# Was the privatisation of utilities a good thing?



## Phil42

Prompted by the news of British Gas's 23% rise in profits, but a more general question. Obviously, it's been good for them and all the other businesses that have sprung up. But have most people saved money and got better service?

I preferred it when you paid the electricity board for your electricity and the gas board for your gas (and so on) without having to worry about constantly switching in order to avoid being ripped off.

What do you think?

Phil


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## iconnor

Yes it was a good thing.
Based on future income the privatised utilities could borrow capital to invest in the infra-structure which they have done on a massive scale.....yes I know the water mains still leak but they are over 100years old and it takes time to replace them all and they have created the London ring main.
Government did not have the money to spend on the infra-structure which is one of the reasons these businesses were privatised. The other reasons (raising money) were just as valid, but the real impact has been to get the government out of the way of running these businesses as they were useless at it as they are at running any business.


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## steco1958

I voted No.

Short term gain, long term pain

We all purchased shares of companies that we already owned !!


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## Bill_OR

Phil,
As an ex-utility sector person I think the answer has to be that competition (and therefore privatisation) has been beneficial.
While having to work harder to get a good deal can be a bit of a pain, I hate to think how much we'd actually be paying for our energy now without competition driving cost out of the system.
Bill


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## GerryD

Can never understand how it is cheaper to buy my gas from a Scottish company rather than the one that actually delivers it through my pipes and electricity from a gas company rather than the one that generates and supplies my house.
Gerry


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## Phil42

Yes, surely that's got to be more expensive?

Any views on the British Gas profiteering? In what other sectors are profits of 23% to be found?

Phil


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## Rosbotham

I work in the telecoms industry, in regulation.

It is absolutely indisputable that competition has been beneficial for our sector. Every innovation has come about because of new entrant competitors challenging the business models of incumbents. The UK has led the world on facilitating competition, and even now tends to be held up as a beacon for efficient markets. Regulation is only necessary where there's a bottleneck of supply (e.g. the copper pairs into your home), and that's where the likes of Ofcom have to act as a proxy for a competitive market.


In other utilities, it is arguable that in the power/gas sector an oligopoly of supply has been allowed to develop, but the regulators should address that. 

There is absolutely no reason why your "local" supplier should be the cheapest : it's all about who can make the best wholesale purchases and sell them to you on a retail basis.

The need to switch supplier to get the best deal may be a pain, but is economically efficient. Fundamentally those people who value getting the lowest bills will be prepared to take the time to seek out the cheapest deal. Whereas those who are less interested and stay with their current supplier will pay more, because clearly they don't care enough to do anything about it. That's economic efficiency (read up on Ramsay Pricing if it interests you).

Finally, in terms of value to the state. Well on a long run basis, the value of a share is the net present value of the future dividends (or NPV of free cash flow, depending on your approach). So in selling the companies, what the government of the time did was to bank the future revenues that they would have got from them in state hands. Now, there's a couple of philosophical debates in terms of it's common in share flotations to offer a discount so the state lost out there, and whether the money received should have been spent in the current account by the government of the time, but inescapably the companies concerned weren't given away.


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## cheshiregordon

I had no issue with the privatisation of utilities and still remain of that opinion. 
I do think that for many years upto 2008 the labour government failed to give a clear strategic direction to the industry to maintain generating capacity and on shore gas stocks.
I also think the privatised utility companies were not protected from the clutches of grasping european public sector suppliers.


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## Phil42

So do the supporters advocate extending privatisation?


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## Stanner

No to all except P.O. Telephones.

I dumped BT as a telephone provider as soon as I could and haven't looked back since.

BT = Big Trouble as far as I was concerned.


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## cheshiregordon

Phil42 said:


> So do the supporters advocate extending privatisation?


yes - because without additional resources the NHS will be forced to contract.


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## Phil42

Sounds as if you believe the private heath providers are charities, rushing to the rescue of an ailing health service.  They're in it for the money of course, so where is that money going to come from?


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## cheshiregordon

Phil42 said:


> Sounds as if you believe the private heath providers are charities, rushing to the rescue of an ailing health service.  They're in it for the money of course, so where is that money going to come from?


I'm not speaking from an idealogical point of view - surely the debate is how to increase the efficiency of the resource available and how to finance greater input of resources - you pays your money etc.

Personally if a little profit motive moves things along faster whats wrong with that.


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## Stanner

cheshiregordon said:


> Phil42 said:
> 
> 
> 
> Sounds as if you believe the private heath providers are charities, rushing to the rescue of an ailing health service.  They're in it for the money of course, so where is that money going to come from?
> 
> 
> 
> I'm not speaking from an idealogical point of view - surely the debate is how to increase the efficiency of the resource available and how to finance greater input of resources - you pays your money etc.
> 
> Personally if a little profit motive moves things along faster whats wrong with that.
Click to expand...

As an ex Health Authority member I can inform you that it doesn't, never has and never will.

Provide just one actual proven example of where it has?


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## DTPCHEMICALS

I watched a tv prog on hols.
Experts on national finances.
The four American panelists were discussing the uk and the state of affaires that we find ourselves in.

Each one of them had come to the same conclusions.

