Ministers fail to refute claims of nationalising Rolls-Royce

Posted on 15 Dec 2015 by Victoria Fitzgerald

A spokeswoman for Downing Street has refused to deny government plans to take back the nuclear submarine arm of Rolls-Royce.

The representative for the Prime Minister was asked about a possible renationalisation following a report in The Financial Times, she responded saying: “Rolls-Royce is a major contributor to our economy. It’s an important supplier to the Government. We will continue to work closely with them.”

During the 1970s and 1980s, the manufacturing giant was owned by the state before being privatised in 1987.

Reports have suggested that the firm has struggled of late, with profit warnings in the last year, a sharp drop in share prices, as well as a number of investors exiting their holdings in the firm.

At present, the Government has a “golden share” in the company, which provides oversight of multiple strategic decisions at the company.

The golden share stipulates that government would have to give permission to Rolls-Royce selling more than 25% of either its nuclear business, or the assets of the group as a whole.

A spokesperson for Rolls-Royce would not comment directly on nationalisation, but said: “We are in contact with government as a matter of routine and regularly keep them updated on our performance and progress.”

Government and industry sources, however, said although nationalisation was possible, it remained highly improbable.