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Alastair Macdonald, senior civil servant at the DTI who was in charge of IT and carried out the privatization of British Telecom – obituary

Alastair Macdonald, who died aged 81, was a central figure in the Department for Trade and Industry for two decades, helping the fledgling IT sector in the early 1980s, organizing the privatization of British Telecom and finally overseeing industrial policy as a whole as Director General for Industry.

He worked closely with ministers in both Conservative and Labor governments, building particularly strong relationships with Kenneth Baker, Norman Tebbit, Michael Heseltine and Peter Mandelson.

Hardworking, hardworking, conscientious and discreet, Macdonald was respected as a man of probity. After entering Whitehall, for example, he was famous for insisting on paying his half of the bill for a lunch with a reporter out of his own pocket, rather than accepting entertainment at an expense.

Alastair John Peter Macdonald was born in Twickenham on August 11, 1940, the eldest of three children of Ewen and Hettie Macdonald. His father was an engineer at a company that made meters to monitor pressure flow in power stations.

From Wimbledon College, where future economics commentator and FT colleague William Keegan became a lifelong friend, he went up to Trinity College, Oxford in 1959 to read modern history. He was among the first undergraduates not to have done national service before.

Fascinated by newspapers, Macdonald became involved with the student magazine Isis, working alongside Richard Ingrams, Paul Foot, Willie Rushton and Andrew Osmond. These older colleagues, he recalls, “talked about wanting to start some kind of satirical magazine like the French Le Canard Enchainé, and the term after they left they started this strange little magazine which was called Private Eye”.

That same term, Macdonald succeeded future Arts Minister Gray Gowrie as editor of Isis. After graduating in 1962, he embarked on journalism, first with The Spectator and then after nine months at the FT as a reporter.

There he joined “a team of young people whose job was to write a dossier, probably once a week, on the outlook for a particular industry. You were required to research and interview players in the field you were writing about, and write a 900-word article about the outlook for that industry. This experience was actually almost like going to business school for a year or two.

Macdonald then spent a year in the FT’s Washington office as David Watt’s deputy, returning in 1966 to become the paper’s editor. While at the FT, he and a group of colleagues invested in a greyhound named Gurrane Jet, which ran with obvious lack of success at the old Wimbledon stadium.

While in Washington, British Embassy staff encouraged him to consider moving into the civil service, and in 1968 he presented and passed the entrance exam. Breaking the news to his colleagues, he explained, “The power is where the power is.

He started as Deputy Director in the Department of Economic Affairs, which the following year was absorbed into the Treasury. In 1971 he began his long association with the DTI; his first assignment – ​​which he particularly enjoyed – was secretary to Lord Devlin’s inquiry into how business and industry could be better represented, commissioned by the Confederation of British Industry and the Association British Chambers of Commerce.

In 1982, Macdonald, then undersecretary, was put in charge of the growing field of computing, working with an enthusiastic and stimulating minister in Baker. He wasn’t that technical himself, but the date was a success.

It was the year of computing, and a government initiative was the Micros in Schools program, which he recalled “opened the eyes of school children and their parents to what was really going on in the ‘computing while playing games on the BBC Micro’.

The DTI then had two aims for the IT industry: to help relatively small UK businesses grow to become internationally competitive – which proved difficult to achieve – and to keep the country’s flagship company afloat, ICL, which would eventually merge with Fujitsu.

Macdonald was particularly involved in the development of Project Alvey, the government’s response to Japan’s Fifth Generation Computing Initiative, which aimed to develop a range of pre-competitive technologies in concert with academia and industry. He felt that Alvey proved invaluable in getting teams from all three sectors used to working together, but produced little tangible business benefit.

In 1984, he took over as head of the telecommunications division of the DTI, in particular to prepare for the privatization of BT. This involved pushing the Telecommunications Bill through Parliament, negotiating the license with BT outlining exactly what the company could do, and arranging the international IPO.

“Every Monday morning I chaired a meeting of Kleinwort Benson and Linklaters, our lawyers, the Treasury and our own team at DTI, and I wrestled with what needed to be done, where we had come to on about a thousand issues. . We were followed closely by Norman Tebbit, who showed great interest.

Despite initial skepticism inside and outside government that the project could go ahead, the IPO was a success – and the biggest the City of London had ever seen.

From 1990 to 1992 Macdonald was seconded to the MoD as Deputy Under Secretary of State (Defence Procurement). He returned to the DTI as Managing Director (Industry), serving in that role for eight years until his retirement in 2000.

For the first three, his secretary of state was Heseltine. “One felt like he had wanted to be Secretary of State for Trade and Industry for a long time,” Macdonald recalled. “He was particularly keen for officials to be close to industrialists, to listen to them, to be influenced by them and to report to ministers the sentiment of industry.”