It’s the same on the NHS. In a recent case, hospital Porters were privatised. They do the same job, day in - day out, how will privatisation improve efficiency? It won’t, it just enables the new supplier to take a profit without any improvements to the service. Its a scam.
Which was exactly what was predicted would happen 50 years ago when England entered its period of lunacy called neo liberal economic period, but since when did anyone listen to union leaders or socialists.
So, thirty years of radical global and national changes, long periods of both Labour and Tory government, technological upheaval and demographic shifts... and it's privatisation that's to blame? Seems a bit.. simplistic.
Let's not forget we saw radical improvements in public services in that period
The more recent flatlining of productivity and atrocious investment in public infrastructure has coincided with the longest period of low inflation in the last century, and significant changes in the working population... and significant decline in the quality of our political classes.
And planning regulation, international exchange rates, demographic changes and the advent of career politicians don't? Public infrastructure projects have become almost impossible to deliver - and those are under direct control of the government. It's madness to ignore those just to fit your biases.
The planning application for the Lower Dartford Crossing is over three hundred and fifty thousand pages long and has taken fifteen years to process. Birmingham City council's payroll system has cost over £130 million. Tram systems in the UK cost over twice that of Europe - and this is because of..
..extremely poor public management, and public objection to infrastructure projects. We're closing down vital systems (loosing over thirty five reservoirs in the last decade) and then unable to build new ones - not because of privatisation, but because of weak government and public opposition.
No-one wants sewage works, reservoirs, power stations, transmission lines, railways, trams or any 'large' projects on their doorsteps, and our political classes are useless at pushing them through for fear of loosing votes. When projects do go ahead, they then screw them up with constant revisions.
You gish galloping is impressive as much as it is unsuccessful. You can take that back to Twatter environment it might work there. Although it makes you wonder why PRIVATE water companies in the UK have sold former reservoir sites for housing developments. For instance, Yorkshire Water ,
If it's not market what exactly is going to drive efficiency and lead to lower costs / better service? I never quite understood this argument - am I missing something?
To be clear here I'm agreeing with your BS sentiment and saying without it there really are no arguments in favour of privatisation - it only drives profit and money to share holders - esp. when ineffective e.g. water companies
It's worked in some areas, telecomms for example. But those are areas where competition is *possible* and you don't have real, effective or geographical monopolies.
When are people going to understand that Companies and Billionaires don’t care about us? Politicians have to because we vote them out. I’ve never voted for the CEO of Pepsi.
We will just have to differ on that Don. The whole of the 50s (apart from 1951) right up to Harold Wilson in 1964 had Tory administrations under Churchill, Eden, Macmillan, Douglas-Hume so not sure where the “statism” comes in.
Might you be thinking of the Atlee government of late 40s
The nationalisation and centralization of large chunks of the British economy post empire was bi-partisan, and ultimately an abject failure economically
"The Rise and Fall of the British Nation" by Edgerton covers this well
Let's not go back to that failure. It didn't work then and won't work now
Really? Can I ask why you think that is so? Where's the free market competition these days? We had a period of competition (BT, Mercury, Telewest, NTL, Vodafone, Cellnet 3, etc,etc.) but now it's reverting back to almost a duopoly again.
Technology advances made more difference than competition.
No one credible is pushing for renationalization of telecoms - because privatisation worked. Data centres, fibre optic, switching, VoIP, app comms, mobile towers, all modern Internet - it's a vast competitive industry far better in private hands, with market incentives.
These are also export opportunities, and competition is world-wide. Any industry with export potential and rapidly evolving technology should be in private hands - no UK public body will credibly seek export growth.
I'm pro-nationalisation of some sectors, just expect more nuance from Bylines.
Sure it's a sector that needs competition - and regulation to ensure it. It's prone to monopolization (and in the US there are real problems, eg local cable company monopolization)
But my point is that no one serious is arguing for nationalisation of this sector, or even small parts of it.
In 1990s I thought telecoms a natural monopoly (eg mobile phone networks). Turns out in UK they aren't - and that competition and private investment work wonders.
Again I'm just arguing for nuance - not all privatisation is wrong - but yes some is disastrous.
Although apparent diversity in the market would appear to be delivering low cost telecoms this was built on public investment, including the expansion of super fast broadband in the 2010s. Private finance had failed to deliver the infrastructure investment.
I remember competition in the Energy sector, which was then hoovered up by the big 6 into the functional cartel we have now. Generally, competition in those sectors is an illusion at best.
