PowerGen: Sale of Shares (Hansard, 15 June 1995)

§ The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Henley)
My Lords, there is no case for a public inquiry. The Treasury is pursuing the further work suggested by the Stock Exchange concerning the circumstances surrounding the GENCO 2 sale. Sir Terence Burns will respond in substance to the Stock Exchange and the response will be published.

§ Lord Haskel
My Lords, I thank the Minister for that response. There are some worrying aspects about the sale. Does the Minister agree that, because the Treasury is an interested party in this matter, a public inquiry would be more in keeping with open government and be seen to be more independent and more rigorous, and would ensure that all aspects of the matter were aired?

§ Lord Henley
My Lords, the noble Lord is being over-simplistic. Matters relating to this issue have been explained by the Government on a number of occasions, and in particular by my right honourable friend the Financial Secretary, who informed the House of those matters last week. As I said in my original Answer, the Stock Exchange wrote to the Treasury and suggested that a Treasury inquiry would be appropriate. That is why the Treasury is taking forward urgently the work suggested by the Stock Exchange. We have asked a senior official within the Treasury, who was not associated with the original work, to carry out that inquiry. As I said in my first reply, we will publish the response when we send it to the Stock Exchange.

§ Lord Hailsham of Saint Marylebone
My Lords, is it not the case that the Question shows that the noble Lord who asked it was suffering from that most distressing and almost universal complaint of "inquiryitis"?

§ Lord Henley
My Lords, I cannot speak for the noble Lord, Lord Haskel, on how he wishes to ask his Question. But people often jump to the idea of having a public inquiry at far too early a stage. As I said, a proper inquiry will be conducted by the Treasury and the results of that inquiry will be published.

§ Lord Wyatt of Weeford
My Lords, I must declare an interest. I bought some of these shares. Is the Minister aware that, since the original issue price, the shares have agreeably gone up in value, and that the only people who have suffered are the speculators who expected to make a very quick profit on the first few days of trading? They did not. But now all who, like myself, bought them as a long-term investment are extremely satisfied with the agreeable increase in price.

§ Lord Henley
My Lords, the noble Lord is absolutely correct. I should like to congratulate him on his financial acumen.

§ Lord Eatwell
My Lords, does the Minister recall that, in his Statement to another place on 9th June, Sir George Young stated: We took financial and legal advice on 3 March about the possibility that Professor Littlechild might make an announcement.… The advice that we received was that no change was required to the prospectus"?—[Official Report, Commons, 9/6/95; col. 422.] Will the Minister confirm that the legal advice was received from the firm of Slaughter and May? Will he tell the House whether, as I am reliably informed, before receiving the opinion of Slaughter and May, the predominant legal opinion in the Treasury was that the prospectus should be changed?

§ Lord Henley
My Lords, as the noble Lord will be well aware, we do not comment upon our legal advice.

§ Lord Eatwell
My Lords, will the Minister answer the second part of my question? Before the receipt of independent legal advice, was the predominant legal opinion within the Treasury that this prospectus should be changed? Is that true or false? Yes or no?

§ Lord Henley
My Lords, my answer does not change. We acted on legal advice.

§ Earl Russell
My Lords, is the Minister telling the House that the Government are like the former servant who brandished an open testimonial which said, "During his period of service with me, Mr. So and So has discharged his duties entirely to his own satisfaction"?

§ Lord Henley
My Lords, the noble Earl makes a very silly point. As I made clear, we are responding to the Stock Exchange, which suggested that an internal inquiry by the Treasury would be appropriate.

§ Lord Richard
My Lords, are the Government saying that there is something wrong with the sale of these shares, but that the Government are not to blame because of the advice that they received, or are they saying that there is nothing wrong with the sale of the shares?

§ Lord Henley
My Lords, we have made it clear that we believe that we have acted absolutely appropriately on all occasions, but we have been asked by the Stock Exchange to conduct an inquiry. As it has so asked us, we have said we will. We are doing it in the manner in which the Stock Exchange has asked us to do it.