Anyone in favour of Nationalisation of utilities?

[JP_]

Whoa hang on, if it's bad for 'foreign' companies to buy into UK utilities, surely it must be good for Brits to buy in. Nothing wrong with profits, I work for a profit as I'm sure you do.

'Obscene profits' are a different kettle of fish of course, I think we've all had enough of seeing those.

If it is state owned then why the need for profits? Reinvest all money back into the system, fix faults, maintain it, make it more efficient etc.
At the moment shareholders, pension funds and directors on 6 figure salaries take all the profits, and then leave the system failing, and we have to pay more. I think we can agree that this approach is not working in the energy sector at the moment. It is also failing in the water supply and waste sectors.

Profit is obviously important in some businesses, but we don't have to make everything about profit, especially when people are freezing to death.

 

[ajohn]

As Starmer has pointed out nationalising currently needs money and in some areas that is needed to help support people who need it and live here.
Really the nationalise idea can only apply to the retail end of power and not the suppliers of gas for instance. His point about inflation reduction is interesting as that can have a bearing on interest rates and of course how much people have to spend. The yah boo replies to the idea - well how ever people are helped the future costs can not be predicted as they may change, They are just predictions. Any gov might find they have problems supporting people enough what ever they do. There is some mention of a tax increases.

Nationalising domestic sources, say wind power. Entirely different area. To my mind it makes sense but yes there are problems but few things are perfect. In some areas privatisation has obvious problems. It has some where ever it is done. It was supposed to improve our economic performance - has it? Also

By the time Margaret Thatcher was ousted from office in 1990, more than 40 UK state-owned businesses employing 600,000 workers had been privatised. “Over GBP60 billion of state assets were sold, and the share of employment accounted for by nationalised industries fell from 9% to under 2%." [
Money that went up in smoke reckonned to have been mostly spent on unemployment. Some of that will be down to other factors, closures etc. Subsesquent share price behaviur suggests that they were undersold. Also it seems water very deliberately so.

North see gas. If we owned it the price could be controlled even subsidised if needed. As far as I am aware we don't own it.

 

[ajohn]

If it is state owned then why the need for profits? Reinvest all money back into the system, fix faults, maintain it, make it more efficient etc.

That area is one of the catches with privatisation. The money for reinvestment has to be raised. A gov may find itself in a position where it has to increase prices of say water to do what needs to be done. Voters say I'm not voting for you as you increased the price of my water. Other parties say we wont increase prices. Things could finish up being subsidised from general taxation. Figures I found once on utilities suggest they were not. Profit but if more of that is needed prices have to go up.

Debt is involved in either case. When privatised that is on the gov's books. At our end it makes little difference - we pay for it. It appears that gov back some privatised debt so they can get low rates.

 

[JP_]

Exactly. Energy companies are making record breaking profits, all of which go into shareholder pockets, while prices have to go up

we are being royally screwed over.

 

[ajohn]

Listening to AlJ the new cap may have been mentioned. 80% increase. I usually listen to AlJ before the beeb. Mainly for Ukraine news but other stuff is often interesting.

 

[JP_]

Yep, and I bet as well as the energy prices, they'll put the daily standing charge up too.

 

[Vinty]

Why doesn't the government buy shares in these companies, maybe make themselves majority shareholders, so that the dividends go to the state rather than private investors.
The Chinese do something similar i believe.

 

[ajohn]

make themselves majority shareholders,

Germany seem to have done that with trains. Total ownership but there may also be a service that isn't info not clear enough to tell.
Yep - the new cap is up 80%. BBC say over so maybe a few more %.

The regulator has said the gov must do something about it. Highly unusual.

Truss - can she actually do what she suggests? Some it seems have wondered about a general taxation increase to cover support. It might be a sensible option. More tax on profits - some companies that pay UK tax, Not sure which ones do. Globals are good at avoiding it.

The profits are clearly not being reinvested where it needs to be quickly - they mention dates in the future.

Sunak's idea of reduced taxation if companies do reinvest. There main interest is risk, pay back time and profit. I'm not sure asset value has any bearing on a companies commercial value - dividends and share price increases are seen as the important thing. More so share prices at times.

 

[Vinty]

Germany seem to have done that with trains

The point i am making is that if private share holders can sit on their arse and get dividends for doing feck all apart from providing capital to make the business viable, why can't the state.

 

[Harry Bloomfield]

The point i am making is that if private share holders can sit on their arse and get dividends for doing feck all, apart from providing capital to make the business viable, why can't the state.

The idea was, we in the UK, should be able to easily invest in our own utilities and services. It might have been better, if investment had been restricted to only the UK, rather than profits going abroad.

 

[Dork Lard]

Sssshhhhh, Don't tell Sid.

 

[Vinty]

The idea was, we in the UK, should be able to easily invest in our own utilities and services. It might have been better, if investment had been restricted to only the UK, rather than profits going abroad.

Anyone with cash can buy shares in utility companies, so, why shouldn't the state.
I read that since privatisation, the water companies have spent 5 billion on the system, while 77 billion has been paid in dividends to private share holders.

 

[Notch7]

The point i am making is that if private share holders can sit on their arse and get dividends for doing feck all apart from providing capital to make the business viable, why can't the state.

It’s entirely possible to have a private company but with the govt as only shareholder. Basically that’s what French govt have done with EDF.

 

[Vinty]

The Communist idea of state control of the means of production doesn't work very well in reality but the on the other hand, while capitalism has been proven to generate wealth, it isn't required to distribute that wealth fairly.

 

[JP_]

The point i am making is that if private share holders can sit on their arse and get dividends for doing feck all apart from providing capital to make the business viable, why can't the state.

They can, and do. But that won't solve the problem.