/ Nationalisation

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krikoman - on 12 Jun 2017
I understand the Tory opposition to nationalisation but is there room for maybe one national supplier for each of our essential services?

One national Electricity supplier.
One national bank.

Etc.

Would it be a good thing to at least give people the choice of a state owned supplier of services?

Maybe not specifically run BY the government but for the government

What are the downsides?
6
Postmanpat on 12 Jun 2017
In reply to krikoman:

> Maybe not specifically run BY the government but for the governmentWhat are the downsides?
>
Why don't you kick off by listing what you think people may regard as downsides?

12
lummox - on 12 Jun 2017
In reply to krikoman:

> I understand the Tory opposition to nationalisation

Now I'm confused. The Cons seem perfectly happy for other countries' nationalised rail systems to own our own. And for a Communist state to run a significant part of our national power output.
3
skog on 12 Jun 2017
In reply to krikoman:

In the event that Labour get to form the government again, I'd like to see them nationalise the Conservative and Unionist party, just for fun.
4
Timmd on 12 Jun 2017
In reply to Postmanpat:

> > Why don't you kick off by listing what you think people may regard as downsides?

I can think of plenty of upsides (depending on what is nationalised).
2
MG - on 12 Jun 2017
In reply to krikoman:

We have that with a few things - OS maps, Met Office. Seems to work OK. I'm not sure that spending money on setting up organisations like this is worthwhile, however. How would nationalising Severn Trent (say) at a cost of £xxb help matters?
1
Timmd on 12 Jun 2017
In reply to lummox:
> Now I'm confused. The Cons seem perfectly happy for other countries' nationalised rail systems to own our own. And for a Communist state to run a significant part of our national power output.

Yes they do. Other nations' governments profit from having stakes in our privatised rail network. So much for market led efficiency, our ticket prices contribute to the GDP of other nations. Whoohoo.

In the short term, it was cheaper than rising taxes to raise the capital needed to invest, but there's no such thing as a free lunch, we still pay in the end. :-|

Edit: I think there can be a binary way of looking at things, or a binary way of things being discussed on internet forums. I'm a liberal lefty, but as the son of a businessman, I'm not going to be against private enterprise, because I've seen how empowering it can be if somebody has marketable ideas and skills. I'm not against a privatised rail network because it's private business, but because we pay through our ticket prices towards other countries making a profit on us. I don't think that makes good financial sense.
Post edited at 11:40
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MG - on 12 Jun 2017
In reply to krikoman:
While we are at it, can anyone explain how privatising air traffic control is meant to work? It's hardly something where competition can function.
Post edited at 11:22
1
Andy Hardy on 12 Jun 2017
In reply to krikoman:

I think there are rules banning state subsidies, because if those businesses don't have to make any money then they can unfairly undercut those businesses that do, everything else being equal.
Wanderer100 - on 12 Jun 2017
In reply to skog:

> In the event that Labour get to form the government again, I'd like to see them nationalise the Conservative and Unionist party, just for fun.

I think they should nationalise all of the nationalist party's.
skog on 12 Jun 2017
In reply to Wanderer100:
> I think they should nationalise all of the nationalist party's.

All of the nationalist party's what?
Post edited at 11:52
Wanderer100 - on 12 Jun 2017
In reply to skog:

Parties?
skog on 12 Jun 2017
In reply to Wanderer100:
OK, I am wholeheartedly behind the idea of nationalising the nationalist party's parties.

How do we get this turned into legislation?
Post edited at 12:04
RomTheBear on 12 Jun 2017
In reply to krikoman:

> One national bank.

Technically, we have one, haven't we.


1
Fraser on 12 Jun 2017
In reply to skog:

Have a party?
RomTheBear on 12 Jun 2017
In reply to Andy Hardy:

> I think there are rules banning state subsidies, because if those businesses don't have to make any money then they can unfairly undercut those businesses that do, everything else being equal.

Very true, but public ownership is not the same thing as state subsidies.

Personally I don't really care whether some services are nationalised or not. Surely it's just a question of being pragmatic, if it works better nationalised, then nationalise it, if it works better privatised, privatise it.
Postmanpat on 12 Jun 2017
In reply to Timmd:

> I can think of plenty of upsides (depending on what is nationalised).

What do u think may be the downsides?
1
krikoman - on 12 Jun 2017
In reply to Postmanpat:
> Why don't you kick off by listing what you think people may regard as downsides?

I see you are back to your old self again, not wanting to join in the conversation, but to ask inane questions.

You don't have to play if you don't want to

The purpose of the original post to gather people thoughts, you obviously don't have any?

