How did they get away with privatising public services?

[Newname85]

Whoever thought it was a good idea to privatise rail services, airports etc - how exactly did they get away with it?

How did anyone believe that adding profits on the top will somehow result in better service/ ROI?

I returned yesterday from a short trip to visit family. At the airport, you are asked to throw water away for security check. But, you are forced to buy it at £3.50 for a small bottle. How is this fair?
Restaurants serve ridiculously expensive food, but no obligation to serve water. wtf ??

The other day, I saw an advertisement from SouthEastern. Why exactly do they need to advertise!??? SE trains are the only option I have !!

Everyone blames this on Thatcher but therefore why have subsequent governments allowed to continue ? If you live in social housing even now there is a right to acquire as they call it, and again at a lower price than the current market valuation.

I thought this sort of thing had been stopped years ago, until our neighbours told us their son is buying his HA property.

I’ve checked Gov.uk website and it is still possible unless you’ve been declared bankrupt.

Surely when the whole country is moaning about the lack of social housing none of it should be sold otherwise we end again with a generation of pensioners in 3/4 bedroom properties after the family have left bought at reduced rates and no homes for young families.

I certainly don't absolve subsequent governments from blame.

Before Right to Buy, I’d agree that many professional people lived in council housing, and often they were the first to snap up their homes, as many were in really nice estates. Lots of lettings were quite subjective in the earlier years of council housing, before they became needs based.

In the 90s, I was a local authority housing worker in the North of England. We were giving tenancies to practically anyone who was eligible. Properties were being demolished due to lack of demand in some areas, and the Home Office leased a good number of our properties for asylum seekers. No need for hotels then.

Just realised I wrote that entirely the wrong way round (because I was on a busy train at the time!). This person left when it was nationalised. They thought nationalisation would be a disaster. 🤣

So again this is what I’ve been told not something I know for sure but even when it was privatised the only line that made money was Glasgow to Edinburgh, every other line was loss making and subsidised by the Scottish Government.

I’ve been using the trains a lot more than usual recently and I think ScotRail do a great job.

I’m very much in the minority tho, complaining about ScotRail is a national pastime here. Try saying anything positive about them at all and people are not receptive to it.

I can’t say if public or private ownership is better because my experience is recent. And maybe service is better where I live and travel to than it is in other places.

I completely understand the sentiment and the world is no doubt in a bad way, but at least some of that feeling you have is surely down to being older. You're bound to feel a lot more hopeful in your teens/early 20s taking the 70s grimness in your stride than 40 years later when you've been through more, plus mortality and all that. People almost always feel like things have got worse when they get older and like the world is coming to an end (for different reasons in each era as things change). Obviously doesn't mean it isn't worse in some ways and won't end, but there's also measures on which it's better than it's been before. But yes, less news is better for MH, especially with the overload possible today.

Post-war, the railways were in a real mess, nationalisation saved them at the time.

Scotland’s population density is such that most lines outside of the Glasgow-Edinburgh corridor, and maybe the suburban network in Glasgow and the Fife Circle could never hope to make a profit, regardless of who runs them. Had Beeching got his way in the 1960s, almost every line in Scotland would have been closed, except Glasgow - Edinburgh, Glasgow to Aberdeen via Perth/Stirling, and Edinburgh to Aberdeen via Dunfermline.

Way before my time, no idea who Beeching is, I’ll take your word for it!

Dr Beeching was appointed by the then Transport Secretary, to see how the railways could stop making losses. The Beeching report recommended large scale closures, many of which happened, though some did not, such as what is now the Mildmay line in north London. The report was flawed in many ways, especially as demand was determined by where people bought their train ticket (so holiday resorts where most people travel from somewhere on a return ticket were said to have low demand),

The Transport Secretary, Ernest Marples, had co-founded a business part of whose main line of work was building roads and motorways. One of the many dubious appointments of the government of Harold Macmillan that makes the Covid era actions seem mild on the corruption scale by comparison. Seven of Mr Macmillan's governments were his relative at one point.

