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I do not want to sustain this argument, but the Gas Act 1995 was the then Conservative Administration's second attempt to get gas privatisation correct.
I hope that the Government will establish a consensus and secure the broad support of most of the parties involved. The Bill is long awaited. The Select Committee on Trade and Industry reported in 1997 before the general election and we had a Green Paper and the consultation and responses to it. It is regrettable that the Bill was not introduced earlier, but its complexity and substance have made it well worth waiting for.
It is legitimate to go over the arguments that relate to the privatisation of utilities that began in 1985. In large measure, the Conservatives used privatisation in the attempt to raise revenues, and precious little thought was given to the more important issue of liberalisation. If there was a fault in state monopoly, there was an even greater fault in the creation of private monopolies with regulatory processes that involved, to say the least, a very light hand on the tiller.
At that time there were arguments about price cuts and share prices, and in the 1990s the issue of fat cats arose. Directors' pay crystallised several issues. The fact that the cost structures of the privatised companies needed trimming was probably not in doubt. Most redundancies were voluntary and in large measure were smoothed by generous payments.
The achievement of even minor efficiencies in many of those organisations was not difficult, and when they were realised, in what was then a monopoly market, they often had a disproportionate impact on profits. It is little wonder, therefore, that the understandable initial caution of the regulators in price setting, combined with the savings that they were able to achieve, resulted in a leap in profits and in the share price.