§ The Chancellor of the Exchequer (Mr. Nigel Lawson)
On a point of order, Mr. Speaker. Having listened attentively to exchanges earlier today, it appears that it would be for the convenience of the House if I were to read the written answer given to my hon. Friend the Member for Keighley (Mr. Waller) 15 minutes ago. My hon. Friend's question, as on the Order Paper, reads as follows:To ask Mr. Chancellor of the Exchequer, what proposals he has for achieving the expanded programme of asset sales in 1983–84 which he announced on 7 July, Official Report, column 418.My answer reads as follows:I expect to raise up to £500 million of the asset sales which I am seeking before the end of the 1983–84 financial year from an offer for sale of a further tranche of BP shares.Parliamentary approval for expenditure in connection with such a sale of BP shares will be sought in a new Vote which will be introduced in a Supplementary Estimate. Pending that approval, any necessary expenditure will be met by repayable advances from the Contingencies Fund'.
§ Mr. John Smith (Monklands, East)
The House will have noticed that the Chancellor of the Exchequer spoke of the convenience of the House but failed to talk about courtesy to the House. Would it not have been better for him to have made an oral statement, without his having to be dragged to the Dispatch Box after a parliamentary row to give information that Parliament is entitled to receive?
Will the right hon. Gentleman undertake not to embark on any more sales of public assets without honestly declaring them to the House so that he can be questioned about the principle of the sales and the technique to be adopted? When is the Supplementary Estimate to be introduced? Is it to be before or after the recess?
Will the right hon. Gentleman give an undertaking that the forced sales of the Wytch farm oilfield and British Gas Corporation assets in the North sea will not be proceeded with until there has been a proper debate in the House about the sales? Bearing in mind his lamentable record in the sale of shares in Amersham International and Britoil, what technique will the Chancellor adopt for the sale of the BP shares to avoid some of the disasters for which he was previously responsible?
798 What justification is there for a national policy that insists that, whenever a public enterprise makes a profit, it has to be sold and the losses have to be borne by the taxpayer?
§ Mr. Lawson
The only matter raised by the right hon. and learned Gentleman that is germane to the exchanges that occurred earlier is that of courtesy to the House, and of that I am sensible.
I can inform the right hon. and learned Gentleman of the precedents in these matters, because there have been a number of previous sales of BP shares. This is not the first by any means, as the right hon. Member for Plymouth, Devonport (Dr. Owen), who was a member of the Government who indulged in such sales, is well aware.
In an oral statement on 7 July I announced that the programme of asset sales during the current year would increase by a further £500 million, and the further details have been filled in by this written answer.
The previous sale of BP shares was in 1981 when the Government and the Bank of England sold the rights that they had as a result of the rights issue. That realised a substantial sum. That was announced to the House in a written answer on 18 June and was accepted by the House.
In 1979 my right hon. and learned Friend the then Chancellor of the Exchequer announced in his Budget statement that there would be a programme of asset sales, and he merely mentioned that BP would be an element in that programme. Nothing was said about the timing. In fact, in early October 1979 the details of the offer were announced in a press notice because the House was not sitting.
The sale previous to that was made by the Labour Government. On that occasion, the then Chancellor made a statement to the House in connection with an agreement with the International Monetary Fund—that does not apply in this case— referring to the intention to sell some BP shares. No details whatever were given. The operation occurred in June 1977. Again, there was an offer for sale and there was a written answer on that day.
§ Mr. Gary Waller (Keighley)
I thank my right hon. Friend for the written reply, which I have now also received orally. It was an extremely good one. In view of what he has just said and as what the Government are now doing is clearly no grand precedent but merely a repetition of what the Labour Government did, was not what we saw today during energy questions and subsequently one hell of a wild goose chase?
§ Dr. David Owen (Plymouth, Devonport)
Is the Chancellor aware that the 1981 operation was not a precedent and that the real precedents were in 1979 and 1977? On both those occasions, the Chancellor announced to the House an intention specifically to sell BP shares. That did not take place on this occasion. That is why the House objected. Quite apart from the wisdom of the Government's selling or proposing to sell about £6 billion in assets since they have been in office and the system of stampede financing that that exemplifies, does the right hon. Gentleman recall the specific promise made by the then Chancellor on 31 October 1979? Elaborating on the terms of the sale, the then Chancellor said:The prospectus will record that the Government do not intend to sell any more of their present holding in the company, 799 nor is there any intention to sell, other than to the Government, any of the shares in the company representing the holding acquired by the Bank of England from the Burmah Oil Company Limited and one of its subsidiaries, for the forseeable future."—[Official Report, 31 October 1979; Vol. 972. c. 523–24.]What does the right hon. Gentleman say to the further assurance given by the then Chancellor on 12 March 1980? When asked for reaffirmation of the undertaking given in the previous year's prospectus about the Government's intention regarding further sales, the then Chancellor said:I can reaffirm that there is no intention in the foreseeable future of selling any more of the Government's shareholding". —[Official Report, 12 March 1980; Vol. 980, c. 1420–21.]If the foreseeable future is from March 1980 until now, the right hon. Gentleman has some explaining to do. Has the financial situation so deteriorated since the election that the Government have to go back on the prospectus and the commitment that they made in it?
