Opinion: The limits of privatisation

We already don’t have sufficient public transport: the fact that we are going to get even less is troublesome. Worse, one of the links to be cut is between Hampton and the City Hospital.

I am sure that Stagecoach don’t see it this way; they have shareholders, and they are trying to return a profit. However, here’s an instance in which the profit of one company is the wrong number to look at.

If we have a well-funded public transport network this saves us money in other ways. The stress on our road network is less, which means less spent on construction and repairs.

Exhaust emissions are less, which reduces carbon we put into the atmosphere and reduces the prevalence of pollution related diseases such as lung problems. Businesses also benefit from people being able to get to work in a timely fashion.

The problem is that Stagecoach can’t judge matters by looking the larger picture, only its narrow one. This is a significant example of the problem with a lot of privatisations: a privatised firm’s focus is simply too limited to consider what is good for the wider economy.

Energy is another leading example: if energy firms are allowed to raise rates as they wish, this will collapse not just many households but also a lot of firms. The way the energy market is structured at present means that in pursuit of their self-interest, energy firms are geared to treat the financial viability of their customers and the survival of the economy as a

secondary concern.

However, energy feeds into everything else: governments on the Continent have limited price rises, not solely out of concern for their citizens’ welfare, they know very well that if business can’t afford energy, then the entire economy is threatened.

A privatised energy firm is not engineered to look at matters this way; the regulator has proven to be limited in its powers, and the government doesn’t want to interfere in what it thinks is a “free market” but is in effect a monopoly.

I think we’ve all had enough of short-term thinking. For the past twelve years, and particularly ever since the pandemic, patchwork solution has been layered on top of patchwork solution.

Liz Truss’s current idea is to keep the energy companies’ profits churning by loading the bill onto future taxpayers. It’s expensive. It’s wasteful. It is a poor use of public money. If we are going to borrow against the future, we should be doing it for projects from which the future will benefit, such as improved hospitals and schools, not ensuring shareholders in a monopoly are pleased.

However, until we have a change of government, we are likely to continue to be the victims of this myopia, this fanatical belief in markets above everything else, even when they don’t work.

For a pragmatic approach, we will need a change of government; hopefully that will happen in Peterborough and on a national level sooner rather than later.