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I sought this debate largely because of a constituency interest. My constituency in central Lanarkshire has been particularly devastated by the impact of the restructuring of the steel industry. My personal assistant, Mr. Frank Roy, is a former shop steward from Ravenscraig steel plant, which is no more. I am conscious that my constituents worry that privatisation has been not only in their worst interests but perhaps in the worst interests of the whole United Kingdom.
I do not necessarily wish to make partisan points, and I do not intend to rehearse the arguments against privatisation. We know where the Government and the Opposition come from on the issue. We are anxious about the impact of privatisation on the utilities themselves and in a broader setting. I would like the Financial Secretary to outline the costs, both hidden and obvious, of privatisation over a period.
We have teased information out of the Government about the costs of privatisation. That has led to some concern about what the accounts of the Exchequer reveal about how much privatisation has actually cost the taxpayers of this country. The Earl of Stockton in another place referred to privatisation as selling off the family silver. The Earl, who was an alumnus of my university, made a witty analogy between privatisation and the great homes of the nation. He referred to selling off the paintings, the furniture and the family silver. In reflecting upon his remarks this morning, I admit to some concern about the fate of his family company, given the speculation about the future of Macmillan. But that is an aside.
It is obvious that the key beneficiaries of privatisation are institutions in the City. Those of us who have been involved in private sector flotations know the substantial fees that are totted up by City advisers. There is concern in the House and elsewhere that some advisers who have been involved in the privatisation process have acquired Tory grandees on their company boards shortly after the privatisations have taken place. The merchant banks, accountants, lawyers, public relations consultants, stockbrokers and technical consultants have an opportunity to put their noses in the privatisation trough.
Only last week, the Financial Secretary admitted that the Government have spent some £136 million advertising privatisation share issues in the past 10 years. Since 1985, advertising costs for the flotations—there have been about 18—have ranged from £1.1 million for the sell-off of Northern Ireland Electricity to the £21.4 million which was spent on the 1986 "Tell Sid" campaign to persuade the public to buy shares in British Gas. I wonder whether Sid will tell us what will happen to the disabled when we address the issue of competition in the gas industry.
The three-stage sell-off of British Telecom cost £35.6 million over eight years in advertising terms alone. That sum beggars belief. That money could have been better spent in the public sector, rather than lining the pockets of advertising agencies and their spin-off agencies.
I hope that hon. Members will forgive me for referring to Scotland, but it is obviously at the forefront of my mind. Some £5.3 million was spent advertising the sale of the Scottish electricity companies. That amounts to more than £2 for every adult in the country.
It is recognised that Opposition Members are very disturbed about the extent to which industries were undervalued in the first place. That undervaluation is also a cost of privatisation. The Government undervalued the assets, heavily hyped their sale through advertising the share issue, and in many cases wrote off debts of billions of pounds beforehand.
To give another Scottish example, at the same time as many Scots were enduring the shameful humiliation of poindings and warrant sales because they had incurred debts as a result of the poll tax—I know that the Financial Secretary is concerned about that issue—the state was writing off £1.5 billion in debt for the Scottish electricity companies.
A poinding or warrant sale is the most depressing, degrading and humiliating way of recovering small debts. A sheriff officer arrives at the house of an harassed family, who are usually in some distress because they cannot pay their debts. The sheriff officer, who is often assisted by the police, can enter that house and go through every item of the family's belongings—from the kitchen table and chairs to televisions and radios—and put an often derisory value on those items. That exercise is often undertaken for the recovery of debts of only £200 or £300. I have witnessed warrant sales—in fact, I spent much of this week trying to prevent one from being inflicted on one of my constituents.
I feel quite bitter when I see that the Government are prepared to write off quite substantial debts in order to make companies that are about to be privatised more attractive for a general share issue. I remind the Financial Secretary of the words of his colleague John Maples, that the rich get richer on the backs of the rest of us.
It is very difficult for me to explain to my constituents—indeed, I would not try to explain it to those who are enduring the humiliation of warrant sales—how that can happen. The only similarity between the way in which the Government write off the debts of companies which are about to be privatised and the sheriff officers is that they both have very flexible attitudes towards the true value of assets.
I accept that many individuals made quick killings from initial share offers when they sold their shares to the institutions which are the current shareholders. The broad base of share ownership in this country has narrowed considerably. Water industry shares were sold at £6.5 billion in 1989, and they are now valued at £12 billion. There have been £2 billion in dividends since 1990. Shareholders get the money and the opportunity to laugh all the way to the bank, but the taxpayers are suffering, and the nation as a whole is impoverished as a consequence.