§ Mr. Gordon BrownTo ask the Secretary of State for Trade and Industry if he will publish the minute of the meeting of 4 July with British Aerospace at which tax benefits were discussed.
§ Mr. RidleyThe agreed way of recording this meeting was an exchange of letters between the advisers of British Aerospace and the Inland Revenue; copies of these letters dated 8 July have already been sent to the hon. Gentleman.
§ Mr. Gordon BrownTo ask the Secretary of State for Trade and Industry if he will place in the Library correspondence between his predecessor and British Aerospace on 6, 12 July and 13 July.
§ Mr. RidleyI have already done so, together with other letters between my predecessor and the British Aerospace chairman dated 14 July 1988 relating to the terms and conditions of the sale of Her Majesty's Government's shareholding in Rover Group to British Aerospace.
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§ Mr. Gordon BrownTo ask the Secretary of State for Trade and Industry if the raising of the ring fence for capital losses includes capital gains in property companies acquired by British Aerospace.
§ Mr. RidleyFollowing the lifting of the contractual ring fence on capital losses which had been a part of the March 1988 conditional agreement for the sale of Rover, British Aerospace has the right to use Rover Group capital losses to set against gains to the same extent and subject to the same statutory conditions as any other group in equivalent circumstances.
§ Mr. Gordon BrownTo ask the Secretary of State for Trade and Industry what information was provided to the European Commission of the tax benefits for British Aerospace of the Rover deal.
§ Mr. RidleyThe Commission was informed that the benefit of using Rover Group's carried forward pre-acquisition trading tax losses was effectively limited to £500 million by the conditional and the final agreement with BAe: that the March 1988 conditional agreement ring fenced the capital losses and disclaimed capital allowances so they could only be utilised by Rover Group; and that as part of the final agreement these would be unringfenced so that BAe would have the same freedom as that available under tax law to any other group. The Commission was made aware of the difficulty of estimating the value of restoring that freedom.
§ Mr. Gordon BrownTo ask the Secretary of State for Trade and Industry who paid the fees for(a) Rover's and (b) British Aerospace's advisers as part of the final contract with British Aerospace.
§ Mr. RidleyAs I explained in my statement of 30 November the Government paid Rover Group £1.5 million for its privatisation costs. BAe paid its own advisers' fees.