Privatisation

HC Deb 29 October 1987 vol 121 cc436-8

4. Mr. Tony Lloyd

asked the Chancellor of the Exchequer that proportion of total Exchequer revenue in each of the past three years has been attributable to the proceeds of privatisation.

Mr. Norman Lamont

Privatisation proceeds have risen from 2.1 per cent. of total Consolidated Fund revenues in 1984–85 to 3.9 per cent. in 1986–87.

Mr. Lloyd

Do not those figures reveal the dilemma in which the country has been placed by the Government's stupidity? On one hand, the Chancellor depends on privatisation to fund public expenditure. On the other, with the Americans breathing down his neck and threatening not to fund further privatisations, the Chancellor knows very well that the BP issue will create real difficulties for the Government in future privatisations. The Government's incompetence has led them into great difficulties.

Mr. Lamont

Privatisation has made a useful contribution to revenues. The Government's estimates will be published in the usual way in the autumn statement. On BP, it would be extremely unwise if I added anything to what my right hon. Friend has said.

Mr. Neil Hamilton

Does my right hon. Friend agree that if the BP share offer goes ahead—as Conservative Members confidently expect it to, and as the vast majority of hon. Members believe it should—the taxpayer will have got an extremely good deal? Has my right hon. friend heard any criticisms from Opposition Members in the past few weeks to the effect that all that we are trying to achieve with this privatisation is to line the pockets of our friends in the City?

Mr. Lamont

I have noted my hon. Friend's remarks, as, I am sure, have Opposition Members. It is, of course, true that if the sale proceeds, the proceeds of £7 billion will be fully realised.

Mr. Beith

Is not that fact weighing too heavily with the Chancellor? Is it not rather profligate to treat capital asset sales as a means of funding current expenditure? For the rest of the day, will the right hon. Gentleman take care to attach more priority to the need to encourage wider share ownership, rather than discouraging it by his treatment of investors who applied early for BP shares?

Mr. Lamont

The hon. Gentleman seems to want to have it both ways. On one hand he says that we should not privatise, while on the other he says that we should pursue a policy of wider share ownership.

Mr. Beith

No.

Mr. Lamont

I am sorry, but that is how it appears to me and to most of my hon. Friends.

Mr. Tim Smith

Will my right hon. Friend tell us which Administration was the first to consider it right to sell shares in BP, whether the shares were underwritten and at what price they were sold?

Mr. Lamont

My hon. Friend is revealing a closely guarded secret, which is that in 1977 the Labour Government decided to dispose of BP shares at a price equivalent today to 100p per share. The great difference is that whereas we want to pursue an objective of wider share ownership, Labour did not. The Labour Government did it purely and simply because they wanted to raise money.