1)A certain Mrs Thatcher did not go far enough with privatisation. Privatisation leads to better choice for the consumer and more efficient services.
2)The NHS should be privatised.
3)Get out of the EU. Trade will still continue as present as each nation depends on each other.
4) The austerity measures are not tough enough.  We should be showing the EU how to ensure the national debts can be reduced.
5)The benefits paid out to the fit and healthy unemployed should be worked for in some way or another.

Dave p


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## Stanner

DTPCHEMICALS said:


> Experts on national finances.


An expert is someone who knows more and more about less and less until they know absolutely everything about bugger all.



> The four American panelists


Hmm Right and what exactly can they teach us about Health care and unemployment?

The USA has no health care (unless you pay through the nose) and lots of unemployment.


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## DTPCHEMICALS

Nice response Stanner:An expert is someone who knows more and more about less and less until they know absolutely everything about bugger all. 


What is your field of expertise :wink: 


I pay for my healthcare. NI and Income Tax.
I am sure that had my NI gone into a Healthcare plan I would have been no worse off.
The state cannot afford to pay for everything that we desire. NHS should be regarded as a safety net for the least well off just as public transportis for thise who cannot afford a car.
As for unemployment a quick search shows that USA has got unemployment problems. But not as bad as you may be sugesting.

USA unemployed as of May 2012 8.2%
UK 8.1%
France April 10.2%
Germany April 5.4%
Italy 10.2%
Greece 22.6%
Ireland June 14.9%
Poland 9.9%
Spain July 25%

Dave p


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## Phil42

So are you seriously suggesting that the US healthcare system is one we should emulate? Even Cameron and Lansley aren't suggesting that.


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## Bob45

You privatisation supporters have your heads in the sand. One by one these policies are unravelling and in the long term will prove to be very bad for the UK.
The whole process of privatisation was badly thought out and has resulted in most of our water companies being owned by other countries such as France or funds who are only interested in making a quick buck. What would Mrs Thatcher say about that if she was capable of any thought that is!
The rail privatisations have resulted in companies such as Virgin making huge profits while the gullible tax payer puts up more and more cash. The service is a shambles especially in the south. Try squeezing on a train going in or out of London.
As for telecoms the piece meal way Thatcher allowed cable companies to operate resulted in short term strategies and poor overall coverage. We are only now beginning to lay down fibre optic cables so necessary for 21st century technology.
I would never argue that things were ok with the utilities before privatisation but they could have been run more effectively with better managers and we would still have a say in their growth and contribution to society.
Rant over and out!

Bob


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## cheshiregordon

I lived in london for a while and found the train service in and out to be very good - a little expensive but on the whole good. I also traveled form the NW to London using Virgin on a regular basis and can only praise the service.
Unfortunately I'm also old enough to remember having a party line due the a long waiting list for phone lines pre-privatisation.
The fact that some privatised have been taken over by foriegn companies has beneficial effects of importing capital - although I'd prefer they stayed UK owned.


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## DTPCHEMICALS

Phil42 said:


> So are you seriously suggesting that the US healthcare system is one we should emulate? Even Cameron and Lansley aren't suggesting that.


I never sugested anything of the kind.

we should all be responsible in some way for our lives. Not dependant on the state, which is.....other peoples money.
I do not subscribe to any healthcare plan but would pay for any member of my familly to queue jump in orde to have an operation if needed.

Now the surgeon and the suport staff may be part time employed by the NHS and the rest of their time spent doing private work.

Obviously the two go hand in hand.
Dave p


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## Patrick_Phillips

Can we just consider our definitions?
Efficient = Cheapest in cash terms
Effective = Cheapest in real value for money

The private sector is good at efficiency.
The majority of the people only recognise efficiency.
The public sector is best at effectiveness but is seldom allowed to offer it by politicians who only understand what the public understands.

The private telecoms have given us 4 networks where we would have 1 in the public sector. It would have been a more expensive (in cash terms) than the private ones in the UK but it would have been cheaper to roam. It would also have covered the geographical country not just most of the population centres. We would have had wide area wireless where every city had a universal wifi (suppressed so far by the private sector but may yet happen; the technology has been there for some years)

The private sector uses the same people as the public. It has the luxury of long term planning whereas the public sector has to justify everything on a one year basis - mostly.

If the water boards had been allowed to invest in repairs and renewals over the same timescale as the private sector, the job would have been done more effectively and more efficiently but the cash spend would have been much higher for the first few years. We could have increased public borrowing to cover the costs and paid much less over 30 years as we would have paid less to borrow and paid no profits.

Private sector = Least cost + profits.
Public sector = Best value + social care.

We choose at the ballot box. We get what we deserve...

Patrick


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## Phil42

We don't always get what we want/deserve, I think. Each of the main parties has a track record of reneging on manifesto policies.

Phil


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## DTPCHEMICALS

Phil42 said:


> We don't always get what we want/deserve, I think. Each of the main parties has a track record of reneging on manifesto policies.
> 
> Phil


And that is probably why we end up with goverments that are elected by a minority of voters.
Dave p


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## Patrick_Phillips

Phil42 said:


> We don't always get what we want/deserve, I think. Each of the main parties has a track record of reneging on manifesto policies.
> 
> Phil


Manifestos are a statement of what the politicians think the voters want to hear. They aren't a contract. Can't be as only the incumbent party has access to the books to see what they could afford, and anyway, circumstances are seldom the same after an election as they seemed to be beforehand.