We lapped it up at the time. The building societies and insurers joined in, and many people owned shares for the first time. Employers introduced share save schemes, some employees had to navigate capital gains tax as a result. But long term, the harsh realities have hit home. Boomers, who knew?
Yes. However, how do we ensure that publicly owned monopolies actually work well in our favour. History isn’t very favourable unfortunately. It looks like it could be done, but can still get awry. Clearly privatisation isn’t the best solution nevertheless.
Well, many fell for the Thatcher privatisation gravy train despite the warnings. Tories said there would be sufficient 'checks and balances' enforcement by independent authorities. Oh how we laughed 🙄
Where there might be detrimental effect to health, the environment, and general public welfare, it's simply not practical, let alone ethical, to make that a commercial industry for the benefit of shareholders.
There *are* priorities for renationalisation, and *water* is the top of my list,
There's plenty of exemples where privatisation was the correct approach. (Aerospace, telecoms, power) it's when the dogma runs wild you end up with railway's privatised and owned by state enterprises from abroad.
Thus is the essential problem of privatization of essential services: the incentive of profit lends itself to collecting maximal fees and providing minimal service; to maximize income while minimizing expenses. In a system with no profit motive, the bar for operation is solvency rather than excess.
👍. All strong examples wealthy, free market capitalist countries. Apart from healthcare, I can think of vey little that’s ‘nationalized’ in those countries.
Can anyone name a public service in the UK that hasn't already been fully/part privatized/outsourced?
Seems almost everything has already at least partly gone & now cemented in place by 10-20 year contracts (NHS, civil service, local council services, etc)
Sadly nationalised services were neither cheap or efficient. I'm old enough to remember comuting in British rail, ways late, overcrowded and expensive.
And how's that different from now?
I used British Rail, the lack of investment was obvious. No wonder there were failures.
Other countries seem to be able to make it work.
That is what we do, we nationalise, then don't invest, so it doesn't work. Of course other countries do it well and we could learn from that
What I'm saying is we need new ideas, to learn from past mistakes. Shared ownership as opposed to state owned and we need to learn by our past mistakes.
Yes, they do but when gave we made a nationalised industry work. Name me one success story. The fact that there are none, suggests we aren't good at it and have to try something different.
Water used to be OK, as did the Bank of England, the NHS, British Airways, & C4.
Maybe we expect nationalisation to be bad; a bit too 'commie' for our liking. A self-fulfilling prophecy.
How about we nationalise railways and get the French to run it?
That's the point, we should get help/advice from those who get it right now. The French health service is pretty good too. I think shared ownership is the way forward, even more "commie". It works because people feel part of the organisation.
I'm old enough to remember the East Coast line - it worked pretty well. If I needed to be at a desk in London in two hours, I could catch the the 0930 train from Scunthorpe, and be at my desk in Bedford Square, waiting for the kettle to boil, by 1130 if the underground didn't let me down.
I used to go from Colchester, it was always supposed to be 50 minutes on a fast train but it never was, so you had to get a train half an hour earlier than you needed to be sure of being on time. Some days were a disaster and lots of strikes. It was late 70s early 80s.
Anyone who questions the effects of privatization on a society need only look at the United States to assess the impact. It leads to the lowest standards at astronomical prices 💯 of the time.
Mike, it would be good if there was an investigation why these things work in other countries but not the U.K. Is it privatisation or is it the U.K. or a combination?
I think it works in telecoms because they're no longer a natural monopoly.
Privatisation fails the most in natural monopolies. In America, for example, some of the most notable market failures are in prisons, charter schools and healthcare.
Other examples include transportation and the utilities.
In Spain I have a choice of train operators between say Madrid and Barcelona or Malaga. In the U.K. I don’t have choice between Surbiton and London. So the competition privatising brings is bollox.
Isn't it such a spooky coincidence that privatisation was kicked off by the Tories (because free market competition would theoretically lead to greater efficiency and lower prices for consumers) but it *also* led to opportunities for fabulous wealth for the Tories' entrepreneur chums?
Which begs the question, why is Wes Streeting privatising even more of the NHS? The evidence of the negative impact of privatisation on public services is there for all to see.
Far as I can tell, they’re not privatising more but are pouring more money into additional private services to supplement existing public services that had been destroyed by 10+ years of cuts and neglect. And he’s doing it because getting NHS waiting lists down the right way will take way too long.
