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Labour unveils National Grid takeover plan - your thoughts?

Discussion in 'Speaker's Corner' started by SDK^, May 16, 2019 at 11:19 AM.

  1. SDK^

    Capodecina

    Joined: Oct 18, 2002

    Posts: 18,142

    Location: Midlands

    So Labour continue to push on with their plan to take the National Grid into public ownership.
    BBC article : https://www.bbc.co.uk/news/business-48286563

    My view on this :
    • The grid profit is c£33 per household pa.
    • Labour will remove the profit by nationalising at a one-off cost of £100B.
    • They will also borrow to fund annual CapEx - £5B next year alone.
    • Spending £100B plus £Bs every year to save households part of £33 is lunacy.
    What are your views/thoughts on this?
     
  2. The_Abyss

    Capodecina

    Joined: May 15, 2007

    Posts: 10,719

    Location: Ipswich / Bodham

    It is a cornerstone of Labour's next manifesto, and therefore we'll see much more on this. There'll be reassurance on how it can be transacted with minimal disruption to existing investors and other similar businesses lined up for the same treatment, and at no cost that will be felt by the taxpayer and State, and this'll be countered by claims that he's recreating Venezuela in Britain, he's a Marxist and how this will cost hard-working families money and indebt future generations.

    The truth will probably be somewhere in between the two views, either of which will be held up to serious scrutiny by the media and so the facts will soon disappear beneath a tsunami of sound bites, and at the end of it 90% of people will still vote red or blue with only a few doing something different or nothing at all.

    That's what I think.
     
  3. Dolph

    Man of Honour

    Joined: Oct 17, 2002

    Posts: 46,251

    Location: Plymouth

    If its less than market value, it will almost certainly be thrown out by the courts as well as massively economically damaging to uk investment.
     
  4. nkata

    Soldato

    Joined: Mar 1, 2010

    Posts: 6,846

    Location: Cheshire / Staffordshire

    I could see that c£33 per household easily being evaporated by centralist control aiming to redistribute costs. It is a relatively modest amount of profit for the main distributor of energy supply and for me just less than 3% of my total annual energy bill. I have worked alongside NG on several projects over the years and they are a competent organisation working well and with equally competent engineers and staff. (Dis)organisation by a Central Government we do not need.
     
  5. BowdonUK

    Wise Guy

    Joined: Jan 17, 2016

    Posts: 1,746

    Ironically, from being on the right I think its about time the government took back control of many of our institutions.
     
  6. JeditOjanen

    Mobster

    Joined: Feb 7, 2011

    Posts: 3,952

    The National Grid made an operating profit of £3.5bn on 2017-18.
     
  7. Evangelion

    Capodecina

    Joined: Dec 29, 2007

    Posts: 21,435

    Location: Adelaide, South Australia

    Essential utilities should never be privatised. I support the renationalisation of National Grid.
     
  8. SDK^

    Capodecina

    Joined: Oct 18, 2002

    Posts: 18,142

    Location: Midlands

    Your point is what? Remember National Grid is a Global Business - UK & US.
    The NG impact on UK consumer energy bills is very small.
     
  9. SDK^

    Capodecina

    Joined: Oct 18, 2002

    Posts: 18,142

    Location: Midlands

    Would you support the renationalisation if the end cost to you was more than it is currently - i.e. funded through a tax rise. [The money has to come from somewhere]
     
  10. Evangelion

    Capodecina

    Joined: Dec 29, 2007

    Posts: 21,435

    Location: Adelaide, South Australia

    Yep, because the government would push it back down again. Not only that, but I'd be more likely to benefit from cheaper electricity prices under government ownership.
     
  11. Lord-Jaffa

    Soldato

    Joined: Jul 29, 2004

    Posts: 5,207

    Location: UK

    Water should be the first one, huge profits with massive amounts of waste and lack of investment into infrastructure
     
  12. doodah

    Capodecina

    Joined: Oct 18, 2002

    Posts: 19,225

    Location: London

    A few thoughts and questions. As Dolph says - if it's below market value, fat chance.

    What do Labour actually want out of this? What will be deemed a success if it were go ahead? Because if it's to save £33 per household, I'll skip thanks.

    Broadening the issue at hand - I know BR was a mess back then but they constantly promise competition is great but what competition is there on the rail network?

    I was always under the impression water was the one that takes the proverbial pee - is this the case?

    Sensible regulation and agencies with actual teeth when companies screw up sounds like the most sensible solution to a lot of these industries.
     
