I have about twelve half-written posts in various states of readiness, so I have decided to start something completely different! They can all wait.
I want to look at how much of our life was managed by the government before what we now call privatisation. It’s about politics but I want to be non-political. As always, I want to just state how things were, without saying why things have changed and without giving my views about whether the changes were right or wrong. (You may pick up some of my views, especially from the earlier blog about Choice. I can’t help it if I’m a Grumpy Old Man!)
I will unashamedly repeat things from earlier blog posts and anticipate things in blogs to come (just in case anyone hasn’t been following assiduously!)
I don’t think this word existed until governments began the process of taking out control of various organizations and handing them over to private companies, usually by floating them on the Stock Market. Whatever else may have motivated such changes, the share issue has been a major source of government income. Before the word was used we would have called it denationalization. One of the aims of privatization is to introduce competition, which means introducing choice where there used to be a monopoly.
As you read on, you may like to imagine the reverse process – What would happen now if the government tried to take back these functions?
Gas and Electricity
Somehow I assumed that these two had always been national institutions but both came after the War. Gas was actually nationalized in 1948 by merging 1,064 privately owned and municipal gas companies into twelve area gas boards each a separate body with its own management structure. In Ilford our gas came from the North Thames Gas Board, shown as ‘9’ on the map above.
The gas used was coal gas (derived by the process that manufactured coke.) In the late sixties British domestic coal gas supplies were replaced by natural gas.
These boards simply became known as the “Gas Board“, a term people still use when referring to British Gas, the private corporation that replaced the boards in 1972. Even in the seventies the Gas Board had High Street shops that you visited for everything to do with your gas supply. These shops were the only place to buy gas cookers.
Because it was still a monopoly, there was no choice of supplier and effectively only one domestic gas tariff.
British Gas was privatized in the mid-eighties with a Stock Market flotation at the end of 1986. To encourage individuals to become shareholders, the offer was intensely advertised with the “If you see Sid…Tell him!” campaign. (Before then ordinary people were not generally shareholders. Buying and selling shares used to be an esoteric process, unknown to most people, with expensive fees using stockbrokers.)
[It’s probably worth saying now that under the quirks of the United Kingdom, everything I say about England won’t necessarily apply to Scotland in exactly the same way, and it’s unlikely to be the same in Northern Ireland. Sometimes England and Wales can be considered together but not always, especially in more recent times.]
Electricity supply was nationalized in 1947 with area Electricity Boards being formed from 505 small organisations. The Central Electricity Generating Board (CEGB) managed the generation of power while twelve boards transmitted and sold it in England and Wales. (Scotland had a different system.) As for gas, there was a local Electricity Board shop. (We paid by a prepayment meter under the stairs taking shilling coins. Our cooker was gas so at first electricity was for lighting, electric fires, the immersion heater and occasionally an iron.)
As for gas there was effectively just one electricity tariff for domestic supply. I remember a special tariff for storage heaters which used cheaper night-time power to heat homes in the day.
In 1990 the area Electricity Boards were changed to electricity companies, privatized later that year. The CEGB became three separate companies for generation and the National Grid for distribution.
Both Gas and Electricity supply and distribution have now become complicated and incomprehensible (at least to me.) The various companies are no longer limited geographically and some companies supply both gas and electricity. Payment tariffs are varied and complex, sometimes encouraging users to change suppliers.
[Many people, like me, have stuck to their original suppliers through various changes of organization and changes of name.]
Coal is so insignificant now that many readers will wonder why I even mention it. Of course in the fifties most people used coal fires to heat their houses. (As shown in the picture, it was delivered in sacks of about 50 kg.) There was no central heating. Also most electric power used to come from coal then.
The National Coal Board was another nationalized utility created just after the War. It had 958 collieries, the property of about 800 companies. It also took over 55 coke ovens, 85 brickworks, 20 smokeless fuel plants and power stations at some collieries and railway sidings. It managed more than 140,000 houses and more than 200,000 acres of farmland. At its inception the NCB employed nearly 800,000 workers which was four percent of Britain’s total workforce.
But competition in the form of cheap oil imports came from the late 1950s and the industry began to contract and collieries were closed. The government stopped subsidizing the industry in the mid-1960s and pits closed as uneconomic. The industry contracted continuously through the sixties and seventies.
In 1984 it was alleged that the NCB was looking to reduce output further and the 1984-1985 miners’ strike was one of the longest and most bitter in history and cost more than £7 billion of tax-payer’s money.
A further 23 collieries closed before the end of 1985. In 1987 the NCB became the British Coal Corporation. The industry was run down further after the privatization of the electricity suppliers and an increase in imports of foreign coal.
In 1994, the industry-wide administrative functions of British Coal were transferred to a new Coal Authority and its economic assets were privatized, the English mining operations being merged with RJB Mining to form UK Coal plc. By the time of privatization, only fifteen pits remained in production.
