Sc - 11 Home Secretary

---

Sc

- 11

CONFIDENTIAL MINUTES ELEVENTH

Present:

OF THE STRATEGY

MEETING :

MONDAY

Copy Number GROUP

19th JANUARY

1987

Prime Minister (in the Chair) Lord President Foreign Secretary

Home Secretary Chancellor of the Exchequer Party Chairman Chief Whip Also

resent:

Mr Alison Professor Griffiths Mr Sherbourne Mr Harris (Secretary)

Action 1.

BTR/Pilkin

ton

The Strategy Group discussed the current controversy surrounding BTR/Pilkington. It was agreed that the main points to be stressed were that: the issue of competition had not arisen; nor was the 'national interest' an issue; the Government therefore had no responsibility to intervene. It might also be pointed out that: the shareholders were quite capable of taking all the considerations fully into account in making their decision; and that if it were thought that special criteria would be applied in such matters by government to firms in the regions that would discourage regional investment. 2.

PM/NL

City

Fraud

The Strategy Group discussed the current controversy about fraud in the City. It was agreed that briefing on this matter should stress the important steps which had already been taken by the Government and draw particular attention to the provisions of the Criminal Justice Bill, amendments to which were being proposed by the Opposition in the Lords - amendments which were designed to reduce the protection which the Government was seeking to extend to investors. It was proposed that both the Prime Minister and the Chancellor of the Exchequer should make speeches on the City. 3.

Next

The next 12 noon

Meetin meeting will take place on Monday, 26th January at when the paper on Presentation will be discussed.

RH/VCS 21.1.87 CONFIDENTIAL

CONFIDENTIAL

Copy

STRATEGY

GROUP

MEETING

ON

MONDAY

this Year"

19th

JANUARY

1987

1.

"Presentation

2.

Forward looking diary for the next two weeks (paper to be circulated at meeting)

3.

The Chancellor's Policy Group Report (already circulated to Strategy Group)

SS 16.1.87

CONFIDENTIAL

(paper

No

attached)

11

Conservative Research Department 0

32 Smith Square Westminster

SWIP3HH

Telephone 01-222 9511 Director:

ROBIN HARRIS

Copy number PRI ME MINISTER cc Mr Sherbourne Professor Griffiths

'MANAGING

Your Strategy Group's

Report

I attach

THE ECONOMY'

Group

on Monday,

a note

will

discuss

RH/VCS

1987

- FINAL

REPORT

the Chancellor's

Policy

19th January.

of my observations

ROBIN

14th January

(PG/86/1)

HARRIS

and recommendations.

Copy number

0

'MANAGING

1.

THE ECONOMY'

- FINAL

REPORT:

COMMENTS

(RH)

General The Report It reaffirms further regard

is clear;

radical

action

fresh

or election

radical

tax changes Treasury

imagining

be better

said now than

to take

to give

in the election bind

to be brought

the

us at present

Recommendations

(References

and education up early

- paragraph

14;

in the

by stealth:

in

and the extension

in the campaign.

view

of what

needs

of uncertainty

(I attach

a

(For

is no point

can be achieved

- appendix

to have

and health

impression

campaign.

serious

in the

parliament.

But there

a realistic

much

pledges

in effect,

in education

on health

and proposes

having

to avoid

in the next

these

elaboration.

involved.

so as,

25-6.)

that

charging

of VAT are bound

S ecific

options

- paragraphs

particular,

which

campaign

look at possibilities

example,

would

is the need

little

strategy

however,

difficulties

theme

need

economic

- without,

to the political

manifesto

its contents

the Government's

A recurring

2.

(PG/86/1)

.

the three

It to be

or division

key tax pledges

A).

of the Re ort

are to paragraph

numbers

of the Policy

Group

Report).

Paragraph

14:

It is unrealistic

can keep all the options in education

and health

open

to imagine

of i-iii

since

are different.--

that one

the possibilities

Nothing

should

be said n

which

implies

treatment

might

no temptation damaging

that

to

charging

be introduced.

parental

education

In practice,

o t is in health:

to the case

and increased

for basic

for devolution

but

or hospital there will

it would

of management

choice if they were linked

be

be politically of schools

with

the

/introduction

of

.....

Copy number - 2

introduction

of charging.

