Reproduced from Daily Express 17 June, 1996

Although he had produced chart-topping hits and even worked as a consultant to John Travolta on Saturday Night Fever and Grease in the Seventies, he had never earned big money.

His Cinderella-like status changed when he set up Loose End Productions in 1978, which became Britain's leading music production company within five years.

He went on to establish Pete Waterman Ltd in 1983 and joined forces with Mike Stock and Matt Aitken to form the famous Stock, Aitken & Waterman partnership.

His biggest triumph came, however, when he launched the singing career of tiny Neighbours star Kylie Minogue, who became the most successful female singer in the UK, selling 2.8 million records.

Now the 49-year-old, who makes no secret of the fact he could not read or write until 10 years ago, owns one of the most successful record production studios in the world with bases in London and Manchester.

He also owns Waterman Railways, the country's only nationwide train operating company with 250 locomotives.

"Starting my own business was the key turning point in my career. I had worked with some of the biggest names in the music industry and I had seen the millions they were earning, yet I was on only £30,000-a-year before deductions," he says.

Waterman, the son of a Coventry aircraft fitter, left school at 15 without having learned to read or write and his first job was as a boilersmith for British Rail at Wolverhampton.

Although he worked in engineering on the shop floor until 1971, he had always been involved in music and used to arrange choirs at Saturday weddings when he was a child.

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He became a local DJ and even played records at the intervals at a number of early Beatles concerts. Fame in the music business was slow in coming. He became a small-time record producer but managed to make only £15,000 out of a song which went to No 4 in 1975, Hurt So Good, by Susan Cadagon.

And even though he had worked as a consultant to the company which managed John Travolta in the mid-Seventies and helped pick some of the songs for Grease, he had little in the way of financial return.

Forming Loose End Productions with friend Pete Collins proved to be the answer.

"That was one of the best decisions I ever made and at last I seemed to be rewarded for my efforts," he says.

"Wealth, however, has never been that important to me. I used to spend all my spare cash on records and my philosophy was that if the rent was paid that was okay." Loose Ends moved to Los Angeles but Waterman wanted to return to England so he left to form PWL and Stock, Aitken & Waterman, which was dissolved three years ago. But the real success was to come later, when Kylie Minogue walked into his studios.

"She was the best artist I had ever had in my studio from day one. She is absolutely brilliant. She recorded I Should Be So Lucky, and left to go back to Australia within two hours," he says.

"Many people thought I was trying to exploit her soap star status, but I had never heard of her and had never watched Neighbours.

"I couldn't get any record label to take her so I set up my own record company, PWL Records and it proved to be an enormous success. Nobody in the UK has ever been as big as this girl," he says.

Waterman has a lot of sympathy for Britain's small businesses, particularly their problems with the banks.

"Many are just so unresponsive and are obsessed with business plans. I bank with the Allied Irish Bank in Coventry and the guy I deal with there is brilliant. If I want £30,000 or £100,000 loans I hardly have to ask," he says.

Apart from records, Waterman, a long time rail enthusiast, now owns a major UK railway company which operates non-scheduled train services, such as football specials.

Unlike many other rail buffs, he is a passionate supporter of rail privatisation.

"Clare Short, the Labour transport spokeswoman, talks absolute rubbish about privatisation," he says.

"If public ownership was so good why are fares too expensive, why is the business overmanned and why is it so badly maintained?"