New Working Paper: Privatisation, Inequality and Poverty in the UK: Briefing prepared for UN Rapporteur on extreme poverty and human rights

Since the late 1980s, successive governments have increased the role of the private sector in the provision of basic services in the UK, particularly in England. In addition, shifting global trends have led to financial innovation, providing more imaginative methods of sweating capital assets and extracting revenue.

As a result, the provision of services to meet fundamental human needs has become a source of profit for international financiers, diverting revenue streams from potentially progressive provision and infrastructure investment. Households, many of which struggle to make ends meet, are in some cases financing interest and dividend payments to the world’s richest via their consumption of basic essentials (here, water, energy and local buses). Privatisation has been driven by an ideological attachment to the supposed efficiency of private markets. In reality, the result has been upward pressure on prices and restructuring of services, in ways that disadvantage the poorest in society, contributing to inequality, both in the UK and globally. In addition, policies are contributing to a culture of individual responsibility for disadvantage and deprivation, thus weakening the scope for a coherent approach to social policy. These privatised structures have promoted the needs of investors, and the “market”, over the population.

This paper shows that where essential and monopolistic public services are provided by private investors, there are inevitable tensions between the priorities of shareholders and the needs of society. Social provision within the water, electricity and public transport sectors fails to reach millions of households for whom many basic services are unaffordable (or non-existent in the case of transport). Furthermore, social policy tends to focus on affordability and consumption while the regressive structures which underpin these outcomes are often neglected.

Key words: privatisation; inequality; water; energy; transport

Dr Kate Bayliss is a Senior Research Fellow, working on the Living Well Within Limits Project at University of Leeds. She is also a Research Associate at SOAS, University of London. She has worked extensively on effects of privatisation and the provision of basic services in the UK and in the Global South.

Dr Giulio Mattioli is Research Fellow at the Department of Transport Planning at the TU Dortmund University, and Visiting Research Fellow at the University of Leeds. He is on the advisory board for the Living Well Within Limits Project. He has worked extensively on transport poverty and affordability in the UK.

Read the paper here.