HC Deb 12 May 1939 vol 347 cc865-7
Mr. Attlee

(by Private Notice) asked the Secretary of State for Air whether he is now in a position to state the result of the negotiations for the acquisition of the undertakings of Imperial Airways and British Airways by the proposed public Corporation envisaged in his announcement of nth November last?

The Secretary of State for Air (Sir Kingsley Wood)

Yes Sir. Subject to the approval of Parliament, offers have been made as follow to the companies concerned:

The Government are prepared, as consideration of taking over by the proposed Corporation of the assets and liabilities of Imperial Airways as at 31st March, 1938, to approve the payment to the company of such sum as will permit a payment to shareholders of 32s. 9d. for each ordinary share of £1. This sum will amount to £2,659,086. Interest will be allowed on the purchase price at the rate of 4 per cent. per annum, less Income Tax, as from 31st March, 1938, to the date of payment.

In regard to British Airways, the Government are prepared, as consideration for the taking over by the Corporation of the assets and liabilities of the company as at 30th September, 1938, to approve the payment to the Company of £262,500. Advances which had been made by the principal shareholders (amounting to £311,000) will also be repaid and interest will be allowed on the purchase price and on such advances at 4 per cent. per annum, less Income Tax, from 30th September, 1938, to the date of payment. The shares which British Airways hold in two internal airline companies are not comprised in the sale. It is estimated that the holders of British Airways' shares will receive a total amount of approximately 15s. 9d. for each £1 share.

The boards of the two companies are recommending these offers to the shareholders for acceptance.

Mr. Shinwell

May I ask whether the payment of 32s. 9d. for a £1 share is the Government's conception of the conscription of wealth?

Sir K. Wood

That is a general question which, I feel, hardly appertains to this particular matter.

Mr. Shinwell

Are not these terms exceedingly generous, particularly at this time?

Sir K. Wood

No, Sir. The question of the price to be paid has been the subject of very careful study and close consultation with the Treasury, and we think this is a fair and reasonable offer. We shall have to wait and see whether the shareholders accept it.

Mr. A. V. Alexander

Is it not unusual in such agreements to put up the capital price to be paid, in view of the subsidies paid by the Government in the past?

Mr. Boothby

May I ask when the amalgamation between the two companies will be completed?

Sir K. Wood

That will depend upon the two parties. I shall have to await now the opinion of the shareholders as to whether they are prepared to accept this offer. Then I shall introduce a Bill into Parliament at an early date.

Mr. Mander

What was the last quoted value of British Airways shares?

Mr. Kirkwood

Does not the Minister think this is too high a price and too great a concession that the Government have given to this firm, considering that the engineers have got only 2s. a week advance at the moment?

Sir K. Wood

No, Sir. The Government have very carefully examined this matter, and I think it is a reasonable and fair offer.

Mr. Kirkwood

Does the right hon. Gentleman mean that, when all they have got is only equal to a halfpenny an hour for the engineers. Is that generosity?

Mr. Paling

In view of the Government's generosity to these shareholders, will they be equally generous next week to the conscripts?

Sir K. Wood

I cannot undertake to answer that, but I would ask the hon. Member not to come to any hasty conclusions. I would ask hon. Members carefully to examine the matter, and of course, I shall in due course be prepared to defend this offer if it is accepted.