§ 4.53 p.m.
§ Lord TREFGARNE
My Lords, a few moments ago we passed the Third Reading of the British Aerospace Bill, and I therefore now rise to move, That the Bill do now pass.
The Bill before your Lordships today is an important one. In one sense the change that it will permit is simple: a company, British Aerospace Limited, incorporated under the Companies Act, will succeed the present statutory corporation, British Aerospace. But the implications of this change are fundamental. The transfer from nationalised industry to limited company represents the ending of the potential for interference from Government which is always such an inhibiting and is so often such a damaging feature of nationalised industries.
This Bill, and the changes which flow from it, will liberate the business to operate according to commercial needs, pressures and interests; to respond to customer demands; and to be subject to the disciplines of the market. The responsibility for this proud and major industry will then lie where it should lie—in the hands of those who manage and work in it. I am confident that they will respond to that challenge.
Your Lordships will not wish me to rehearse the arguments of principles and of detail which we have had in the course of our debates. But there is one matter to which I should draw your Lordships' attention and it is a matter of some importance. As we made clear on Second Reading, the Government intend to make special arrangements to enable employees to acquire shares in the successor company. The Government have been, and remain, totally committed to promoting a signicant employee shareholding in the new company.
920 In his Budget Statement my right honourable friend the Chancellor of the Exchequer announced measures to widen and make more attractive the existing provisions of the Finance Act 1978 by which shares acquired by employees and held in trust enjoy tax advantages. I can now give your Lordships some further information about the arrangement the Government have decided to introduce in relation to British Aerospace, to take advantage of the new arrangements. On the initial floatation the Government will be prepared, within financial limits, to make available free shares for those employees who purchase their own shares, and lodge the shares—those purchased and those given by Government to match the purchase—in a trust established under the Finance Act provisions.
I recognise that these may appear complex arrangements. It may help your Lordships if I say that there is a precedent for this in the recent BP sale. It may help even more if I say that what is proposed may be described simply as a "limited offer", for I repeat, there will be financial limits, of two for the price of one, with tax advantages on top of that. In addition to this—on which we have decided—we are also considering whether we can and should go beyond this proposal by providing in addition shares for those employees who do not themselves contribute as my noble friend Lord Cullen of Ashbourne explained in Committee. This, I should make clear, is still subject to further consideration and decision.
The steps which I have announced are intended to promote a small but significant initial shareholding for employees. They relate, of course, only to the initial floatation. Thereafter, it will be for the company to decide what continuing scheme to adopt. This will require careful consideration, but not Government decree. I am confident that the start and the impetus that the Government are giving to the initial floatation will be carried forward by the company in future years to bring about a substantial and growing employee stake in the new company.
I have never concealed my own involvement in a personal capacity in the industry with which we are concerned today. I hope, therefore, that your Lordships will excuse me if I find this an important moment. I have a sense of pride in 921 having contributed to a Bill which will prevent this unique and important industry from being subject to what my noble friends and I consider to be the wrong influences. The dead hand of nationalisation lies heavy on any industry. The opportunity of freeing one such from these harmful and pervasive effects is, therefore, to be welcomed. I beg to move.
Moved, That the Bill do now pass.—(Lord Trefgarne.)
§ On Question, Bill passed, and returned to the Commons.