Train nationalisation or not ?

[Sue Pertwee-Tyr]

The morality question is simple. If a privatisation is in a utility that is operating in a competitive field, then the competition lowers prices and increases efficiency. That happened in the electrical, gas and telecom sell offs. That is a morale sell off.
<snip>
The worst one was the Royal Mail which was a good world class organisation that was sold by Labour headed by Peter Mandelson and Cameron had no option to finish it off and delegated it to Vince Cable one of the LibDem coalition members.

If it’s a utility operating in a competitive environment, it will have competition, and prices will already be competitive so why would you privatise it? If the market works, it succeeds or fails on its own competitiveness, whether in public hands or not.

On the latter point, you only argue the Post Office was the worst because you have inside knowledge of how efficient it was prior to privatisation. Why would you assume the other privatised organisations were not similarly efficient?

 

[paulfromcamden]

If it’s a utility operating in a competitive environment, it will have competition, and prices will already be competitive so why would you privatise it? If the market works, it succeeds or fails on its own competitiveness, whether in public hands or not.

On the latter point, you only argue the Post Office was the worst because you have inside knowledge of how efficient it was prior to privatisation. Why would you assume the other privatised organisations were not similarly efficient?

I think this is exactly what Mick is saying. Energy and telecoms privatisation/deregulation means we can buy electricity/gas and broadband from competing companies. That's not true for the water companies or Royal Mail. It's obviously also not true for the firms that maintain the infrastructure. I'd argue it's also not true for most rail services where the majority of journeys are on a line operated by a single TOC.

 

[Mick P]

I think this is exactly what Mick is saying. Energy and telecoms privatisation/deregulation means we can buy electricity/gas and broadband from competing companies. That's not true for the water companies or Royal Mail. It's obviously also not true for the firms that maintain the infrastructure. I'd argue it's also not true for most rail services where the majority of journeys are on a line operated by a single TOC.

Correct.

 

[Sue Pertwee-Tyr]

I think this is exactly what Mick is saying. Energy and telecoms privatisation/deregulation means we can buy electricity/gas and broadband from competing companies. That's not true for the water companies or Royal Mail. It's obviously also not true for the firms that maintain the infrastructure. I'd argue it's also not true for most rail services where the majority of journeys are on a line operated by a single TOC.

I don't see why the fiction employed to deregulate electricity and gas, couldn't also be employed for, eg water. Firms actually provide the service, but who we pay for that service doesn't have to actually do the providing, ie transport the actual cubic metres of gas, or the electrons, we consume; they just account for their share in some sort of clearing house. So why could I not move my water and sewerage charges to another provider if I chose?

In truth, I'm not disagreeing with the principle that a natural monopoly ought not to be in private hands; but some of those privatisations that Mick approves of, are only demonopolised (is that a word?) by dint of some fancy legal and financial footwork. It's mainly a figleaf.

 

[ks.234]

I think this is exactly what Mick is saying. Energy and telecoms privatisation/deregulation means we can buy electricity/gas and broadband from competing companies. That's not true for the water companies or Royal Mail. It's obviously also not true for the firms that maintain the infrastructure. I'd argue it's also not true for most rail services where the majority of journeys are on a line operated by a single TOC.

Yes. There can be a good case to be made for some privatisations, but we are talking about the moral case for privatisation, the idea that privatisation is itself a good thing.

We also have to ask to what end is privatisation or nationalisation for? Moral or Amoral?

Do moral considerations count as good? If they are, how are they measured? Is the wider good of having happier, healthier, people worth counting? How much will it cost? Who pays?

As ever, who pays?

But along with privatisation and deregulation is an ideological belief that government spending is the path to ruin, so ‘who pays’ is always ‘the taxpayer’.

 

[paulfromcamden]

I don't see why the fiction employed to deregulate electricity and gas, couldn't also be employed for, eg water.

I wondered that as well. Dunno. Maybe gas and leccy are just more cost effective to ship around than water so you can create a wholesale market but piping in water from Norway would result in it costing £50 to take a bath. I'm sure there are members brighter than me who could answer.

 

[ks.234]

 

[Mick P]

I don't see why the fiction employed to deregulate electricity and gas, couldn't also be employed for, eg water. Firms actually provide the service, but who we pay for that service doesn't have to actually do the providing, ie transport the actual cubic metres of gas, or the electrons, we consume; they just account for their share in some sort of clearing house. So why could I not move my water and sewerage charges to another provider if I chose?

In truth, I'm not disagreeing with the principle that a natural monopoly ought not to be in private hands; but some of those privatisations that Mick approves of, are only demonopolised (is that a word?) by dint of some fancy legal and financial footwork. It's mainly a figleaf.

