§ Mr. Hannamasked the Secretary of State for Energy what progress has been made towards the privatisation of British Gas; and if he is able to announce further details.
§ Mr. Peter WalkerSince my statement to the House about gas privatisation last May, the Gas Bill has received its Third Reading and is nearing Report stage in another place. I am now able to give the House further details of the basis on which, subject to passage of the legislation, the Government intend to sell the equity in British Gas plc in the autumn.
The new company's balance sheet will contain both debt and equity. This is in line with normal commercial practice. After careful consideration, the Government have decided that the debt element should be fixed at £2.5 billion. This will ensure a properly balanced capital structure while leaving the company full opportunity for business development and growth.
The Gas Bill provides the necessary powers for the Government to assume responsibility for the existing British Gas Corporation 3 per cent. guaranteed stock, which relates to liabilities incurred during nationalisation in 1948. This will be transferred to the national loans fund, which will then assume liability for the service and redemption of the stock. There will be no compensatory payment into the NLF to balance this liability, which will