British Aerospace was privatised in 1981 with an IPO of 52 percent of its shares, with remaining shares unloaded in later years. In the late 1990s, several high-profile rail accidents raised concerns about the industry’s new structure. - Thatcher felt that the selling of state assets was essential to curing British economic stagnation. But they learned as they went, and some early successes generated momentum for further reforms. And, indeed, water prices did initially rise. Nonetheless, passenger rail has flourished since privatisation. Productivity has substantially improved, with passenger journeys per employee increasing 37 per cent since the reforms. Simon, E (2013)“Thatcher’s Legacy: How Has Privatisation Fared?” Telegraph (April 12). Privatisation would allow those innovators to inject fresh capital, new ideas, and dynamism into a range of industries currently stifled by political control and bureaucracy. Globally, there are trillions of pounds being retained by corporations who see no viable avenue for profitable investment. Privatisation has attracted opposition from the public in many countries, but very rarely have reforms been undone once they have been put in place, at least in the developed nations. The reforms also “massively increased the size and efficiency of the world’s capital markets,” argues William Megginson in his book, The Financial Economics of Privatization (2005: 4). London: Institute of Economic Affairs. 2013: 18). When possible, privatisation should be paired with the removal of entry barriers because open competition is preferable to either government or private monopoly. Then, over time, the government opened BT up to competition. We can see this through a potted history of privatisation in the UK.
Bloated workforces at many formerly state-owned firms were slashed. Management and employee buyouts were also popular in Eastern Europe after the fall of communism. And despite a few high-profile accidents in the 1990s, the overall safety record of British rail has steadily improved since privatisation (Merkert and Nash 2006: 83).

President Ronald Reagan’s administration explored privatising the US Postal Service, Amtrak, the Tennessee Valley Authority, the air traffic control system and federal land, but those efforts stalled. In the technocratic nomenclature of the IMF, this would be called a "structural adjustment programme", but that doesn't really capture the sweeping scale of the transformation. Economist David Parker (2004: 16) found, “There is no substantial evidence that lower manning and price reductions in the public utilities have been at the expense of service quality.” The share of British Telecom service calls completed within eight days soared from 59 per cent to 97 per cent in the decade after privatisation (Holder 1998: 20).

In sum, British rail reform has been a success, not the failure that some critics have claimed. It is inspiring to look back at Margaret Thatcher’s privatisation triumph. Drucker, P F (1969) “The Sickness of Government.” The Public Interest 14 (Winter): 3–23. Privatisation has attracted opposition from the public in many countries, but very rarely have reforms been undone once they have been put in place, at least in the developed nations.

Thatcher was heavily influenced by economist F A Hayek, as well as by her key adviser Keith Joseph. - It would reduce government spending on loss-making industries and on wages as civil servants would be replaced by government employees- It was believed privatisation would increase competition and therefore innovation - The revenue could be used to fund tax reductions, another of Thatcher's main aims

British Steel chopped its workforce and improved its productivity leading up to its 1988 privatisation, as did British Airways before its 1987 privatisation. Just knowing that privatisation was coming spurred reforms in many companies. Get Swarajya in your inbox everyday.

With the economy recovering in the early 1980s, and with Thatcher reelected with a large majority in 1983, the British privatisation program kicked into high gear.
John Major’s Conservative government, for example, privatised British Rail.

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