An Act to provide for the establishment of two bodies corporate to be called British Aerospace and British Shipbuilders, and to make provision with respect to their functions; to provide for the vesting in British Aerospace of the securities of certain companies engaged in manufacturing aircraft and guided weapons and the vesting in British Shipbuilders of the securities of certain companies engaged in shipbuilding and allied industries; to make provision for the vesting in those companies of certain property, rights and liabilities; to provide for payments to British Aerospace and its wholly owned subsidiaries, for the purpose of promoting the design, development and production of civil aircraft; and for connected purposes.
The nationalisation was announced in July 1974 but the compensation terms were not announced until March 1975.[3] The bill had its first reading on 30 April 1975 but ran out of parliamentary time in that session.[4] Subsequent bills had a stormy passage through Parliament. Ship repairing was originally included in its scope but removed because of the findings of examiners that the bill was hybrid. The bill was rejected by the House of Lords on three separate occasions. Michael Heseltine used the mace in the House of Commons to show his outrage at the Labour Party winning the final vote due in part to its failure to comply with the traditional requirements of a parliamentary pair. It was possible that the provisions of the Parliament Acts 1911 and 1949 could have been employed to enact it, but the legislation was approved following concessions by the government, including deletion of the twelve ship repairing companies.[citation needed]
List of assets subsumed by British Aerospace
The assets of the following companies vested in British Aerospace on 29 April 1977 (ss.19(1) and 56(1)/ Sch.1):[5]
Section 35 of the act provided for compensation to the original owners. Compensation was to be by government bonds against a valuation of the shares over a relevant period of six months up to the Labour Party's election on 28 February 1974. For companies listed on the London Stock Exchange, this was the average quoted price over the relevant period. For non-listed shares, the government would negotiate with a shareholders' representative to establish a hypothetical market valuation. If no agreement was reached, the shareholders had recourse to arbitration (ss.36–41).[3] However, section 39 controversially included a provision to make deductions from this base value if a company had dissipated its assets by declaring dividends in anticipation of nationalisation, or by other means.[7]
Aircraft and Shipbuilding Industries Arbitration Tribunal
Section 42 of the act established the Aircraft and Shipbuilding Industries Arbitration Tribunal to hear appeals over valuation but not challenges to the fairness of the statutory formula. The tribunal was governed by rules made respectively by the Lord Advocate for Scotland and the Lord Chancellor for the remainder of the UK.[8][9] There was a right of appeal to the Court of Session in Scotland and to the Court of Appeal in the remainder of the UK (Sch.7), with a possible further appeal to the House of Lords. There was also provision for judicial review of the original compensation offer.[10]
^Council on Tribunals (2006). "Annual Report 2005/ 2006"(PDF). Council on Tribunals archive site. Ministry of Justice. pp. p.70. Archived from the original(PDF) on 1 December 2008. Retrieved 22 March 2008.
Norton, P. M. (1991). "A law of the future or a law of the past? Modern tribunals and the International law of expropriation". American Journal of International Law. 85 (3): 474–505. doi:10.2307/2203108. JSTOR2203108. S2CID144989903.
Lithgow and Others, in Lauterpacht, E. (1987) International Law Reports, London: Cambridge University Press, ISBN0-949009-08-3, pp438–536