Monday, October 12, 2009

Gordon can do it, but John?

Pause for a moment, I am going to praise Gordon Brown.

You see he's about to announce a privatisation programme. Yes you read right. Privatisation, eight months out from an election. It is worth around £3 billion of assets in the first phase, but up to £16 billion overall.

What sort of assets? Well it isn't just surplus pockets of land. It include the sort of assets juveniles would call "strategic":
- Channel Tunnel Rail Link (Folkestone to St Pancras);
- Dartford Crossing (the eight lanes of highway crossing the Thames that completes the M25 ring);
- its stake in Urenco (nuclear fuel enrichment company);
- a third of the debt in student loans;
- The Tote (government owned bookmaker).

So yes, you can privatise a road, a major one at that, which has no serious alternative routes for many miles.

The reaction of the other parties? Would that play this against Brown? Well no:
- The Guardian reported a Conservative Party spokesman saying "Given the state the country is in is probably necessary but it is no substitute for a long-term plan to get the country to live within its means";
- Liberal Democrat Treasury Spokesman Vince Cable said "Given the state of the public finances, asset sales, at least in principle, make sense" but he expressed concern about selling land in a depressed market and how badly the government was in getting value from its privatisations.

So in other words all three main political parties support privatisation.

However in New Zealand it can't be so. National ruled it out to get elected, Labour was the nationaliser extraordinaire, and only ACT of the parties in Parliament warms to privatisation (and even then not too loudly).

Now the UK government could sell much more than that list, but the nature of what is on the list is what is positive. Particularly, given my interests, the Dartford Crossing. It's a tolled crossing comprising two 2-lane tunnels for northbound traffic, and a 4-lane bridge southbound, and it is heavily congested (with plans proposed for an additional crossing). Selling it and letting the private sector choose the best way to expand it will demonstrate to the naysayers who think roads can't be privatised.

Imagine, for example, Auckland's Harbour Bridge and approaches privatised (and tolled) so that another crossing could be financed and built.

However we know it wont happen, for now, but it would be nice if the debate could be had without ghosts of Winston Peters and Jim Anderton taking things to the level of the banal ("but it's strategic, what happens if they want to sell it for scrap").

The New Zealand Government has a whole portfolio of SOEs that could and should be sold, easily, without even going near roads, schools, hospitals or dare I say Kiwirail. There is no good reason why Genesis, Meridian and Mighty River Power are in state hands, when Contact and Trustpower are private sector competitors, and most people don't know whether their power company is private or state owned.

It's time to talk about privatisation - if it isn't controversial in the UK, with its plethora of nanny state quangoes and laws, why so in New Zealand?

4 comments:

Anonymous said...

This has nothing to do with this particular post but I was wondering, in a libertarian society what road rules would be in place and if there were rules eg speed limits, how could they possibly be justified under the libertarian banner of no coercion under any circumstances?

libertyscott said...

Property rights: The road owner decides the rules. No road owner will want to own a road where chaos ensues. It is no different from a shopkeeper having rules about not bring in hot drinks, or not smoking etc.

Road owners would be concerned, in particular, with vehicles leaving their property and crashing into that of neighbours for they may fear lawsuits or insurance claims for not taking reasonable steps to avoid vehicles trespassing.

Hope that helps

Anonymous said...

Dunno about these private roads. Imagine the two roads between Auckland and Wellsford owned by the same company. They could charge what they liked and without competition, another route, that would definitely be coercion.

Jeremy Harris said...

I think privatisation in NZ has become a black and white issue... I think if it was done like the Aussies in the 80's by only selling to NZ citizens in small sharemarket releases it would be passable to the great unwashed...