of the company.
Perhaps we can now look at the second aspect of the debate. That deals with the very important aspect, which has concerned all of us who have dealt with this matter, of the question of the unemployment and the general level of employment in Rolls-Royce.
The House will not have missed the point that the motion explains that one of the main purposes of the criticism of the Government and, indeed, one of the alternative policies of the Labour Party, would be to
safeguard the jobs of those workers whose skills and dedication are its only real asset.
The way that the Labour Party intends to do this is to take into public ownership the shares of the aerospace and car sides of Rolls-Royce.
It is worth asking the question, in what way has public ownership ever protected the jobs of anyone in the industries to which it has been applied? Certainly it has never done so in any of the major nationalised industries, at any time since they have been nationalised. It certainly did not do so when the right hon. Gentleman was responsible for those industries.
Is not the hon. Gentleman aware that had the Labour Government at the time not nationalised steel when they did and re-set the target for steel production, there would have been mass unemployment?
I am sure that the right hon. Lady would not want us to be diverted on to the steel industry. She will be aware of the massive injection of public support that we have given to the steel industry in recent announcements, on quite the most ambitious plans that that industry has ever had.
Let us deal specifically with the integrity of the claim based in the motion by hon. Members of the Opopsition.
The Opposition set up the Plowden Committee to report on the aerospace industry in order to consider this whole question. What we found was that the Plowden Report said:
We consider it vital that the Government should not do anything to maintain the industry at an artificially high level, and that following the defence review the industry should slim as much as is compatible with the future demand.
The right hon. Member for Sheffield, Park (Mr. Mulley) said that the Government saw no case for supporting the industry at any particular size. The size of the industry, as the Plowden Committee said, had to depend upon the amount of work it succeeded in obtaining. So much for the general argument that we should support the industry in order to protect the jobs of the people concerned.
Then we can consider, perhaps, the arguments of the Chancellor of the Exchequer at that time, the right hon. Member for Cardiff, South-East (Mr. Callaghan), after the cancellation of the TSR2 programme, in which he said:
Our aim now and in the longer term is to establish an orderly and articulated policy designed to move as rapidly as possible sufficient resources into improving our trade balance. In order to do both this and to achieve faster economic growth we must redeploy resources in a positive way. The decision to cancel the TSR2 is an earnest of this determination."—[OFFICIAL REPORT, 6th April, 1965. Vol. 710, c. 282.]
The hon. Gentleman is quite fair in quoting the Plowden Report and the speeches made, but the present prospects in the industry depend on the Marshall Report, which the hon. Gentleman has not even published. That is what is causing uncertainty to the workers.
The prospects of the industry depend on no report. They never have, and never will. They depend entirely upon the level of jobs available, the work flow available, the sales achieved and Government decisions.
It might be helpful, therefore, to consider the specific question whether the right hon. Gentleman, in talking about the jobs available for employees of Rolls-Royce at Derby, is able to give the impression that something happened under the present Government about which his party and, much more specifically, he himself, were not aware. The fact is—as his hon. Friend the Member for Derby, North (Mr. Whitehead) will tell him—that the rundown in jobs in Rolls-Royce had started long before the 1970 General Election. Between December 1969 and June 1970, when the right hon. Gentleman gave up responsibility, 3,000 jobs were lost in Rolls-Royce. Between June 1970 and March 1971 a further 800 jobs were lost. That shows that there was a stabilisation of the position after the General Election, until the crash. After the crash, 5,000 jobs were lost. Let us be clear that the job losses in Rolls-Royce were known to the right hon. Gentleman. He set up the IRC report to look into the situation, and it had reported before the job losses started to take place. This was known to him. To my knowledge—the right hon. Gentleman may wish to deny it—no steps were taken by him to do anything about it. All the evidence is that he would not even have tried to do anything about it.
The steps taken to deal with Rolls-Royce unemployment were to authorise the RB211. Without that authorisation Rolls-Royce would have collapsed. The hon. Gentleman knows very well that the RB211 engine was authorised because the whole future of Rolls-Royce depended on the development of that engine.
I was under the impression that the purpose of joining in the RB211 project was to keep this country in the forefront of aerospace technology. But the decision in respect of the RB211 was taken two years before that date. The point that the right hon. Gentleman is making is that in some way jobs should be automatically protected. When he had the chance to do something about it, he did nothing. He had every opportunity so to do.
I put one point to the right hon. Gentleman. I consider it to be important in this context. We have heard an immense amount about worker consultation. Everyone knows that what that means is that the right hon. Gentleman dreams up an idea and says, "This is what the workers want." But he never asks the workers. That is the one thing that never happens.
I ask the right hon. Gentleman this question: in the event of a Labour Government being elected, will they consult the employees of the Rolls-Royce motor company before deciding whether to nationalise it, and if they do nationalise it, what form will that consultation take?
The hon. Gentleman is having a lot of fun. But if the Labour Government are elected to power on a platform of advancing public ownership, and if the Rolls-Royce motor company, which earned most of its assets out of the taxpayers' money, is brought into public ownership, that will have been explicitly approved.
I understand that where we have a clash between doctrine and consultation, doctrine will win. So much for all the Press quotations to the effect that the Government are not in the least bit interested in the working people of the company being taken over. They will suffer in exactly the way that the right hon. Gentleman has made clear.
This brings us to the nub of the debate —the issues upon which the debate is centred. It has nothing to do with the RB211, Rolls-Royce, or how this or that particular decision came about. It has nothing to do with that, except for one thing—which is that the right hon. Gentleman made a speech saying that the Labour Party would nationalise, without compensation, the shares in Rolls-Royce Motors—a speech calculated to do the maximum possible harm to the people who were likely to acquire those shares. The next day it became necessary for the right hon. Gentleman's colleagues in the Shadow Cabinet to repudiate what he had said.—[HON. MEMBERS: "Where are they?"]
I thought that I heard a question from the benches behind me, "Where are they?" That is a devastating question Doubtless they are working out how to get round the next boob of the right hon. Gentleman's. That is a full-time occupation for anyone. The fact is that in the political interests of the Labour Party it was necessary to get the party off the hook. This debate is an attempt to do so. However, more hooks have been firmly secured than even the Shadow
When will the right hon. Gentleman deal with the matter seriously? It is not fun.
The harm has been done. The hon. Member for Ealing, North (Mr. Molloy) says that it is not fun. He is right; it is not fun for those who work in this company. It is not fun for people in the private sector to listen to the endless and banal criticisms and the generalising in every small particular to which they are subjected by the right hon. Gentleman and his right hon. and hon. Friends.
This country's trading position is now one of considerable optimism. The people responsible for that position deserve our support, as opposed to our endless criticism. The right hon. Member for Bristol, South-East, brings particular qualities to his political activities. It could be claimed that he is the energy and the thrust of the RB211. That engine has been called the quietest engine in the world; what a tragedy that the right hon. Gentleman is not just as quiet.
That this House severely censures the Government for its gross mishandling of its dealings with Rolls-Royce since the bankruptcy of the Company in 1971; and demands the acquisition at a fair valuation under the Rolls-Royce (Purchase) Act 1971 of all the assets of the company from the Receiver so that it can continue to make its full contribution to the national economy from within the public sector, and thus safeguard the jobs of those workers whose skills and dedication are its only real assets:—