government intervention case studies

Question 1

Give an example of when privatisation lead to increased competition in a market.

Answer 1

• privatisation of royal mail
• now new mail providers such as Hermes, Evri, Fedex

Question 2

Give a past example of collusion leading to fines?

Answer 2

• in 2007, sainsbury and asda admitted to fixing the prices of milk, cheese and butter
• supermarkets were fined £116m
• teso and morrisons did not accept liability

Question 3

give an example of a recent price cap.

Answer 3

• OFGEM introduced a price cap on energy
• for an average house hold the energy bill is expected to fall around 12%

Question 4

give an example of a blocked merger.

Answer 4

• in 2018 the CMA blocked the merger between asda and sainsburys

Question 5

what is the average wait time for a non-emergency appointment at the NHS?

Answer 5

14.5 weeks

Question 6

give a statistic that suggests the need for investment in the NHS.

Answer 6

• the ammount of avaliable beds has fallen by 5% but admissions have increased by 15%

Question 7

what has Ofcom introduced to increase elasticity of demand for broadband providers?

Answer 7

• ‘one touch switch process’- consumers only need to contact their new provider to switch
• came into force in 2023

Question 8

in total how much has been spent on outsourcing the NHS?

Answer 8

£11.5 bn

Question 9

what does oxford anaylsis suggest the impact of outsourcing is on preventable deaths?

Answer 9

a rise in anual outsourcing spending of 1% is correlated with a 0.38% rise in treatable deaths

Question 10

how many deaths between 2014- 2020 are believed to be atributable to outsourcing? why is this believed to be the cause?

Answer 10

557
- cost cutting in the private sector leads to lower quality and more deaths

Question 11

Give an example of a controversy surrounding NHS outsourcing.

Answer 11

• Vanguard health (private) operates an NHS hospital
• in 2014 the NHS faced legal challenges over a seried of eye operations carried out in 2014 at a hospital in somerset that left people with blurred vision
• a report found that operations had appeared rushed

Question 12

how many people in the US (in 2022) were uninsured and therefore dont have acess to health care?

Answer 12

26 million
- this is despite medicare and medicade

Question 13

give an example of regulatory capture.

Answer 13

• OFWAT
• its chairman had dinners with water company executives (exposed in 2024)
• in a 2023 parliamentary committee report it argued regulation had been insufficient

Question 14

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Give a recent example of a firm being fined after breaking competition laws?

Answer 14

• compare the market was fined almost £18m
• found that between 2015 and 2017 it broke competition policies
• they had a clause in their contracts that prevented home insurer firms from offering lower prices on other comparison sights

Question 15

give an example of a firm being fined for preditory pricing.

Answer 15

• in 2018 royal mail was fined £50m for preditory price reductions
• aimed at damging its rival whistle

Question 16

since privatisation, how much debt have water companies built up?

Answer 16

£66bn in debt

Question 17

How has ofwat regulation reduced the quality of water services?

Answer 17

• OFWAT’s rules are designed to reward efficiency
• this has lead to firms cutting short term costs such as investment

Question 18

Give an example of a large fine recieved by water firms.

Answer 18

• in 2021 southern water recieved a £90m fine for deliberately tipping sewage into beaches for several years

Question 19

give an example of when privatisation lead to increased costs.

Answer 19

• privatisation of rail (began in 1994)
• broke up rail and sold parts off to private firms

Question 20

how much have single standard fairs increased since the privatisation of rail?

Answer 20

• increased by up to 208%