The socialists may try to dress up their intentions by using a marketing phrase like "social ownership," but the truth is that not one denationalised company will be safe if Labour take power.

Apart from the ballot box, one of the greatest bulwarks in our determination to ensure that Britain goes forward in a spirit of enterprise is a widening of the shareholder base and making share allocations part of the salary package. Such is the interest and enthusiasm of employees that some 84,000 people, plus 21,000 pensioners, from the 12 regional electricity companies, the National Grid Company and the Electricity Association applied for and received shares recently. Between them, they were allocated almost 160 million shares. That is true capitalism at work.

Perhaps the most telling statistic that I could give the House is that a driver or fitter who invested £1,000 in 1982 at the time of the employee buy-out of the National Freight Corporation could be sitting on £70,000 value today. Nothing could be clearer than that message for every trade unionist in the land. A vote for socialism would actually erode common sense and the value of their savings. Those who are worried about taking the plunge into the private sector need look no further.

Britons have invested many times more in their homes than in equities in the post-war era. It is time to redress the balance and encourage greater share participation. It is clearly important to change national attitudes. For example, we need more comprehensive reporting by pension funds and investment schemes. I well appreciate the quip made in some Sunday finance columns that getting information out of the pension funds is almost as difficult as trying to investigate the finances of the Vatican. I shall not encroach upon that, but pension funds are generally a reluctant audience.

The tax treatment of direct share ownership should be changed. It would be apt to give an annual tax-free allowance to those investing directly in a United Kingdom company. The Confederation of British Industry task force suggested that it could be £100 a month—a modest but sensible proposal for my right hon. Friend the Chancellor of the exchequer. Furthermore, we need to change the personal equity plan regulations to allow more than one plan manager in any one tax year and to increase the annual limit to £10,000. We need to introduce a lump sum PEP scheme to encourage investment of inherited funds and pension lump sums.

We must both reduce the time period before employees can become shareholders in their own right and provide a greater incentive to retain shares once their options have been exercised or transferred to the employee. With respect to profit-sharing schemes, the shares acquired under the Inland Revenue profit-sharing schemes should be transferable into a PEP without having to be sold and repurchased. That would avoid taxes and charges. The period for which the shares are held by the share trust before they are transferred could be reduced from five to three years.

Accounts and other circulars to shareholders should clearly be distributed to all participating employees. It would be helpful if when shares became transferable a statement was sent to all employees of the capital growth and the dividends received on shares since allocation. Furthermore, institutional investment committees should not restrict the numbers of shares purchased for the benefit of employees under profit-sharing schemes. If share purchases are to be made easier for individuals, we need to look at the saving and follow the recommendation of TAURUS, the International Stock Exchange system for electronic recording of ownership and transfer of shares, so that they can be passed on to the private investor.

A share maintenance service is needed for the private investor at no additional cost. At present there is a lack of liquidity in the stocks of smaller companies, which could and should be investigated by the ISE. There should perhaps be separate orders with a driven market for smaller company stocks. We may well see the development of retail stockbrokers closely involved with companies which wish to seek the help of private customers.

As I reach the end of these thoughts, I pay a special tribute to my hon. Friend the Member for Esher (Mr. Taylor), who hoped to participate in the debate but has not been able to do so.

The Government have encouraged employee share ownership in successive Finance Acts and tax reliefs, and with important concessions in the Companies Act 1989. Politically, the value of employee share ownership to the worker, to the company, to the economy and to society is now well established. There is more employee identification with a firm's need for profitability and its return on capital. There is more motivation for the work force to assist the development and efficiency of the company. There is less tendency to engage in labour disputes and more realism about pay negotiations. There is a lower staff turnover through loyalty and a greater sense of involvement of the company in the community in which it operates, as I saw frequently with Rowntree Mackintosh before it became part of Nestle in York, and as I have seen since then when it has been under Swiss ownership.

It is admitted that many of the benefits will be realised only if the companies concerned adopt participatory management techniques. If not, the sense of involvement that the work force have through shareholding may remain rather latent. That should apply whatever percentage of the company is held by employees.

Clearly, the Treasury is not entirely sympathetic to qualifying ESOPs because of the tax privileges that have occurred in the United States. It could be argued that some have become corporate financing tools. However, I am sure that there are devices that my hon. Friend and his Treasury team could use to ensure a more appropriate way of developing wider share ownership, partly through tax breaks, and to reduce inflation.

If we see in the next pay round of British Rail, for example, not only an increase in wages, but an opportunity for employees to participate in shares, just as was done in British Rail Engineering Ltd., there will be a reduction in the demand on the British Railways Board, a lowering of the increase in ticket prices for passengers, an increase in freight costs that is below inflation and an opportunity for the company gradually to ease its way towards the market.

I have referred to several possible schemes and I have given examples of many companies which have moved into the private sector since 1979. I have been clear and open to the House about the dangers that would occur in the unlikely event of our ever having a socialist Government again. I welcome the opportunity for my hon. Friend the Financial Secretary to respond to some of those positive thoughts.