NeutronIC wrote:I have to say that I do not like the commercialisation of core services in the country (I do not understand how privitisation of key services can ever possibly work to be frank, companies go bust especially where there is competition and the last thing that a key service needs is for its main provider to go bust!).
Privatisation works. State ownership is costly and inefficient.
Apologies if this is getting off-topic considering this is the general discussion forum but take the example of Britain's water industry which is privatised in England but a nationalised industry in Scotland.
Scottish household bills have gone up by 94% whilst English bills have gone up by only 22% since 1989. An even bigger difference is seen in the cost to business. It is estimated that a medium sized office in Scotland pays 16 times more than its English counterpart whilst it is even worse for bigger companies - BP's refinery at Grangemouth in Scotland has a current annual bill from Scottish Water for £12.7m whilst in England it would be about £7m. BP is even pondering taking Scottish Water to court as it is frustrating its efforts to find alternative supplies.
John Downie, Scottish director of the Federation of Small Businesses, has said that small businesses in Scotland face water bill increases of between 50% and 300% in 2003 - between four and five times the level of equivalent bills in England and that this will cost jobs in Scotland. In total Scottish companies pay about £190m a year more for water than their counterparts in England.
In addition to a nationalised industry being grossly more expensive, it is also less efficient. The Scots get poorer drinking water, more pollution from their sewers and their pipes are more than twice as leaky.
Alan Sutherland – who is Scotland's water regulator – claims that about £86 of the £231 average domestic bill in 2001-02 was wasted.
It's pretty clear that - in general - private firms beat public sector provision on all counts.
NeutronIC wrote:I definitely do not think that companies who have put themselves in to debt should receive any more help than any other company, to be frank, at the end of the day it is their responsibility to run a business in a responsible manner, not to run it in to debt and then start crying to the government.
Exactly right. Off-topic again really but British Energy is a good example. British Energy is the UK’s nuclear electricity generator and produces a fifth of the UK’s electricity and had to ask the Government last year for a massive loan to avoid going bust.
Since 1998 electricity wholesale prices in the UK have fallen by around 40% with much of that saving passed on to businesses and householders - British Energy, which has higher costs than its competitors, could no longer compete.
Privatisation has exposed the true costs of nuclear power and the company's financial problems are a measure of the success, not the failure, of the privatised regime. The openness of the privatised industry makes economic inefficiency and political fudge harder to hide.
Instead of providing a bailout the Government should have let British Energy go under – market forces at work. The shareholders would have lost their money but that’s capitalism.
Robbie S.
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