The Official History of Privatisation, Vol. II: Popular Capitalism, 1987-97

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This is Volume II of Professor Parker's authoritative Official History of Privatisation, covering the period from the re-election of Margaret Thatcher in 1987 to the election of Tony Blair in 1997. Volume II considers in detail several of the major privatisations, including those of airports, steel, water, electricity, coal and the railways, as well as a number of smaller ones. Each privatisation involved major challenges in terms of industrial restructuring, organising successful sales and, in a number of cases, establishing effective regulatory regimes. The policy evolved and new methods of selling and regulating were put in place that enabled further disposals to occur. Monolithic nationalised industries with their emphasis on the benefits of economies of scale, vertical integration and rationalisation, were replaced by industrial structures rooted in the importance of commercial management, risk taking and competition. In government departments and parts of the National Health Service, direct employees were replaced by private contractors, and private investment became a characteristic of public infrastructure in the form of PFI/PPP schemes. This study draws heavily on the official records of the British government, to which the author was given full access and on interviews with the leading figures involved in each of the privatisations, including ex-ministers, civil servants, business and City figures, as well as academics that have studied the subject. This book will of great interest to students of privatisation, British political history and of business and economics in general. Cover The Official History of Privatisation Copyright Contents Abbrevations List of figures, tables and plates Acknowledgements Preface 1. The Privatisation Programme by June 1987 2. On To The Next Stage – Privatisation and the 1987–92 Government The economic and political context The Community Charge, Thatcher’s resignation and Major’s election Once more into recession Deregulation and privatisation: the background The BP share offer The Next Steps initiative Market testing Public private partnerships Smaller privatisations – property sales and government agencies The National Engineering Laboratory The Tote James Mackie – a near nationalisation The welfare state 3. Privatising The British Airports Authority The decision to privatise Rethinking the structure Ministerial disagreements The Airports White Paper and the Airports Act The flotation 4. Privatising British Steel Manifest crisis Disposals and joint ventures Continuing problems and the future of Ravenscraig A difficult privatisation The flotation And afterwards 5. Privatising British Leyland Reluctant support Jaguar Commercial vehicles, Land Rover and Leyland Bus Unipart Austin Rover No redemption 6. Privatising Girobank, The Trust Ports and Short Brothers Girobank The trust ports Short Brothers 7. Privatising the Water Industry in England and Wales: Early Planning The structure of the water industry under public ownership The decision to privatise Opposition to the White Paper The plans resubmitted Addressing remaining challenges 8. Regulating the Water Industry The basic structure The price cap Setting the K factors 9. Water Privatisation Achieved Arranging the flotation Settling outstanding issues Marketing the sale The flotation Post sale developments 10. Privatising of the Electricity Industry: The Origins The electricity industry pre-privatisation Electricity privatisation: initial ideas The decision to privatise Fresh impetus and the White Papers The Electricity Act 11. The Failure to Privatise Nuclear Generation Protecting nuclear energy The mounting back end costs The privatisation unravels Nuclear withdrawn 12. Creating Electricity Markets Administering the process The power pool The distribution and transmission contract arrangements Generation and supply contracts Competition in supply and concluding the generation contracts Regulation The distribution and supply price caps The transmission price cap The European dimension Employment relations and pensions Green issues and the implications of privatisation for the coal industry 13. Privatising the Electricity Industry: Capital Restructuring, the Sales and Later Developments Capital restructuring Organising the flotations Marketing the shares The employee share incentives Special shares Concluding the sale of the RECs Concluding the sale of National Power and PowerGen The sale of Scottish Power and Scottish Hydro-Electric Northern Ireland Electricity Later developments 14. Completing the Circle: Privatisation and the 1992–97 Government The citizen’s charter, deregulation and market testing The private finance initiative Miscellaneous small privatisations The privatisation of British Energy The one that got away – the Royal Mail 15. Privatising the Coal Industry The perennial loss maker The ultimate privatisation The coal crisis The coal review Privatisation achieved 16. Privatising the Railways: From Rejection to Legislation BR under the first two Thatcher Governments Full privatisation emerges The White Paper and the Railways Bill 17. Privatising the Railways: A Privatisation too Far? Franchising the TOCs The ROSCOs and engineering Freight and parcels Railtrack Regulation The legacy 18. Reviving the Goose Eighteen years of privatisation The results Appendix: Major Privatisations July 1987–April 1997: A listing of the principal advisers Notes References Index