§ 6.19 p.m.
§ The Chancellor of the Exchequer (Mr. Selwyn Lloyd)
In a long statement at the end of Questions today I tried to set out fully the reasons for the decision which I have taken with regard to Fords. I will not read that statement again, as I understand that many hon. Members, on both sides of the House, want to speak in this debate.
As far as the history of the matter is concerned, the application was received by the Bank of England on Thursday night, I saw it on Friday morning and discussed it on Friday afternoon and since with representatives of the United States company and the United Kingdom company. On Friday afternoon, I received a deputation introduced by the hon. Member for Dagenham (Mr. Parker), whom I see in his place, a deputation from Dagenham Corporation.
I also stated in answer to a Question on Thursday that I would inform Mr. Beard, chairman of the Ford Joint Negotiating Committee, that I was willing to meet a trade union deputation if one wished to see me. I have received no such request. I have fully considered all the views put in these interviews and the views which have been given expression elsewhere.
I think that United States investment in the United Kingdom is to be welcomed for several reasons. We need investment in this country. There was considerable criticism in the debate in the week before last that investment here was at too low a level and such investment is likely to provide employment. What better if it could be directed to areas where unemployment is a problem? It adds to efficiency of industry here, particularly when it involves bringing over the results of United States research and development programmes which are on a greater scale than we can find resources for here, for obvious reasons.
They have a larger market and a much greater gross national product, but we have derived considerable benefit from the bringing over to this country in other cases of the results of United States research and development. That increases our export potential. I think that every 828 Government since 1945 have done their best to attract United States investment here.
Another general point is that such a movement of United States funds helps our balance of payments and adds to our resources for investment overseas. In the debate which took place in the week before last, I spoke frankly to the House about our balance of payments problem. I gave my view of the present situation and expressed anxiety as to whether, in the present balance of payments position, and prospects, we shall be able to do all we should like in overseas spending and lending. It is quite clear that a transaction of this sort will fortify our resources for those purposes.
A third general point concerns the movement of capital. The United Kingdom has a paramount interest in the freest possible movement of capital. We want capital to move freely. We do not want other Governments to impose restrictions, or to be too nationalist in their approaches to the movement of capital. We have been steadily building up our position again as a creditor nation over the last ten years, and I think that it would be silly for us, of all people, to raise difficulties or impose restrictions unless they are absolutely necessary.
My next point, which I have already mentioned in my statement, has to be balanced against other matters. Should there be a limit to this process of foreign capital coming into the country? What matters under this heading is control. In industries which are important for national security, or in those which are a major factor in our economy, obviously there must be limits to the extent to which control can be allowed to pass to foreign countries.
Each transaction has to be considered on its merits. There may be transfers of control of particular firms which may be advantageous. There may be others which may not be advantageous. One has to consider the balance of advantage in each case and decide each case on its merits. This I promise to do. That is really irrelevant to this decision, because in this case control is already in the United States of America.
We must consider the future of the motor industry in Europe. Against that background we have to consider the pros 829 and cons of the transaction. The 1950s were characterised by relatively easy expansion. There was on the whole a sellers' market. In the 1960s there should be continued expansion, probably less fast, with intensified competition in world markets between the United Kingdom, Germany, Italy and France. This transaction will strengthen the competitive power of Fords in the United Kingdom.
The phrase "operational flexibility" has been frequently used and perhaps commented on adversely. There has been an attempt to construe the phrase as being in some way rather sinister. I answered a question about the past after I had made my statement today. I think that the meaning of the phrase is fairly simple. If the parent board is considering the future, where to put its main emphasis and effort outside the United States, it will be affected by the consideration whether the United Kingdom company is 100 per cent. owned. It is bound to be affected by that consideration, particularly if we are moving into a phase of greater competition.
It is said that production will be slowed up in the United Kingdom to suit output in Detroit. It is said that exports from the United Kingdom to the United States may in some way be affected. I see no reason why they should be affected to any greater degree than in the existing circumstances. As things are at present, production can be slowed up in the United Kingdom, or the United Kingdom company can be prevented from sending exports to the United States, because control is already in the United States. If the transaction goes through and the subsidiary here is 100 per cent. owned, it is much less likely to happen. It is much less likely that Fords in the United Kingdom will not be permitted to develop to its fullest possible extent.
We must also remember that, if the transaction goes through, the intention is that Fords in the United Kingdom should become bigger than all the other activities of Fords outside the United States put together. That gives the Ford Company of the United States a very big incentive to maintain and increase the value of its British undertaking.
830 In my statement I went carefully through the various matters affecting Fords in the United Kingdom and detailed the assurances which I have been given: first, that the dividend policy will continue, in other words, a large proportion of the profits will be ploughed back; secondly, that the employment policy will continue; thirdly, that the management will continue as at present; fourthly, that the majority of the Board will be British nationals, with Sir Patrick Hennessy as Chairman; and, fifthly—this was raised by the hon. Member for Lincoln (Mr. de Freitas)—that the purchase and manufacture of components in the United Kingdom will continue as at present, which means nearly 100 per cent. of the components used.
These are important matters about which it was necessary to receive assurances. These assurances have been given. They should relieve some anxieties which have been expressed.
I have also considered the consequences if this were to be refused. It would not be the end of Fords, but I believe that the incentive to build up here would be diminished. There would be the risk that in time Germany would oust the United Kingdom as the centre of Fords' main effort overseas. I also think that on general grounds it would be a fundamental shock to those contemplating investment in the United Kingdom.
Therefore, on the general ground which I have already stated, and on the particular factors affecting the transaction, there is no doubt that it is in the national interest, in the interests of those who work at Fords in the United Kingdom, and in the interests of those who depend on their supplies to the Company, that I should reach the decision which I have reached in this case. I ask the House of Commons to support me in it.
§ 6.30 p.m.
§ Mr. Harold Wilson (Huyton)
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 831 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.
832 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.
833 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 834 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 835 or their resources in favour, perhaps, of Fords of Western Germany——
§ Mr. Geoffrey Wilson (Truro)
Is the right hon. Gentleman aware that, on 10th November, Fords of Dagenham held a very big exhibition in Hamburg, advertising Fords' British products—particularly the Fordson tractor—and that the Press says that they spent £60,000 on that exhibition? Might it not be possible that Fords wish to get the full benefit of their expansion in Europe by owning all the shares in this country?
§ Mr. Wilson
I am very grateful to the hon. Member, because it enables me to recall that last week a London evening evening newspaper—I think it was the Evening News—had an account of some negotiations which have been going on between Fords of Dagenham and Fords of Detroit for the past two or three years, and explaining how tough Sir Patrick Hennessy was by saying that he had to fight very hard against the Ford parent company in Detroit to enable him to keep open the lines of export from this country to Europe. That suggests that there is a very real danger here.
Having referred to the effect of this decision on Fords of Dagenham, I should like to turn to the effect on the national interest. After the Chancellor had made his statement this afternoon, I asked him what assurance the Government had asked for and obtained about the intention of Fords of America to go on importing British produced cars and to distribute them through their very extensive and efficient distribution channels in the United States. The Chancellor should certainly have insisted on a minimum commitment on a long-term basis for this establishment, but from his statement this afternoon it was clear that not only did he not get such an assurance but he did not even ask for it.
Again, in Europe, what assurance is there, as we asked last Tuesday—that Dagenham will not be sacrificed to Cologne? If the world market for cars becomes more competitive, if producers all over the world face redundancies and lay-offs, what guarantee is there that Dagenham products for third countries—such as South America or the Middle East—will not be sacrificed to the interests of Dearborn, Michigan?
836 Again to quote from the Economist:One cannot assume that the profit considerations motivating any international business in its interlocked operations will necessarily always run parallel with considerations of tax and the balance of payments for all the countries in which it happens to operate.Here, I must make it plain that I do not criticise Fords in saying this. They have their job to do, but equally we have our job to do in this House. A member of President Eisenhower's Cabinet, on being appointed some eight years ago, summarised his philosophy by saying that what was good for General Motors was good for the United States. I think that very few hon. Members will agree with that philosophy, and even fewer, I hope, will agree with the proposition that what is good for Ford Motors of America is necessary and automatically good for Great Britain.
While on the subject of trade and the national interest, I should like to mention one additional anxiety. Suppose that Fords of Dagenham have the chance of substantial orders for their products from a country which is currently unpopular in the United States—let us say China, which, in the eyes of the United States, does not even exist, although we hope that that situation will improve. Will this unchallenged 100 per cent. control mean that Dagenham will be embargoed by Detroit?
This is not a fanciful suggestion on my part. Hon. Members will remember that one of the biggest factors leading to Mr. Diefenbaker's electoral victory in 1958 in Canada was a very ham-handed action by a Detroit firm, which imposed a veto on its Canadian subsidiary's desire to accept an order from China at a time of heavy unemployment in Canada. The firm was Fords of Detroit. That caused a great outcry in Canada, and probably had more effect in that election than any other factor, even though the volume of the order was very small. Employment at Dagenham, insofar as it is affected by decisions of that kind to export cars to China or to any other part of the world, should be governed by the kind of foreign trade policies which this House approves and not by a possible outburst of economic McCarthyism in the parent company's board room in Detroit.
I have mentioned Canada. The House should be reminded of the very wide 837 concern felt in Canada by American permeation of Canadian firms. I saw some figures the other day to the effect that 60 per cent. of all dividends paid by public companies in Canada last year went to overseas shareholders; some in this country, of course, but the overwhelming majority in the United States.
I want now to turn briefly to three other questions. First, there is the matter of the adequacy of the price offered, on which the Chancellor opened his statement this afternoon. The City columns have had a very difficult time advising those of their readers who are fortunate to hold Ford shares on this question. The price offered represents, of course, a rather big jump from the levels of ten days ago, and I personally find something unacceptable about the argument that private shareholders who have contributed nothing to the expansion of the firm should have this windfall, this tax-free bonus—and it is a very big bonus, and it is tax-free—when the workers in the firm who, by hand and brain, have built up this great asset are offered nothing. There is all this money floating about—perhaps it might have been planned rather differently.
Arguments of this kind, of course, will not weigh with those who decide these things. This is capitalism and American capitalism at that, and capitalist shareholders will form their own views as to whether the price is adequate. By the rules of their game there is some evidence that the price is too low; certainly the small minority of German Ford shareholders who refused to sell three years ago have got a price far in excess of Ford's 1957 offer.
I believe that the Government have a duty to consider this point, although for my part, as I said last week, I should prefer that if these shares are to be sold the Government should themselves take them over at a fair price. I have still to understand—and this is always a point that worries me—the argument of hon. Gentlemen opposite who fight so bitterly, especially at election times, about the British people owning a share of British industry but offer no objection to Americans doing so. Some day this schizophrenia of hon. Members opposite will explain itself to me, but I have not got there yet.
838 There is a second point that I should like to put to the right hon. and learned Gentleman, and perhaps the President of the Board of Trade will deal with this. Under the Companies Act, as I understand it, once the firm which is making the bid succeeds in getting 90 per cent. of the shares, it can use powers of coercion to force remaining shareholders to sell. If this deal is going through, has the Chancellor thought of raising the matter with Fords and asking them if they intend to operate that provision? I think that he could quite fairly have asked, as a condition of his agreeing to the deal, for an assurance that it would not be operated.
On his own argument, on the fact that many people feel that Fords may have had a good reason to offer this price for the shares and that they must be worth more in the future, the Chancellor might have protected British interests and the British balance of payments by insisting that that provision should not be applied. Perhaps the President of the Board of Trade will tell us what consideration he and the Chancellor gave to that last week. I suspect that they gave no consideration to it at all.
The third point has been made a great deal of in the last week, and the Chancellor made it one of the central themes of his speech. It is argued that Britain is investing in America and that we should not prejudice this investment by placing limitations on American investments here. It is, of course, a plausible argument, but, with respect, I think that in this particular case it is fallacious.
We have been reminded in a lot of newspapers in the last week that Mr. Clore and Mr. Cotton have been making big investments in American property deals. But have we as a House of Commons to agree to the surrender of a major industrial complex such as Dagenham just to leave Mr. Cotton and Mr. Clore free to speculate in American real estate? This argument has been seriously put forward in a number of Conservative newspapers and in City columns last week. Which is more important to Britain?
To my mind, the real question is whether the Clore-Cotton deals should be going on at all. At a time when our balance of payments surplus has practically disappeared, investments of this 839 kind should not be getting the priority that they are getting. If we have resources to invest out of a surplus of current production, they would be better invested in British industry or in the Commonwealth or in under-developed areas, and not in Manhattan. I hope that we shall hear nothing tonight of the argument that because there is a certain amount of free investment going on in Manhattan we must therefore agree to American investment in this country.
In any case, do those who argue for the free flow of international investment really believe that the American Government would tolerate British investments in America which mean full British ownership of firms accounting for half of a major American industry? This 100 per cent. bid will mean that practically half the British motor car industry will have a wholly-owned American subsidiary. The American Government would not tolerate investment on that scale.
§ Mr. T. H. H. Skeet (Willesden, East)
The right hon. Gentleman will note, however, the position of Borax Consolidated in the United States of America. It is a British-controlled company controlling the greater part of world supply of borax and boron compounds. The United States Government have made no attempt to divest our interest.
§ Mr. Wilson
I do not think it is a fact that we own 100 per cent. of Borax Consolidated of America. On the whole of the argument and the Chancellor's repeated declarations, it is vital that Fords should be allowed to go from a majority control to 100 per cent. Ownership. Nor is Borax comparable in the American economy to the motor car industry in Britain.
I was about to say that other countries do not allow foreign investment on the scale that the Chancellor contemplates. Holland allows international capital to invest in Phillips. Switzerland allows foreign investment in Nestlés. But both countries safeguard the principle of national control, and Scandinavian countries have similar safeguards. It is a matter for consideration whether we should not be giving thought to this kind of proposal.
840 I want to make it clear that we on this side of the House are not against American investment in this country. There has been a great deal of it. But we are against a major industry being owned by the Americans. We are not against American investment as such in this country. There was a great amount of it during the lifetime of the Labour Government. I had a great deal to do with it, and so had my right hon. Friend the Member for Battersea, North (Mr. Jay). Especially was there American investment in Scotland which brought great benefit to the areas in question. But do not let us press this argument of the desirability of some American investment to the point of 100 per cent. ownership.
Finally, all of us in all parts of the House are deeply aware that this debate, which is on the Ford takeover, is taking place against the background of a very grave situation in the motor car industry as a whole in this country. The present Government, because they refuse to plan, because they have made certain industries—especially automobiles—the whipping boys of their economic policy, have twice plunged the motor car industry into depression. Now every time we pick up the newspapers or listen to the radio, we hear, almost daily, of fresh redundancies and short-time working in the motor car industry.
Britain's biggest car manufacturer has cut its output by one-third. The industry as a whole has cut its output by about one-half, at a time of the year when seasonal considerations would normally require a reduction in output of not more than one-fifth. The makers of accessories, who fill a large part of the industrial complex of this country, and a growing part compared with a few years ago, are suffering as a result. Pressed Steel have discharged 1,100 at Swindon and 500 more at Cowley. Lucas have put 10,000 men on a four-day week. Wilmot-Breeden have put from 3,000 to 4,000 men on to two-and-a-half to four days a week. Smiths Motor Accessories, Automotive Productions and Associated Engineering—nearly all these firms are going on to short-time or actual redundancy. Unemployment areas are heavily dependent on expansion schemes of the industry. Existing motor car areas very much fear over-expansion of the industry as a 841 whole. There is deep concern about the industry both as regards home trade and export markets.
I hope, without going into this wider field, that we can get an early debate about the problems of the motor car industry as a whole as they existed before the latest move from Fords, because the economy is heavily dependent, to a degree unprecedented in our economic history, on the lurchings one way or the other of the motor car industry. I would put this to the Government now, because this is urgent and we cannot wait for another debate. There is the greatest possible need for an urgent inquiry into the future of the industry as a whole, into its size and expansion, and I would hope that the President of the Board of Trade, in consultation with the motor car manufacturers and, for all I know, with the trade unions, will agree now to set up a development council or a working party in the industry, with representatives of both sides of the industry and independent members, so that we can see something of the prospects of the industry and so that the right decisions can be taken nationally and firm by firm.
