The United Kingdom's current cost of living crisis has been fueled to a large extent by the astronomical rise in energy costs resulting from the lifting of caps on energy tariffs. The rise in energy costs has meant tha not only are people facing economic hardship but there is also a real risk to life stemming from an inability to heat homes during the cold months. There are certainly questions to be asked about whether the UK government has done enough to protect citizens against dramatic energy cost increases and whether it has responded effectively to the prospect of millions of people not being able to afford to pay their energy bills. What is happening to domestic energy costs illustrates the dangers of privatising essential public services.
Recent events involving the Royal Mail, National Grid, rail services and the energy sector demonstrate the long term risks of privatising essential services that are critical to the day to day lives of people. When such public services put making a profit over the welfare and safety of people the adverse effects on people’s lives can be devastating. It is becoming increasingly clear that privatising is not proving a cheaper way to run public corporations. The costs being racked up in rescuing or shoring up these privatised entities are greatly exceeding what would have been the cost of running them by the government.
The energy sector has fought to lift price caps leading to tariffs that are risking lives and ruining businesses. Rail companies have been steadily increasing fares and cutting services. The National Grid is warning about blackouts during the coldest months after a period of declaring millions in profits. The Royal Mail has become unrecognisable with erratic service delivery and threats to lay off thousands of staff to remain profitable. These companies have no problems with paying out huge dividends but seem to balk at investing profits in service improvement and innovation.
The ideal of privatisation was to create more efficient production and introduce competition in order to make productivity more economical and drive prices down. What in fact has happened is that privatised companies have prioritised profits and dividends rather than cheaper services for consumers. These are services that are meant to be essential for the smooth running of people lives and businesses. Yet we are consistently getting threats of service withdrawal because almost all profits are being funnelled out to shareholders. In reality it has not been viable to run these services as private profit making companies.
The reality of privatising essential public services has been poorer service provision and increased hardship for majority of the public using those services. The opposition to privatising is not about condemning profit making but about ensuring that people and business can get access to the services they need in a way that is fair and reasonable.