I do think airports need to stop charging extortionate amounts to drop off or pick up customers. I’m in Edinburgh and when I want to pick up my great aunt from the airport it costs £6, and you can’t linger, they have to be there waiting. This isn’t at all east when she’s not very good with her phone and has mobility issues. The airport trot out nonsense that it’s for environmental reasons and that they are trying to encourage people to get the bus whereas the bus goes nowhere near where we live.

Profits from privitised utililities etc. indeed go to shareholders - and not to stakeholders (i.e. customers and taxpayers). Profits are taken out of the business instead of being put back into the services in order to improve them. In fact the reverse has happened - private companies have increased their short-term profits by deliberately not investing, and by loading the services with debt, in order to pay the shareholders and directors huge dividends.

Then there is the question of who the shareholders actually are. For example, some of the largest shareholders in Thames Water are foreign pension funds, so the dividends paid to a Canadian or Australian shareholder do not "trickle down" into the UK economy but disappear overseas.

"Do you really want the state to control and pay for everything?"

No, but it would be beneficial if the vital public services were owned by, and run for, the benefit of the population at large instead of being run as low-risk cash-cows for investors. And anyway, who or what is "the state" if it is not the taxpayers, consumers and citizens themselves? Why should the population not benefit from owning these vital services, whether, in the case of water, that be in the form of lower bills, cleaner water, functioning sewers etc.

No. I was born abroad in the 80s and only moved to the UK in my 20s.

@Newname85 You didn’t live through the 60s and 70s then! You would not want to repeat it.

Thames Water hadn’t worked but the regulator has no teeth. Other privatizations are owned by shareholders and many of us are invested with them! It’s how our economy works. We certainly aren’t in the position to buy everything back. The world has moved on from the ideologies post WW2.

A major problem is so much of our services are owned by foreign investors who will cost a fortune to buy out

My idea, probably impractical, is that from now on only a total of 25% of any British service can be owned in total by foreign entities. 75% should at least be owned by British investors - they hopefully might be more interested in the services actually running in this country unlike France who's trains are running very nicely, subsidised by their interest in rail services in Britain

I am not sure which other countries are invested although something is nagging me about Australia owning bits of some of our water companies but I could have got that wrong. I doubt they are going to care about sewage spillage all those many miles away if in fact they do have any interest.

Edited for further thoughts and clarification

There's a distinction between privatisation by selling public services into private ownership, and outsourcing, where private companies are contracted to provide services on behalf of Governments.
I spent 30 years in the public sector, mistakenly believing we were morally superior to our private sector counterparts. I saw our services destroyed by terrible unaccountable decision making, a rampant Trades Union and uncontrolled staff attrition. The privately operated services held up so much better and I eventually jumped ship and joined a private outsourcer. We provide the service much better and more efficiently. We are allowed to innovate and our skills are not stifled by bureaucracy. If I perform really well I'm rewarded- if not I'm held accountable. I want my company to succeed so I make sure my contracts are fulfilled. Without question the public benefits from this arrangement.

In the 19th century, most things were privatised. So, why is it ok to revert to this ideology, but not the more modern, post WW2 one? Because you like it better?

Where were you born abroad and how were utilities and services arranged there?

When some services begin they are the idea of the state. Most were the idea of business owners who put money in to develop them. The railways were not state owned in the 19th century. Nor water companies. Nor steel or coal. Nor most other things. Schools were often charities or church run and there was no council housing until 1890. Lots of state ownership began after ww2. However I’m really glad the government ditched British Leyland and Thomas Cook and Rolls Royce as government owned companies. I also have no desire to go back to the 19th century.

I read on Xitter - believe none of what you read.. - that Pain Management has been hived off by the NHS and is now a private enterprise promoting meditation to people with chronic pain... cos that will work!!!

Urgh it’s so utterly immoral. It’s depressing.

@TizerorFizz As cities expanded during the 19th and early 20th century, the supply of water (and the need to dispose of waste water and sewage) became critical and was a task that was far beyond the means of the small private companies that had been supplying these services.

As a matter of vital public health and safety, municipal water boards were set up to address the problem - not state-run, but run by local municipal councils "owned" by the residents rather than by commercial companies. Similar situations existed for electricity and gas supplies, and for public transport in cities.