Tonight, we are concerned with the Ford Motor Company. I have given my reasons for showing that the Government have acted to some extent irresponsibly with far too little evident concern for the national interest involved. Their minds were made up before they began to collect the facts, and their examination of the issues before the Chancellor's statement has been perfunctory. Worse, this takes place against the background of a very serious balance of payments position, which makes the Government all too ready to sacrifice the long-term interests of the country for the sake of a short-term gain to the dollar reserves.
I still feel that they would not have been so willing to approve the application, with all the difficulties involved, if our balance of payments had been strong and our reserves adequate. It is all part and parcel of their general attitude to economic affairs. Refusing to plan themselves, they are ready to leave the major decisions about our economy to others, whether British or American industrialists. They have erected complacency into a system of Government, and the country is paying the price. We have 842 had too little information to justify the step that the Governmen are taking.
It may be that the President of the Board of Trade, in winding up, will tell us more than the Chancellor has done in his two efforts today at the Box. If not, then conscious that the Government intend to go from here to sanction a major decision affecting a major industry, conscious also that the House has not been given adequate reasons for that decision, we shall register our disapproval of the Government's attitude in the Division Lobby.
§ 6.59 p.m.
§ Mr. Martin Lindsay (Solihull)
Since, rather to my surprise, I find myself following the right hon. Member for Huyton (Mr. H. Wilson), I hope that I may be allowed to say, with the greatest respect, that I am glad that he has put his case with restraint, because it would be a great pity if anti-American venom were injected into this debate.
§ Mr. Lindsay
No one could possibly accuse me of being anti-American, but that does not mean that I am happy about the situation, which has existed for many years, in which half of so important an industry as the motor car industry is controlled by another country. But, in my view, the time to change that situation has already past. There have been many opportunities when we could have done so, when the capital of Vauxhall Motors or of the Ford Motor Company was reconstructed. In my view, the greater proportion of ownership which will now result from these proposals represents merely a difference in degree and, therefore, I am satisfied that the Treasury had no alternative but to approve the proposals.
I take the view, however, that it is dangerous for so large a proportion of such a vial industry as this to be controlled by a foreign country, even by our friends and allies in America. So long as things continue to go well, I have not the slightest doubt that these pro-proposals, as the Chancellor said, will be of the greatest benefit to the Dagenham company and its ancilliaries. Of course, those in control of it intend to run it to make a profit, and, of course, they will provide good employment for 843 thousands of our people, perhaps many more thousands than they employ now. There is no doubt about that.
I do not think that we need look very far for the reasons for this proposal. It is perfectly natural, with the massive investment contemplated by the American company, that it should wish to reap the benefit by taking the higher profits which will accrue. There is nothing sinister at all about the proposal. But, I ask myself, what will be the position if a serious slump occurs in the United States, like the one before the war, when nearly 15 million people were unemployed—and with the American motor industry desperately pushed for exports? Although that possibility may seem remote, I think that it is one that we should face now, and face squarely.
I do not believe that there are friends and allies when it comes to a desperate trade war. That half of the motor industry which America already controls will be run, as it is now, in American interests and not in British interests. Up to now, everything has been fine because American interests and British interests have coincided. If trade becomes much more difficult, and the Ford Company finds that it can make profits and maintain employment in Dagenham only at the expense of profits and employment in Detroit, the answer will be absolutely inevitable. I think that we all know what view would be taken. In those changed circumstances, I do not believe that the assurances which were given to the Chancellor, assurances which, I accept, were given in complete good faith, would really be worth very much.
This seems to me to be the danger of the situation confronting us. I accept, control having passed, there is nothing to be gained, except perhaps acrimony, by preventing ownership passing, too. My conclusion is that we should never have allowed such a situation to arise. We should regard this as a jolt and a warning, and we should take what steps we can to prevent the major part of any other vital industry becoming foreign-controlled.
For a nation to control the majority of its important industries is, surely, a basic principle of sovereignty. Of course, we wish to encourage foreign investment 844 in this country, particularly American investment, but, in my judgment, control of the major part of a major industry is a quite different matter. It may be said that America would be unwilling to invest without control; but there are many examples where the contrary has applied. In Japan, for instance, America has made many major investments and been satisfied with 49 per cent. of the holdings. I do not, therefore, believe that control is as important as all that.
The Chancellor gave a warning in his statement this afternoon, which he repeated this evening. I hope that he will go further than that. I hope that he and the President of the Board of Trade will go through our economy industry by industry, major company by major company, to decide which would be the most suitable of the many obvious precautions which it is open to us to take to prevent such a situation arising again.
§ 7.6 p.m.
§ Sir Lynn Ungoed-Thomas (Leicester, North-East)
On both sides of the House, we are all very much concerned about this proposal. For my part, I should like to identify myself with every single word said by the hon. Member for Solihull (Mr. Lindsay). I have no venom of any kind against Americans. I have the greatest admiration for them as a people. I would very strongly welcome American investment in this country. Those are not my reasons for probing further the Government's action in regard to the purchase of Ford Motor Company.
What exactly does Ford of America want here? It is absolutely clear that the Americans are out for 100 per cent. control. There is no question about that at all. They have made it quite clear, because they have said that the offer they are making is dependent upon acceptance by other shareholders to the extent of 75 per cent. in numbers and 90 per cent. in value. Those figures are chosen, of course, because, if they have those percentages of acceptances, they can force the remainder to sell their shares.
Therefore, if they get acceptances to the extent of 75 per cent. in number and 90 per cent. in value, they can, in fact, obtain 100 per cent. control of the company. They have given notice, also, that the preference shareholders are to be bought out by 31st July next so that the 845 preference shareholders will not be standing in the way of 100 per cent. American control.
The big question, therefore, is why, when they have 55 per cent. control, do they want 100 per cent. control? The case which the Government make, and which the Chancellor has made, is that they already have 55 per cent., so it does not make any difference whether they have 100 per cent. or not. Why, then, does Ford of America want to raise its holding from 55 to 100 per cent.?
Every lawyer and every director here, and anyone who has ever had anything to do with a company, knows perfectly well that a company in this country must be run in the interests of the company as a whole, not in the interests of any body of shareholders, not even in the interests of the majority of the shareholders. It has to be run in the interests of the company as a whole. Thus we have the position which my right hon. Friend the Member for Huyton (Mr. H. Wilson) referred to, in answer to an intervention a little earlier.
Sir Patrick Hennessy, in view of the distribution of shares in Ford Motor Company in this country at the moment, can stand up to Detroit and say to Detroit that he, in the interests of the company in this country, wants to develop the European market and, for that purpose, he proposes to spend money on advertising there. He is in a position to do so, but only because a substantial part of the shareholding in Fords in this country is at the moment not in the American company's hands.
The board of Fords in this country must carry on British Fords in the interests of the British company and not of any particular shareholders in the company. It is not at this moment entitled to sacrifice the interests of British Fords to the interests of American Fords. That is a position which will be completely reversed if the American company gets 100 per cent. control.
There are remedies for minority shareholders—clumsy remedies, perhaps, in same ways—through the Board of Trade, by getting inspection through the Board of Trade, and by application to the court for winding-up or the intervention of the court for the regulation of the affairs of the company. Perhaps they are clumsy remedies and, in some cases, ineffective 846 remedies, but they are remedies which involve publicity.
An American company involved in a situation in which it is questionable whether it is sacrificing British interests to American interests might very well hesitate before taking that course, if only because of the publicity. We have, therefore, the provision and the deterrence both of publicity and court application standing in the way of British Fords being run in the interests of American Fords, although the American organisation holds over 50 per cent. of the shares.
If this deal goes through, and the American company gets 100 per cent. control, British interests could be secured only by Government intervention. If the Government intervene to make sure that British interests are safeguarded in a crisis, it would mean taking the matter out of the commercial level altogether, dealing with it politically by Government action and perhaps involving, on the other side, the intervention of the American Government as well.
Mr. Ford has been perfectly frank about why he wants 100 per cent. control. It is not, as has been suggested by some hon. Members, merely to get 100 per cent. profits from investments. That is not the reason he has given. He has said:Our objective is to obtain greater operational flexibility and enable us better to co-ordinate our European and American manufacturing facilities, and integrate further our product lines and operation on a world-wide basis.We may all ask whatgreater operational flexibility … to co-ordinate … and integrate … on a worldwide basismeans.
My hon. Friend the Member for Coventry, North (Mr. Edelman) asked the Chancellor of the Exchequer in the House, on 17th November:Does not this 'greater flexibility' mean, in plain English, the power to manipulate British Fords, and, therefore, the British motor industry, in the interests of American Fords?The Chancellor's reply was:… that company can do that sort of thing now."—[OFFICIAL REPORT, 17th November, 1960; Vol. 630, c. 540.]But that is exactly what it cannot do now to the detriment of the British 847 shareholders' interests and the British company.
The Economist, in the passage which my right hon. Friend the Member for Huyton quoted, recognised the position perfectly well. It said: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 said to be held in Britain.As the hon. Member for Solihull said so fairly, what we contemplated and what we have to provide against is the possibility of a clash between American interests and British interests in controlling British Fords.
There are obvious advantages to the American company in having 100 per cent. control. The one which perhaps first occurs to our minds is whether British exports to America are to be cut. In the conversations between the Chancellor of the Exchequer and Mr. Ford, of the American company, exports from this country to America were not referred to. Apparently, they were limited exclusively to the European market. At a time when the Americans are producing the compact car and when they are concerned about the dollar situation and the balance of payments, surely the first question which arises is: will 100 per cent. control of the British company by the American company mean that, in the interests of the American company and of America, British Ford exports to America will be cut and that we are to take the risk of diverting our energies towards Europe?
My right hon. Friend the Member for Huyton asked the Chancellor of the Exchequer that question this afternoon. The Chancellor said that he had not put it to the Americans at all. Why not? Is he not concerned about the balance of payments position? Is he not concerned to know whether the company is to cut its exports to the United States from such a vast factory as British Fords? To my mind, that is not understandable. It is an appalling dereliction of duty to this country. There have been ups and downs in the motor industry. 848 There will be ups and downs again in the motor industry. We may be met by an international recession in the industry.
If, in those circumstances, as the hon. Member for Solihull envisaged, we are met with a world depression in the motor industry, is British Fords to bear the export of unemployment from Detroit? Has the Chancellor any guarantee about that? With 100 per cent. control, the Ford company in America will be entitled to dictate policy to British Fords which it is not entitled to dictate at present.
§ Sir Harry Legge-Bourke (Isle of Ely)
Is the hon. and learned Gentleman trying to argue that there is a greater likelihood of those who own all the capital deliberately denuding themselves of any profit on that capital than there is if they did not own all of it?
§ Sir L. Ungoed-Thomas
I wish the hon. Member would follow the argument. I said, assume that a world recession hit both America and the whole of the world's motor industry. In those circumstances, the American company obviously might easily decide that we should bear the brunt of the unemployment which would result.
§ Sir Godfrey Nicholson (Farnham)
I am following the hon. and learned Gentleman's argument closely. What possible guarantee could be given in those hypothetical circumstances?
§ Sir L. Ungoed-Thomas
The guarantee which could be given is the one which there is at present, namely, that the British company would be run in British and not American interests. That guarantee disappears once the American company has 100 per cent. instead of a mere 55 per cent. control. What this means is that half the British motor industry will go into American hands. I am sure that none of us, on either side of the House, could possibly be anything except deeply concerned about that situation.
The motor industry is now a basic industry in this country. Its success or failure deeply affects the whole of the economy, and it is not a healthy state for this country to have half a basic industry of this kind in foreign hands, however friendly we may be with them.
849 This decision means that the Americans can, without our knowing it until after it has happened, by commercial means, influence to an unhealthy extent our prosperity or poverty, our employment or unemployment, and our industrial and trading policy. It means that in a basic part of our economy we will be no longer complete masters.
It is a position, as my right hon. Friend the Member for Huyton said, against which other countries have legislated and revolted. It is a position which cannot do anything except cause strain between this country and America. The Observer, on Sunday, had an interesting observation to make. It said:If no private investor can compete against the giant American corporations, would the Government itself feel doctrinally inhibited from making a bid?—that is, for these shares. These shares ought to be in this country. This country should not be allowed to go into 100 per cent. American control.
If this is carried through, the only answer to it, perhaps in a time of crisis which may well arise, is to take action along the lines which the Observer itself suggested, and that is by the Government taking over the shares of this company. I am quite sure that if the crisis that the hon. Member for Solihull contemplated came about, this country would unhesitatingly prefer nationalisation to Americanisation.
§ 7.21 p.m.
§ Mr. Robert Carr (Mitcham)
The hon. and learned Member for Leicester, North-East (Sir L. Ungoed-Thomas) began by referring to what is familiar to any company director or anyone engaged in industry. I could not help thinking as he went along that he showed that he was not very familiar with that atmosphere.
Whatever legalistic arguments may be put forward, it is well known to any of us who work in industry that where a company owns over 50 per cent. of the shares, as the Ford Company of America does, and always has done in Fords of this country, it does in fact control in all but very rare circumstances the policy of the other company.
§ Sir L. Ungoed-Thomas
I agree that it has a tremendous say in the policies of the other company. The whole point I 850 am making is that it cannot do that to the detriment of the other shareholders. With 100 per cent. control it can do that.
§ Mr. Carr
We can have long arguments about the true meaning of the word "control", but the facts of industrial life are much more like those I have stated. I strongly support the action of my right hon. and learned Friend in granting this application. It is astonishing and alarming to find this narrow, nationalistic, almost, I might say, Cuban opposition, to this proposal. I believe that to refuse this application would be against the interests of the prosperity of our economy in this country and against the cause of full employment which right hon. and hon. Members opposite are claiming to espouse in attacking the Government over the action they have taken.
My main reason for that view has not particularly to do with Fords; it is a general economic reason. What would be the repercussions on our economy in this country and abroad if we were to refuse an application of this kind? We have a great interest, probably a greater interest than any other country in the world, in foreign investment. That is to a large extent how we have lived and grown rich in the world, and to which we owe our present position in the world in political and economic terms. That is not just past history.
It is true that over the last few years we have suffered from Governments abroad taking the view which hon. Members opposite would like our Government to take today. As a result of that we have suffered some loss of wealth abroad. But in spite of that, British firms are still investing abroad. Anyone would think from the speeches made today, the remarks at Question Time, and the reports in the papers, that the United States was buying up this country. I suspect that British investment in the United States since the war—and I am not thinking only of anything that Mr. Clore and Mr. Cotton may be doing—is not far short of American investment in this country. I should like to ask the President of the Board of Trade whether it is possible to give us some figures to indicate the extent of British industrial investment in the United States so that we can see this matter in perspective.
851 What will happen to us if we put up barriers of this kind? Shall we not be encouraging more and more countries to do likewise, and may that not damage our economy far more than this sort of thing is likely to do? Is it not likely to damage us not only if we actually refuse permission but if we give an acceptance in the begrudging and restrictive terms which the right hon. Member for Huyton (Mr. H. Wilson) would try to impose? I have often heard hon. Members opposite criticising the United States for attaching strings to all sort of offers. Now it seems to me that they would like to tie up an offer of this kind in a whole cocoon of strings in such a way that would-be offerers would not wish to proceed.
It is not only a matter of British investment abroad; it is also how much we want foreign capital, particularly this kind of American capital, to come to this country. Some years ago, when I was Parliamentary Secretary to the Ministry of Labour, I had a very close interest in the question of unemployment in some of the more difficult areas of this country—I am thinking particularly at the moment of Scotland. Anyone who has studied the Scottish employment problem must know how much we owe to American investment for the inroads we have made in our efforts to tackle that problem.
No one can go to Scotland without being aware of the tremendous advantages which American investment has brought both to the British economy as a whole and to Scotland in particular. Do we really suppose that American firms would go on investing in that way? I have heard Scottish Members and many other people interested in Scotland outside the House advocating that they should.
§ Mr. Emrys Hughes (South Ayrshire)
Would the hon. Member be in favour of an American combine taking over the Scotch whisky monopoly?
§ Mr. Carr
That is an interesting proposition. I would be against it for the reason that I like Scotch rather than American whisky.
