asked the Secretary of State for Industry how much new tonnage and how many new ships were ordered by the British merchant shipping companies in 1979; and how much and how many were placed in the yards of British Shipbuilders.
The information is as follows:tries Act 1977, £50 million in the form of a grant subject to the condition
"that the Secretary of State may, from time to time, at any time after the making of the grant and after consultation with British Aerospace, convert the grant with the approval of the Treasury either in whole or in part into a loan and/or public dividend capital ".
It is necessary for these terms to be amended before British Aerospace's undertaking is vested in the successor company; it would be wrong for a private sector company to have a contingent liability which could be brought into effect at the sole discretion of the Secretary of State. Accordingly my right hon. Friend the Secretary of State, after consulting British Aerospace and with the approval of the Treasury, has determined that the grant should be treated as public dividend capital with effect from 31 December, 1979. British Aerospace will remunerate the £50 million after the date of conversion on the same basis as their other public dividend capital—and on the appointed day the money will become part of the company's shareholders funds.
The necessary amendments to the current Aerospace Bill, which has recently completed its Third Reading, have been made to enable the £50 million to be treated in the same way as public dividend capital issued under section 16 of the 1977 Act when BAe's business vests in the successor company.