How did they get away with privatising public services?

They "got away with it" in rather the same way that they got away with nationalising the private companies in the first place.

Watch a bit of Yes Prime Minister - there are advantages to having things removed from the government books

Private children's homes. Companies bid so the council can pay the least amount of money and the private company can make the most profit - on children in care.

See also NHS staff paying to park at work.

@Havanananana We did use the savings for other things we wanted. You might need a bit of an economics lesson. Low taxes often stimulate the economy and that can stimulate growth. We did have high unemployment in the 80s but growth meant we got back to decent levels of employment. This is better for everyone. We used money from privatization to pay benefits and stimulate the economy by lower taxes. I cannot, even with the benefit of time, see much wrong with that. We now have a poorly performing economy and few are better off! We have a huge need to get productivity and growth moving and many people believe it’s not achieved via higher taxes. We need to boost business and we have got ourselves the biggest problem because of Brexit.

Some misinformation about building homes too. HA homes are mostly built by housing developers. For everyone’s information, there is a huge labour shortage. How can LAs get labour if it’s not available? Another Brexit issue. There are vast costs associated with planning applications and enquiries as well as providing money for services such as schools etc. These are devolved from the state to developers via developer contributions. Inevitably the house purchaser pays or the HA pays. Housing Associations raise money via borrowing to purchase the houses. There is no way on this earth that councils can now build the volume of houses we need. They are there to advise and regulate and hopefully, if we want more homes, regulate far less - eg planning and parking restrictions.

Housing built by councils and housing associations are at least double the cost of those built by the private sector. I agree that we need more social housing but it's unavoidable that the waste and mismanagement in the public sector needs to be addressed.

The houses built by conventional methods tended to be sturdier, they were better designed slightly larger rooms, coal store and pram shed etc.

"The public were encouraged to apply for an allocation of shares at each of the flotations, the shares would launch and immediately go up by 30% on the first day of trading to reflect this under valuation, the public would immediately sell their shares and use their gains to redo their kitchens, bathrooms etc."

But only those members of the public with money to spare could afford to buy the shares, and the allocations were so small that for most people the gains would not have been sufficient to pay for a new kitchen or bathroom. The sections of society that didn't have the money, and who who probably rented rather than owned their homes, and therefore would not be investing in any home improvements, did not benefit in any way.

The big trick was that people were being invited to purchase something that they essentially already owned. To cash in and claim their little windfall, the public then sold the shares to the asset-strippers and vultures, who acquired vital monopolies at a knock-down price. Don't tell Sid, but he was conned.

When each of the utilities were sold, the Tories sold at a discount to their true value. The public were encouraged to apply for an allocation of shares at each of the flotations, the shares would launch and immediately go up by 30% on the first day of trading to reflect this under valuation, the public would immediately sell their shares and use their gains to redo their kitchens, bathrooms etc. This happened utility after utility; BT, Water, Electricity, British Rail. Some infrastructure the Tories just sold in private deals such as the airports, Rover Group, British Aerospace, Sealink and the Isle of Wight Ferries. There were lots of companies that the UK Government owned or had a golden share. The 80's was a massive giveaway. The reasoning given was that these industries and sectors required huge amounts of investment going forward and private debt was a better way of funding this than national debt. We could have been French about this and taken the long view but that isn't what the Tories do, they know the price of everything and the value of nothing. With the exception of BT, what was created was a series of monopolies with no incentive to invest or perform.

Housing built by councils and housing associations are at least double the cost of those built by the private sector. I agree that we need more social housing but it's unavoidable that the waste and mismanagement in the public sector needs to be addressed.

Security checks in airports and the liquid ban would be there if they were state owned or privatised. Actually state run services tend to be more expensive and inefficient - hence privatisation

@TizerorFizz "We transferred public sector savings into benefits and the NHS."

Not really - the public sector savings were used to keep taxes low, which only benefits those paying high levels of tax.

Governments, particularly Conservative governments, also committed the cardinal error of selling off the public services (which they had to effectively steal from the taxpayer in the first place) to people who would turn out to be asset strippers and spivs.

Imagine someone offering to buy your house from you for cash for less than the current value, but you still get to live there. Think of all the holidays you could have, and the improvements and conservatory etc. that they'll also pay for. What could go wrong? Firstly, the company can now charge you whatever they want in rent if you want to continue to live in the house, and attempt to charge you for any repairs. Secondly, they can decide to stop fixing the roof, stop replacing the broken gutters and windows and generally delay any vital maintenance - all the time while pocketing your rent. Thirdly they can take out a loan for the value of the house, and once they've moved the cash offshore they can neglect the house until it is on the point of falling down and then just walk away, leaving the people in the house and the lenders to sort out the mess. Nobody in their right mind would agree to such a deal - but it is essentially what some of the utility companies and transport companies have done with the assets that were gifted to them by the government.