It wasn't to tell people what I thought THEY thought.

There's obviously opposition to nationalised companies, otherwise we'd have some / more.
Post edited at 12:37
skog on 12 Jun 2017
In reply to Fraser:

The National Party for the Nationalisation of the Nationalist Party's Parties?

To be fair, it isn't much wackier than some of the single issue parties we get on the ballot paper from time to time.
krikoman - on 12 Jun 2017
In reply to Andy Hardy:

> I think there are rules banning state subsidies, because if those businesses don't have to make any money then they can unfairly undercut those businesses that do, everything else being equal.

Don't we make our own rules now, Pre-POST Brexit? Haven't we taken back THE power?

The idea would be, they'd have to stand on their own feet after, set up costs, if there were any.

Example would be the Trains, we simply don't renew their franchises, cost to the UK tax payer is zero.

All the money we lost on QE, could be used to set up rival companies for electricity supply for instance, the profit then comes directly to the gov.
2
krikoman - on 12 Jun 2017
In reply to RomTheBear:

> Technically, we have one, haven't we.

Sort of but it's limited in the range of services it offers you can't get a mortgage from them.
MG - on 12 Jun 2017
In reply to krikoman:

RBS do mortgages
krikoman - on 12 Jun 2017
In reply to MG:

> While we are at it, can anyone explain how privatising air traffic control is meant to work? It's hardly something where competition can function.

I have no idea, sounds like a licence to make money if you ask me. But didn't the land registry go the same way? I know there was talk of it being privatised.
krikoman - on 12 Jun 2017
In reply to lummox:

> Now I'm confused. The Cons seem perfectly happy for other countries' nationalised rail systems to own our own. And for a Communist state to run a significant part of our national power output.

Well exactly, I've said this to many people who have attacked Labour, for wanting to nationalise anything!

One reason I think is people don't realise who actually own OUR stuff, they don't know the French gov. own EDF. So may be it's that, others don't care.
1
krikoman - on 12 Jun 2017
In reply to MG:

> RBS do mortgages

Stop it, you're being silly

It might not be a bad example though, RBS is a shit bank with poor management, so it could be a reason for not having nationalisation, if we're going to end up with a load of RBSs.
Timmd on 12 Jun 2017
In reply to krikoman:
> There's obviously opposition to nationalised companies, otherwise we'd have some / more.

It could equally be, that there isn't the political will to ask people to pay for things upfront through taxation in return for getting something good back in return for it in the long term?

That a proportion of our rail ticket fairs goes towards giving other countries a profitable return on their stake in our railway network makes no financial sense, but it makes political sense if one wants to be reelected and doesn't want to risk not being through asking for higher taxes in return for more investment in the rail network.
Post edited at 12:47
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summo on 12 Jun 2017
In reply to Andy Hardy:

> I think there are rules banning state subsidies,.

Only if you are in the EU etc... Plenty countries do subsidise railways, because they aren't actually competing. The tracks are static, even if the government chose to subsidise West coast mainline, it would be impossible to use the same train between Milan and Rome for example. It's only on goods or services that can be traded, ex/imported that it applies.
Timmd on 12 Jun 2017
In reply to Postmanpat:

> What do u think may be the downsides?

I think a right wing perspective like your's could be helpful, in outlining some of them.
RomTheBear on 12 Jun 2017
In reply to krikoman:
> Sort of but it's limited in the range of services it offers you can't get a mortgage from them.

Ho yes they do ! Go to your local RBS / NatWest or Ulster Bank, and I'm sure they'll sort you something out.
Post edited at 12:47
summo on 12 Jun 2017
In reply to Timmd:

Of the fact that the UK network was so under funded the scale of borrowing needed required a profit carrot for companies to even consider it.

I imagine if nationalised any government would take the revenue it generated and spend it elsewhere. The rolling stock, buildings, tracks would progressively decline in quality as every government would think they'd scrape another 5 years out of them.
Timmd on 12 Jun 2017
In reply to summo:
> Of the fact that the UK network was so under funded the scale of borrowing needed required a profit carrot for companies to even consider it.

> I imagine if nationalised any government would take the revenue it generated and spend it elsewhere. The rolling stock, buildings, tracks would progressively decline in quality as every government would think they'd scrape another 5 years out of them.

