Do you agree with nationalisation? Railways, energy and utility companies.
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I'm on the fence on this and open to being persuaded by evidence of how something works better elsewhere.
Ideologically I would prefer to privatise things but you have to be realistic when there are markets with high barriers to entry and limited competition: they are not going to be efficient markets whoever runs them.
However when you compare the UK to what goes on in Europe you find that in railways we seem to be doing worse, we have higher fares for people that are peak time commuters and need the train to get to work. In energy markets however we one of the cheaper countries in Europe for electricity.
So there might be some scope for looking at how other countries in Europe do their transport but on energy I'm less convinced.
The big problem with energy is energy is expensive to produce. People have unrealistic expectations with energy. They want to have guaranteed supply, whenever they want it, they take it for granted as a guaranteed right, which is why its so politically toxic for any politician to consider energy rationing ('the lights going out'). But they also think that it should be cheap and if its not cheap the government should step in to make it cheap.
Unfortunately building the capacity to keep the supply on is expensive. The fixed costs of building the generation capacity are very high, so even though once its built the marginal costs of production aren't too high, firms need to be able to earn large margins over their production costs to pay back the costs sunk in building the capacity.
Ideologically I would prefer to privatise things but you have to be realistic when there are markets with high barriers to entry and limited competition: they are not going to be efficient markets whoever runs them.
However when you compare the UK to what goes on in Europe you find that in railways we seem to be doing worse, we have higher fares for people that are peak time commuters and need the train to get to work. In energy markets however we one of the cheaper countries in Europe for electricity.
So there might be some scope for looking at how other countries in Europe do their transport but on energy I'm less convinced.
The big problem with energy is energy is expensive to produce. People have unrealistic expectations with energy. They want to have guaranteed supply, whenever they want it, they take it for granted as a guaranteed right, which is why its so politically toxic for any politician to consider energy rationing ('the lights going out'). But they also think that it should be cheap and if its not cheap the government should step in to make it cheap.
Unfortunately building the capacity to keep the supply on is expensive. The fixed costs of building the generation capacity are very high, so even though once its built the marginal costs of production aren't too high, firms need to be able to earn large margins over their production costs to pay back the costs sunk in building the capacity.
Original post by chrisawhitmore
The other thing you need to do to nationalize an industry is pay for it. Where do you propose we get the money for this?
Remember that the companies involved in the energy industry make profit, nationalisation would mean the government would get that profit - not the companies. There are no costs involved for the government. Except in the case of a nationalised industry, the government can choose to pursue lower profit margins to benefit the population at large, or decide to improve infrastructure in certain areas.
Leaving these things to the 'hand of the free market' sounds quite loony to be honest.
Original post by JamesGibson
Remember that the companies involved in the energy industry make profit, nationalisation would mean the government would get that profit - not the companies. There are no costs involved for the government. Except in the case of a nationalised industry, the government can choose to pursue lower profit margins to benefit the population at large, or decide to improve infrastructure in certain areas.
Leaving these things to the 'hand of the free market' sounds quite loony to be honest.
Leaving these things to the 'hand of the free market' sounds quite loony to be honest.
You have to buy the company in order to nationalise it. Thats the cost being referred to.
The Govt borrowed £200 in December for each man, woman and child to keep the Govt afloat.
The poster is suggesting borrowing more would be 'bad'.
Original post by JamesGibson
Remember that the companies involved in the energy industry make profit, nationalisation would mean the government would get that profit - not the companies. There are no costs involved for the government. Except in the case of a nationalised industry, the government can choose to pursue lower profit margins to benefit the population at large, or decide to improve infrastructure in certain areas.
Leaving these things to the 'hand of the free market' sounds quite loony to be honest.
Leaving these things to the 'hand of the free market' sounds quite loony to be honest.
Except when we had a a nationalised industries they were firstly loosing money so they were continually getting tax payer bailouts, an issue that the World Trade Organisation frowns on as its a givernment subsidy that's acts as a protectionist measure. Secondly, the tax payer is also libel for the rather large pensions liability that these nationalised organisations create.
