Privatisation

HC Deb 15 November 1984 vol 67 cc781-2

3. Mr. Gerald Howarth

asked the Chancellor of the Exchequer what has been the impact on the economy of the privatisation programme.

Mr. Moore

Privatisation helps the economy by giving companies the freedom and the challenge of the market place. This greatly benefits their customers, their employees, and the nation.

Mr. Howarth

I thank my hon. Friend for that reply. Does he agree that British Aerospace is a fine example of the benefits of privatisation, with record sales and profits? Will he take forward with enthusiasm that programme of genuine public ownership?

Mr. Moore

I fully endorse what my hon. Friend said. British Aerospace is a classic example, because it is winning major orders against fierce international competition. My hon. Friend will know from the latest published accounts that the turnover of British Aerospace is up 62 per cent. A higher turnover produces higher profits and increased investment, and increases the number of jobs, which is something that I suspect all hon. Members want.

Mr. Douglas Hogg

Is it not bizarre that the Labour party, which calls for increased public ownership of wealth and assets, should at the same time refuse to support denationalisation in the form, for example, of the sale of council houses or shares in British Telecom, when that is the most effective way of giving individual members of our society a genuine stake in the national wealth?

Mr. Moore

I have difficulty in understanding what is not bizarre about the Labour party's policies. My hon. Friend will realise that the employees of industries which were once nationalised but are now in the private sector have become owners as well as earners and are committed to their success, and that that suggests that the Opposition are divorced from the real views of the majority of the electorate as expressed at the last election.

Mr. Wrigglesworth

Why have the Government not taken the opportunity with British Airways and British Telecom to increase competition so that the consumer, rather than just the Treasury, benefits? Did not the Government back down when they had the opportunity of bringing about greater competition in civil aviation because the interests of the Treasury were put first?

Mr. Moore

It is quite the reverse. We are delighted to have any support for privatisation from the alliance parties, recognising that privatisation will give competition. We trust that the alliance parties will look at how new regulatory structures seek to aid that competition by helping the consumer, not the politician.

Dr. McDonald

Is the Minister aware that the main privatisation sales have so far brought £1.9 billion to the Exchequer, which is £450 million less than the shares are now worth and that it represents an opportunity cost to the Government? After all, if the Government had invested that money in the infrastructure, it would have been better used to create 100,000 new jobs.

Mr. Moore

The reality is perfectly expressed by the hon. Lady, in the sense that those companies have done much better in the private sector. Freed from the dead hand of state, the turnover of Cable and Wireless is up by 122 per cent., of Amersham by 80 per cent., of British Aerospace by 62 per cent., of Britoil by 44 per cent., and of National Freight by 14 per cent. Those successes are shared by the employees as well as by the market place. Instead of sticking to their Clause Four commitments, Opposition Members should try to discuss these issues with the employees of denationalised industries.