Essay: ‘Private Island. Why Britain belongs to someone else.’

‘Private Island. Why Britain belongs to someone else.’ is a recent book of 2015, that offers an opportunity to examine and analyse the history and results of privatisation in the UK, which can obviously be deduced from the title. The book is written by a famous British journalist and novelist, who worked for the Guardian, the independent newspaper, from 1994 to 2006. Last year James Meek won an Orwell Prize for the exceptional quality literature work related to politics with the above-named book. It is a significantly informative work for the whole UK society, as it would open reader’s eyes to the specific consequences of privatisation’s issues in Britain. The composition ‘Private Island’ is a set of journalistic notes and short novels about the effects of privatisation of distinct state industrial enterprises. The author of it relied on personal thoughts, dialogues with those who were ‘somehow influenced by the sell-offs’ people and traveller’s notes. The book is divided into 7 chapters, each of which represents the consequences of different privatised industries, namely mail, railways, water, electricity, NHS and homes.
The book starts with a description of James Meek’s trip to Russia, where soon after the dissolution of USSR privatisation started. This made the author interested what has been done in the UK in terms of this issue. After the elections of 1983, Margaret Thatcher started the politics of neoliberalism, which involved privatisation. Political tactics generally targeted on the development of economic and financial stability along with the incentive of price-decreasing of consumer goods for the regular customers. Although it is extremely doubtful to say that generally privatisation of main British natural monopolies is harmful to the UK society, James Meek attempts to explain the negative sides of privatisation. It can be clearly seen from the introduction of the book about the author’s political views. He might criticise Thatcher’s politics of neoliberalism, being a socio-democratic and thinking about privatisation and the market economy from his political point of view. According to Erickson et al (2009, p.59), the problem of neoliberal politics is the situation of income gap that occurs when the profit yielded from privatisation comes to nation’s wealth and help businesses increase their effectiveness. This is one of the points that was not examined by James Meek.
The consequences of selling-off the British Rail, the national railways company, are discussed in the second episode of the book. James Meek states that the initial price for modernisation of British railways was largely exceeded, from supposed 1.5 billion pounds to actual 9. Although the company was no more state-owned, the government still subsidised its project’s from the money collected from taxes. Surprisingly, a plan of railways improvement by instaling ‘the moving blocks’ eventually failed due to the incompetency of the top management. Even Margaret Thatcher thought that privatisation of British Rail went ‘too far’, supporting the Meek’s point of the management’s failure (Whelan, M., 2014). However the embezzlement of taxpayer’s money was not the only one problem, associated with the effects of British Rail privatisation. What the author did not include in the discussion is that the prices for tickets on WCML, the main UK railways, experienced a sharp rise right after the above-named process happened (Thomson R., Macintyre D., 1993). Furthermore, Smith S. (2012) believes that incredible crashes, that took place on the Great Western Main Line by 1999, which killed 38 people and injured over 600, are still the results of unprofessional management and in turn of privatisation.
The third chapter of the book describes the situation, where privatised water-supply firm Severn Trent, gathering massive profits, has not invested in an emergency safety against floods. This action made the Britain be out of water for ten days. It can be argued, that even if the privatisation stimulates competition and increases the wealth of nation by increasing the nation’s GDP, in this particular case it showed that public service has to be in government’s ownership in order to guarantee inhabitant’s stability. It would be wise to mention Vladimir Putin’s reply during the 2014 press-conference on journalist’s question about the privatisation of Russia’s national gas firm, Gazprom. He told that privatisation increases the liquidity of the firm in the outer markets, attracts foreign investments and credits and allows a firm to start their investment projects, however, to maintain the control of the most significant government’s resources, it would be definitely right to hold the controlling interest in the government’s hands. And this is particularly the case for British water-supply company. If the government had a control over such firm, it would never allow occurred situation to happen.
James Meek introduced the story of privatised electricity in chapter four of the book. He stated that one of the biggest suppliers of electricity is now mainly owned by France. The author treats the foreign ownership as a problem and loss of state resources for regular citizens, but it seems to make no difference for them if the conditions of service would be improved. In such claim, James Meek represents himself from the patriotic side, rather than being impersonal and precise. However, once again, if The Thatcher’s aim of privatisation was to improve consumer’s quality of life by reducing bills and improving quality of public services due to the appearance of possible competition, it mainly failed, as now customers do not recognise whether they pay an appropriate amount of money for electricity bills, as it is set by the monopolistic power of the owners. One more point that might support Meek’s reasoning is that according to Stanlake and Grant (2000, pp. 200-205), when there are few firms, operating in the market, in other words, oligopoly, they might collude by increasing prices and not competing with each other in order to get larger profits each, rather than compete for a particular customer by improving the quality of the service. This could definitely be a huge disadvantage for customers and without a doubt a fail of privatisation for the government itself.
The author made an effort, discussing the stories about negative consequences of privatisation, however, he did not represent a few extremely useful cases. One egregious example of privatisation failure that was not included in the list of privatised firms of James Meek is the sell-off of British Steel. Martin S. and Parker D. (2003, p.29) stated that while Ian MacGregor introduced new financial aims for the company in 1980, it experienced a financial ‘renaissance’, by being one of the most successful steel production firms in the world. However, after the privatisation the company began losing its productivity and profitability. The amount of salary per employee fell from 26.5$ in 1986 to 22.12$ in 1991 (Parker D., Wu H. L., 1998, p.39). The figures provided by Parker D. and Wu H.L. (1998) fully support the loss in efficiency of British Steal since privatisation was introduced. The researchers concluded ‘In terms of relative technical efficiency, by 1991 the UK steel industry ranked low’ (ibid). This supports Meek’s argument about the disadvantages of privatisation.
On the contrary, even though Meek’s findings of drawbacks of British privatisation are compelling, he did not demonstrate the other side of above-named process, being the positive effects of selling-off for UK citizens. Most of the privatised firms were successfully boosted in their labour productivity, as it was suggested by Margaret Thatcher (Martin S., Parker D., 2003, p.85). Moreover, Kirby H. (2013) states that some firms experienced an increase in their prices for shares, such as British Gas and British Telecom, which made them much more attractive for investments and, thus, opened for innovations. Additionally, BT, being a British telecommunicational enterprise, speeded up the process of line installation from 6 months to just 15 days, which significantly improved the quality of life for those, who wish to use their technologies (ibid).
In conclusion, ‘Private Island’ is a great piece of work for those, who would like to go in depth in analysing the failures of privatised public enterprises and who is interested in the mechanics of selling-offs after the politics of Margaret Thatcher started. James Meek provided significant evidence of fiascos by interviewing top managers of the companies and personally being a witness of the effects of those. However, Meek’s interpretation sometimes overlooks much of the political background, making the book slightly bias. Additionally, the creator of the book does not cover the flip side of privatisation, the advantages of it. Nevertheless, it definitely deserves attention, as it is a perfectly written book with a great deal of research conducted and an interesting accessible information provided.