Paragraph

15:

This

Paragraph

22:

(i) and

well;

but the argument

other

options

will

again

for cuts

also need

now and the General

profile

of the issue of tax:

Group

on tax/social

Report

associated Survey would also

by the public

(July 1986) cut taxes

true

that

as that

show

they would

Similarly,

to suggest

tax cuts

than others.

lower

rather

taxes

that

growing

Paragraph

28:

in preparations the objective ceiling

outlined

be advantage

honestly

spending

are more

polls

or not) taxes.

services,

of no

in favour

should not

than public

Labour

It is

to lower

therefore,

See above

services

because

of be

but

of a healthy

- something

which

But

of relief

I attach C.

in a further

- 1. General.

be discussing

by the Policy

(though

- appendix

do so.

the opinion

are now possible

for the Budget.

we can exploit).

that

reverse.

You will

Parties

Summer

to me that he knows

there a note

That rise

this with

it is worth Group

forward

suggests

considering

shows

rates

- is

confusions

and which

the Parties'

to me that there

in the £30,000

that

in the

by the Labour

are some past which

the Chancellor

- no rise

at the higher

the same as that now put

'Alliance'

positions

economy,

and limitation

effectively

and better

believed

would

group

important

of the But the

The Party's

people

public

the C1/C2

and those

that we are clearly

(whether

has confirmed

25 et se g.:

Paragraphs

say

to

the

us in that.

B) that

Our argument,

Conservative

help

as many

increased

that

taxes

would

will

- appendix

to raise

problems

tax cutting.

that

are more

lower

our opponents

with

rate as opposed

We need

Labour's

for tax cuts

out convincingly

the Conservatives

Britto

evidence

that

Election.

that people

prefer

Keith

to be spelt

in believing

showed

(see attached

consistently

in the basic

security

is complacent

at the level of theory.

(ii) put the argument

between

'Alliance'

remains

ceiling:

would in

/particular,

we

...

Copy number

- 3 .

particular, against

we might

it and the SDP abstaining

Paragraph women

29 (ii):

are not happy

Paragraphs be worth

including

Channon

are made reform

and

On balance,

on wider

- both

of which

ownership

provide group

of which

did

chaired

I forwarded

that

of keen

further

thinking

we want

to make

full use of the property

feature during of it. presents

40:

in other

Reports:

the Chancellor's

Group's

The main

like to give

3.

Omissions 1.

proposals

his Group's

may

areas

The proposals

Group

Peter

of the Policy

Group's

the CPS wider a paper

that we do need

in the Manifesto owning

Cropper

deliberations

if

democracy

theme.

rents

provided

a paper

on the finances

be considered

When

remit

in 'Alliance'

for de-regulating

should

Report.

or on further

interest

I am sure

to show

Paragraph

that no new proposals

o- provided

Vinson

on-both

ask

as well.

on pensions;

to the Treasury.

they

in the Group's

in the course

by Nigel

which

you should

ownership

were

some proposals

it would

from the beginning

areas

share

are the subject

John Redwood

discussions

be asked

It is disappointing

in the Report

circles.

which

35-36:

in these

that

allowances.

for privatisation

be privatised I recommend

ideas

of the Conservative

I believe

candidates

voting

last time.

for transferable

In any case , we will

of pensions

both

as they did

the proposal

some named

for his

and Liberals

some

campaign.

Paragraphs

Party

As you know,

be and how they might

of the Election Paul

with

30-34:

in the Manifesto . might

see the Labour

that happens

when the

Mr Ridley ance

or

his views.

What

pledges

the Chancellor

really

made

in and since

urging

should

the 1983 campaign

not be reaffirmed /time?

this .

is

Copy number

.

- 4

2. Manifesto

3.

Are we still

further

for zero

inflation:

Should

the

say so?

What

or as a share

4.

aiming

There work

is our aim

for public

of GDP - and what

- in real

do we say about

are no new proposals now be commissioned?

spending

on wider

terms

it?

ownership:

Should

Copy number

0 CONFIDENTIAL

APPENDIX

Commitments

iven

1.

Mort

The

Prime

that

mortgage

"I

Minister

confirm

on Food

"We

a

on

no

intention

ice cream,

nditures

public.

assurances

will

as

be retained,

for example:

I am

Dispatch

relief

at

will

the

be

a

Box,

policy

of

the

made

in

the

77 no 97 col 1331.

European

Labour

(Prime

tax

1984

of

several

long

1985 OR vol

have

leader

so

statements

to the

Tax E

Party".

VAT

of

given

relief

interest

April

run-up

has

that,

[16

number

on the Ma'or

Relief

interest

Conservative

A

Ministers

a e Interest

mortgage

2.

b

A

the

VAT

and

elections,

of

opposition

should who

soft drinks

and potato

12

June

put

1984

7561.

1

were

for example:

extending

Chancellor

Minister

food

VAT

to

remember VAT

on

food. that

it

The was

confectionery,

crisps." OR

vol

61

no

169

col

Copy number 3.

