HL Deb 25 July 1984 vol 455 cc281-3

2.43 p.m.

Lord Taylor of Gryfe

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether, in view of recent difficulties in the private flotation of companies presently in public ownership and the reports of the Public Accounts Committee on this subject, they will make a Statement on future policy.

The Minister of State, Privy Council Office, and Minister for the Arts (The Earl of Gowrie)

My Lords, the Government remain firmly committed to the privatisation programme which is of benefit to consumers, employees, taxpayers and the economy at large. The primary aim remains to promote competition and to increase efficiency. The Government will continue to seek the best outcome in each individual element of the programme. The methods chosen in particular cases will be decided after considering all relevant factors, including past experience and the views expressed by the Public Accounts Committee.

Lord Taylor of Gryfe

My Lords, I should like to thank the Minister for his reply, and agree with him that in the disposals to private enterprise there have been some successes. It is easy to be wise after the event, but would the noble Earl agree with me that the timing and pricing of a number of these issues has caused public concern and even embarrassment to Her Majesty's Government, particularly the recent case of Enterprise Oil, which could affect the forthcoming issue of British Telecom? In the light of these facts, would he now state what is the net amount which the Government expect to raise from the Telecom issue and how this differs from the original estimate?

The Earl of Gowrie

My Lords, I accept that all issues of public policy are prone, by their nature, to cause public concern. I do not accept for a minute that the Government are embarrassed by the flotation of Enterprise Oil. It was underwritten at £380 million and it raised £380 million, and if the public that it was returned to is now receiving some benefit, no one could be more delighted than Her Majesty's Government. I cannot speculate about future flotations except to say that of course the programme will remain a vital plank of the Government's policy.

Lord Oram

My Lords, will the Government at least give up the pretence that privatisation has as its purpose the democratic ownership of industrial shares? I notice that in the original Answer the noble Earl did not include that among the advantages that the Government now have in mind. Does not the experience, for example, of British Aerospace, of Amersham International and others, show that whereas small investors bought shares in the early days, the vast bulk of them very soon sold out to big shareholders?

The Earl of Gowrie

My Lords, in this country—and it is a singular reason for the success of British capital markets—the big shareholders are the aggregate wealth of small savers.

Lord Cledwyn of Penrhos

My Lords, is the noble Earl aware that this movement by the Government gives no guarantee of greater success, and certainly no guarantee of greater accountability? Will he make plain to the House—and indeed to the country—that it is the Government's plan to move away from the policy of a mixed economy which has served this country very well over the past 30 years to an extreme policy of private enterprise which will cause considerable suffering and uncertainty to the British people?

The Earl of Gowrie

My Lords, I have to say to the noble Lord the Leader of the official Opposition that I cannot accept that at all. In ordinary language, we are returning the family silver to the family and I think the gesture is far overdue.

Lord Leatherland

My Lords, will the Government undertake that in future when they sell off nationalised undertakings they will sell them off at a proper price? For example, is the noble Lord aware that when Amersham was sold off people who bought relatively small numbers of that share were able to make a profit of £250 within a few days?

The Earl of Gowrie

My Lords, again, I cannot feel great concern about this since capital markets are there to deliver profits. But the fact is that when privatisation takes place all relevant factors need to be considered. One has to get the right balance between the immediate needs of the taxpayer and the longer term benefits—which, in my view are well worth paying for—of returning public industries to the public.

Lord Taylor of Gryfe

My Lords, while the Minister stated that the Enterprise Oil issue caused no embarrassment, would he agree that the Financial Times described it as a case in which the Government got egg on their faces? I would regard that as reasonably embarrassing. May I also ask him to answer the second part of the Question which concerns the Public Accounts Committee report on the privatisation to date and the strategy used by the Government in these various issues? Will he take cognisance of that report? Since very large sums of public money are involved, would this not be the subject of a further parliamentary report and discussion?

The Earl of Gowrie

My Lords, the issue of parliamentary debate is not for me. I would be very surprised if there was not additional parliamentary interest in this subject. Indeed, I imagine that it will come up next Wednesday in your Lordships' House. But the Government have been sufficiently praised by the Financial Times over the period that they have been in office not to be too anxious if the Financial Times feel that they hiccough from time to time. However, I do not accept that Enterprise Oil is a hiccough for the simple reason that it achieved the price at which it was underwritten.

Lord Elwyn-Jones

My Lords, reverting to the noble Earl's metaphor, will he tell the House who have their hands on the family silver now?

The Earl of Gowrie

My Lords, that was my point exactly: the family have.

Lord Glenamara

My Lords, will the noble Earl say how the Government will balance the books when there are no more assets to strip?

The Earl of Gowrie

My Lords, in my judgment the noble Lord's question is based on a false assumption. He equates the assets of the state with the state. I equate the assets of the state with those who hold them right across the economy.

Lord Ezra

My Lords, will the noble Earl kindly indicate whether he considers that the Government's privatisation policy both past and present will necessarily lead to greater competitiveness?

The Earl of Gowrie

Yes, my Lords.