British Petroleum (Shareholding) (Hansard, 21 October 1981)

§ Mr. Ridley:

The Government have already made clear their intention to acquire in due course the shareholding in the British Petroleum Company Ltd. (BP) held by the issue department of the Bank of England, which the bank acquired from Burmah in 1975. Following the recent conclusion of the legal proceedings between the bank and 131W Burmah, the Government and the bank have agreed that the shares should be transferred to the Government, subject to parliamentary approval of a winter Supplementary Estimate for the provision of the necessary funds.

The Estimate will provide for a payment by the Treasury to the bank of a sum equivalent to the shareholding's valuation, established in accordance with the procedure set out in the Treasury minute of 4 April 1968 for valuation of the assets of the issue department in accordance with the provisions laid down in section 9 of the National Loans Act 1968. The Estimate will also provide for the payment of the necessary stamp duty. Neither the payment by the Treasury to the bank nor the payment of stamp duty will add to the central Government borrowing requirement or the public sector borrowing requirement.

At the time of the bank's acquisition of its shareholding in 1975, assurances were given to the Panel on Takeovers and Mergers, restricting the exercise of votes by Her Majesty's Government and the bank in respect of their shareholdings. The panel has agreed that these restrictions will cease to have effect after the shares have been transferred to Her Majesty's Government. The panel will not require the Government, as a result of the transfer, to make an offer under the City code for the BP ordinary shares then held by the public.

The Government's relationship with BP will continue to be maintained in a way which does not breach the traditional practice of non-intervention in the administration of BP as a commercial concern.