CONSERVATIVE PARTY CONFERENCE: The Conservatives need to showcase the benefits of privatisation but also improve regulation to combat the rise of nostalgic promises of nationalisation from Labour.
“It is all too easy to forget just how bad it was,” said John Penrose, MP for Weston-super-Mare.
“It was dreadful, but – and it’s a huge but – privatisation may not be dead but it needs to grow up.”
Penrose pointed to a future modelled around new rail timetables and soaring energy bills at a packed fringe event, asking: “Is privatisation dead?”
“We have this incredibly dangerous harking back to the 1970s. It’s our fault that we have not, as a party of the centre-right, enunciated a new and positive vision about what these companies ought to be doing going forwards.”
Penrose was sitting on the fringe panel with John Redwood, MP for Wokingham and one of the original architects of privatisation in the 1980s.
Redwood said privatisation made companies productive contributors to society. He said that without privatising BT, the City of London would not have been successful.
“I could not get a decent data line from my office 200 yards from the Bank of England when it was raining, as the particular data lines degraded when rain got into the works,” he said. “Corbyn and the Labour Party have raised the spectre of nationalisation, riding on the wave of unhappiness and mistrust of big businesses. It has been a policy pledge gaining popularity with the public.
Redwood said the British public were always against privatisation – but loved the outcome.
“We need to tell people nationalisation is a bad idea. It is bad for customers, taxpayers and the economy,” he said.
“Should we privatise more? Of course we should. The magic ingredient is competition, it is choice.”
Productivity increase
Tony Ballance, director of strategy and regulation at Severn Trent Water, said that since the organisation had been privatised it had seen a 64% increase in productivity, a 40-fold increase in quality and five-fold increase in reliability.
“There is a good deal of cynicism towards private business generally,” he said. “People are suspicious about the motivations private business has. It is absolutely clear that those of us who work for regulated monopolies have to work really hard.”
Balance said that, where competition could be made to be practical, you should have it; otherwise there should be strong and effective regulation.
He said there needed to be role models for responsible capitalism, with rewards linked to performance. Paying the right level of tax and sustainable dividends “should all be watchwords in the private sector.”
Penrose said that there needed to be new ways of looking at privatisation, such as Open Access Rail where different operators can run on the same track.
“It gives passengers a choice – people love it,” he said. “That’s the kind of thing the Conservative Party should put forward for utilities.
“As a party, we cannot just point out that Corbyn is wrong; we need to explain what we would do instead.”
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