Majority of British industry now owned by foreigners - Michael Meacher MP

The aim behind the flotation of Royal Mail was to enhance populist capitalism by maximising the number of individual shareholders.   It hasn’t worked out that way.  

As in the heyday when 750,000 persons bid for BT shares when the former telecoms monopoly was sold off in 1984, this time round more than 700,000 individuals applied for the Royal shares.   But exactly as happened 30 years ago, the great majority of these individuals quickly sold on their shares in order to realise the capital gain as the price rose two-thirds above the IPO, valuing the company at £5.5bn far above the the £3.3.bn original price offer.  

 Furthermore the Royal Mail offer has hardly opened up share ownership to new investors at all, since around 90% of the applications came from existing clients.   But there are deeper lessons to be drawn from the overall pattern of share ownership which are even more sobering.

In 1963 individual ownership of UK shares amounted to 53%, while overseas investors totalled only some 7%.   Since that high point in personal ownership, the proportion held by individuals has been in persistent decline for half a century till today it amounts to no more than 10%.   The election of Mrs. Thatcher in 1979, with the first tranche of BT shares offered to the public in 1984 followed by British Gas shares offered in the Tell Sid campaign in 1986, made no perceptible change in the pace or momentum of decline whatever.  

There is no sign that this time round it will be any different.   Whereas half of all Americans own a share or fund and in Sweden it is 80%, in Britain the proportion of share-holders remains as low as 30%.


Michael Meacher MP