ALEX BRUMMER: Margaret Thatcher’s privatisation vision betrayed

ALEX BRUMMER: What would the late, great Prime Minister Margaret Thatcher make of the fate of so much of her privatisation programme?

  • Public-to-private initiative was to encourage investment and innovation
  • Several of the enterprises floated have transferred ownership overseas
  • Decisions on energy, transport and other services taken abroad rather than in UK

Betrayed: Former PM Margaret Thatcher

Tory leadership contenders are fond of quoting Mrs Thatcher. But none has so far questioned what the late, great Prime Minister would make of the fate of so much of her privatisation programme. 

The idea behind her public-to-private initiative was to expose the utilities to free market disciplines and competition, shake out bloated workforces and encourage investment and innovation. 

What she cannot possibly have considered was that within a few short decades of privatisation, several of the enterprises broken up and floated on the stock market would simply transfer their ownership from the UK state to overseas government control. 

Nor could she have envisaged that vital decisions on energy, transport and other services would be taken in Paris, Berlin, Sydney and Madrid rather than the UK. 

The loss of command and control in vital industries and services is in the spotlight at present. John Holland-Kaye is the talking head at Heathrow. He is the captive of Spanish owners Ferrovial, Qatar et al and together they have delivered chaos and reputational damage to Britain’s premier airport. 

None of these distant owners seem to care a jot about Emirates or BA, the passengers, or the role of Heathrow in the UK’s service-driven economy. 

Then there is the matter of our energy supply in the midst of a global crisis. The French government currently is taking full control of one of the big five generators in the UK, Electricite de France (EDF). 

President Emmanuel Macron is anxious to rehabilitate and expand France’s nuclear fleet which has proved a source of national strength in the face of Russia’s war on Ukraine. Resources potentially invested in next-generation nuclear in the UK could be directed back home to France. 

This has been seen before. When the Fukushima nuclear plant in Japan was damaged by an earthquake in March 2011, the government of Angela Merkel in Berlin decided to halt new nuclear investment in Germany and decommission existing plants by 2022.

As a consequence, German power suppliers EON and RWE decided to cancel plans for new nuclear plants in the UK at Anglesey and Oldbury, saying the economics no longer made sense. Britain had ceded control over its electricity future to Berlin. 

In this year’s energy crisis the loudest protests about energy bills and the need for corporate bailouts came from Scottish Power. The utility is owned by Spain’s Iberdrola which, in the past, has come under fire in Scotland for sending cash surpluses off to Spain for investment in wind farms in North America. 

At present several UK water suppliers, including overseas-owned Anglian, Thames and Yorkshire, face serious enforcement actions from the UK Environment Agency for pollution. 

Overseas and sometimes state ownership of UK utilities have done enough damage. Yet the UK’s remaining home-owned and quoted bus and train franchises are currently being targeted. 

Stagecoach is being bought by German investment fund DWS, Aberdeen-based First Group is being targeted by private equity suitors and Newcastle’s Go Ahead by Aussie and Spanish investors. Other than a sugar rush of cash for shareholders and executives, nothing positive can come from the loss of local ownership. 

If levelling up is ever to happen, the next Tory leader needs to get a grip – and fast.