Historically all (landline) telephone networks and telephone services became part of the Post Office (with the rather strange exception of a small area around Kingston-upon-Hull.) This meant that we only had one telephone tariff for calls – but anything beyond a local call was pretty difficult anyway! Of course in the fifties we had no choice of handset and the heavy, black Bakelite phones remained fixed by cables to the wall.
The telecoms side of the Post Office was renamed as British Telecommunications (trading as British Telecom) in 1980, and then became a separate company. A gradual process to introduce competition into British telecommunications industry continued through the eighties and beyond. In the mid-eighties more than 50 per cent of British Telecommunications shares were sold to the public. At the time, this was the largest share issue in the world. The monopoly of British Telecommunications (later BT) was eventually ended and the rest of it has been sold on the Stock Exchange.
As you know (if you’ve been paying attention,) television was much more basic then – very primitive, poor quality terrestrial BBC. It was part of the Post Office so that was where you bought your television licence.
The BBC is now independent but retains links with the government, especially in its income from television licences. All other aspects of television are now commercial.
[I have missed out mobile phones, the Internet, satellite cable and Freeview television and lots more, which just did not exist then.]
Now we have many ways to deliver things but it used to be just the Royal Mail, part of the Post Office, delivering letters, packets and parcels everywhere. Parcelforce as a brand did not exist until 1986 and letters and parcels were delivered together. Although branded separately as Royal Mail, this was not floated on the Stock Exchange until 2013. Royal Mail continues by law with the universal service, which means that items of a specific size can be sent to any location within the United Kingdom for a fixed price, not affected by distance. The Postal Services Act 2011 guaranteed that Royal Mail would continue to provide the universal service until at least 2021.
The Post Office Savings Bank, together with other forms of National Savings including Premium Bonds, was part of the Post Office. In 1969 it transferred to a separate department, the National Savings Bank and became independent in 1971. It is now branded as NS&I.
(There used to be Trustee Savings Banks, similar to Post Office Savings. It was never quite clear who owned them but in the seventies and eighties they merged and were floated on the Stock Exchange by the government. TSB has now merged with Lloyds Bank.)
You have seen how parts of the Post Office have separated and been privatised. What is left of it covers remaining shops and their counter services. It is now still owned by the Government.
(National Giro was a public sector bank initially run by the Post Office in the late sixties. It became National Girobank then Girobank and was demerged from the Post Office. It is now part of Santander.)
Water used to be something controlled by local government and somehow included in Rates, the earlier local government taxation system, almost without people being aware that they paid for it.
Rates were abolished in 1990 and replaced with the so-called “poll tax“, a fixed tax per head that produced strong public opinion against it. It was soon replaced with Council Tax, a system based on the estimated market value of property assessed in bands of value, with a discount for people living alone.
The Water Act of 1973 reorganized the water, sewage management and river management of England and Wales Water, removing it from local authority control, and ten larger regional water authorities were set up, under state control based on Regional Water Authorities.
Water utilities have now been privatized and Thames Water Utilities is now listed on the Stock Exchange.
From 1948 Railways in Britain were managed by British Railways, which from 1965 traded as British Rail. It had monopoly control of the train services so there was virtually just one option when you bought a ticket! (Actually you could buy a single or a return – which was valid on any returning train for three months. There was an off-peak return, valid for one day outside rush hours, and a few others that would give unlimited travel for a week or more. You could buy season tickets.)
I will look at the dramatic changes in railways in another blog but like the other utilities considered here, rail transport has now been privatized and split up. We now have different train operators and a highly complex pricing system. If you want to go from A to B, the cost will depend on the exact date and time, when and how you book, and which of many options you pick. It may be cheaper to buy a ticket from A to C, beyond B; or to buy a return; or go First Class; or buy two separate tickets from A to Z and Z to B! (You won’t be told any of this when you book.)
(The Rail logo shown above was at times the logo of British Rail, but not in the fifties and sixties. It is now used in general for railways)
Ministry of Defence
Of course this is still part of the government but large chunks of it have been privatized.
When I left university there where MoD establishments all over the country, probably left over from the War, for example the Royal Aerospace Establishment (RAE); the Admiralty Research Establishment (ARE); the Royal Armament Research and Development Establishment (RARDE); and the Royal Signals and Radar Establishment (RSRE). Gradually their work changed. Those listed and a few others were merged to form the Defence Evaluation and Research Agency (DERA) still part of MoD until July 2, 2001. It was the UK’s largest science and technology organization. Some, but not all of DERA was privatized to a commercial firm Qinetiq.
Other Government Departments
All I can say about these is that they used to be part of government and they are no longer so. There are many and I take as examples the National Physical Laboratory, (NPL) the Meteorological Office, the Bank of England and London Regent’s Park Zoo (now ZSL) I could list many more.
As a final example of things that are being taken out of government (and local government) control I want to consider schools. All schools in the public sector (which were more or less Grammar, Comprehensive or Primary) came under the Local Education Authority (LEA), part of local government. There are now many more types with the emphasis moving towards Academies, independently funded and without LEA control.
As for many blog posts I am indebted to Wikipedia for details, particularly dates. The facts are theirs, the mistakes are probably mine!