Outlook: Sell-off is the way forward for BNFL

FEW PEOPLE thought it possible to privatise British Energy when the idea of selling off the country's nuclear generating capacity was first floated, and yet it was done and the company has proved a fabulous investment. So, in theory, there's no reason the Government shouldn't do the same with British Nuclear Fuels (BNFL), which produces and reprocesses the raw material for nuclear power.

Certainly that was the idea under the previous administration. Despite their new found acceptance of many of the central theologies of the Thatcher years, quite a few of the new lot still have a bit a problem with the idea of privatisation, particularly when it comes to the sort of business BNFL is in.

This is silly. What BNFL does is highly sensitive and there's no doubt that it is a dirty business many ethical investors won't want to touch. Today's acquisition of Westinghouse's nuclear reprocessing plants and related businesses in the US, nonetheless demonstrates both that it is possible to have private ownership of such assets and that this has become a truly global business perhaps best managed by a global enterprise.

There is every reason why BNFL should be doing this deal - for a start, it gains access to a US customer base to add to its existing UK and Japanese ones - but there is no reason why the British taxpayer should be helping to fund such an expansion. As a state owned industry, BNFL forms part of the public finances and this purchase will presumably therefore have some, if only a minor, impact on them.

Politically the Labour Government might still find it difficult to sell the idea of a stock-market flotation of BNFL to its back benchers. The idea of selling off the Post Office is already causing a humdinger of a row between the Chancellor and the Prime Minister. But full privatisation must be the end game, even if it takes a few years yet to arrive.