§ Mr. Pikeasked the Secretary of State for Defence if he will make a statement regarding the present viability of royal ordnance factories; and what effects he forecasts will result from privatisation.
§ Mr. Norman LamontThe change of the royal ordnance factories' status to that of an independent, commercial Companies Act company has improved flexibility and opened up new trading opportunities, thus enhancing the organisation's overall prospects. Privatisation will be the final step to virtually complete commercial freedom to secure a prosperous future, but at all times success will depend on the company's ability to exploit commercial opportunities.
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§ Mr. Peter Pikeasked the Secretary of State for Defence (1) which royal ordnance factories at present maintain strategic capacity;
(2) at which royal ordnance factories he proposes to maintain strategic capacity.
§ Mr. Norman LamontDetailed arrangements of this kind are a contractual matter between the Ministry of Defence and Royal Ordnance plc.
§ Mr. Pikeasked the Secretary of State for Defence if he proposes that Coopers and Lybrand will issue the prospectus for privatisation of the royal ordnance factories before he makes an announcement on strategic capacity.
§ Mr. Norman LamontIn the usual way I would expect a prospectus for the public offer for sale of shares in Royal Ordnance plc to be issued by a merchant bank acting on behalf of the Secretary of State for Defence. Coopers and Lybrand are not a merchant bank. The timing of the issue of a prospectus would depend on the timing of the sale; which as I indicated to the hon. Member for Blackburn (Mr. Straw) on 22 October 1985 at column 141 is subject to a number of factors.
§ Mr. Pikeasked the Secretary of State for Defence if he will ensure that the prospectus for royal ordnance factories contains the full details of accountancy figures.
§ Mr. Norman LamontThe intention of the hon. Member's question is not clear. A prospectus is a formal document which must meet certain statutory and quasi-statutory regulations. It follows that the Royal Ordnance plc prospectus would contain sufficient accounting detail to meet these requirements, but the precise amount of information will be a matter for judgment in the light of advice from our merchant bank.