Energy companies in the UK make profit, but the UK still has the cheapest energy prices in Western Europe.
There's many other levers that givernment a can use to lower prices. It would seem that common sense has now prevailed throughout Europe on this one.
http://www.telegraph.co.uk/finance/newsbysector/energy/10588121/European-Commission-to-ditch-legally-binding-renewable-energy-targets.html
Original post by JamesGibson
Miliband has been wise to raise attention to an issue that's been effecting ordinary people for decades - the extortionate bills being charged by transport and energy companies. Bills have been rising consistently year and year, and there's keen evidence to suggest that this is not entirely because of increasing cost of raw fuel, but instead a consequence of cold-hearted profiteering on the behalf of a few business fatcats.
Just two weeks the 2.8% rise in rail fares came into effect. A fair increase or another attempt to make life harder for ordinary people to get to work and back. Could public ownership protect British people from profit-driven interests of these private companies?
Do you think that Britain should nationalise its railway and energy companies?
Just two weeks the 2.8% rise in rail fares came into effect. A fair increase or another attempt to make life harder for ordinary people to get to work and back. Could public ownership protect British people from profit-driven interests of these private companies?
Do you think that Britain should nationalise its railway and energy companies?
I think your question is too simple in itself. When looks at the supply and retail arms (operators in the case of rail) different factors are at work which require different solutions.
In regards to the infrastructure for rail and energy (Network Rail and National Grid) then i largely agree that the free market cannot provide power or infrastructure on a national scale (a pure free market would not provide power to a tiny village in the north because it would be inefficient), as such i believe that they should be owned 51% by the state. In the case of Network Rail they are already an independent state entity however the National Grid is part of a multinational company which essentially has a licensed monopoly, state control would not only allow us to lower the cost of electricity by at least 10% on average (its net profit margin is 18%) but we could also abolish the subsidy system which is currently making Scotland pay for London's electricity (yup, your national grid charges subside London).
In regards to operations then i wholly object to a potentially inefficient state taking control where prices are decided on the whim of the next election (margins are also quite small). Currently railway competition is discouraged by franchise agreements which contain 'moderation of competition clauses', these should be wholly abolished in order to enable open access operators to increase service provision, generally with newer trains as well. In regards to energy we need tax incentives in order to provide an incentive for new entrants to enter the market and in addition we need to abolish the secondary market which allows the big 6 to sell energy to each other at inflated prices (for that you have a 2001 Labour act to thank).
In addition to the above we must remove the burden of taxation from energy and rail consumers by making spending cuts in other areas.
Original post by JamesGibson
Agreed, but maybe consumers could be incorporated into the mix? Ed Miliband is also talking about giving more powers to consumer pressure groups like Citizens Advice Bureau and Which? - maybe ordinary consumers could be given a role in decision making as well. Look at the co-op retail chain, all of their customers accumulate points as they use co-op services, I'm sure the government to implement a similar system.
Some Tories might argue that this model is inefficient, or not profitable enough. However, all evidence points to the contrary. Most co-ops, because of their sustainable ideals and fair employee/consumer relationships are far more successful that short-lived private sector start-ups. Just take a look at John Lewis, Waitrose and all of the co-op stores - collectively owned, yet still make some of Britain's leading brands.
Some Tories might argue that this model is inefficient, or not profitable enough. However, all evidence points to the contrary. Most co-ops, because of their sustainable ideals and fair employee/consumer relationships are far more successful that short-lived private sector start-ups. Just take a look at John Lewis, Waitrose and all of the co-op stores - collectively owned, yet still make some of Britain's leading brands.
Tesco customers also accumulate points and rewards.
Having worked at Waitrose and having a close friend who worked at the Co-op i can tell you that like any other supermarket they essentially pay minimum wage and infact my friend was quite scathing about the Co-op saying that Tesco was preferable (he worked there too). Waitrose does pay you a bonus of around 16% per year which is great but they don't give it to staff who work their less than 3 months so anybody getting a Christmas job won't experience much different from any other business. I'd also add that they are on the expensive side though Waitrose is fantastic in all other areas.
