§ Mr. Meale
To ask the Secretary of State for Trade and Industry what recent changes have been made to the ceilings of percentage in shares of Rolls-Royce and British Aerospace respectively which may be held by persons or bodies not within the United Kingdom; what communications he has received from the Commission of the European Communities on this and the period within which any such new limitation shall operate; and if he will place copies of any such correspondence in the Library.
§ Mr. Douglas Hogg
The Secretary of State for Trade and Industry announced on 3 August that the Government had decided that, following discussions with the European Commission on Rolls-Royce, the limit on foreign shareholdings could reasonably be increased for both Rolls-Royce and British Aerospace from 15 per cent. to 29.5 per cent. Extraordinary general meetings of the two companies held respectively on 11 September and 16 August approved special resolutions to raise the limit to the new level. In reaching this decision the Government took into account not only the concern expressed by the Commission about the effect of the restriction on other EC nationals wishing to buy shares in Rolls-Royce, but the wishes of Rolls-Royce and British Aerospace to have the limit increased given the international nature of their business. As the discussions with the European Commission were confidential, documents cannot be placed in the Library. The Government agreed with the Commission that it would review at the end of 1992 the limit on foreign shareholdings in the light of any changes in the structure of the European defence industry and in the pattern of defence procurement over the period.