Privatisation
The rationale of privatisation gives deregulation; the economic freedom – not government controlled; allegedly increases efficiency, (conversely the rail industry counter argues this point); creating or unleashing entrepreneurial skills; removing bureaucracy; creating greater wealth and jobs; which gives consumers a greater choice and the share owing democracy ensues. During the period 1979 to 1988 increases in share ownership went up by 300%.
There are a number of pitfalls in deregulation and privatisation in as much as they create a private sector monopoly; prices may increase; social considerations are ignored; the possibility of oversubscriptions on the sale of shares – for example Halifax BS where control of the company’s assets are not assured; and the quality, quantity, adherence to fair competition and monopoly policies can be ‘misinterpreted’.
Changes in Transport
During the deregulation period discussed above, we saw that many industries were sold to private companies or consortium’s. This is also true of the transport industry. The above railway’s example supports this point. Other transport sectors were also affected. The structure of the British transport industry has changed considerably since 1945 (Gubbins, 2004). Therefore the start of regulation in 1947 which then moved onto nationalise all forms of transport. This resulted in the denationalisation of the industry. One example is the Transport Act of 1953 which ended, in theory, the state ownership of the road haulage business. Therefore one of the aims of nationalisation was the full integration of state transport. Without complete state control, this was doomed to failure. The main result of this denationalisation was to increase competition both within single modes of transportation and against other methods. For example, one road haulage firms aggressive strategy against another and the development of modal competition such as between road and rail. An important note is that despite the Labour manifesto claim of 1997 that more social transport should be made available. As a result of this, we see examples of deregulation and the increase in competition.
The deregulation of industry opened up new opportunities. Deregulation allowed more competition between individual transport providers and between different modes. This led to innovation and creative thinking in the development of competitive advantage methods. Therefore the role of the empowered customer became more critical, and the supply chain had to respond to the needs of customers and consumers. As a result, deregulation allowed the customer to push for competitive rates and added value services which have had a significant impact on the supply chain.