Old Chinese proverb: Cheap no good; Good no cheap.

If we keep demanding cheap then the manifestos will say cheap and then the reality hits the winner - the money is all gone! Ergo: new manifesto!

We need people who will tell the politicians what we really want instead of what we don't want. But that means thinking about things a bit deeper and we have telly to watch...!

Cynic? Me?
Patrick


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## Chausson

And now the Welsh electric is owned by china


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## frankly

er, excuse me but has no one seen the farce in having a poll that only allows certain members to vote in? i have to have made 5 post but then i have to subscribe to be able to make anymore.
another issue but where is the logic in rewarding the ones that post more often by making them pay? obviously, the members that choose to put the most in have no choice but to subscribe if they wish to continue making a contribution. no wonder this forum is a mere shadow of what it once was a few years ago when financial contributions where voluntary.
MHF seems to be overshadowed by too many self serving bigots and has been ruined just as these types seem intent ruin all that is good in the uk.
i hope only those of whom the cap fits take offence at my views and that others might try to turn this forum around.


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## erneboy

Loony alert!


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## DTPCHEMICALS

I`ve always wanted a lert. :lol: :lol: 
Bet he pays for his newspapers

Dave p


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## erneboy

Be alert, your country needs lerts.


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## frankly

here we go again...


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## erneboy

Well not really unless you subscribe.


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## Glandwr

A difficult one this, privatisation and the supremacy of the market to serve our collective needs was (and still is) the central tenet of Thatcherism. Witness Nick Ridley’s statement when in charge of local government, “my ideal council would be a small committee that would meet once a year and hand out the contracts for the next, it will simply be a PO box the rest of the time”

To even pose the question as you do Phil creates tensions. It is impossible for those that revere the “great” lady to even contemplate. 

One can argue all you like about whether it has made our utilities more efficient or innovative, the question can never be resolved that way. Too many ifs and buts.

Looking at facts though what stands out are that the better educated and better off you are the less you pay for your utilities, that the very poorest pay about 30% more than average, that many people have made an awful lot of money out of it and still do. And most damning of all is that these companies are still in the most part essentially nationally owned. The only difference now is that the French and German governments now have controlling interests in what Harold McMillan called our national family silver. 

Still I supposed it helped us to afford to put many of our miners and heavy industrial workers on to long term sickness benefit. But that’s a different story.

I voted no, but am genuinely surprised with the majority for no.

Dick


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## DTPCHEMICALS

frankly said:


> here we go again...


Web sites such as this are not free. they cost a lot of money to run and maintain them. (As we are informed by the owner)

Every year I ponder, Should I stay or should I go.
I will be pondering again in a few weeks time.
I may put it to a vote of subscription payers.
Should I stay Yes or No.
Unless one subscribes why should they receive the same benefits as subscribers.

I wager I will not get an answer from you on this one :wink:

Quality is better than quantity.

dave p


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## ob1

I feel that privatisation is the better system remembering the inefficiency of the old ones. A friend of mine used to run a garage when he was supposed to be on Water Board duty! However, I think that a change in some of the terms and conditions that these companies work under need reviewing. That a small island like us has record rainfalls whilst at the same time has hosepipe bans in some areas is a disgrace. In such situations areas should be forced to share their loot. You can tell I'm a southerner. :roll:


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## erneboy

I have been giving some thought and I conclude that the information I would need to make a judgement does not exist.

I don't know what would have happened had the utilities not been privatised. Would they have muddled along in their old inefficient way or would they have improved? I have no way of knowing.

As to hose pipe bans, well the UK is a wet place, we expect rainfall sufficient to provide for our needs, when that doesn't happen we have problems. In the last half century or so we haven't provided storage to keep up with increasing demand but that's not new and can't all be blamed on the current water companies.

All I know is that we are where we are and there is room for improvement, Alan.


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## Pat-H

As an end user I've not gained from the competition privatisation was supposed to generate.
I've been inundated by sales people fighting over my custom for no fain.
The profits these companies now make cones from the bills we make.
Money that as a state utility went into the state before.
The rail network is a fiasco and the idea that we have choice is just an illusion.


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## erneboy

Wouldn't you agree that the money which now goes in profit might previously have been absorbed by inefficiency? Alan.


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## Stanner

erneboy said:


> Wouldn't you agree that the money which now goes in profit might previously have been absorbed by inefficiency? Alan.


Perhaps the previous "inefficiency" was British people people in British jobs and the present profits are foreign suits in flash foreign cars with most of the money going abroad into foreign bank accounts and the people who were previously in the "inefficient" jobs now on the dole and still costing us money but now doing nothing for it?

So the cost of the service is now the previous cost + the cost of the dole for those who lost their jobs?

Maybe inefficiency can actually be cheaper and perhaps more "efficient" overall?

I for one would rather have any "spare" money employing more people instead of buying flash suits and BMWs.


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## erneboy

Agreed, it hasn't really changed much. Previously they sat in their tea huts and got paid for doing nothing, now they are unemployed and paid for doing nothing. It just comes out of a different pot and that's one we are more acutely aware of.

