§ Mrs. Peacockasked the Secretary of State for Transport what arrangements will govern the relationship between the Government and British Airways plc between vesting and privatisation.
§ Mr. RidleyAs I announced to the House on 12 December, the business of the British Airways Board will vest in British Airways plc on 1 April. Pending the flotation of the company, which I am planning for early next year, all shares in British Airways plc will be retained by the Government and British Airways will remain in the public sector. During this period my powers over British Airways plc will be those of a sole shareholder over his company.
The present members of the British Airways Board will continue as the directors of British Airways plc, with Lord King of Wartnaby as chairman.
After consultation with the hoard, I have drawn up new articles of association for the company that will come into force on vesting day, 1 April. I have also concluded a memorandum of understanding with the directors dealing with certain aspects of our relationship not covered in the articles of association.
I have placed copies of both documents in the Library of the House. The principle underlying these arrangements is broadly to preserve over British Airways plc, while it 317W remains in the public sector, controls similar to those that I have hitherto exercised over British Airways as a statutory corporation.