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

[Startingagainandagain]

I am glad to see that Starmer is finally announcing some more radical policies and this is a positive step as far as I am concerned.

https://www.independent.co.uk/news/uk/politics/renationalise-railways-labour-election-starmer-b2534505.html

I would like to see water, gas and electricity to be brought back into public ownership too, considering the profiteering, lack of investment and the sewage scandals that privatisation gave use.

I am old enough to remember the times before privatisation and I think that a big part of the cost of living crisis comes from private companies trying to squeeze as much profit out of us.

Also with climate change I think we also need to bring natural resources into public ownership.

The prpblem with the private sector is when profit is your concern, you want to run a higher margin business. This typically means trying to offer more of a premium service - but at a very premium price, and accepting you price out the lower income consumer. But you can make more money.

It isn't what people want from public utilities. We want the basics. No frills, high volume, low margin. We don't mind if the rolling stock is a bit older/less shiny, if it arrives on time. We want the prices kept low because these are services that need to be affordable for everyone.

This as at odds with how the private sector want to run.

@SkyBloo

We don't mind if the rolling stock is a bit older/less shiny, if it arrives on time.

It wasn't a choice. The health and safety laws required the old "slam door" stock to be replaced with electrically operated doors with safety mechanisms. Disability discrimination laws required larger more accessible toilets on EVERY train (so if the toilet is out of order, the train can't run!), it also required the destination screens within every carriage and the station/safety announcements systems. Also wider more accessible doorways and vestibules. The old carriages which "dropped" toilet waste onto the track were also banned and trains now require tanks to hold the waste until proper emptying/disposal. Health and safety laws also required coaches to be built with better safety for crash worthiness etc - the older stock was basically a metal/wooden frame that crumpled in a collision - the modern stock is more robust and designed to withstand accidents - look at how well that Pendolino survived the Lambrigg derailment.

The new trains, which we had to have by law, cost many millions of pounds per carriage.

Billions of pounds needed to be spent on replacing the old rolling stock and that couldn't be put on the government's credit card, so privatisation to use private finance was the only viable option to comply with the laws. Similar really to PFI which paid for all the shiny new hospitals and schools!

I cannot believe that anyone with knowledge of the absolute sh*tshow that is HS2 would want the government anywhere near their railways.

Public sector is incapable of doing things cheaply. It will cost an incredible amount of money which will have to be printed. The people that use trains will have mildly cheaper tickets, along with higher taxes and more inflation for everyone.

Franchising certainly isn't the natural order of things. It's a ridiculous and wasteful system. If you go to Switzerland you have several railway companies (SBB, BLS, RhB etc.) which are variously owned by the federal or cantonal governments. They're well funded, and importantly are integrated together. There's no "Oh this ticket is for Avanti, I'll have to charge you again", and the timetables work.

A European directive forced the accounting separation of infrastructure and operations, something which has been blamed for the current system. The Dutch found a way around it though - let their main passenger service concession to NS. Again the Dutch have a fully-integrated system, with contactless ticketing that works across all public transport and a takt timetable like the Swiss have.

@CranfordScones
'' Most of the rhetoric is just kneejerk denunciation of anything that dares to be so successful as to make a profit.''

That is nonsense...

You only have to look at Thames Water. There is nothing successful about failing to invest while rewarding share holders and senior staff with large sums of money, polluting our rivers and seas and then having the nerve to expect the tax payer to pay for your debts through an increase of 44% in bills.

Utility companies make a profit by piling on misery and hardship on their customers.

That is not what success looks like.

I agree Op. It's one thing making a profit when you're properly funding maintenance and repairs. Although a huge profit would suggest overcharging for the service in a monopoly.

Utility companies make a profit by piling on misery and hardship on their customers.

Sorry but this sort of hyperbole is singularly unhelpful. Try and have a grown up conversation at least.

Governments are crap at running businesses. The water utilities ran up massive debt when they were publicly run. The government covered those debts (ie we, the taxpayer paid them) and sold them off to businesses to run.

As we know that hasn’t panned out that brilliantly either, but that’s another story.

''@TonTonMacoute · Yesterday 20:50
Utility companies make a profit by piling on misery and hardship on their customers.

Sorry but this sort of hyperbole is singularly unhelpful. Try and have a grown up conversation at least.

Governments are crap at running businesses. The water utilities ran up massive debt when they were publicly run. The government covered those debts (ie we, the taxpayer paid them) and sold them off to businesses to run.

As we know that hasn’t panned out that brilliantly either, but that’s another story.''

People were having a grown up conversation until you turned up...

I would really suggest changing your username too.

Governments are crap at running businesses. The water utilities ran up massive debt when they were publicly run.

And now the water companies are making vast profits while overcharging us and polluting all our waters. Excellent.

I agree about the name too.

Given the indebtedness of most of the water companies, why would there be a cost at all? They’re worth about tuppence so they could be purchased very cheaply or just taken back for failure to perform. That’s the beauty of being in government, especially with a large majority - you can basically do what you want as we’ve seen recently.

I’m broadly in favour of nationalising as much as possible but I have a kind of creeping dread that nothing we do will make much difference at this point, there’s something intrinsic wrong with the country and until we work out what it is nothing will improve really ☹️

TonTonMacoute · Yesterday 20:50

Governments are crap at running businesses. The water utilities ran up massive debt when they were publicly run.

Have you got a link to support that?

But could the gov create a utilities company or their own in essence bankrupting the private companies and encouraging the public to join it?

@Startingagainandagain

Then I assume that if the government at least nationalised these British companies and then offered customers decent prices then it would be a case of customers voting with their feet and the remaining privately owned company would either go bust or have to offer more competitive tariffs too.

It wouldn't work unless the government also managed to leverage their way into the upstream business (generating electricity, sourcing gas). They are the ones that dictate the wholesale cost of energy (and the big players in this game are mostly French). The suppliers just pass that on. Plus, all of the tariffs are pretty the same because of the price cap set by Ofgem...the statutory body run by government (albeit class as a Non-Ministerial Government Department).

If you only nationalise those 3 companies, they still wouldn't be able to operate because of the competition laws in the UK - collectively they have too great a market share to be allowed to exist as one entity. All of the market needs to be nationalised together to not fall foul of this. Plus you'd be tanking the pension pots of millions of people, not just retired folk, but those still trying to build up money with the hope of being able to retire before dying.

Shareholders aren't all privileged white men in ivory towers sneering at the plebs. They're pension funds too. How will the government afford shoring up countless pension schemes going bust?

Like I said, the horse has firmly bolted. The UK does not have the finance or capability to re-nationalise energy utilities. It should never have happened in the first place. Labour could have reversed it all when Tony Blair came into power, the market was still new and largely British. But 1990 was eons ago in business terms - too much has changed hands since then and the coffers aren't big enough to buy all of the private companies out.

In theory, yes, the government could establish a nationally owned company that competes with the existing utilities companies but what would be their competitive advantage? They don't own any power generating infrastructure- they would have to buy or build it (using money from taxes) - so it would take decades to become large enough to compete with existing generators, if ever. They would also likely be more expensive so why would people buy power from them?

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

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?

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.

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 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.

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.

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).

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.

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

@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.