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Community (Public) Ownership and Privatisation

Profitable Service: Remploy

Public Utility: Gas Board

Accountability to the Community

Multinational Summits and Agreements,
Top-level Decision-taking and Democracy


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Community (Public) Ownership and Privatisation   (Part 2)

Profitable Service: Remploy

Public Utility: Gas Board

Accountability to the Community

Multinational Summits and Agreements,
Top-level Decision-taking and Democracy

Profitable Service: Remploy: Social Benefits and Social Costs

Take REMPLOY, a company which has about 80 factories employing only disabled workers for producing a wide range of quality goods.
  1. Commercial considerations:
    (a) Unprofitable and making losses.
    (b) Subsidised by the community via the government of the day which makes up the losses.
  2. Social benefits:
    (a) Social security benefits saved which would otherwise have had to be paid by the government.
    (b) Income tax received by government from employees.
  3. Overall:
    Social benefits greater than the government's subsidy. In other words, a profitable operation from the point of view of the community as a whole.
  4. Add:
    Not quantified or included so far is the impact of paid employment on disabled employees who now see themselves as useful members of society doing needed and worth-while work.

In other words, the profitability of community-owned enterprises, like that of privately-owned enterprises, can only be assessed by including social benefits and social costs in Profit and Loss statements.

Similarly, concerning 'privatisation', consider the arguments about what happened, and is happening, within the European Union to the British National Health Service and the German Gesundheitswesen. 'Unable to support financially' is not a valid argument for privatising unless social benefits and social costs are included in the cost-benefit analysis.

Public Utility: Gas Board: Price Increases above Inflation: Protecting the Community from being Exploited

One reason for taking an industry into community ownership is to protect the community from being exploited.

But what if the government of the day has other ideas?

In the early eighties the British Gas Board was increasing its prices to domestic consumers each year by a substantial amount above the rate of inflation, apparently in line with government instructions. For the financial year to March 1983, for example, its profits were enormous. On a conventional historic-cost accounting basis, its profits were probably £1.6 billion. British Gas depressed profit figures by using a current-cost accounting basis, to a current-cost profit of £660 million after paying a gas levy to the government of £530 million.

Here a government apparently instructed a community-owned national industry to increase its prices each year substantially above inflation, and then collected a good deal of the resulting profits by means of a levy. The government was in effect using British Gas to collect a special tax from the Gas Board's customers.

The government was able to do so because gas was then much cheaper than electricity and provided the population with an alternative and comparatively cheap form of energy, and British Gas increased its prices to near the electricity costs. The resulting profits were enormous.

To me it seems that this is an example of exploitation of consumers by misuse of monopoly power by a government.

Accountability to the Community

Planning and control of activities and performance are matters in which community-owned enterprises do not differ from other enterprises.

Directors and chief executives of community-owned enterprises or industries are appointed by the government of the day.

The Board of Directors is responsible for the day-to-day operation of the enterprise or industry it controls, and the directors are generally accountable for the quality of their work to those who appointed them.

The Minister who appoints them lays down the overall policy which they need to adhere to, and in the end have to adhere to, if they wish to be reappointed. In this way the Board's role becomes that of putting into effect the politically biased policies of the government of the day and so the government's policies are imposed on the community-owned enterprise or industry.

In practice the Minister can blame the board for the resulting problems but they are unlikely to be able to criticise the policies of the government which appointed them.

It might be argued that the appointees are responsible through those ministers who appointed them, and thus through the government of the day, to the policy-making delegate body such as Parliament.

But this method of accountability is so remote from what is actually happening in the enterprise, and so distant from the voters, that it does not work effectively.

Multinational Summits and Agreements, Top-level Decision-taking and Democracy

Hence the community's (the public's) concern when the bureaucracy (politicians, officials and managers) attempt to move decision-taking upwards and further away from citizens (voters), distancing the decision-taking further away from the population or the workforce.

That is, when politicians, officials or managers attempt to bypass or negate democratic decision-taking so as to replace it with more remote centralised decision-taking, with greater authoritarianism.

A process which appears to be taking place in the European Union at the present time, with politicians apparently discouraging or bypassing the holding of national referendums about proposed changes to top level decision-taking.

Short Descriptions

See reports
Community and Public Ownership
Multinational Summits and Agreements, Top-level Decision-taking and Democracy
by Manfred Davidmann,

Title   Description
Multinational Summits and Agreements, Top-level Decision-taking and Democracy     Describes how secretive top-level multinational meetings and agreements (such as GATT and MAI) negate democratic government and decision-taking. Shows that publicity about what is being planned or taking place is an effective deterrent.
Community and Public Ownership   This report objectively evaluates community ownership and reviews the reasons both for nationalising and for privatising. Performance, control and accountability of community-owned enterprises and industries are discussed. Points made are illustrated by a number of striking case-studies.
Included in the report are these case-studies:

Rescuing an Important Industry   Rolls-Royce   Cars, aero-engines
Imposing the Will of the Government   Coal Board   Closing-down an industry
Profitable Service   Remploy   Social benefits and social costs
Benevolent Monopoly   British Oxygen   Controlling monopoly power
Price Increases above Inflation   Gas Board   Public utility
Unprofitable Industry   British Leyland   Making cars

Manfred Davidmann

Manfred Davidmann is an internationally well-known and respected scientist and author of a number of books and reports which have had and are having considerable impact. His work usually breaks new ground and opens up new understanding and is written in meaningful and easily understood language. Outstanding is that his work is generally accepted as factual, objective and unbiased.

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