Nationalisation – A Dirty Word?

When Ed Miliband told the Labour Party Conference in Brighton that he promised a freeze on energy prices, it appeared a bold policy. This was Ed and Labour looking out for its original core voters; the working class. This was Ed promising to stop the energy companies from hiking up the prices yet again, for the services that every household needs to survive. This was Ed making sure the electorate saw he was on the side of David and not Goliath. This was Ed not looking back and forging his own path as Labour leader. But this was also Ed, not going far enough.

Nationalisation, or re-nationalisation, to be precise, is what’s needed. We had it right once. There was a time not long ago in this country, when public services and infrastructure were exactly that, public. They were operated by the public for the public. They didn’t have shareholders to pay, or dividends to create. They took the money from the tax-payer and put it into running the service, whether it was electricity or water or the railways. This summer has seen the issue of nationalisation crop up time and time again. Be it the fact that the publicly owned East Coast Rail Company is on track for record customer satisfaction levels, or the coalition’s plans to privatise Royal Mail. But nationalisation remains beyond the pale. Not one of the three political parties, supposedly representing the political spectrum, look likely to put it in their manifestos. And yet, it makes sense.

Privatisation of public services isn’t working in this country. Train fares are at their highest, while train standards are not. Last summer was the wettest in 100 years and yet we saw water shortages in southern England due to the failings of a privatised water company. A water company that continued to reward its shareholders regardless. Outsourcing and privatisation have continually produced a reduction in service quality, whilst providing little to no savings for the general public. The arguments against the re-nationalisation of the railways rests on the idea that taxes would have to increase as increased subsidies would need to go to a state-owned train company. And yet, in the current system – a supposedly free-market system – the tax-payer subsidises the railways anyway. When the West Coast Mainline franchise was put out to tender, the Government signed a risk-sharing agreement with Virgin Trains. This meant in 2011/12 when Virgin Trains earnt £100 million less than they had expected, the taxpayer paid £50 million pounds to compensate them. So in effect, the profits are privatised while the losses are socialised. Equality in action, it is not.

It is unsurprising then that no other major European country has followed Britain’s lead in privatising its railways. If you take a trip on the train in Germany, its clean, efficient and quick. It’s also at least two-thirds the cost of similar journeys in Britain. The German state – through the company Deutsche Bahn – runs a public service additionally funded with the money it earns from its private ownership of another set of trains, in another country – Arriva UK.

Furthermore, re-nationalisation would give effective democratic control back to the consumer. Privatisation is meant to give the consumer more choice and yet we’ve seen cartels and monopolies arise in every public service that’s been put out to tender. The worry is, that when privatisation occurs in services people need to live, the fact that real private enterprise favours profit over and above everything else, means the wellbeing of the general public is at risk. After all, it has only been a year since the British Army were called in to provide security at the Olympics because of the inadequacy of G4S. And yet, the coalition are still seeking to privatise areas of the policing in this country. What’s more, if utilities were put back into the hands of the state, Ed could have focused his speech on the social housing crisis and really put pressure on the Tories.

As a nation Britain should return to its simple post-war position. That the services that are used by the many should not unduly profit the few. There doesn’t need to be shareholders and dividends. The profits that are created should be put back into the service, to improve its quality and efficiency. Re-nationalisation need not be a communist call to arms. It is not the slippery slope towards a socialist state. It will not signal the death of capitalism or a new world order. It’s a return to the way things were. An acceptance that even for Ed, its okay to look back, in order to move forwards.

One response to “Nationalisation – A Dirty Word?”

  1. […] a recent article ‘Nationalisation a dirty word?’  Jamie Kinnear Timson presents, as many before him, the case that the privatisation of our […]

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