§ Mr. Ashleyasked the Secretary of State for Trade and Industry what rates of commission have been agreed by his Department for the British Telecom share issue with the City institutions involved; and if he will detail any rates which are higher than those agreed for previous Government issues, and give reasons for the difference.
§ Mr. FletcherThe rates of commissions payable to City institutions are set out in part IV, section 13, of the prospectus. They are as follows:
- to the United Kingdom underwriters, 0.375 per cent. on the United Kingdom portion of the offer;
- to the Bank of England, 1.25 per cent. on the overseas portion;
- to priority applicants, 1.5 per cent. on their placing shares and 1.25 per cent. on their commitment shares;
- to certain stockbrokers, 0.125 per cent. on applications from priority applicants introduced by them;
- to Swiss Bank Corporation International Limited, 1.25 per cent. on the shares comprised in the application together with a selling concession of 1.25 per cent. on the shares in respect of which its application is accepted.
Commissions paid in past privatisations have varied according to the circumstances. Underwriting and broking commissions taken together have been up to 0.5 per cent. Because the structure of the British Telecom offer is quite different from that of any previous privatisation, it is not possible to make direct comparisons with the rates of commission paid in previous cases.
§ Mr. Ashleyasked the Secretary of State for Trade and Industry what will be the total cost to the Government of the British Telecom share issue; how much of it will be payments to City institutions; and how much of that will be to stockbrokers.
§ Mr. ButcherI refer the right hon. Member to the answer I gave the hon. Member for Dagenham (Mr. Gould) on 27 November.