Privatisation (Hansard, 28 November 1996)

§ 7. Mr. Whittingdale
To ask the Chancellor of the Exchequer what assessment he has made of the effects on the public finances of the Government's privatisation programme. [4862]

§ Mr. Waldegrave
Total receipts from the privatisation programme from May 1979 to March 1996 were £81 billion at 1995–96 prices. That has helped the Government 453 to ensure that public debt as a share of gross domestic product is among the lowest in the European Union. In 1979, it was among the highest.

§ Mr. Whittingdale
Has my right hon. Friend seen the recent survey, which shows that, between 1980 and 1982, the nationalised industries cost the taxpayer £300 million every year, and that between 1987 and 1995 those same industries contributed £4.8 billion to the Exchequer every year, excluding privatisation receipts? Did not the Labour party oppose every single privatisation? Even now, it would destroy that success by political interference through the regulator, and by the imposition of a windfall tax.

§ Mr. Waldegrave
My hon. Friend is right. I have seen the tax figures to which he referred, and they certainly show that those industries make a large net contribution to the Exchequer. I should like to draw another dimension to my hon. Friend's attention. Without privatisation proceeds, and other things being equal, our debt stock would now be higher by about £100 billion. That includes extra debt interest totalling £37 billion since 1979, which is 5 per cent. of GDP. They would have been the figures if we had not privatised those industries, although the principal reasons for privatisation were the huge supply-side gains and the gains to the consumers.

§ Mr. Pearson
As it is impossible to identify in the Red Book the level of asset sales built into the Budget, will the Minister confirm what assets will be sold in the next financial year? Will he publish a table to make it clear, so that we can all see how the Government are selling off the country's assets?

§ Mr. Waldegrave
I am glad to hear that the hon. Gentleman is still in old Labour mode on privatisation—I suspect that that applies to the whole of his party. The level of asset sales in any particular year that is corning depends on achieving the proper price for those assets. It is unwise to give too much detail in advance of sales. That has always been the custom in the House.

§ Mr. Legg
I congratulate my right hon. and learned Friend the Chancellor on his statement in the Budget that the student loan book is to he privatised. In line with my right hon. and learned Friend's assurances to the House in his statement on Monday, will my right hon. Friend the Chief Secretary confirm that the Maastricht convergence criteria will not be fudged and that the estimated £3 billion proceeds from that sale—which is equivalent to almost 0.5 per cent. of gross domestic product—will not count towards achieving our 3 per cent. Maastricht deficit criteria?

§ Mr. Waldegrave
In privatising the student loan book—a sensible thing to do—it was not in our mind to achieve any particular level of anything. We are following the sensible policy of transferring risk to the private sector and getting the Government out of a business that they should not be in—ownership of a large loan business. It is sensible to do so.