Base Value of Securities of a Listed Class

Part of Orders of the Day — Aircraft and Shipbuilding Industries Bill – in the House of Commons at 12:00 am on 29th July 1976.

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Photo of Mr Teddy Taylor Mr Teddy Taylor , Glasgow Cathcart 12:00 am, 29th July 1976

In Committee I made frequent attempts to improve the Bill, but whenever I did so the Minister said "We connot do that, because it breaks the precedents from the Gas Act". I became almost obsessed with the Gas Act and, therefore, studied it to see the many excellent things in it which the Minister might not have noticed and which we might be able to incorporate in the Bill.

The clause defines the base value of listed securities for compensation purposes as being determined by reference to the average quoted values on each Wednesday in the six months to Wednesday 27th February 1974. Although some concern was expressed on both sides about whether the compensation was too much or too little, everyone seemed to agree that that was a very artificial and short period for the purpose.

The object of my amendment is to provide the stockholders' representative with an election between two periods for valuation purposes, which include one longer period in place of the single six-month period specified in the Bill. Is the selection of only one period unique, or has it been done before? As far as I can see, it is almost exceptional in nationalisation measures. I can find it in no other.

There is a choice of two periods in the Transport Act 1947, the Electricity Act 1947, even in the Gas Act 1948, in the Iron and Steel Act 1949, the Iron and Steel Act 1967—a terrible Act—and the Ports Act 1969, which was even worse. In that dreadful measure, the Iron and Steel Act 1967, and in the Ports Act, the choices were between six months, in the case of steel five years, and in the case of ports three years. It has been recognised in all nationalisation Bills that the only way to try to be fair in all the circumstances is to have a choice between a short period and a longer period. Six months is a very artificial period and can be very unfair.

Apart from that, we must see whether the six months' period is entirely normal and fair. I do not think that it can be, because the six months to the end of February 1974 were most unusual. They were unfair and abnormal months to choose for stock valuation purposes. There were first, the Middle East War; secondly, the oil crisis; thirdly, the miners' strike; fourthly, the three-day working week; fifthly, the run-up to the General Election; and, sixthly, price and dividend control throughout the period.

I appreciate that, as the Minister of State has admitted many times, under a Labour Government, disasters come frequently. It could be alleged that a disaster period was a normal period for valuation purposes, but I think even the hon. Gentleman will agree that to pick those six months when we had all those dreadful and unusual things is not fair.

In addition, no matter what formula is arrived at, if the period is as short as six months it may be fair to some and very unfair to others. My suggestion, which is a compromise based on all the precedents of other nationalisation measures, will be fairer because it gives a choice. It cannot be as fair as Amendment No. 293, which refers to a "fair price". That is the right way, but the Minister has said time and again that he wants to do it on the basis of stock market valuations. If he is doing that, it is better to pick a long period than a short period.

I hope that as a gesture of good will the hon. Gentleman will accept my reasonable amendment. If he is not entirely convinced, I ask him to answer two brief questions. First, why do all the other nationalisation measures adopt what I propose while his is different? Secondly, does he honestly think that it is fair to pick a period when there were events such as the Middle East War, the oil crisis, the miners' strike, the three-day working week, the run-up to the General Election and price and dividend control?

We are moving into a time of cumulative disasters because of Socialist Government. In Scotland there are 165,000 unemployed, and projects such as the Hunterston steel project are not proceeding. Terrible things are happening all the time. But we are here talking about a period just after the golden age of Conservative Government, when things were going well. Therefore, to pick that six-month period is very unfair and unreasonable.

I hope that the Minister will accept my amendment. The only way to be fair to a diversity of companies whose circumstances were different is to give a choice of periods which will ensure that what may be fair for one can also be fair to others.