Alan Whitehouse: We exchanged our state-run monoliths for a greedy gang of private profiteers

AS the dust on one of the most controversial periods in postwar politics begins to settle, I began thinking about the effects of one of Margaret Thatcher’s main policies: privatisation.

We have all been affected by it in one way or another. Her own three Governments were more or less defined by it. It is arguably, the Thatherite legacy: lift the dead hand of state control and let entrepreneurial flair and vision deliver better, cheaper services. But has it worked out that way?

A small number of people have done very, very well out of it, making millions on the back of state-owned assets sold off at very attractive prices. But what about the rest of us? Here are some of my experiences over the past few months.

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I moved house about three months ago. These days, one of the first things you need is a phone and broadband connection. So, a call to BT. Because they want to sell me something, I find myself speaking to someone in this country. My previous conversation with a BT call handler ended when I found myself having to spell out my address using the phonetic alphabet.

There will be a £130 connection charge. The line is already installed so this is just a matter of screwing a couple of wires into a couple of terminals in a junction box. But it’ll cost £130 unless I agree to a new 18-month contract tying me to BT at a higher tariff than the one I am currently on. No wonder profits were up seven per cent last year.

Utilities next, and the builder of my new home has signed up for both gas and electricity from British Gas. We get off to a bad start. I call to register my name at the address and give meter readings. When the confirmation letter arrives they have my name wrong and part of the address.

Still, I get an electricity bill. Then I get another, different to the first in that it asks for more money. I pay the second one only to find I am now just over £7 in credit. This strikes me as a good wheeze. If you can persuade all your customers to give you a £7 interest free loan, you’ll be quids in. Literally.

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No wonder British Gas’s profits are up 14 per cent and even less wonder that its chief executive has pocketed a multi-million pound pay package. British Gas, by the way, is far from unique. Last week the “big six” utility companies were described as cold-blooded profiteers. If you have received an energy bill recently, you may sympathise with the description.

According to Ofgem, the industry regulator, the six energy giants have doubled their profit margin over the last 18 months and are now well on track to make £100 profit per household per year. And there’s worse: These same companies make huge profits on actually generating electricity as well as distributing it. The same six have seen their average profit margin rise from around 18 per cent to around 24 per cent.

All this might just be acceptable if it had brought in its wake any significant improvements to Britain’s energy supply and its security. But it has not. The boss of one of these companies, Scottish and Southern Electricity, says there is a real danger of the lights going out because as old power stations come off line, no new ones are being built to take their place.

Why? Because they all want fat taxpayer subsidies in the form of guarantees and assurances on future electricity prices before they will invest. Privatisation was meant to be about setting entrepreneurial flair free to do things better and cheaper. Instead, a small few inflate their bank balances while the rest of us pick up the tab when it goes wrong.

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My own experiences are in many ways the tip of a much larger iceberg. The coal industry? Well, we still burn lots of coal. Last winter, 40 per cent of our energy needs came from burning it. Yorkshire still sits atop millions of tonnes of the stuff. But instead of mining it, we import it with all the implications for our trade figures, which are bad and getting worse.

Financial services? Look at the train wreck that is the Halifax. Once a proud, mutually owned landmark of Yorkshire thrift and financial commonsense, it has been run into the ground by incompetents.

Did I just mention trains? Well how about rail privatisation as the crowning glory of the whole privatisation bandwagon?

What “deeply inefficient” 
British Rail did for a subsidy of just under £1bn a year and falling, the private sector this year will demand around £3bn. For several years the figure was above £5bn. Yet most of Yorkshire’s commuters still sit on trains built by BR. And there are no plans to replace them.

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Don’t misunderstand. I was around in the 1970s and I well remember the state the country was in. Something had to be done, and you can put up a strong argument that Baroness Thatcher had the best set of ideas at the time. Bringing some sanity back into labour relations was a vital necessity. Arguably, so was re-taking the Falkland Islands.

But I cannot help feeling that, just as we were often ill-served by lacklustre state-run monoliths, we are today equally often ill-served by greedy and short-sighted private companies.