The Labour government is in a fine old mess over privatisations
The Labour government is in a fine old mess over privatisations.
It likes the cash they raise, prefers private sector management and is only
too happy to take future investment off the books of the Exchequer.
But the botched and hurried sell-off of the railways, by a Tory government
strapped for cash, has left terrible scars. The promised new investment has
never fully materialised, the system has been plagued with safety failures
and the publicly-quoted rail operating company is seen as so jinxed, and such a
political hot potato, that no one wants the nowin job of chairman.
As a result the remaining publicly owned utilities have become the scene of
a series of prizefights, resulting in political fudge. The decision to sell
off 46 percent of National Air Traffic Services (NATs) to a consortium of the big users of Britain’s airports, smells of just that.
It will raise UKpound 800 million for the exchequer, money which is expected
to be used to modernise the system, and maybe even get the troubled new control
centre at Swanwick up and running after years of delay and software snafus.
But it is a messy solution which seems to please no one but Lord Marshall,
one of the leaders of the airline group, who one might have thought has enoughon
his hands at present as deputy-chairman of BT and chairman of Invensys – two
of the nation’s worst performing shares.
The workforce fears the cutbacks, which are an essential part of ending the
public sector culture. The consumer fears the loss of safety. Good sense
suggests that at some point there may well be a conflict of interest between
the new owners – who control most of the slots at Britain’s airports – and the
safety needs of the air traffic control system.
The taxpayer may also have been short changed, in that NATs has been valued
too cheaply.
The other privatisation fights focus on the London Tube and Consignia, which
most of us know as the Post Office. Gordon Brown wants private-public
partnership, on the NATs model, for the Underground.
This, despite the public clamour for a public sector solution, using the New
York City honed skills of Bob Kiley – with a record of success behind him.
As for Consignia, the compromise of a publicly- owned plc leaves it a
dinosaur, with worsening service, price controls and a disgraceful lack of innovation.
It must compete with fully privatised European post offices such as Deutsche
Post. This is not the path to the competitive, high productivity economy we
heard so much about in the Budget.
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Knight Ridder/Tribune Business News.
KNIGHT RIDDER TRIBUNE, 28th March 2001