•

Pension

In his

1985

Fund Taxation

Budget

"There

is

of

pension

of

the

Any

Statement

also

a

way,

a Green

as

for

of

reform

need

to

be

that

I have

no such Green

indeed,

agitation,

do

affect

and

the

tax

treatment

thorough-going

personal this

savings kind

by

reform

generally.

would,

the

in

the

publication

of

am

sure,

be

Paper

the the

interested

to

learn

in mind.

unparalleled

of

the

tax-deductibility

of

pension

fund

the

tax

of

pension

fund

gains,

detailed

pre-Budget

any

capital

tax free

[OR 19 March

I

despite

contributions,

loved

said:

Paper.

will,

income

a

preceded

House

Budget

of

of

The

Nor,

changing

part

treatment

fundamental

same

case

funds,

tax

the Chancellor

free or

nature the

proposals

anomalous

lump sum."

1985 vol

75 no 83 col 7951.

but

in

my

much-

Copy.

numbe

.

B

ConservativeandUnionist Central Office 32 Smith Square Westminster SW1P 3HH

Telephone 01-222 9000

Memorandum from:

.BRI•TTO......

Date : ..........

TAXES

..............KEITH

13tfl .January.

AND

PUBLIC

To: """""'ROBTN'HALRIS'

...........

.....................................

.1987 .................

SPENDING

As promised I have looked at recent polls with regard to attitudes to tax cuts versus public spending. The latest available information I have is taken from a Gallup survey published in October - the results are given below together with comparative figures from June 1986.

People

have

differing

views

about

whether

it is more important to reduce taxes or keep up Government Which

of these

spending.

statements

comes

How closest

about

you?

to your

Oct

June

1986

1986

own

view?

Taxes being cut, even if it means some reductions in Government services, such as

health, education and welfare. Things

should

be left

9

17

18

14

68

64

5

5

as they

are. Government services such as health, education and welfare should be extended, even if it

means some increases in taxes Don't

know

As you can see there has been little change since from June 1986 to October 1986. In June 1986 64% thought Government services should be extended even if this means increases in taxes compared with 68% in October 1986. We do not have a detailed analysis of this question by socio-economic groups I will try and obtain. It is likely to be only ABC1, C2 and DE. I doubt if I will be able to separate out Cl's from the ABC1 groups.

Copy

number

i..

C

OPPOSITION

1.

LIBERALS

AND

PARTIES

ON

MORTGAGE

INTEREST

TAX

RELIEF

SDP 'Partnershi

for

Pro

ress ' : Jul

1986

The Alliance would also promote owner occupation by enabling those on low incomes to become home owners. Mortgage Tax Relief has assisted millions on households to buy their own homes. It is essential and must be retained. We do not believe however that the present situation whereby the better off benefit most from this relief is fair. lie would therefore conf' ne iort a e Tax Relief to the basic rate of tax. The Alliance Parties propose help for t ose on low incomes - wit a eposit by extending the existing Home Purchase Assistance Scheme which was set up in 1973. This Scheme would particularly help young people buying for the first time, and council tenants could choose this scheme instead of the 'Right to Buy'. We would also promote, through local authorities and building societies, index-linked mortgages to reduce mortgage repayments in the early years when they are highest.

2.

LABOUR

NEC

Statement

to 1986 Conference

Party

Policy

As

: Social

Approved

by

Securit

Conference

Making the structure of taxation fairer V part of our plan, It more !undamental reform of taxation we have prepared a package ,tf hjn¢r' atth the following haracieristics •

An end to e' Jt,.nmtnaflon

in the taxation of earnings hs• taxing

men and women ndeprndrntk •

lntroJuctiun tt J new reduced rate hand of income tax for the low paid, and a progressive i%stemof !axrates to be levied according to inutmc

•

Resirtctwn oiill Jllowan.e, against tax to the sta ndard ra te. so as at end the present sstrm of extra tax allowance for the weal'h\

•

ntr,tducnon

of j new

pnterrs,ne

:mph

st

!jeer and more comprehensi%r system of nati

•

kcmosat

-I

rsm .n,urance

ln,otuit

n of J lamp Joan

a-iJJn,e

-kill

l hi,

A ill 's•sf utre

in the Inland

i,h, '

's

main

Those

on

tnwuncc . nmhuuom _JrR to ,fx_, ai natonal n se _s: ,t.r seek and in sestmenI

the

r,,m .aro, nC s:mpu,nn.me ! :ns . s •4 L . "v -p..,.

