HC Deb 26 May 1976 vol 912 cc201-2W
Mr. Trotter

asked the Secretary of State for Trade what financial benefits have accrued from the amalgamation of the State-owned airlines into British Airways; whether the advantages have arisen on as large a scale and as fast as was expected at the time of the amalgamation; what savings will come from the proposed amalgamation of the separate repair facilities; and whether in general he is satisfied with the extent of the savings achieved through changes resulting from amalgamation and the speed with which they have been achieved.

Mr. Clinton Davis

The Select Committee on Nationalised Industries, in its Report on the progress made on the amalgamation of the State airlines to form British Airways, published in February (House of Commons Paper 56), concluded that while BA had made considerable progress towards full integration of the former corporations it had sometimes tended to err on the side of caution. I agree in general with the

Customs heading Customs Duty per cent. Home Compensation Tax Levy/ Export Rebate per cent.
Spanish Duties 73.38 (all items) 20 12
United Kingdom Duties 73.38 BI (baths) 6
73.38 BII (cookware) 9

N.B. The home compensation tax levy is similar to the United Kingdom VAT. It is applied to virtually all Spanish imports from whatever source and deducted from all Spanish exports whatever their destination.

Like Her Majesty's Government the Spanish Government have a wide range of measures to support industries in the "Development Poles"—similar to the United Kingdom assisted areas. As in the United Kingdom, these arrangements vary according to the nature, problems and location of the individual firm. In the private sector Spanish measures generally take the form of tax reliefs rather than loans. In the public sector the State industrial holding company (INI) has access to Government loans at interest rates of 6 per cent. and upwards.

Select Committee's conclusions, but, like the Committee, I feel that due allowance should be made for the fuel crisis and economic downturn, which made BA's task far more complicated than anticipated. Since the Select Committee's Report, further progress towards integration has been made. Computer facilities are now fully amalgamated, and the first steps have been taken towards establishing the common engineering unit. It is not yet possible for British Airways to quantify with precision the benefits which will stem from the amalgamated repair facilities when they are in operation, but the airline is confident that they will be significant.