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 Mr Tim Smith Mr Tim Smith , Beaconsfield 5:30 pm, 3rd April 1995

I do not accept that customers are suffering. The amounts involving customers are trivial. My right hon. Friend the President of the Board of Trade recently gave some figures about British Gas. They showed that, if the director of British Gas were paid nothing, the annual benefit to each customer would be trivial. I do not think that it is a matter for customers.

The other important point is that, since privatisation, both the customers and shareholders of those companies have benefited. If one takes British Gas, in the past nine years, the price of gas has fallen by 20 per cent. in real terms. At the same time, the business's profitability has increased substantially, because new pressure has been placed on management to become more efficient and to drive costs down. As profitability has risen, so has the share price.