Converting the Post Office into a nationalised industry, as opposed to a governmental department, was first discussed in 1932 by Lord Wolmer. In 1932 the Bridgeman Committee produced a report that was rejected. In 1961, more proposals were ignored. The Post Office remained a department of central government, with the Postmaster General sitting in Cabinet as a Secretary of State.
In March 1965, Tony Benn, the acting Postmaster General, wrote to Harold Wilson, the Prime Minister, proposing that studies be undertaken aimed at converting the Post Office into a nationalised industry. A committee was set up to look into the advantages and disadvantages of the proposal, and its findings were found to be favourable enough for the Government to re-establish a Steering Group on the Organisation of the Post Office. After some initial deliberations that the business should be divided into five divisions; Post, Telecommunications, Savings, Giro and National Data Processing Services, it was decided that there should be two: Post and Telecommunications. These events finally resulted in the introduction of the Post Office Act, 1969.
On 1 October 1969, under the Post Office Act of 1969, the Post Office ceased to be a government department and it became established as a public corporation. The Act gave the Post Office the exclusive privilege of operating telecommunications systems with listed powers to authorise others to run such systems. Effectively, the General Post Office retained its telecommunications monopoly.
1969 to 1982
In 1977, the Carter Committee Report recommended a further division of the two main services and for their relocation under two individual corporations. The findings contained in the report led to the renaming of Post Office Telecommunications as British Telecommunications (trading as British Telecom) in 1980, although it remained part of the Post Office.
The British Telecommunications Act 1981 transferred the responsibility for telecommunications services from the Post Office, creating two separate corporations, Post Office Ltd. and British Telecommunications. At this time the first steps were taken to introduce competition into British telecommunications industry. In particular, the Act empowered the Secretary of State for Trade and Industry, as well as British Telecommunications, to license other operators to run public telecommunications systems. Additionally, a framework was established which enabled the Secretary of State to set standards with the British Standards Institution (BSI) for apparatus supplied to the public by third parties, and had the effect of requiring British Telecommunications to connect approved apparatus to its systems. The Secretary of State made use of these new powers and began the process of opening up the apparatus supply market, where a phased programme of liberalisation was started in 1981. In 1982, a licence was granted to Cable & Wireless to run a public telecommunications network through its subsidiary, Mercury Communications Ltd