HC Deb 09 November 1987 vol 122 cc64-6W
Mr. McTaggart

To ask the Chancellor of the Exchequer what is the total cost of advertising the BP share offer.

Mr. Norman Lamont

The cost to the Government of advertising the BP share offer is currently estimated to be about £18¼ million (excluding VAT).

Mr. Austin Mitchell

To ask the Chancellor of the Exchequer whether BP shares purchased by the Bank of England will be liable for the second and third instalments; and if he will make a statement.

Mr. Norman Lamont

Yes.

Mr. Austin Mitchell

asked the Chancellor of the Exchequer whether net purchase of BP shares by the Bank of England will be opened up to all part-paid shares, whether sold on or not; and if he will make a statement.

Mr. Norman Lamont

Yes.

Mr. Austin Mitchell

To ask the Chancellor of the Exchequer when he intends to announce the end date for the repurchase arrangement for BP shares.

Mr. Norman Lamont

I refer the hon. Member to the advertisement about the Bank scheme printed in the national press on 6 and 7 November.

Mr. Austin Mitchell

To ask the Chancellor of the Exchequer if he will give the total possible liability of the Bank of England in its commitment to repurchase BP shares; if he will specify which department of the bank will finance the repurchase; where the money will come from and what charges will be payable by Her Majesty's Government for the service.

Mr. Norman Lamont

The theoretical maximum liability would arise if the Bank of England repurchased the 2,126 million partly paid shares in the original offer. On the other points, I refer the hon. Member to my reply to the hon. Member for Islington, South (Mr. Smith) on Thursday 5 November.

Mr. Austin Mitchell

To ask the Chancellor of the Exchequer if the Inland Revenue plans to investigate the large bed-and-breakfast deals in BP shares intended to establish tax losses for capital gains tax purposes; and if he will make a statement.

Mr. Norman Lamont

I cannot comment on the tax affairs of individual companies.

Mr. Austin Mitchell

To ask the Chancellor of the Exchequer whether he proposes to place any limits on the extent of share repurchase in the event of the market price of part-paid shares falling below 70p; and if he will make a statement.

Mr. Norman Lamont

No; the arrangement is available for all partly paid BP shares.

Mr. Gould

To ask the Chancellor of the Exchequer what price per share Her Majesty's Government are now committed to pay for the BP rights issue.

Mr. Norman Lamont

[holding answer 6 November 1987]: The subscription price for the new BP shares was £3.30 per share.

Mr. Austin Mitchell

To ask the Chancellor of the Exchequer what special arrangements for advisory services he proposes for small shareholders who applied for BP shares before the closing date at a price higher than that available on the market.

Mr. Norman Lamont

[holding answer 3 November 1987]: Small shareholders should seek general advice on their BP shareholdings from their own financial advisers. Small shareholders of part-paid BP shares will be eligible to take part in the special arrangements announced by my right hon. Friend the Chancellor of the Exchequer on 29 October at column 540.

Mr. Austin Mitchell

To ask the Chancellor of the Exchequer what is his estimate of the loss incurred by underwriters and sub underwriters, less commission, and less allowances for bonus shares and interest on the instalments who sell block shares to the Bank of England as against the privatising price on Friday 30 October.

Mr. Norman Lamont

[holding answer 3 November 1987]: The difference between the part-paid underwritten price of 120p and the Bank offer price for part-paid shares of 70p is 50p per BP share. The opening price of part-paid BP shares on 3 November was 81p. United Kingdom primary underwriters will receive aggregate underwriting commission of 0.018 per cent. and the United Kingdom sub-underwriters will receive I per cent. sub-underwriting commission at the fixed offer price of 330p for the underwritten shares: overseas underwriters received combined underwriting and selling commissions of 1.058 per cent. Any loss realised by any underwriter or sub-underwriter will depend on a combination of factors including commissions but particularly the price at which it sells any shares (if at all). Underwriters and sub-underwriters are not eligible for bonus shares.

Copies of the underwriting agreements have been placed in the Library.

Mr. Austin Mitchell

To ask the Chancellor of the Exchequer whether it is his intention to allow applicants who applied for a small number of BP shares at a price higher than the market price and who then try and cancel the cheques and applications to be sued.

Mr. Norman Lamont

[holding answer 3 November 1987]: When they signed their application forms, applicants agreed not to revoke their application. Any applicants who have stopped their cheques will be asked to pay.

Mr. Austin Mitchell

To ask the Chancellor of the Exchequer what is his estimate of the effect of his decision to provide a floor for the BP share price on the willingness of foreign investors to buy the shares and on the proportion of BP shares held overseas.

Mr. Norman Lamont

[holding answer 3 November 1987]: The purpose of the arrangements made with the Bank of England announced by my right hon. Friend the Chancellor of the Exchequer on 29 October at column 540 is to ensure that there are orderly aftermarkets in BP shares. An orderly aftermarket will allow both overseas and domestic investors to take investment decisions on their merits.

Mr. Wilson

To ask the Chancellor of the Exchequer if he will list the sums spent on advertising the BP share issue through(a) individual newspapers, (b) local radio stations, (c) television companies and (d) other media.

Mr. Norman Lamont

[holding answer 30 October 1987]: The total cost to the Government of advertising the BP share offer is estimated to be about £18.25 million (excluding VAT) of which about £5.9 million is for newspaper advertising, including publication of the prospectus, about £6.5 million for television advertising, and about £0.95 million for other media. The balance is mainly for production costs. There was no advertising on local radio stations.

Mr. Tony Banks

To ask the Chancellor of the Exchequer what has been the total cost to date of advertising and publicity associated with the sale of BP shares.

Mr. Norman Lamont

[holding answer 2 November 1987]: The total United Kingdom marketing cost to the Government in the BP share sale is estimated at about £39 million (excluding VAT).