Privatization fails over and over in the UK

The Margaret Thatcher Tony Blair privatization plans all sounded so wonderful. Basic services such as public transportation and the mail could be spun off and the free market would save everyone lots of money! Hooray! Except it didn't quite work out that way. Public transportation privatization has been a fiasco and costs to consumers have hardly decreased. As a regular consumer of public transportation in France I'm horrified with the outrageously high costs when I travel to the UK. It's very expensive and the quality is generally sub-standard.

The rail privatization took a hit as another rail operator notified the government that it has had enough. Like many business ideas from the recent past, what sounded impressive during the credit boom suddenly looks like a very bad idea. Politicians such as Blair and "modern" lefties all bought into the idea that government services could become sexy and profitable if only they had a bit of faux capitalism. Only a politician who spent their life working in government could have viewed this as a good idea.

The DfT's financial constraints were exacerbated as National Express announced it will hand back its £1.4bn east coast contract at the end of the year, the second time in three years that a company has bid more than £1bn for the route and then quit after admitting that it could not afford it. GNER gave up its £1.3bn contract in 2006, only for National Express to place a higher bid less than a year later.

The east coast withdrawal marked a new low in the tense relationship between struggling train operators, who are battling to honour expensive contracts signed before the recession, and the transport secretary, Lord Adonis. He warned that National Express would be barred from the rail market amid uproar that the company was preparing to avoid fulfilling its £1.4bn pledge.

In yet another blow, the UK government is now backing down from its privatization of the post office. The government was becoming addicted to the easy money and ignoring the real world results. The post office privatization is thankfully gone though the UK government is now eying some very steep financial hurdles. All of these programs still require money but there's none left. It was all spent bailing out the banks and covering some of the basics. The UK is in the difficult situation of either requiring a new economic surge (not likely) or raising taxes. The government was drunk on credit and the phony economy that they created and now they have to figure out how to survive without either. The Conservatives may be howling but if anything, they would have gone even deeper into credit and privatization. Their strongest selling point today is that they are not Labour.