The State needs to wrest back control from the rail and water companies

During the eighties a great number of public assets were sold off, ostensibly with two aims in mind. The choice agenda and the share-owning democracy were given as reasons, although selling the state silver to fund tax cuts was the view among the cynical.

The creation of a share-owning democracy never really happened. It is true enough that there was a clamour when shares were first floated, but these were soon scooped up by the big fish. A quick buck for the small investor, a longer-term gain for the corporate investors, and a loss for tax-payers insofar that what was once owned by us all was (and still is) bought up, often by foreign investors.

Was the choice agenda served? For some industries the answer is undoubtedly yes. Telecommunications was liberated, although superseded by mobile communications. Power (electricity and gas) supply also gives choice, as well as huge profits (creating a call for windfall taxes, unnecessary if still publicly owned).

There were sell-offs that did nothing for the choice agenda. Railways and water are two obvious examples.

Try as I might, when I visit my local railway station I have a choice of one. That railway privatisation has failed to deliver choice is clear, that there are other manifest failures and that the railway companies are in receipt of large subsidies is also a given.

To bring the railways back into public ownership is easily and cheaply achieved. Non-renewal of franchises as and when they come about is a pain-free way to bring this back into public ownership. With climate change very much on the agenda, public transport should be playing a key role in this. I am far from certain that private profit has a role here, and I am sure that a state-funded monopoly is not progressive.

Water supply and sewage disposal are also a utility where choice is non-existent. This vital utility should not be at the mercy of the market. This is another case of a monopoly handed over with little if any discernible improvement to the customer.

Where real choice is created, and where market forces can be proved to deliver improvement, then there is an argument for the sell-offs. Neither applies to railways and water, and the state has a role to play here.

Julian Ware-Lane, Labour PPC for Castle Point

3 Responses to “The State needs to wrest back control from the rail and water companies”

  1. Progressive manifesto ideas – have your say | Left Foot Forward

    […] Julian Ware-Lane calls for renationalising of two industries because their privatisation has neither created a share-owning democracy nor created real choice in the industries. […]

  2. Tim Worstall

    “Water supply and sewage disposal are also a utility where choice is non-existent. This vital utility should not be at the mercy of the market. This is another case of a monopoly handed over with little if any discernible improvement to the customer.”

    Hmm, lesseee, since privatisation investment in water and sewage systems has soared. The government that owned them would not pay for it but private companies would and did. We’ve now got cleaner water than we had. And you want to go backwards?

  3. Introduce a living wage, say Left Foot Forward readers | Left Foot Forward

    […] a favourite of campaigning economist Richard Murphy. In fifth place, with 26 per cent, is the nationalisation of the rail and water industries which was suggested by Labour PPC Julian […]

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