Basically we must realise that this two-way flow of capital is a vital British 852 interest, more vital to this country perhaps than to any other. Therefore, it is not sufficient to look abroad and say that this country restricts foreign investment in this way or another country restricts it in another way. Those countries are in an entirely different position to Britain. Both British investment abroad and the receipt of foreign investment in this country is of vital interest to our future prosperity.
§ Mr. H. Wilson
The hon. Member has paid tribute, as I did, to American investment in Scotland. Both he and I have had a lot to do with it. Can he tell the House what proportion of these major American investments in Scotland are on a 100 per cent. participation basis and how many of them are merely satisfied with control?
§ Mr. Carr
Of course, I cannot give that figure offhand.
The point we must bear in mind is that if we expect a foreign company to come and invest here, circumstances may arise in which it may wish to have a 100 per cent. control, just as when British companies go abroad circumstances may arise where a British company might wish to have 100 per cent. control. It does not mean to say that they will always wish to have it, but if there is a feeling that this is always to be denied it would be a severe deterrent to the sort of investment which we should encourage.
§ Mr. Carr
And so my main reason in supporting my right hon. and learned Friend is that if we reject this offer we promote a danger which we should distegard as our peril.
I should like to say a few words about Fords. What are these terrible fears which hon. Members opposite have dreamed up in their nightmares of the last few days? It seems a peculiar way 853 of cutting down the activities of a company to invest something like £130 million in it. It is true that the Americans could use the power which they achieve in that way, but it seems a rather fanciful way of achieving that end. It is true that they could wish to divert business to Germany, but, here again, which is the safer of the two positions? At the moment, Fords in Germany is virtually 100 per cent. owned by Fords of America. If under present conditions there is a marginal decision whether a new Ford development should go to Germany or to Britain, is it not likely that Fords present 100 per cent. ownership of the German company, compared with only 55 per cent. ownership of the British' company, might tend to make the development go to Germany rather than to come here?
Then, there is the question of withdrawing orders to Detroit in the case of slumps. This is one of the most fanciful arguments of all. It is not fanciful, of course, in the case of Ford's Canadian company. No doubt, that is what hon. Members opposite have in mind. There is, however, a big difference between Ford's Canadian company and Ford's British company. The Canadian company is making virtually the same sort of product as is made in Detroit. Moreover, the market is relatively near at hand. The British company, however, is manufacturing for a market which is far removed from Detroit and is making an entirely different range of products. It simply does not make sense to imagine Ford's British production being withdrawn to Detroit at a time of slump.
What may be the reasons why Fords of America wish for this 100 per cent. control? I was interested to hear the right hon. Member for Huyton suggest that it might be a good investment. That was a rather peculiar tribute to the strength of the British economy under the leadership of my right hon. Friends from a right hon. Member Who usually delights in saying that we are at the bottom of every league.
What may be the real reasons? There may well be genuine commercial reasons other than reasons of good investment. It may be, for example, that looking at world markets as a whole, the Ford management back in America may desire to specialise their production to a greater 854 extent. It might well be that for the sake of their overall market development the Americans might wish to make in their English factory a high proportion of a product which might not be so profitable. This would be difficult if they had to take into account, as the hon. and learned Member for Leicester, North-East said, the interests of all their shareholders. It would not mean less activity for Dagenham, but it might conceivably mean, at least for a year or two, less profits for Dagenham. This might be a very real commercial reason, and certainly not a commercial reason to the detriment of this counfry, why Fords of America might wish for 100 per cent. control. In addition, there may possibly be questions relating to United States monopoly law which may also be having their influence as a subsidiary reason.
To sum up, although no one can be certain about it, I feel that the transaction is far more likely to ensure a vigorous and expansionist policy for Fords, Great Britain, in the future than if the position were to remain as it is. Certainly, I see no substantial reason to feel that it will lead to a less expansionist or vigorous policy.
What of the effect on the motor industry as a whole? This transaction does not gain any new control in the motor industry. We may not like it, but the fact remains that American companies already control 50 per cent., or whatever the figure is of that order, of the British motor industry through Vauxhalls and Fords. If this were a proposal to take over Standards or the Rootes Group, of course that issue would arise. As it is, it does not arise at all. The deal may conceivably mean tougher competition, certainly in the home market, and, possibly, in the overseas markets for British companies, but who is to say that that might not be good for the British motor industry?
Suppose that on instructions from America Fords were to withdraw from an export market such as the Chinese market, which the right hon. Member for Huyton mentioned. If that were to happen, would it not merely provide a better opportunity for B.M.C., Rootes, Standards and the rest? There is little doubt that in a decision in which the future developments cannot be certain, 855 the odds are clearly in favour of the decision that my right hon. and learned Friend has taken. I believe that the economic arguments are always likely to be in favour of similar decisions in future circumstances of this kind.
Does that, therefore, mean that we should always approve such applications in any circumstances? I should be the last person to say that, because I believe that in certain circumstances political and social reasons could properly override economic reasons. There is a case to be made against foreign control of too large a proportion of any one particularly important industry. If this deal were affecting a position of that kind, we should have to think much more carefully about it and we should have much more delicately to weigh the immediate economic advantages against the other more imponderable political questions which we should have to take into account.
In the circumstances, however, I believe that the deal is more likely to lead to a vigorous and expansionist policy for Fords. In the meantime, it frees a large sum of money, probably nearly £100 million, for some of the much needed other investment which we wish to undertake.
§ 7.38 p.m.
§ Mr. John Parker (Dagenham)
I have never found stronger unity in Dagenham than there is on this issue. Opinion of all kinds is against a change in the ownership of Fords. There is very deep disquiet as to what the result of such a change may be. This is, naturally, felt by the 40,000 people who work in the Ford factories, but it is also felt by the Dagenham Town Council and the Chamber of Trade. In fact, all sections of opinion, including workers in factories other than Fords, feel strongly about this issue.
Why is there this deep disquiet? When a community earns so large a part of its livelihood in one industry and from one firm, it is, naturally, particularly interested in the future of that firm. There is a feeling that this take-over bid has been suddenly sprung upon people without any information about the real reasons for it being given.
When this news first broke, hardly any statement was made by the American 856 Ford Company on what it proposed to do and why it proposed to do it. Owing to the disquiet felt here, last Saturday we had a statement by Henry Ford II which was rather fuller. But it still did not remove the disquiet, and I do not feel that the statement made today by the Chancellor of the Exchequer has removed that disquiet. There is a feeling that whatever promises may have been made there are no sanctions to see that they are carried out. There is an underlying fear that in a future recession, either in the United States alone or in the world car market, when all the Ford undertakings are 100 per cent. American-owned, it will be to the advantage of the parent company to divert production to Detroit and export unemployment to Dagenham.
The hon. Member for Mitcham (Mr. Carr) said that this was not likely to happen because different types of cars were produced, but I remind him that Fords of America has a compact car and has plans far advanced for a Ford minicar. These kinds of car are intended to take the American market which is largely met by exports from this country and they could be used to go into all Ford markets where British small cars have gone in the past. The fear that this kind of thing may happen is the basis of the present disquiet in Dagenham.
There is another point of great importance. Public relations have never been the strong point of the Ford Company in this country. The way in which this news was broken to the British public and to the Ford employees is a very good example of these bad public relations. Fords have been an American-owned firm from the very beginning in this country. Many other either wholly or partly-owned American firms in this country have very good public relations. I understand that this is the case with Vauxhalls, but it has never been the case in Dagenham. Up to the last war, trade unionism was banned altogether in Fords and there were big fights to get it established. There has always been disquiet and deep feelings of frustration among the workers at Fords and there is still an underlying disquiet and fear there.
I should like to make a short quotation on the subject of what a good 857 employer ought to do from a statement put out by the National Joint Advisory Council of the Ministry of Labour in 1956 and circulated to employers generally. It said:… Employers must also accept responsibility for telling their workpeople fully and frankly about the fortunes of the firm. This is not merely a matter of publishing a works magazine or circulating a printed statement of the annual accounts. It is certainly not merely the announcement of bad news from time to time. The aim of every employer should be to maintain communication with his employees, whether through personal contact, joint committees or printed documents, so that good news will be handled equally with bad and what is said will come in course of time to be trusted as authoritative by all members of the firm. This is not easy. It may well demand a large amount of the time and attention of senior management. It will, however, amply repay the effort made.That kind of consultation and co-operation between management and employees has never existed in the Ford firm at Dagenham. There is a strong feeling that with an increase of American control there will be more Americanisation of methods of handling labour than there has been in the past and an increase in the bad relations which have been responsible for so much of the trouble that has taken place from time to time in Fords.
§ Mr. R. Gresham Cooke (Twickenham)
Does the hon. Member not admit that Vauxhall Motors, which is and has been for the last thirty years a 100 per cent.-owned subsidiary of General Motors, has had exemplary labour relations in this country?
§ Mr. Parker
I have already said that. I particularly mentioned Vauxhalls and said that the original British tradition in handling labour had been carried on there, but we have never had good relations in Fords at Dagenham.
There has been a general tendency in American subsidiaries in this country to become more independent of their parent companies in America, and they have tended to hand over a larger proportion of their shares to British ownership. They have certainly employed a larger proportion of British people in management. This has been a healthy development but in the last year or two there has been a change in this tendency.
This change first appeared in the firm of Timkin, the roller-bearings manufacturers 858 in Nottingham. Previously, it was 54 per cent. American-owned and suddenly, about eighteen months or two years ago, there was a 100 per cent. takeover. One cannot get a full answer from the management at present, but I believe that since the 100 per cent. American take-over there has been a great deal of disquiet among all ranks of its employees about the future. That takeover was a precedent for what is now happening with Fords. Is it to be followed by similar take-over bids? Many of us would like to know.
I suggest that the Government should bring in legislation to deal with this danger. It is not desirable that any large firm in this country should be under too much foreign control. I suggest that if more than half the shares in any firm of over a certain size are foreign-owned, the law should be such that no number of shares in excess of 55 per cent. should be foreign-owned. It should be further provided that where more than 50 per cent. of the shares of a firm are in foreign ownership there should be a Government-appointed director who should be responsible for reporting back to the Government on whether any of the actions taken or proposed by that firm were in the national interest or not. That would provide some safeguard over the operations of the firm.
In addition, there should be directors elected by the British shareholders in the firm. Legislation on these lines is desirable. It should be brought in forthwith and should be retrospective to cover all American firms in this country.
§ Mr. A. P. Costain (Folkestone and Hythe)
Does the hon. Member want the same sort of law passed in countries where we invest?
§ Mr. John Hall (Wycombe)
Do I understand the hon. Member correctly? Does he say that this would apply only to companies where the foreign shareholding exceeded 55 per cent.? If it does, then surely the 55 per cent., and indeed 51 per cent., would give a foreign company all the control it needed, including packing the board of directors so that it could establish any policy it liked for the company?
§ Mr. Parker
What I said was that any firm in which more than 50 per cent. of the capital was owned by a foreign company should have a Government-appointed director and that in no case should foreigners be allowed to own more than 55 per cent. of the capital in any large concern.
I should like to say something to Henry Ford II as a warning from Dagenham. The people of Dagenham remember Henry Ford I. As we all know, he was a very successful self-made businessman, and, like many people of that kind, he liked from time to time to put out statements of his views on every conceivable subject, many of which he knew nothing about and on some of which he talked a great deal of nonsense. One of his sayings was, "History is bunk." The people of Dagenham remember, however, one interesting episode in American history, and that is the Boston Tea Party. Hon. Members will remember that American colonists, feeling that they had suffered economic injustice at the hands of the British rulers of the country, took positive and definite action. If the American Ford Company misuses the position which it will acquire as a result of this take-over bid to the detriment of Dagenham in regard to employment, there will be a Boston Tea Party in Dagenham and we shall throw the American interests into the Thames. We shall free Dagenham from colonial rule.
If there is misuse of that power by the American firm, there will be a demand on the Government here, whatever their complexion may be, that the British firm be taken into national ownership. When the firm is taken into national ownership, the Ford workers will remember the position of Renault, in France, and will want it also to be public ownership. I conclude by warning Henry Ford not to misuse his position, for otherwise the people of Dagenham will have their revenge.
§ 7.51 p.m.
§ Mr. Godfrey Lagden (Hornchurch)
I am very pleased to be able to follow the hon. Member for Dagenham (Mr. Parker). Before I come to the main part of my speech, I should like to take up with him one or two very small points made in his—shall we say?—very amusing speech.
860 The hon. Member talked about the Boston Tea Party, and he speculates as to whom the people of Dagenham will throw into the Thames. I suggest to the hon. Member that if his words and actions lead to unemployment and repression of the good things that flow from a prosperous industry in Dagenham, he will be in far greater danger than Henry Ford will be.
The hon. Member referred to local opinion in Dagenham—I take it that he was referring also to Hornchurch, which I represent, which lives cheek by jowl with Dagenham, and in which a very large number of the Ford workers reside—being united against the transaction. I would remind the hon. Member—I think he will agree with me on this point if on no other—that the Ford workers have never failed to let their elected Members of Parliament know their views, but I can inform him that on this occasion I have not received a single letter objecting to the transaction.
The hon. Member has talked about the public relations in the Ford motor works, which, according to him, have been so bad. If we cast our minds back, the hon. Member himself has done very little—in fact, he has done the exact opposite—to make labour relations between the factory and the men better than they are. The hon. Gentleman speaks of bad conditions, but it is perfectly obvious to everyone who has ever been to the works that the conditions there are as good as and better than those in the majority of the great works in the country.
§ Mr. Lagden
I am sorry if I misunderstood the hon. Member, but I certainly thought he said "bad conditions" I will certainly withdraw what I have said if the hon. Gentleman did not use that term. In order not to take up too much time of the House in making one of the points, I wish to quote from one of the official releases of which hon. Members have had the benefit and which they may have read. The first is from Henry Ford II:In my view, the results of the proposed transaction should be beneficial to the economies of both the United States and the United Kingdom. … I should like to repeat what was 861 said in the announcement, namely, that so far as we are concerned, we intend that Ford Motor Company Limited's operation shall continue under the able direction of Sir Patrick Hennessy without change in its employment policy or in its development programme.Some hon. Members have tried to suggest that that is not a particularly straightforward announcement. I find it a very straightforward announcement indeed, and I am certain that those who are employed in the Ford motor works will be very glad to hear that that pronouncement has been made.
I now quote from another release on 2nd May, 1960. It concerns the £10 million expansion of this company's works at Basildon, Essex. It says:A 100 acre site in Basildon New Town only 20 miles from the Dagenham factory will make it possible for many to work at the new location without moving their homes.I would remind hon. Members of the £28 million car factory on the Halewood site.
On the question of modernisation at Fords, I quote again:The post-war development of the Ford Motor Company Ltd. … In the years from 1946 to 1959 floor space and labour strength were roughly quadrupled, bringing about a five-fold increase in production.This is the works—in case hon. Members are beginning to doubt it—about which the hon. Member for Dagenham was talking a few minutes ago.
My right hon. and learned Friend the Chancellor of the Exchequer stated one or two rather interesting things when he spoke today. I quote from his statement, a copy of which was placed in the Library. He said:I therefore formed the view that full American ownership would lead to a still more vigorous development in the Ford enterprise here and to an even greater effort in the export markets …Is that what the hon. Member for Dagenham would desire? I am sure that my constituents in Hornchurch who are vitally interested in this, small shopkeepers as well as those employed in the works, are very glad to hear that that is the opinion of the Chancellor.
The Chancellor went on to say that he had based this opinion on facts. It is very important that all hon. Members, while discussing this problem, should base their opinion on facts, because that is the only thing that really matters.
862 My right hon. and learned Friend also said:I am satisfied, as a result of my discussions, that so far from our having anything to fear from this proposed transaction, its purpose is to strengthen the United Kingdom and particularly to enable it to compete more effectively in world markets.Is it not desirable that this country should be able to be more effective in the world's markets? Or would the hon. Gentleman prefer that this country's production of Ford motor cars should be run down and at the same time the production of Ford motor cars in Germany should be run up? Would that be his wish? If it is not his wish, would he be suggesting at this stage that it is the wish of his constituents? I do not know, but it seems to me that if the hon. Member is seriously putting that forward he is on very dangerous ground indeed.
