§ Lord BeswickMy 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 what was the total cost of the flotation of British Gas; and whether the total includes the cost of the march to the Stock Exchange, headed by the Secretary of State for Energy, the chairman of British Gas and a band, in celebration of the first day of dealing in British Gas shares.
§ Viscount DavidsonMy Lords, the cost to the Government in 1986–87 of the sale of British Gas has been estimated at around 2 per cent. of the total proceeds of some £7,750 million. Any costs incurred in connection with the march to the Stock Exchange on 8th December, which was led by the Scottish Gas Pipe Band, were met by British Gas and not by the taxpayer.
§ Lord BeswickMy Lords, I thank the noble Viscount for his Answer, though he contrived of course to gloss over what were the sums of money involved. It would be helpful if he were to give them in clearer terms. Is there not something significant, even sinister, in society when we have these appalling disclosures of excessive greediness in the City of London today while at the same time the Government are spending these enormous sums of money in encouraging and exploiting the same acquisitive instincts in the rest of us? Having spent so much time, effort and money in selling the shares, why did the Government go to this bizarre length of marching to the City to applaud those who sold the shares to make a 12 per cent. or 20 per cent. overnight profit?
§ Viscount DavidsonMy Lords, I fail to see the connection between part of the noble Lord's supplementary question and the original Question. He asked about the actual costs. I said that they came to 2 per cent. of the £7,750 million.
§ Viscount DavidsonMy Lords, I am about to tell the noble Lord. If he would like to do a certain amount of arithmetic he will see that these costs amount to £164 million; but the result is that British Gas has the largest number of shareholders of any company in the world. I should have thought that is a success well worth celebrating.
§ Lord RentonMy Lords, can my noble friend say roughly how many of these shareholders have never been shareholders before and are therefore for the first time able to say that they have a stake in this great national enterprise, never previously having had a stake in industry?
§ Viscount DavidsonMy Lords, it has been estimated that 2 million applicants for British Gas shares are first-time shareholders.
Lord Bruce of DoningtonMy Lords, is the noble Viscount aware that although one can understand the physical exuberance of those who marched and who were going to receive a 20 per cent. profit or more the day following flotation, it is a scandal that a celebration of this kind, headed by the Secretary of State for Energy, among others, according to the Question, should be made at a time when most of the country is suffering from unparalleled distress?
§ Viscount DavidsonMy Lords, the proposal for the march came from Sir Denis Rooke and British Gas was entirely responsible for organising it. The costs are therefore a matter for British Gas and not for the Government.
§ Lord Mackie of BenshieMy Lords, can the noble Viscount advise the House where the Government are going to invest the £7,750 million? Into what productive industry is it going?
§ Viscount DavidsonMy Lords, that is not a question for me.
Lord Campbell of CroyMy Lords, can my noble friend tell the House whether the pipe band included in its repertoire that day the mournful pipe tune Sidney's Lament, for the reason that the message never in fact got through to him?
§ Viscount DavidsonMy Lords, I am afraid I was not on the march myself.
§ Lord SomersMy Lords, will the noble Viscount tell the House what benefit, if any, this process will bring to the ordinary consumer?
§ Viscount DavidsonMy Lords, I am afraid I did not hear the question.
§ Lord SomersMy Lords, I asked the noble Viscount whether he could tell the House what benefit, if any, this process will bring to the ordinary consumer.
§ Viscount DavidsonMy Lords, it depends on whether consumers applied for shares and received shares. Most consumers have done so.
§ Lord Maude of Stratford-upon-AvonMy Lords, is my noble friend aware that most people will consider that there is much to be said for adding an element of hilarity, if not farce, to what is essentially a very dull business?
§ Viscount DavidsonI agree entirely, my Lords.
§ Lord GlenamaraMy Lords, is the noble Viscount aware that before privatisation everyone in Britain was a shareholder in British Gas and now only a small number of them are? What is there to trumpet about in that?
§ Viscount DavidsonMy Lords, before privatisation nobody received any dividends.
The Earl of HalsburyMy Lords, is the noble Viscount aware that yesterday I attended a lunch for the old boys who were once upon a time executives or part-time members of North Thames Gas Board? I now have a new tie to wear, which is that of an employee of the gas board, with a red stripe to indicate that I am also a shareholder.
§ Viscount DavidsonMy Lords, I am delighted.
§ Lord EnnalsMy Lords, can the noble Viscount comment on the very strange priorities by which £160 million is paid for publicity for this operation and £20 million is made available for publicity for AIDS? What sort of priority is that?
§ Viscount DavidsonMy Lords, I do not think that question requires an answer.
§ Lord EnnalsDoes it not? Why not, my Lords?
§ Lord UnderhillMy Lords, does the noble Viscount not think it strange that in all the comments on the successful flotation celebrations there has been no mention whatever that the reason for this so-called successful flotation is the great success of the publicly-owned industry in the days before it was nationalised? Why has no comment been made that there was so much interest in the flotation because a successful public industry had already been built up?
§ Viscount DavidsonThat, my Lords, is a matter of opinion.
§ Lord BeswickMy Lords, in view of the fact that so much has been said about the enthusiastic shareholding involved, can the noble Viscount say that the buyers who offloaded 20 per cent. of the shares at a profit on the first day cared a damn about British Gas? Can he give me one other example from here or elsewhere of a march to celebrate stagging on the stock market?
§ Viscount DavidsonNo, my Lords, I cannot.
Lord Paget of NorthamptonMy Lords, is the noble Viscount aware that I still want to know who paid for the band?
§ Viscount DavidsonMy Lords, I shall tell the noble Lord. I understand that British Gas paid the band a fee, plus compensation for loss of earnings and expenses for its members.
§ Lord Hatch of LusbyMy Lords, can the noble Viscount tell the House what difference in principle the Government see between using money to advertise the privatisation of the gas industry and the GLC using 926 its money to publicise the causes for which it was responsible?
§ Viscount DavidsonThere is a considerable difference, my Lords. All I can say is that the sale was highly cost-effective.