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Wider Share Ownership

Volume 474: debated on Wednesday 7 May 1986

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2.50 p.m.

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 what further measures they propose to take to spread the ownership of shares more widely.

My Lords, the Budget Statement contained a number of further measures to encourage wider share ownership. Direct share ownership by individuals will be stimulated by the introduction of the personal equity plan. The rate of stamp duty on share purchases will be reduced from 1 per cent. to ½ per cent. The Finance Bill contains several refinements to the existing all-employee share schemes, including an extension of the schemes to worker co-operatives. Finally, the Government will continue to provide opportunities for new investors to purchase shares through the privatisation programme.

My Lords, I thank my noble friend for that very satisfactory reply. Can he enlarge upon it and say how soon the public will receive details of the personal equity plan? Can he say on what basis the recent National Opinion Poll was taken which showed that there are now 6 million shareholders in this country?

My Lords, as regards the personal equity plan, consultations are taking place with interested parties and it is hoped to issue a draft prospectus very shortly. Regarding the National Opinion Poll commissioned by the Treasury which showed that 16 per cent. of all adults now own shares, it was a very large survey of over 7,000 people.

My Lords, will it not be sensible to caution those with limited capital—namely, the vast majority of working people in this country—about risking very limited amounts of capital by investing them in shares?

Yes, my Lords, of course there must always be a note of caution regarding investment in shares; after all, it will be risk capital. But I think that to invest a little either each month or each year certainly should show dividends over the years.

My Lords, will my noble friend agree that the amount of money that has been invested as risk capital in small businesses has been extremely successful?

My Lords, I would indeed agree with my noble friend and I would perhaps refer to the business expansion scheme which, no doubt she will be aware, is to continue.

My Lords, is the noble Lord aware that one of the best methods of spreading share ownership more evenly is to ensure that the country's wealth is spread more evenly? Is he not aware that some 50 per cent. of the adult population at the moment own only some 4 per cent. of the nation's disposable wealth? In view of the fact that the richer are getting richer and the poor are getting poorer, how does he propose to effect the redistribution of wealth to achieve the aim that lies behind the Question?

My Lords, I am glad that the noble Lord shares the same view as the Government—that wealth should be spread more evenly. That is why we are proposing these schemes and why we have been very successful in what we have done so far. We hope to be more successful in the future in getting more people in this country to have a direct stake in British industry.

My Lords, will my noble friend not agree that public investment by private individuals encourages jobs?

Certainly, my Lords; I entirely agree with my noble friend. Any more involvement, particularly through employee share ownership schemes, which have increased from 30 in 1979 to over 1,000 now, must relate to providing more employment.

My Lords, with regard to the final sentence of the noble Lord's original Answer, can he explain to us how the ownership of, say, British Gas could be spread more widely than it is at present when it is owned by all the British people? Why do the Government persist in restricting the ownership of these national assets to a small number of people who can afford to buy shares?

My Lords, first of all, in regard to nationalised industries such as British Gas I do not believe that anybody in the country has a real sense of direct ownership in them. When the noble Lord travels on a train to Newcastle does he really believe that he owns a piece of that train? It is not only a small number of people who will participate in share ownership through the privatisation programme. As well as the individual shareholders, there are many millions of others who participate through insurance schemes, unit trusts or other investment plans.

My Lords, will the noble Lord not agree that there are literally thousands of private enterprises which depend upon the publicly-owned industries? Would he make the same remark as he made about British Gas in relation to the management and deployment of the Royal Air Force, the Navy and the British Army?

My Lords, I think we are straying a little wide of the Question on the Order Paper. At the moment, as far as I know, the Government have no plans at this stage to denationalise any of the three forces to which the noble Lord referred.

My Lords, is the noble Lord aware that I feel sorry that he should use irony against my noble friend Lord Glenamara since he asked a very relevant question? Can the noble Lord give the assurance that if and when British Gas is sold off, is floated, there will be very widespread share ownership and that institutions in the City and people abroad will not be able to make millions and millions of pounds overnight through being allocated huge batches of those shares?

My Lords, I can give the noble Lord the assurance that when British Gas is sold to the public—

My Lords, perhaps we should turn to that when we reach the relevant stage in the Bill which we are now considering. When British Gas is privatised obviously there will be the maximum possible participation by small shareholders.

My Lords, will the noble Lord not agree that we have already spent some considerable time talking about gas, that we are all going to spend a great deal more time talking about gas, and that this very important subject of ownership is best dealt with then?