95/01111 Whose utility: The social impact of public utility privatisation and regulation in Britain

Abstract

Privatisation of gas, electricity and water services in Britain has been predicated on an explicit belief that ordinary consumers would be amongst the major beneficiaries of the programme to restructure the utility industries. Along with the promise of reduced prices and improved standards of service, domestic users of public utility services were to be given new rights in relation to consumer sovereignty and choice. Has the delivery of the utility privatisation programme thus far, matched these expectations?This study is the first substantive attempt to address the question of how domestic consumers have fared under the structure of public utility privatisation and regulation in Britain. As well as containing a detailed examination of the impact of the privatisation on domestic consumers generally, the study gives considerable attention to how low income households have been affected. The research is based on a comprehensive survey of primary and secondary data sources and on extensive fieldwork.The first part of the thesis establishes the background for evaluating the consequences of privatisation. It includes a review of the history of the utility privatisation programme, which documents for the first time, the community and consumer sector campaign to influence the privatisation legislation; an analysis of the social and economic characteristics of energy and water services, which distinguish them from other commodity areas in the market economy; and a critical examination of the British model of public utility regulation.In part two, the social consequences of utility privatisation are considered at two levels.First, major aspects of the privatisation settlement are examined -asset sales, share ownership, company profits and employment -and it is concluded that these have resulted in regressive distributional outcomes. Second, key areas of the utility companies' relationship with domestic consumers are assessed -i.e. prices, debt and disconnection, standards of service and consumer protection, and consumer representation. It is found that although the outcomes for consumers in general have 3 been mixed, low income consumers in particular have been adversely affected. The intervention of the independent regulatory bodies has been an instrumental factor in some areas of service provision.The thesis concludes with a discussion of the limitations in the British model of privatisation and regulation, and argues that the paradigm of consumerism is inappropriate to the domain of public utility services. CONTENTS