§ The Secretary of State for Trade and Industry(Mr. Norman Tebbit)
The capital structure of any such joint venture is a matter of negotiation between the boards of the companies involved. However, I know that both parties are concerned to ensure that any agreed arrangement properly reflects their relative contributions.
§ Mr. Hardy
The Minister's answer is in part reassuring, but will he confirm that in the envisaged Phoenix 2 company three quarters of the assets will come from the British Steel Corporation, and that those involved in the industry, and those interested in it, are keen to ensure that, after three years of furtive plotting and corrosive anxiety, there will be no justification for an accusation of what might be seen in Yorkshire as daylight robbery even if it is not so seen in Whitehall?
§ Mr. Tebbit
I think that there are some curious ideas about daylight robbery in Yorkshire, if that is the hon. 274 Gentleman's definition. What he has to take into account is the real value of the assets that are contributed, and the assets that are loss-making are not necessarily to be taken as being valued at their cost.
§ Mr. Duffy
Is the Secretary of State aware that it is not only equity for BSC that is being looked for in the long-delayed statement about the outcome of Phoenix 2, but the public interest, and will he dismiss rumours that the reason for this long delay is that he is being looked to for a further £100 million for a new arrangement which eventually is to go private?
§ Mr. Ewing
What does the Secretary of State's answer mean? Does the right hon. Gentleman mean that if the British Steel Corporation contributes 75 per cent. of the assets to the Phoenix 2 project he is in favour of the Corporation holding 75 per cent. of the equity? If he is not, why is he not? Did he not hear the Prime Minister yesterday pay a glowing tribute to the British Steel Corporation and the workers in that industry? Why does he not share the same confidence in transferring that to the Phoenix 2 project?
§ Mr. Tebbit
The Prime Minister and I have considerable admiration for the strides made by the BSC under its new and more enlightened management. That does not mean that we do not also have regard for the private sector and its enlightened work force and management.
The hon. Gentleman must have misheard me. It is no good saying that an asset is valued at £X million, perhaps because that is what it cost or what it is listed at in the books. It is a question of what the asset is worth in earning power, either where it is or with a new company. These are matters for discussion and mutual agreement between the boards concerned.