Sir: Tony Blair should tread warily over the railway sell-off. Privatisation schemes have a hidden purpose. They widen the ownership of shares and, at the following general election, confront the shareholders with a new prospect: if the Conservatives don't win, their shares will go down.
The 1992 election illustrated this. Polling day was on 9 April. On 1 April the opinion polls projected a seven-point Labour lead. The following day, the FTSE-100 dropped 54 points and 10 million private shareholders were given the unambiguous message "a Labour victory means a drop in the price of my shares". This influenced the result of the election.
No doubt buyers of railway equities will be discouraged - as in previous privatisations - from selling their shares before the election. So what will new Labour do to reassure these individuals about the value of their shares after polling day?
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