I suppose I'm looking at the country like I might do a business, in that in the long term, as a nation we still end up paying more thanks to money going out of the country to outside investors wanting a continuing return. I can't see it as something which can be fudged, in that we still pay for it in one way or the other. I gather that our ticket prices are among the highest in Europe, which can't be good for the economy if it's more expensive for people (skills) to travel.
Post edited at 12:55
summo on 12 Jun 2017
In reply to Timmd:

Of course you pay for it either way. I just doubt any government will commit to spending billions on trains to last 30 years, when they might be out of office in less than 5. A special cross party committee might work, so no one party can blame the other etc.. for the state of the railways or alleged excess borrowing. A kind of long term strategy that ignores the 5 year terms of office.
Andy Hardy on 12 Jun 2017
In reply to krikoman:

> Don't we make our own rules now, Pre-POST Brexit? Haven't we taken back THE power?
Not quite yet, as we're still in the EU
> The idea would be, they'd have to stand on their own feet after, set up costs, if there were any.

> Example would be the Trains, we simply don't renew their franchises, cost to the UK tax payer is zero.

> All the money we lost on QE, could be used to set up rival companies for electricity supply for instance, the profit then comes directly to the gov.
If your nationalised companies are trying to make a profit (and hence stand on their own 2 feet) what's the difference to me as a consumer? They aren't going to be cheaper (assuming everything else stays the same)

To me the major thing wrong with privatising the utilities / rail - is that it was done badly, for example the railtrack own the tracks not the TOCs, the electricity network is not owned by the company you buy your electricity off, the phone line ditto, the gas ditto. Privatising the utilities was a political decision badly executed.



1
Timmd on 12 Jun 2017
In reply to summo:

> A special cross party committee might work, so no one party can blame the other etc.. for the state of the railways or alleged excess borrowing. A kind of long term strategy that ignores the 5 year terms of office.

Yes, something like that perhaps. I've let off steam about the railways now...time to get on. ;-)
Wanderer100 - on 12 Jun 2017
In reply to skog:

Get all the nationalist parties to attend a party and ask them all to become party to nationalisation of anything with a nationalistic sentiment. Once having achieved that then throw a big celebratory party with balloons and party poppers and all that kind of stuff.
summo on 12 Jun 2017
In reply to Wanderer100:

Who would be fat controller?
Wanderer100 - on 12 Jun 2017
In reply to summo:

Alex Salmond!
krikoman - on 12 Jun 2017
In reply to Timmd:

But the railways is the easiest of all, because we don't NEED to buy it back, we wait for the franchise to run out and "we" take over.

The argument about profit, doesn't make sense either, because at present they still have to invest and they still pay dividends. It's not one or the other, so in effect what we do is reduce the dividends, to reduce ticket prices and any surpluse goes to the trasurey.

The problem is being too greedy or too generous, there is obviously a balance to make, but is you don't nationalise all trains (or any other utility) there's always something to compare things too.

Suppose we set up an energy supply company, and we pitch the price at the same as EDF. You then have the choice of buying the same electricity from EDF or our own BEC( British Electric Company). You don't win financially, because you're paying the same price as for your electricity, the gov. wins because the profits the BEC make go to them. They'd still have to invest, but so do both of them.
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krikoman - on 12 Jun 2017
In reply to Andy Hardy:

> what's the difference to me as a consumer? They aren't going to be cheaper (assuming everything else stays the same)

It's where the profits go that make the difference, it doesn't have to be cheaper for us (the UK) to get a benefit out of it.

It does however stop and cartel forming when you have a limited umber of suppliers and NO control over prices. When you part of the machine you also have influence on some aspects of the market too.


skog on 12 Jun 2017
In reply to Wanderer100:

Having failed to get re-elected, he can no longer be party to this.
ebdon - on 12 Jun 2017
In reply to MG:

For the record neither the OS nor metoffice are national bodies (both spun out in the last few years)
MG - on 12 Jun 2017
In reply to ebdon:

They are fully owned by the government.
summo on 12 Jun 2017
In reply to MG:
> They are fully owned by the government.

Until the digital era and selling of electronic mapping rights, the OS made a loss.

Forestry commission would be better example. If it didn't put a lot of money aside for recreational development the UKs forests could be managed to produce an excellent long term income. They are certainly better than the likes of tilhill though.
Post edited at 13:36
Mike Highbury - on 12 Jun 2017
In reply to Andy Hardy:
> I think there are rules banning state subsidies, because if those businesses don't have to make any money then they can unfairly undercut those businesses that do, everything else being equal.

