Utility Gains

This paper assesses the various utility sales of telecoms, gas, water and electricity companies during the 1980’s and 1990’s and looks at how government, shareholders and customers fared since the privatisation process. The paper argues that the following benefits occurred for each stakeholder:

For the government – various general benefits accrued, such as a pronounced surge in investment. It benefited financially, both from one-off sales proceeds and from ongoing sizeable Corporation Tax receipts.

For shareholders, like pension funds, have generally done very well, with many privatizations – particularly the 12 RECs – heavily outperforming the FTSE 100. Privatized water stocks, too, have powered ahead. There are a few notable exceptions to this, such as Railtrack, British Energy and British Telecom.

For utility customers the financial benefits have been less tangible – in a period of massively rising wholesale prices there has been little to pass on. But investment has been much higher and much-needed improvements in customer service have been developed. Telecoms prices have actually fallen materially, while domestic gas, water and electricity prices have all risen sharply in real terms. However, domestic energy prices have risen mainly due to much higher wholesale gas costs – not because of private sector ownership.

The paper finds investment in utilities is now much higher than before privatization, especially in the electricity distribution and water sectors. It also argues that the privatisation of utilities also created an innovation spike, specifically in the telecoms sector.

Read the report.

Privatization - Reviving the Momentum

Privatization - Reviving the Momentum calls for a new wave of privatizations, which could net the exchequer in excess of £20bn. Given the worsening state of the economy and the increasing tightness of the public finances, the report notes that such an inflow of funds would be very welcome.  In addition to the revenues generated for the government, a new wave of privatizations would also deliver significant operational benefits. Previous privatizations have delivered a wide range of improvements, including increased investment, lower prices, greater choice and better service for customers – as well as underpinning billions of pounds worth of economic activity. The leading privatization candidates identified by the report include the Royal Mail, Channel 4, BBC Worldwide, Scottish Water, Northern Ireland Water, Glas Cymru, the National Air Traffic Control System, as well as government stakes in British Energy and the Nuclear industry.

Read it here.

Wood for the Trees

The privatization of the Forestry Commission and the reasons why are looked into by Douglas Mason. He looks closely at the history of the Forestry Commission and the reasons as to why they have failed in all areas to make state owned forestry viable. He highlights one area, visitors to the forests, as the only one if run properly by the State that could be profitable, though the need for change exists. Douglas Mason also looks at how the privatization could be pushed through and how best to protect the forests under the private sector.

Read it here.

Privatization and Economic Revival

This report covers the theme of Privatization and Economic Revival, which was discussed by a number of leading privatization experts at the Fourth London Conference on Privatization held in Westminster. The London Conference has now become a principal event in the internation privatization calendar, and at the Fourth Conference we welcomed over 250 top-ranking delegates from 50 different countries and different territories. 

The practical and world-wide experience of our contributors prompted us to concentrate this report onto the special features of privatization in developing countries. this resulting report provides policymaker in the developing world with a manual of a great insight, which should help them press ahead towards the important political and economic benefits which privatization can bring. 

Read the the first part of the report here and the second part here.

Privatization Now!

This report contains the edited transcripts of the remarks given at the Third London Conference on Privatization.

The authors' worldwide experience prompted us to concentrate the focus of the Third London Conference onto the special features of privatization in developing countries. This resulting report provides policymakers in the developing world with a manual of great insight, which should help them press ahead towards the important political and economic benefits of privatization.

Read the first part of the report here and the second part here.

Mechanics of Privatization

Nowhere does there exist a greater concentration of expertise on privatization than in the United Kingdom. The privatization programme in the UK started before those of other countries, and has included government companies and services that are larger and more diverse than anywhere else. 

Indeed, British merchant banks, marketing agencies, policy analysts, and other institutions now have so much knowledge about how to make privatization work that their advice is one of UK's most thriving export industries! The whole world, it seems - whatever the prevailing political colour - wants to know how to reap the benefits of privatization.

It was to assemble the best of this expertise that in July 1987 the Adam Smith Institute sponsored the first London Conference on Privatization, from which most of the papers in the report derive. Over 100 finance ministers, businesspeople, and other delegates from all over the world came to learn for themselves something of the mechanics of privatization. 

Read the whole report here.