§ 50 Clause 31, page 42, line 39, leave out from "reduced" to end of line 41 and insert "in accordance with section 38(7A) below".
§ The Commons disagreed to this Amendment for the following Reason:
§ 55 Because they might involve charges on public funds, and the Commons do not offer any further Reason trusting that this Reason may he deemed sufficient.
§ Lord MELCHETT
My Lords, I beg to move that the House doth not insist on their Amendment No. 50, to which the Commons have disagreed for the Reason numbered 55. In doing so, I think that it might be for the convenience of the House if I speak also to Amendments Nos. 51, 52 and 53, or at least address my remarks to those Amendments, all of which were disagreed to for the Reason numbered 55. All of these Amendments are concerned with the amount of compensation payable under the Bill. Amendments Nos. 50, 52 and 54 deal with adjustments to the basic compensation terms laid down in the Bill while Amendments Nos. 51 and 53 represent a fundamental rewriting of the compensation provisions.
The Commons have given as their Reason for disagreeing with all these Amendments that they might involve charges on public funds. We have already on previous occasions discussed at considerable length all the Amendments in this group. Amendments Nos. 50 and 54 are concerned with the price at which assets of the vesting companies may be hived off before vesting day. They propose that the price of assets hived off should, in effect, represent the contribution of these assets to the value of the company's securities at the reference period. Under the Bill as drafted the question of price has been left to the discretion of the Secretary of State. In all cases where he has exercised this discretion already the Secretary of State has specified that the price shall be the open market price at the time of disposal. This has been accepted by the companies in virtually every case. There is complete justice in this approach. We have given assurance to the companies, and in certain cases the Bill actually specifies this, that 1212 any investment into the vesting companies after the reference period will be repaid in full. It is therefore entirely fair that any disposals of assets after the reference period should be treated on the same basis. To do otherwise would be to destroy the symmetry of the provisions of the Bill, to the benefit of shareholders and to the detriment of the Corporations and the taxpayers.
Amendment No. 52 is concerned with severance payments. As has been explained in your Lordships'House on three previous occasions, we do not believe that such a provision is necessary. The Bill already contains provisions in Clause 20 which have the effect of substantially reducing, if not eliminating, the effects of disruption which might be caused by the vesting of one subsidiary of a group. Clause 20 is new in this Bill. There is no precedent for it in previous nationalisation measures and its effect is to eliminate the need for a separate severance provision.
Amendments Nos. 51 and 53 both seek to effect a fundamental change in the compensation provisions. They are completely unacceptable to the Government. They seek to destroy the carefully worked out objective basis of valuation laid down in the Bill and replace it with terms which are at best ill-defined and at worst entirely open ended. Amendment No. 51 provides for the existing terms of the Bill to be ignored and the valuation to be carried out on any basis which the arbitration tribunal thinks fit. Amendment No. 53 is at the least unnecessary and if, as we believe, it seeks to overthrow the basis of compensation in the Bill, it is both unacceptable and inconsistent with the existing words. For those reasons I hope your Lordships will not insist on this series of Amendments.
§ Moved, That the House doth not insist on the said Amendment (No. 50), to which the Commons have disagreed for the Reason numbered 55.