Labour in 49% sell-offs
Government departments look at partnerships between public and private sectors as alternative to full privatisations
Sunday 05 October 1997
The move, which is being studied by the Treasury and other government departments, could mark the end of privatisation of state assets in Britain.
But it would also produce millions of pounds in revenue for the Government while retaining public control of the businesses.
The latest proposals being debated by ministers involve a split of the businesses, which would keep 51 per cent of the equity in government hands and sell 49 per cent to the private sector.
That would enable the Government to avoid the politically contentious step of privatisation, which remains a sensitive issue for Labour.
At last week's party conference in Brighton, John Prescott, the deputy prime minister, saw off a move to commit the Government to renationalising the rail network.
However, senior Labour sources are aware that embarking on a new round of privatisation would provoke opposition both inside and outside government.
At the Treasury, the unit which dealt with privatisation has now been instructed to focus its effort on a broader range of measures designed to bring the private sector in. Among the options it is investigating, is the proposal for the 51/49 per cent split.
Ministers in the Department of the Environment, Transport and the Regions have made known their reservations, however, about the possibility of selling the air traffic control system. They are particularly concerned about the prospect of splitting up the network.
The new proposals are thought to be compatible with an expected plan to change London's tube system by dividing it into four businesses.
The main drawback to the partnership idea remains the Government's strict accounting rules, which count all borrowing against the public sector borrowing requirement.
The Treasury is believed to have ruled out any changes to these regulations for public/private partnerships on the basis that control of the new companies would remain in the public sector.
While the Post Office, which is a profitable concern, is likely to be an attractive investment opportunity, government sources concede that greater incentives would be needed to tempt private money into the tube.
During the general election campaign, privatisation became a central issue when the Conservatives claimed that there was a pounds 12bn "black hole" in Labour's spending plans.
With Labour's tax and spending proposals based on the then government's plans, Gordon Brown, then shadow Chancellor, said that he might have to sell state assets worth up to pounds 122bn.
At the time, his aides made clear that he would consider any privatisations, including Channel Four, Parcelforce and other Royal Mail agencies, and the National Air Traffic Control system - sell-offs Labour had previously opposed.
Earlier, Robin Cook had moved quickly to squash suggestions that a Labour government might privatise the Tote.
Under the Conservatives the Post Office was a long-standing target for privatisation. The last government's plans for a sell-off were ditched only after a high-profile campaign by the post office unions struck home with Conservative backbenchers, and it became clear that there was no parliamentary majority for the move.
- 1 Bill Clinton portrait features Monica Lewinsky reference, artist admits
- 2 Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
- 3 PornHub turns masturbation into energy in bid to save the planet
- 4 Have sex with your iPad thanks to the new sex toy no-one asked for
- 5 Average penis size revealed: Scientists attempt to find what is 'normal' to reassure concerned men
Bill Clinton portrait features Monica Lewinsky reference, artist admits
Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
The 'sex selfie stick' lets you FaceTime the inside of a vagina
Kanye West gives guest lecture at Oxford University: 'If I, Kanye West, can remove my ego, I think there's hope for everyone'
'This is what Islam tells us to do': A rare glimpse inside a Saudi Arabian prison – where Isis terrorists are showered with perks and privileges
New theory could prove how life began and disprove God
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
This is what it's like to be dead, according to a guy who died for a bit
Ukip would cut billions from Scottish budget to fund English tax cuts
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
End of the licence fee: BBC to back radical overhaul of how it is funded
iJobs Money & Business
£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
£15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...
£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...