Note that i'm not making a dig at Co-Ops in general and i have no objection to businesses using whatever management model they like but i don't think these big businesses are really the types of socialist co-operatives most people think of. Nowadays they can be described simply as nicer businesses (though in the case of the Co-op maybe not even).
(edited 10 years ago)
Original post by JamesGibson
Remember that the companies involved in the energy industry make profit, nationalisation would mean the government would get that profit - not the companies. There are no costs involved for the government. Except in the case of a nationalised industry, the government can choose to pursue lower profit margins to benefit the population at large, or decide to improve infrastructure in certain areas.
Leaving these things to the 'hand of the free market' sounds quite loony to be honest.
Leaving these things to the 'hand of the free market' sounds quite loony to be honest.
Well, the main cost would be acquiring the energy companies. Unless you're just planning to march troops into power stations, you'll have to pay the market value for the companies and their assets.
Original post by MatureStudent36
Except when we had a a nationalised industries they were firstly loosing money so they were continually getting tax payer bailouts, an issue that the World Trade Organisation frowns on as its a givernment subsidy that's acts as a protectionist measure. Secondly, the tax payer is also libel for the rather large pensions liability that these nationalised organisations create.
Energy companies in the UK make profit, but the UK still has the cheapest energy prices in Western Europe.
There's many other levers that givernment a can use to lower prices. It would seem that common sense has now prevailed throughout Europe on this one.
http://www.telegraph.co.uk/finance/newsbysector/energy/10588121/European-Commission-to-ditch-legally-binding-renewable-energy-targets.html
Energy companies in the UK make profit, but the UK still has the cheapest energy prices in Western Europe.
There's many other levers that givernment a can use to lower prices. It would seem that common sense has now prevailed throughout Europe on this one.
http://www.telegraph.co.uk/finance/newsbysector/energy/10588121/European-Commission-to-ditch-legally-binding-renewable-energy-targets.html
I was just talking about the initial cost of buying out every energy company in the UK. I think that'd be a rather large addition to the deficit.
Original post by JamesGibson
Remember that the companies involved in the energy industry make profit, nationalisation would mean the government would get that profit - not the companies. There are no costs involved for the government. Except in the case of a nationalised industry, the government can choose to pursue lower profit margins to benefit the population at large, or decide to improve infrastructure in certain areas.
Leaving these things to the 'hand of the free market' sounds quite loony to be honest.
Leaving these things to the 'hand of the free market' sounds quite loony to be honest.
I'm afraid this is incorrect.
If you take railway operators then as they under franchise agreements you can simply wait them out for free so that's okay and Network Rail is already so you've got your railways sorted for nothing. Energy and water on the other hand are different beasts. They are not subject to time expiration franchise agreements and as such you would have to purchase them at market price. If you do not purchase them at market price then in the case of water for example you have just raided the pensions of Canadians and Singaporeans. The National Grid is multinational and would be pretty complicated to buy and also expensive (market cap is well over £20bn).
It's not as easy as just seizing control unless you want to piss off other countries who have invested in these companies and that's before you get to your ordinary people who may do it through work or have small investments themselves or through an ISA.
Original post by chrisawhitmore
I was just talking about the initial cost of buying out every energy company in the UK. I think that'd be a rather large addition to the deficit.
I will definitely agree with you on that.
Prior to WW2 UK had the best railway system and service in the world, strangely they were ALL built using private money. After WW2 and the onset of nationalization it became one of the worst in Europe. Most of you on here must be too young to remember British Rail when it was still a behemoth of a bureaucracy and crap services. I still remember how it was in the 1980s, crap services, dirty rolling stock and it wasn't uncommon to find trains where the seats were all ripped and torn. I don't recall anyone saying it was cheap either. Delays and cancellations were a guaranteed certainty which probably was the reason why most people trusted their Ford, Rover or Vauxhalls more than they would on the rails. Complaints? hahahahaha good luck getting it heard.
