When I first made the case to Margaret Thatcher in the 1970 s she argued “they won’t let me do that.” She was right that there was public opposition to privatising a big utility, whipped up by Unions, management, civil servants and academics. They said a privatised BT would close all the street phone boxes…
When I first made the case to Margaret Thatcher in the 1970 s she argued “they won’t let me do that.” She was right that there was public opposition to privatising a big utility, whipped up by Unions, management, civil servants and academics. They said a privatised BT would close all the street phone boxes still in use, would fail to invest enough, and put the prices up.
In 1982 she started to work on BT and in 1983 she invited me into Downing Street to make the case from the inside and to solve the practical and technical issues. We guaranteed the future of phone boxes , put in a price control requiring price cuts every year and licensed a new competitor who promised a big expansion of business based capacity. This got us through whilst the true answer of competition was gradually introduced.
There were immediate wins.
1. The investment spend of BT was removed from public spending for good, Investment went up a lot with no cost to taxpayers.
2 The state got a large receipt for sale. As BT grew faster so the state got lots more tax revenue from taxing its profits. This helped bring the deficit and taxes down whilst supporting higher spend on health and education
3.BT set about narrowing the gap with the more innovative and advanced US telecoms. BT adopted electronic switching in place of its old fashioned electromechanical system.
4. BT and Cable and Wireless put in large capacity increases to power the big City expansion and service sector expansion. Public budgets would have restricted that.
5 When mobiles, then broadband arrived the private sector threw huge sums at these exciting new products which a nationalised BT would not have been able to do.
6.Competition brought many different phone and data service providers, often added a new cable connection to each home and greatly increased and modernised capacity.
