HC Deb 13 December 1989 vol 163 cc699-700W
Mr. Gordon Brown

To ask the Secretary of State for Trade and Industry if he will publish the correspondence between British Aerospace and the Government over the future of the golden share.

Mr. Ridley

Correspondence between British Aerospace and the Government over the future of the golden share from 1985 (when British Aerospace made its initial request to raise the foreign shareholding limit), to August 1989 when I decided to raise the BAe and Rolls-Royce limits following agreement with the European Commission, took place on the basis of commercial confidentiality. At the time of the Rover Group sale my right hon. and noble Friend, the then Secretary of State for Trade and Industry, made it clear, as can be seen from his letter of 12 July which I have sent to the hon. Member, that he was sympathetic to BAe's case for a relaxation of the limit. The detailed proposals for raising the limit, common to both companies, had to be decided in consultation with the Commission which had since 1987 queried compatibility at the 15 per cent. foreign shareholding with EC law.

Mr. Gordon Brown

To ask the Secretary of State for Trade and Industry what he now estimates to be the value of the tax concessions made to British Aerospace during the Rover negotiations.

Mr. Ridley

No tax concessions were made to British Aerospace during the Rover negotiations. On the contrary, contractual arrangements were put in place effectively to deny Rover Group the benefit of tax losses in excess of £500 million which the group was entitled to carry forward under United Kingdom tax law. In that connection, the position remains subject to any applicability of section 768 of the Income and Corporation Taxes Act 1988, on which British Aerospace may seek a view from the Inland Revenue in accordance with the terms of the correspondence between British Aerospace's advisers and the Inland Revenue which has been made available to the Public Accounts Committee.

As explained at the time of the final deal, certain contractual ring-fencing arrangements agreed in the March conditional terms were lifted so that the final contractual position with regard to disclaimed capital allowances and capital losses was no more, and no less, restrictive than under normal revenue law.