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Case Against Privatisation Of Public Services


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What if you can't afford shares, and all you want is affordable gas, water and electricity?

Shares aren't usually that expensive; most people could afford to buy some, if they felt they would do better than their savings.

Socialism always promises to provide a land of milk and honey, but it doesn't mean it can deliver it. In other words, you're presenting a false dichotomy.

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The argument that privatisation makes for a worse service deserves some examination.

BT - in the good old days, it took at least a month to get a phone line, and it look at least a week to get it fixed. Seems a lot better now.

If you were lucky - it took my parents over 6 months to get a line in a new house, back in the day. There was also a choice of a single handset. However, their support is sh*t now, I'll grant you that. There is a lot more competition now though, including VOIP (skype etc), mobile phones and alternative telcos, so you can avoid BT for all but the land line for broadband if needed (which is all I use them for).

Railways - OK, they used to be a lot cheaper, but they were also very shit. When I started work 20 years ago, you flew to Manchester from London. It wouldn't cross my mind to do that now, the trains are far, far better. Virgin is having all sorts of trouble on that route because the government owns the rolling stock, so there is no capacity. The implementation of that privatisation was indeed daft.

Privatisation of rail doesn't seem to work in the current model. I'm sure it could be made better, but often only have one train company on the route you need, which isn't much choice. That said, they do compete with cars, buses and planes (let alone push bikes/walking), which drives efficiency in many cases - you can vote with your feet (which is why many don't bother with the rubbish + expensive trains, I suppose!)

BP - recent troubles aside has been transformed from an also ran into a global player.

Yup - very successful as a private company.

Water/Gas - the service is actually pretty good, especially in terms of customer facing stuff. It is a hell of a lot better than it was 20 years ago. I don't think a state owned company would be any cheaper.

They can compete on service/efficiency, which should drive down costs. I've tried both recently - here in NI it's been closed to competition, yet the water is still paid for via rates. Who knows whether this presents good/poor value in comparison, but the service has been equally good. That said, there was a recent scandal about dodgy deals done at high rates, to the mates of the management, dating back to before they were even privatised.

(apologies if any details are wrong there - my understanding is a bit rough)

BA - would have ended up like Alitalia and gone bankrupt if it had stayed in state hands

Seem to have done relatively well as a private company, despite a very competitive market in air travel.

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The argument that privatisation makes for a worse service deserves some examination.

BT - in the good old days, it took at least a month to get a phone line, and it look at least a week to get it fixed. Seems a lot better now.

Railways - OK, they used to be a lot cheaper, but they were also very shit. When I started work 20 years ago, you flew to Manchester from London. It wouldn't cross my mind to do that now, the trains are far, far better. Virgin is having all sorts of trouble on that route because the government owns the rolling stock, so there is no capacity. The implementation of that privatisation was indeed daft.

BP - recent troubles aside has been transformed from an also ran into a global player.

Water/Gas - the service is actually pretty good, especially in terms of customer facing stuff. It is a hell of a lot better than it was 20 years ago. I don't think a state owned company would be any cheaper.

BA - would have ended up like Alitalia and gone bankrupt if it had stayed in state hands

Comparison of any company now with 20 years ago isn't exactly fair. Public companies in other countries should really be the basis for comparison.

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