•

:onirihunnns

a:ll tale a lister rate of national insurance r. neher n.omes

bras and m,dJle m..,me, - mtrthui - n Than h- -

Re' moe

ram,-

their

-,

tjjrJ,

1

1 protc

i .mail

JCrr,

in trines ?srnritt,. ij\ r%i,wn Jnd as ;ne

Hutton

oh, which

of j uhsran iii i num her Ott thri,uRh rrsrnur tt- acted

.,,i

•

Reinrn-JJsts,n of a ,,mprchrn,i\c

•

1;ehtrnine Thetmsregime for ar0Jl gain, and insrstment mime

•

Inin iu.ttn

let

') Uih a pJ.kJge he pasicage

,.i a as

u\ on .apical rranarr,

n aCJi!h

,'I rrt , rm, -a,,u1Jmake the ux system much latter in nseit. could not nsofse an\ tax mcreasa• lOr the

ordinars t.tspjser Thu a f+'ssihie hecausr of the sheer scale of redutnhuuon trim oriinan ta\pa\ers to the nih that has taken place sin ce the Ismsrr\auyes

same :ii pnwl 'r

in

1979

and

Taxation

PRIME

MINISTER

16

MANAGING

The

Thrust

The

major

of the

Re ort

proposals

are:

a.

a target

b.

a reduction and

c.

of

zero

top

privatisation

d.

joining

e.

more

t.

resources

rate

PSA and

rate

tax

to 25p

to 50p

coal,

steel , water

and

Waterways

Exchange

rigorous

of income

inflation

of electricity,

the

1987

ECONOMY

in the basic

in the

possibly

THE

Januar

Rate

tests

Mechanism

for welfare

following

consumers

of the

EMS

benefits

in

education

and

health

All

9•

revitalisation

of

are

desirable

the

apart

from

a. and

ERM

and

The

cornerstone

Medium for

of

exception

need

economic

Financial

more

reduced the

It

and

is

taxes

money

policy

Strategy

expenditure,

growth.

measuring

b . all

rented

of

market.

the

joining

ERM;

but

work.

EMS

Term

supply

been

the

public

with

the private

public

since

(MFTS), sector

because

of

cut,

despite

supply.

- 1 -

1979

which

has

borrowing

this

that

has

been

set and

inflation

the difficulties

the

targets money has

of

r y. Er', -

This

Report

reaffirms but

that

says

does

advocates public

nothing

not even

a binding

a major

change

expenditure

about

the

mention

needs

PSBR

or

the MTFS.

commitment

to

in tactics.

the

to be controlled, money

supply.

In its place

membership

of

It

the

It

it advocates

ERM

after

the

election.

It

is

highly

likely

Secretary

will

the

place

to

and

exchange

the

foreign

damaging

run-up

to

to press

discuss

tactical

rate

policy.

exchange the

Chancellor

this

issue.

questions

It would

and money

Government,

and

not

A Manifesto of

lead

markets least

Foreign

is not funding

monetary

to speculation

and in

could

the

in

be very

immediate

to the election.

election ERM

the

wish

Recommendation:

for

that

Maintain

there

will

present

be plenty

policy.

of time

Having

to examine

won the

the case

membership.

Privatisation

We need make

to expand

this

on our

an important

success

part

of our

It is unrealistic,

however,

substantial

privatisation

specific are

future

industries

prepared

run

involved

we

the

(b)

you will

risk

that

be hounded

past

a commitment

without

listing

(see appendix in this

A).

the

Unless

will

the campaign

be vague;

to say

something;

(c)

it will

be more

parliamentary

difficult

colleagues

to secure for

privatisation.

-

2

and

to

Manifesto:

the Manifesto

during

privatisation

programme.

to make

to be specific

(a)

with

the support

the more

contentious

of

we

Steel,

electricity,

difficulties be

how

we

of

British

in being

declare Rail

South-East)

union

Should

extended?

The

Freight,

the

the

give

list

What

much

of

about

Inter-City, of

to imagine

that

of a hostage

parts

parts

Network

the

trade

by being

to fortune.

to be privatised

of the

would

NC}3 and

opposition

industries

no

difficulty the

Parcels,

incurring

present

major

regarding

It is difficult

you may

not

and Waterways

intentions

(BREL,

without

PSA

mentioned.

our

movement.

specific

water,

Post

be

and

office

urban

bus

companies?

Para

30

which

competition programme"

how

reaffirms

"the

or an important is

it might

very

objective

part

important

and

of

of

the

needs

increasing

privatisation more

thinking

as

taxes,

but

to

be implemented.

Recommendation:

(i)

List

(ii)

specific

Extend

(iii)

existing

Reaffirm

(ii) and

industries

(iii)

list

competition

require

extra

work.

