HC Deb 06 December 1979 vol 975 cc589-90
1. Mrs. Dunwoody

asked the Chancellor of the Exchequer what was the cost of issuing the recent sale of British Petroleum Ltd. shares; why it was necessary to have the new issue underwritten by private commercial banks and at what cost paid out of public funds; and what part was played by the commercial banks in the administration of the issue.

The Chief Secretary to the Treasury (Mr. John Biffen)

The estimate laid before the House last week made clear that the cost of the recent sale of BP shares, excluding tax, was about £7½ million. As in 1977, the sale was underwritten because of the importance of getting the receipts in the financial year. The cost of underwriting was about £4 million. Six merchant banks underwrote the sale and arranged the sub-underwriting: a number of other banks assisted in the distribution of prospectuses and application forms and acted as receiving banks.

Mrs. Dunwoody

Is not that a disgraceful situation? Does not the right hon. Gentleman really mean that for a totally doctrinaire reason he is prepared, when it suits him, to give away taxpayers' assets and use private banks in order to get the stock underwritten?

Mr. Biffen

The procedures followed were almost identical to those followed by the previous Government.

Mr. Rost

Does my right hon. Friend agree that the alternative to having the stock underwritten would have been to have offered it at a lower price, and that that would have resulted in less than £7½ million coming to the revenue out of the issue?

Mr. Biffen

Absolutely—and the degree of oversubscription shows how right the Government were to employ underwriters.

Mr. Frank Allaun

May I remind the Minister that the TUC and the Labour Party have overwhelmingly agreed that the next Labour Government will re-nationalise without compensation. Is he aware that speculators who burn their fingers have only themselves to blame?

Mr. Biffen

Expropriation is made no more dignified, even when endorsed by the Labour Party and the TUC.