You obviously have not looked into how each industry works. The first privatisation was BT in 1980. Pre privatisation every phone in the country was a BT one. BT controlled the manufacture of the phones, the telephone cables and lines were all installed by BT. I can remember having my first telephone in 1973. It was a 4 month waiting list and the cost was £80.00. That level of service applied to both the domestic and commercial markets. After privatisation, competition was let in. You could buy your own phone and simply plug it in for a fraction of BT's cost. You had to use BT's line system for many years but eventually the likes of NTL and others came in and the cost of telephone rentals stablised.

Today I pay £54pm for a landline, two tv boxes and a fairly fast broadband. Back in the early 1970s a typical landline phone bill was about £10.00 pm. The average wage back then was about £1700pa. So you can see how things have improve.

Now take a look at the water boards. They have territorial reservoirs and pipes to deliver water to regional addresses. If you want water, you have to buy your water from the same reservoir as you did 50 years ago and the same pipes deliver the water to your house. The shareholders now own that infracture and it is impossible for you to use another company.

If the government had even suggested that different companies would have to compete for the supply of water to every address and yet still be responsible for reservoirs and pipes, they would have walked away. Therefore the privatisations of these non comp industries was a total farce. This applied to the Royal Mail and Rail Board. If you want to take a train to London, you jump on the same train and use the same stations and rail track. The only element of competition is that rail owners have to compete for effectively renting the rail lines but it is pretty feeble.

Despite privatisation of the Royal Mail, you use the same pillar box and your letters go through the same sorting office and get delivered by the same post man as pre privatisation. Commercial firms have some clout and can do deals with private companies but you can't.

That is why I am saying what I am saying.

 

[Sue Pertwee-Tyr]

You obviously have not looked into how each industry works. The first privatisation was BT in 1980. Pre privatisation every phone in the country was a BT one. BT controlled the manufacture of the phones, the telephone cables and lines were all installed by BT. I can remember having my first telephone in 1973. It was a 4 month waiting list and the cost was £80.00. That level of service applied to both the domestic and commercial markets. After privatisation, competition was let in. You could buy your own phone and simply plug it in for a fraction of BT's cost. You had to use BT's line system for many years but eventually the likes of NTL and others came in and the cost of telephone rentals stablised.

Today I pay £54pm for a landline, two tv boxes and a fairly fast broadband. Back in the early 1970s a typical landline phone bill was about £10.00 pm. The average wage back then was about £1700pa. So you can see how things have improve.

Now take a look at the water boards. They have territorial reservoirs and pipes to deliver water to regional addresses. If you want water, you have to buy your water from the same reservoir as you did 50 years ago and the same pipes deliver the water to your house. The shareholders now own that infracture and it is impossible for you to use another company.

If the government had even suggested that different companies would have to compete for the supply of water to every address and yet still be responsible for reservoirs and pipes, they would have walked away. Therefore the privatisations of these non comp industries was a total farce. This applied to the Royal Mail and Rail Board. If you want to take a train to London, you jump on the same train and use the same stations and rail track. The only element of competition is that rail owners have to compete for effectively renting the rail lines but it is pretty feeble.

Despite privatisation of the Royal Mail, you use the same pillar box and your letters go through the same sorting office and get delivered by the same post man as pre privatisation. Commercial firms have some clout and can do deals with private companies but you can't.

That is why I am saying what I am saying.

Yes, but you’re not being consistent. You approve of, eg, electricity privatisation and deregulation, but my power came from essentially the same coal, gas or nuclear stations as before, and travelled the same grid network to my home. It’s only different to your water example because somebody said so, not because it’s actually conceptually different.

 

[Mick P]

Yes, but you’re not being consistent. You approve of, eg, electricity privatisation and deregulation, but my power came from essentially the same coal, gas or nuclear stations as before, and travelled the same grid network to my home. It’s only different to your water example because somebody said so, not because it’s actually conceptually different.

Ok - Before privatisation you bought your electricity off the CEGB and they bought coal from the coal board, they generated electricity, send it it through sub stations via their cables into your house. The downside is that UK electricity was the most expensive in the EU and British industry was screaming blue murder about it.

I remember this well because I was once in charge of energy buying and also sat on the Main Energy Users Council. When Privatisation took place, 46 companies were set up and competition was fierce. The industry now consisted of a supply chain of generators who produced the energy, distributors who ran it down the cables and each distributor played the generators against each other and you and the private companies could play each distributor against each other.

The price plummeted by 46% over two years and I was sitting on my arse getting distributors to fall other each other for custom. You can do the same (but covid has buggered that up a bit with capping) and you can even employ companies to recommend a distributor to you.

Large companies can negotiate a lower price than you but the overall effect is that the UK now has competitive energy prices. I pay considerably more for electricity in my Spanish place than I do in the UK because I am stuck with the same Spanish supplier (Endesa) whether I like it or not.

I hope this clarifies the position.

 

[Enfield boy]

Even as a Tory I have to accept that privatising the Royal Mail, Rail structure and Water supply was purely a money making opportunity for those who bought up the shares. All it did was to replace a government monopoly with a privately owned monopoly and the shareholders are sucking it dry with no improvement to the services. The pressure to improve services is virtually nil and they take full advantage of it. To quote Ted Heath, it is the unacceptable face of capitalism.

