§ Mr. Barry JonesTo ask the President of the Board of Trade if she will make a statement about the requests from British Aerospace plc and Rolls-Royce plc for changes to their foreign shareholding limits. [34678]
§ Mr. BattleThe Government as holders of the special shares in British Aerospace plc and Rolls-Royce plc, have today agreed to the changes requested by these two companies.
When British Aerospace and Rolls-Royce were privatised, a limit was imposed on total foreign shareholdings in each company, in order to maintain UK control of these companies because of their strategic 335W importance to the UK's defence interests. These limits can be varied only with the consent of the Government, under the powers of the special share which it holds in each company. These foreign shareholding limits are currently set at 29.5 per cent. and the companies have now proposed that these limits be increased to 49.5 per cent., together with a new limit of 15 per cent. on any individual foreign shareholder. These revised limits will take effect only if they are also approved by the shareholders of the two companies. I understand that resolutions to make these changes will now be put to the forthcoming Annual General Meetings of the respective shareholders of both companies.
These changes are designed to promote the competitiveness of these companies, by increasing their freedom to operate commercially in world markets.