POLITICS
The need for competition which should put ministers in the docks
MA RTIN IVENS
In the bad old days before Mrs Thatcher, the Conservative Party had a ritual re- sponse to nationalisation. When Labour governments took whole industries into what was euphemistically termed 'public ownership' the Tory senior ranks would perform a war dance in Parliament and vow solemnly to roll back the frontiers of the state after the election. In office, they might at best condescend to denationalise steel, or at worst as in Ted Heath's case, flog Thomas Cook's and a few pubs in Carlisle. The trend was called 'the ratchet effect of socialism', although 'Tory defeat- ism' would have been a more accurate political term. Had it continued until the end of the century private enterprise would have ended up as the sole province of the match-seller.
Since 1979, however, huge corporations employing hundreds of thousands of peo- ple have been returned to the private sector. The fiscal and political rewards have been considerable. It has been calcu- lated that, at the last election an average of 15,000 voters in each constituency has at one time taken part in the sale of Britain's `family silver'. The outstanding success of privatisation has helped ensure that Mrs Thatcher will stay in office until the late 1980s and turned the national consensus against nationalisation for years to come. Alongside the sale of council houses, privatisation has brought nearer the Tory dream of a property-owning democracy.
Yet viewed from a different, economic perspective, the Government's ambitious privatisation programme leaves much to be desired. What has it done to widen con- sumer choice and exert discipline on the management of denationalised industries? What has it done to improve competition?
Nationalised industry chiefs have rightly welcomed privatisation because it means less civil service and political interference in the running of their businesses. But their co-operation has been bought on the understanding that ministers will bring their empires intact into the private sector. The Treasury has gone along with this charade so far, calculating cynically that private monopolies will fetch a better price on the Stock Exchange. British Gas's reten- tion of its monopoly is a case in point. Sir Denis Rooke, who has a number of min- isterial scalps to his credit, saw off a challenge to his authority from Nigel Law- son when he was Energy Secretary and kept his precious showrooms. When Peter Walker replaced Mr Lawson, the security of Sir Denis's empire was assured. Although the corporation could easily have been split up into regional companies on American lines, the Treasury was happy to take the money and run.
Opposition to monopolistic sales has been hitherto confined to a few free market economists, easily dismissed as cranks because they were said to Mack any understanding of 'political realities'. Spec- tator readers, too, who abhorred British Telecom's act of vandalism in substituting draughty, new telephone booths for the sturdy, red boxes were not long ago a small, if influential minority. Now, a general hue-and-cry against BT's ineffi- ciencies has made the company call in its public relations men and ministers serious- ly consider opening up the telecommunica- tions market still further in 1990.
Lack of competition is not the Govern- ment's only worry. If the bull market collapses, many small shareholders would have their first unhappy experience of a downturn in the value of their purchases. Seizing on disillusionment with privatisa- tion, Walworth Road's young technocrats, now committed to jettisoning vote-losing socialist economics, could well decide to take on the unlikely role of the consumer's champion. This offers a new challenge to ambitious Conservative politicians, jock- eying for position for the time when Lady Grantham takes up her rightful place in the House of Lords.
Monopoly sale bonanzas may lose their electoral appeal. But fostering competition is not a soft political option. It requires a lot of work. One ambitious politician, the new Energy Minister, Cecil Parkinson, has gone off to brood about the future of the electricity industry. As well he might. If he wants to break up the existing monopoly he faces the daunting task of taking on its boss Lord Marshall and restructuring the entire industry. Commentators are already suggesting he may choose to put off its sale for the sake of securing long-term competi- tion. Mr Nicholas Ridley is pressing ahead with the privatisation of the water author- ities and has plans to end rent controls. These, too, may be fraught with political difficulties. Elsewhere, British Steel, the plaything of governments for decades, is not a natural monopoly, but its sale will probably have to wait until its profits increase and its European counterparts further cut back on excess capacity.
That may leave the running to two ministers at very different stages in their careers. Mr John Moore, who master- minded the privatisation programme while at the Treasury, is undoubtedly on his way up. He has Mr Parkinson's good looks, is as energetic as anyone, likes to remind you of the fact and needs no stimulus but adrenalin and camomile tea to climb poli- tical mountains. The man who boasts he is never ill has ironically been given charge of the National Health Service. But if he is to really show his mettle Mr Moore has to prove he is prepared to contract out more hospital services against the wishes of tough unions and weak management. Paul Channon appears to have gone through a mid-life crisis after his mauling at Trade and Industry. But politicians are flexible creatures — they can go through several political menopauses and still come back rejuvenated. The Department of Transport could be viewed as a backwater since a previous incumbent, Mr Ridley' who is to privatisation what Ignatius Loyola was to the Counter-Reformation, took on the task of breaking up the bus companies. But Mr Channon could do Britain's economy a favour and salvage his political career at the same time if he tackled the privatisation of the docks. Nobody in their right mind, however' would invest a single penny in Britain's ports with the Dock Labour Scheme still intact. Under the Luddite-inspired Aldington-Jones agreement registered dockers in scheme ports have the sole right to work and are guaranteed a job for life.
As a preliminary to privatisation, the Government would have to pass legislation abolishing the dock labour scheme out- right. Of course the trade unions would be unlikely to surrender their privileges with- out a fight. But if the Prime Minister were prepared to stand by Channon in such a confrontation, as I suspect they would he might be tempted to proceed. Certainly the National Association of Port Employers are itching to recover the right to manage. Perhaps the docks will be the place to launch a final campaign against public ownership.
Martin Ivens works for the Daily Tele- graph.
Ferdinand Mcormt is on holiday.
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