UK General Election 24/25
- Thread starter LarryHagman
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That seems the sensible approach.
Great British Energy is the big one for me.
I suspect the railways will be a right mess whatever they do, but creating a nationalised, green-focused energy company that invests heavily in infrastructure is a potential game changer for the economy, growth, and reducing on reliance on the likes of Putin and general global forces. That sounds achievable. I'd hope the water would be next.
I suspect the railways will be a right mess whatever they do, but creating a nationalised, green-focused energy company that invests heavily in infrastructure is a potential game changer for the economy, growth, and reducing on reliance on the likes of Putin and general global forces. That sounds achievable. I'd hope the water would be next.
Yes, and hopefully it'll silence those who think net zero is a pipe dream. A quick look at some other countries will show you that it's clearly not, Portugal is already hitting about 97% renewables, California sometimes produces so much electricity from renewable sources that people are being sent text messages telling them they can charge their car for free, Spain is also producing shit loads of renewable power.
The railways are under fixed-term franchise agreements. Once those agreements expire, they can be renationalised with no requirement to compensate the former franchise owners - those owners have no option or entitlement to a new deal and they just don't get one. So if can be done over time and for free (other than costs of setting up the new management structure). The five-year timeline is probably based on the longest unexpired term of any of the franchises (they are usually 7-year agreements) but we'll probably see some of them nationalised sooner as some of the shorter agreements expire.
And some local networks (like Merseyrail) might fall into a hybrid model where they revert to a local transport authority rather than the national operator (ie the old-style British Rail). They would still come back into public ownership, but managed locally, which makes sense to me.
Whereas the utilities were sold outright to private owners, so they'd need to be compensated - which would cost £100bn plus. Basically the government would need to buy then back so that's off the table. Even with a company like Thames Water, which is on the verge of bankruptcy, taking it back into public ownership would be expensive - even if the shareholders are forced to give up their shares, it woukd cost a fortune in public money to keep it afloat.
For my sins, I was involved in a lot of M&A deals in the water sector in my former life and it's no real surprise to me that so many of these companies have been pushed to the brink of collapse.
And some local networks (like Merseyrail) might fall into a hybrid model where they revert to a local transport authority rather than the national operator (ie the old-style British Rail). They would still come back into public ownership, but managed locally, which makes sense to me.
Whereas the utilities were sold outright to private owners, so they'd need to be compensated - which would cost £100bn plus. Basically the government would need to buy then back so that's off the table. Even with a company like Thames Water, which is on the verge of bankruptcy, taking it back into public ownership would be expensive - even if the shareholders are forced to give up their shares, it woukd cost a fortune in public money to keep it afloat.
For my sins, I was involved in a lot of M&A deals in the water sector in my former life and it's no real surprise to me that so many of these companies have been pushed to the brink of collapse.
Yep, that's right. The rail network is on the books at about £80bn but is in public hands.
As I understand it, that doesn't cover everything in the network. I worked on the HS1 takeover, for example, and HS1 sits in a separate company (effectively like a rail version of a PFI deal). The physical asset sits in a company which has a concession to run the line. There's likely a few other bits and pieces like this.
As with the main rail franchises, the HS1 operation would come into public ownership by default once the concession expires, but from memory it was a 30 year concession. It was sold for around £2bn, but the construction costs were several times higher than that. Rail doesn't pay its own way, it will always need to be subsidised and it makes sense, therefore, that it should be publicly owned.
So the franchise falls back in to the Government's hand but what about the rolling stock. My knowledge here is pretty limited but I think much of the rolling stock is leased by the franchisee's from large investors - mainly the big banks. So instead of the franchises filling the banks pockets it'll be the government?Whilst we've heard about the vast profits that have been made in energy and water, the only big profits I've heard about in the railways is in leasing rolling stock.
I think you’re right. If you look at government spending on rail, the two main areas of leakage to the private sector are profits in the train operating companies and the leasing companies. Bringing the TOCs into public ownership removes the former, but you’ve still got a few hundred £m leaking into the leasing companies. As with the utilities, it would cost money to bring those companies into public ownership.
But context is king here.
For the year to March 2023, government subsidy of rail was £11.9bn. In that context, the leakage to the leasing companies is pretty small beer, as is the leakage to the operating companies.
So the renationalisation of rail, while it would reduce leakage to private operators, isn’t going to make a huge difference to the finances. But it plays well to the galleries.
