Chapter 661: Capital and Politics

'It's Geoffrey Howe!'

Xia Yu, sitting in the crowd, saw the elderly man in his fifties who took the lead on stage, and a flash of surprise appeared in his eyes.

Geoffrey Howe belonged to the Conservative Party, was Margaret Thatcher's right-hand man, and is currently the British Chancellor of the Exchequer, in charge of economic and financial affairs in the British cabinet.

The Chancellor of the Exchequer, also known as the Minister of Finance, is one of the four most important British state ministers, and because he holds the purse strings, he has the status of being the leader of the four most important state ministers.

According to later recollections, Geoffrey Howe was the longest-serving member of Margaret's cabinet. He went on to become foreign secretary, speaker of the House of Commons and deputy prime minister. After he announced his resignation from all positions in 1990, Margaret stepped down three weeks later.

This was a very important figure with a busy schedule, but at this time he came here to attend this gathering of the financial industry.

Before he came, he had no idea that Geoffrey Howe would appear.

Xia Yu's brain was working at high speed, pondering the real purpose of Geoffrey Howe's appearance here.

Just as he had a certain guess, Geoffrey Howe on the stage gave a slight smile and began his speech.

'Good afternoon, ladies and gentlemen, it is my honour to be here on this special occasion...'

'I am here to announce some figures. Under the wise leadership of Prime Minister Margaret, in just less than two months, the UK's unemployment rate has dropped by 1.15%, the downward trend in the economy has slowed, and capital investment is more active than before the change of government. In the past two months, a total of 520 million pounds of foreign capital has been invested in the UK...'

'The cabinet is now formulating a series of policies to stimulate economic and market development, but it is still facing possible capital constraints.'

'The British economy is about to recover. This is a historic opportunity. You gentlemen can choose to follow the trend of history and let your company grow rapidly, or you can just stand aside and watch. You all have the right to choose your own path, but I sincerely hope that everyone can enjoy the delicious feast of wealth, which will not only benefit you, but also the people of the whole country...'

'Let me see, I've taken up five minutes of your time. Thank you for listening!'

Jeffrey Howe looked at his watch and smiled, before bowing slightly to the audience and walking off the stage.

On this platform where the financial industry gathered, although he was the finance minister, he was still not the protagonist. He had taken this opportunity to say everything he needed to say, and the hints were clear enough. If people still couldn't understand, it was because they didn't have the right level of understanding or strength. Such people were not the targets that the cabinet desperately needed.

Although others did not understand, Xia Yu could hear the meaning behind it.

'Feast of wealth...'

He chewed on these words, a smile curling the corners of his mouth. He looked around, noticing that many people had serious expressions on their faces and gold flecks in their eyes, obviously having better information than Xia Yu.

'Judging by the timing, it will start in a little over a month.'

Xia Yu recalled the situation for a moment, mentally calculating, and came up with a rough estimate of the time.

Although no one has notified him yet, Xia Yu knows very well that in October, the Margaret Thatcher cabinet will complete the preliminary preparations, pave the way, and officially begin the privatisation reform. The first to be targeted will be the British National Oil Corporation, and 19% of its shares will be released at once.

In fact, in the UK, the state-owned components of the steel, aviation, automobile, and oil extraction sectors account for 75%, 75%, 50%, and 25% respectively, with the oil extraction industry being the lowest.

If it is for the good of the people, then logically, it should start with the sectors with the highest proportion. After all, in the UK, the more nationalised an industry is, the worse the state-owned enterprises perform, the more serious the losses, and the greater the burden on government finances.

But that is just a thought. We must remember that this is a capitalist country, and the extent of the influence of capital on the government cannot be explained in a few words.

Precisely because the proportion of state-owned enterprises in the oil extraction industry is low, the greater the competitive pressure they face. That they have been able to survive under these circumstances shows just how much of a threat they are to private enterprises in the oil industry.

Xia Yu knew that the Margaret Thatcher government had moved against the oil industry because of the pressure from capital behind it, or rather, the return of benefits, the return of support from the oil interests that supported the Conservative Party.