Generally I believe in sustainability, nationalization isn't the way to go as the state isn't always the best allocator of resources, I wouldn't want another term of Liebour government who inflated the civil service, imagine what they could do to a railway service when they inflate it even further, it is either a bigger deficit or higher ticket prices..........take your pick.
I don't see a problem with railways being run for a profit, it is very simple really profit = efficiency. Considering that UK's trains these days are mostly on-time most of the time I think the model works.
UK once used to have one of the biggest car industries in the world, most companies were British owned, then nationalization set in with a company called British Leyland. From a reputation of Britain making cars that were robust, reliable and well made it became known as the country whose cars were unreliable, crap and best to stay far away from, the cancer hasn't been easy to fix, up until today that reputation is out there. Producing cars like the Austin Allegro, Morris Marina and the junks like Metros, Maestros etc probably didn't help and could only happen due to interference from the state. While there is no denying state-owned can be good, Volkswagen is still mostly state-owned strangely it is one of the most valuable companies in the world which was mostly down to good management practices, very little state-interference and most likely it was from day one made to be a company that was run for profit rather than as a social service. Could UK do something similar? Probably not to say the least.
Generally I believe in sustainability, nationalization isn't the way to go as the state isn't always the best allocator of resources, I wouldn't want another term of Liebour government who inflated the civil service, imagine what they could do to a railway service when they inflate it even further, it is either a bigger deficit or higher ticket prices..........take your pick.
I don't see a problem with railways being run for a profit, it is very simple really profit = efficiency. Considering that UK's trains these days are mostly on-time most of the time I think the model works.
UK once used to have one of the biggest car industries in the world, most companies were British owned, then nationalization set in with a company called British Leyland. From a reputation of Britain making cars that were robust, reliable and well made it became known as the country whose cars were unreliable, crap and best to stay far away from, the cancer hasn't been easy to fix, up until today that reputation is out there. Producing cars like the Austin Allegro, Morris Marina and the junks like Metros, Maestros etc probably didn't help and could only happen due to interference from the state. While there is no denying state-owned can be good, Volkswagen is still mostly state-owned strangely it is one of the most valuable companies in the world which was mostly down to good management practices, very little state-interference and most likely it was from day one made to be a company that was run for profit rather than as a social service. Could UK do something similar? Probably not to say the least.
With nationalisation you have to find the right balance. Allow a certain percentage of shares to be privately owned so that the business is still required to be successful and well managed to return a profit on investment. Set competitive wages based on performance to attract people who know how to run it properly. Make sure employees still get a fair deal, with everyone on at least a living wage or higher, and for the prices of the services provided to be affordable to the customers. I think that EDF is a good example of a well run government owned company. The problem is that most British nationalised companies were poorly managed, which the Conservatives used as an excuse to sell them off, when these companies could have been reformed. Selling off national assets to foreign investors isn't ideal.
I think the issue is more the structure of the services not whether they are public or private. The main problem I see with the railways is the Network Rail/Train Operating Companies/Train Leasing Company split.
Original post by Rakas21
I'm afraid this is incorrect.
If you take railway operators then as they under franchise agreements you can simply wait them out for free so that's okay and Network Rail is already so you've got your railways sorted for nothing. Energy and water on the other hand are different beasts. They are not subject to time expiration franchise agreements and as such you would have to purchase them at market price. If you do not purchase them at market price then in the case of water for example you have just raided the pensions of Canadians and Singaporeans. The National Grid is multinational and would be pretty complicated to buy and also expensive (market cap is well over £20bn).
It's not as easy as just seizing control unless you want to piss off other countries who have invested in these companies and that's before you get to your ordinary people who may do it through work or have small investments themselves or through an ISA.
If you take railway operators then as they under franchise agreements you can simply wait them out for free so that's okay and Network Rail is already so you've got your railways sorted for nothing. Energy and water on the other hand are different beasts. They are not subject to time expiration franchise agreements and as such you would have to purchase them at market price. If you do not purchase them at market price then in the case of water for example you have just raided the pensions of Canadians and Singaporeans. The National Grid is multinational and would be pretty complicated to buy and also expensive (market cap is well over £20bn).
