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March 29, 2012 9:28 AM   Subscribe

A short history of privatisation in the UK: 1979-2012
posted by fearfulsymmetry (46 comments total) 10 users marked this as a favorite

 
One good way to get a monk on is to go to the Wikipedia article List of Privatisations and scroll down to the UK.
posted by Hartster at 9:36 AM on March 29, 2012 [4 favorites]


*googles "get a monk on", is still confused*
posted by BitterOldPunk at 9:43 AM on March 29, 2012 [1 favorite]


My monks been on since Thatcher took over the monastery
posted by MrMerlot at 9:48 AM on March 29, 2012


Get this kind of Monk on: Oh, How to Do Now?
posted by scruss at 9:55 AM on March 29, 2012


Am I the only one hoping that getting a monk on is not the same as bashing the bishop?
posted by MuffinMan at 9:57 AM on March 29, 2012


v. (to have a) monk on: to be grumpy, to have a sulky face
posted by Acey at 10:03 AM on March 29, 2012 [2 favorites]


If only this was about the marketplace, about the power of people to choose, and, ultimately, forsake those companies which screw us over. But there can be no forsaking of the hugely overpriced trains, nor the profit scalping water companies, nor can I choose whether my hospital accepts PFI, or if my GP contracts out services to his own company. All these things are not of the marketplace, and will not experience its (sometimes) beneficial power. Instead this is monopoly capitalism, with private profit, and public protection of those profits. Look at how folk have shied away from buses outside of London, where the choice between a poor private "service" and driving is easy to make. Where there is no market, privatization is little more than a scam, a redistribution of wealth from the average citizen to the rich. The wealthy set their envious eyes on public goods, and we were foolish enough to let them have them.
posted by Jehan at 10:34 AM on March 29, 2012 [17 favorites]


Someone please explain to me "profit scalping water companies". The government told them to make massive investment in the network for health and safety reasons, they did. They have to get paid for that. The returns are in-line with what they are allowed. Its a regulated industry
posted by JPD at 10:47 AM on March 29, 2012


Someone please explain to me "profit scalping water companies". The government told them to make massive investment in the network for health and safety reasons, they did. They have to get paid for that. The returns are in-line with what they are allowed. Its a regulated industry
posted by JPD at 1:47 PM on March 29 [+] [!]


What he means is that instead of having a public utility whose costs are supported by progressive taxation. You have a regulated monopoly with guaranteed profits and funded largely by fees for service so that me and, say, warren buffet pay the same amount for the same glass of water.
posted by ennui.bz at 11:01 AM on March 29, 2012


Fuel prices go up when wholesale costs go up.
Fuel prices remain up when wholesale costs go down.

Even Gazprom has more integrity than the fuel cartels of the privatised UK.
posted by davemee at 11:01 AM on March 29, 2012


When I was a kid, the British rail system was a byword for efficiency and service. Too bad privatization ruined that.

The UK is still subsidizing rail - only now it's expensive rail with the cream skimmed off for profits.
posted by jb at 11:05 AM on March 29, 2012


What he means is that instead of having a public utility whose costs are supported by progressive taxation.

I hope not, because that's not how the nationalized utilities in the UK worked.
posted by JPD at 11:08 AM on March 29, 2012


Nor to my knowledge do they work like that in most of the developed world.
posted by JPD at 11:09 AM on March 29, 2012


Profit margins in the English and Welsh water companies did rise enormously post-privatisation, and were much higher than those of water suppliers in comparable nations (there was a fairly well-known report done by PSIRU in 2001 [.doc file, also here as a web page]).
posted by Abiezer at 11:18 AM on March 29, 2012 [2 favorites]


Nor to my knowledge do they work like that in most of the developed world.
posted by JPD at 2:09 PM on March 29 [+] [!]


One of the reasons why water infrastructure in the US is in such ba d shape is that it is riding on public investments made up to 100 years ago. But there are implicit subsidies even in nominally fee for service municipal water utilities as well. But, all things being equal, there's not a huge difference between municipal or private market bonds riding on user fees... which is why financing the massive investment needed in the US results in eyepopping fee increases.

Either way, investment in a service which is a natural monopoly based on per-use fees is just another way to shift to a flat tax funding model rather a progressive tax model. In the current bond markets i doubt you could make any argument that using the private capital markets does any public good...
posted by ennui.bz at 11:21 AM on March 29, 2012


Profit margins in the English and Welsh water companies did rise enormously post-privatisation, and were much higher than those of water suppliers in comparable nations (there was a fairly well-known report done by PSIRU in 2001 [.doc file, also here as a web page]).

