The pain and joy of the privatization of British state owned enterprises The wave of reform led by

Mondo Finance Updated on 2024-01-29

Britain, as an old capitalist country, has also undergone drastic reforms of state-owned enterprises!But unlike other countries, the UK has been more radical in its reforms, privatizing state-owned enterprises altogether.

Britain underwent a massive nationalization reform before "Thatcherism" prevailed. This reform involves:Banking, aviation, transportation, electric power, military industryand other key sectors, with the goal of consolidating these enterprises into large nationalized groups. However, this has also led to the so-called "British disease" such as the lack of separation between government and business, inefficiency, crowding out too much money and resources, and accelerating inflation.

At the end of the 70s of the 20th century, the problem of state-owned enterprises in Britain became increasingly serious, which prompted the first to start thinking about reforming state-owned enterprises. Margaret Thatcher, as the leader of the Conservative Party, after winning in **, began to pushPrivatization of inefficient state-owned enterprises。Her strategy was to carefully sell off state-owned shares to employees, making them supporters rather than opponents of privatization. This strategy has been successful with small state-owned freight companies.

In 1983, Margaret Thatcher began a large-scale campaign against the country's major countriesPrivatization of state-owned enterprises and monopolies。With the exception of the railway and postal systems, state-owned enterprises (SOEs) in almost all key sectors have been targeted for privatization. Of these, BT became the main target of the reforms, and by marketing its ** to 2 million Britons in three years, the UK ** successfully raised funds from **36.368.5 billion pounds, has become a "model project" for the reform of British-style state-owned enterprises.

Through privatization, the UK has cut more than 700,000 state-owned enterprise jobs, the direct revenue of the treasury has reached 20 billion pounds, and more than 20% of the total population of the United Kingdom has become the original state-owned enterprise shareholders after privatization. This reform strategy has proven to be successful, significantly improving the operational efficiency of the business and leading to an increase in investment and operational efficiency. Some long-term loss-making state-owned enterprises such as:British Steel, British Airways, British WaterAnd so on also realizedTurn losses into profits

However, there are still some problems with the privatization of state-owned enterprises.

First of all,It is closely related to the prosperity of the capital market。Only when the ** is prosperous and people see that the ** of state-owned enterprises spin-off or listed issuance can make money and make a lot of money, they are willing to become small shareholders of these **. However, the global stock market crash of 1987 made the "Thatcherist" privatization strategy lose its original appeal.

Secondly,The privatization of state-owned enterprises is also undertaken with state-owned enterprisesFunctions are closely related。The privatization reform of some public service state-owned enterprises has not improved the quality of services, but has led to the failure of the public to realize the best preferential treatment expected by the public. British Rail, for example, was split into dozens of private or joint-stock companies, and the privatized railway companies were pressured by shareholders to reduce their investment in maintenance and construction, resulting in a sharp increase in railway accidents.

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Finally, determining the right time for the privatization of SOEs is also a challenge. Royal Mail, for example, has seen a significant increase in a short period of time after listing, but this does not guarantee that all SOEs will be able to achieve such success after privatisation. After the Royal Bank of Scotland was bailed out in 2008, it was given to the public at a low price by Cameron in 2015, but this was a 34% discount from the original "bailout price", which means that British taxpayers lost 1.1 billion pounds in the process.

Overall, the privatization of state-owned enterprises in the UK is fraught with challenges and opportunities. Although the privatization strategy has achieved remarkable results in improving corporate efficiency and promoting economic growth, how to grasp the timing and how to deal with the transformation of state-owned enterprises is still a huge test for the first country.

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