State aid, EU stuff, you don't need to worry about that any more.
ebdon - on 12 Jun 2017
In reply to MG:

They are private entities with the govt as 100% shareholder. Whith may sound like splitting hairs to some but is quite different. (I work for a government organistion looking at going through the same process)
Its not necessarily a bad thing working as a civil servant right now aint much fun.
tony on 12 Jun 2017
In reply to summo:
> I imagine if nationalised any government would take the revenue it generated and spend it elsewhere. The rolling stock, buildings, tracks would progressively decline in quality as every government would think they'd scrape another 5 years out of them.

Is that the way it works in Sweden?
NoddyBoulder on 12 Jun 2017
In reply to Andy Hardy:

And yet the private rail companies receive huge subsidies from the public purse anyway.

And the silly short-term franchise system for our railways means that innovations like smart ticket systems (like Oyster in London) don't happen without millions of pounds of public money. Rail franchise holders have no incentive to invest in upgrading ticket barriers etc. if a different company is going to have the franchise in a few years and reap the benefits.
tony on 12 Jun 2017
In reply to NoddyBoulder:
> And the silly short-term franchise system for our railways means that innovations like smart ticket systems (like Oyster in London) don't happen without millions of pounds of public money.

Transport for London, which introduced the Oyster system, is publicly owned. Or at least, it's a local government body. So we have a publicly owned operator making innovations yet to be seen by other, privately owned, transport operators
1
RomTheBear on 12 Jun 2017
In reply to summo:

> Until the digital era and selling of electronic mapping rights, the OS made a loss.

> Forestry commission would be better example. If it didn't put a lot of money aside for recreational development the UKs forests could be managed to produce an excellent long term income. They are certainly better than the likes of tilhill though.

And maybe it's not a bad thing that to have recreational developments ? It's called a public service.
1
Andy Hardy on 12 Jun 2017
In reply to krikoman:


> It does however stop and cartel forming when you have a limited umber of suppliers and NO control over prices. When you part of the machine you also have influence on some aspects of the market too.

Good point.
ads.ukclimbing.com
summo on 12 Jun 2017
In reply to tony:

Nope. Mix of private and national. Some lines run both, with price agreements, others are single operators. There is a level of state subsidy though as some lines are very long through low population bases etc.. so you get a much cheaper service than in the UK, but you are paying indirectly through taxation. The tracks, signalling are all state funded. It's is a different set up to the UK, much more freight by train through hubs, think stobarts style with lots of attic unit trailers on trains where they only use the roads for the first and last part. At certain times freight takes priority over passengers and trains heading towards airports usually have priority over those leaving for obvious reasons when there works on tracks. (Like now with a big track renewal programme in the south).

There are efficiency savings though which might not go well in the UK. Staff less stations(no face to face offices or desks) even for busy places. Tickets machines or just a phone app are normal. But on the plus side free or nominal fee car parking is normal, as they want people to use trains rather then drive long distances. Kids go for small admin fee of about £4.
1
summo on 12 Jun 2017
In reply to RomTheBear:

> And maybe it's not a bad thing that to have recreational developments ? It's called a public service.

Didn't say it was bad. It's only because of the UKs Victorian open access laws that you have to some how make a special effort with FC woodland.
1
tony on 12 Jun 2017
In reply to summo:

So, nothing like:
"I imagine if nationalised any government would take the revenue it generated and spend it elsewhere. The rolling stock, buildings, tracks would progressively decline in quality as every government would think they'd scrape another 5 years out of them."

Apparently, state-owned railways work perfectly well all over the place. Hell, they even work perfectly well here!
1
summo on 12 Jun 2017
In reply to tony:

> "I imagine if nationalised any government would take the revenue it generated and spend it elsewhere. The rolling stock, buildings, tracks would progressively decline in quality as every government would think they'd scrape another 5 years out of them."

> Apparently, state-owned railways work perfectly well all over the place. Hell, they even work perfectly well here!

Didn't say they don't work elsewhere did I?

But the UK mentality towards paying more tax and having something back from it at some point in your life is very different to any of the nordics. The same difference for state ownership. Any investment in infrastructure is done at taxpayer expense. The UK population thinks everything is a great idea, provided someone else is funding it.

1
tony on 12 Jun 2017
In reply to summo:
> The same difference for state ownership. Any investment in infrastructure is done at taxpayer expense. The UK population thinks everything is a great idea, provided someone else is funding it.

Transport for London carries more than 30 million journeys each day. In the course of a year, about 1.3 billion passenger journeys are made on the Tube, with more than 2.3 billion passenger journeys on buses. It's publicly owned. The idea that the UK can't manage publicly owned mass transport is nonsense.
3
summo on 12 Jun 2017
In reply to tony:

> Transport for London carries more than 30 million journeys each day. In the course of a year, about 1.3 billion passenger journeys are made on the Tube, with more than 2.3 billion passenger journeys on buses. It's publicly owned. The idea that the UK can't manage publicly owned mass transport is nonsense.