I do not propose to weary the House by telling hon. Members too much of what has happened, but I would mention the £6 million new press shop and paint, trim and assembly buildings, with 4,000 men extra working there and with commercial vehicles now being made under one roof, and the jetty, which is a proud thing for anybody to look at and to realise how it has been built.
Does the hon. Member for Dagenham know—have his friends in the trades council told him, or do they not know?—that three out of every ten cars exported to the world markets in 1958 came from Dagenham? Is not this a matter on which the hon. Member should be looking not dejected as he is now but thoroughly happy?
§ Mr. Lagden
The position in 1961 would be very serious indeed if the prosperity of 1958 were not continued and German prosperity had overtaken us.
There is also the apprentices school, with more than 8,000 books, to bring along young English people who have not had the advantages in education and in engineering education which many others have had.
I quote from the Sunday Dispatch, which came out with the astounding headline:Fords—The Big Secret Is Out.863 The paper claimed to have information from Detroit that a new baby car, now under construction and under test, would sweep the world. It went on to say that it was told and believed that the car was to be manufactured at Dagenham. Does the hon. Member for Dagenham think that that is such a bad thing? Ought it to be manufactured in Germany? Ought it to be manufactured in the United States? Ought it not to be manufactured here?
The paper goes on to say that there are certain fringe benefits which the employees of Ford motor works may be able to acquire. It says that those fringe benefits include being able to buy Ford shares at a price cheaper than the market price and a scheme whereby men laid off from work in a depression can get up to 65 per cent. of their wages.
I think that that is probably an exaggeration. In fact, I have today learned from Detroit that what is said about the purchase of shares at a cheaper price is not correct and that there are certain conditions attached to the second benefit which makes it difficult to understand how the scheme would work in this country. [Laughter.] Nevertheless, I suggest to the gentlemen who find it so amusing that the workpeople might want to become shareholders and increase their benefits in schemes for times when they are unemployed. Hon. Members opposite have lost touch with these people and do not appreciate that they want to become shareholders and are anxious to invest their money in this sort of works which they know, even if hon. Members opposite do not, is and will continue to be very prosperous.
§ Mr. Ron Ledger (Romford)
Unlike the hon. Member, I have been considerably pressed about this matter by some of my constituents who work in the Ford motor works. Some are in the House today. Is the hon. Member arguing that in the event of redundancy there is a possibility that Ford workers will get 65 per cent. of their pay?
§ Mr. Lagden
I am glad the hon. Member has asked that question, although I thought that I had made it clear. This would give the workers an opportunity, through their unions, to negotiate for benefits similar to those enjoyed in the 864 United States. I am astonished that the hon. Member for Romford (Mr. Ledger) should not think that worth fighting for and should not think that British working men should have exactly the same benefits as foreign working men, if their unions can obtain them. I should have thought that the hon. Member for Romford and the hon. Member for Dagenham would have been outside the factory gates, as they sometimes are, urging workers to withhold their labour until they get that sort of thing.
§ Mr. Lagden
I have given way twice.
I ask hon. Members to recall the days before Ford Motors came to Dagenham. Many large manufacturing companies had examined the Dagenham site and had decided that it would not be profitable and not a good investment to build there. The Ford Motor Company thought differently and, with great enterprise, it built on that site, much of the factory being constructed on piles at a very high cost. The 562-acre site now occupied shows the wisdom of that decision.
Since the Ford Motor Company came to this country, it has built factories at Doncaster, Leamington, Southampton, Langley, Brentford, Croydon, Woolwich, Walthamstow, Romford, Basildon, Rainham and Birmingham. [Laughter.] Hon. Members opposite astound me with their levity. Are they not glad that those factories are in those places and that people are drawing, as the hon. Member for Dagenham admits, very good wages from those enterprises? Or is there something wrong with this? Are the workers to be ashamed to take this money? Of course they should not be. They are producing the goods and they are entitled to every single penny they earn.
There will be nine British and two Amenican directors on the board of directors which is to be left. Sir Patrick Hennessy, we are told, will be the chairman, and there are other names on the board which are well known in industry—Mr. Thacker, Sir Rowland Smith, and Mr. J. M. A. Smith, for instance, all names which stand for something in industry. [HON. MEMBERS: "What about you?"] I thank hon. Members 865 immensely for that recommendation. I sincerely hope those words do not fall on deaf ears.
In 1947, the firm of Kelsey Hayes Wheel Company, situated on practically the same site as Fords, was taken over, and, in 1953, Briggs Bodies, also nearby, was taken over. At the time, the employees of both works were told by unscrupulous persons that the moment their firms were taken over by "this heartless concern", this great Ford Motor Company, their conditions would worsen and their employment would be endangered. If he has not done so recently, the hon. Member for Dagenham should go down there and see whether there are fewer people employed and whether their conditions have worsened and whether they are in a state of rebellion against the company which they were warned about.
I believe that when this transaction came to light it was the duty of Members of Parliament, particularly those Members in whose constituencies thousands upon thousands of these workers resided, to examine the facts. What it was not their duty to do was to spread alarm and despondency among ordinary, decent working people. That has been done by some people and by some who sit in this honourable House. For years the hon. Member for Dagenham has been carrying on a sort of running battle with the Ford Motor Company. I do not know why. If I have to make a guess, I would say that all his prophecies of doom and all his prophecies of unemployment have been unfulfilled and, not liking to be proved wrong, he has hoped against hope that, if he went on long enough, he might be proved right. That is the only thing I can think of. That is the only thing of which I can think.
The hon. Member for Dagenham will forgive me if I tell him that he is a very slow-moving, unimaginative Member of this House, but on this occasion, as on all occasions where the Ford Motor Company enters into things, he becomes a gadfly dashing around trying to sting left, right and centre. I will also tell him one thing which may not make him very proud. After one or two things which he said recently, several people came to me in a state of real alarm and asked: "Is the hon. Member for 866 Dagenham taking leave of his senses? What does he think he is doing? We should be very worried indeed if we thought that there was even a glimmer of truth in what he said".
§ Mr. Lagden
I have not the slightest doubt that the hon. Gentleman tries; it is merely the method he uses which is so unsuccessful.
During his speech the hon. Gentleman said that he would like to warn Henry Ford II. Far from warning him I should like to congratulate him on showing confidence not only in this country but in the workpeople of Dagenham and Hornchurch. I believe that his action, and the investment of the money which he has suggested shall be invested in this country, will be a great blessing and will give full employment and a lot of happiness to the people whom I represent, and whom, I am sorry to say, however misguidedly, the hon. Member for Dagenham misrepresents.
§ 8.12 p.m.
§ Mr. Maurice Edelman (Coventry)
My hon. Friend the Member for Dagenham (Mr. Parker) complained about the poor public relations of the Ford Motor Company in Dagenham. After listening to the hon. Member for Hornchurch (Mr. Lagden) I confess that I cannot help feeling that Fords' public relations are in very good hands. Although he has not received any complaints about the anxiety of the workers of Fords, or in the motor industry generally, it may well be that the hon. Gentleman does not command the confidence of the motor workers in Dagenham. I have no doubt that in reporting their doubts, their fears and their anxieties to my other hon. Friends whose constituents include workers in the motor industry they are taking their anxieties to quarters where they know they will be considered sympathetically and receive attention.
I speak as a member for a city which is directly concerned with the motor industry, and where many of my constituents are grievously anxious about the effect of the Ford take-over bid in Dagenham. When considering the validity of the arguments which have 867 been advanced in favour of, or opposition to, the Ford take-over bid, I could not help wondering what would be the reaction in the United States if auto workers in Detroit, or in the United States generally, were to hear that, say, the British Motor Corporation had made a successful take-over bid for Fords of Detroit. I think that it is certain that the Americans would be deeply anxious and profoundly concerned about what the effect would be of a British take-over of a major strategical industry.
Without any chauvinisim, xenophobia, or obvious economic nationalism, there are people in this country, not only on both sides of the House, but people of all political views and of no political views, who are deeply concerned that the control and direction, not simply of Fords of Dagenham, but of the British motor industry, will be determined not from Coventry, not from Dagenham, not from Whitehall or Westminster, but from Detroit or Washington. That is really the problem with which we are concerned tonight.
One hon. Member pointed out that there was an equation between British investment in America, and American investment in Britain. He said, "In view of the nature of the money market, it is desirable that there should be this two-way investment". For my part, I welcome and endorse any form of investment which will fertilise industry, whether in Britain or in the United States, but this investment, which consists, I believe, of about £900 million of American investment in Britain, and £700 million of British investment in America, has to be very carefully examined before we accept that there is a real equation between the two.
Where does our investment in the United States lie? It lies in things like gramophone records, cosmetics and boracic powder. The investment of the United States has been steadily directed towards the key strategical centres of British industry. If one were to make an equation of American investment, and of British investment, not in terms merely of financial return, but of economic power, it would be seen that steadily the control of the strategy of British industry is passing out of British hands into American hands.
868 Henry Ford II has already been quoted as having made certain statements in reply to the Chancellor, principally to explain why he was putting up all this money for the balance of the shareholding in British Fords. He used the now notorious term, "greater operational flexibility" to which he has now added "co-ordination." Also, he has stated that he will do what lies in his power to continue the policies which existed before. In fact, only today the Chancellor came to the House and said that he had received certain assurances from Mr. Henry Ford II.
My hon. Friends have already pointed out, and I say this without disrespect to Henry Ford II, that assurances given by him to the Chancellor about the future of the British motor industry are not worth the breath with which they are spoken, for this reason. No one, not even Henry Ford II, can predict with any confidence what the future development of the American motor industry is likely to be, or what will be the effect of that development on the British motor industry.
The Ford Company in the United States is already working far below capacity. Despite the seasonal improvement which has taken place in the last couple of weeks, no one can say that the general decline in the output of cars and in American sales will not continue. Indeed, when Henry Ford II uses his other mystical word "integration", we begin to get some clue as to why Fords of America are seeking to buy Fords of England.
§ Mr. Geoffrey Wilson (Truro)
Can the hon. Gentleman suggest any possible reason why the Ford Company of Dagenham should spend a large sum of money in Hamburg this month on advertising Fordson Tractors if the company does not want to expand, but wants to contract?
§ Mr. Edelman
It is not my argument that Fords will cease trading. Of course, the company will trade as well as it can, but what is happening now is that Henry Ford is preparing a grand strategy for the Ford empire. That strategy is not concerned with British interests. As is stated in the Chancellor's statement, a copy of which he put in the Library, it is concerned with the economic and financial interests of the Ford empire.
869 I will try to show how that may develop. In trying to do so, I make no claim to omniscience in this matter in any sense. All I am trying to do is to pick up some clues which have been dropped. Although, in the events leading up to this take-over bid, the Chancellor consistently denied that he or any other member of the Government had any contact with Fords in connection with this bid, he said that the President of the Board of Trade had had communications with and had actually met Henry Ford II. It would be interesting to know, first, whether Henry Ford II gave any inkling to the President of the Board of Trade of what was in his mind—whether he had any intention of making this take-over bid—and, secondly, whether, in turn, the right hon. Gentleman gave Henry Ford II any inkling of Britain's intentions towards the Common Market.
§ The President of the Board of Trade (Mr. Reginald Maudling)
No such inklings were given on either side.
§ Mr. Edelman
In that case, we are led to the conclusion that Henry Ford II and the President of the Board of Trade must have fallen back upon the state of the weather as a subject of conversation.
§ Mr. Maudling
In my conversations with the Ford Motor Company I hoped to persuade it to set up manufacturing capacity in Scotland and other development districts.
§ Mr. Edelman
Everyone is in favour of taking industry to Scotland and doing away with the high level of unemployment which exists there today under the present Government. I am glad that the right hon. Gentleman has mentioned that.
We now come to another mystery. At a time when the British motor car industry is expanding its plant and capacity, when existing capacity is already excessive for the market, and when 100,000 men are working on short time, it seems extraordinary that the Americans should come to Britain and go in for this vast investment and expansion, creating capacity of such a size that by 1962—as it has been forecast—we shall be able to produce three times as many cars as we can today.
870 The answer can only be that Fords of America is concerned with making an investment in capital goods and equipment in this country as a long-term investment, and not necessarily with the intention of maintaining our employment at a stable level in order to yield, year by year, dividends in the interest of its shareholders—because it certainly could not carry on a tactic of that kind if it had to deal with the "nuisance" of a minority of British shareholders. What the Ford Company has in mind is to lay down plant and capital equipment and to make a great investment with the intention of co-ordinating its British national investment with the grand strategy of the Ford empire.
How would that work? I will indicate the process by which I think it would be done. It is quite clear that an international company like Fords would want to have what Henry Ford has called flexibility. That means that it could ring the changes and switch emphasis from one company to another according to the interests of Fords of America. The time may well come when, to encourage production—whether in America or in Cologne—Fords of America will want to depress production in Great Britain. If it has total ownership, which involves total control, it might be to its overall commercial interest to depress British production for a period, with the accessory intention—and here the point made by the chairman of B.M.C. this morning is relevant—of depressing wages in the British motor-car industry.
I stress this point because wages in the industry have lately been under attack. It has been suggested that the high cost of production is due to high wages. Speaking as a Member for a Midlands constituency, I would agree that a combination of new techniques and highly organised trade unions has resulted in a high level of wages being paid. But even today Fords of Dagenham is paying approximately 2s. an hour less than wages paid in the Midlands.
§ Mr. John Arbuthnot (Dover)
Will the hon. Member explain to the House how it would be easier for Fords to depress production in this country when it had 100 per cent. control than it would be at present, when it has a shareholding substantially in excess of 50 per cent.? It could take the same action just as 871 easily as things are at the moment, without spending its money to do so.
§ Mr. Edelman
The hon. Member has repeated an argument put forward by the Chancellor, Which has been repeated time and time again by back benchers opposite. The fact is that—to draw an analogy which may simplify the matter for the hon. Member—it is all the difference between a totalitarian Government, which can do whatever they like without any opposition, and a Government confronted by a democratic opposition which are tame and civilised. They have to pay respect to the minority. If hon. Members do not accept that analogy—
§ Mr. Edelman
A minority shareholding confers upon the minority shareholders certain legal rights. My hon. and learned Friend the Member for Leicester, North-East (Sir L. Ungoed-Thomas) has already enlarged upon that point.
§ Mr. John Howard (Southampton, Test)
The right hon. Member for Huyton (Mr. H. Wilson) referred to the case of the Canadian company which had been directed by Detroit to abandon certain orders from Canada. In the case of the Canadian company, Detroit has only a 74 per cent. control. How, then, is the position of the English company different? There is no effective difference between a 50 per cent. control and a 74 per cent. control.
§ Mr. Edelman
I am much obliged to the hon. Member. His example merely illustrates the supine nature of the Canadian minority shareholders. He has emphasised clearly that not only is it possible but that, in practice, Detroit has already instructed a subsidiary or peripheral company to depress its output and its profits in the interests of the parent company.
Henry Ford, in his statement, has indulged in certain abstract propositions which, to me at any rate, seem extremely ominous. I have mentioned some of them, but he has also said that we are now entering an era of intense competition. That, of course, is the way in which capitalism works. Those who can survive that competition, those who are not 872 bankrupted by that competition and those Who are not rendered unemployed by it or have to work short time, are the winners. They are the ones who stand on top of the pile at the end of the day, but for those whom I represent, the workers of Coventry, those words had a sinister ring.
Is Ford of England, integrated with the great massive strength of Ford of America, now to indulge in all-out, cutthroat competition with the older established British companies? Is that to be the intention? If so, how are we to obtain the grand strategy for the British motor industry, which is the only way in which the British motor industry and the jobs of the workers concerned can be preserved? How are we to be masters in our own house if the effect of the deal will be so to integrate Ford of England with Ford of America that we are to enter an era of competition which will be detrimental to an overall plan for British industry, and which will end in unemployment?
