Did privatisation work?

Former_MSE_Andrea

Poll Started 29 September 2004. Did privatisation work? Would you renationalise? Mrs Thatchers shareholding democracy is now in its adolescence, but has it worked, are things better now our big utility companies are private or would you prefer to renationalise, so the state again owns and controls our railways, gas and electricity and phone system? Which of the following would you renationalise?

A. Railways, Energy and Phone
B. Railways and Energy
C. Railways and Phone
D. Energy and Phone
E. Just Railways
F. Just Energy
G. Just Phone
H. None, privatisation ain't great, but it's better than nationalisation
I. None, privatisation has been a great success

The_Nickster

As much as I hate to say it on balance I think privatisation did work but with a few exceptions.

Transport privatisation I feel has failed. Public transport is too expensive and unreliable. Buses should be subsidised heavily and free or very cheap to use. Although on the face of it this looks expensive for the 'hard pressed taxpayer' it would yield enormous dividends in much less congestion and environmental benefits. Car users would be much more willing to travel by bus if they knew the service was reliable and much cheaper than using a car as the experiences of other European countries shows.

Almost everyone agrees that rail privatisation has been a disaster. I believe Railtrack (or whatever it is called now) has effectively been renationalised but it would probably be too expensive to renationalise the operating companies (Virgin etc.).

Energy appears to be OK with market competition keeping prices relatively low.

I am not sure about water though - I have no choice about what water company I can use and have to pay whatever price is dictated.

alanjarrett

Short answer - H

I see no direct links between Nationalisation, Privatisation and setting cost and performance standards.

I do not believe Government should own such utilities, but they should set standards of service, performance and cost and either offer up for tender (like rail) or to the open market (like fuel).

We need more competition (as with Telecomunications) not less. The structure set by Government should seek to exclude monopolies (nationalised services included) as far as possible.

If we really do need cheap or free travel (another debate) I see no problem for local or national government providing this as long as they do it indirectly using open competative quotes, but not directly using some form of nationalised industry.

Some services are a special case (Military, Police and Fire for example). I would not advocate privatisation for these types of services, which I see as forming a basic secure structure for society as a whole. That is, a basic test for not privatising is how the fabric of society is affected if individuals do or do not 'buy in' to the market. I have deliberately not used health as an example, since I am still 'on the fence' with that one.

chubbybrown4real

H

just think of
Nuclear,railways,steel,buses,electric and Gas

theoriginalsims

E

sixtysomething

B
Phones don't matter too much, but energy and transport need long term decision making, and long term investment, neither of which are likely under privatisation.
The main problem with the old nationalised industries was that they weren't run by the right people. The top management should always have been recruited from the private sector to obtain the efficiencies needed.
Without that, we finished up with what we had, -- the civil service mentality in these industries (and similar costs) whereas all that was needed was enthusiastic, resolute management.

alwaysatwork

Did privatisation work? It depends on who you are and how you wanted it to work.

I know a bit about the gas privatisation as I used to work in the industry. At first there was very little difference when BG was sold off as you would expect but slowly things began to change.

One of the first most noticable things to change was the closure of the gas showrooms. They did not make money so they had to go which removed a point of payment for bills, an advice shop and outlet to purchase applainces from the high street.

Next was the seperation of the repair and installtion section from the rest of the company. Overnight the cost of having a gas man in your house jumped form £15 per hour to over £60 and is now something like £80+. That was not the only service to increase in cost. The price of central heating contracts jumped up and all sorts of exclusions were introduced

The emergency service for escapes did not stay with the repair company. This means that where as several years ago if you called a BG engineeer to your house for an escape as you have to by law for safety reasons he would arrive within the hour and offer to repair the installation at £15per hour you are now likely to have your gas disconnected and have to find your own CORGI engineer and pay £80 per hour if you can get one.

Meters cause problems now as well. Originally all meters were owned by BG and then Transco but companies can now choose to put their own meters rather than hire them from Transco. The result is that meters are being installed and removed on a regular basis at considerable cost as people change houses or suppliers. Engineers can also be called by a customer to a meter only to be told that it belongs to another company resulting in wasted visits and customers time.

Another cost previously not charged for was the instalation of a service which is now likely to cost you £300.

However ignoring all of the above the real reason for privatisation was supposedly to reduce the cost of gas. When you hear such things discussed we are often told that in real terms gas is cheaper than it was or that it is cheaper than France or whatever. Maybe Martin can say if that is true or not but what I know for sure is my gas bill is more expensive than it was.

I also know that (approx) the year before privatisation when there was really only BG, BG made £35 million profit and now the companies such as BG, Transco and all the other sellers of gas make a total of profit in the billions.

Rather than privatise BG the government could have beat BG around the head with the regulator and made the same cost savings etc and passed the billions in profit back to the customers in reduced gas bills instead.

So in answer to your question a least as far as BG is cocerned I would say privatiation did not work for customers but it will have worked for a few rich businessmen and short term for a few small shareholders but the country as a whole is worse off.