Taxation

Para

29 not only

a fair

deal

for women

Reco mmendation:

further

Public

work

Before

a commitment and

removal

any

to lower of existing

commitment

is

made

tax

also

penalties.

these

need

and discussion.

Ex enditure

Demographic

pressure

makes

trends

on public

and

rising

expectations

expenditure.

The

-3-

great

are

putting

challenge

great

to

future

governments

assumptions

"free".

This

context public

and

of

is to break

policies,

has

lower

reforms

cases

the objective sector

practical.

The

concrete

provided

overburdened

one

by

stimulated

the Manifesto

housing

and

to introduce in

by

should

health. more

direct

paras

where

12-18

Regional

In all

paying is

outline

activities

to

wherever

rather

for

might

higher

be

renovation,

services

which

for

mentioned

rules

and

limit

Authorities

hospitals

house/flat a range

of

might

pay)

people

explicitly

which

introduced

council

of increased

Health

schools

pricing

options

are not

funding

individual

economy

be to transfer

of

loans,

if they

and

is

lacks:

medical

per capita LEAs

and

as the price

preventive

b)

must

examples

(eg student

even

expenditure

discussion

It

what

in the negative

a vigorous

in education,

the private

rents

of

of established

taxation.

of public

theoretical.

of

not

arthritic

but

major

a)

an

expenditure,

In terms

especially

to be presented

avoiding

appreciably

the mould

in the Manifesto;

the discretion

of

in funding

- so that

money

follows

choice;

c)

increased

use

of

private

schools

and

the BBC

re independent

Recommendation: these

issues?

BRIAN

GRIFFITHS

housing

Would

supplies

(compared

it

within

to the

25%

the

rate

NHS,

imposed

on

producers).

be

useful

to

commission

papers

on

APPENDIX

A

SECRET

ELECTRICITY

The

PRIVATISATION

Pro osal:

To privatise

(ESI)

in a way

would

be

sell

off

Area

Boards

would

to generate

some

to

which

maintain

competing

become

of

grid.

independent

own

electricity

best

grid

companies,

paying

industry solution

but

to

or in groups.

electricity

companies,

The

The

electricity

individually

their

supply

competition.

national

stations

generating

national

promotes the

the power

the electricity

or

freedom

to buy

tolls

showrooms

with

for

would

The

from

use

the

of the

be sold

off

separately.

Reasons

in

proceeds

favour:

well

ownership.

over

More

therefore

more

consumers

could

contracts

when

security ESI.

A major

from

twice

efficient shop

of

projects

efficiency

through

use of

or district

Ar

a

likely

and

commodity handle

ainst:

private standards

The

advantageous

decisions.

small-scale

heat

Greater

up the monolithic

local

by the scope

heating

and

industrial

by breaking

the waste

industry

electricity

for

for

greater

energy

industrial

schemes.

up

the

monolithic

within

wider

the

structure industry

regional

- currently

a maximum

as electricity

this

could

stations

into

of is

variations

of 11%.

in

For a

be difficult

to

politically.

Transferring

nuclear

action

to substantially

as basic

Major

with

share-

supply

the most

competition

tariffs

Wider

the

investment

Breaking

promoting

to lead

electricity

for

justified

complexes

ESI

more

privatisation

of gas.

production.

around

industrial

of

within

considering

generation

the

those

competition

Possibility

uments

tranche

the

sector may

nuclear

hands

will

power

arouse

be compromised.

industry

pro-competitive

in the eyes

form

concerns

This

could

of a nervous

of privatisation

SECRET

profit-motivated

that

safety

damn

the whole

public.

proposed

will

be

SECRET

opposed

by

the

management.

the

The

power

:

relatively

competition sector

of

the

energy-efficient pro-competitive

and

in

operated

existing power

discourages

big

We would

SECRET

of with

country

there

of

stations,

linked

with

subject

by

an economic

neither

of

power

to

the private

station

scale

opt

keeping

or privatising

WYBREW

level

conflict

system

disciplines

small

necessary

sector

ESI

The

group.

JOHN

serious

in accordance

initiatives.

in the public

a

a monolithic

if

senior

severe.

the

inefficient.

model,

most

densely-populated

to the commercial

CEGB

the of

well-located

However,

is horribly

mentality

stations

large

nor

risks

a compact,

grid

order.

probably

particularly

attraction

few

the national merit

are

For

a conceptual

and

political

workers

Assessment is

unions

for

the

the

nuclear

them

radical

as a single

S EC RBT

PRIVATISATION

OF

The

Pro osal:

for

a diversity

THE

To

COAL

restructure

of

private

licensing/regulatory established gas

for

tender.

