James Daley: Why is privatisation such a dirty word?
Saturday 28 March 2009
Walking through Waterloo station this morning, I was handed a flyer by someone campaigning against the privatisation of Royal Mail. Amongst its "10 reasons to SAY NO" was the rather rash and unsupported statement that it would "repeat the mistakes of privatisations in other industries".
For me, this was the point where the flyer lost all credibility. After all, while there have undoubtedly been mistakes in previous privatisations, I believe that most privatisations have turned out to be something of a success in the long-run. Competition in the phone market has meant we all now pay practically nothing for a landline. Electricity and gas prices were also driven down post-privatisation and while they have increased recently, regulators are now intervening to ensure that consumers continue to get a good deal.
Admittedly, there are industries, such as the railways, that are still some way from what you could call a success – but this does not mean that privatisation should be dismissed out of hand.
When it comes to the postal service in Britain, it's hard to deny that there's a serious problem. It's no exaggeration when I say that roughly one in 10 packages that are sent to my flat never arrives. And if they've not been insured by the sender, there's nothing I can do about it. Furthermore, the post now rarely arrives before 4 or 5pm, and the local post-box is now only emptied once a day – rather than four or five times, as it used to be.
Ultimately, the Royal Mail needs billions of pounds worth of investment to restore its service to the level that we all expect – and this is money that the Government simply doesn't have at the moment. So why not allow the private sector to provide some of that investment, in return for a share of the profits?
I'm always disappointed that whenever economic times get tough in the UK, there's a lurch to the extreme left in public opinion. Next week, thousands of people are set to join an anti-capitalism march in the City of London to protest against our "greedy bankers". While a few days ago, Sir Fred Goodwin, the former RBS chief executive, had his house and car vandalised – no doubt by sympathisers to the anti-capitalist cause.
But all these people have benefited to a large degree from capitalism – which has helped generate wealth and pull more and more people out of poverty over the past few decades. Though inadequate regulation has meant that we are now suffering from a harder recession than we might have, this is all part of capitalism's development and evolution. Capitalism has evolved at a frightening rate over the past couple of centuries, and it is no wonder than we have not yet created a perfect system. Nevertheless, what the last two centuries have shown is that markets and competition can be used to the benefit of everyone – not just the richest in society.
If Royal Mail is privatised, it should be with the proviso that services must still be provided to every house in Britain, and that postal prices cannot be raised beyond a reasonable ceiling. If these kind of regulations are put in place, what is it that we have to fear? Surely standards can only get better.
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