It is not only economic considerations which count in this matter. I began my speech by disclaiming any form of economic chauvinism. We ought to take note, as my hon. Friend the Member for Dagenham said, of some of the lessons of history. What happens and what has happened when the major, the basic, industry of a country has fallen into the hands of foreign capital? An hon. Member opposite taunted us with the example of Cuba and said that we were becoming a Cuban Opposition, but the revolt in Cuba and many of the troubles in Cuba stemmed directly from the fact that the basic industry of Cuba was in foreign hands. It was an ownership which was oppressively used, an ownership which was not used democratically. It was an ownership which was profoundly resented by the workers in that industry.
The Chancellor ought to remember what happened in the case of Nasser. He ought to remember what happened about the Suez Canal, when there was an Egyptian revolt against the ownership by foreigners who had their hands on the jugular vein of Egypt. I could multiply the examples, but I will not. Hon. Members opposite jeer and sneer, but they would be making a great mistake if they did not recognise not only the 873 practical disadvantages of this takeover bid, but also the psychological and social disadvantages. I hope very much that this will be the last arrangement of this kind in which an overseas company, untrammelled, will be allowed to put its hands on and take control of a key industry of this country.
§ 8.30 p.m.
§ Mr. John Hobson (Warwick and Leamington)
This has been in many ways an interesting debate to those who have been observing What hon. and right hon. Members opposite have been doing. The right hon. Member for Huyton (Mr. H. Wilson) is, of course, one of our most spirited orators, but the most eloquent part of his speech was the great silence which surrounded him for the most part of it.
§ Mr. Hobson
We have just heard from the hon. Member for Coventry, North (Mr. Edelman) that he opposes the decision of my right hon. and learned Friend the Chancellor, first, because he is frighthened of what the consequences may be for the Ford Company, and secondly—in order to have a doublebarrel in case the reverse should happen—because he thinks that the Ford Company may become too powerful and too competitive for the trading interests which exist in the Midlands and in other car factories in the country. We have to make up our minds how we regard this bid for a minority of the shareholding of Fords.
I represent a constituency in which, as my hon. Friend the Member for Hornchurch (Mr. Lagden) mentioned, there is a large subsidiary of Fords, a Ford foundry employing nearly 2,000 people. I am glad to say that the representatives of those who work on the shop floor came to see me over the weekend about their anxieties for the future. They expressed, as everyone employed in a company the management of which is in doubt for the future must, anxiety as to what was going to happen, but the first anxiety they expressed was not for themselves but for their fellow-workers in Midland car factories.
They expressed the view that, while it may be a very good thing indeed for 874 them, it might produce exceedingly severe competition for their neighbours and friends who work in Standards, Rootes, B.M.C. and the other great car factories of England. I think that is a right view, that one of the consequences of this offer may well be that Fords of Detroit will start pumping an enormous quantity of capital not only into Dagenham, but into Leamington, Liverpool and, perhaps Scotland, which will produce much more acute competition for other car manufacturers.
I do not think that is a bad thing for the economy of the country as a whole, which is what we are concerned with in this House. In the first place, it should make Fords of England far more competitive in overseas markets, and I would have assumed that it would have made the other car manufacturers far more competitive themselves. Whatever one may say about the motor industry at the moment, there can surely be no dispute that its future must depend upon its export trade and that anything which can increase the competitiveness of our car factories must be to the benefit of the car industry and of the country as a whole.
I welcome the assurances which my right hon. and learned Friend has obtained from Mr. Henry Ford. I do not think anybody should imagine that they are mere words. They will and can be used against him hereafter. No responsible person could give such assurances without having to meet them in the future if called upon to do so. I am sure that all those who represent constituencies in which there are Ford employees will particularly welcome the assurances that the management of the British company will remain substantially as it is at present and in future will remain substantially British, and, secondly, that the employment policy of the British company will remain unaltered.
I should like to ask, however, about the undertaking concerning components. Not only does it affect the foundry within my constituency, but there are many other things which Fords at Dagenham and in other areas require. I should like to ask particularly about machine tools and raw materials. Does the assurance given by Mr. Henry Ford go to the question of whether the tooling up and 875 the use of raw material, particularly sheet steel, will in future be British, or is the assurance confined only to components for the assembly of motor cars, the majority of which are already manufactured by subsidiaries of the Ford Motor Company? The assurances which have been obtained will do much to alleviate the natural anxieties of all those employed in the Ford Company, who are anxious to know what is to happen in the future.
That brings me to the real question which has troubled this House, namely, as to the probable result in the long-term of the suggestion that the American company should take over a 39 per cent. minority holding in the British company. The hon. Member for Coventry, North said that it was part of the grand strategy of the Ford empire. Even if we assume that it is so, is it not the case that anybody who has an empire is much more likely to expend money upon it and to develop that part of it which he really controls rather than that part which he only partly controls? While we talk of military analogies, anybody in command of strategy naturally wants to use those troops who are reliable and under proper control and not somebody whose loyalties and ability are distant and uncertain.
Therefore, I should have thought that before they decide where the weight of their investment overseas shall be in future, Fords want to be sure whether they will invest in a company which they control. From that point of view, I should have thought that it was for the benefit of this country in the long run that their subsidiary in England should be on equal terms with the subsidiaries in other parts of the world, because when considering which of them to invest in hereafter they can consider each of those subsidiaries upon equal terms. I should regard it as in our interests that that should be so, and in substance, control already is in America.
In my opinion, the hon. Member for Leicester, North-East (Sir L. Ungoed-Thomas) has emphasised far too greatly the importance of the minority shareholding. The rights of minority shareholders are well known, but they are fairly minimal. They do not give any right whatever to control the day-to-day trading policy of the board of directors. That is what is of importance.
§ Mr. Hobson
That is what I am saying. What is all the fuss about when, in fact, the board of directors can already be appointed by the majority American shareholding and when control is in substance already in Detroit?
§ Mr. Collick
I am trying hard to follow the argument which the hon. and learned Gentleman is advancing. It seems to me that the logic of his argument is that the more British industry passes to 100 per cent. American control the better it is for this country.
§ Mr. Hobson
No. I hope that I shall make it plain by the end of my speech. That is not my argument, nor is it what I intended to say as a general principle. I am dealing at present with the particular case of Fords. I will come later to the generality of such bids in future. The hon. Gentleman will find that there is a distinction between the two.
What I am saying on this bid is that the major argument which has been advanced from the other side of the House is that the minority shareholding would be of tremendous importance in the future should there be a world depression. I do not think that is so, because the day-to-day trading policies of any company are not dictated, and cannot be dictated, by a minority shareholding. They are dictated by the board of directors, which is in charge of the way the company directs its affairs. The rights of minority shareholders are only to ensure that there is an equal distribution of profits, that no scheme for the arrangement of capital is to their detriment, and matters of that kind, which cannot possibly affect the way in which the business of the company is dictated.
We have listened to many quotations from the Economist, but it is worth quoting this passage which deals with the argument of Fords that they want flexibility of operational control The Economist says:This stated intention entirely justifies Parliamentary concern with the possible implications of such a policy for the very real national interest in the export prospects of the British motor industry. But, even within the present pattern of ownership, such a policy could not be prevented in Britain if the American parent chose to dictate it, either regardless of or in the longer-term interest of the minority shareholders. Never since the first sales branch was 877 set up in Shaftesbury Avenue in 1908 has ultimate control of Fords operation in Britain resided anywhere but in Detroit.That is true, and for that reason the decision of my right hon. and learned Friend was right, because nothing of substance is being taken away. Control already resides in Detroit. For that reason, I do not think that the House should object to the taking over of a minority British shareholding of 39 per cent. when it may well lead to the Ford Company in America deciding to invest substantially larger sums in its subsidiary in this country and thus improve our own economy.
§ Mr. Charles Loughlin (Gloucestershire, West)
The point which the hon. and learned Gentleman is making at present is perhaps the crux of the difference between the two sides of the House. If his argument is valid, there is no reason why the American company should want to acquire a minority interest which does not in any way by its existence impede or inhibit policy decisions of the American board. In the event of a crisis which might result in the closure of the Ford Company at Dagenham, the chief value of the minority shareholding would be to canalise all the protests and, consequently it might deter the board in Detroit from taking that decision.
§ Mr. Hobson
That may be so, but there are dozens of other channels. There are the representatives of those who work in the company. There are the Members of the House of Commons who represent the workers. There would be dozens of other channels for making protests about that and what goes on at Dagenham, although it would be owned 100 per cent. by Fords of America. I should have thought that there was little in that argument, because there are so many other channels available whereas, turning it upside down and looking at it the other way, if Fords of America are to develop the United Kingdom subsidiary, if they are to pump enormous sums of capital into this country, it is important to them that they should have complete control over that capital and the profits from it.
They should not have to put up large sums of money merely for the benefit of the 39 per cent. holding of the people in this country who have not put up the 878 capital and, therefore, do not deserve the profits from it. It is for that reason that I cannot think that anyone would put down enormous sums of money in this country unless the intention was to develop the subsidiary here. Because of that, I welcome the particular decision in this case made by my right hon. and learned Friend.
I want now to come to what I regard as the far more important question of our attitude to bids of this sort generally. We do not often have the opportunity to discuss that problem, which I regard as of far greater importance than this particular issue of the Ford minority holding. I agree with my hon. Friend the Member for Mitcham (Mr. R. Carr) that the country's interests require that there should be the maximum possible freedom of movement of capital, and that any restrictions that we ourselves put on the movement of capital are likely to rebound to our own disadvantage.
As many speakers have said today, it is not merely a question of the two-way balance of movement of capital between America and the United Kingdom. It is far wider than that. Great Britain is the greatest investing country in the world. Our investments do not go merely to America but to the Commonwealth countries and to many other countries. Those investments are badly needed in many under-developed countries, and it would be regrettable were we, except for necessitous reasons, to lay down as a principle that capital should not move freely between one country and another.
I would remind hon. Members that the United Kingdom has invested about £2,000 million overseas in the last ten years, and that a very large part of that investment has been in the Commonwealth, where it is badly needed. I would regret to see any steps that were likely to stem that flow or interrupt the movement of capital to those parts of the world where it is needed.
There is, however, a countervailing argument. At what stage is one to say that capital should not come to this country because control is passing out of the country? I regard that as the crux of the problem on the general principle. I believe—and I am glad to know that speakers on the other side of the House have welcomed the fact—that 879 American investment should come here. While we all desire to invest as much as possible overseas, I am sure that we should also welcome investment in this country, not only from America but from other countries.
One comes, then, to the great problem: at what stage and upon what principle should one limit in any future case the investment of capital in this country? I deduce and infer from my right hon. and learned Friend's statement that he intends to apply the following principles in future. The first is to ask himself whether there is any risk to our economy by its passing to a foreign company? I am sure that that is right, and that all hon. Members will agree that that is one of the vital questions.
According to the Chancellor's statement, which I welcome, the second question, if I am right in drawing the right inference, is that in future cases he will ask whether there is a risk to the employees or other dependants in any company which is likely in future to be adversely affected. I am sure that in all future cases when it is a question of the passing of control, that question must be answered negatively before the investment can be allowed.
Thirdly, I submit that we must always in future see that we do not allow control of a large unit of our industrial production to pass into overseas ownership and control if there are any strategic questions involved and also if it means that a significant proportion of one of our major manufacturing industries is going into foreign control.
We have in every case to balance the necessity for retaining the freedom of movement of capital out of and into this country against the risk of allowing major units of our economy to fall under foreign control which may prejudice any future economic position. If I am right in deducing that those are the principles on which my right hon. and learned Friend has said that in future he will consider the problem, I welcome those, as indeed I welcome the decision which has actually been reached in this case.
§ 8.51 p.m.
§ Mr. Tom Driberg (Barking)
In the course of his long and thoughtful speech the hon. and learned Member for Warwick and Leamington (Mr. Hobson) was, 880 perhaps, a little unfortunate in picking up the phrase used by my hon. Friend the Member for Coventry North (Mr. Edelman) about the Ford empire. He pursued that analogy and said that people who had got an empire wanted to develop it and make it prosperous, or words to that effect.
That is quite true, but we on this side of the House, who happen to be anti-imperialist, know that people who have an empire develop it and make it prosperous for their own profit and not for the welfare of the colonial territories in that empire, and that they do so very often by exploiting and impoverishing the natives. We do not want to be part of any empire, whether it is called the Ford empire or an empire of the old-fashioned political kind.
§ Mr. Driberg
My hon. Friend the Member for Coventry, North also referred to a very curious remark by one hon. Member on the benches opposite who referred to what he called the "Cuban" attitude of the Opposition on this matter. I do not think that any very close analogy can be drawn between the Cuban Legislature and any part of this honourable House; but, as a matter of fact, for the purpose of settling this problem in the interests of the people of Britain, I myself rather wish that instead of right hon. Gentlemen opposite we had Dr. Castro as Prime Minister or as Chancellor of the Exchequer, just for a few weeks.
As has been suggested from the other side of the House, a Socialist Government would, of course, solve this difficulty by taking over at least the minority shareholding. If we took over the majority shareholding as well, as Dr. Castro might if he were our Prime Minister, we would, of course, acquire one quite substantial peak in the commanding heights of the economy.
§ Sir Henry d'Avigdor-Goldsmid (Walsall, South)
The hon. Member said that a Socialist Government would take over the minority shareholding. I should like 881 to know from the hon. Gentleman how a Socialist Government would deal with the American minority shareholding which, according to the latest figures, represents 15 per cent. of the entire Ford shareholding.
§ Mr. Driberg
I have not the faintest idea, but I am sure that people much cleverer than I would be able to tell the hon. Member.
I hope that I shall not be interrupted too much. I think you will agree, Mr. Deputy-Speaker, that there have been some very long speeches whose length has been aggravated by a number of interruptions, perhaps from both sides of the House. I am never afraid of interruptions, but I do not want my speech to take too long.
I have been trying to follow the course of the argument. Again and again, it has come back to the point about whether the minority shareholders can make any real and effective protest and, if not, whether what is now being done has any real effect on the ultimate authority of Detroit. It may well be that the hon. and learned Member for Warwick and Leamington and other hon. Members are right in saying that it does not make very much difference; the minority cannot make any effective protest, not even the protest that an Opposition in Parliament can make even though they know they will be voted down at the end of the day. If that is so, it seems to me greatly to strengthen the Socialist case for taking aver these holdings in the national interest. The nation, the Government, should take them over.
At the very least, the Government ought to insist, as one of the conditions of granting the application, that, as my hon. Friend the Member for Dagenham (Mr. Parker) suggested, there should be a Government-appointed director on the board who could watch the progress of affairs in the company in the interests of the nation as a whole: he could report back to the Government on any developments which seemed contrary to the national interest, and he would always, of course, have up his sleeve, as it were, the ultimate sanction of some form of nationalisation.
It is not mere sentimental nationalism which causes us to be anxious about this 882 project. It is certainly not "anti-American venom", to use the phrase of the hon. Member for Solihull (Mr. Lindsay), to repeat what he himself, after all, went on to say, that there may well be recessions in the future, and to suggest that the American economy is somewhat top-heavy and precarious. Despite all the Keynesians who are now supposed to be floating around in Washington, there might come a time when there would be a quite serious depression in the motor industry. I know that it is repeating what has been said already, but, despite all the argument about different types of cars and so on, I cannot believe that Detroit would not, in such a situation as that, export its unemployment to Dagenham.
This is the main anxiety at the back of our minds. Because we feel this very strongly and deeply, it was really a little unfair of the hon. Member for Hornchurch (Mr. Lagden), in what was, on the whole, a very entertaining slapstick half or three-quarters of an hour, to suggest that my hon. Friend the Member for Dagenham and others are soured because our warnings that there might be unemployment have not yet come true in a big way. This is really a terrible slander on the motives and interests of hon. and right hon. Members on this side of the House.
Of course we hope that this development, now that the Chancellor has given his approval to the application, will work out for the good of the British motor industry as a whole and of our constituents in particular. We should be fools if we did not hope that. But we should be very foolish if we did not also point to some of the real dangers which seem to be involved in the transaction.
We are not reassured by the jargon in the Chancellor's statement, quoting from Mr. Ford's statement, about "operational flexibility". That sounds to me a rather sinister bit of jargon recalling almost the kind of operational flexibility which was once practised on Jarrow and on other unfortunate places between the wars.
