The Aircraft and Shipbuilding Industries Act 1977 is an Act of the Parliament of the United Kingdom that nationalised large parts of the UK aerospace and shipbuilding industries and established two corporations, British Aerospace and British Shipbuilders. Nationalisation of the two industries had been a manifesto commitment of the Labour Party in the February 1974 United Kingdom general election. It met immediate opposition from the industries, including from Labour politician and Vickers chairman Lord Robens. The nationalisation was announced in July 1974 but the compensation terms were not announced until March 1975. The bill had its first reading on 30 April 1975 but ran out of parliamentary time in that session. 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. 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.
List of assets subsumed by British Aerospace
The assets of the following companies vested in British Aerospace on 29 April 1977 and 56:
British Aircraft Corporation
Hawker Siddeley Aviation
Hawker Siddeley Dynamics
Scottish Aviation
List of assets subsumed by British Shipbuilders
The assets of the following companies vested in British Shipbuilders on 1 September 1977 and 56:
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 an hypothetical market valuation. If no agreement was reached, the shareholders had recourse to arbitration. 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.
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.Application 9482/81 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, with a possible further appeal to the House of Lords. There was also provision for judicial review of the original compensation offer. Having been described, in 2006, by the Council on Tribunals as "rarely convened/moribund", the tribunal was abolished in March 2013 under the UK Government's public bodies reforms.