Yeah and several times a year the drivers of the underground hold the public to ransom!

tony on 12 Jun 2017
In reply to summo:

The relevance of that being? Believe it or not, drivers on other railways do the same elsewhere. Private ownership does not give any immunity from strike action. Just ask the poor f*ckers who have to use the woefully inadequate Southern Rail services.
4
Postmanpat on 12 Jun 2017
In reply to krikoman:
> I see you are back to your old self again, not wanting to join in the conversation, but to ask inane questions.

> You don't have to play if you don't want to

>
An embarrassingly large number of posts for someone who doesn't join conversations

But that aside, it's not going to be a very illuminating conversation if its progenitor doesn't have a basic understanding of both sides of the argument. So I'm asking you to kick off by setting out cons and pros and we can go from there.
Post edited at 15:52
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krikoman - on 12 Jun 2017
In reply to Postmanpat:

> So I'm asking you to kick off by setting out cons and pros and we can go from there.

Why? Don't you have any thoughts yourself.

Seen very strange you need me to feed you, either what I think, or what I think YOU think.

Just seems to give you more ammunition to use your, "Why do you think xxx is a good idea... " or "Why would you think I think that?" line of argument, it's a bit robotic.

What if I don't have any idea of the pros and cons, am I not allowed to post?

1
Postmanpat on 12 Jun 2017
In reply to krikoman:

> What if I don't have any idea of the pros and cons, am I not allowed to post?
>
Of course you're welcome to post, but it's not going to be a very challenging or interesting conversation is it? You have strong views I'm guessing you think a nationalised bank would be a good idea and to reach that conclusion you must understand why it it might not be a good idea. Hence I ask.

1
MG - on 12 Jun 2017
In reply to Postmanpat:

How about because last time there was a nationalised bank, Girobank, it shook up the entire system to everyone's benefit by introducing electronic banking widely (according to wiki). Maybe the same disruption would happen again with similar benfits?
2
Noo Noo - on 12 Jun 2017
In reply to krikoman:

I'd like to hear more of the Tory opposition to nationalisation because I'm opposed to privatisation.

In my experience of privatisation I cant see the economy or efficiency of it at all. Quite the opposite in fact and I'm personally terrified that this will happen to the NHS in particular. I dont think it has gone well for the postal service or rail services as another example.

As an engineer I've seen privatisation of the work we do on our highways and for me I dont think it offers value at all. In fact it may be a surprise to some that you have large foreign firms in charge of the management of our highways. Does that seem right?
1
Bob Kemp - on 12 Jun 2017
In reply to krikoman:

Try this - decent summary of advantages and disadvantages.

http://www.economicshelp.org/blog/501/economics/advantages-of-privatisation/

Bjartur i Sumarhus on 12 Jun 2017
In reply to Postmanpat:

He did say why a nationalised bank is a bad idea, he couldn't get a mortgage from RBS .



Moley on 12 Jun 2017
In reply to krikoman:
I think some of us older generation have not that great memories of nationalised industries and shed few tears when they were privatised. With these old memories it is hard not to question the wisdom of privatisation again and I am very sceptical.

I am not against it, if it works (there are plenty of examples of it working across the globe) but wary. I feel it is associated with a very left wing socialist government (in UK) and this may coincide with power returning to the trade unions, who then have the upper hand to dictate to the government their terms for the industry. And their reactions if that government changes to the other side - whom the unions do not like.

If a government can nationalise an industry and keep it running smoothly, efficiently and ideally cheaper (such as transport) without the public subsidising it, then great, but I have this nagging feeling that it won't work in the long term in the UK.
Post edited at 16:53
andyfallsoff - on 12 Jun 2017
In reply to Noo Noo:
From what I can gather (talking to more right wing friends) they all seem to have an ideological belief that the state *cannot* run private industry, which has its grounding in a philosophy based on the writings of Hayek etc - essentially 1980s Thatcherite / Reaganite politics.

It is a real belief that being publicly owned means that it must be worse, and that only private enterprises can innovate. I think it is nonsense, because it is ideological rather than based on evidence, but then I also think that it is equally rubbish to suggest that any single industry would automatically be better off in the public ownership. I'd advocate a case by case, evidence based approach that looked at the pros / cons, but no one seems to offer such a thing...
Post edited at 16:55
1
Wanderer100 - on 12 Jun 2017
In reply to skog:

> Having failed to get re-elected, he can no longer be party to this.