Ugh. 1) Profit margins don't matter for capital intensive businesses. Return on Capital does. That's the number that is regulated ignore margins.
2) Profit margins across countries are even less meaningful. Like look at how much lower the french margins are - that's because the business model of the french operators is completely different. Same with AgBar. they are just service providers. Actually Veolia, Suez, and SAUR are widely suspected of massively overcharging in France, but their margins are low. The french municipal water industry is famous as a cesspool of corruption.
3) Everyone talks about the '01 report - well yes OFWAT got hoodwinked in that time period on Capex. So in the next review period the absolutely hammered the water companies. in '03 and '04 you could buy them for less then the value of their assets. People thought United Utilities was going to go bankrupt.

Either way, investment in a service which is a natural monopoly based on per-use fees is just another way to shift to a flat tax funding model rather a progressive tax model.

But no one does that - even the nationalized utilities, so you can't complain that privatization shifts that.

One of the reasons why water infrastructure in the US is in such ba d shape is that it is riding on public investments made up to 100 years ago. But there are implicit subsidies even in nominally fee for service municipal water utilities as well. But, all things being equal, there's not a huge difference between municipal or private market bonds riding on user fees... which is why financing the massive investment needed in the US results in eyepopping fee increases.

Yes this is what has happened in the UK, but do the math on what the higher cost of capital for private water companies is versus the treasuries cost of capital and that's how much this costs consumers. Its meaningful, and an argument against privatization, but its probably only about 2%-3% different.
posted by JPD at 11:33 AM on March 29, 2012


Someone please explain to me "profit scalping water companies". The government told them to make massive investment in the network for health and safety reasons, they did. They have to get paid for that. The returns are in-line with what they are allowed. Its a regulated industry

The government sold those companies a monopoly, not a business as such. Water companies make significant profits from a monopoly situation. There's no market, and so no chance of price improvement through competition. The profits are still high after paying any debt they may have incurred, and that is money paid out to shareholders. It a funnel through which money is redistributed from every householder and business to a smaller group of shareholders. High water prices are an unnecessary burden on the economy. There is no need for water prices to be any higher than the cost of infrastructure, management, and maintenance. There is no benefit for it being held privately, and as a public good should not be. The bare fact that they are highly regulated is an admission of there being no market and yet a huge public interest in their business.

It is a scam.
posted by Jehan at 11:34 AM on March 29, 2012 [7 favorites]


its a regulated monopoly. they don't just set prices where ever they want. The profits aren't high. The regulated return on equity is something like 9%.

There is no need for water prices to be any higher than the cost of infrastructure, management, and maintenance. You are aware that this is actually exactly how prices are set yes? Or is capital free in your world?
posted by JPD at 11:39 AM on March 29, 2012


The regulated return on equity is something like 9%.

Isn't that rather high? Also, don't the private companies find ways to pay regular workers less (by union busting), but pay management more (they have to attract the top performers!!)?
posted by Chuckles at 11:43 AM on March 29, 2012 [1 favorite]


You are aware that this is actually exactly how prices are set yes? Or is capital free in your world?

Do they make a profit over and above the need to repay capital and interest? I mean, do they actually pay out money to their shareholders?
posted by Jehan at 11:44 AM on March 29, 2012


BitterOldPunk: "*googles "get a monk on", is still confused*"

Is this something I'd need to be a Shaloub to understand?
posted by schmod at 12:25 PM on March 29, 2012 [1 favorite]


Isn't that rather high?
No. The average return on equity over time in the developed markets is something around 10% or 11%. OFWAT does a ton of work on what the cost of equity is - you can probably poke holes in it +/- 1% or so. You should go take a look at it if this is something that interests you. I bet you could even call someone at OFWAT and have them help you understand the figures.

Do they make a profit over and above the need to repay capital and interest?
If you believe the cost of equity capital is 9% no. Paying dividends to shareholders represents paying capital costs. Equity has a cost.

Now this isn't to say there isn't a real critique here that can be made of the conservative view that privatization is always better. Ennui.bz is actually pretty much on. The argument is that while a private entity has a higher cost of capital than a state-owned one, the much greater profit motive means that the assets will be run better and/or at lower costs, more than compensating for the higher capital costs. I think the data is not clear as the whether this is true or not. I actually suspect it isn't true.