I’m old enough to remember when we were told the same thing about rail, mail and energy. Wes Streeting is ‘outsourcing’ more procedures to the private sector. Those treatments are not coming back (unless a profit can’t be made). Slow and steady wins the race 😕
I would argue that telecoms and internet services have improved massively. It is said under Post Office Telecoms only 2 phones were available and it would take months to get an extension installed. Now there have been great improvements.
Agreed totally with this, and disappointing to see Bylines pushing naive narratives wanting a return to a 1950s-style national economy, which failed the nation so badly when empire markets dried up.
The UK needs more successful private export-based businesses, not fewer - how else it succeed?
these are not natural monopolies, especially since fibreoptics were introduced. Same for post, although f*cked up by allowing the parcel business to separate from mail. The real issue is monopolies like water and to a certain extent, rail.
Nationalisation only fails if those chosen to run the industries are chosen for who they know and not what they know. Royal Mail being a case in point since it was privatised.
One thing we can thank the Tories for: proving comprehensively (with mountains of experimental evidence) that when it comes to public services, privatisation doesn’t work - it’s counterproductive and uneconomic.
Of course, at the same time, they proved that ‘Conservatism’ doesn’t work either..
"British Rail" by Christopher Wolmar is an excellent read which dispels a lot of myths about the public railways and shows just how flawed the privatisation dogma is.
Funny to see you amongst all the gamers & cute cat photos......Failure of a) regulation & b) therefore uncontrolled capitalism aka market forces........
Privatisation did initially improve efficiency to make the businesses profitable. However once they were profitable then investment in infrastructure and services reduced to maximise profits. The various watchdogs failed in their duty to ensure the public got value for its money.
It doesn’t increase efficiency in any way that the people using the service recognize though.
When rail is privatized with the promise of efficiency what people expect is trains that run faster, more frequently, with fewer breakdowns or on time.
This is awful stuff, not bearing up to even the most cursory scrutiny
BT? Royal Mail?
Economic stagnation and low investment nothing to do with privatisation... everything to do with planning regs, pension portfolios and a million other things from Brexit to education levels
BT didn't have a natural monopoly with telecoms, and I don't think you can hold up their rollout of OpenReach as a paragon of private sector efficiency.
Royal Mail's biggest thorn is the universal service obligation. Still sold for mate's rates at £4B to benefit the banks. Undervalued by billions.
That's quite different than having a complete monopoly on all telecommunications, which it did not have at the point of privatisation but it did have in 1846 when The Electric Telegraph company was founded.
The principal fiduciary responsibility of any company is to its shareholders. Which means charging as much as possible while spending as little as possible.
That simple fact is why private company’s should never get anywhere close to hospitals, schools, water, energy or transportation.
Company’s get richer and richer and offer terrible services as the CEO’s get massive bonuses and we let them get away with this, they are taking the mick
And not just in the UK: nobody, anywhere in the world, at any time, has ever found sustained improvements in service and costs from nationalisation of a natural monopoly. The universal experience is a service decline until collapse and then public bail out.
Nonsense. High speed trains between major cities in Spain are run by state operator and private companies. And deliver real competition. Maybe it’s the incompetence of the U.K.
I only need one example to disprove your claim that nowhere "has ever found sustained improvements in service and costs from nationalisation of a natural monopoly".
When the water boards were nationalised in the UK the service was improved and water, a natural monopoly, was delivered for less cost.
Then what happened was sustained improvements to service whilst the cost remained minimal.
The construction of new water works and sewerage kept pace with the booming population. Investment dropped after privatisation quite dramatically and service has been on a sustained decline ever since.
Then they would be foolish.
The problem is Regulation.
As soon as Margaret Thatcher was gone the Tories set about neutering the regulators, and Labour did little to oppose them as they too didn't like Regulation - they wanted to go back to direct government control.
Yep. Any public sector endeavour advocating outsourcing, privatisation etc is predicated on the claim that the cost of the dividend is outstripped by that efficiency. It totally ignores things like economies of scale and the fact that plenty of the private sector is poorly run & inefficient.
Our town privatized trash pickup, now they charge 3 times as much, the same people are doing the work and they are on Social Security instead of a pension.
Privatization without competition is just fabricating monopolies. Governments know this, the people making the decisions are getting a cut one way or another.
Comments
When politicians hide facts like: how much would profit cost? It kinda gives the game away, assuming people have the time to think about it.
I joined BT soon after privatisation. Successive managers merely cut, cut & cut some more.
Public - company needs to produce the service or good with no need to turn extra profit, and no need for growing profit.