The

authority.

Into The

Government

Where

be

mines

be

management/employee

buy-outs

Reasons

The

a natural

Coal

interests, lieu the

of

Government

highly

business

and

desirable

shift

a monolithic

NCB

ever

as an efficient,

operate

business. and

The

pre-War

is at the the

riven

present

work

because

appropriate

winning

coal

pick

with

and

sector

(probably

tender.

required)

of coal

for oil

gas.

and

combination rent

of business

collector

policy.

from

a

in

Even

given

supply-driven

it is doubtful

conflicts

of

interest

that can

commercially-disciplined has

industry

practices

be awarded

development

social

British

of work

for

existing

business,

technology,

the

that

emphasis

structure

of

and

for

these

practices.

forefront

benefits

with

launched.

would

investment

economic

to a market-responsive

be

competitive

confused

of

competitive

be encouraged.

than

vehicle

concession

Concessions

private

for

exploration

authority,

and

Exchequer.

would

Coal's

would

is a hopelessly

licensing

the

future

monopoly

to the

of new mines

offered

(ie limited

into

off.

British

locked

in

inefficiency

deep-mining

capability

yet still

we are

S EC R ET

denied

operates

to the days

shovel.

a

licensing/regulatory

industry

from

of UK oil

or after

directly

development

would

in favour:

basis

in

successfully

divided

auctioned

companies).

appropriate

British

be

aiming

operating

development

be the

pass

tendering

and oil

is no more

and

privatised

would

and

competitive

profitable

a

pits

the exploration

mining

to that

would

would

would

framework,

open-cast

after

akin

country

industry,

participants

on a discretionary

Royalty

this

sector

regime

The

awarded

the UK coal

the exploration

resources..

areas,

INDUSTRY

on

much the

of a million

of

basis

miners

SECRI'['

Ar uments case

A ainst:

nr(I

irre[utable.

dislocation

the

coal

have

deep

The

cautiously bang",

argument,

step-by-step,

Assessment: cost

value

of

our oil

with

Given of coal

UK

and

extractive

JOHN

logic ,

on too

the

gas

reserves.

industry

is set

at

a

time

to rise,

Mining

deep

mines,

the

greater

a "big

than

the

lead

by oil

the

potential that

for privatisation

when

SECRET

to proceed

for reducing

modernised,

WYBREW

of

communities

to go for

scope

prize

to a diverse,

the

restructuring

is whether

probably

The

that

privatisation.

from

is

argue

is a North/South

considerable

reserves

radical

it were,

electricity

macro-economic

wi 11

severe.

therefore, as

and

some

the

There

or,

coal

terms

be

production

be transformation

in real

will

loyalties.

in tandem

unit

consequent

industry

tribal

dimension.

business Nonethele';s

social UK

The

of

would

market-responsive

trend

and

of

energy

gas

prices

prices.

WATER

The

Pro osal:

England public

To privatise

and Wales interest

through

suppliers

and

regulary

functions

to

bodies.

Bill

share

through

opportunities

for

Ar uments

a ainst:

which

regulatory

added

of

that of

The

regulatory

These

and

privatised Secretary and

protected

proposal

previous functions ensuring

STREDDER

of for

the

privatised

to a

to greater

efficiency

of

authorities,

diversify

including

to customers.

to privatise

since

No real

there

industry

will

stimulus

is highly

inevitably

to efficiency

privatisation can

exercising

remain

Parliament. office

markets.

Bill

of

statutorily

conflicts

in

and

of

the

the

responsible

interests

water)

to ensure

functions

as agents

Consumer (of

how

Parliament.

in the

regulatory them

not

without

to

is envisaged

who will

in capital

about

be performed

the

as a measure

question

accountability

as

regulatory

desirable

is a genuine

fencing

and

of State,

competition

PETER

There

bodies

by

the

the

are monopolies.

by ring

accountable

to

services

can be overcome,

preparation,

regulation

receipts,

investors

interest.

with

interest

protecting

privatisation

incentives

functions

of privatisation. encountered

in

to Parliament by

Inappropriate

authorities

:

proper

undertaken

industries

value

Assessment

be

between

providing

because

ensuring

Authorities

whilst

accountability

ownership,

be conflicts

entities

Substantial

comparisons

has

10 Water

in preparation.

in Favour :

wider

the

as single

monopoly

Reasons

PRIVATISATION

by

will

be

POST

The

Pro osal:

(Inland

letters,

services and

be

for

although

Reasons

only

Office

Favour:

which

fast

is

no

post,

and

separable is

no

and

special

means

longer

profitable synergistic

in

unions

one

business

would

is therefore

so

that

the

separately.

status

of

a

letter

of communication

valid.

