Peter Jackson column
Dec 9 2004 By Peter Jackson, The Journal
This week marks the 20th anniversary of the invention of privatisation in Britain, or so I read.
In fact it marks the 20th anniversary of the privatisation of BT, which was not quite the beginning of the story.
Even before Margaret Thatcher, there had been attempts at denationalisation, by restoring nationalised enterprises to their previous owners, but the success had been, at best, patchy.
What was different about the Tory privatisations was that they involved selling state-owned concerns to completely new owners.
The process began as early as 1979, with the sale of sufficient BP shares to reduce Government holdings to less than 50pc.
This toe in the water was followed by the sale of British Aerospace in 1981, and by Amersham International and National Freight Company a year later. In 1983 Britoil and British Ports were sold and the following year Jaguar and British Telecom.
The sale of British Telecom was different in that it was the first People's Privatisation, with 2.1m members of the public being allocated almost two fifths of the shares.
This was the pattern to be followed, so that, by 1990, 42 businesses, employing almost 900,000 people, had been sold off.
Reasons given for privatisation were that state-run businesses are inherently inefficient. It was also felt it would be good to create a share-owning democracy.
There was, however, another powerful factor driving privatisation - the fact that it brought the Government a lot of money. By the late 1980s the proceeds of privatisation was bringing the Treasury more than £4bn a year.
This was the Philosopher's Stone, the very Holy Grail of government - a means of raising money without raising taxes. Not since the Spaniards got their hands on the gold and silver of the Aztecs had anything like this happened.
Which is why it caught on so incredibly swiftly overseas. Enter the word `privatisation' into Google and the first page alone will give you details of denationalisation programmes in Delhi, Zambia, Nepal, Uganda, Qatar and Bangladesh.
The motives behind it may have been mixed. In certain industries one can argue about the good or harm it has done. But could anybody now imagine any programme of renationalisation?