Get his political party to introduce him as a 3d part so that all the other parties come to an agreement.
Bob Hughes - on 12 Jun 2017
In reply to andyfallsoff:

> From what I can gather (talking to more right wing friends) they all seem to have an ideological belief that the state *cannot* run private industry, which has its grounding in a philosophy based on the writings of Hayek etc - essentially 1980s Thatcherite / Reaganite politics.

> It is a real belief that being publicly owned means that it must be worse, and that only private enterprises can innovate. I think it is nonsense, because it is ideological rather than based on evidence, but then I also think that it is equally rubbish to suggest that any single industry would automatically be better off in the public ownership. I'd advocate a case by case, evidence based approach that looked at the pros / cons, but no one seems to offer such a thing...

The reason public ownership often doesn't work is that it usually sets up a monopoly and therefore no incentive to provide a high-quality product and no automatic system of pruning away poor ideas. Note that privately-owned monopolies suffer from exactly the same problem. It is the pluralism of a functioning market which leads to an effective organisation, not who owns the organisation itself.
krikoman - on 12 Jun 2017
In reply to Bjartur i Sumarhus:

> He did say why a nationalised bank is a bad idea, he couldn't get a mortgage from RBS .

If you going to be daft then what's the point?

RBS is hardly an example of what we're talking about, you could say nationalisation has rescued the bank so we should do it to all of them.

The point being this shit bank, which was poorly managed and still seems to be, will be re-privatised as soon as is possible.

A specifically set up, nationalised bank or building society, would be something very different from the near fatally wounded RBS.
1
MG - on 12 Jun 2017
In reply to krikoman:

With banks, what would you see as the advantage - it is a pretty competitive sector, unlike railways or water.
krikoman - on 12 Jun 2017
In reply to Moley:

I'll reply to you but there are other issues from other people here too

The historical issues for nationalised industries, are in the back of my mind too, so I share some of the reticence you talk about.

As stated above, by many people and it's a good point, we have OTHER nation states running our "stuff" now so why is it OK for them but not us?

Monopolies : I can see the issue with creating a monopoly and the problems that can create but I'm not advocating, the creation of a monopoly. Obviously, there should be some monopolies, for security reasons.

I'd like to see an opportunity for us (the people) to have a choice, to purchase our services from state owned supplier. Be it water, electricity or gas, there seems to be a number of companies we can buy this stuff from now, why can't one of them be owned by us?
krikoman - on 12 Jun 2017
In reply to MG:

> With banks, what would you see as the advantage - it is a pretty competitive sector, unlike railways or water.

It is competitive, but hasn't stopped new banks opening and offering reasonable interest rates too, Aldermore is one of them, though I'm not sure they give mortgages either.

What I see as an advantage is the profits would be our (the UK people), I can see there may be a large number of people who would be attracted to the brand, they wouldn't be supporting "the evil bankers".

Like I said I don't really know, other than I sort of like the idea of a national option.
tony on 12 Jun 2017
In reply to Andy Hardy:

> Privatising the utilities was a political decision badly executed.

In this context, it's also worth remembering that one of the drivers behind the wholesale privatisation of the utilities was the idea of the share-owning democracy, to increase the numbers of households holding shares. Remember the Tell Sid campaign when British Gas was being sold?

Of course, that all went tits up. In 1964, more than half of the UK stock market was held by individuals, while in 2010 found that barely 10 per cent of the value of shares traded on London exchanges were held by individuals. Over the same period, the percentage of UK shares held by foreign investors has increased from 7% to over 50%, and many of the privatised utilities have extensive foreign ownership.
neilh - on 12 Jun 2017
In reply to krikoman:

I can see a big weakness in setting up an alternative to say power companies etc. It costs money, and there are simply better things that the govt can do with that money. For example do you nationailise water utilities or spend it on say the north south cross rail. Granted there are different ways you could finance it . But any govt can only spend so much before it affects things like bond rates and then mortgages.

I am off the view we have a mature sophisticated economy and the Treasury has a reasonable angle on the overall costs of these various ideas so most of them never get off the ground as they are just plain economic non starters in terms of the total cost.
L bearman68 - on 12 Jun 2017
In reply to andyfallsoff:

Don't you come here with that half baked nonsense of looking at data. That won't prove anything.

I mean, what is the world coming to where one applies rigorous scientific testing to a beloved idea-that will just get people to defend their pet idea more firmly.