Office,

Counter

natural

management of action

Post

and

together

be privatised

The

of the

activities

course

should

practicable

legacy

are There

these

logical

in

Overseas

privatised.

activities

activities

Girobank)

Post

The

PRIVATISATION

main

Parcels,

keeping

the

argue. four

four

including

should

reason

The

OFFICE

A

as

the

is a Victorian

letter

is

simply

a

thing

to be carried.

Post

office

standards

profits

of service

competition quality best

has

time

other

been

in the

future

badly.

junk

most

than mail

years

while

Whenever

services

because

other

as

10

sprout

is improved.

post

arrive

past

This

and

the

is the

important

by post

and

volumes

is transmitted

by

mechanisms.

Ar uments

A ainst:

profitable

and

rural

Offices

Post

franchise mail

the

private

generally the

already

over

deteriorated

allowed

to privatise

decline

risen

have

of the service

communications will

have

for

services

Rural

close

under

are

selling

for

which

minimum

fee.

Under

cease.

Rural

delivery

privatisation. nationalised outlying

areas

of

privately

stamps Post

of mail of

service the

and

Office

also

centres

actually

shops

out

a

most

with

the providing

blanket

would

discontinue

and

against away of

Post with

service

improved.

a

of

procedures

did

quality

to be

However,

owned

critics

the USA the

cease

pays

these

may

the

when

may

ownership.

privatisation

However,

from

private

the

argument

freight

Offices

in fact

the

is the strongest

Post

to

this

Office

Assessment:

There

there

is no reason

owned

and

is nothing why

financed.

of the

Post

which

Offices

do

Post

their

The

activities

to be addressed

required

to provide

Post

of

to legislate

to

the

service

the

monopoly

terms

privatisation

all

the

Secretary and

other

agency

Legally

the

work

there

are

of State

is

so it is not simply

practices

within

it is probably

of the

and

be privately

including

because

In practical for

applies

letters

cannot

Government.

a postal

suspending

Offices.

same

for

about

carriage

Office

problems

a question

special

Post

the

necessary

Office.

Action

Owing

to the emotive

standing

of

be desirable candidate

the

stamp

to name

nature

carrying

the

Post

in the Manifesto.

GEORGE GUISE

of

the Post The

and

Queen's

Office

the head,

perceived it

may

as a privatisation

not

SECRET

PRIVATISATION

The

OF

Pro osal :

- InterCity, Parcels

BRITISH

The

restructuring

Network

South

- is yielding

efficiency

and

HALL

East,

marked

sectors

have

Taking

account

of its property

East

commercial

BR's

could

Given employee

Provision

would

to operate

the

services,

segregation

either

sectors

railway

Network

a saleable,

open

and modern

be

progressively

nature

of

encouraged.

rail-based relevant

to the

businesses

track-owning

other

length

under

the

users.

With

supplier

way,

BREL

must

be

in parts.

with

West

the

terms

BR has

build

will

a ainst:

of market-orientated shown

European

on

on

the market

rail

much

emphasis

naturally

promise

- with

more

employee

this

success.

for high-speed

cities.

technology

Railways

heritage.

promising

future

heartlands.

The

ultimately

fringes

targets.

The rail

Market-driven can

yet

rejuvenate

our

industry.

Ar uments

will

and

potential,

be

competing

creation

within

to North

would

- well

or

The

would

Tunnel

enterprise

British

whole

Privatisation

participation

would

- as an arms

business

in favour:

services

Freight

commercial

intensive

reimbursing

of BREL

privatised

Channel

for

on similar

for BR's

come.

sectors

manpower

be made

competing

to

InterCity,

of becoming

participation

or company

business

and

in attitudes,

development

sight

business

industry,

Reasons

Freight

attainable

sectors

concern.

privatised.

the

set

be within

unsubsidised

sector

Provincial,

The

Parcel

South

business

improvements

commerciality.

been

of BR into

of

the

The are

a

politics

sensitive,

logical be

have

in the

even

not

in the Tory

consequence

network.

SECRET

place

of change

significant

Provincial

a special

least of

reduction

the

towards

course of

the

a

proposed under-used

Assessment opportunity

:

This which

Gov-rnment

ha,

would

been

have

laid

the

undreamt

foundations of

in

1979

SECRET

PRIVATISATION

The

OF

business

been

and

by

of

the

and

operating

given

be a good

team.

subsidy.

turn-around

by privatising

Reasons

favour:

Underground

growing,

core

constraints,

there

particularly

in

intensive

employee

share

ownership.

this

will

action.

