HC Deb 20 June 1989 vol 155 cc68-9W
Mr. Wood

To ask the Secretary of State for the Environment whether he is in a position to give further details of the share offer arrangements for employees of the privatised water authorities.

Mr. Howard

The Government welcome the opportunity which privatisation of the water authorities provides for employees to become shareholders in the new plcs. I can now announce the following special arrangements for eligible employees of the new water plcs and their wholly owned subsidiaries:

  1. (i) employees will be offered free shares worth around £70 at the offer price plus about £2 of shares for every year of continuous service with their new company and the predecessor water authority up to a date close to flotation. In addition, people who were employed by the predecessor water authority on 1 April 1974, when the authority took over from bodies previously responsible for water supply and sewerage services, will be treated as having an additional five years' entitlement;
  2. (ii) employees will also be offered two free shares for each one bought at the full offer price on a matching basis up to a maximum of £400 worth of free shares; under this element of the package, if an employee bought shares worth £200 at the offer price he would receive shares worth in total £600;
  3. (iii) employees will be able to buy up to a maximum of £2,350 worth of additional shares at a discount of 10 per cent. from the full offer price;
  4. (iv) employees applying for shares will be treated on a priority basis over the general public, up to an individual limit of shares worth £12,000 at the offer price; this is in addition to the free, matching and discount shares.

The free and matching shares will be available to employees who satisfy certain minimum qualification periods on length of employment and hours worked per week. The discount and priority shares will be available to all employees at a date close to the flotation date.

We have also decided that pensioners of a new water plc, its wholly owned subsidiaries or its predecessor water authority should be able to apply on a priority basis, over the general public, for shares up to an individual limit of £12,000 at the offer price.