Labour pledges to re-nationalise railways - Is it time for utilities too?

How much it's received dosn't really matter, its how much profit it has made. And I can't be bothered to look back that far, but its easy enough to find out that it made £116m in 2019/20, lost £770 million in 2020/21 and lost £1.6 billion in 2021/22.

A lot of that, undoubtedly because of the huge interest payments on the debt mountain it has accumulated in investing in its infractucture, and the huge depreciation that results from that capital expenditure. The dividends along the way are a distraction really - it's a poorly run company that has invested a fortune and run out of cash. The alternative, under state ownership, was a poorly run company that invested nothing and bled cash from the treasury. At least the cash that has been / will be lost is not taxpayers

So, per that, it now has £14.7bn of debt. It has invested £16 billion since 2008, and paid no dividends for 7 years.

How much has it received from bill payers in that tine?

So, per that, it now has £14.7bn of debt. It has invested £16 billion since 2008, and paid no dividends for 7 years. If it had remained in public ownership no dividends would have been paid, and the bare minimum invested in the business.

Which is preferable; capital investment of 2 or 3 times the amount paid to shareholders, or nothong paid to shareholders and no capital investment ?

The return for shareholders is a reward for risk; in the case of Thames Water they will lose a lot because that didn't pay off.

I suspect your issue is broader, and based on the common structure of the buyer loading a company with debt to cover their investment. I agree, that shouldn't be allowed to happen. But that's not a failing of privatisation, but regulation.

Why is Thames Water in so much trouble? https://www.bbc.co.uk/news/business-66051555

Always helpful to look at the facts... Most of the debt has been spent on capital investment. Per Hansard, £190 billion has been invested by water companies in infrastructure post privatisation

Much of that initially as to catch up on decades of underinvestment by the state. Dividends over that period total between £42 billion and £68 billion depending on which source is correct, and debt £48 billion.

Water Industry: Financial Resilience - Hansard - UK Parliament

Far from investing the private utilities have taken on enormous debt to pay dividends to shareholders. The water companies have invested nothing hence shit in the sea and rivers. They’ve asset stripped and, even if nationalised, it will take decades to repair the damage they’ve inflicted.

Whereas I think little of the modernisation would have happened without privatisation. The chronic underinvestment in industries the government interfered in was because there was never enough capital to invest in everything.

That hasn’t changed, and so in very short order if the government ‘renationalises’ the railways, they’ll be competing with other departments for funding. And we all know that it’ll be easier to cut investment in the railways than in the NHS or education. Given a short term choice between cutting benefits and social security payments or spending less on rail in any given year is also clear what will happen.

The writing is already on the wall, as Labour included in their document a revised timetable for key routes, clearly showing they plan on reducing services. Two reasons; one so they can quickly say that the trains have got more punctual under Labour. And secondly because that’s all the unions have agreed to staff. So, rather than invest in training and recruitment, we end up with a rail service determined by what the unions think is best for their members.

Not a great first foot forwards for Labour, as that sets the tone for every other union negotiation. In rail we will end up with a services run for the benefit of the staff, which is pretty much where we are with the NHS already. The slide back into the ‘70s continues….

People forget just how poor the service nationalised telecoms, utilities, rail, airline and car companies provided the public / tax payer. Sure, customer service isn’t great in all of those sectors now. But actual service and ability to get a phone line, book a train or plane ticket and be confident that’d you’d get to your destination are miles better than they were then, even if there is still room for improvement. Be careful what you wish for!

Yeah, Pacers were brilliant for a two hour bone shaking cold noisy journey weren’t they? Some even had hard seats. Basically a bus on train wheels that we had to endure because they were cheap.

Every time I travel through Germany I am reminded that the UK isn't so bad after all. Delays, short-notice engineering work etc.

This train should have been in Vienna an hour ago. It's not even close.

British Rail had a far smaller budget and had to rely on the technology available at the time. Given the circumstances it was doing rather well by 1993.

It's interesting to see posters claiming that nationalisation wouldn't / can't work when there are so many examples of it working fine in other countries.

As has been previously mentioned there are plenty of examples of good state rail operators kicking around in Europe alone. While in the energy sector the likes of EDF, Saudi Aramco, Statkraft, Uniper, Equinor ASA, Vattenfall, and Orsted are all good examples of successful (commercial speaking anyway) energy companies with varying levels of government majority ownership.

Orsted are a particularly interesting one because up until 2017 they were known as DONG (Danish Oil and Natural Gas) Energy but in just 7 years they've managed to transition away from oil and gas and become one of the biggest players in the renewables industry (they own c20% of the UKs offshore wind capacity as things stand).

I think it would be more accurate to say that these models haven't previously worked in the UK rather than they can't / won't work. I suspect the reason they haven't in the past is more to do with the fact we keep elected the entirely incompetent tory party into power, who's sole mission while in office seems to be to find ways to make themselves richer at the expense of the rest of us.

I was in a little village, not a big city.

Depends on the frequency of trains really. If you're in a major city with a train every 15 minutes you'd hardly notice a cancellation. If you're in the regions with a train only every 2 hours (or worse), a cancellation has the potential to ruin your day. Same applies to overcrowded trains - if your journey is 30 minutes or less, you don't mind so much being crammed into a sardine special with your nose in someone's smelly armpit. When you have to suffer the same on a journey lasting a couple of hours or more, it becomes unbearable.

