HC Deb 19 December 1989 vol 164 cc140-1W
Mr. Gordon Brown

To ask the Secretary of State for Trade and Industry (1) how much of Rover's trading tax losses was eliminated in the final agreement;

(2) what was the maximum quantum of the Rover Group's pre-acquisition trading tax losses potentially available to claw back under the contractual sale arrangements between the Department of Trade and Industry and British Aerospace.

Mr. Ridley

[holding answer 18 December 1989]: Because the £469 million of the cash injection relating to Rover's historic debt had, through conditions attaching to it, to be passed down to the operating companies in the form of a taxable subvention it eliminated a corresponding amount of trading tax losses. The remainder of the mechanism effectively to limit Rover Group's access to the benefit of past trading tax losses was the pound-for-pound contractual clawback affecting use of more than £500 million of such losses. It is not possible to state the amount of Rover's trading tax losses eliminated in the final agreement or the maximum amount potentially available to be clawed back. These depend on the outcome of the normal application of tax law to the circumstances of the Rover Group, including any claims or disclaimers made by it, and this is governed by the strict rules of tax confidentiality.

Mr. Gordon Brown

To ask the Secretary of State for Trade and Industry how much of the capital allowances disclaimed by the Rover Group which, under the March conditional terms, could have been clawed back under the contractual sale arrangements if used outside the Rover Group were disclaimed within the statutory time limit set down in the relevant Finance Acts.

Mr. Ridley

[holding answer 18 December 1989]: As I said in my reply of 12 December on disclaimers of capital allowances by Rover Group—Official Report, column 638—this is a matter for Rover Group and the normal rules of confidentiality governing taxpayers' affairs apply.

Mr. Gordon Brown

To ask the Secretary of State for Trade and Industry when the plan to defer payment of £150 million for the Rover sale was discussed; and what were the options under consideration in July.

Mr. Ridley

[holding answer 18 December 1989]: The deferment of the £150 million consideration was first raised at the end of June 1988. Three specific options were set out in a letter of July 1988 from the then Secretary of State to the chairman of British Aerospace, a copy of which has already been placed in the Library of the House. There were further discussions on 12 July following receipt of the letter at which it was decided that the consideration would be paid not later than 30 March 1990.

Mr. Gordon Brown

To ask the Secretary of State for Trade and Industry when he received the request from British Aerospace seeking abandonment of the golden share.

Mr. Ridley

[holding answer 18 December 1989]: I am unaware of any such request. As I explained on 13 December at columns 699–700, the company has consulted us on a number of occasions on the detail of certain provisions in the company's articles of association which require the consent of the special shareholder before any changes can be made.