The real win here for Joe Public is if it comes with an improvement in service quality, but that will necessarily eat into the cost savings. The current system encourages private operators to run a lean operation so they can make more money, hence cramped services at peak times as they try or use as little rolling stock as possible. My best guess would be that bringing rail back into public hands, for the most part, will drive costs up, but improve service.
EDIT
Worth noting that government subsidy is still high v long term average (due to reduced passenger income post covid, presumably largely due to more home working), so whilst the leakage to private sector is currently a small proportion, historically it has been more significant, but still not a huge chunk of the total subsidy. But if the reduced passenger revenue IS due to home working then it’s likely to continue.
A good few years ago I heard Ken Clarke who had been the treasurer when it happened saying there was great belief all around cabinet and beyond that the railways were being mismanaged by incompetent public sector lazy people and the markets would whip it into shape. He said he regularly bumped into fellow decision makers who were embarrassed about how wrong they were on both counts (it was actually an incredibly complex system ran super efficiently). It's been a disaster. As we can see every time we use trains overseas.
Segmenting the service made things worse. It’s madness if something goes wrong in Euston but the closest qualified person to fix it is in St Pancras can’t go fix it because he works for a different company.
Clarke’s argument is essentially the case for all privatisation, bu it misses the central point that these industries were nationalised in the first place because they should be focused on best possible service. That’s at odds with a profit motive for a private operator.
So in water for example, given the choice between investing in proper infrastructure, reducing dividends or not investing, pumping shit into Windermere and taking a fine, they chose the latter option. The system of regulation should never have allowed that to happen.
Where they are running late, it’s determined by the final stop. So they could decide to miss shit loads of stops to make up time and avoid the fine. Fuck the users who need to get off at those missed stops.
Slightly different tangent, lots of places in Mykonos have made illegal changes to listed buildings but they're making so much money that they just pay a yearly fine and keep it the way they want instead of reverting the property back to the way it was.
If something is illegal but it's only punishable with a fine then it should no longer be classified as illegal. There should be a new term for "you can do this if you can afford it".
If something is illegal but it's only punishable with a fine then it should no longer be classified as illegal. There should be a new term for "you can do this if you can afford it".
It’s a monopoly. Or a racket. Whatever way you look at it the public is being shafted.
Better railway and energy outcomes may help an already improving environment in the UK. Some EU countries in particular need to make a bigger effort? Renewables are part of the equation but not a panacea.
epi.yale.edu
2024 Environmental Performance Index - Environmental Performance Index
2024 Environmental Performance Index - Environmental Performance Index
epi.yale.edu
So (eventual) nationalisation will have one operator maximising the track and rolling stock capacity to provide as frequent a service with as many carriages but at roughly the same cost to travel across the whole of the UK
The efficient use of stock nationally may mean better frequency of service in Cornwall to the detriment of Derbyshire as they will be rationilsing nationally
Network Rail is considered 'arms length' public sector. Up until a few years ago (can't remember exactly, I wanna say it was maybe around the start of Control Period 5, so 2014ish) they were able to borrow money off the markets and didn't show up on the government's books.
Nowadays they're part of the national debt, hence the budgets have been slashed dramatically. I think the CP7 budget is maybe in the high £40bn range or so - but currently everyone is robbing Peter to pay Paul, so next year's money has already been spent in many areas. I highly expect loads of projects to get canned towards 2029 as there won't be any money left...but see what happens with GBR and renationalisation I guess?
Network Rail own and are responsible for the maintenance of the infrastructure and fixed assets such as bridges etc, as well as owning loads (most) of the stations - though many are leased out to TOCs and only a few are 'managed stations' like Euston, Liverpool Street etc.
However, shedloads of the infrastructure upgrades and maintenance work is farmed out to the supply chain, so even though it has ~40k employees, of which maybe 75% are frontline (i.e. trackside) workers, the true number of people working on the railway is possibly double that
One thing they could do to help people with little effort would be to change the price cap on electricity.
I've no idea how it works, but I believe it's set by the highest bidder which is usually the gas giants and it helps to keep power prices high. Perhaps @singlerider or someone knows about this.
I've no idea how it works, but I believe it's set by the highest bidder which is usually the gas giants and it helps to keep power prices high. Perhaps @singlerider or someone knows about this.
Dont forget Coffey shitwater
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