It seems obvious that behaviour needs to be managed. After all, we can’t have people or organisations behaving badly, can we? For this, we need laws and policing. Of course, there may well be needs to control people’s law-abiding behaviour, and in the UK we’ve seen plenty of examples of this. Some notable examples:
We might want to avoid over-spending on healthcare for avoidable threats. A good example is smoking. In earlier times there were even health claims made for tobacco products, but latterly we’ve come to realise that smoking causes cancers – so, it’s fairly easy to see that a programme of measures to educate and control people’s behaviour may be needed – even from a straightforward fiscal perspective. We’ve seen efforts in education, such as health warnings on cigarette packets and Government sponsored advertising; taxation, making it more expensive to smoke; and so on. When government wanted to spend less maintaining its stock of social housing, it bought in the ‘right to buy’ scheme. This might be a cynical viewpoint; after all, the selling point seems to be a social benefit, but when you look at the finances, the onus for repair has shifted from councils to the new owners of the same properties. As private ownership has increased, the stock of available social housing has shrunk. But my point here isn’t whether government was right or wrong, but that we the public can be, and are, manipulated for the ends of government.
A common maxim is that companies exist to maximise the return to their shareholders. But is this right? If I establish a business to provide a service, isn’t the purpose of the business to provide that service, to make a reasonable profit and to provide reasonably paid employment for its employees? Well, a principled and private organisation might be just like that, but is the same true of an organisation that is owned by a group of shareholders? Of course, the answer isn’t simple, is it? Take some simple decisions that a brewery might take, for example. If the business buys a couple of pubs, then it can sell its own beer, thus increasing turnover, the employee base and probably profitability. If it then needs some money to invest in buying more pubs then it can turn to the market and sell shares in the business. If, subsequently, it lowers the quality of the beer that it sells, then beer sales become more profitable. Of course this comes with risks – not least that competing breweries may take part of the market share if their beers are better. But the accountant’s argument is a strong one and we’re all aware of examples of corporate behaviour that seems entirely wrong, even though it’s probably profitable.
Whole industries need to be controlled as well. Maybe an example is needed here. Button back your ears; this may well be a bit of a ride.
Once, the UK had a nationalised railway industry (The first railway company was the Stockton and Darlington Railway, which opened in 1825, but the industry as a whole was private and regionalised), but government didn’t have control of investment, or other business decisions. Laws were introduced that allowed the railway companies to compulsorily purchase land in order to expand the rail service. In 1948, the railway was nationalised and British Railways (later British Rail) was formed. Later, with the introduction of the motor car, it looked as though the scope of the UK’s railway was limited. So, in the 1960’s very many services were cut; stations were closed and so on. This reduction wasn’t reversible; yet now I think it’s regretted. Then, in 1994, British Rail – the nationalised industry – was returned to private hands. Railtrack, the failed private company was replaced by Network Rail in 2002. Network Rail was established as a company limited by guarantee and owned the country’s railway infrastructure; a set of franchisees, or Train Operating Companies operates the passenger trains, which are leased from their owners, Rolling Stock Companies who typically undertake major refurbishments and upgrades. It’s all very complex. Government established a Regulator to oversee the whole shooting match, supported by a raft of legislation, intended to police everything. Indeed, the Regulator’s duties include checking that the involved organisations are keeping to the law and abiding by the set of promises made when they won their franchises or gained their market positions. It also incorporates the Rail Accident Investigations Board. So, here we have a suite of items needed for control – law, regulation, a regulator operating organisations; a set of infrastructure, and vehicles to run on it. All of this is overseen by a Government department (the Department for Transport), led by The Rt Hon Heidi Alexander MP, who is the Secretary of State for Transport in the UK. By the way, she is responsible for the overall strategic direction of the department, which manages English transport networks and specific national transport matters (so not just the railway). So, there we have it– the suite of businesses and experts who run the UK’s railway network; and government is certainly involved.