Not all the profits go overseas to buy BMWs though. Many British people are share holders either directly or through pension funds and other investments.

In one of my first jobs there was a lazy sod who put an enormous amount of effort into avoiding actually doing anything. I pointed this out to him and he told me that every firm needed a time waster. Perhaps he was right, spread them out evenly in every company and let everyone else carry them, that way they are less visible. The only problem is that they are infectious and corrosive, Alan.


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## DTPCHEMICALS

National Coal Board, British Steel to name two state owned companies that in many cases overpaid the over staffed workers.
Yes overstaffing cost a lot of money, but did ensure a Labour following.
Dave p


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## Phil42

I don't think it's going to advance your argument to get into thr area of people being overpaid!


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## Glandwr

Maybe if we looked at history. 

Where did the impetus for the massive improvement of public health by the provision of clean water and sewage systems come from in our 19th century cities? 

The private sector, although there were private water companies then? No, they were only interested in the rich suburbs where the money was. And in their own way were only private in the sense that they were funded by subscription from those that benefited.

It was public money that financed the like of Basiljet’s transformation of London. There are some things that need to be run for the public good first and foremost rather than profit.

Dick


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## Glandwr

DTPCHEMICALS said:


> National Coal Board, British Steel to name two state owned companies that in many cases overpaid the over staffed workers.
> Yes overstaffing cost a lot of money, but did ensure a Labour following.
> Dave p


Dave there were huge management problems no one denies that. But it was a enormous and ideological step to say that the only cure was to give it all away to the market.

The countries that opted to keep controlling ownership of their own utilities but introduce private management are now running them so well that they are also running ours as well. Just as they are with the cars we make etc.

Dick


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## erneboy

The trouble is that neither solution is perfect, one seen as inefficient, wasteful and costly while the other is considered efficient, greedy and probably just as costly in the long run, Alan.


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## Glandwr

erneboy said:


> The trouble is that neither solution is perfect, one seen as inefficient, wasteful and costly while the other is considered efficient, greedy and probably just as costly in the long run, Alan.


Are you talking of the choice between full market forces or state run Alan? I know it's a hackneyed phrase but there is a third way Alan.

Dick


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## erneboy

Perhaps I missed that Dick, do tell, Alan.


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## Easyriders

No, it wasn't. I put a post on here about 3-4 months back about the nonsensical merry go round you have to do to get gas/electricity/broadband etc at the best prices every year. Most of these private companies offer the best deals to new customers, and bugger the existing ones.

The idea "private good, public bad" was started with Thatcher, and nobody has had the guts to reverse this trend. Private companies are there to make profits, not to serve the public. Adam Smith (whom Thatcher often quoted, rather selectively) himself said that some things, such as fuel and transport, were too important to well-being to be entrusted to private profit, and should be state controlled. Just look at the state controlled railways in most of Europe, and compare their trains with the sort of rubbish service and inflated prices we pay the likes of Richard Branson. Linda


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## DTPCHEMICALS

I do not want to support railways through my taxes. I do not use them. If I did I would expect to pay a fair price for the journey expecting the company to make a profit.
Profit is not a dirty word.
My profits are my wages. Sell nowt earn nowt.


I do not expect rail users to subsidise my business or my Motorhoming.

Dave p


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## Stanner

DTPCHEMICALS said:


> National Coal Board, British Steel to name two state owned companies that in many cases overpaid the over staffed workers.
> Yes overstaffing cost a lot of money, but did ensure a Labour following.
> Dave p


Personally I'd rather have more (slightly) overpaid workers (who aren't on the dole) and some moderately recompensed managers - than fewer (and worse paid) workers and some vastly overpaid bosses shovelling profits into foreign tax havens with even more (ex) workers having to be paid (by me and you) for doing nothing.

As for choice there are lots of things I don't want to support with my taxes but the railways are a long way down that list well behind things like the Arts Council and other subsidies to very rich people. 
Roll on Means Testing for subsidised Opera and Ballet tickets etc.


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## BrianJP

Stanner said:


> No to all except P.O. Telephones.
> 
> I dumped BT as a telephone provider as soon as I could and haven't looked back since.
> 
> BT = Big Trouble as far as I was concerned.


Glad you are happy but whoever you buy your service from now you are probably still using BT services anyway.

PO telecoms as was ,was stifled/strangled/suppressed and robbed off revenue under successive governments for decades prior to privatisation.When privatised they were forced to help competition set themselves up ( eg Mercury ) and not allowed to compete on level terms so its customers would feel let down and move away. As BT it has always been at the cutting edge of technology and has developed many of the systems and devices that we now use eg. digital telecoms/mobile phone networks/Digital terrestial TV distribution and many more. Although at the time I was opposed to it, privatisation was a good thing for BT as it released it from the governments control albeit only after many years when Oftels grip was removed. I speak as an ex employee of 35years.


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## Glandwr

erneboy said:


> Perhaps I missed that Dick, do tell, Alan.


Surely you are not suggesting it's beyond the wit of man to design a compromise Alan  . The golden share, although needing some legal clarification and legislation is a good example. As would be the sell off future profits as opposed to assets. In fact the private sector is full of examples were different interests can share in the prospering of an enterprise, take franchising or licensing.