§ Mr. Lawson
I assure the right hon. Gentleman that what I have said is fully consistent with the undertakings given in the prospectus and elsewhere. If he doubts my word, he can consult any reputable lawyer or legal expert in these matters.
As for the foreseeable future, I wonder whether the right hon. Gentleman could have foreseen in 1979 or 1980 that today he would be a member not of the Labour party but of a totally different party.
§ Mr. Terence Higgins (Worthing)
Will my right hon. Friend spell out why a Supplementary Estimate will be needed and confirm that it will not be presented until the autumn?
§ Mr. John Evans (St. Helens, North)
I now unreservedly accept that the Secretary of State for Energy answered my question absolutely correctly, if somewhat tersely, and I withdraw any criticism of him. In future, however, before the Chancellor gets friendly Back Benchers to table planted questions, will he check the Order Paper to ensure that he will not embarrass any of his Cabinet colleagues? Will he also tell the House whether the suggested sale of Britoil has been circumvented in the Cabinet by the new Secretary of State for Energy persuading his colleagues that such a move would be folly in the extreme?
§ Mr. Lawson
Sales of Britoil shares, like sales of BP shares, are not matters for my right hon. Friend the Secretary of State for Energy. In both cases, the shares are held by the Treasury and are the responsibility of the Chancellor. I remind the hon. Gentleman that the announcement refers specifically to sales of BP shares. I am grateful for the hon. Gentleman's remarks about my right hon. Friend the Secretary of State for Energy having given a perfectly correct answer. I might add that my right hon. Friend was not embarrassed in the slightest.
§ Viscount Cranborne (Dorset, South)
Does my right hon. Friend agree that there is no strategic reason for hanging on to BP shares? If so, why did not the Government get rid of them long ago?
§ Mr. Lawson
The Government are selling shares where there is no national interest reason for the Government's holding them. They are sold as and when market conditions appear appropriate and in quantities which appear appropriate.
§ Mr. Tam Dalyell (Linlithgow)
Does the Chancellor recall that in his previous incarnation as Secretary of State for Energy he had plenty to say to my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), myself and others in the Committee on the Oil and Gas (Enterprise) Bill about how important it was to get right the timing on sales of shares. If the timing does not look favourable and the omens are not good, will the sale still go ahead?
§ Mr. Lawson
That is a hypothetical question. As the hon. Gentleman referred to his earlier remarks about the sale of Britoil shares, he may be interested to know that the current price of those shares is within 3p or about 1.5 per cent. of the issue price.
§ Mr. Tim Eggar (Enfield, North)
Will my right hon. Friend confirm that the decision to raise money through the sale of BP shares in no way excludes decisions by himself or other Ministers to raise money from the sale of other majority or minority stakes held by the Government?
§ Mr. Lawson
The Government have all these matters under constant review. I repeat that my answer today referred specifically to BP shares. I recommend my hon. Friend to read it when he has the chance.
§ Mr. Anthony Beaumont-Dark (Birmingham, Selly Oak)
Does my right hon. Friend agree that it is spurious to argue that Governments need to own great national assets for the people because taxation and legislation allow them a certain amount of control and substantial revenue in any case? Is it not better to sell the assets and ensure that the Government do not have to cut expenditure to such an extent that public services are damaged or, worse still, increase income tax which damages companies? Does my right hon. Friend also agree that it is sound policy to sell what is sensible to raise capital so that the long-term strategy is not damaged?
§ Mr. Lawson
I entirely agree with my hon. Friend. In the circumstances prevailing when I came to the House on 7 July, given that the public sector borrowing requirement was in danger of overrunning — indeed, all the signs were that it was overrunning—it made very good sense to reduce the PSBR at least to the tune of £500 million by a sale of assets — notably the assets that I have mentioned today.
§ Mr. Peter Bottomley (Eltham)
At the risk of drifting into industrial matters, about which my right hon. Friend knows at least as much as I do, will he arrange to provide written answers to questions on nationalised industries that lose more than £500 million a year to see whether the Opposition take as much interest in that as they have in this asset sale?
§ Mr. Lawson
That is an interesting point, but I doubt whether such written answers are matters for me.
§ Mr. John Smith
Does the Chancellor now agree that, in view of some of the information that has been revealed by questions, it was well worth his time coming to the House to answer them? However, will he now answer some of the questions that he has not so far answered?
Will the Government not proceed with any more sales in the energy sector—Wytch Farm and BGC interests in the North sea — until we have had a parliamentary debate? The Chancellor of the Exchequer answered a 801 question from the right hon. Member for Worthing (Mr. Higgins) about no Vote being sought until after the recess. Why, then, is it necessary to say in the written answer:Pending that approval, any necessary expenditure will be met by repayable advances from the Contingencies Fund"?What expenditure will be entered into before the House returns from the recess? What will be the cost of the sale and, given the eliptical nature of the right hon. Gentleman's answer, what will the Government do before we have a chance to return to the subject?
§ Mr. Lawson
I cannot at present say what the cost of the offer for sale will be, but the right hon. and learned Gentleman will be well aware that costs are associated with any offer for sale, as they were with the Labour Government's offer for sale of BP shares in 1977.
Wytch Farm and BGC oil assets stray outside what we are talking about, but these matters have been debated ad nauseam on many occasions.