§ Mr. Driberg
In addition, the Ford statement issued on Saturday referred to the intensely 883 competitive struggle for world markets which lies ahead; and this statement's rather optimistic tone seemed to be based on the assumption that Fords, including Fords of Britain, would necessarily be victorious in that struggle. There was no examination of the alternative hypothesis—by Fords, by the Chancellor today, or by anybody. Suppose that the Ford concern is not successful in that struggle? In the circumstances as they are, we must hope that it will be, but a depression, unbeatable competition—various factors—might mean defeat in that struggle. What will happen then, when our motor industry is even more closely integrated with that of America?
I cannot quite understand why the Chancellor and some hon. Members opposite are content—so naïvely, so gullibly, as it seems to me—to accept the assurances that they have been given. If one examines closely the notice distributed in the Ford works by Sir Patrick Hennessy, which quoted in full the letter to Sir Patrick from the vice-president of the Ford Motor Company—again echoing the jargon about "greater operational flexibility"—one finds, as the Chancellor said today, that there is an indication that there will be no change in the "employment policy" of the company. That is rather a vague phrase. Do the words "employment policy" mean the same as "employment level", or not? I should like an answer to that question.
It is also rather interesting that at the end of the letter comes this short sentence:You may be assured that we will have regard for the interests of our English organisation and its employees.But that sentence is not part of the letter from the vice-president of the company. It is simply signed by Sir Patrick Hennessy, the chairman at Dagenham. The phrase "we will have regard for" seems a very weak substitute for guarantees, hard-and-fast safeguards, or anything of that kind—which we might have expected from the Chancellor and, indeed, from Sir Patrick Hennessy if he had any real power vis-à-vis Detroit.
No, Mr. Deputy-Speaker, I do not see why these assurances should have been found acceptable. As my hon. Friend the Member for Coventry, North said, it 884 is impossible to accept them because nobody in Detroit or here can know what the future will bring to the American and British motor industries. Moreover, I hope that it will not be thought unduly offensive if I say that it seems a bit odd so readily to accept assurances from people who, over the past year or two, have steadily lied about their intentions concerning the British Ford Company, as we know the American Ford Company has done.
The final point that I should like to complain about is not the fault of Fords, but the fault of the Government. We have been treated in the past week to yet another example of the Government's contempt for Parliament—their growing practice of taking a decision and presenting the House of Commons with a fait accompli without giving the House a chance of expressing a view before the decision is taken——
§ Mr. Driberg
—and, as my hon. Friend reminds me, telling the Press first about their decisions.
This sort of totalitarian contempt for Parliament helps to explain why the Government and the Chancellor scurry so sycophantically to obey the crack of the whip of American big business when it seeks to establish itself in a more totalitarian position vis-à-vis our own workers and people. [Laughter.] Hon. Members opposite find that amusing. I can well understand why. They happen to be on the winning side tonight, but that will not always be so.
This attitude of the Government towards the House of Commons is one of the reasons why I am very glad that, unless the President of the Board of Trade gives us a much more satisfactory reply than I expect he will, we shall go into the Division Lobby tonight against the Government. I venture to hope that we shall have with us, and against this dangerous decision, a few of those Conservative Members who have also shown their anxiety about it, or that they will at least abstain from voting—thus following the example of some other Conservative Members of Parliament who, twenty years ago, voted against another Conservative Government, or abstained from voting, when that earlier 885 Conservative Government, in its blind folly, had betrayed the nation.
§ 9.6 p.m.
§ Mr. Leonard Cleaver (Birmingham, Yardley)
The hon. Member for Barking (Mr. Driberg) appears not to have read or to have listened to the statement the Chancellor made earlier this afternoon. It explains most carefully, in the second and third lines, that the Chancellor had to decide whether Treasury consent should be given under Section 9 of the Exchange Control Act. He has reported what he has done and the Government have agreed that there should be a debate in this House tonight on this subject. I cannot think of anything more democratic than that.
I suggest that this question divides itself into two distinct issues. One, whether or not we should allow Fords to become completely owned and controlled from Detroit, and the other—the major problem—what proportion of our industry we are prepared to see controlled by overseas interests.
I consider that the right hon. Member for Huyton (Mr. H. Wilson) has been less than fair in not putting forward the case for both sides in this matter. I am of the opinion that he has created more alarm and despondency by not having more forcibly mentioned and advantages and by dealing so much with the possible disadvantages. We should remember that the Ford Motor Company has pioneered the manufacture of the motor car all over the world. If any company can size up the merits of the motor manufacturing business it is the Ford Company. The parent company had two distinct alternatives before it. It could have invested more money in its concerns located in the area of the Six, or it could have decided to invest more money in England by acquiring the minority interest in the Ford Company. In my view, the efficient production and the progressive outlook and up-to-date management at Dagenham have been deciding factors. I am certain that it shows a confidence in the workpeople and in the quality of the Ford products.
One has to be quite certain that this offer has not been made either to reduce sales, to stifle expansion or to close the works at Dagenham or in any other part of the country. If that was the intention, as some hon. Members opposite have 886 suggested, it could have been done without publicity by the control that the Americans already have.
The right hon. Member for Huyton suggested that it was possible that the Ford Company would prefer to get rid of its holding of dollars and to invest in a stable currency. What a compliment that is to the way in which the Government have exercised financial control over the past few years and what confidence it shows in their ability to do it in the future.
For my part, I do net think that the offer is good enough. [HON. MEMBERS: "Hear, hear."] It has been made at a good time for a buyer. That is, possibly, the secret reason that hon. Members opposite are trying to discover, why the purchase has been made now. It certainly has not been made at the top of the market. No doubt, the City is preparing a case which would justify an increase in the figure.
§ Mr. Cleaver
What is important for us to decide is the allied and major problem of the extent to which we allow foreign capital to dominate our domestic scene and the extent to which we consider that our strategic industries should be controlled abroad. There is certainly genuine concern in this matter. There is always a risk of misunderstanding when there is a feeling amongst any employees that possibly the control of their company is far away and that there is an absentee boss. On the one hand, we do not wish to interfere in any way with the freedom of the buyer and seller which will encourage private industry to be both enterprising and efficient. On the other hand, there is a limit beyond which we should not go.
We have before us the example of Canada. [An HON. MEMBER: "On whose side is the hon. Member?"] There, 60 per cent. of the dividends paid by Canadian corporations are paid to, and 56 per cent. of private industry is controlled by, foreign nationals. The result is that there has been and still is considerable concern about this which expressed itself in no uncertain way at the last Canadian General Election. I do not think that public feeling here would be any different if similar circumstances applied. Investment abroad is 887 a respectable phrase, but we should bear in mind that when foreign investments are made here we are increasing our overseas indebtedness. While, when the original investment is made, our gold and dollar reserves will feel the benefit, we are at the same time building up a long-term and permanent future outgoing.
This problem has been faced by both Canada and Australia, as well as by a number of smaller European countries. It is control and not investment which is the problem. It is interesting to note the way in which the matter has been dealt with in other countries. For example, foreign investment is allowed in Nestlé's and in Phillips lamps, but steps have been taken to ensure that the control of these companies remains in either Switzerland or Holland, respectively.
In this country, there is a fear that where vast foreign control in a company exists, the company may not pull its weight in the financial economy of the Commonwealth in times of stress or that British concerns may be prevented from competing wholeheartedly in export markets where they are in competition with other sections of the controlling group or with other concerns in the country where control is exercised. I take no narrow view of this. I submit that either of the extreme attitudes is wrong. It would be wrong, on the one hand, to allow the whole of British industry to be controlled abroad. On the other hand, it would be wrong to prevent the natural flow of capital from one country to another. Foreign investment should be encouraged, but foreign control should be scrutinised with great care. Somewhere between these two extremes of attitudes, we should be wise to draw the line.
It is far wiser to decide now which companies we would keep under our control for strategic reasons and what proportion of our industries we should retain. No doubt, there will be many other bids in the future, but I hope that my right hon. and learned Friend the Chancellor of the Exchequer will not be put in the position of having to make ad hoc decisions in each case. Where a company has been restricting dividends—
§ Mr. Lipton
The whole force of the hon. Member's argument seems to indicate that he will abstain from voting. Will he put our anxieties at rest and please announce that?
§ Mr. Cleaver
To put hon. Members' anxieties at rest, I shall support the Government, for the simple reason that they have no grounds on which to refuse this bid and, as I shall show, we should think about the major problem now and not deal with it ad hoc in the future when any particular case arises.
It is undesirable that these bids should be made public before the Chancellor has had an opportunity to consider them and express his views. It is most unfortunate when this happens. Prices on the Stock Exchange may vary, and if the Chancellor finds that for strategic reasons he has to refuse permission, loss may be sustained or harm may be done unfairly to many shareholders. I do not think either that the management of a public company should have this sort of thing going on unless it knows what is happening. This again involves the question of how we should treat nominee shareholders. Perhaps the debate does not cover that point but I think that it is an important one.
It is right that this matter should be discussed now, and that is why I am speaking on it. I am sure that, quite genuinely, there is feeling in the country about this, and I am sure that the House is the proper place for all points of view to be expressed, but I do not think that we should take a narrow view. I do not think that we should stop the purchase of the Ford shares. I do not see that the purchase will do the industry any harm or the people in it. It will certainly result in large amounts of capital being put in the company to develop it, which will not only provide employment in other areas where the Ford Company has already established itself but will continue to provide employment in Dagenham.
§ Mr. Richard Marsh (Greenwich)
Can the hon. Member answer one question which is worrying some of us? Since he agrees that one must draw the line somewhere in the take-over of British companies by foreign concerns, and since he does not accept the 100 per cent. takeover, where is the line to be drawn if 889 the hon. Member does not go below 100 per cent.?
§ Mr. Cleaver
Fords has control now, but this major problem should be considered by the Government to decide where they think control should go. I do not think that important concerns which have a major effect on the lives of people in this country should be controlled by overseas interests.
§ 9.18 p.m.
§ Mr. Douglas Jay (Battersea, North)
I am not sure whether the speech of the hon. Member for Birmingham, Yardley (Mr. Cleaver) was written in Dagenham or in Detroit, but it was a little difficult to follow which side he was on. The present Chancellor of the Exchequer has never had much reputation for being a successful defender of British interests. [HON. MEMBERS: "Shame."] I cannot believe that many hon. Members on either side of the House are satisfied with the hasty and sketchy fashion in which the Government have dealt with this problem. We are, after all, discussing a proposal involving the expenditure of £130 million, and, indeed, £270 million if we count in the whole Ford expansion plan, involving 50,000 workers and a large section of one of our key industries.
The Government tell us that they had no discussion at all on this issue with Mr. Henry Ford when he was in London a month ago. Therefore, if they believe the denials that Mr. Ford was making up to 20th October that nothing of this kind was contemplated, then Ministers can apparently have known nothing about this proposal until the beginning of last week. They received application formally only on Friday, yet we are expected to believe that all these complicated and international issues have been fully considered and adequate assurance received from the Ford Company apparently by this morning.
Why did we have to have all this haste? Why was it not possible to wait at least until Parliament had expressed an opinion about this issue? Was it really that the Chancellor was so desperately anxious for this addition to his gold and dollar reserves? I hope not. I hope that there was no implied warning in the Ford statement that if this did not go through then perhaps the expansion 890 might not continue. At any rate, I think that most people in this country believe that this problem deserves far more consideration than the Government appear to have given it.
It is, of course, desirable that we should have foreign investment, American investment, in this country, but one cannot just brush aside everybody's anxieties about this merely by pointing out that obvious fact. There are, first, deep anxieties about employment, and it is very natural that there should be in the present state of the motor industry. I happened to have a letter from a constituent of mine this morning telling how another American firm which employed him and others in London only a fortnight ago suddenly dismissed one-third of its staff because a gentleman had arrived from Chicago—Chicago in this case, not Detroit—and that action was taken contrary to the wishes of the whole British management. One is constantly hearing stories of this kind, and that is why ordinary people have anxieties about this kind of control.
I am not, of course, suggesting that Fords has any intention of under-using its capacity at Dagenham or elsewhere, or holding back on the absolutely vital expansion on Merseyside. But neither Fords nor the Chancellor has really done anything in public seriously to allay the fears that exist in the country. I can assure the Chancellor that the constant repetition of the words "flexibility" and "co-ordination", so far from allaying fears, positively aggravates them. The public assurances that the Chancellor gave today about employment policy—one could hardly imagine anything vaguer—seem to me to mean almost nothing at all. The Chancellor, after three statements, has still failed to answer the question which ordinary people are asking: why is it that Fords, if it does not plan to make any major changes, is willing to spend £130 million to get control of these shares? Until that has been answered, people will continue to feel anxieties about the transaction.
There are also legitimate fears and anxieties about exports and about the foreign exchange earnings of the Ford Company in future. We have been given a rather hazy assurance about exports in Europe. Why were the words "in 891 Europe" deliberately inserted in the assurance? Again, we do not know; we simply have not the information to judge. I do not believe that these anxieties are altogether fanciful.
I remember that in the first few years after the war certain large foreign companies which operated in this country so arranged their financial affairs that the whole foreign exchange earnings of their exports from the United Kingdom—and, incidentally, all the tax revenue which they ought to have been paying—were not coming into the hands of the British Treasury. It took a long, laborious and tough negotiation to reach a satisfactory arrangement with the firms in that case. Are we really expected to believe that the Chancellor has gone into all this aspect of the matter, too, only since last Friday? Frankly, I find it very difficult to believe.
Also, there is a major defence aspect in all this which has not been greatly mentioned today. After all, Fords and Vauxhall together represent a large section of the vehicle production capacity of this country, which is a large part of our defence potential in industrial terms. It is certainly true that both these companies co-operated with the Ministry of Supply as loyally as any British companies during the war, and, incidentally, did so before the United States came into the war, but there were some foreign companies in this country of which one could not have said that quite so emphatically.
Did the Chancellor really have time to go into this aspect of the matter? He has had a very short period in which to do it. He says that he has assurances on all this, but we do not know in the least—I must confess that I cannot understand—what sort of sanction he means to apply if these assurances are not kept after a certain period of years. The very fact that one of the assurances is that Sir Patrick Hennessy is to remain chairman of the company throws doubt on the other assurances. I am very glad that he is to remain chairman, but, presumably, that is not a permanent appointment; and if all the assurances operate for only a few years ahead, they do not have any great value.
The real issue before us, as the hon. Member for Solihull (Mr. Lindsay) said, is whether we are prepared to allow a 892 major part of a key British industry to fall under total foreign control. That is a question different from the issue of foreign investment or participation, which all of us on this side of the House welcome. I do not know whether the Chancellor remembers his immediate predecessor agreeing, in the debates about British Aluminium, that there was a great difference in those controversies between participation and control. We cannot allow foreign control of major firms and major industries in this country.
Even the Chancellor this afternoon said vaguely that there must be a limit, but he does not seem to have the slightest idea of what that limit is, or on what principle the Government will make decisions on further applications of this kind. Indeed, some of the Chancellor's statements today implied that in no circumstances would he use his powers to withhold permission in this sort of application.
I ask the President of the Board of Trade whether the Government have thought out the principles of policy according to which they will or will not grant permission in other cases of this kind. Will he explain tonight what those principles are? Do the Government know by what principles these things are governed? If we do not know, I am bound to ask whether the Government would take no action if some German interests were buying total control of I.C.I., or if they found that the French aircraft industry was buying control of Rolls-Royce, or the American steel industry of the Steel Company of Wales—[HON. MEMBERS: "Or the Russians."] We will not say the Russians, but if the Japanese were buying control of the British Motor Corporation would the Government still take no action in those circumstances?
It seems to us that in those circumstance's a British Government would be bound to intervene on political, economic, social and defence grounds. Do the Government agree with that and, if so, will the right hon. Gentleman tell us so? We do not know what the Government policy is on these issues and the Chancellor sounded as though he himself did not know and had had no time to conclude what he thought. One even wondered whether he had had sufficient 893 time to collect information on which to reach a proper and considered judgment.
Therefore, while we hope to see the Ford Motor Company continue its valuable investment and its very important industrial expansion in this country, I hope that the House will register a protest against the Government's failure to secure any proper safeguards and against the whole hurried, casual and off-hand manner in which they have dealt with this extremely important issue.
