HC Deb 14 April 1994 vol 241 cc408-10
7. Mr. Riddick

To ask the Chancellor of the Exchequer whether he will name the countries which have requested advice on (a) privatisation or (b) nationalisation of key industries; and if he will make a statement.

Mr. Portillo

Governments all over the world now favour privatisation over nationalisation. A very wide range of countries seek to share the United Kingdom's unparalleled privatisation expertise.

Mr. Riddick

Is my right hon. Friend aware that countries around the world are creating free markets, reducing tariffs, abolishing regulations and privatising state-run companies because they know that such policies will lead to increased prosperity and freedom? Are not those countries following Britain's lead? Is not that free enterprise approach complete anathema to the socialists on the Opposition Benches? That is why, despite our current difficulties, the Opposition will stay exactly where they are.

Mr. Portillo

My hon. Friend is right. Countries in every corner of the world are following policies of competition, deregulation, privatisation, lower tariffs, free trade, free markets and political freedom. They believe that the United Kingdom's invented many of those concepts and has exported those concepts to them. There is no question of the United Kingdom being isolated within Europe—the United Kingdom is fighting every day to make sure that Europe, and the Labour party, is not isolated in the world against that trend.

Mrs. Mahon

Is the Chief Secretary seriously telling the House that he is proud that the mines have been privatised? Does he think that that is a success story? Is he aware that my hon. Friend the Member for Cynon Valley (Mrs. Clwyd) is currently meeting miners underground at the only remaining pit in Wales? Is that something of which he is proud? Will he now—even at this late stage—persuade his right hon. and hon. Friends to tell the Coal Board to stop playing cat and mouse with the decent men and women whose livelihoods depend on that pit and to put that pit into the coal review procedure?

Mr. Portillo

I am proud of every privatisation that has taken place. All the public services that have been privatised have become no less public—and the services have become a great deal better.

In the past few months, the United Kingdom has been asked to give advice to Brazil, Chile, Japan, South Korea, India, Indonesia, Croatia, Gambia, Angola, Australia, Ecuador, Sweden, France, Singapore and New Zealand. I assume that North Korea and Cuba look to the Labour party for their advice.

Sir Peter Tapsell

Yesterday's announcement on interest rates will be widely seen as a possible further step towards the privatisation of the Bank of England. Will my right hon. Friend bear in mind the real danger that, if discussions and disagreements between the Chancellor and the Governor on interest rates are to become publicised within six weeks of the event, it will almost certainly have an unsettling effect on the bond, stock and currency markets?

When such disputes become public, especially when one of the participants is arguing for an increase in interest rates, it could easily lead to an immediate collapse of the gilt market and a large inflow of hot money into sterling. Is my right hon. Friend aware that, to me, that looks to be a speculator's charter like the exchange rate mechanism?

Mr. Portillo

My hon. Friend's views on the subject are known and I look forward to studying some of his speeches again. It is undoubtedly the case that my right hon. and learned Friend has taken a courageous decision by publishing those minutes. In the past 18 months, we have taken decisive steps forward in increasing transparency and the credibility of our monetary policy. That is necessary to give investors and business men confidence. The fact that such confidence exists is shown by the healthy inflow of funds and by the number of countries and companies willing to invest in Britain because they have confidence that monetary decisions here are taken for economic and not political reasons.

Mr. Nicholas Brown

When the French, Germans and Japanese ring him to ask how they can make their countries more like Conservative Britain, does the Chief Secretary draw to their attention the Public Accounts Committee reports that followed each and every privatisation? Does he draw their attention to the fact that the PAC found that many of the privatisations were pump primed at the taxpayers' expense, that privatisations did not represent true value for money and that, in the case of the public utilities, the prices of electricity, gas, telephones and water have all increased ahead of inflation since 1979?

Mr. Portillo

Most of the countries are well able to read the facts for themselves and have seen that prices have been falling in the former nationalised industries and standards of service rising. Quite honestly, if the French Minister who has been presented with a bill for FF 20 billion by Air France rang up, he would think that whatever we had done in this country was good value.

Dr. Spink

Just to get it clear, can my right hon. Friend confirm that since privatisation in 1986, the price of domestic gas has fallen in real terms by 23 per cent. and that the price of electricity has fallen in the past two years by 6 per cent. and is set to fall again this year? Is not that good news for the economy and for domestic consumers?

Mr. Portillo

My hon. Friend is right and his figures are extremely close to the ones that I have in front of me. Not only have prices been falling, but standards of service have been rising and the satisfaction of customers is the most decisive factor of all. When hon. Members comment today, as they sometimes do, about infrastructure in Britain they are not saying that the infrastructure of British Telecom and the gas, water and electricity industries is poor. Members of Parliament and my hon. Friends do not receive complaints about those industries because they are making the necessary capital investment and providing a good standard of service to their customers.