Ar uments

a ainst:

to launch

the privatisation.

prolonged

track

Assessment

:

Let

of the London underground demonstration

JOHN

There

us

be

of

from

service

are

the

The

timid

of unsubsidised

bold

and

aim

in the

capital

the virtues

SECRET

generous

se

provides

sector

vehicle

wider

early

modern,

a

for

political

vulnerable

only

As

issue argue

to

is when for a

operation.

would

a

opportunities,

privatisation

privatised

be a marvellous

of privatisation.

WYBREW

this

Underground.

public

will

for

A lively,

on

franchising.

less

none. The

Underground.

service

and

build

with

related

Keith

is in sight

per

from

have

being

London

it is an ideal

the

industrial

record

Freed

Apart

make

and

service

development

business,

of

system

the

considerable

property

manpower

benefits,

business.'

are

the

for a flotation

participation.

The

approach

Consolidate

candidate

Service

the Underground

for employee

solid,

Underground

With

provisions

in

SERVICE

market-orientated

a facelift,

without

remarkable

UNDERGROUND

the London

his management

modernised

It would

LONDON

prospects

transformed

Bright

of

THE

SECRET

PRIVATISATION

The

OF

Pro osal :

(currently

lines

URBAN

Privatise

municipal

COMPANIES

the

bus

in favour:

The

industry

is still

benefits

are already

undertakings

and

PTEs)

along

- principally

into the

deregulation

in the melting evident.

bus managements

with

of NBC

bus

the

same

management/

buy-outs.

Reasons

urban

urban

companies

as the privatisation

employee

NBC

BUS

would

privatisation.

pot. There

welcome

To

Government's

of

do

so

policy.

the

However, are

the

bus

substantial

indications opportunity

would

The

local

be

only

wholly

question

that to follow

consistent is

how

soon.

Ar uments owners

a ainst:

of urban

privatisation

bus

Some

of

the existing

companies

and during

the

will

local

attempt

transition

authority

to frustrate

period

passengers

may

suffer.

Assessment

:

competition

There but

collectively industry. deter

us;

not

is no logic the urban

represent The

the

if he considers

bus

against oL

it prudent

State

JOHN

WYBREW

SECRET

of

the

can

use

more

to enhance

which

local

proceeding

to move

cases.

NBC

undertakings

the majority

arguments Secretary

in privatising

bus

apace his

powers

slowly

should

not

sparingly

in particular

PRIVATISATION

The

Pro

their

osal:

To

associated

outlets

to

would

then

the United

OF

return

the

fabricating

five

major

UK

companies

British

operate

in the

way

as steel

proposals

for the

and

same

European

Bank

company

yet

whether

the

resolved

privatised

Telecom

has

privatisation

to that

as

and

been

marketing

Steel

industry

industries

invited

in

Steel

will

corporation,

Gas,

to submit for

end of April.

recommendation

British

their

of British by the

one

plants,

countries.

(BZW)

presentation

steel

and

The

Merchant

British

INDUSTRY

ownership.

States

be

STEEL

private

Barclay's

should

THE

in

It is not

be that the

BSC

manner

or as a number

of

of separate

businesses.

Reasons

in Favour:

steel-making ownership. British

Steel

has

to competition UK.

present

Ar

case

is no case

achieved

elsewhere.

It does

not

A

British

ainst

:

steel

against

therefore

There

is

industry

maintaining

five

Ravenscraig

in Scotland

in mid-1988.

dislocation

whether was

capacity,

surplus and

Steel which

efficient

with

profitable

is already

vie

operate

directly

a monopoly

is privatised. it was

privatised

privatised as

there steel

would

after

There

in Scotland

substantial

and

of privatisation

industry

steel

British

consequence

expire

Government

comparable

of imports

about

for continued

profitability

parameters

because

monopoly

subject with

it

in its

form.

uments

the

is no natural

the worldwide

operating

companies

in the

there

Despite

technical steel

and

There

over-capacity

is a strong mills.

be the

present

is therefore

and The

elsewhere same

as a single

individual

logical

closure

of

likely once

argument

the

undertaking to be social steel

would

entity

businesses.

economic

The

Government

in

apply

or whether

it

Assessment policy

and

detailed should

:

Privatisation is

proceeding

practical

of BSC beyond

recommendations

is stated

the

general

for

Government study

stage

implementation.

be encouraged.

Action: Manifesto,

If individual steel

should

businesses

are

certainly

be.

included

in the

to

This