§ 9.25 p.m.
§ The President of the Board of Trade (Mr. Reginald Maudling)
There has been a rather noticeable difference between the arguments put forward from the back benches opposite and from the Front Bench. [HON. MEMBERS: "Which side?"] It has been apparent that a number of hon. Members on the back benches opposite—[HON. MEMBERS: "And the other side."]—are wholly opposed to the Government approving or accepting this transaction. They have made clear the reasons—which I do not accept—why they take that point of view, but we have not had that clarity from the Front Bench opposite. The Front Bench speakers approached these matters with same discretion and possibly more experience. They contented themselves with saying, in the one case, that they have not enough information, and, in the other, that we acted too hastily.
I was unable, from the speech of the right hon. Member for Battersea, North (Mr. Jay), to discover any reason why my right hon. and learned Friend should have rejected this offer. In fact, he was very careful not to give any such reason. He complained about the hasty, and I think he called it sketchy, fashion in which my right hon. and learned Friend dealt with this application. That is not a normal complaint about Government, and particularly Treasury, action, I confess, but he did not give any convincing reasons, or put forward any convincing arguments, showing how my right hon. and learned Friend could have acted differently.
The right hon. Gentleman talked about the failure of my right hon. and learned Friend to obtain convincing—I think that the word was "watertight"—safeguards, but several of his hon. Friends pointed out that in matters like employment policy, or the future expansion of the 894 industry, or how far it will go, watertight safeguards are not obtainable. No one, either here or in America, can guarantee what will be the future market for motor cars, what shape it will take, or what the movements will be.
It is clear that my right hon. and learned Friend, in obtaining the assurances to which he referred, was obtaining assurances as far reaching and as satisfactory as could be obtained, and which were certainly adequate to justify his action in saying that he would not withhold approval for this transaction if the shareholders decided to accept this or another offer.
I think that the debate has been concerned with two matters. First, the general principle of foreign investment in the United Kingdom. Secondly, how this general principle should apply to the Ford Motor Company case, in particular. I want to say something about both those matters, because we can surely only judge our decision in the Ford case against the general background of policy and in the light of the effect this decision will have on our general policy and our general interest in international investment as a whole.
Surely, as my hon. Friend the Member for Mitcham (Mr. R. Carr) said, we in this country should be the last people in the world to impede the international flow of capital. Surely we should be the last people to do anything that puts barriers in the way of the movement of capital through the world to those areas where it is likely to be most fruitful.
§ Mr. Maudling
I do not understand the point of that intervention, nor, I think, does the hon. Gentleman himself.
In a world which is starved of capital, where we all surely have a pressing interest to ensure that capital is employed as fruitfully as possible, this is pre-eminently a time when we should stimulate the international movement of capital and not try to hold it back.
After all, we have been pioneers in this matter of international investment. A great deal of our prosperity has been built up on international investment. A great deal of our current prosperity continues to be built on, and sustained by, 895 this, and I think that we are plainly recognising and emphasising the duty that we have to expand our investment, particularly in the under-developed areas of the world.
Surely, at this time, we should take a lead not in trying to impede the flow of international investment, or the movement of capital, but in trying to stimulate the movement of capital to areas where it will be the most fruitful, bearing in mind that private capital will not go where it is not welcome. I say to right hon. and hon. Gentlemen opposite who say that they are not anxious to see American capital come to this country that there are many places for American capital to go, including the United States itself.
§ Mr. Maudling
The hon. Member is not improving as he advances. There are some people who say that the United States is itself the most under-developed area in the world. Certainly the opportunities of profitable investment there, with relative political security, are considerable. United States capital, which we all want to see move across the world, producing fertilising results as it goes among world economies, will move only to countries where it feels it is welcome and can reasonably operate.
This country has benefited immensely from this international movement of capital. We have benefited, first, from the investment we ourselves have made abroad. The contribution of our overseas investments, in terms of dividend interest to our balance of payments, is measured in hundreds of millions of pounds, and is a major factor in our balance of payments accounts, the building up of assets of British companies and enterprises abroad, and a major addition to the capital strength of this country.
§ Mr. Maudling
It is not nonsense; it is fact. If the hon. Member studies the matter he will find that that is so.
§ Mr. Maudling
I gather that the hon. Member would rather invest at home than abroad. A case can sometimes be made for saying that marginally it is better to invest at home than abroad, but I thought that the balance of opinion among hon. Members opposite was in favour of overseas investment, by other countries here and in other countries by us. I believe it is to the interest of our economy and of people employed in this country. The right hon. Gentleman made reference to some recent investments in the United States. He picked the examples most fashionable, for obvious reasons. He did not mention companies like Bowaters, with its very big investment in the United States, or Courtaulds, or E.M.I., and some of our insurance companies. They have very large and important investments which, as I understand it, are as welcome in the United States as they are valuable to this country.
Although I have not got the exact figures for which one of my hon. Friends asked, in general our investment in the United States is of the same order of magnitude as their investment here.
§ Sir L. Ungoed-Thomas
Is there evidence of our having a 100 per cent. interest of half of any major industry in the United States?
§ Mr. Maudling
I cannot think of our having 100 per cent. of half of any major industry. I say that as far as we can judge our investment in America is about the same size as their investment here, and it is of great value to both countries.
§ Mr. Maudling
I am not being misleading. Incoming investment has been of immense value to us, for several reasons. It gives British industry access to research and "know-how" which we would not otherwise have. The research 897 effort in American industry is much bigger than ours, because American industry is much bigger than ours, and it can afford to spend much more than we can in total on research and development throughout industry.
§ Mr. Edelman
Does the right hon. Gentleman suggest that the techniques of the British motor industry are inferior to those of the American motor industry?
§ Mr. Maudling
I was not saying anything of the sort. I was saying that because of its much greater size American industry naturally has a much greater research and development capacity. It must be eight times as big as ours in terms of national product. It is of great value to this country to have access to that research, just as it is of great value to have access to the know-how of many American businesses.
§ Mr. Maudling
I think I ought not to give way again.
In addition to access to "know-how" and research results, there is the provision of productive capacity and export capacity for Britain which arises from foreign investment in this country. These great firms not only bring "know-how" and research results, but capital which builds up British industry and British exports. Also, we must not forget that this foreign investment increases our capacity to lend overseas. At the moment we cannot lend abroad anything like as much as we should like to lend.
Whether it be to help the developing countries, whether it be to expand suppliers' credits for heavy capital exports, our ability to lend overseas is clearly limited by our ability to earn a current surplus, but the more investment flows to this country from overseas, the greater our capacity to lend abroad. That in itself is extremely valuable for the British economy and, with an item like Fords, in which the sums involved are so very great, that makes a contribution not merely to our reserves position, but also to our long-term overseas lending capacity.
I should have thought that hon. Members opposite who so often stress the need for capital from this country flowing to other parts of the world should 898 welcome this for business reasons as a new way of strengthening our lending capacity from this country.
§ Mr. John Morris (Aberavon)
Is the right hon. Gentleman now suggesting on that argument that every industry in this country should be sold to America by pieces?
§ Mr. Maudling
Of course, I am not suggesting anything of the sort. I am making a serious point that increased investment in this country strengthens our capacity to export elsewhere.
If we want to consider the value to this country of in-coming investment from America in particular, we have only to name a certain number of firms established in this country, some wholly owned and some partly owned by America. There is Esso, which is wholly owned; Ford of Dagenham is partly owned, Vauxhall which has been a wholly owned subsidiary of General Motors for many years. Kodaks, Monsanto, Woolworths, Heinz and many other companies we could name which have been of great benefit to this country and those industries and to the employees in those industries. They have also been of great benefit to the exporting capacity of the country and of great benefit to development districts.
For example, what would have been the position of Scotland if it were not for the inflow of American firms and capital there in the last ten years? They have brought new jobs and techniques and also, hon. Members will agree, very good labour-management relations. When things are said about American labour relations and their effect on management at Dagenham. I should remind hon. Members that the labour relations in Scotland have been very good. Both sides, to the best of my knowledge, are thoroughly satisfied with one another.
§ Mr. F. H. Hayman (Falmouth and Camborne)
Will the right hon. Gentleman say why he persuaded I.C.I. to transfer its factory from Cornwall to Scotland, the factory of a British firm, and is doing nothing in return for my constituency of Falmouth and Camborne?
§ Mr. Maudling
I doubt whether that arises on the decision on the Ford case. 899 We can give plenty of examples in Scotland—Caterpillar Tractors, Minneapolis-Honeywell, International Business Machines, Remington-Rand, to name only a few—of the companies which have gone to Scotland bringing new techniques and employment. Surely this is to be welcomed as a process which both sides of the House should commend and try to see sustained.
§ Mr. Maudling
I have given way a great deal. It is not, I hope, seriously doubted that American investment in this country is a good thing, but, in view of many of the things which have been said by hon. Members opposite today, I thought it worthwhile to restate the case, which seems overwhelming, for support and encouragement of American investment in this country, making clear to our American friends that they are welcome here, particularly in Scotland, Ulster, the North-East Coast and other areas. For those reasons there should be no serious dispute either as to the value to our economy of American investment, or as to the difficulties which could arise if American capital flowed into the hands of some of our competitors.
This is a very important point, because America is looking upon Europe as a field for the investment of industrial capital, "know-how" and research results. That capital will either come to this country, or go to some of our competitors. It is very important indeed to encourage American capital to come to this country. It would be an act of folly to push American capital away from here into the hands of some of our competitors.
§ Mr. Maudling
It is exactly the point. If the hon. Gentleman does not yet realise that, it means that he has not understood a word which has been said.
§ Mr. Collick
The right hon. Gentleman is completely dodging the issue. There has been no mention today from these benches of any objection to American capital coming here. [HON. MEMBERS: "Oh."] The objection is to 100 per cent. control. That is what the 900 right hon. Gentleman should direct himself to.
§ Mr. Maudling
I will come to that point. [HON. MEMBERS: "Answer."] I am just coming to that point. Against this background of general policy, how should we judge the Ford case? Two arguments have been advanced to suggest that it would be wrong to approve this application. Our general policy, obviously, would be to approve the application on the general basis that it is a good thing to attract American capital to this country. If people object to our decision, there must be special reasons in this case why we should refuse it.
The two reasons which have been advanced are: first, that this will give the United States control over a large share of a vital British industry; and, secondly, that the development of the British Ford Company may be prejudiced. Those seem to me to be the two very important arguments that have been advanced. I want to deal with both of them.
The question of American control over a large share of a vital industry is a serious matter of policy which cannot be brushed aside; nor did my right hon. and learned Friend in any way try to brush it aside in his statement or his speech. It is also obviously a complicated matter, because we have interests in both directions. We have interests in the position of our industry and the position of incoming investors. We also have a great interest in our outflowing investment and in the position we will hold in the industries of other countries.
We should be unwise to try to lay down a rigid rule in these matters. If we laid down a rigid rule, as the right hon. Member for Battersea, North rather suggested that we should, to cover every case, it would be found to be so restrictive as to do positive damage to us in many other parts of the world. Therefore, I think that we must follow my right hon. and learned Friend's line in saying that we must examine these cases individually.
My right hon. and learned Friend made quite clear in his statement that the decision he has taken in this case does not prejudge the facts in any other 901 case. As my right hon. and learned Friend said:In another one, the balance might point the other way. There may well be cases where proposals might seem attractive from a commercial point of view, but, nevertheless, it may be necessary to refuse consent to transfer of control for reasons of national security or the significance of a particular firm or industry to our economic life.That is the principle upon which we must operate. It is clearly the principle which he will apply in any particular case.
In this case, it does not arise because, despite what has been said so often by right hon. and hon. Gentlemen opposite, this is not a question of transfer of control, because control of Fords Dagenham has been in American hands since the firm started. As my hon. Friend the Member for Solihull (Mr. Lindsay) said, quite rightly, control has always been in American hands. This is not a question in any way of transfer of control. It is a question of transfer of ownership of shares, which is quite different.
§ Mr. Maudling
I am coming on to the point about the minority shareholding.
The second point was that the development of the United Kingdom Ford Company might be prejudiced. The American company already has the power, with its 54 per cent. holding, to restrict expansion and exports. With a 100 per cent. holding it will have a much greater incentive to expand exports. That is the fundamental point at issue.
It is true that minority shareholders—especially if organised, which is not always easy—have certain rights, but their rights of self-protection are very narrowly defined rights. To my knowledge, no one has ever suggested that a minority has the right to control the operational, management and investment policy of a company.
§ Sir L. Ungoed-Thomas
Does the right hon. Gentleman really suggest that it would be open to a British company that was not 100 per cent. American-controlled to run down employment here in the interests of an American company?
§ Mr. Maudling
I say that these management matters—sales policy, investment policy and policy as to numbers employed—are controlled by the majority. That is the point of having a majority. This is a very important 902 point. At the moment, the Ford Company of America shareholders would have the right to restrict the expansion and investment programme of the British company. It now has 128 million reasons for not doing so which it did not have before.
We are asked by the party opposite: what are the Ford Company's motives in wanting 100 per cent. control as against 54 per cent. control. I think that those motives are quite clear, and have been made clear. In the first place, it thinks that this is a good investment for its money——
§ Mr. Maudling
I would not know of the Ford Company making a bad investment. Seriously, the Ford people would not invest £128 million in a bad investment. I might add that if they listened to what some hon. Members opposite say about the British motor industry they might think it a bad investment. They would not invest here at all if they listened to what was said by some hon. Members opposite. In fact, if they listened too closely, they might withdraw investments and then, indeed. I would worry.
I say that this investment by the Ford Company of America is a great vote of confidence in the future prosperity of the British motor industry, and cannot be taken as anything——
§ Mr. Walter Monslow (Barrow-in-Furness)
Then can the hon. Gentleman explain why it is that there is a great contraction in the motor industry in Detroit, as I read a few days ago?
§ Mr. Maudling
There is a great contraction in the motor industry all over the world because there is a contraction of sales, but, despite that contraction, the Ford Company thinks it worth while to put £128 million into the country. [An HON. MEMBER: "Why?"] Because of the long-term prospects of expansion.
Then there is the phrase "operational flexibility". It is quite obvious what that means. The Ford Company sees its overseas operations growing, and the progress of the Ford Company as a whole is also of great importance to the progress of the individual subsidiaries of the Ford Company. It wants to be able 903 to plan its operations, so the Ford Company as a whole has to be efficient, and that cannot but be in the interests not only of the parent company but of the members of the group.
My hon. Friend the Member for Mitcham made the point that the Ford Company might, for example, want to go in for some operations in this country which, while providing activity and employment here might, in terms of the company, be less profitable to it. But, in deciding where to carry out the expansion the company will be considerably influenced if, in Germany, it holds 99 per cent. of that Company and here holds only 54 per cent.
Surely, it is quite clear that if the Ford Company is deciding where to put its new investment, it is bound to show preference for where it owns the whole of a company, because it is then getting the whole return. But with 100 per cent. ownership here comparable with that in Germany, the disadvantage under which the United Kingdom company at present labours will be removed, and the scales will no longer be weighted in favour of the German company.
The right hon. Member for Huyton (Mr. H. Wilson) made a rather strange remark about the danger, under this arrangement, of Dagenham being sacrificed to Cologne. Surely, the opposite is the fact—it will avoid that happening. The fact is that people do not invest £128 million in order to restrict the activity of the company in which they are investing——
§ Mr. H. Wilson
Is it not a recent fact that the Daily Mail invested quite a substantial amount in the News Chronicle? Was not that with the idea of restricting the activities of the firm taken over?
§ Mr. Maudling
If I understand the motives correctly, it was with the purpose of increasing the total output of a combined operation.
The fact is that, as my right hon. and learned Friend has said, after this operation the United Kingdom Ford Company will be a bigger element in the Ford organisation than all its other overseas units put together. Surely, it is foolish to blink at that fact, and to disregard it. It must be in the interests of United Kingdom Ford that the importance of developing this company in 904 every way will bulk much larger in the minds of the people in Detroit than it would if they were owning only 54 per cent. of the equity. Surely, in this competition we can feel confident that the United Kingdom will win.
