§ Mr. Denis Howellasked the Secretary of State for Transport why Her Majesty's Government has rejected the proposal to ensure that the work force of British 513W Airways shall be allocated at least 25 per cent. holding in the company upon privatisation; and what are the objections which have led Her Majesty's Government to oppose the establishment of a trust to administer such a holding.
§ Mr. MooreMy objectives in this flotation are both to foster the commitment of the employees of British Airways to the company's future, and to give the public, including British Airways' many customers, an adequate opportunity to participate. Because I cannot forecast the level of demand, I wish to retain flexibility in the allocation arrangements for the public in the event of heavy oversubscription. It would severely limit that flexibility if I were to reserve 25 per cent. of the shares on offer to employees, and I have therefore decided that their legitimate aspirations are best satisfied by the generous terms I announced on 21 October.
If employees wish to place shares in a trust when they have acquired them, that is entirely a matter for them. But the investment decision is one which each employee should take individually when the terms of the offer are known.
§ Mr. Denis Howellasked the Secretary of State for Transport if he will state the basis upon which any share offer will be made to the directors and executive management of British Airways upon privatisation of the company, the numbers of such staff in each category who will benefit from the receipt of an allocation and the total percentage of the company's shareholding that is likely to be allocated in these categories.
§ Mr. MooreI refer the right hon. Member to my answer on 21 October at column 102. Directors and executive management eligible to apply for free, matching and priority shares at the time of the initial public offering will be given exactly the same opportunity to subscribe for shares as all other eligible staff of British Airways. I cannot forecast how large an allocation senior staff will receive, but it is likely to be small, as a percentage of the company's total market capitalisation.