There is also another more nuanced critiqued that basically shows SOE's that don't earn enough from their services to reinvest in their assets is actually a really powerful way to stimulate economic growth in sectors that benefit from those inputs. An example of this would be France where EdF's tariffs don't come close to covering the capital costs of their reactors, but provide very cheap electricity to industry.
posted by JPD at 1:22 PM on March 29, 2012


If you believe the cost of equity capital is 9% no. Paying dividends to shareholders represents paying capital costs. Equity has a cost.

Why is capital raised through shareholders for these companies? I appreciate that they need to raise capital, and must pay it back with interest, but why must it be raised in such a way that transfers the ownership of the company into private hands? A loan can be paid back in the same manner without a long term need to continue paying dividends. A loan might expire after 20 years; how long til we no longer have to pay shareholders? Or is this just a permanent guaranteed profit for them?
posted by Jehan at 1:44 PM on March 29, 2012 [2 favorites]


I would argue that by making profit the primary motive and regulating prices, it creates the incentive to decrease costs at the expense of service. It encourages my power company, for example, to give me the worst electricity service that they think they can get away with. They have a hard time increasing prices and I can't just get my electricity from another source (yet) so I have to count on the regulators to insure that I get an adequate level of service.

I would rather that, with utilities, things like safety and quality be incentivised directly rather than count on it being a side-effect of profit.
posted by VTX at 1:49 PM on March 29, 2012 [2 favorites]


Privatisation here in Victoria Australia has essentially meant selling as many stateowned assets to the Singaporegovernment or French multinationals. It's a disaster, no benifits to the people who once owned the asset. Efficiency? Bullshit, cost reduction through service degredation.
posted by mattoxic at 2:01 PM on March 29, 2012 [2 favorites]


I stated the argument for privatization above. I am totally unconvinced its a cheaper option, but I also don't get in a moral panic about it. As long as your regulator is strong, the equity holders actually have very very little to do with running the business. In the case of the UK pretty much every facet of the business - including costs - is determined by the regulator. The company is allowed to capture a portion of whatever they can outperform by for a five year time period, and then everything is reset. The capital holders are very very passive by definition.

The UK water companies had another complication which was that the network was massively underinvested in, water quality in UK estuaries was way out of EU norms. The government either had to inject massive amounts of its own capital or they could privatize it and allow private capital to recapitalize the business and basically break even economically. Unless the government wanted to make the water assets a general obligation of the government tho, it does need to be capitalized with some equity. You can't capitalize something 100% with debt. The debt holders won't let you.

Or put this way -

If your argument is your prices went up too much - well they were going to go up no matter what. The UK had to spend a ton of money to get the network up to standard. This was sort of amplified by the way the UK originally calculated the asset bases that were sold off - they way understated them because properly accounting for them would have meant immediate huge increases in water tariffs. Instead they bet on them slowly coming up over time as old equipment wore out and was replaced with new.

If you think the Private owners make too much money - I can see an argument that executive comp shouldn't be an allowed expense (At least about a very low level) - but beyond that its hard to see that there is really any rents being extracted by the owners (There is some cap structure arbitrage going on that should be more aggressively cracked down on - but to be honest I'm not up to speed on that at the moment).

If you are fundamentally opposed to privatization because you don't think its a cheaper solution, I think that's a fine argument.

Personally I think mutual ownership of the assets with some sort of profit motivated service provider is the best option, but its really really really hard to implement and keep all of the incentives aligned correctly.

I would rather that, with utilities, things like safety and quality be incentivised directly rather than count on it being a side-effect of profit.

IME as an outside observer regulators really really to want to find away to do this. Its just really hard. That said in the US the easiest way for a Utility to totally fuck up its relationship with its regulator is by letting safety and quality become an issue. Especially in states where the PSC is elected.
posted by JPD at 2:04 PM on March 29, 2012 [3 favorites]


A loan can be paid back in the same manner without a long term need to continue paying dividends. A loan might expire after 20 years; how long til we no longer have to pay shareholders? Or is this just a permanent guaranteed profit for them?

What's the difference between a loan and equity? Its all just different points on a continuum of risk. Especially in something like a Water company. The fact its equity means it isn't guaranteed. It also means the equity can't forcibly take the assets if things go bad. You don't have to repay the equity holders, you do have to repay the debt holders.

