§ Mr. Kenneth Carlisleasked the Chancellor of the Exchequer if he will make a statement about expected receipts from the sale of public sector assets.
§ Mr. LawsonThe British Petroleum Company Ltd. has announced today a rights issue to raise £624 million. It would have cost the Government and the Bank of England together some £280 million to subscribe for the rights in respect of their shareholdings in the company. This expenditure could not have been justified at a time when the Government are giving priority to containing public expenditure and the public sector borrowing requirement. The Government and the Bank are therefore not taking up their rights.
In order to provide for the disposal of the Government and the Bank's rights in an orderly manner, shares which would otherwise have been offered to the Government and the Bank will, subject to an additional payment of 15 pence per share, be offered to the company's other shareholders and the participants in its group share schemes for employees.
416WThis offer has been underwritten and the additional payment will produce net proceeds of some £14 million, which will be collected by the company on behalf of the Government and the Bank.
The company's offering circular for the rights issue records that, while Her Majesty's Government's policy of selling publicly owned assets to the private sector is regularly reviewed, Her Majesty's Government have no plans at this stage to sell any more of their present holding in the company and will not do so in the financial year ending 31 March 1982, nor does the Bank of England have any plans to sell, other than to Her Majesty's Government, any of the shares in BP representing the holding acquired by the Bank in 1975 from Burmah, which acquisition is currently the subject of litigation. The offering circular also records the Government's reaffirmation of their intention to maintain their relationship with BP in a way which does not breach the traditional practice of non-intervention in the administration of BP as a commercial concern.
An Estimate for a token amount will be presented to the House in due course to provide for the Government's expenses of the sale. The net receipts from the additional payments will be credited to the public sector asset disposals programme. The Government stated in the public expenditure White Paper (Cmnd. 8175) that sales planned for 1981–82 were expected to yield some £500 million in outturn prices.