Major Puts New Face on Privatization Effort
WHETHER or not London Zoo, like Noah's Ark, can be successfully floated, there is no doubt that privatization in the Thatcher era has transformed Britain's industrial landscape. Also it has supplied government coffers with some $60 billion in funds. More privatizations are in prospect.
Key industries, including state-owned British Rail, remain targets for moving into the private sector, but Prime Minister John Major's approach differs from that of his predecessor, Margaret Thatcher.
The prime minister, Whitehall officials say, has abandoned plans to sell off the entire British Rail (BR) network, most of which is unprofitable. Instead, he is focusing on its Inter-City and Freight sectors, both of which are profitable. He plans to invite the private sector to bid for a 51 percent stake in the two sectors.
BR would remain the biggest single shareholder and be responsible for track and safety.
The partial sell-off of BR, worth an estimated $700 million, will happen after the next general election (mid-1992 at the latest) if the ruling Conservatives are returned. British Coal ($100 million) would be sold by auction soon after.
Sale by auction will be the preferred method of asset disposal, a government official says. This contrasts with the highly popular sale of stock in British Airways, British Gas, the British Airports Authority, and other concerns to the public.
The only important exception will be British Telecom, in which, after a partial sell-off in the mid-1980s, the government retains a 49 percent shareholding.
Mr. Major and Norman Lamont, the Chancellor of the Exchequer, intend to offer the remaining shares to the public in the fall. The Telecom sale will be the last "whopper" in Britain's privatization program, worth an estimated $14 billion.
A measure of the permanence of the change in ownership of previously state-held assets is the Labour opposition's reluctance to suggest that the policy would be put into reverse if it becomes the government.
Neil Kinnock, the opposition leader, has said some important utilities now in private ownership would be placed under firm controls by a Labour government, but most of the Thatcher era's privatizations would be left untouched.
Major has signaled one measure that is certain to raise Labour hackles if he decides to adopt it. Last month government officials leaked suggestions that the prime minister wants to privatize social security offices and inject more competition into the supply of services to government departments.
Steps were taken in the 1980s to inject private enterprise into the supply of services to state-run hospitals. These measures continue to anger hospital workers, many of whom are Labour Party supporters.