in page 31 of bpp text,there is this sentence which I didn’t understand. The sentence is”The government presented the nationalization in terms of it acting as agents for the taxpayers,who were effectively the new shareholders.” what do this means?what is the relationship between government and tax payer in nationalization?
You need to be aware of the situation BEFORE Margaret Thatcher’s historic course of action. The public utility providers in the UK were under the control of the Government – that is, there were no shareholders and there was little in the way of accountability.
Then along came Margaret Thatcher! She took the utility providers which were “owned” by the Government – who are the representatives of “the people” – and sold those utility providers to ….the people. Those members of the public who wished to buy a direct involvement in these businesses therefore applied for and, if they were lucky, were allotted shares in the new companies like British Gas and British Telecom.
Before this action, the utility providers were referred to as “publicly owned” even though no member of the public held a direct interest in the business. The sale to the public is referred to ( anomalously! ) as “privatisation”.
Before privatisation, the gas provider was subsidised by the Government to the tune of £1 million per day. After privatisation, the British Gas pays into the Treasury £1 million per day by way of tax on its profits.
Now, the tax payer – I’ve referred to them as “the public” – appoint, by way of election, representatives to run the country – very much like directors are appointed by companies to run the affairs of the company. So Members of Parliament are the elected representatives of the people who elected them. Normally, the political party with the greatest number of elected members forms the Government whilst the other political parties make up the “opposition”.
Margaret Thatcher was the leader of the Government which privatised the utility providers.
So, does this explain the sentence “The government presented the nationalization in terms of it acting as agents for the taxpayers,who were effectively the new shareholders”?
I do understand now much than before. have the economic crisis of 2008 given birth to the new government and tax payer relationship?is the term taxpayer used as shareholders under nationalization?
No, not really! A tax-payer is anyone who pays ( or evades! ) tax. The comment is merely bringing to your attention the fact that the Government ( in any country ) is always acting as agents of the public…in whatever they do!
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