Quote:
Originally Posted by Recliner[_2_]
Could you be more specific on this? After all, the Roscos and Tocs were
not owned by the City institutions at privatisation, and nor was
Railtrack. So, which financial institutions exactly benefited from these
reserved shares?
On the other hand, a lot of lawyers and accountants did very well out of
the complex restructuring. They didn't buy any part of the system, but
were well paid for helping carve it up.
Major's government probably did sell it all off too cheaply, not so much
as to benefit their pals, but to make sure it all got sold off before
they lost power. They also made it as complex as possible for an
incoming Labour government to re-nationalise it. So it was ideology (and
incompetence by a tired, failing government), not spivery, at work.
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Quite frankly, after all these years, I don't know which institutions bought which shares. Essentially British Rail was split into various segments and shares in each segment were offered for sale. I think 20% was reserved for financial institutions. This was not the first privatisation where this had happened.
Thatcher's Government started privatising on a small scale and made all the shares available to the public. The shares sold out in advance and Opposition politicians said that proved the price had been set too low. When council houses were sold off for far less than their market value, the Tories' opponents and some irreverent journalists noticed a pattern emerging. I recall on radio programmes like "Today" Government Ministers being given a grilling on their failure to protect tax-payers by maximising revenue.
Later, when the really big privatisations took place, the Tories announced that a chunk of the shares were being reserved for the big institutions. I seem to remember one minister being challenged on this and replying that some stability in the financial market was required for such a large privatisation and that if small shareholders quickly sold for a fast profit, this might unsettle the market! If my memory serves me correctly, at that time there was no suggestion by Opposition politicians or journalists that there was an "over-close relationship" - Harold Wilson's phrase incidentally - between the Tories and some people in the City.
By the time John Major's Government decided to privatise the railways, the mood of the country had changed and cynicism about the Tories' integrity was widespread. No longer was the electorate prepared to give the Govenment the benefit of the doubt and when, once again, the price was set a level which most informed observers felt was way below the real value, accusations of corruption were thrown about gleefully.
It is certainly the case that some people made a huge profit overnight. There was one instance of a company being sold soon after privatisation for 300 million more than the shareholders had paid for it.
There must be plenty of information about all this on the Internet although, of course, some of the posters will have political axes to grind.