The significance of the state

Lesson 1.4 – Year 13 Business

Get thinking…

• London’s tube network is owned and operated by the state, but could it be privatised and run by a number of private companies?

The State and Business

The State

A provider A consumer

A supporterA source of constraint

Political Styles and the state

• Margaret Thatcher, then Conservative Prime Minister introduced the ‘Right to Buy’ Scheme in the 1980’s.

• This meant that many low income families were able to buy their council house at a discount, and with a mortgage provided by the government.

• Whilst this backed by many conservatives at the time, the labour party were very much against this idea, as it lowered the stock of council houses…

Political styles and the state

• Therefore, it is important to note that different political styles with have an impact on how much involvement the state will have in different markets.

The state as a consumer…

• Please read the BAE systems news story and answer the questions in exam style.

The state as a provider…Thousands of NHS patients are failing to receive appropriate care due to waste, inefficiency and postcode prescribing, the chief medical officer for England said today.Professor Sir Liam Donaldson blamed variations in care across the country on doctors and NHS managers who put their own preferences for certain treatments before the needs of patients. Both the over-use of some treatments and the under-use of others were wasting millions of pounds, he warned in his annual report on the state of public health.

Sir Liam said one factor that could affect the treatment a patient received was their socio-economic status. He pointed to the comparatively high number of poor children who underwent tonsillectomies, suggesting that many unnecessary operations were being carried out.

The professor said if the national rate of tonsillectomies was the same as that in the most affluent children, "around 8,000 operations could be avoided per annum and over £6m saved".

(The Independent, 21st July 2006)

The state as a source of constraint…

• This is the latest US governmental restriction on tobacco retailing.

• How do you think this will affect tobacco manufacturers?

• What strategies could they employ to reduce the constraint imposed by the state?

Homework

• Royal Mail is owned and operated by the UK Government. Evaluate whether Royal Mail should be privatised. (16 marks)