Government and Politics

The Other N Word

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Some words deserve their bad reputation like the N word, but others don’t.  Nationalisation is such a word.  It is such an anathema that we don’t even discuss it.  However, Labour wants to return essential services to public ownership at the end of their franchise. So, nationalisation is on the agenda.  Right wing politicians and the establishment press are condescending and disapproving of the idea. With an election around the corner, is nationalisation really a swear word?

The Case Against Nationalisation

Neoliberal’s (right-wingers) consider nationalisation to be an overstaffed, subsidy ingurgitating waste.  Partly because the state is incapable of managing businesses. Therefore they should not own any. They use The Winter Of Discontent, when rubbish was lining the streets, as evidence of poor management and union power.

Instead of nationalisation, neoliberals subscribe to the free market and ‘Popular Capitalism’. Free markets allow businesses to compete among themselves and encourages competition. So, businesses have to deliver the most efficient, cost-effective services to survive.  Free markets also stimulate private investment doing away with the need for public investment.

At the same time, Neoliberals champion ‘Popular Capitalism’ a share-owning democracy created through privatisation. Hence the sale of publicly owned assets.  Curiously, it means that people are buying what they already own. However, they also argue that Popular Capitalism provides greater accountability.

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The Case For Nationalisation

However, there are excellent reasons for nationalisation.  Morally, all citizens should own essential services which operate for the benefit of citizens.   It feels intrinsically wrong that our utilities are controlled by foreign governments and private companies.  Nationalisation also dilutes the power of corporations and their ability to govern society. Water privatisation is a compelling case in point.

The very existence of efficient state run state companies from British Aerospace to Royal Mail undermines the neoliberal view of nationalism.  In fact, companies like East Coast Line have outperformed privatised ones. When National Express walked out on their contract the railway returned to state ownership. Under it, East Coast Line was costing the taxpayer less than any privatised network. At the same time as raising a billion pounds for the treasury. Despite the highest levels of customer satisfaction, it was forced back into privatisation. So nationalised businesses are as competitive and efficient as foreign government-owned and other privatised companies that now run our utilities.

Contrary to popular belief privatisation does not necessarily deliver a cost effective quality service. Rail fares have increased 117%. Yet, I regularly experience delays and cancellation on Southern and not as a result of industrial action.  Since privatisation Royal Mail is constantly cutting its delivery service and has stopped Sunday collections.  The truth is that since privatisation more money has been flowing out of Royal Mail rather than into it.  So, that refutes the idea that the free market provides the most efficient and cost effective services.

The Public Purse & Foreign Ownership

Many of our utilities belong to the state-owned businesses of foreign governments. They are making huge profits for their citizens from British pockets.  Those government businesses are working successfully with our trade unions. Perhaps because those government-owned foreign businesses are like EDF. It is run by the powerful French CGT trade union.  That rather makes a mockery of the neoliberal rhetoric on state management and unions. It also removes the fear generated by the Winter Of Discontent.

What is frightening, however, is that when nationalised utilities are sold, the upgrading and technological development is underwritten by the state. Privatisation is a bigger drain on the public purse than nationalisation.  Taxpayers spend billions of pounds subsidising privatised companies.  So, while shareholders receive all the profits, taxpayers pick up the bills.

Subsidising private companies also puts paid to the lie of non-interference by the government in the free market.  It is not just the banks that are bailed out by public money. Tata Steel is being rescued by the public purse and the employee’s pension fund. So if the government is using taxpayers money and interfering in the free market we might as well own part of it.

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Nationalisation An Acceptable N-Word

Nationalisation seems eminently sensible.  None of the promised benefits of privatisation has materialised.  It does not provide the customer with more choice just higher costs.  There is also a distinct lack of competition.  I also think there is a danger in allowing foreign governments to run our infrastructure.  It gives another nation leverage.  In addition to which if French, German and Spanish and other treasuries can profit from our utilities why can’t our government? Unless, it fears it cannot manage, which begs the question of why they are in power in the first place.  Finally, as much as we might be Brexiting Europe, European countries will still be running us.

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