Why Mrs Thatcher will be remembered for centuries

Press, 17 June 1988, Page 12

Why Mrs Thatcher will be remembered for centuries

Privatisation is here to stay, says Oliver Letwin. He talks about it to Colin Hughes of the “Independent”

Margaret thatcher will merit no mere footnote, but a chapter in history. World history. When people are still talking about her 400 years from now, it will be because of the global revolution wrought by privatisation. Such is Oliver Letwin’s contention. He believes that Britain under Margaret Thatcher represents a crucible of change akin to the Elizabethan era. The 32-year-old Cambridge and Harvard philosophy graduate epitomises the select group of bright young things who have been cultivated by the top Tory echelons as ideological agents provocateurs during the past nine years. From being special adviser to Sir Keith Joseph at education, he went on to the Downing Street policy unit, left the Government, published a large tome on moral philosophy, and stood hopelessly as the Tory candidate against Labour’s Diane Abbott at the last General Election. He is now working for N. M. Rothschild, the bankers, exporting the privatisation idea to foreign governments. Pursuing that cause, he has just published “Privatising the World,” a handbook for practitioners which also, incidentally, provides the first insider’s account of what privatisation really means. Privatisation, Mr Letwin says, is the point at which the economic and political Thatcher revolutions converge. The idea of selling State assets was born out of a gut feeling in the Seventies that businesses would run better if they were free of Government’s dead hand. There have been other benefits: popular capitalism; cutting the national debt with the proceeds; expanding the City’s financial capacity. But few imagined it would lead to the multi-billion asset sales of British Telecom, British Gas, British Petroleum, and now electricity and water. Yet the most important benefit is still only dimly perceived: a transformation in the way the Government thinks and behaves. In fact, Mr Letwin says, politicians have become freer to criticise, control, and regulate private industry. It is easier to

control private rather than Stateowned industry because regulation is better than self-control.

Nationalised industries drag officials and ministers into opposing the customer’s interest Once privatisation is complete, “the role of Ministers in running everything will never be restored ... Britain is moving back to a position where people in Government do not think it is their business to run anything. Four hundred years from now people will still be talking about Mrs Thatcher. And it will be because of that profound shift in the way Government thinks.”

But surely the wheel could be spun back any time, by a different Government with other views? “I don’t believe a future socialist . Government would change this. Just as for many years Conservatives came to see nationalisation as a feature of life that was unchangeable, socialists around the world are seeing this as a different way of running the economy. The difference is going to be over how you distribute the benefits through society. “You can exaggerate it, but what is going on in communist countries is extremely significant. If you had said at a dinner party 10 years ago that China would be thinking about privatising things, and Russia would be creating free markets, people would have thought you were loony. But it’s happening.”

What of the contention that industries were nationalised in the first place because the private sector failed to do that job? Most Tories would agree that pre-war mine-owners were disastrously short term, as well as socially offensive, in their management. Surely exploiting natural resources, building transport networks and establishing new technologies needed the power of State planning to get off the ground?

“Governments fell down in their role of regulation, the only proper role of government in the economy. The public business is to protect individuals and the community as a whole against commercial interests going too far.

“Very serious efforts have gone into ensuring, through builtin competition, regulations, that what is now being recreated as private enterprise is not going to become- subject to the same problems. Government has enough power to prevent excessive exploitation or ill-manage-ment becoming a recurrent feature.”

The early problems of British Telecom, he says, prove his point: “Not enough competition in the domestic , sector. Now we are getting { competition, from Mercury, BT will improve — it is already improving.

“Look at the United States. Barely anything has ever been in public ownership, yet it has about the/most developed utilities in the world. There is a widespread notion in frontier countries, that if the public sector had not stepped in, there would never had been the great industries that there are now. That’s a travesty of history. There were small private-sector utilities.”

Are there natural monopolies? “Yes. But very, very few. And only in the pure classical sense — tracks, roads, bridges — pure infrastructure,. None of the things that run over, or on, or through, tracks, roads, bridges, pipes, lines, are natural monopolies. You can argue that for strategic reasons you want to create or retain a monopoly, but that’s different.”

So, privatisation knows almost no boundaries. But if privatisation was born of a gut idea, then the accusation of the Earl of Stockton (the former Prime Minister, Harold MacMillan) that

Mrs Thatcher was selling the family silver is also a gut reaction. It strikes a popular chord. Not at all, says Mr, Letwin: it strikes a class chord. “One day something is owned by the State, the next day it isn’t. Are;’ the products still coming out? 'Are the bricks and mortar still th,ere? Of course they are. “Just because a country’s assets change hands, it doesn’t meant they are lost to the country. There is a warning; but it is not what the Earl of Stockton was saying. <: “It is that you cannot take assets and sell them, and use the cash as a means of cloaking additional public expenditure. But that isn’t what Howe and Lawson (Mrs Thatcher’s past and

present Chancellors: of the Exchequer) have been doing, They have used it to cut expenditure — or to cut the deficit, and taxes, which is the same thing.” Privatisation might signal the absolute demise of Marxism. It might help Third World countries pav off their debt. It might bring democratic capitalism to fruition. : < ?’ Might it not, equally, make it easier to run a market socialist economy, because you are setting the precedents of regulatory intervention? "The truth is,” Mr Letwin smiles, “you are making it easier to run any economy.” “Privatising the World" is published by Cassell ( £19.95 and £9.95 in Britain).