Ethan Thoburn | Opinion
Following the end of the Second World War, the newly elected Labour government set out on a radical programme of nationalisation under the leadership of Labour leader, Clement Attlee. Attlee was the first major reformer in modern British history; the second was Margaret Thatcher who revolutionised British politics, industry and economics throughout her eleven and a half years at Number 10.
Mrs Thatcher’s privatisation programme began on 4th May 1979 after winning a majority of 43 seats at the polls, over Labour’s Jim Callaghan, who’d been largely responsible for the infamous Winter of Discontent.
So why was reform needed? Why did it need to happen so quickly? And how has it left Britain for the better?
Reform was needed, predominantly because the unions had held government after government at ransom for years, successive governments of Ted Heath, Harold Wilson and Jim Callaghan had tried to change the unions but failed miserably. The unions dictated how British industry functioned, which created a unhealthy rate of inflation, a low GDP and an overall decline in the British economy – reform was needed and it was hard to disagree.
During Thatcher’s more than decade as PM, she oversaw the privatisation of key industries and firms such as British Petroleum, British Steel, British Oil, British Airways, Jaguar, British Telecom – the list goes on! The key to this was that no longer were these industries and firms state run monopolies ran by the consumer for the employee, they were now subject to competition. It essentially allowed the consumer to run the business by choosing whether they patronised a specific business or a competitor. The newly created free market economy of the UK allowed competition to thrive and putting the power in the hands of the people, not unions, making it a survival of the fittest of firms. This in turn increased productivity, reliability, efficiency and investment into the UK economy by foreign investors. Now when Japanese, American, Australian and other World firms looked to invest in Europe, where was their first choice? Britain.
In 1981, the then Secretary of State for Energy Nigel Lawson said: “No industry should remain under state ownership unless there is a positive and overwhelming case for it to do so. Inertia is not enough. As a nation, we simply cannot afford it”. Lord Lawson couldn’t be closer to the truth, state run industry costs the taxpayer far more than is necessary. Unproductive and inefficient industry was costing the British taxpayer millions of pounds which should be invested elsewhere, like in better social services and welfare. Privatisation needed to happen, and it needed to happen quickly. Britain was seen as the sick man of Europe, and not even the Soviet Union would buy goods off us due to the poor quality and inability to meet timescales, mainly due to strike action in the public sector which brought the nation to a standstill. If this industrial action and lack of production had continued, these industries would have collapsed resulting in recession, and mass bankruptcy and unemployment nationwide.
Privatisation has obviously been a success story, as nobody has reversed it in the almost thirty years since the end of Thatcher’s premiership. This is despite nationalisation being a Labour manifesto promise under Michael Foot and Neil Kinnock, followed by 13 years of Labour government where nothing was done by Blair or Brown to reverse Mrs Thatcher’s measures. The Thatcher privatisation reforms of the public sector and have had a lasting impact on each and every one of our lives today. The only challenge we see to privatisation is that of the railways, which John Major privatised after succeeding Thatcher as PM. Although, despite its flaws when you compare the modern railway system to the the days of the nationalised, unreliable, inefficient and outdated British Rail, railway journeys have increased from 700 million journeys per year to 1.7 billion annual railway journeys following the privatisation of it. It is essential we keep the railways in private ownership to avoid complacency of state ownership which will inevitably turn people to using cars to commute, then that draws the whole new environmental argument.
People who call for renationalisation don’t realise how appalling public sector industries could be, you could wait up to six months for a telephone off BT and nothing could be done because you couldn’t just change to Sky or Virgin Media – there was no competition and it allowed complacency in industries. Private companies are responsive to their customers and trends in the markets, this all leads to the snowball effect of competition leading to better prices for the consumer, a better service for the consumer because if companies don’t provide then they will easily be replaced.
The Thatcher legacy continues to live on in each one of our daily lives, we all flourish in ‘Thatcher’s Britain’; as seen from the telephones we use to the trains we commute on and the petrol we use for our cars. As a nation Britain was transformed from the sick man of Europe to a global superpower in the services sector and we are now one of the most prosperous nations in the World. Mrs Thatcher created a great wealth for our nation by deregulating and privatising industry and the banks to create a prosperous and stable financial sector and service sector. Ultimately, we have the ‘Iron Lady’ to thank for making London one of the world’s two financial capitals.
To conclude, Thatcher modernised how we operate as a nation. We moved away from unproductive and inefficient heavy industry, to become a major player in World banking, global trade, and the service sector. Not only did Thatcher achieve this, she handed responsibility back to the people, she handed accountability to the people and the firms. However, Thatcher most of all, gave power to the people by creating a dream of a Britain that aspired to be something better than it was.