Originally Posted by Recliner[_2_]

I suspect that you're one of the people with a political axe to grind. I
don't think the privatisation of BR was corrupt, simply incompetent and
ideological. It was rushed, as they were determined to complete it
before the next election, which meant they put speed ahead of anything
else, including getting the best price. Few components were sold as new
PLCs that financial institutions could or would invest in, and it
appears that no thought was put into creating stable, efficient
companies.

The biggest reason for the low prices was Prescott's threats to
nationalise BR for minimal compensation. That scared off bidders with
deep pockets, so MBOs bought many of the fragments of BR for low prices.
Most sold out a few years later, once Labour's pre-election threats were
exposed as hollow, making huge profits in the process (the Roscos being
the prime example). The winners were BR managers, not pals of the
previous government. The other major beneficiaries were the big legal
and accounting firms who provided many millions of pounds of expensive
advice (who gained just as much from Labour's PFI schemes, so they
conscientiously befriend both major political parties). So John Prescott
bears as much blame for the low prices as John Major. Both were useless,
and promoted way beyond their capabilities.

And when you talk about mysterious 'financial institutions', these are
mainly public pension funds and insurance companies investing your and
my savings. we should all be happy if they do well. They tend to own the
majority of stock in UK listed companies, so as you say, even if "Sids"
(members of the public) initially buy privatised company stock, they
tend to sell it on pretty soon (I wish I'd dumped my Railtrack stock a
lot quicker than I did).

Administering large stockholder lists is expensive for public companies,
and those armies of small stockholders rarely bother to use their votes
or even read the thick, glossy annual reports that thud on to their
doormats -- so they are quite relieved when large, professional
financial institutions buy them out (I speak from personal experience as
a smallish shareholder in scores of public companies and funds). The
small shareholders of privatised utility companies made quick, easy but
modest tax-free profits (as they were usually well below the capital
gains tax threshold), so everyone was happy.