To sell off lock stock and barrel because you believe anything short of that would trammel the market is a triumph of ideology over sense as must as the old centrally planned state run monolith.

Dick


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## Glandwr

DTPCHEMICALS said:


> I do not want to support railways through my taxes. I do not use them. If I did I would expect to pay a fair price for the journey expecting the company to make a profit.
> Profit is not a dirty word.
> My profits are my wages. Sell nowt earn nowt.
> 
> I do not expect rail users to subsidise my business or my Motorhoming.
> 
> Dave p


Schools? if you don't have children. Sewers? if you are on septic tank. Roads? if you can't drive. Defense? if you are a quaker. You could go on for ever Dave, but what's it to do with privatiastion?

Dick


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## erneboy

A little information about the practicalities would help Dick. To me public and private are oil and water, Alan.


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## Mike48

Glandwr said:


> erneboy said:
> 
> 
> 
> Perhaps I missed that Dick, do tell, Alan.
> 
> 
> 
> Surely you are not suggesting it's beyond the wit of man to design a compromise Alan  . The golden share, although needing some legal clarification and legislation is a good example. As would be the sell off future profits as opposed to assets. In fact the private sector is full of examples were different interests can share in the prospering of an enterprise, take franchising or licensing.
> 
> To sell off lock stock and barrel because you believe anything short of that would trammel the market is a triumph of ideology over sense as must as the old centrally planned state run monolith.
> 
> Dick
Click to expand...

Not all privatisations have been successful. Railtrack and Hyder (the Welsh Water Utility) are examples of catastrophic failures.

Golden shares are seen by the City as stifling the ability of a company to grow and succeed thereby depressing share price meaning from the outset the Government would receive far less from the proceeds of an individual privatisation.


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## Glandwr

An example of what can happen when you put your utilities in the hands of the market happened in the US 6 years ago. P&O (good Brit company) had ownership of 6 US port authorities. It was taken over by a Dubai company and all hell broke loose.

What is there to stop Putin taking over Centrica and controlling the supply and distribution of our gas? French with water and electricity OK? Germans with our transport system OK? How about Putin?

Dick


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## Glandwr

erneboy said:


> A little information about the practicalities would help Dick. To me public and private are oil and water, Alan.


As I said Alan it is possible, it might be oil and water to you Alan but it works in many ways were the private sector is given limited opportunaties to make money from running enterprise in the government's gift. Take 3g licences, limited time yet the money was falling over its self to get in there.

Dick


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## Stanner

BrianJP said:


> and not allowed to compete on level terms so its customers would feel let down and move away.


Exactly and some of the customer service staff I tried to deal with must have been in the pay of the opposition, they did a great job of sending customers into the arms of the likes of (then) Cambridge Cable. It then appears loads of them got jobs with NTL - which took over CC.

I'm quite aware of what happened to POT/BT as my Bro-in-Law was with them for years and he was as disillusioned with the whole situation as well, so much so he left.

and - Yes I know that if I have a non-cable line it is probably maintained by "BT" but it wasn't that side of BT that I ever had "BT" with, just the so called "customer services".


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## Glandwr

Mike48 said:


> Glandwr said:
> 
> 
> 
> 
> 
> erneboy said:
> 
> 
> 
> Perhaps I missed that Dick, do tell, Alan.
> 
> 
> 
> Surely you are not suggesting it's beyond the wit of man to design a compromise Alan  . The golden share, although needing some legal clarification and legislation is a good example. As would be the sell off future profits as opposed to assets. In fact the private sector is full of examples were different interests can share in the prospering of an enterprise, take franchising or licensing.
> 
> To sell off lock stock and barrel because you believe anything short of that would trammel the market is a triumph of ideology over sense as must as the old centrally planned state run monolith.
> 
> Dick
> 
> Click to expand...
> 
> Not all privatisations have been successful. Railtrack and Hyder (the Welsh Water Utility) are examples of catastrophic failures.
> 
> Golden shares are seen by the City as stifling the ability of a company to grow and succeed thereby depressing share price meaning from the outset the Government would receive far less from the proceeds of an individual privatisation.
Click to expand...

Perfectly true they are enormously resented (and fought in the courts) which to me suggests that they are effective. Are you saying that your examples failed because of them?

Dick


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## erneboy

Surely the 3G thing was just an example of government getting the best price for something they could sell, where was the public/private partnership in that Dick? Alan.


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## Phil42

I must say I'm surprised by the vote so far (and the proportions have been pretty consistent). I know that this is a small self-selecting sample but even so....

It would be interesting to know if there have been national properly-conducted opinion polls on the topic.

Phil


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## Stanner

That's because most people now see it for what it is - a way of transferring public money to private companies for the benefit of the already very rich.

I would love to see figures for how much of that money has found it's way back to the coffers of political parties and which one - ooops sorry sorry sorry  , which ones.


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## Glandwr

erneboy said:


> Surely the 3G thing was just an example of government getting the best price for something they could sell, where was the public/private partnership in that Dick? Alan.


In the fact that it is run by private enterprise but still owned by the country. And that (if there is a future in 3g) there will be another tranche (plus a chance to weed out the rogues) into the exchequer soon.

There was not the ideology driven imperative to put it beyond state control as a matter of principle. As was the privatisation of Air traffic control for instance.

