Privatisation
- Created by: audreyhorne123
- Created on: 11-01-20 14:05
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- Privatisation
- Transfer of assets from public to private sector
- UK has had a large reduction in the size of the public sector= only 2% GDP
- Good for the economy
- Increased efficiency and improve economic welfare
- Reduces trade union power
- Lack of political interference
- Important supply side policy designed to drive competition and improve productive and dynamic efficiency
- Revenue stream for Government from selling assets
- Bad for the economy
- Private companies want to make profits vs the Government wanting to maximise consumer welfare= not good for consumers
- Natural monopoly may become a private monopoly- exploit consumers and requires Government regulation
- Government misses out on potential dividends which instead go to wealthy shareholders
- Can cause fragmentation of monopolies- can be very damaging eg Hatfield rail crash
- May focus on short term to please shareholders
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