If anyone remembered our shocking public services in the 60s and 70s you would have been desperate for someone else to invest! The selling of shares meant investment. Most services improved and modernised. There are obviously issues that have arisen due to lack of control of ownership and subsequent investment vs profits. However the government could not afford to invest either! When did anyone last look at government borrowing? It’s sky high. We transferred public sector savings into benefits and the NHS.

Refarding airports, just go without water for a couple of hours! It’s not obligatory to buy water. Your travel costs include buying what you need. Or take an empty flask and find a drinking water tap. Thank God they are not run by the state.

I could understand railway privatisation if it truly allowed the passenger to have choice to encourage competition. So if I need a train I can take the 7:14 from company x or wait for the 7:20 from company z which has nicer seats, forcing company x to provide better seating etc etc. But it doesn't work like that. Company x has the franchise repeatedly given to them no matter how bad the service, how much it rips off the passenger etc.

A certain section of society wanted lower taxes - and the same people were also the demographic able to buy shares in utility companies, the railways, Royal Mail etc. so they had the double incentive of being able to earn dividends from the vital services that were previously "owned" by everyone.

The Conservative mantra is that the Free Market will provide the best services - a mantra that time after time has been shown to be completely false because the Free Market is only interested in profit maximisation, not in providing better services, and if something isn't profitable, it doesn't happen. Couple this with regulators such as Ofwat that are stuffed with industry insiders, but which have little or no consumer representation, and a combination of weak regulators overseeing badly-drafted regulations and the private companies have a license to print money - in the safe knowledge that once they have milked the service for every penny and loaded it with huge levels of debt, the government (i.e. you, the taxpayer) will be forced to pick up the tab.

As someone who can remember them in public ownership, at the time, they were deemed to be so inefficient and expensive that any change would have been seen as an improvement.

I'm 62 and the state of the country and the world is the worst in my lifetime. I lived through the 3 day weeks and power cuts of the 70s, the high times of the 89s, the repossessions on the 90s etc. but in those days we all had something that we don't have now. Hope.
I feel that there's no hope for a better future. It depresses me so much. I have to avoid the news and politics now as my mental health can't cope with it. Awful.

People wanted lower taxes.

Also the length of time you had to have resided in the property has changed. Now you can apply after THREE years. I can't remember what the criteria was when it was first introduced but the somehow the figure of twenty years keeps popping into my head

Yes! This.

During the 1970s it was realised that so much of infrastructure needed rebuilding and improving, partly this was because we were still paying off loans from WW2. We had little money to invest without putting up taxes enormously. So it seemed like a good idea to let private money into the Railways and Utilities. The Shareholder democracy of the 1980 did last and we are better for it, IMO The railways did improve. We have been secure on energy since.
Unfortunately the management of these were the weak link and full potential never achieved. (Like Brexit)
For the record I thought Right to Buy the stupidest idea ever and not allowing Local Authorities to build houses with the proceeds the second silliest idea.

Yep and it rid the government of the responsibility of providing and maintaining said services !!!

The water example wouldn't necessarily be different in an alt public sector timeline. There's more free water fountains/bottle filling places than ever before and the getting rid of bottles comes from terrorism threat unrelated to private /public sector.

I do think some things would be better off nationalised, but the 70s was no dream, a lot of things were pretty fucked so it looked like a solution to sell them and have that temporary high. Politicians don't tend to deal in long term consequences when it won't affect their reelection chances.

There was far less demand for social housing in past times, partly because the population was smaller, partly because there were fewer single person and single parent households. However, Scotland and Wales withdrew the Right to Buy some time ago, surely it’s time England followed their example.

The idea was that the private sector would invest in the relevant infrastructure (as a quid pro quo for subsequent profits) so that the taxpayer wouldn't have to. Except they didn't legislate to require them to do so, hence the shitshow that is the water companies.

This. Instead the private sector realised they could buy cash cows at a discount and strip out as much value as possible, knowinh the government would have no choice but to step back in & rescue (eg see operator of last resort trains!) when it all fell apart.

The public sector can be inefficient - no doubt. However, in my experience you only really get the proper "private sector efficiency" when something is run totally and solely to maximise profit, eg on high margin, high cost, premium services, which is never going be a cost effective way to deliver health care, utilities & transport to 70m people.