Orders of the Day — Ford Motor Company, Dagenham

Part of the debate – in the House of Commons at 12:00 am on 21st November 1960.

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Photo of Mr Harold Wilson Mr Harold Wilson , Huyton 12:00 am, 21st November 1960

The Chancellor of the Exchequer has twice addressed the House from that Box this afternoon, but it is still fair to say, and it is a remarkable thing, that the House as a whole, the Government, the country and the Ford shareholders have still not been given enough information and explanation to justify the Government's decision.

We began the questioning last Tuesday, by asking: why are Fords making this bid? I am not satisfied—I am sure that many hon. Members in more than one part of the House will not be satisfield—that we have received the answer. Already, as the Chancellor of the Exchequer has repeatedly said—we heard it time and again at Question time last week—Fords of Detroit have full operational control. Why must it be 100 per cent. control?

Various suggestions have been made in the Press, in the City and elsewhere. One, which I am bound to say occurred to me as soon as I heard about this was that perhaps Fords would like to get 300 million dollars out of America and get into good sound British equities before there is any possible devaluation of the dollar. That suggestion has been made quite seriously. The Economist and other commentators have suggested that there may be certain tax advantages for an American parent company in having a wholly owned rather than a partly owned subsidiary. I mean tax advantages from the point of view of American tax legislation. The Chancellor of the Exchequer said nothing about that.

It has been suggested also that, if there are to be market sharing arrangements—an allocation of markets between Detroit, Dagenham and Cologne—there may be advantages from the point of view of American anti-trust legislation. Did the Chancellor go into that when he discussed this with Fords? These are complicated issues, and we do not know, but as the House of Commons we ought to know. The Government ought to know. [HON. MEMBERS: "Why?"] I will explain why in a moment.

The Chancellor of the Exchequer made his announcement, we feel, after only the most perfunctory inquiries. He had obviously made up his mind before he received the application. That was very clear last week. I have never seen a man so vehement in defending a decision which he had not yet taken. Then he obviously sat in the Treasury waiting, as the House sometimes waits for Black Rod, until Fords came along with the final formalities and the final application, his mind already made up about what be intended to do.

Why has the Chancellor of the Exchequer so obviously fallen over himself to approve the transaction? I shall not exaggerate the nationalist point of the transaction. This is not another Trinidad, in the sense of transferring a vital British-controlled asset to other hands. However, there are, for all that, very important considerations affecting the national interest.

At the general election, the right hon. and learned Gentleman went on television and accused this party of being anti-British, of all things. Why is the right hon. and "patriotic" Gentleman so eager to approve this transfer? I will give him credit for this: I do not think that it is just an ideological subservience to a big business interest, such as some hon. Gentlemen would be only too ready to display.

I think he wants the dollars. On the very day that Fords made its announcement, the President of the Board of Trade published the October trade returns showing a visible trade gap, on the usual basis, of £109 million in a single month or, on a seasonally corrected basis, £122 million. The House knows that over 1960 as a whole we are most unlikely to have any surplus at all on current account. We may have even a substantial deficit on current account.

I am sure that the Home Secretary, who many years ago said that we must have a surplus of £300 million a year on current account, which the Treasury, because of the rise in prices, later wrote up to £450 million a year, will deplore the stewardship of his various successors who have left us in 1960 with a position where we are unlikely to have any surplus at all on current account.

Therefore, the right hon. and learned Gentleman has every reason to welcome a windfall addition of about 300 million dollars to the gold reserves, just as four years ago, when the Prime Minister's financial policy was running us into a grave crisis, the Treasury was so ready to pocket the 176 million dollars from the Trinidad deal. The Chancellor of the Exchequer is facing such a desperate payment crisis, concealed as it is by the hot money which is still flowing into the country, that when he receives an application of this kind his only policy must be to take the cash and let the credit go.

We have had Trinidad, British Timken, British Aluminium, S. G. Brown, where there was a very substantial American minority holding, and now Fords. We are bound to ask: where will this end? The Chancellor of the Exchequer made no bones about it just now. He admitted that this country wants to invest abroad, and that the reserves are inadequate to sustain the volume of investment we all want to see. Therefore, he is only too ready to accept these 300 million dollars.

This afternoon the right hon. and learned Gentleman specifically reserved himself to this case, saying that he would have to judge other cases on their merits. Despite that, another thing which may result from this decision is that any American firm in this country, reading the speech the right hon. and learned Gentleman has just made, will conclude that it would be wrong not to go for 100 per cent. control. The right hon. and learned Gentleman was not talking just now about American investment in Britain. He was arguing in favour of 100 per cent. control. I am afraid that many other American firms will now come along and take him at his word.

Let us look on the starvation diet of facts which the right hon. and learned Gentleman and Mr. Henry Ford between them have laid before us at the effects of the deal.

First, we must look at the effects on Fords of Dagenham. I am sure that we all welcome Mr. Ford's assurance that the expansion programme on Merseyside, Basildon and elsewhere will continue, and we welcome, too, his assurance that the employment position at Dagenham will, as far as possible, be safeguarded. I am quite sure that that is Mr. Ford's intention. But how can anyone say what will happen if in a year or two the American car industry is plunged into another depression? Will Dagenham's interest then be fully protected? Will the disappearance of the minority British shareholding have no effect whatsoever?

I thought that the Economist this week put the issue very fairly, and I quote the opening of the article. It says: Anyone comfortably assuming that this week's bid by Ford of America to make its ownership of Ford of Britain complete could leave the long-run commercial future of Britain's second largest motor manufacturer unaltered would display no more respect for the parent company's intelligence than for its veracity. One does not bid £129 million for administrative tidiness. American Ford, it must be assumed, has policies in mind to the advantage of an international concern, which it might find significantly less convenient to carry through while minority shareholders still own some 45 per cent. of British Ford's ordinary shares, of which 30 per cent. is held in Britain. In fact, the figure is not 30 per cent.—the Chancellor corrected that this afternoon.

I think that this is true of minority shareholders, as it is true of a minority party in this House. They have some rights, whether the votes are counted by Members of Parliament passing through the Lobbies, or whether it is done by counting equity shares. There is a difference between a numerical majority and a steam-roller majority, just as there would be a difference in this House as between the majority the Government can command and the situation that could arise had they 100 per cent. of the votes.

Our Companies Act, with all its shortcomings, exists to protect minority groups. Fords are paying £129 million to get rid of the minority—not just, I think, for theoretical flexibility. The Chancellor, in his statement this afternoon, used some words which I think gave ground for concern. He said: I was told it meant that if the offer were to be accepted, their decisions with regard to expansion, production and exports in Europe would not be affected by the fact that profits from activity in the United Kingdom would belong only to the extent of just over half to the parent company. After he had said that, I asked him whether it meant that, in the past, Fords had done less for Fords of Dagenham than they otherwise would have done because they held only just over half of the shares. The Chancellor replied that he was not making the accusation that Fords had been in any less way enterprising at Dagenham because of that, but that he was thinking of the future.

Does the right hon. and learned Gentleman mean by that that Fords themselves have, in fact—in, I am sure, the nicest possible way—spoken to him in terms that might be regarded as a threat; that if they did not get permission to buy 100 per cent. of the shares it would be their intention to re-allocate their production or their resources in favour, perhaps, of Fords of Western Germany——