TOC 'profit margin' is on average about 3.4%. While that disguises a number of highs and lows, it doesn't strike me as excessive. I personally suspect 3.4% profit will quite happily become a red number in public ownership, but that's just me, I'm an old git, and I recall the 1970's. (Ugh), and I busily defending my personal prejudice.
1
krikoman - on 12 Jun 2017
In reply to neilh:
> I can see a big weakness in setting up an alternative to say power companies etc. It costs money, and there are simply better things that the govt can do with that money. For example do you nationailise water utilities or spend it on say the north south cross rail. Granted there are different ways you could finance it . But any govt can only spend so much before it affects things like bond rates and then mortgages.

And yet there was money for QE, which we get no return from.
I think some nationalisation has the possibility for benefiting us all, if not just to give us an extra choice.
Post edited at 19:33
1
Bob Kemp - on 12 Jun 2017
In reply to neilh:

"I am off the view we have a mature sophisticated economy"

Mature, yes, sophisticated, I'm not so sure. Too many endemic problems, eg. low investment.
neilh - on 12 Jun 2017
In reply to krikoman:

Well the return on QE is that the economy was kept from collapsing in on itself.That was the overall benefit.
neilh - on 12 Jun 2017
In reply to Bob Kemp:

Compared with most others ..., yes we have a mature economy.

like most such economies it has its pluses and minuses.
Lion Bakes on 12 Jun 2017
In reply to krikoman:

We could nationalise all crags in the UK for the public use in perpetuity

Andy Hardy on 12 Jun 2017
In reply to krikoman:

I'm pretty sure that you can't change water suppliers, given there is no national grid for water.
1
Moley on 12 Jun 2017
In reply to krikoman:

I follow your thinking on sections of an industry being nationalised (utilities are an obvious example) and giving public an opportunity to chose between private or public supplier.
That would be very interesting as to whether the prices would match, whether users would chose the cheapest alternative only, or pay more for gas/water from a public supplier - it may be the cheaper alternative - out of conscience.

As I look at it from the other side, I think "What would the government get out nationalisation"? A big gamble, high stakes if it goes wrong; strikes me as a great carrot to dangle in front of supporters but to probably never quite get there. Who knows?
Bob Kemp - on 12 Jun 2017
In reply to neilh:
I agree about the mature bit - it's the sophistication I'm wondering about. You see people describing for example the Dutch or Swiss economies as sophisticated, but not the UK. Sophisticated tax avoidance maybe!
Post edited at 20:55
birdie num num - on 12 Jun 2017
In reply to krikoman:

One upside of nationalising the railways is that there will be no further need to sit in the alleyway huffing and puffing, and pretending there are no seats available
1
Bob Kemp - on 12 Jun 2017
In reply to birdie num num:

We can expect representatives of the Daily Mail to be scouring trains from Day One of railway nationalisation looking for exactly such an opportunity.
3
lummox - on 13 Jun 2017
In reply to birdie num num:

I'm impressed that Branson found time to go through the train CCTV whilst suing a NHS Trust for having the temerity not take up his business offer. Multi tasking at its finest.
2
krikoman - on 13 Jun 2017
In reply to Andy Hardy:

> I'm pretty sure that you can't change water suppliers, given there is no national grid for water.

It's on it's way, or was at least before May fest, not sure about the grid, but the ability to change supplier.
2
neilh - on 13 Jun 2017
In reply to Bob Kemp:

I do not know of any country which does not practise tax avoidance as part of its economy structure so to speak.
2
L edwardgrundy2 - on 13 Jun 2017
In reply to krikoman:
Depends how it's done but I can think of the following. I think it's worth trying.

Downsides: risk is borne by the tax payer if it goes wrong (to some extent risk is borne by tax payer for banks anyway); could distort market if it's given or percieved as being gievn some kind of advantage; reduces private investment opportunities, eg for pensions; political issues around paying high wages for CEOs etc.

Upsides: profits go to tax payer - more if gov borrows for them but they pay market rates to gov; reduces risk of exessive profits from private firms; could provide useful information to regulatory bodies - for example, they may be better placed than regulators to spot malpractice; could be used as example of restraint in CEO pay.
Post edited at 09:25
L edwardgrundy2 - on 13 Jun 2017
In reply to neilh:

> I do not know of any country which does not practise tax avoidance as part of its economy structure so to speak.

Not exactly sure what you mean but I expect it's kind of behind the point: which is that we're bordering on being a tax haven - ie we do it more than (most) other countries.
1
Noo Noo - on 13 Jun 2017

> From what I can gather (talking to more right wing friends) they all seem to have an ideological belief that the state *cannot* run private industry, which has its grounding in a philosophy based on the writings of Hayek etc - essentially 1980s Thatcherite / Reaganite politics.