When I think of the real estate value that given away the water and rail sell off it makes me want to spit. Pure looting! BR for instance had large land holdings and a large hotel in every provincial town.

Too think that our subsidy to the railways is now higher than it was at privatisation and fare are going up 5% more than inflation :evil:

Dick


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## erneboy

Don't see the comparison between the airwaves and the railways Dick. The airwaves have no infrastructure and don't need an operator to maintain them. 

If the government owned the rail network, or any other network, while private companies ran the trains etc. there would be endless multi million pound law suits as companies claimed that the state of the network was preventing efficient running and damaging profitability. It would be an impossible situation I believe, Alan.


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## Phil42

*Glendwr wrote*


> To think that our subsidy to the railways is now higher than it was at privatisation


Yes, to me this blasts a massive hole in the arguments in favour of privatisation. We've not just been shafted the once. 8O


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## Stanner

Stanner said:


> I would love to see figures for how much of that money has found it's way back to the coffers of political parties and which one - ooops sorry sorry sorry  , which ones.


Well here's over £430,000 that found it's way back for a start.

http://www.telegraph.co.uk/news/pol...m-had-stake-in-work-programme-contractor.html

I've taken the precaution of quoting the Torygraph, just to show there is no bias by quoting the Independent or the Guardian.


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## Rosbotham

BrianJP said:


> PO telecoms as was ,was stifled/strangled/suppressed and robbed off revenue under successive governments for decades prior to privatisation.When privatised they were forced to help competition set themselves up ( eg Mercury ) and not allowed to compete on level terms so its customers would feel let down and move away. As BT it has always been at the cutting edge of technology and has developed many of the systems and devices that we now use eg. digital telecoms/mobile phone networks/Digital terrestial TV distribution and many more. Although at the time I was opposed to it, privatisation was a good thing for BT as it released it from the governments control albeit only after many years when Oftels grip was removed. I speak as an ex employee of 35years.


And I speak as an ex employee of BT, and someone who has worked in regulation and competition policy in the telecoms industry for the last 22 years. You're talking absolute garbage.

BT did not help Mercury set up, they did everything to prevent it happening, for example by setting charges way above costs. And for good measure it's fairly common knowledge that BT staff at the time sabotaged certain interconnection kit.

There were soft barriers put in place, for example by Mercury being given inferior numbers (e.g. in those days the equivalent of today's 0870 was 0990 - Mercury were fobbed off with the highly memorable 05415. BT had 0800, Mercury weren't allowed to access that and were given 0500. Why was that the case...well maybe it was because the numbers weren't managed by Oftel, but by an internal BT department). Whereas today you can select to have your calls carried by your chosen non-BT carrier, back then Mercury had to ensure anyone wishing to use their service had bought a special phone. It was almost a decade after competition was introduced before it was possible to take your number with you when changing provider, so business customers whose number had economic value had to move their outbound service to Mercury while keeping their incoming lines with associated number on BT.

When Mercury launched, BT had upwards of 3-400,000 staff. It was incredibly inefficient, and I well remember for example it was considered normal to sod off down the pub at Friday lunchtime and not return. It now has 89000, and is efficient largely because of competitive pressures.

Competitors do use BT lines, but nowadays only the natural monopoly stuff which is hived off into Openreach. Really, BT should have been structurally separated before it was ever privatised. However, it wouldn't have been worth as much that way, which is why it wasn't done.


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## peribro

I voted a very big "Yes" on this and if I could exchange my votes in all the other polls on MHF so that I could vote more than once in this one, then I would do so! As far as I can see privatisation of the utility businesses has been a win all round. It has been evidenced countless times that Government is not very good at managing anything and I don't think that many people would argue otherwise. Whilst private management doesn't always get it right (e.g. G4S), they generally do an awful lot better than state appointed management - and just because it sometimes goes awry in private hands isn't a reason to chuck the baby out with the bathwater.

As for the emotive bit about these utility businesses making profits for their shareholders, so what? Who are the shareholders? The answer in most cases is pension funds and other institutional investors in this country and abroad. As such we benefit from this in many ways. Our pensions and / or other savings may be invested directly or indirectly in these shareholders and let's not forget that the UK government raised significant sums of money by privatising the utility companies in the first place.

To those who voted "No", ask yourselves whether you honestly believe that under state ownership you would have a half decent telephone and internet service, clean beaches and rivers, the choice of who supplies your gas and electricity, etc etc. Also, where do you draw the line? If gas, electricity, telephony should be state owned then what about food? That is pretty important to us all so it must follow that there would be an argument to nationalise the farms and the supermarkets. We could then call them collectives..........


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## Glandwr

erneboy said:


> If the government owned the rail network, or any other network, while private companies ran the trains etc. there would be endless multi million pound law suits as companies claimed that the state of the network was preventing efficient running and damaging profitability. It would be an impossible situation I believe, Alan.


But Alan such an arrangement was the favourite of Major's government at the time of privatisation. It also had the support of many in the city and business community. That the infrastructure was retained and the franchises to run trains were floated. After all it was the running of the service that was in dire need of revision and ate subsidy. Some would also say it what we have now.

