British Airways (Hansard, 8 November 1982)

§ 4. Mr. Robert Atkins
asked the Minister for Trade what further discussions he has had with the chairman of British Airways concerning the injection of private capital into the company.

§ The Under-Secretary of State for Trade (Mr. Ian Sproat)
I am in regular touch with the chairman of British Airways about its sale to the private sector.

§ Mr. Atkins
Is my hon. Friend aware that I and many Conservative Members share his determined commitment to privatise British Airways as soon as is practical? Nevertheless, some Conservative Members are concerned to ensure that those free enterprise airlines which have kept their houses in order during a difficult time should not suffer or be placed at a disadvantage by the effects of such privatisation as he and we think necessary.

§ Mr. Sproat
I share my hon. Friend's desire that the private sector should be put at no competitive disadvantage by our action with regard to British Airways. Therefore, I have decided that, over the coming weeks and months, I shall give every opportunity to the managements of the private sector airlines to tell me what they feel about the matter so that we can take their views into full account.

§ Mr. McNally
As the Minister has released the taxpayer from the burden of operating Concorde, will he make it clear to the chairman and any would-be investors that public assets associated with Concorde's operation will be transferred to British Airways on a strictly commercial basis?

§ Mr. Sproat
The financing of Concorde is a matter for my hon. Friend the Minister of State, Department of Industry. He will shortly be making a statement on that matter and the hon. Gentleman can then put his question to him.

§ Mr. Foulkes
Does the Minister realise that he and his place man, Sir John King, are causing grave damage to British Airways by massaging the accounts and pushing the airline towards privatisation against the advice of all the professionals in the airline industry? Will he desist from that practice and stop trying to add another scalp to his belt in time for the general election?

§ Mr. Sproat
It would be hard to state the opposite of the truth with more exactitude. If the hon. Gentleman will wait until British Airways publish their accounts for the first six months of this financial year, he will see that they are in true profit of about £100 million after the payment of taxation and the repayment of debt interest. That is an almost miraculous turn round, and I look for the Opposition's unqualified approval of that splendid achievement.

§ Mr. McCrindle
Will my hon. Friend confirm that any restructuring of the capital base of British Airways which the Government may have in mind would require legislation from the House? Are we to draw any conclusion from the absence of any such reference in the Queen's Speech?

§ Mr. Sproat
No, I would not draw any conclusions from what the Queen's Speech does not say on this matter. The House has already given us the approval that we need to turn British Airways into a private limited company. We are currently considering the capital reconstruction proposals which British Airways have put to us.

§ Mr. John Smith
Will the Minister tell us what public interest would benefit by the writing off of about £700 million of British Airways' liabilities prior to selling the assets on the private market? Is that not a total loss for the taxpayer and a gain only for the speculators and investors?

§ Mr. Sproat
We have not mentioned any actual figures. We are merely considering the proposals for capital reconstruction which British Airways have put to us.
I am certain that privatisation—when it comes, as come it will—will prove to be of the greatest benefit not only to British Airways but to British Airways staff—who will have a good, prosperous industry which gives them job security—to the consumer and the taxpayer.