Major aims to carry on privatising

Railtrack and atomic energy top list of sell-offs
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JOHN MAJOR intends to appease his right-wing critics with a package of privatisation measures including the multi-billion pound sell-off of Railtrack, the body that owns railway track and stations.

Mr Major, stung by the row over his retreat from postal privatisation, is expected to begin his ideological counter-attack this week with a commitment in the Queen's Speech to sell the commercial wing of the Atomic Energy Authority, AEA Technology.

This follows a Whitehall-wide search for privatisation candidates after the defeat of the Government's plans for the Post Office. But suggestions that air traffic control could be privatised ran into technical difficulties.

New legislation is not required to privatise Railtrack because the powers are already enshrined in law. But Labour will launch a fierce attack on the plan, particularly because a minister promised during the passage of the Railways Bill - which privatised train services - that Railtrack would stay in the public sector ``for the foreseeable future''.

The Secretary of State for Transport, Brian Mawhinney, is scheduled to announce the sell-off on 21 November.

Railtrack owns the track, stations and signalling and has been valued at up to pounds 6.5bn, although even optimistic observers believe it to be worth no more than half that sum, perhaps pounds 3bn. Private train service operators will pay a fee for the use of the track. Ministers hope the flotation will take place in the first quarter of 1996 - probably too late to help the Chancellor achieve pre-election tax cuts.

AEA Technology is a much smaller operation with a turnover of around pounds 250m a year. It provides science and engineering services for businesses. It is separated from the more sensitive government division of the Atomic Energy Authority which deals with the decommissioning of prototype reactors and which will stay in the public sector.

Although a place for the paving legislation in the Queen's Speech had not been finalised last week, the Leader of the House, Tony Newton, has sent Mr Major a minute, supporting the AEA Technology sale, and its prospects are good.

News that Railtrack privatisation is imminent produced a Labour reaction which could sabotage the sale. It said potential investors should realise that the business could be taken back into public ownership by a Labour government.

Henry McLeish, opposition rail spokesman, said privatisation was ``completely mad'', and accused Mr Major of being ``irresponsible with the future of the railways''. Brian Wilson, industry spokesman, said the Government was trying to sell Railtrack because of its lack of progress in dispensing with franchises for private operators.

Mr Major hopes that right-wing critics, angered by the departure of the junior minister Neil Hamilton, as well as by the loss of postal privatisation, can be brought back on side by the new sell-offs.

However, privatisation of air traffic control is unlikely to go ahead immediately, partly because of complications created by the needs of the armed forces. The compulsory sale of regional airports owned by local authorities (worth about pounds 500m) is also unlikely to proceed at present.

In another clear sign of nervousness Mr Major is expected to delay the Dudley West by-election until the New Year, despite pressure from local Tories for a poll in December. But Mr Major's allies are now confident that he will avoid a leadership challenge this year. They concede that 20 Tory MPs are disgruntled but 33 - 10 per cent of the parliamentary party - are needed to trigger a contest.

This week's Queen's speech will highlight 12 Bills including, as has been widely predicted, equalisation of pensionable age between men and women. Other Bills will set up a new environmental agency and increase the EU budget.

But Mr Major may postpone the crucial Commons vote on the new European Union budget until 1996, depending on the advice of government business managers. Ministers are still deadlocked over the scope of a Bill which will give disabled people increased rights of access, at least to all public buildings.

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