HC Deb 05 July 1971 vol 820 cc906-7
14. Mr. Rost

asked the Secretary of State for Trade and Industry when he expects to be in a position to make a further statement on the price to be paid for the acquisition of Rolls-Royce Limited assets by Rolls-Royce (1971) Limited, and the basis upon which such a price has been calculated.

Mr. Corfield

The determination of this price is a matter of considerable complexity, and is bound to take a substantial time. I cannot at the moment forecast when it will be possible to say anything further, but the parties concerned, of course, recognise the need for an early settlement.

Mr. Rost

Does the Minister agree that the most valuable asset of Rolls-Royce is its goodwill, which includes the vast expenditure on research and development which absorbed the bulk of the capital which the company lost over the years, but without which the new company cannot make the profits which it appears to be making now? Will he confirm that this will be taken into account when the price is finally fixed?

Mr. Corfield

An element of goodwill comes into this, but it is essential that we get the profit forecast accurate. By the time we have multiplied it by the number of years purchase, errors can turn out to be considerable sums.

Mr. Whitehead

We have the word of the receiver that the purchase price for Rolls-Royce assets will very much depend on the final settlement of the RB 211 deal. Will the right hon. Gentleman tell the House what representations have been received from the United States Government about the continuation of British guarantees of support after 8th August? If he cannot do so, will he tell the House whether we shall have some statement on this matter before the recess?

Mr. Corfield

I am not aware that the receiver has made the valuation in any way dependent on the continuation of the RB 211, for fairly obvious valuation reasons. I shall ensure that before the recess the House is kept up to date with the situation as it then stands.