Geography Reference
In-Depth Information
During the conversation, he used the word 'privatisation', which I had never heard be-
fore. I put it in the first paragraph of an
FT
leader-page feature I was writing with an
economics correspondent, Anatole Kaletski, saying: 'A new word has been circulating in
Whitehall in recent weeks. It goes to the heart of the government's policy for reforming
the ownership and bureaucracy of state-owned industries, but few ministers would admit
to using it. The word is “privatisation” which, to those close to the centre of Tory thinking,
means the government's well-known interest in selling public sector assets to private indi-
viduals, financial institutions, and anyone else [apart from foreign interests in some sens-
itive cases] who might want to buy them.' The
FT
features editor refused to put it in the
article's headline, saying something like, 'no one will know what it means'. Instead, with
vintage
FT
caution and precision, the headline read, 'Long and short term aims of dena-
tionalisation'.
People of course rapidly came to 'know what it means', and the word became used inter-
nationally. The Thatcher government's purpose was simply to put a positive and permanent
private sector spin on the negative sounding policy of denationalisation, though some of
its proponents wanted it to lead to wider public ownership by private individuals and in-
terests, which did not happen. National businesses and services such as the railways, the
steel industry, an airline, an aircraft manufacturer, gas supplies and a telecom provider were
successfully sold off. But the policy went too far and broke up services such as water, elec-
tricity and airports (and, most recently, the post office) that were sold off to large corpor-
ations, including some based abroad, which were more interested in making profits than
providing what the public needed.
The policy also developed into a worldwide craze for PPP (public- private partnership),
which often blurs and confuses the confl icting priorities of providing adequate public ser-
vices and making private sector profits. The private sector cannot be trusted to deliver pub-
lic services in terms of quantity and quality, as has been seen in Britain with railways and
hospitals, and in India with airports, where deals have been corrupted by land and other
scams, and highways, where companies shirk responsibilities.
India has debated how far to go along the Thatcher path for over 20 years, but its lack of
willingness to face major change has been demonstrated by more progress being made on
divestment, which involves selling only minority stakes, than on privatising control. Man-
mohan Singh's reluctance to sell off profi table businesses reflects both India's old socialist
approach, and maybe also justified scepticism about how far the Indian private sector could
be trusted with the family jewels.
Lessons and Debate
