Discretionary Share Option Schemes in the Privatised Utilities

Part of New clause 1 – in the House of Commons at 5:30 pm on 3rd April 1995.

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Photo of David Winnick David Winnick , Walsall North 5:30 pm, 3rd April 1995

It will be interesting to see the Financial Secretary's reaction to the debate. As my hon. Friend the Member for Oxford, East (Mr. Smith) said, it is very much a test of how concerned the Government really are about the share option scandal, and the outrage felt about it.

Through no fault of my own, I hope, I have spent more time outside the House than inside it during the past two months. Therefore, I can tell the Financial Secretary that we are not exaggerating the sense of outrage felt by so many people throughout the country—by no means only Labour voters—that so much can accrue to so few people who, at the end of the day, are simply doing precisely the work they did previously, when the utilities were in public ownership.

Not only have the salaries of those who run the privatised industries increased substantially, but they have been given various perks—altogether almost as though they had won the top prizes in the national lottery a number of times over. In addition, if they were to realise the share options, a great deal more money would accrue to them, which would cause further concern throughout the country.

I have been studying some of the figures. Based on share prices at 30 March, the value of shares held under option by the directors of the water, electricity and gas companies totals no less than £80 million. The profit that could be made were those shares to be sold would be about £27 million, to be shared by only a few individuals.

The hon. Member for Wirral, South (Mr. Porter) made a fair-minded speech, except that he took my hon. Friend the Member for Oxford, East to task for using what he called emotive language about bosses. But they are bosses; they run the industries. Almost without exception, those same people were running the industries when they were in public ownership and they were receiving a reasonable salary; but since privatisation, they have received salary increases far, far in excess in percentage terms of anything our constituents could ever get. They have also had various perks, and now they have share options.

The Government's only response is to say that, although they do not really like it, there is nothing they can do about it. As the hon. Member for Milton Keynes, South-West (Mr. Legg) said, they think that it is a matter for the shareholders. I can tell the Government that what has been happening with these directors smells as much among the electorate as what happened with Westminster council—