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Original poster

Privatisation: can anyone give me an example of where it's really worked well?

83 replies

WinkyWinkola · 24/01/2011 21:03

I mean, the railways were privatised and the government still subsidises the railway companies so they can pay their shareholders their dividends. Consumers however pay soaring fares and suffer poor quality service.

The water companies were privatised and they make enormous profits without investing in infrastructure.

The hospitals outsource their cleaning staff and the incidences of disease rises and the standards of cleanliness decline.

There never seems to be state of true capitalist competition in these areas anyway.

I just don't see how privatisation benefits any one really. One cannot be proud of poor standards and a big profit, surely?

OP posts:
Takver · 24/01/2011 21:40

BA is a bit of a funny one - the shift to profitability came before the sell off - Sir John King turned it around and then it was sold.

I have to say that (as an unreconstructed lefty) telecoms provision does seem much better now than pre-privatisation.

But I think tbh the message from BA and elsewhere is that in practice ownership is not key to success. As BeenBeta says, regulation is very important, and also effective management (which can be public or private, but needs the backup of the owners, whoever they are).

Access to borrowing/capital is also critical, which I think (not an expert at all on this) was an issue for publicly owned companies because of the impact on the PSBR. (Not that this should necessarily have been a problem if they were borrowing to invest, as one would expect a large company to do, but politically it was an issue IIRC.)

jackstarb · 24/01/2011 21:24

Oh and Directory Enquiries wasn't a direct privatisation. It was a BT run monopoly for years, and was then opened up to other providers.

BeenBeta · 24/01/2011 21:21

The problem with privatisation was not privatisation - but consistently poor regulation of monopoly or oligopoly powers that mean customers are paying more for less as prices rise and quality of service falls.

jackstarb · 24/01/2011 21:15

BT and BA.

Both are globally successful companies. Ok they are not perfect and their monopoly-like powers have been a challenge for the regulators at times - but compared to their nationalised equivalents elsewhere they have worked well.

Original poster
WinkyWinkola · 24/01/2011 21:15

I would really honestly like examples. I believe in profit but just not taking the p*ss. Does that make sense? Good service etc.

OP posts:
edam · 24/01/2011 21:10

ooh, directory enquiries has to win the award for most pointless privatisation of no use whatsoever to any single user of the service. I'd be willing to bet whoever dreamed that one up has benefited in some way - probably a few tasty non-exec directorships paying handsomely for turning up at two meetings a year involved.

ByTheSea · 24/01/2011 21:05

I can't think of any.

edam · 24/01/2011 21:05

No, no examples that I can see...

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