In the end as a sop to his ideologically driven Thatcherite Bs as he called them the lot went up for sale. BR was then ruthlessly stripped of its assets (city centre land, office blocks, hotels etc.) Less than a decade later the infrastructure management side of things went into administration, no buyers could be found. And it became a non profit making private company backed by government guarantee. Back to where it was but without the assets?

As I said before there are too many out there in public and private life that dare not revisit the ideological arguments for fear of questioning basic tenets of their belief.

Undoubtedly the private sector has advantages in areas because it can sail closer to the wind, the public sector on the other hand has probity in its suit of strengths.

To treat then as mutually exclusive, like oil and water is I believe wrong.

One thing that I don't know much of though are the utilities in NI that were not privatised when mainland ones were. Is there a clamour over there for privatisation now? Why weren't they done in the first place?

Dick


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## Glandwr

peribro said:


> If gas, electricity, telephony should be state owned then what about food? That is pretty important to us all so it must follow that there would be an argument to nationalise the farms and the supermarkets. We could then call them collectives..........


I think the emotion is coming through a bit there Peter  . As I've said there are many that cannot engage on this without questioning the very foundations of there political beliefs.

They can only see black (a state controlled centrally planned economy) or white (the final triumph of the free market). The idea of public and private working together is an anathema.

Dick


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## erneboy

Water and sewerage were privatised Dick. It's hopeless, Northern Ireland Water are completely incompetent, imagine G4S type incompetence x 10. It was a carve up for the boys and a costly disaster for the population. 

Electricity was also sold off but hasn't been quite as bad in so far as service goes, Alan.


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## Glandwr

Thanks Alan for some reason I thought that things were held off there. Were they done as the same time as the rest of the UK?

Dick


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## peribro

Glandwr said:


> I think the emotion is coming through a bit there Peter  . As I've said there are many that cannot engage on this without questioning the very foundations of there political beliefs.
> 
> They can only see black (a state controlled centrally planned economy) or white (the final triumph of the free market). The idea of public and private working together is an anathema.


No Dick. I accept that the concept of working together is a necessary evil during the transition from black through grey on our way to white!   Peter


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## erneboy

More recently for sure Dick, Alan.


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## erneboy

A bit more research would seem to indicate that it's a government owned limited company run by highly paid incompetents, Alan.


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## peribro

erneboy said:


> A bit more research would seem to indicate that it's a government owned limited company run by highly paid incompetents, Alan.


Proves my point entirely - well done Alan! At least if the incompetents are poorly paid, one gets a modicum of satisfaction in knowing that some money is being saved. But in this case, it's a double whammy. Full privatisation as soon as possible is the only solution. Peter


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## erneboy

Dick might want to search Northern Ireland Water and read the stories just to get a picture of the complete shambles this dream combination is. If they are typical I don't want any more of it.

I will tell my own story as an example. The first thing NIW decided to do was to meter all business supplies. One day I found a woman in a hard hat wandering round my premises having climbed in over a locked gate. I went and asked what she was doing. She was from NIW and had come to decide where to fit the meter. She had decided it would go in one the sheds. The whole site is two acres and there are taps and buildings with water supplies all over but all she seemed to want to meter was one shed which has a toilet and a sink in it. Who was I to argue the toss in the face of such kindness. I was annoyed that she had just turned up and climbed the gate for access though didn't bother to say so.

Weeks later an unmarked van turned up, the guy got out and went to the shed, a salesman or a thief I thought. Turned out he was from NIW and had come to fit the meter. I opened the shed door for him. He took one look at the piping which is alkathene and asked me if I had any fittings to suit as he only carried copper fittings. I imagine that at least half the premises he would go to would also have alkathene piping not having the fittings was idiotic. I suggested he could get the bits and come again another day. I also suggested that no doubt he had other local calls to do so that his journey would not be wasted. No was the answer, his next call was 60 miles away. Amazed I asked who he worked for and he told me he was a sub-contractor working for a main contractor who had the contract for installing meters. I asked how he was paid and he told me it was time and materials plus mileage. Amazing.

A few days later he arrived back with the fittings he needed. I opened the shed for him. Inside the door was my power washer which we use to keep the vehicles clean. It's supplied with water plumbed from the pipe inside out through the wall. He fitted the meter above the tap so that the supply for the power washer wasn't metered. It was also below the stop cock, which is important too. Off he went having metered the supply to one toilet and one sink. Fine by me. Except that next day I discovered that the fittings on the meter were leaking both above and below. I rang and reported it but no one ever came to fix it. I fixed it because I was paying for the leaked water.

During the winter the pipes froze as they always do. No damage to our bit as we turn the stop cock off but their meter burst.

They fitted a new one in the same place and it burst the next year. Then they decided that since our usage was so small perhaps we didn't need a meter at all anyway. Fine.

During all the time we have had an account with NIW I have had direct debits in place to pay the miserable few pounds they want and never yet have they managed to collect that properly. They always send me a bill and a letter saying my bank have failed to pay them. I always challenge them and eventually it turns out that the fault was theirs. It takes a lot of correspondence and argument to get them to admit the fault is theirs but I enjoy that. There is no effective way to complain about them.

So that's your dream combination in action Dick. Sorry it wasn't brief, Alan.


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## Phil42

Seems to have come to a halt at exactly 100! And throughout the percentages have remained remarkably constant.