I started working in the early 80s and suffered crap trains on an almost daily basis, so much so that it soon incentivised me to buy my own car! But this was North West England, so presumably (as now) no one cares because those in the big cities have always had a better train system.

I was a student in the 80s and used the train all the time. It was definitely no shitter than now and at least it didn't cost an arm and a leg.

@User2460177 forced was perhaps the wrong word. ‘Required by their own ideology’. There are many core services that have been contracted out that in the vast majority of countries would be delivered by government directly: disability benefit assessment and armed forces recruitment are two examples that spring to mind.

Many of these services are contracted out not for reasons of greater efficiency or value for money, but for a combination of ideology and, frankly, graft.

You obviously aren't old enough to remember how shit British Rail was OP!

The government aren’t “forced” to contract out any services but it’s often better value than keeping them in the public sector. There also isn’t the capacity for many services or goods that parts of the public sector needs to be produced by them.

There definitely is a lot of waste in the public sector but no evidence producing goods and services in house would make that better (in fact likely the opposite). Public procurement processes are published and if any company considers it is not being fairly treated, it can challenge the award.

They could but actual electricity and gas suppliers are not making money- it’s producers who are raking it in with higher gas and electricity prices. To be honest it’s unlikely that state owned utilities could produce power more cheaply. There’s no evidence of that happening elsewhere (of course in some countries state owned utilities are forced to produce at a loss and the taxpayers bails them out but that’s not a good use of public money imo).

Ultimately, the problem at the heart of UK government, is corruption
They have been in power for too long and power corrupts, there is also a compounding effect, as time goes on the corruption increases and becomes more entrenched.
We have to get them out.

I work for an IT supplier with major government contracts. IMO, the reason the UK government balls up so much is because they are forced to contract out so many services that could be much better supplied internally - you then end up with loads of bad contracts and service providers who don't talk to each other, while politicians' mates line their pockets - and line up a nice sinecure for the ministers who granted the contracts in the first place. Many of the services provided by the likes of Capita, Capgemini, Atos, Infosys etc could be provided in a much more efficient and integrated way if they were provided directly by government rather than contracted out - but then where would the opportunity be for your old school chums and your father-in-law to trouser wads of cash?

Ultimately, the problem at the heart of UK government, is corruption. We just don't like to call it that because it's legal.

And the government do run multiple nuclear power plants without any major hiccups - they just happen to all be inside submarines.

To be fair, the lack of confidence isn't in whether any government can run businesses...but there's a significant lack of confidence in whether the UK government can. I mean look at how easily they balls up driving licences and passports - that's their own systems that they entirely control. DWP, HMRC...none are glorious examples of efficiency and competence. No external factors of any kind and they still can't manage those 'businesses' effectively or efficiently.

Would you honestly trust those sycophantic clowns to be in charge of nuclear power or for that matter knowing when/where power stations need to kick in to compensate for green energy not being generated? Or negotiating decent trade deals for the gas imports we rely on? There's something utterly useless at the heart of government and how they manage things. I'd sooner trust a fox in a chicken coop than trust any of the senior people the government let lead these businesses.

I don't know about other water companies but this is absolutely not the case with Thames. It was debt-free when it was privatised. It ran up £15Bn of debt under the ownership of Macquarie bank who bled it dry and then did a runner.

As far as governments being crap at running businesses - have you ever actually been abroad? Used a train that ran ontime in Switzerland? Drunk clean water and bathed on a clean beach in Denmark? Used cleanly produced electricity in France? It is normal for transport, power and water utilities to be state owned. Even the Americans aren't mad enough to privatise water.

I don't particularly care whether private companies or the government operate trains. Both fuck it up quite spectacularly. Neither will prioritise the public who use these facilities. There's really no difference between a private company who want to maximise profits and the state who want to minimise costs. Either way the traveller gets fucked, often quite spectacularly and expensively.

I do think that energy is quite a parasitic industry, in that electricity and gas can have different prices for different people on different contracts, tariffs, providers etc. A unit of electricity is just that - a bloody unit. Nothing fancy or better, it's a unit of electricity. It should have a cost that is the same for everyone. It shouldn't be made up games that generate unfairness and profit. That said, the government have fucked the NHS and I don't therefore trust them with energy. Not just this government, previous govt as well. It's idealism to think that labour are the answer to this mess. In fact, both labour and conservative have heavily contributed to the mess the NHS is in and also the other messes we are in. There isn't anyone decent to vote for.

I do think labour will get in, but I think people will be very very disappointed when they realise that Kier Starmer does not have a magic wand concealed up his arse.

I don't vote. I am old enough to remember hideous misdemeanors from both labour and conservative governments.

On balance, the government has enough to deal with and probably ought to leave it all in private hands. I don't really understand how the government could afford to acquire railway/energy companies. They have shares, which all of our pension schemes are invested in. We all lose if govt has to buy them don't we?

In that case we all cover our houses cars hats umbrellas etc with solar panels and generates our own power 👷‍♀️⚡💡