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Volume 127: debated on Thursday 11 February 1988

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To ask the Chancellor of the Exchequer what is the extent of the state-owned commercial sector which has been transferred to the private sector since 1979.

Since 1979 we have privatised getting on for 40 per cent. of the state-owned sector of industry.

Does my right hon. Friend agree that the history of the state as an employer in the commercial and industrial sectors of the economy has been wholly unprofitable for the state and for its employees? The long-term prospects and prosperity of those enterprises would be enhanced if they were returned to the private sector as quickly as possible.

My hon. Friend is certainly right in saying that privatisation benefits the company, its employees and the economy as a whole. The employees of the companies concerned see this very clearly, as is evidenced by the fact that they are very anxious to acquire shares in the company for which they work as soon as it is privatised, and the great majority of them hold on to them.

Will the Chancellor confirm, or deny, that on 27 January, at a meeting with merchant bankers from the underwriting houses, Treasury Ministers said that public sector corporations were being sold and must be sold at

"20 per cent. less than their real worth to attract investors"?
Did that take place? Was that good husbandry on behalf of taxpayers? Will water, electricity and other forms of public commercial assets be sold in the same way at bargain-basement prices?

I am glad that the hon. Gentleman has asked me that question, because it gives me the opportunity categorically to deny that absurd story. No such statement was made. It is not the Government's policy, and, as usual, The Observer got it wrong. I am surprised that Labour Members believe it.

Is not the success of the Government's privatisation policy evident in the way in which productivity has improved? In some cases profits have doubled or trebled, and in the case of the National Freight Corporation they have increased ninefold.

Almost every company that has been privatised has done signally better since privatisation than it did before. Many chairmen of the companies have made that point at their annual meetings. The National Freight Corporation, to which my hon. Friend rightly alluded, has been an outstanding success.