Co-operative - produces good or service to members. No profit growth necessary.
Let's not forget we saw radical improvements in public services in that period
We can do better than falling back to failed 1950s statism, which was a catastrophe for the UK.
Might you be thinking of the Atlee government of late 40s
"The Rise and Fall of the British Nation" by Edgerton covers this well
Let's not go back to that failure. It didn't work then and won't work now
Technology advances made more difference than competition.
I'm pro-nationalisation of some sectors, just expect more nuance from Bylines.
Go look up DARPANET, JANET, and see how it was Govmnt funding which created the internet.
'Everything over IP' is a tech shift nothing more, nothing less.
But my point is that no one serious is arguing for nationalisation of this sector, or even small parts of it.
Again I'm just arguing for nuance - not all privatisation is wrong - but yes some is disastrous.
Telecoms benefitted from privatisation. Water did not. Rail and transport a mixed bag - 1970s rail was awful. Post Office tells of failings of both
We need new narratives of social responsibility. Not naive "public good, private bad" statism.
https://bsky.app/profile/dsyme.bsky.social/post/3lcb42tt46s2f
There *are* priorities for renationalisation, and *water* is the top of my list,
You can't think of much that is nationalised in Norway?
The US has the least amount of publicly-owned industry out of the list of countries I gave, but it still has some federally.
https://en.m.wikipedia.org/wiki/State-owned_enterprises_of_the_United_States
Here's a few dozen
I’m sure these things will be remembered the next time public services are up for privatization
Seems almost everything has already at least partly gone & now cemented in place by 10-20 year contracts (NHS, civil service, local council services, etc)
Oh, libraries! They're not private yet!
That reminds me that the rail network is also still public.
I used British Rail, the lack of investment was obvious. No wonder there were failures.
Other countries seem to be able to make it work.
What I'm saying is we need new ideas, to learn from past mistakes. Shared ownership as opposed to state owned and we need to learn by our past mistakes.
Maybe we expect nationalisation to be bad; a bit too 'commie' for our liking. A self-fulfilling prophecy.
How about we nationalise railways and get the French to run it?
Privatisation fails the most in natural monopolies. In America, for example, some of the most notable market failures are in prisons, charter schools and healthcare.
Other examples include transportation and the utilities.
The UK needs more successful private export-based businesses, not fewer - how else it succeed?
Of course, at the same time, they proved that ‘Conservatism’ doesn’t work either..
The public-private partnership aspect of Medicare created by George W. Bush.
But if you're going to privatization, that means you're trying to lessen your oversight.
When rail is privatized with the promise of efficiency what people expect is trains that run faster, more frequently, with fewer breakdowns or on time.
Not a reorganization of middle management.
a) join this
b) put the express in the same skip fire as twatter.
BT? Royal Mail?
Economic stagnation and low investment nothing to do with privatisation... everything to do with planning regs, pension portfolios and a million other things from Brexit to education levels
Royal Mail's biggest thorn is the universal service obligation. Still sold for mate's rates at £4B to benefit the banks. Undervalued by billions.
You'll have to evidence the rest.
https://www.hso.co.uk/blog/regulation/bt-openreach/is-it-time-bt-was-stripped-of-its-monopoly
That's quite different than having a complete monopoly on all telecommunications, which it did not have at the point of privatisation but it did have in 1846 when The Electric Telegraph company was founded.
That simple fact is why private company’s should never get anywhere close to hospitals, schools, water, energy or transportation.
Private companies then exploit this to maximise profits at the expense of service.
‘‘Twas ever so.
https://ourworldindata.org/grapher/life-expectancy-vs-health-expenditure?country=GBR~ARG~HRV~DNK~EST~IRL~PER~USA~KOR~SVN
There are otherwise dozens of examples of sustained improvements in service and cost from nationalising natural monopolies.
When the water boards were nationalised in the UK the service was improved and water, a natural monopoly, was delivered for less cost.
The construction of new water works and sewerage kept pace with the booming population. Investment dropped after privatisation quite dramatically and service has been on a sustained decline ever since.
What a fucking stupid claim you made 😄
Schools - not a monopoly at all.
A technical term for optimising private wealth to the detriment of public wellbeing.
The problem is Regulation.
As soon as Margaret Thatcher was gone the Tories set about neutering the regulators, and Labour did little to oppose them as they too didn't like Regulation - they wanted to go back to direct government control.
Everything on top is the "Just World" fallacy turned into ideology.