Transcript IGCSE nationalised industries and privatisation

Public and Private Ownership
Ownership
Within a mixed economy:
private and public ownership
exists.
Public Sector
Public Sector
Owned / controlled by central / local
government.
Mainly funded through taxes.
Essential services for good of whole
community.
Profit not usually a major objective.
Other Objectives can be:
Save jobs
Keep prices low
Public Sector
Central Government
This Provides the following
services:
•
•
•
•
Health
Education,
Transport
Defence
Public Sector
Local Government
Local Authorities provides such as:
• Law, order
• Environmental services
• Transport, Communication
Privatisation
The selling of state owned assets
to the private sector, transferring
nationalised industries back into
private ownership.
Policy pursued in recent years in
China although many firms still
partly owned by Government.
Privatisation
Examples of nationalised industries in UK were
(dates show year of privatisation):
British Telecom (1984)
Water Boards (1989)
British Gas (1988)
Electricity Boards (90)
British Airways (1987)
British Coal (1994)
British Steel (1988)
Railtrack (1996).
Now find out anything you can on privatisations that
have occurred in China (Group work 15 minutes activity.
China’s Privatisation
 Nuclear power is still a nationalised industry (Why am I
happy about this?)
 China’s telecom industry has been partially privatised.
 Most banks in China are still state owned.
 Petro China (oil exploration ) is a nationalised industy
still
 Real estate, retailing, textiles-lots of privatisation.
 Manufacturing- lots of privatisation
 Most transport providers are still state owned- Shanghai
metro
 Buses have been privatised mainly
 Government has gained huge revenue from privatisation.
Why are some sectors privatised whilst others are still state
owned?
Privatisation
General Points
In Favour
Against

Increased competition – better
services, prices.

Greater efficiency – firms strive for
maximum profits.
Privatisation
General Points
In Favour

Revenue for government from sale
of assets.
Privatisation
General Points
Against
 Redundancies as firms strive for
maximum profit- so reduce
number of workers.
 Unprofitable but necessary
services not provided (rural bus
services may not be profitable).
Privatisation
General Points
Against

Safety and quality compromised due to competitive
pressures.

Regulation may still be required to protect public
interest.

Now turn this around- what are the benefits of state
owned nationalised industries? make a list
Private Sector
Private sector organisations
owned, controlled by private
individuals eg
Sole traders, partnerships,
limited companies. –Remember
Public Limited companies are in the private
sector!