The previous government was Labour, and during the general election, the opposition Labour Party's election platform clearly advocated: strengthening government control over North Sea oil resources and oil production and transportation.

This slogan was very popular with the people, and it helped the Labour Party win the election and come to power.

After Labour came to power, just as the first oil fields in the North Sea began to produce, the Labour government successively passed the Petroleum Taxation Act and the Petroleum and Underwater Management Act, which stipulated that a 'petroleum revenue tax' be levied on crude oil produced in the North Sea based on the rising international oil prices at that time.

These two acts greatly expanded the powers of the energy sector. The Labour government then established the British National Oil Corporation (BNOC) to strengthen government control and supervision of the oil industry.

The Labour government shamelessly tied its policies to BNOC, granting it special rights and functions.

First, it was to ensure the UK's oil supply. BNOC had the right to purchase and sell 51% of the crude oil produced by the oil fields in UK waters at market price. This right represented the Labour government's representation in the management bodies of the oil fields.

Second, in the fifth and sixth bidding rounds in 1977 and early 1979, the government stipulated that the successful foreign companies must allow BP to acquire a 51% stake.

Third, the Labour government also awarded BP eleven offshore blocks to operate as the operator.

Finally, it was also stipulated that BP had the right of first refusal when equity was transferred in the various mining areas in the UK North Sea, and because the company handed over its profits to the government, it was not subject to the petroleum income tax.

Under these favourable conditions, BP became one of the largest oil companies in the North Sea in less than five years after its establishment, and in 1978, the oil fields it had purchased also began to produce oil, posing a huge threat to the major oil companies.

In 1978, BP purchased and sold $1.5 billion worth of crude oil from North Sea companies, and sold $400 million worth of its own shares and self-produced oil, making a profit for the first time.

While state-owned enterprises generally suffered losses, BP made a record profit. With so many privileges in its hands, private oil companies would be worn out, so it naturally became the thorn in the side of all private oil companies.

At the beginning of the year, the Conservative Party, which was in opposition, seized the opportunity to raise the slogan of opposing government intervention in the oil industry. Naturally, the oil interest groups made peace with the Conservative Party and supported the Conservative Party's rise to power.

In return, the Conservative Party had to cancel the privileges and functions of BP, so that all companies would be on the same starting line, and the government would withdraw from the oil industry.

However, the privatisation of BP did not mean that the shares had to be sold to the original oil interest groups.

After all, BP was only a company established five years ago. After being stripped of its policy halo, its competitiveness instantly decreased a lot. Other major oil companies simply did not bully it. It would be best if they could acquire it, but if they couldn't, it didn't matter.

The Conservative government also knows the attitude of the oil interests, so it has used it as a huge bargaining chip to exchange with various interests.

Just like just now, the Chancellor of the Exchequer, Geoffrey Howe, made it very obvious.

Although he didn't say it was in the oil sector, as long as someone at a high level uses their connections, they can still get some news about the cabinet's policies.

Geoffrey Howe's meaning is clear. If you want to be eligible to compete, then you have to come up with enough chips to get on the Conservative government's boat and provide funding for the government's economic reforms. Activate the dormant market potential again and get the money flowing in society!

Only when the money flows will a series of economic benefits be generated, and the government will be able to collect more taxes, which will then be invested in various fields to improve people's lives and develop the economy, thus forming a virtuous cycle.

Of course, Xia Yu didn't have to consider these things. At this time, he was already thinking about the BP stake.

Although others were not sure, he knew that the Conservative government would give up 19% of its stake at once.

The conditions had already been set out, and there was still room for manoeuvre.

He didn't need to take 5% of the stake, after all, that was simply not realistic.

He just needs a ticket, a ticket to get involved in the British oil sector!

He doesn't need much of a stake, and he would be satisfied with 1%.

At present, he doesn't have the strength to compete with the major British consortia and American Rockefeller consortia in the oil sector.

But as long as he gets a small stake, then he can use this small opening to gradually expand his influence. When he becomes strong enough, entering the oil sector will no longer seem abrupt, and he will not be targeted by the others.

Xia Yu looked at the Duke of Carter Howard sitting in the VIP box, his eyes narrowed as he contemplated.