On the wrong track: the case for renationalisation

Written by Ellie Mae O’Hagan is Media and Communications Officer for Class – the Centre for Labour and Social Studies on 11 July 2014 in Diary
Many other countries are moving away from privatising national assets in favour of public ownership. It's time for Britain to do the same, says Ellie Mae O'Hagan

I’ve spent a long time sitting on trains coursing through Britain’s green and pleasant lands. You’d think the rolling hills, rapeseed and frolicking lambs would ease one’s mind, but no. Actually I spend most of my time on trains in a state of perpetual rage. I could cope with the overcrowding, the occasional sweltering temperatures when the air-con breaks (and for some reason Virgin trains don’t have windows like the trains in India); I could even cope with the more than occasional delays. But it’s the price, readers! The blessed price! I just can’t come to terms with it. Every time I visit my parents it costs me £90. £90! Every time I travel I feel like I’ve been simultaneously mugged and slapped across the face with a wet kipper.

So like 72% of the UK population, I want something to be done. I want the government to be able to control the prices of train fare. Better still, like two thirds of the UK population, I want rail to be taken into public ownership.( http://classonline.org.uk/news/latest/new-class-yougov-poll-released-today-shows-that-most-people-are-not-benefit)

Happily, the Centre for Labour and Social Studies (Class) has released a paper this week entitled ‘Renewing Public Ownership: Constructing a Democratic Economy in the Twenty-First Century,’ by leading academic Professor Andrew Cumbers. (http://classonline.org.uk/pubs/item/renewing-public-ownership) The paper examines three decades of privatisation, and argues that it has resulted into the economy falling into the hands of a narrow set of vested corporate and financial interests. As a result of privatisation decision-making is short term, meaning that the common good is often neglected. Sticking with the example of rail, the paper argues that public subsidies to private rail companies have increased, while investment has fallen: investment in rolling stock in the five years prior to rail privatisation was over 60 per cent higher than in the five-year period to 2012. Perhaps that explains all the times I’ve darted across Chester station faster than a Virgin train because my connection was delayed.

But the paper expands its criticism of privatisation to other industries too. Because the UK has been so relentlessly committed to selling off its public assets, we are now in the perverse situation where formerly state-owned British companies are now owned by state-owned companies in other countries. This includes 25% of the British energy sector, and the move to privatise energy has led to a 10-20% increase in energy prices. 10 of the 23 regional water companies in England and Wales are foreign-owned, and a further 8 are owned by private equity groups. Aren’t we just privatising the benefits of these public assets – ensuring a small group of wealthy people benefit instead of all of us?

Many other countries seem to think so, and are now moving away from privatising national assets in favour of public ownership. Since the year 2000, 86 cities worldwide have nationalised their water supply, including the US cities Atlanta, Houston, and Indianapolis. In Germany, over 100 energy concessions have returned to public hands since 2007. Professor Cumbers says the UK is now “out of step” with the rest of the world by sticking with privatisation when so many other states are opting for something different. He calls for new and diverse forms of public ownership, which he says will restore public services to the common good. Looking at the many old train tickets in my purse, I can only come to one conclusion: it’s about time.


Tags: Ellie Mae O'Hagan, Privatisation, Public ownership

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