British Telecom (Hansard, 4 July 1984)

§ 5. Mr. Fisher
asked the Secretary of State for Trade and Industry when he intends to publish the prospectus for the sale of shares in British Telecom plc.

§ The Secretary of State for Trade and Industry (Mr. Norman Tebbit)
A week or two before the closing date for acceptances of the offer for sale.

§ Mr. Fisher
In view of the fiasco of Enterprise Oil last week, does the Secretary of State accept that the Government's best policy now would be not to publish the prospectus for BT until they have initiated a full public inquiry into all their flotations of public shares? Would not such an inquiry reveal the pathetic, bumbling incompetence of the Secretary of State? Would it not show that the Government's policies have cost the taxpayer millions of pounds—and, in the case of British Telecom, given its size, would cost the British public hundreds of millions of pounds? Is it not the Secretary of State's duty to conduct such an inquiry?

§ Mr. Tebbit
As far as I can disinter the half dozen or so muddled questions put by the hon. Gentleman, my answers must be no, no, no and no.

§ Mr. Budgen
Are the purchases of BT shares likely to be at a higher, or lower, price as a result of the Government blocking the first application by Rio Tinto-Zinc for the shares of Enterprise Oil?

§ Mr. Tebbit
The price offered for BT by investors will be set by their view of the company's prospects. Inevitably, there will be those who will look carefully, and rightly so, at any restrictions which the Government may place upon the maximum number of shares to be held by any one investor. Such limits may discourage some investors and encourage others. Therefore, my hon. Friend's question is difficult to answer.

§ Mr. Wrigglesworth
Does the Secretary of State accept that because of the happenings over the sale of Enterprise Oil, the only way in which BT can be floated on the market in the present environment is if a substantial discount is offered on the price? Would that not constitute even worse asset-stripping than we have already seen? Therefore, will the right hon. Gentleman defer the sale of BT beyond the end of the year?

§ Mr. Tebbit
There has been no asset-stripping, so the hon. Gentleman's question is based on a false premise.
My right hon. Friends the Prime Minister and the Secretary of State for Energy dealt more than adequately on Tuesday with the launch of Enterprise Oil. I have nothing to add to what they said.

§ Mr. Bill Walker
Does my right hon. Friend agree that the prospectus for the shares of BT will show clearly that it is worth buying into that company, especially as it will maintain the facilities and service of which we are so proud?

§ Mr. Tebbit
The important point about all the privatisations is that underlined on television on Sunday by my right hon. Friend the Member for Hertsmere (Mr. Parkinson), that every one of the companies that has been denationalised has performed better under its new private sector ownership than it did in the public sector.

§ Mr. Shore
In the light of experience of the various efforts to sell publicly-owned assets—on the one hand Amersham International being 29 times over-subscribed on a fixed price sale, with quick killings for the profit seekers, and on the other Enterprise Oil being a fiasco with 70-odd per cent. of its shares left with the underwriters —does the Secretary of State not believe that he should carefully reconsider the Government's strategy?
It is not good enough to say now, in the light of that experience, that the right hon. Gentleman hopes to sell BT on anything like the same terms that were available before the Enterprise Oil fiasco occurred. If the right hon. Gentleman cannot postpone or stop the whole operation, would not the best way to proceed be initially to float a very much smaller proportion of the shares?

§ Mr. Tebbit
That is an unusually puerile suggestion from the right hon. Gentleman. The objective of privatisation is that companies should be taken out of state control and put back into true public ownership.
The right hon. Gentleman referred to the fiasco of Enterprise Oil—a circumstance in which my right hon. Friend obtained a price for the company which was more than the market believed it was worth. If that is a fiasco, it is the sort of fiasco in which many sellers would like to be involved.