§ Mr. Robert Atkinsasked the Secretary of State for Defence when he expects to be able to make a statement about a new financial structure for the Royal ordnance factories.
§ Mr. Nott[pursuant to the reply, 23 March 1982, Vol. 20 c. 320]: During recent months, the Government have considered carefully the best way of making changes to the constitution of the Royal ordnance factories, in order to ease the existing constraints on their operations and to allow them to function more competitively.
We have now decided that, subject to parliamentary approval, the ROFs should no longer operate under the Government Trading Funds Act, 1973, but in a more commercial environment under the Companies Acts. This will, of course, require legislation and it is the Government's intention to introduce this when the Parliamentary timetable allows. Initially thereafter Government ownership will continue but with the intention in due course of involving private capital directly—either through sale to the private sector, joint venture or flotation of shares. Meanwhile, in line with the recommendations of the 1981 study group report, relevant MOD design and development capabilities and sales functions will be transferred to ROF control as soon as possible. The Government believe that this represents a constructive and purposeful programme for the development of the Royal ordnance factories beyond their present status.
The co-operation of existing staff at all levels is vital for the success of the ROFs both during the transitional period and when Companies Act status is achieved; and the need is well recognised for early discussions with the trade unions concerned on the terms and conditions of service to apply on the change of status. Further details will be made available as soon as possible to ensure that the transition is effected smoothly and that, in the meantime, the business of the ROFs is carried out and developed efficienty and energetically.