Nationalisation

Question 1

Arguments for Nationalisation

Answer 1

Essential industries
Often unprofitable industries
Capital intensive industries
Natural monopolies

Question 2

The problems with nationalisation

Answer 2

Inefficient and gave no or little consumer choice

Question 3

Who runs nationalised corporations

Answer 3

Owned and run by government who appoint a chairperson

Question 4

What is privatisation

Answer 4

The transfer of productive assets from the public sector to the private sector

Question 5

The transfer of productive assets can be carried out in three ways

Answer 5

1. Denationalisation- the most profitable for the govt
2. Contracting out - where privately run firms are allowed to bid for supply of key services
3. Deregulation- this is where sum rules that are governed in an industry are altered to allow anyone to become involved in the provision of services

Question 6

Arguments for privatisation

Answer 6

Lower costs through competition and efficiency
Greater consumer choice
Higher quality product
More innovation
Increase share ownership

Question 7

Arguments against privatisation

Answer 7

Duplication of natural resources
Phone and broadband packages

Competition takes a long time to establish

Unemployment
The no. of jobs lost in shipbuilding and mining

Loss of control to other countries
You might think that UK airports belong to BAA (British Airports Authority)