Privatisation (Hansard, 27 February 1985)

§ 7. Mr. Neil Hamilton
asked the Secretary of State for Trade and Industry if he is satisfied with the performance of those businesses which his Department has returned to the private sector, whilst retaining a financial interest.

§ Mr. Tebbit
Not merely satisfied, but pleased and encouraged.

§ Mr. Hamilton
My right hon. Friend will be reassured to know that his opinion on these matters coincides with my own. Will he confirm that all the businesses that his Department has returned to the private sector have improved their performance as a result? As this makes jobs both more numerous and more secure, we all look forward to his pressing ahead with privatisation in other areas.

§ Mr. Tebbit
Yes, in general all the businesses which have been returned to the private sector have been doing very well, for example, Cable and Wireless, British Aerospace, Jaguar, Tyne Shiprepairers, Allied Steel and Wire, Inmos, and Goole shipyard. The House may be interested in the example of Cable and Wireless. Since privatisation its profits have nearly trebled. The Government's income from our 23 per cent. holding is now roughly the same as that which we received when we were the sole shareholder. Our 23 per cent. stake has a stock market valuation of over £500 million, which is a little more than the valuation of the entire company when we first sold 50 per cent.

§ Mr. Campbell-Savours
But what about the future of Johnson Matthey? Why is access being denied to the records of the company? Is something being hidden?

§ Mr. Tebbit
It has not been privatised. It does not arise on this question.

§ Mr. Hill
Can my right hon. Friend give an update to the House on the privatisation of British Airways? We are all anxious that privatisation should go ahead, and an update from him would be useful.

§ Mr. Tebbit
We are so closely approaching the further sale of shares in British Aerospace that it would be wise for me, not to say anything about that matter without careful consideration. British Airways is a matter for my right hon. Friend the Secretary of State for Transport, and I hope that he will be able to make a statement in the not too distant future which will presage the launch of British Airways back into the private sector.

§ Mr. Crowther
Does the Secretary of State agree that the establishment of Sheffield Forgemasters, which, if I remember rightly, was code named Phoenix III, has been a near disaster, not just for the British Steel Corporation but for the private sector company involved? In connection with the Phoenix II scheme involving a merger of BSC Special Steels with the GKN Brimbo works, is the right hon. Gentleman aware that GKN is now advertising in the South Yorkshire Press for a manager with experience of continuous casting for its Brimbo works where there is no continuous casting at the moment? Does that not support the view that I have expressed before that Phoenix II will not happen?

§ Mr. Tebbit
There is no guarantee of success merely because of privatisation. It is the lack of guarantee that makes success far more likely. There was no guarantee of success for the firms involved in Sheffield Forgemasters or the possible participants in Phoenix II. There is no guarantee of success if those parts stay in the public sector. The hon. Gentleman characteristically forgot to mention Allied Steel and Wire, which is by far the biggest privatisation and is extremely successful.

§ Mr. Alton
Does the Secretary of State believe that, since its return to the private sector, British Telecom has taken sufficient cognisance of the effects on British industry and the consumer of its procurement policy and, in particular, its decision to purchase the derived services system from AT and T and its decision on system Y? Does he agree that the long-term interests of British industry and consumers should come before short-term profit motives?

§ Mr. Tebbit
Yes, I do. That is why it is wise to put such firms back into the private sector where such long-term considerations are not distorted by short-term political considerations.

§ Mr. Sayeed
As the Tornado aircraft is of considerable importance to at least one of the companies properly denationalised, does my right hon. Friend agree that it is a great shame that the Treasury is denying ECGD facilities for the sale to Turkey of 40 Tornado aircraft, which amounts to about £1 billion?

§ Mr. Tebbit
I have no information that such an order has been placed nor that the Treasury, as opposed to ECGD, which is part of my Department, has denied credit to cover such an order. It could not be, since an order has not been placed. The whole raison d'être of exporting, like any other form of business, is to ensure that one sells to a customer who is well able to afford the purchase price and accept the credit terms that might be involved.

§ Mr. Geoffrey Robinson
With regard to British Telecom, is the Secretary of State aware that BT's imminent decisions to purchase an alternative switching system to that of system X from an overseas manufacturer will have damaging consequences for United Kingdom telecom manufacturers, European co-operation and the export prospects of system X? He is anxious to take what credit he can. Will he now face his responsibilities? Does he agree that it is a matter for his attention under part I, section 3, of the Telecommunications Act 1984? It should be a matter under which he could give a general direction under part III of that Act to the Director General of Oftel to investigate the reason and the need for British Telecom to take that decision.

§ Mr. Tebbit
British Telecom has the prime duty of serving its consumers. That is of vital economic importance. It is one of the reasons why companies are now coming back from overseas into the City of London to enjoy good telecommunications facilities as opposed to the position when his Government were in office and British Telecom was being mucked around from one end of Whitehall to the other and companies were leaving the City of London because they could not get adequate telecommunications. In acting in the best interests of the consumer, British Telecom will be acting in the best interests of the British economy.