Don't forget - regulated utilities do go bankrupt.
posted by JPD at 2:11 PM on March 29, 2012


What's the difference between a loan and equity?

Will the shareholders continue to take dividends beyond the time limit that an ordinary loan (either government backed or from a private institution) would have expired? If yes, well then, that's a profit they needn't be taking out of the economy. Like you said, the government had a choice to do something themselves, or even try to innovate a new way of running the water companies, but they didn't. They sold them as a guaranteed profit to whoever had the money to buy.

The fact its equity means it isn't guaranteed. It also means the equity can't forcibly take the assets if things go bad. You don't have to repay the equity holders, you do have to repay the debt holders.

Can we take the assets if things go bad? I mean, I'm pretty dependent on Anglian Water not "going bad". But if they start screwing up, what happens? There's not the same liability here as in the open market. The monopoly status along with the essential nature of water, means that they'll never bear the same risk as real investors.
posted by Jehan at 2:37 PM on March 29, 2012


Will the shareholders continue to take dividends beyond the time limit that an ordinary loan (either government backed or from a private institution) would have expired? If yes, well then, that's a profit they needn't be taking out of the economy.

Yes - because they still have their capital in the business. The should get paid for that. Loans don't expire they get repaid - that capital is taken out of the business. You have to have equity in the structure over the long-term if its private. You can't just have debt. Even if you nationalize it there is still equity in the structure in the form of the state's guarantee to repay the debt, and the state's ability to print money.

Can we take the assets if things go bad?

Actually you can. OFWAT could seize the ring fenced regulated assets if the equity holders really fucked up.

The monopoly status along with the essential nature of water, means that they'll never bear the same risk as real investors.

But they do still bear risk. Welsh Water went bankrupt. The equity holders were wiped out.

Yes it is by most standards not very risky, that's also why the allowed return on Equity is below the average return on equity of the market as a whole.
posted by JPD at 3:12 PM on March 29, 2012


not very risky for equity
posted by JPD at 3:13 PM on March 29, 2012


JPD: What's the difference between a loan and equity?

Well, if you are the German government you get a negative interest rate instead of a 9% return. Interest on debt is nowhere near historical averages, so giving a historically based return on equity is overly generous. Would you like to give me 9% on my capital, (you will have to be 100% insured against all risk, just like the government, but that's no big deal is it?).
posted by Chuckles at 3:15 PM on March 29, 2012


No the German ten-year is 1.8% not negative.

You don't use spot interest rates to determine long-term investment decisions. That's true whether rates are 2% or 20%. When you put a piece of pipe in the ground its a 30 year investment.
posted by JPD at 3:23 PM on March 29, 2012


Privatization is a total disaster. When was the last time any First World government actually nationalized anything? Anything worthwhile, that is; nationalizing crap deals to corruptly protect those responsible is just privatization with the time axis reversed.
posted by aeschenkarnos at 9:36 PM on March 29, 2012


"The government told them to make massive investment in the network for health and safety reasons, they did. They have to get paid for that. The returns are in-line with what they are allowed. Its a regulated industry"
posted by JPD

3,300,000,000 litres are lost every single day through leakage .

Some investment.

Last year Southern Water, which made an operating profit of £191m in 2010-2011, failed to meet its target for reducing leaks for the second year running and has been ordered by Ofwat to return £5 million to customers through their bills.

Ofwat figures show that in 2010-2011 Southern Water lost 96 million litres of water per day (Ml/d, the official unit of measurement) in leaks – enough to supply five cities the size of Exeter with water for a year. The amount lost amounted to 16 per cent of its daily total.

As a result it missed the target set by Ofwat for reducing leaks to 83 Ml/d by 16 per cent.

At the same time as they face a hosepipe ban, households in Southern Water’s area will have to pay 8.2 per cent more for their supplies from next month, with their annual water and sewerage bill rising to £416.

Anglian Water missed its target on reducing leaks by eight per cent. The firm – whose slogan is “love every drop” – lost 230 million litres per day last year, just under 20 per cent of its total. Despite this it has raised its prices by 5.4 per cent this year, with the total annual household bill rising to £423.


And you think privitisation of the NHS and schools will make it better? Really?
posted by marienbad at 4:22 AM on March 30, 2012


yes and go look at what leakage was before privatization. You people literally don't let the fact get in the way of ideology.

