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.

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.

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 in a little village, not a big city.

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.

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.

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.

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.

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!

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.

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

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

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.

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?

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

Just thought I would come back to this thread as Labour announced today that it will create a publicly owned energy provider, to be called Great British Energy.

Really hope this could bring back better competition in that market and cut down on the current level of profiteering!