Phil


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## Glandwr

peribro said:


> Full privatisation as soon as possible is the only solution. Peter


But Peter it was fully privatised in 1994 and the assets of the old BR were systematically looted until it collapsed in 2001. Don't you remember even the Telegraph and Mail calling on the government to take it over because of the incompetence of its directors? This was after an already substantial bailout.

Share price was in excess of 1,700p at peak but at its liquidation it could get no buyers on the market at 70p a share.

The government was faced with the choice of no railway or a cobbled together solution. As to re privatisation there has not been a peep in the last two years. In fact insiders in the transport industry say that the whole debacle is what holds back DC on road privatisation.

Alan is the water industry in NI privatised or not? I'm still confused.

Dick


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## Glandwr

I can’t believe the stupidity of some ideologically driven politicians. We could be ending up with a fully nationalised rail service soon. :roll: 

Rail Track was taken back into effective govt ownership after incompetent and greedy private operators failed (2001). East coast line the same (in 2010) and now we award the West Coast line to a smoke and mirrors bidder. :roll: 

Rumour has it the DfT had discarded the top bid as unrealistic and opportunist but that the master strategist, Thatcherite free marketeer and economic genius Osborne :roll: :roll: :lol: overruled them. Choosing anything but the highest bid without good cause would be an warranted interference in the market being the reason. 

Lord save us from ideologically driven politicians of all colours.

Dick


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## Rosbotham

As someone who travels frequently on that route Dick, you're right.

First's justification for their hi-ball bid is growing passenger numbers. But the line is full in context of ability to squeeze in any extra trains (hence need for HS2). Euston is constrained in that only half of the platforms can take Pendelinos...it's inherent in the physical shape of the station. The trains are pretty much full too. The fares are outrageous (e.g. peak return Preston-London is approx £360), but the trains are full so perhaps supply/demand indicates they're not so. Colleagues in Birmingham tell me that since Virgin started running through services Manchester-Birmingham-London rather than dedicated Birmingham-London services, they frequently need to stand. So it must be a mystery to anyone familiar with the line just how it can be possible to grow passenger numbers.

Madness, absolute madness. I can understand why Branson's furious, surely there should be due diligence carried out in awarding these franchises?

(Doubt First are going to give me Virgin Atlantic miles either... :roll: )


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## erneboy

Glandwr said:


> Alan is the water industry in NI privatised or not? I'm still confused.
> 
> Dick


You are not alone in that Dick. It's a publicly owned limited company. So what's that? Alan.


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## Rosbotham

erneboy said:


> You are not alone in that Dick. It's a publicly owned limited company. So what's that? Alan.


Public/state-owned.

That was the status Cable&Wireless had for approx 60 years.


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## oldun

We all know that the present situation is not good but knowing how councils and other public bodies run projects I have no faith in their ability to run things any better.

Every public run build is always about 10 times over budget - remember the Olympics and the new aircraft carriers?

How do we know that despite the higf costs that the facilities now provi8ded privately are worse than they would have been under the old public ownership?

It seems to me that once a system (private or public) gets bedded down it's all downhill from then on.


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## DTPCHEMICALS

The privatisation gives us competition, 
But
many cannot understand or have the means of getting the best deal 
Dave p


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## Spiritofherald

How can privatisation ever been good! All they did was sell off public assets to make a quick buck to help make the balance sheets look good to help stay in power. Then because of lack of revenue we all have to pay more tax as well as higher utility bills. Making the average man feel better off in the short term is a sure fire election victory. The public eventually saw the error of their ways in the 1997.

Oops, strayed into politics even though I say I never will again!!


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## raynipper

Has the 'vote' closed.? I can't put my choice in.

Ray.


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## anjasola

NO from me.
As for real competition forget it and regulation of the utility section is a joke.
The energy sector in general needs a kick up the arse.
The amount of money being wasted on renewables is frightening especially wind turbines, not be long before the EU mob have smart meters fitted in our homes switching the power on and off at will.


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## Spiritofherald

raynipper said:


> Has the 'vote' closed.? I can't put my choice in.
> 
> Ray.


I've just submitted my vote without problem (thanks for the reminder).


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## Stanner

oldun said:


> We all know that the present situation is not good but knowing how councils and other public bodies run projects I have no faith in their ability to run things any better.
> 
> Every public run build is always about 10 times over budget - remember the Olympics and the new aircraft carriers?
> 
> How do we know that despite the higf costs that the facilities now provi8ded privately are worse than they would have been under the old public ownership?
> 
> It seems to me that once a system (private or public) gets bedded down it's all downhill from then on.


The reason such things run over budget is because the private contractors make sure they do. I was told once by someone tendering for a road project that trying to work out a sensible realistic price for the job was pointless because if they did they would NEVER get a contract EVER as they would always be underbid.

So his tactic was to put in the lowest price he thought would look believable and then pile on every possible "contingency" fee they could even think about getting away with to try and make a profit on the job. The simple answer is a fixed price contract from the start - if any contingencies arise - tough! you should have done your homework better.


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## raynipper

Nope, I'm obviously banned from voting even though the site says I can.

I'm a fully paid up member. Whats goin onn...???

Just twigged. Maybe I had already voted....... :roll: 

Ray.


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