And you think privitisation of the NHS and schools will make it better?

Go find where I said that. I dare you. Because not only didn't I say it, I don't think it.
posted by JPD at 4:40 AM on March 30, 2012


I would suggest you read this document on leakage from a pressure group dedicated to keeping serving the consumers interests in dealing with OFWAT and the Water Operating Companies.

Most companies meet their leakage targets, but Southern missed their target in 2005-06, United Utilities in both 2004-05 and 2005-06 and Severn Trent in both 2005-06 and 2006-07 and Thames for the three years to 2005-06.
Ofwat has powers to fine companies that fail to meet their leakage targets. But instead of exercising these powers – any fine would go to Treasury - Ofwat has sought legally binding agreements with the companies to spend shareholders money on additional leakage control activity.

In July 2006, Ofwat announced that Thames had agreed to invest an extra £150m, twice as much as the fine the regulator could have imposed, to replace ageing pipes over five years.

In August 2007 Ofwat announced a legal agreement with Severn Trent that binds the company to achieving its leakage reduction targets for the next three years. The company has underpinned this with a commitment to spend an extra £45 million.


(Bold is mine)

Those fines come out of the returns allocated to the private capital holders.

Finally, and this point is made in the last paragraph - fixing the leaks costs money. You all think you are being ripped off because water prices went up - well it would be even worse if you demanded a leakless network today. Why? Because when the assets were publicly held they were massively underinvested in.
posted by JPD at 4:54 AM on March 30, 2012 [1 favorite]


You people literally don't let the fact get in the way of ideology.
But if you look at the history of UK privatisations as some exercise in a rational evaluation as to what was the best way to get capital investment, you'd ignore the clearly ideological underpinnings of the exercise.

well it would be even worse if you demanded a leakless network today. Because when the assets were publicly held they were massively underinvested in.
This was clearly a problem, and was seen in much of the rest of the state sector post-war where a problem would be ignored if it wasn't deemed politically pressing, but it doesn't follow that the sell-off was the only way to get investment into the water sector.
posted by Abiezer at 5:07 AM on March 30, 2012


it doesn't follow that the sell-off was the only way to get investment into the water sector.

absolutely, no question I agree - the point is a huge proportion of the increase in water prices post privatization was driven by that earlier underinvestment, not because it was "a scam". Even if you didn't privatize them you had to have price increases to pay for the capital investment. Its not because the equity holders are capturing rents.

But if you look at the history of UK privatisations as some exercise in a rational evaluation as to what was the best way to get capital investment, you'd ignore the clearly ideological underpinnings of the exercise.

I'm well aware of that and as I said above I think there are flaws in their logic. Clearly there are businesses they want to privatize that I don't think should be privatized, and I think there is logic behind why those businesses should not be privatized. The ideology that people here are blinded by is the idea that "State-owned = good". This is just as flawed as the conservatives view that "Private =good". Its not some manchean battle.

Businesses that can easily be regulated - capital intensive utilities with natural monopolies, there isn't really a need for the state to own the capital as long as the regulatory regime is robust.
posted by JPD at 5:48 AM on March 30, 2012 [1 favorite]


Fair enough on all of your last JPD.
As you've no doubt spotted I am unashamedly against privatisation on political grounds, though perversely not because I think the state is good but that socialised solutions are good, and as things stood in late '70s early '80s in the UK, despite all their shortcomings the public utilities and services like the rail network bred a certain type of public service mentality that has since been undermined. Thatcher herself put it fairly frankly in an interview with the Sunday Times in 81, the last line has become notorious but the whole para is interesting:
What's irritated me about the whole direction of politics in the last 30 years is that it's always been towards the collectivist society. People have forgotten about the personal society. And they say: do I count, do I matter? To which the short answer is, yes. And therefore, it isn't that I set out on economic policies; it's that I set out really to change the approach, and changing the economics is the means of changing that approach. If you change the approach you really are after the heart and soul of the nation. Economics are the method; the object is to change the heart and soul.
Of course for my money those three post-war decades were moving in the right direction and it was a fairly Manichaean choice at the time and largely remains so.
posted by Abiezer at 5:58 AM on March 30, 2012


The problem is that the political expediency of lower tax rates makes the high marginal tax rates required to support the huge state of the 50's-70's untenable.

Thatcher and her core supporters were ideologues, but that doesn't mean the marginal voters that helped her win elections were.