> It is a real belief that being publicly owned means that it must be worse, and that only private enterprises can innovate. I think it is nonsense, because it is ideological rather than based on evidence, but then I also think that it is equally rubbish to suggest that any single industry would automatically be better off in the public ownership. I'd advocate a case by case, evidence based approach that looked at the pros / cons, but no one seems to offer such a thing...

Thanks for this.
Yes I agree with what you are saying.

For me, based on my limited experience and exposure if you have a pot of money set aside for a particular service I'd prefer to give that money to the people that ultimately are in control of that service and tell them to get on with it. I do not want them to procure consultants to tender, provide a contract and procure a contractor to do that work because in my experience all of this procurement comes from the original budget. Of course there's then a cost in overseeing that contract. But because the organisation that is in control of the service has removed all of its resources to do the work then they can show a cost saving!!! It just feels such a broken way of doing things to me with money being directed away from what it is actually intended for. Add in the bureaucracy of ensuring quality and value and I find it quite startling how little of a budget can be directed at the work it is intended to do. Of course there's profit too!

Now I also fully agree that there needs to be a case by case basis and there are instances where a special resource, process or timescale dictates the need for input from the private sector. I'm perfectly comfortable with that and believe it is necessary but it's gone far too far in many cases.
NoddyBoulder on 13 Jun 2017
In reply to tony:

That's my point. The publicly-owned TfL has Oyster, while privately-run rail franchises don't have anything similar.

To quote a recent Private Eye column:

"In 2012 the Department for Transport (DafT) started the £45m ‘South East Flexible Ticketing’ (Seft) programme to make plastic smart-cards available on 11 franchises in and around London [...] Seft should have finished in 2014 [...] It is almost 20 years since DafT created an organisation to develop the specification for smart-cards which would work on different franchises. But franchisees, whose chief duty is to shareholders, can't be sure that investing in smart-card equipment will return profits "over the duration of the franchise" [...] No wonder Seft burned £54m of public cash [...] Last December [outsourcing zealot Chris Grayling announced] another £80m on rolling out smart ticketing!”

So the only way it will happen is by public investment of many millions of pounds, because the franchises don't benefit from improving systems across networks.

Even getting Oyster to work on local rail franchises took £40m of public money.
krikoman - on 14 Jun 2017
In reply to krikoman:

I was thinking about this yesterday.

A great example of the state NOT having a stake in our services is the housing market, where local councils were forced to sell it's housing stock and not allowed to re-invest the proceeds in housing.

We now piss mountains of money away to private landlords and have no influence on rental pricing. If local councils had a significant housing stock and had also been building houses, we'd have :
A) more houses.
B) some influence on the costs of rents ( it would be difficult for the private sector to charge significantly more)
C) money coming back into the community, rather than paying dividends to someone.
D) probably a more realistic housing market, with more chances for first time buyers.
Rob Parsons on 14 Jun 2017
In reply to krikoman:

> A great example of the state NOT having a stake in our services is the housing market ...

Defence housing is another example where it's predictably gone tits up: see e.g. https://www.theguardian.com/news/2017/apr/25/mod-privatise-military-housing-disaster-guy-hands


krikoman - on 14 Jun 2017
In reply to Rob Parsons:

It's a funny old world!
Ciro - on 14 Jun 2017
In reply to Rob Parsons:

An interesting read, and a good example of how privatisation allows companies to extract massive profits from our assets.

"In January 1996, a little more than a year after Hands had arrived at Nomura, PFG paid £696m for Angel Trains. It was only after the sale that the key element of the deal became clear. After buying Angel Trains, the Nomura consortium securitised the debt through a bond issue of £690m. This meant that within weeks of buying the trains, PFG had sold the rights to the Angel Trains income for £690m, but retained ownership of the asset. In December 1997 – less than two years after they had bought Angel – Nomura sold it on. RBS bought the business for £395m. PFG had made almost £400m in less than two years."

"After the Angel Trains deal, he could now be confident that if he bought the military housing, he would be able to almost simultaneously borrow hundreds of millions to cover the purchase price. He could then cover the costs of borrowing by renting back the housing to the MoD. According to his team’s projections, the underlying value of the properties would gradually appreciate, and once the rights to the rental income were sold, the debt would be off Nomura’s balance sheet, and they could move on to the next deal. “Nowadays, what we did is absolutely standard, it’s what private equity does,” said the second Nomura banker. “At the time, that was regarded as groundbreaking.”"


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