We need to teach these shareholders who buy into an infrastructure without any competition a lesson that will be long remembered and that is to take the shares back without any compensation. They will squawk and make a noise but the lesson will be learned for any future potential acquisition, - do not replace one monopoly with another.

I agree yet I'd be royally pissed off if one of my small pensions went tits up as a result! Piss poor socialist, me.

Privatisations are done for the public good. They bring private money into to government coffers and make the industry concerned more efficient.

The moral aspect was not to privatise certain industries.

First sentence I vehemently disagree with and showed a few ordinary people could make a bob or 2 before the vultures took the lot. The second is, well, bollx. Meant not as an insult to Mick but we can see where "the public good" has led. It's been zero fkn good for the public.

We need to teach thieving corrupt Tory scum a lesson, ideally with fire.

The Conservative Party created all this mess. They own it outright.

OK

I think this is exactly what Mick is saying. Energy and telecoms privatisation/deregulation means we can buy electricity/gas and broadband from competing companies. That's not true for the water companies or Royal Mail. It's obviously also not true for the firms that maintain the infrastructure. I'd argue it's also not true for most rail services where the majority of journeys are on a line operated by a single TOC.

No. The grid is the grid. The comms network was BT until a couple of years age when lying shysters like Gigaclear were allowed to dig up our roads, balls up a cable or two and lie about what they could offer (without prejudice as the rep didn't put it in writing to me).

A gas pipeline is singular, the mains elec cable likewise. It's duplication of execs taking what they can while letting the infrastructure go to hell.

 

[Sue Pertwee-Tyr]

The position was clear before, Mick. I just think you are cherry picking the examples you approve of and ignoring the similarities with those you don’t.

 

[paulfromcamden]

No. The grid is the grid. The comms network was BT until a couple of years age when lying shysters like Gigaclear were allowed to dig up our roads, balls up a cable or two and lie about what they could offer (without prejudice as the rep didn't put it in writing to me).

The only industry I really have any knowledge of is telecoms. BT/Openreach do indeed operate most of the 'last mile' infrastructure. But that's almost just the patch cable that plugs you into the wider network - which is operated by a large number of physical infrastructure providers and an almost countless number of network providers (look at the member list at the London Internet Exchange). What you're buying is 1) rental of the bit of BT copper and 2) transit across your chosen broadband provider's network.

And from a business/technology perspective, when my job was engineering network connectivity, having multiple providers was crucial. I could buy a leased line from BT and another from COLT so when BT did something silly and all their connectivity went down my employer was still online. It was very rare to try and connect to a location in the UK and for it not to have points of presence from at least three service providers. This is a good thing!

 

[PsB]

Ok - Before privatisation you bought your electricity off the CEGB and they bought coal from the coal board, they generated electricity, send it it through sub stations via their cables into your house. The downside is that UK electricity was the most expensive in the EU and British industry was screaming blue murder about it.

I remember this well because I was once in charge of energy buying and also sat on the Main Energy Users Council. When Privatisation took place, 46 companies were set up and competition was fierce. The industry now consisted of a supply chain of generators who produced the energy, distributors who ran it down the cables and each distributor played the generators against each other and you and the private companies could play each distributor against each other.

The price plummeted by 46% over two years and I was sitting on my arse getting distributors to fall other each other for custom. You can do the same (but covid has buggered that up a bit with capping) and you can even employ companies to recommend a distributor to you.

Large companies can negotiate a lower price than you but the overall effect is that the UK now has competitive energy prices. I pay considerably more for electricity in my Spanish place than I do in the UK because I am stuck with the same Spanish supplier (Endesa) whether I like it or not.

I hope this clarifies the position.

Do you mean energy prices in general or electricity in particular? I don't want to question what you say about energy prices back then, but according to metrics I follow (ratio of gas to electricity prices) UK electricity prices seem to be among the highest in Europe these days, even for corporate users. I'm not sure why it is this way, because the structure of the market in the UK doesn't strike me as fundamentally different from what it is in other European countries. What indicators* make you say UK electricity is cheap relative to other European countries?

About water versus electricity: the point you make about water (the infrastructure hasn't changed in decades, and it is very difficult for the consumer to make alternative connections to the source) seems to essentially apply to electricity, too. In other countries where private companies compete to supply water or water treatment, the competition does not necessarily take place at the consumer level. It is typically done at the local authority level: each community periodically issues a tender and the water supply majors compete for the award. Same for sewage/water processing, same for rubbish collection and recycling, etc. I'm not saying this is ideal (municipal politics and tenders are murky things) but it does provide a model where low-performers can be hoofed out.

*apart from the anecdotal one about your place in Spain

 

[ks.234]

“Since privatisation, water companies have invested "less than nothing".

Here's what happened when I raised this with the CEO of Ofwat.”

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