‘Privatization has failed again and again’
Photos: We Own It
Privatization has failed again and again.
Cat Hobbs is the founder and director of We Own It in the UK It campaigns ‘to end privatization for good so that people come before profit’. She started We Own It five years ago as a positive voice for public ownership. Before that she campaigned for better public transport and was angry that privatization failed for rail and bus passengers.
‘I believe public services are the best, most civilized, wonderful thing that people have invented,’ she says. Dinyar Godrej interviewed her about the campaign.
Why is it a good idea for public services to stay in public hands?
We think there are three reasons.
Reason number one: they are vital services, things that are important for all of us to live well in society. And so people believe that we should run them for people and not fot profit.
Cat Hobbs campaigning against giving money to Richard Branson’s Virgin Trains East Coast. Photo: We Own It
Reason number two: they are usually natural monopolies, for example, water. It seems a good idea to run that monopoly in a publicly accountable way and not to try to create an artificial market where it is impossible.
The third reason is these are services where you need democratic accountability, so you need accountability both as users of the service and as citizens. So, for example, you might want to give your opinions on where your bus goes and what kind of service you get from your bus company. And you might want to give your opinions on the future of transport in the country. And if you leave all of those choices, big and small, to private companies which are for profit, it’s very difficult for the public to have a democratic voice about their services and the future of their services.
We know that it is perfectly possible for public organizations to run services well. But over the past 30 years, and especially since 2010 when a rightwing coalition government came to power in the UK, there has been cuts to public services and cuts to councils and the kinds of organizations that could deliver services. The public sector needs to have enough funding, enough know-how, and it needs to have what it needs to make public ownership possible.
Why has the privatization of public services failed?
Over the last 30-40 years there’s been an idea that private companies should do everything. So we shouldn’t have a mixed economy, but everything should be a market, a consumer product, something the private sector can profit from.
So you have private companies with the wrong ideas and working in the wrong way. The quality often goes down, because private companies put profit first.
We often see that costs go up, because a private company will charge as much as they can for their service.
We can’t hold private companies accountable in the same way that we can hold public bodies accountable.
Private companies choose the easiest services. For example, if you’re a private company running probation services, you want to deal with the easy, low-risk offenders, and not the high-risk offenders, because that takes up less time.
You have the same thing in the postal service. and in the bus service. In a public ownership, you can cross-subsidize. That means you can say, it is harder to reach these people in rural areas, but we can use the profitable parts of the service to help the less profitable parts.
If you’re a private company, you want to choose the profitable parts, make your money from them, and forget the rest, even if people need them. And everybody wants to share information and improve things in the public sector. But you have private companies who simply want to get a profit. There’s less flexibility.
We have often quite big multinational companies which are very, very good at getting contracts. But they aren’t really interested in giving a good service. They’re often ‘too big to fail’. When things go wrong, it is usually the private sector that takes the profit and the public sector has to pay the bill and solve the problems, because there is no other way. Public services are too important to disappear; someone has to provide the service.
People often say that the answer is to have better, stronger regulation and not make the private companies public.
People say a lot of good things about regulators. The promise of privatization back in the 1980s was: it will be great for consumers, you’re going to see lower prices, better quality; these private companies are all efficient and will deliver what you want.
But the reality is completely different.
People are paying more for a service where often there is no investment. Many people in the South of England didn’t have water the other week. This was because the water company had failed to plan ahead and did not invest in our water infrastructure. That’s what they are there for, but from their point of view, they are just there to make a profit.
The regulators have completely failed to make any difference. They are now saying they need another chance to make another review. It is too late for that really. It’s too little, too late.
The public has never really liked privatization.
But, public ownership is very popular. The regulators aren’t very popular.
There is a big industry with people doing the regulations, writing the contracts, the lawyers and accountants, the private companies and getting contracts. And it is very complex, and expensive, and fragmented. The privatized system hasn’t worked. It is very hard to think of an example where privatization has worked. And the regulators are a part of that system.
So, how much longer do we want to wait before we say the promises have not worked? And we’ve given you 30 years. Maybe that is enough now and we need try something else.
What are your different campaigns? And have you had any successes?
We do two things: we run campaigns where we think we might win and we try to keep discussions moving.
The first campaign was in 2013. We were trying to get the government not to re-privatize the East Coast Line. It was working very well in public ownership. We had a little success with that and we worked with all the different rail campaigners and unions. We didn’t succeed in that campaign, but we’ve started that campaign again now, because the East Coast Line is once again having problems in private hands. We’re now campaigning to bring it back into public ownership.
We Own It started with just me on my laptop in my bedroom. Now we have a group of supporters and our networks and we’ve had three real successes. In 2015 we helped to stop the government privatizing Network Rail. The government wanted private ownership for Network Rail. It is the only publicly owned part of the railway.
We then had a success with other campaigners on the Land Registry – we helped to stop privatization. There was a proposal to privatize the Land Registry and we worked with PCS and 38 Degrees to stop that. We were interested that the Land Registry with other public services, was profitable. So we did some work with the New Economics Foundation to see how long it would take before selling the Land Registry was a really stupid economic decision. Because you are losing the millions of profit every year that would go to the public purse.
If you have a profitable public service and it is making money for the public, why not keep it working in public hands?
Then last summer we led the campaign against the privatization of NHS Professionals, which is the NHS staffing agency. And again, working with other NHS campaigners, we led that campaign and we stopped the government from selling it.
I felt very happy about that because my parents work for the NHS. So that was quite personal to say, ‘Look, we did that’.
We started small, but we’re growing all the time and getting more successes. And it is exciting because of the Labour Party’s policies on public ownership, we have many more opportunities to talk about it. Politically, it is a very good time, a positive time, to really make progress with this.
NOW READ THE ORIGINAL: https://newint.org/features/web-exclusive/2018/05/10/public-ownership-cat
(This article has been simplified so the words, text structure and quotes may have been changed).