Thatcher to Denationalize British Gas

The government announced plans Tuesday to sell British Gas, the country’s most profitable state-owned industry, as part of its program to transfer government-held sectors of the economy into private hands.

Energy Secretary Peter Walker told Parliament that the sale will take place “at the earliest opportunity,” but he set no date.

Market experts put a value of at least $7.2 billion on the sale.

Walker said that shares in the corporation will be offered to employees and the general public, with clauses to prevent the new company from coming under foreign control.

With profits of $1.2 billion in the latest year, British Gas is seen as a bonanza for the stock market.

It will join the British Telecom communications giant, Jaguar autos and Britoil, the gas and oil prospecting company, in going private under Prime Minister Margaret Thatcher’s program of rolling back state ownership of British industry and services.

“To have an organization that will be judged on its commercial success and judged on its efficiency . . . is far better than having the constant bureaucratic control that every nationalized industry suffers from,” Walker said.

But the opposition Labor Party, which launched nationalization when it won the 1945 general election, attacked the plans. Labor’s energy spokesman, Stan Orme, claimed that privatization of British Gas would only create “a massive new private monopoly.”

He contended that private ownership would lead to corner cutting in safety standards and said that there was no evidence that natural gas bills would come down.

Orme dismissed the success of previous sell-offs such as British Telecom, which was spread among some 2 million investors. He said the shares had since been bought up by big business, leaving only 5% of the company in the hands of small investors.