It is the later privitsation of these vital services that has damaged the services - a mixture of greed on the part of the commercial companies and poor regulation from the regulators and from government.

The world has indeed moved on from the ideologies of the immediate post-WW2 years. A population that had previously shared the deprivation and losses of life of two world wars and the Depression, a population that worked together to rebuild the country, a population that was promised "a land fit for heros" has been turned into a divided "greed is good" "me first" society. Privitisation of vital services and running them for profit, particularly when much of the profit then disappears overseas, is ultimately a recipe for disaster. As for not being in a position to buy everything back - why not? The railways have already largely been taken back into public ownership. Transport in London was never allowed to be privitised. Thames Water is begging for government subsidies, having loaded to company with debt and moved the profits and dividends abroad instead of investing in improvements (or even in basic maintenence).

These services are vital to the social, physical and economic health and wellbeing of the country. If these basic building blocks (along with healthcare, infrastucture and education) are not in place then ultimately things will collapse. To quote Hemingway:

"How did you go bankrupt?" Bill asked.
"Two ways," Mike said. "Gradually and then suddenly."

As for not being in a position to buy everything back - why not?

Quite. Those nationalised industries were created post war, in a society that had been pretty much destroyed. There were those who thought that Europe was entirely finished - and nationalised sectors helped make the difference. If they had the money to do it after the wars, why not now? There is still money in this country. We have a tendency to pretend that the country should run on the accounts of working people who have been impoverished ever since the housing crisis started. But much of the money is still there, siphoned off into private pockets: we have more billionaires being created than ever and the stately homes have been rebuilt. Have a look at this from the Equality Trust (founded by the authors of ‘The Spirit Level’): equalitytrust.org.uk/obscene-wealth-simulator/

And yes, right to buy still exists, making a mockery out of those of us who worked hard and got forced into private renting and would never be considered for social housing. The unholy alliance of the very rich inheritors and the benefit sitters is killing us. The question that urgently needs to be addressed is what is there for working people, because at this point more and more are just dropping out and joining the lawless underclasses.

"As for not being in a position to buy everything back - why not?"

The government doesn't necessarily have to buy everything back. For example, the water companies are supposed to still operate in the public interest and are on 25-year licenses. If any particular company continuted to asset-strip, failed to improve their performance or if they were declared bankrupt the government could revoke the license, at which point the government would take over.

I saw an article the other day that quoted the number of millionaires that left the U.K. last year being massively up on prior years (can’t remember where, people can google it if they’re interested).

I think we need to be careful not to create an environment where people no longer feel the U.K. is a good place to be based if you have money. And I think we are heading that way with our current anti-business anti-growth government (they pay lip service to wanting to boost growth but their actions suggest the opposite).

I realise the consensus of lots of people on Mumsnet is anyone that has money is the enemy and pays no tax, and got a bunch of tax cuts from their Tory mates but that’s just not true. The highest earners paid more in tax prior to the election than they did in 2010, and capital gains allowance was slashed was £12,500 to £500, corporation tax increased to 25% by a supposedly Conservative government.

Sure I’ve said this on here before but I voted Lib Dem in the recent election and have voted Labour and Conservative and abstained previously. I’m not a natural supporter of any party. Just before the shouts of Tory troll start.

For all the faults of New Labour Blair and Brown encouraged wealthy people to based here as it was thought there was economic benefit to it, low corporation tax encouraging companies to be based here meant higher tax revenues overall. I have no data on if that worked or not but that was the idea.

All ‘foreign investment’ has brought us is massively over-inflated house prices, public funds siphoned off overseas and a reputation as the money-laundering centre of the world. We are running the place off working taxes anyway, with our own elites charging the public sector everything they can get away with. Big business pay minimal tax. I’d be quite happy to see the super rich parasites bugger off, as long as unlike Harry they foreswear all ownership and interest here. It would be difficult for a while I admit, as we have lost huge numbers of skills in the last 50 years and a great deal of basic resourcefulness, needed to rediscover them - but at this point many working people would be no worse off as medieval peasants.