  13. Stretch

    Capodecina

    Joined: Feb 14, 2004

    Posts: 11,202

    Location: Cambridge

    They should start with the government.
     
  14. Nasher

    Capodecina

    Joined: Nov 22, 2006

    Posts: 11,542

    Selling any services off was a stupid move in the first place.
     
  15. TJM

    Wise Guy

    Joined: Jun 10, 2007

    Posts: 2,140

    'The Golden Age of British Rail' on BBC4 is an interesting watch. BR spent the 70s and 80s modernising its intercity services. When the private operators arrived on the scene, they found there was little scope for improvement and the existing service patterns remained intact. (The cynical view is that privatisation only occurred because BR had sorted itself out by the end of its existence, making it easier to sell.)

    Is there competition? I think you need to break the sector down:

    Rolling stock - No. Extremely expensive and, generally speaking, built/configured to run on particular lines so an operator has to use a particular ROSCO. This 'market' is a complete sham.
    Network management - There's no money in this and it is safety critical so privatisation is idiotic. Of course, that didn't stop us trying it for a few years.
    Operations - There can be a functioning market for this. TfL own all of the equipment on the DLR and Overground but allow private operators to staff the trains, with contracts that punish avoidable delays and don't reward neglecting off-peak or less popular services. The franchising system, on the other hand, is so absurdly complicated that only a few massive companies can compete (almost all owned by nationalised foreign train companies) and losing a franchise for poor performance is almost impossible.

    Here's an article that should make anyone angry: https://www.ft.com/content/5413ebf8-24f1-11e7-8691-d5f7e0cd0a16
     
  16. dowie

    Caporegime

    Joined: Jan 29, 2008

    Posts: 38,316

    Why?
     
  17. ttaskmaster

    Sgarrista

    Joined: Sep 11, 2013

    Posts: 7,882

    Location: Reading, UK

    Compared to what? Massive failures of health and safety standards, with absolutely no investment at all, and £140 billion in backlogged infrastucture maintenance, all tied up in years of bureaucratic BS and run by micro-empires, but with no risk of being hounded by European Standards bods, since we're Brexiting?
    OK, sure. Renationalise it. Be my guest. Be my ******* guest. I'll HAPPILY take the pay rise and complete loss of any work to do. Just don't complain when nothing gets done, yeh?

    Meantime, remember that most investment since 1979 was only possible through the higher revenues that privatisation brought, that their profits are being paid to shareholders whose investments fund your pensions, and that the amount of money they're allowed to investment in infrastucture is actually decided by the government regulator. Indeed, our local lot just asked if they could invest £11 billion in infrastructure, but all signs so far point to Ofwat simply laughing and telling them where to stick it...
     
  18. Dolph

    Man of Honour

    Joined: Oct 17, 2002

    Posts: 46,251

    Location: Plymouth

    Except reality trumps belief in this matter...
     
  19. Rroff

    Man of Honour

    Joined: Oct 13, 2006

    Posts: 61,160

    Lot of potential arguments to nationalisation versus privatisation of utilities, etc. but regardless anyone who thinks that nationalisation plans under the ideologies of those currently shaping Labour will lead to a good thing aren't looking hard enough and/or don't care for the bigger picture.

    It is kind of like these people who when driving can't understand that having right of way doesn't automatically give you a right to exercise that right of way - just because you can justify something as being for the "greater good" doesn't automatically mean that it actually can accomplish something for the greater good.
     
  20. The_Abyss

    Capodecina

    Joined: May 15, 2007

    Posts: 10,719

    Location: Ipswich / Bodham

    Unless this thread turns crazy like the Brexit one, this particular element of the topic is one that'll be raised again and again, so I thought I might single it out and address it now.

    UK pension funds do invest in UK utility companies. They're attractive for a number of reasons:

    - they're stable. The regulatory environment is mostly benign.
    - they're predictable. The business models are not complex and market shocks are not likely
    - they generate income. They normally pay good, consistent dividends, which provides the kind of liquidity that many pension funds need
    - they're listed in Sterling, so no forex risk for what are primarily UK pensioners / investors

    If the utility provider in question was renationalised at the market value, then there is no loss to the pension funds. They won't be lost without this kind of business to invest in - there are plenty of other similar companies to invest in. The world will not cease turning, and everything will carry on as normal.

    if renationalisation occurred at below market value then yes, there would be a capital loss that all investors would experience.

    The 'but think of the pensioners' will likely be rolled out as a reason not to nationalise but it is a false one, especially so in a nation that is ludicrously far removed and uneducated about the need to save for their own retirement.