It's not as easy as just seizing control unless you want to piss off other countries who have invested in these companies and that's before you get to your ordinary people who may do it through work or have small investments themselves or through an ISA.
When the welfare of British people are at stake, I think it's fair to take back our rails from the international hedgefunds and brokers that bought into it. Our government needs to stop pandering to business/financial interests and start doing what's right for ordinary people.
Original post by JamesGibson
When the welfare of British people are at stake, I think it's fair to take back our rails from the international hedgefunds and brokers that bought into it. Our government needs to stop pandering to business/financial interests and start doing what's right for ordinary people.
And by 'international hedgefunds and brokers' you mean pension funds for UK citizens (as these hold the majority of the shares).
Ordinary people will love that.
Original post by Quady
And by 'international hedgefunds and brokers' you mean pension funds for UK citizens (as these hold the majority of the shares).
Ordinary people will love that.
Ordinary people will love that.
Really? Hedge funds are usually reserved only for richer (£500k+) investors, but you could be talking about mutual funds - which actually only account for about 20% of the money invested in these companies. In fact, a huge portion of money invested in rail and energy companies is straight from institutional investors like investment banks and stock brokers. At the very least we could choose to safeguard mutual funds (not hedge funds) and default on obligations to the richer, financial investors.
Ultimately, there are some very rich people involved in rails. I'm not a finance expert, but I know when something's unfair. We shouldn't have fatcats running a profit on services that were better provided under the government.
And most people agree with me - http://yougov.co.uk/news/2013/11/04/nationalise-energy-and-rail-companies-say-public/
Original post by JamesGibson
Really? Hedge funds are usually reserved only for richer (£500k+) investors, but you could be talking about mutual funds - which actually only account for about 20% of the money invested in these companies. In fact, a huge portion of money invested in rail and energy companies is straight from institutional investors like investment banks and stock brokers. At the very least we could choose to safeguard mutual funds (not hedge funds) and default on obligations to the richer, financial investors.
Ultimately, there are some very rich people involved in rails. I'm not a finance expert, but I know when something's unfair. We shouldn't have fatcats running a profit on services that were better provided under the government.
And most people agree with me - http://yougov.co.uk/news/2013/11/04/nationalise-energy-and-rail-companies-say-public/
Ultimately, there are some very rich people involved in rails. I'm not a finance expert, but I know when something's unfair. We shouldn't have fatcats running a profit on services that were better provided under the government.
And most people agree with me - http://yougov.co.uk/news/2013/11/04/nationalise-energy-and-rail-companies-say-public/
And why exactly do you believe it is okay to default just because it is owed to someone wealthier?
You want another Black Wednesday?
Original post by Alfissti
And why exactly do you believe it is okay to default just because it is owed to someone wealthier?
You want another Black Wednesday?
You want another Black Wednesday?
Because it'll allow us to bring back our services under democratic control, rather than in the hands of whichever institution has the most money. Our services should be directed on the basis of the needs and wants of British citizens, not dictated by this invisible hand of the free market.
Original post by JamesGibson
Because it'll allow us to bring back our services under democratic control, rather than in the hands of whichever institution has the most money. Our services should be directed on the basis of the needs and wants of British citizens, not dictated by this invisible hand of the free market.
What else would you like to steal next?
How about farms and factories that produces food?
Will brick, cement and steel plants be next on your list too?
Original post by JamesGibson
Because it'll allow us to bring back our services under democratic control, rather than in the hands of whichever institution has the most money. Our services should be directed on the basis of the needs and wants of British citizens, not dictated by this invisible hand of the free market.
Even if this is the need and want of the majority of British citizens?
Original post by Quady
Even if this is the need and want of the majority of British citizens?
Let me re-iterate again, polls show that the majority of British citizens support nationalisation. The majority of Britons feel they're being exploited in some-way by their energy firms. Bills are rising year on year, pensioners are unable to heat their homes - and the rises don't correspond to increasing prices of raw fuel.
The want of the British people is nationalisation. Shown in multiple YouGov polls and reaffirmed in the poll of this thread.
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