There's no value judgement in that statement on my part, its just how we got to where we are. And once the state has reduced revenues it has to make choices. It needs to figure out where its money is best spent. I think Rail, Schools, Basic Science Research, Alternative Energy, Social Welfare and Healthcare are places where the benefits to spending money "inefficiently" are really really high so those are things the state should be funding. I don't think owning power plants, coal mines, or steel mills are effective places to allocate money.

(I've put "inefficiently" in quotes because I can't accurately describe what I'm trying to get at, but its meant to be a positive. For example - Rails - the benefits of a good rail network far outweigh the cost of subsidizing the operating losses it has to incur to convince people to use it.
posted by JPD at 6:18 AM on March 30, 2012


Yes and go look at what leakage was before privatization.

I had this exact same thought.

Page 3 of this PDF report shows that leakage reached it's peak around 1995 (there was a drought that spiked demand). I haven't been able to find data that goes back to 1989 when the privatization happened but it looks to me like, if one adjusted for the increase in demand, leakage has been improving.

According to this, it certainly sounds like they were given a steep hill to climb: Investment by Thames Water to replace Victorian pipes in the London water resource zone has led to an overall downward trend in leakage since 2003/4. [Emphasis mine]

The question really is, assuming that the investments in infrastructure would have happened either way, were they made more effective and more efficient by privatization?

I think the problem with any measure of efficiency is that government spending has more far reaching economic affects that can't really be measured. We might be able to compare similar infrastructure investments by private and public companies and it would be easy to say that the private company got the same results with less money but maybe all the government's "wasteful" spending spurred a bunch of economic activity that increased tax revenues. Since that data would be buried in about 1,000 other variables, we can't really measure the net effect.

Since the water infrastructure had been grossly under-invested in, I think it's safe to say that privatization, in this specific case, made service more effective. It helps that stopping leaks saves the company money and the regulators enhanced that particular economic incentive. Had the government been "better" they would have been making investments in the infrastructure over time and rates would have likewise risen over time and the net effect on rates would have likely been the same, I guess there just wasn't the political will to deal with it or elected officials were worried about re-election if they were known as "the guy made it more expensive to flush my toilet." This way, they can demand that the private companies improve service and then point the finger at them for increasing rates.

I'm not for or against privatization in general. I'm for it some cases, against it in others. When it's easy to get the economic incentives to line up with quality of service, I think it's great as long as the regulation is solid.
posted by VTX at 6:27 AM on March 30, 2012


The problem is that the political expediency of lower tax rates makes the high marginal tax rates required to support the huge state of the 50's-70's untenable.
See, this is the part (both the rates being untenable and the state particularly large) that I think has become accepted wisdom but formed little or no part of the debate at the time. There was of course grumbling about taxes and plenty who happily accepted cuts to those taxes (though only a narrow band of the electorate got them IIRC), but not some major groundswell prior to the monetarists in Thatcher's cabinet getting the whip hand. Anyway, it made me look it up, and if I'm reading the chart in section 1.2 right [PDF], the tax take of 45% of GDP at its very peak in the early years of the first Thatcher government is only slightly higher than that of several OECD countries today, and at 40% in 1978 was lower.
posted by Abiezer at 6:41 AM on March 30, 2012


Probably better to look directly at the source data. Expenditure a better measure than taxes, especially if you accept at some level debt levels become problematic.

http://www.hm-treasury.gov.uk/psf_statistics.htm

I'm not sure cross-state comparisons make a lot of sense, because the argument is about politics not about economics. I would certainly agree with the assertion that its unproven lower tax rates = faster growth.
posted by JPD at 7:04 AM on March 30, 2012 [1 favorite]


ETA: look at public sector net debt back in the 70's. You had high tax rates and large deficits, compare that with the current environment of low taxes and large deficits. Clearly its easier to fix the later than the former.
posted by JPD at 7:07 AM on March 30, 2012


Wasn't the general trend though a long, slow decline from the massive burden of WWII? I.e. it was coming down to about the level we have now.
posted by Abiezer at 7:19 AM on March 30, 2012


Yes the burden at the end of WWII was like 250% of GDP. By about 74 you were back to the current level of debt.

Is hard to make the case that economic fortunes of the UK during the 70's were at a high point. Maybe you could make a case they were sustainable, but the rising inflation during that time period would say they probably were not.
posted by JPD at 8:53 AM on March 30, 2012


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