The employment that Fords can give in this country will depend upon the sales of Ford products in competitive world markets, and that will depend upon the increase in their facilities and the amount of capital they have available. I should have thought it would be crystal clear that the more American capital which comes into British Ford and the greater interest that Detroit is likely to take in British Ford the larger will be the increase in the opportunities for the British company to expand and, therefore, for increased opportunities of employment for British people.
§ Mr. Driberg
Could the right hon. Gentleman say what exactly is meant by this phrase "employment policy"? Does it mean employment level, or is the assurance about employment policy one of those assurances which he said earlier were not watertight?
§ Mr. Maudling
I said at the beginning of my speech that no company can ever give an assurance about the level of employment because it depends on ability to sell its products in a competitive market. There is a great difference between employment level and employment policy. Clearly, it means employment policy and not employment level.
The purpose of this operation is, as Fords say, to make what from the Company's point of view is a good investment, to make sure that it brings all its overseas operations into one system so that it can operate it as efficiently as possible, and so that, as a result, there can be no doubt that this means increased opportunities for the British Ford Company. This is a clear declaration, in the most practical terms of cash across the Exchanges, of the American company's confidence in the British motor industry.
If my right hon. and learned Friend were to decide to refuse this application, as some hon. Members opposite want him to do, he would be doing great damage to the Ford Company of England and certainly great damage to United States investment in this country. 905 As I said when opening my speech, American investment in this country has been important, remains important and will continue for a long time to be a very important matter in the expansion of our industry and of our exports. To take any decision other than that taken by my right hon. and learned Friend would be to damage the company, its employees and the general prospects of the British economy. I am sure that, for that reason, the House will support him in his decision.
§ Does he really think that this is a proud day for Britain?
§ Mr. William Yates (The Wrekin)
Does my right hon. Friend not agree that the Ford Motor Company has decided to put this money into Britain because it realises that all its money and interest will never be nationalised for the next fifteen years?
§ Question put, That this House do now adjourn:—
§ The House divided: Ayes 160, Noes 256.907
|Division No. 5.]||AYES||[9.59 p.m.|
|Ainsley, William||Herbison, Miss Margaret||Pavitt, Laurence|
|Albu, Austen||Hewitson, Capt. M.||Peart, Frederick|
|Allaun, Frank (Salford, E.)||Hill, J. (Midlothian)||Pentland, Norman|
|Awbery, Stan||Hilton, A. V.||Prentice, R. E.|
|Bacon, Miss Alice||Holman, Peroy||Price, J. T. (Westhoughton)|
|Baird, John||Houghton, Douglas||Probert, Arthur|
|Baxter, William (Stirlingshire, W.)||Hoy, James H.||Pursey, Cmdr. Harry|
|Beaney, Alan||Hughes, Emrys (S. Ayrshire)||Randall, Harry|
|Blackburn, F.||Hughes, Hector (Aberdeen, N.)||Rankin, John|
|Bowden, Herbert W. (Leics, S. W.)||Irvine, A. J. (Edge Hill)||Redhead, E. C.|
|Bowles, Frank||Irving, Sydney (Dartford)||Reid, William|
|Boyden, James||Jay, Rt. Hon. Douglas||Reynolds, G. W.|
|Brockway, A. Fenner||Jeger, George||Roberts, Albert (Normanton)|
|Brown, Rt. Hon. George (Betper)||Johnson, Carol (Lewisham, S.)||Roberts, Goronwy (Caernarvon)|
|Butler, Herbert (Hackney, C.)||Johnston, Douglas (Paisley)||Robinson, Kenneth (St. Pancras, N.)|
|Butler, Mrs. Joyce (Wood Green)||Jones, Rt. Hn. A. Creech (Wakefield)||Ross, William|
|Callaghan, James||Jones, J. Idwal (Wrexham)||Shinwell, Rt. Hon. E.|
|Castle, Mrs. Barbara||Jones, T. W. (Merioneth)||Silverman, Julius (Aston)|
|Cliffe, Michael||Kelley, Richard||Silverman, Sydney (Nelson)|
|Collick, Percy||Kenyon, Clifford||Skeffington, Arthur|
|Corbet, Mrs. Freda||Key, Rt. Hon. C. W.||Small, William|
|Craddock, George (Bradford, S.)||King, Dr. Horaoe||Smith, Ellis (Stoke, S.)|
|Cronin, John||Lawson, George||Snow, Julian|
|Crossman, R. H. S.||Ledger, Ron||Sorensen, R. W.|
|Cullen, Mrs. Alice||Lee, Frederick (Newton)||Soskice, Rt. Hon. Sir Frank|
|Darling, George||Lee, Miss Jennie (Cannock)||Spriggs, Leslie|
|Davies, G. Elfed (Rhondda, E.)||Lewis, Arthur (West Ham, N.)||Stonehouse, John|
|Davies, Ifor (Gower)||Lipton, Marcus||Strauss, Rt. Hn. G. R. (Vauxhall)|
|Deer, George||Loughlin, Charles||Summerskill, Dr. Rt. Hon. Edith|
|de Freitas, Geoffrey||Mabon, Dr. J. Dickson||Swain, Thomas|
|Diamond, John||MacColl, James||Sylvester, George|
|Dodds, Norman||McKay, John (Wallsend)||Symonds, J. B.|
|Donnelly, Desmond||Mackie, John||Taylor, Bernard (Mansfield)|
|Driberg, Tom||McLeavy, Frank||Taylor, John (West Lothian)|
|Ede, Rt. Hon. Chuter||Mallalieu, J. P. W. (Huddersfield, E.)||Thomson, G. M. (Dundee, E.)|
|Edelman, Maurice||Manuel, A. C.|
|Edwards, Robert (Bilston)||Marquand, Rt. Hon. H. A.||Tomney, Frank|
|Edwards, Walter (Stepney)||Marsh, Richard||Ungoed-Thomas, Sir Lynn|
|Finch, Harold||Mason, Roy||Wainwright, Edwin|
|Fletcher, Eric||Millan, Bruce||Warbey, William|
|Fraser, Thomas (Hamilton)||Monslow, Walter||Weitzman, David|
|Gaitskell, Rt. Hon. Hugh||Moody, A. S.||Wells, Percy (Faversham)|
|Ginsburg, David||Morris, John||Wells, William (Walsall, N.)|
|Gooch, E. G.||Moyle, Arthur||Whitlock, William|
|Gordon Walker, Rt. Hon. P. C.||Mulley, Frederick||Wigg, George|
|Greenwood, Anthony||Neal, Harold||Wilkins, W. A.|
|Grey, Charles||Noel-Baker, Francis (Swindon)||Willey, Frederick|
|Griffiths, David (Rother Valley)||Noel-Baker, Rt. Hn. Phillp (Derby, S.)||Williams, W. R. (Openshaw)|
|Griffiths, Rt. Hon. James (Llanelly)||Oliver, G. H.||Wilson, Rt. Hon. Harold (Huyton)|
|Griffiths, W. (Exchange)||Oram, A. E.||Woof, Robert|
|Hall, Rt. Hon. Glenvil (Colne Valley)||Oswald, Thomas||Yates, Victor (Ladywood)|
|Hamilton, William (West Fife)||Paget, R. T.|
|Hannan, William||Pannell, Charles (Leeds, W.)||TELLERS FOR THE AYES:|
|Hayman, F. H.||Pargiter, G. A.||Mr. Howell and Dr. Broughton.|
|Healey, Denis||Parker, John (Dagenham)|
|Aitken, W. T.||Atkins, Humphrey||Barter, John|
|Allason, James||Balniel, Lord||Baxter, Sir Beverley (Southgate)|
|Alport, Rt. Hon. C. J. M.||Barber, Anthony||Beamish, Col. Tufton|
|Arbuthnot, John||Barlow, Sir John||Bell, Ronald (S. Bucks.)|
|Bennett, F. M. (Torquay)||Grimond, J.||Neave, Airey|
|Bennett, Dr. Reginald (Gos & Fhm)||Grosvenor, Lt.-Col. R. G.||Nicholson, Sir Godfrey|
|Berkeley, Humphry||Gurden, Harold||Noble, Michael|
|Bevins, Rt. Hon. Reginald (Toxteth)||Hall, John (Wycombe)||Oakshott, Sir Hendrie|
|Bidgood, John C.||Hamilton, Michael (Wellingborough)||Orr, Capt. L. P. S.|
|Biggs-Davison, John||Hare, Rt. Hon. John||Orr-Ewing, C. Ian|
|Birch, Rt. Hon. Nigel||Harris, Reader (Heston)||Page, John (Harrow, West)|
|Bishop, F. P.||Harrison, Brian (Maldon)||Partridge, E.|
|Black, Sir Cyril||Harrison, Col. J. H. (Eye)||Pearson, Frank (Clitheroe)|
|Bossom, Clive||Harvey, Sir Arthur Vere (Maoolesf'd)||Percival, Ian|
|Bourne-Arton, A.||Harvey, John (Walthamstow, E.)||Pitman, I. J.|
|Bowen, Roderic (Cardigan)||Hay, John||Pitt, Miss Edith|
|Box, Donald||Heald, Rt. Hon. Sir Lionel||Pott, Percivall|
|Boyd-Carpenter, Rt. Hon. John||Heath, Rt. Hon. Edward||Powell, Rt. Hon. J. Enoch|
|Boyle, Sir Edward||Henderson, John (Cathcart)||Price, H. A. (Lewisham, W.)|
|Braine, Bernard||Henderson-Stewart, Sir James||Proudfoot, Wilfred|
|Bromley-Davenport, Lt.-Col. W. H.||Hendry, Forbes||Ramsden, James|
|Brooman-White, R.||Hiley, Joseph||Rawlinson, Peter|
|Browne, Percy (Torrington)||Hill, J. E. B. (S. Norfolk)||Redmayne, Rt. Hon. Martin|
|Bryan, Paul||Hirst, Geoffrey||Rees, Hugh|
|Bullard, Denys||Hobson, John||Rees-Davies, W. R.|
|Bullus, Wing Commander Eric||Holland, Philip||Renton, David|
|Burden, F. A.||Hollingworth, John||Ridley, Hon. Nicholas|
|Butcher, Sir Herbert||Holt, Arthur||Ridsdale, Julian|
|Butler, Rt. Hn. R. A. (Saffron Walden)||Hopkins, Alan||Roberts, Sir Peter (Heeley)|
|Campbell, Sir David (Belfast, S.)||Hornby, R. P.||Robinson, Sir Roland (Blackpool, S.)|
|Campbell, Gordon (Moray & Nairn)||Hornsby-Smith, Rt. Hon. Patricia||Roots, William|
|Carr, Compton (Barons Court)||Howard, Gerald (Cambridgeshire)||Ropner, Col. Sir Leonard|
|Carr, Robert (Mitcham)||Howard, Hon. G. R. (St. Ives)||Royle, Anthony (Richmond, Surrey)|
|Cary, Sir Robert||Hughes Hallett, Vice-Admiral John||Russell, Ronald|
|Channon, H. P. G.||Hughes-Young, Michael||Scott-Hopkins, James|
|Chataway, Christopher||Hulbert, Sir Norman||Seymour, Leslie|
|Chichester-Clark, R.||Hurd, Sir Anthony||Sharples, Richard|
|Clark, William (Nottingham, S.)||Iremonger, T. L.||Shaw, M.|
|Clarke, Brig. Terence (Portsmth, W.)||Irvine, Bryant Godman (Rye)||Shepherd, William|
|Cleaver, Leonard||Jackson, John||Simon, Sir Jocelyn|
|Cole, Norman||Jenkins, Robert (Dulwich)||Skeet, T. H. H.|
|Collard, Richard||Johnson, Dr. Donald (Carlisle)||Smyth, Brig. Sir John (Norwood)|
|Cooke, Robert||Johnson, Eric (Blackley)||Soames, Rt. Hon. Christopher|
|Cooper, A. E.||Kaberry, Sir Donald||Spearman, Sir Alexander|
|Cooper-Key, Sir Neill||Kerans, Cdr. J. S.||Stanley, Hon. Richard|
|Cordeaux, Lt.-Col. J. K.||Kimball, Marous||Stevens, Geoffrey|
|Cordle, John||Kirk, Peter||Steward, Harold (Stockport, S.)|
|Corfield, F. V.||Kitson, Timothy||Stodart, J. A.|
|Costain, A. P.||Lagden, Godfrey|
|Coulson, J. M.||Lancaster, Col. C. G.||Stoddart-Scott, Col. Sir Malcolm|
|Courtney, Cdr. Athony||Leather, E. H. C.||Storey, Sir Samuel|
|Craddock, Sir Beresford||Leavey, J. A.||Studholme, Sir Henry|
|Critchley, Julian||Leburn, Gilmour||Summers, Sir Spencer (Aylesbury)|
|Crosthwaite-Eyre, Col. O. E.||Legge-Bourke, Sir Harry||Sumner, Donald (Orpington)|
|Cunningham, Knox||Lewis, Kenneth (Rutland)||Tapsell, Peter|
|Curran, Charles||Lilley, F. J. P.||Taylor, Sir Charles (Eastbourne)|
|Currie, G. B. H.||Lindsay, Martin||Temple, John M.|
|Dalkeith, Earl of||Linstead, Sir Hugh||Thatcher, Mrs. Margart|
|d'Avigdor-Goldsmid, Sir Henry||Lloyd, Rt. Hn. Geoffrey (Sut'n C'dfield)||Thomas, Leslie (Canterbury)|
|Deedes, W. F.||Lloyd, Rt. Hon. Selwyn (Wirral)||Thomas, Peter (Conway)|
|de Ferranti, Basil||Longbottom, Charles||Thompson, Kenneth (Walton)|
|Digby, Simon Wingfield||Loveys, Walter H.||Thornton-Kemsley, Sir Colin|
|Doughty, Charles||Low, Rt. Hon. Sir Toby||Turner, Colin|
|Drayson, G. B.||Lucas-Tooth, Sir Hugh||Turton, Rt. Hon. R. H.|
|du Cann, Edward||McAdden, Stephen||Van Straubenzee, W. R.|
|Duncan, Sir James||MacArthur, Ian||Vane, W. M. F.|
|Eden, John||McLaren, Martin||Vaughan-Morgan, Sir John|
|Emery, Peter||Macleod, Rt. Hn. Iain (Enfield, W.)||Wade, Donald|
|Emmet, Hon. Mrs. Evelyn||McMaster, Stanley R.||Walker-Smith, Rt. Hon. Derek|
|Errington, Sir Eric||Macpherson, Niall (Dumfries)||Wall, Patrick|
|Fell, Anthony||Maddan, Martin||Ward, Dame Irene (Tynemouth)|
|Fisher, Nigel||Maginnis, John E.||Watkinson, Rt. Hon. Harold|
|Fraser, Hn. Hugh (Stafford & Stone)||Maitland, Sir John||Watts, James|
|Fraser, Ian (Plymouth, Sutton)||Manningham-Buller, Rt. Hn. Sir R.||Wells, John (Maidstone)|
|Freeth, Denzil||Markham, Major Sir Frank||Whitelaw, William|
|Gammans, Lady||Marshall, Douglas||Wilson, Geoffrey (Truro)|
|Gardner, Edward||Marten, Neil||Wolrige-Gordon, Patrick|
|George, J. C. (Pollok)||Mathew, Robert (Honiton)||Wood, Rt. Hon. Richard|
|Gibson-Watt, David||Matthews, Gordon (Meriden)||Woodhouse, C. M.|
|Glover, Sir Douglas||Maudling, Rt. Hon. Reginald||Woodnutt, Mark|
|Glyn, Sir Richard (Dorset, N.)||Mawby, Ray||Woollam, John|
|Goodhart, Philip||Mills, Stratton||Worsley, Marcus|
|Goodhew, Victor||Molson, Rt. Hon. Hugh||Yates, William (The Wrekin)|
|Gough, Frederick||Montgomery, Fergus|
|Grant-Ferris, Wg Cdr. R. (Nantwich)||Morgan, William||TELLERS FOR THE NOES:|
|Green, Alan||Mott-Radclyffe, Sir Charles||Mr. Edward Wakefield and|
|Gresham Cooke, R.||Nabarro, Gerald||Mr. Finlay.|