EVER since then-Chancellor of the Exchequer Denis Healey found he could raise cash by selling off the Treasury's shares in BP in 1976, even socialist politicians have seen the revenue potential from auctioning off the state's strange and vast portfolio of dormant assets.
New Labour's privatisation of Qinetiq, the defence laboratories, for £1.3bn earlier this year is a vivid example. Another candidate which the Treasury wants to see sold off is Scottish Water, the biggest of the British water entities. It is reckoned
to be worth £2bn. No wonder Brown wants to float it off.
Yet there is an exquisite anomaly. Scottish Water is formally under the aegis of the devolved government of Scotland which is dominated by the Scottish Labour Party in close collusion with the Liberal Democrats.
To judge from some of the wildly hostile remarks from the Scottish political classes, it would seem this slothful water utility is regarded as a sacred object. Water, they argue, is a natural right that cannot be vulgarised or degraded by reduction to the language of drainage, flows, soaks or, worse, balance sheets. Some even refer to it as "God's Water". The implication is that God is a socialist.
If the Chancellor were not a Scottish MP and the heir to the Labour Party's throne, the Scottish establishment could better portray it as a desecration of a holy object, but Gordon Brown cannot be portrayed as a heartless merchant banker... hence the deep anguish in Scotland that is a pleasure to us market folk to observe.
Scottish Water supplies 2.2m people and 130,000 businesses. It pipes water to its customers from huge reservoirs encircling Scotland's cities. Some are as vast as nature's lochs. It is the evolved result of mostly municipal enterprise, though some communities did have private water suppliers. I have not seen it argued that private water flowed less freely or was of a poorer quality.
What will be amusing to watch will be the struggle between a Chancellor's natural desire to raise cash against the perplexing emotional attachment to "public" ownership of the Scottish establishment. Constitutionally, Brown cannot just instruct Scotland's First Minister Jack McConnell and his team in the Scottish Executive to yield this agency to the stock market... but informally McConnell may be making an adverse career decision if he blunts or blocks the Chancellor.
The Scottish Lib Dems seem hostile to privatisation yet Sir Menzies Campbell's first policy prescription was to endorse privatisation of the Post Office. The politics of Scottish Water are murky waters. Even the Conservatives in Scotland are diffident about bringing Scottish Water to market. Murdo Fraser, their spokesman, urges it be reconstituted as a "mutual" company owned by its workers. That the Tories are syndicalist in the north is a curious illustration of the creeping dampness in "devolved" government.
As a small boy I used to cycle in the hills of the north of England, where Derbyshire and Cheshire meet. In the distance I could often see tempting stretches of water but all the accesses were blocked with barbed wire and gates with notices reading "Public Property: Keep Out". I didn't grasp the paradoxical comedy of this until I studied economics years later. Now, with the water utility privatised, the signs say "Private Property: Public Welcome" and the wonderful views are enjoyed by everyone. There are walks, gardens, arboretums, a restaurant, picnic sites and parking. People can swim and there is a bus service to the local town.
One of the greatest man-made lakes in Europe is Keilder Water, high in the remote hills of Northumberland. It is as important for recreation as to keep the taps of Newcastle flowing.
Why do Scottish politicos think "public ownership" a blessing? Is it that they like the patronage or dignity it gives them? It is baffling. Do they observe bureaucratic provision to work? It is all so irrational and contrary to Scottish common sense I cannot understand their emotional responses. Privatisation seems to me to offer benevolent transformation. I offer the First Minister of Scotland the ten miracles of privatisation to dent his complacency. They apply to all privatisation in every nation.
• It lowers prices. Costs are then criticised with new eyes.
• It enhances quality. Customers suddenly matter.
• It creates choices, providing it is not preserved as a monopoly.
• It minimises corruption. Political or bureaucratic patronage is not needed.
• It boosts investment. Capital expenditure becomes purposeful.
• It nurtures innovation. Experimentation becomes useful rather than a threat.
• It improves management. Managers have far more price information and local discretion.
• It is more open or transparent. The requirements of plc status are much less opaque than quangoes.
• It creates critical market observation. The brokers and other experts are alert and agile.
• It allows fewer or no strikes. The heavily unionised ethos ends.
These subtle transformations are because a company is rich in price information. It thrives on feedback. It knows more than a public body can because of the cascade of knowledge that is a market. The case against monopoly is one of the clear lessons of economics.
Scottish Water is a perfect candidate for the market, but let there be some communities with an opt-out. We need the dissident forces of competition to ensure complacency can always be subverted.
I heard a stock broker analyst argue that Scottish Water could have a global appeal as the primary ingredient of whisky. This, he argued invests it with instant romance.
I'm not sure I believe him but it is more rational than the quasi-religious feelings of the Executive.
He also asks if on the balance sheet the Loch Ness Monster would count as a tangible or intangible asset in the prospectus.
• John Blundell is Director General of the Institute of Economic Affairs