The Labour government 1997-2010
The government accepted before and after the election that they would not have the money to renationalise. They saw that in cases like telecoms and electricity the new private enterprise industries were delivering growth, new investment, better service and lower prices. The Labour movement was keen to renationalise rail, but John Prescott made speeches explaining that spending money on renationalising took money they needed for the NHS and other public services. Over the years that followed both Labour and Conservatives have allowed creeping rail renationalisation. Today the fully nationalised regions struggle to perform as well as the remaining private sector train companies elsewhere. All fail to deliver the better service , the more attractive timetables and ticket prices, and the big investment needed. A fully nationalised HS 2 has dominated budgets for rail and added substantially to state debt and rail subsidies. It has reminded the country of how badly nationalised projects can miscarry even when they are given huge sums of money and resource to try to succeed.
2010-2024 Drift to more regulation and government interference in privatised businesses
Under pressure of events, accelerated by covid lockdowns and the inflation of 2022-3, the big transport and energy businesses spun off from nationalised industries have fallen under more and more central control. The electricity industry now has highly managed prices instead of relying on markets supplying cheapest power, with subsidies and favoured access for renewables over gas generated power. Dialling down use of gas to be a back up system adds to costs as the gas stations can no longer run full out spreading the capital costs over more power. The gas industry is restricted by bans on new exploration and delays or objections to extracting more gas from known UK deposits. This forces more reliance on dearer imports of energy.
Labour renationalised Railtrack, placing the new signalling and extra track needed back into the queue for public spending approvals. Rail badly needs more customers, following a large decline in goods traffic and continuing attrition of passenger numbers after lockdowns. The government controlled timetables and complex partially controlled fares do not help in adjusting train supply to the potential demand. Shifting more freight from trucks to trains needs more sidings and branch lines into modern industrial parks and a better system for attracting waggon load traffic. Passenger demand is shifting from the reliable five day a week commuter needing peak time trains as more people work part of the week from home. The railway needs to do more with specials for events, holidays and family outings. Nationalised railway managers often find it easier to argue for more subsidy than to win more passengers.
Wider Ownership
Privatisation was part of the wider ownership movement. Some of the best privatisations were employee and manager buy outs including National Freight and Tower Colliery. Both of these businesses were transformed by trusting the drivers and miners. The Coal Board thought Tower had to close but it had more than a decade of successful mining ahead . when owned by those who worked there. The big privatisations encouraged some employee ownership with free and discounted shares. Allowing more employee participation and co ownership often helps deliver better results by creating a common interest in success.
Nationalisation or privatisation – the balance of advantage
The UK has conducted a long post war experiment. The 1945-50 Labour government set up a large nationalised economy which was struggling by the 1960s and 1970s. Rail decline led to the Beeching axe on rail lines and services. Failure to find enough steel customers led to the progressive closure of the new works nationalisation had brought. At the point BT was privatised UK telecoms were years behind the US technically, providing a limited and rationed service to an economy hat needed better to expand. Electricity relied too much on inefficient and dirty coal. Gas needed to speed its conversion to abundant cleaner gas from the North Sea. The US with a much larger private sector was richer and growing faster than the UK.
There was a wider experiment between the two systems across Europe. The Soviet bloc was mainly nationalised. It fell further and further behind in GDP per head and living standards. Western Europe made more progress recovering from war damage using US money and private sector finance funding competitive free enterprise companies. By the time the Berlin Wall came down it was quite clear which system had won. East Germans had long wanted to come west but were banned from doing so . There was no queue of people wanting to go east, and they were free to do so as far as the West was concerned anyway.
Some privatisations have been better than others. Telecoms took off once freed. Rail muddled on as some economic regulation and partial nationalisation got in the way. The issue of the pace of new investment for water was never resolved , with the absence of competition meaning it remained an industry where government set the price and controlled the cashflows. Electricity performed very well until government intervened to control prices, and to require much more renewable power before the technologies were cheap enough.
Privatisation for the future
The government is discovering that it can raise less in tax than it wants to spend. It should examine again how a major transfer of liabilities and costs from the public to the private sectors in the 1980s and 1990s greatly eased similar strains on public spending and borrowing. Last year the largely nationalised railways cost taxpayers £33 bn and Bank of England trading losses reached huge numbers. It is time to revisit the benefits of the private sector providing more of the goods and services people pay for. The public sector trading less could help ease the squeeze again.
April 10, 2025
Too much Humble Pie is the problem – not the fact that by experience we have not learned what to do.
Those who can’t swallow the pie and can’t prove that their way works need to leave politics.
We can’t afford them.
April 10, 2025
The people drawn into politics are very often entirely the wrong types of people (the rather few JR types obviously excepted). Either they are bossy, mad religious types who want to tell everyone else what to do, people with chips on their shoulders (Jess Phillip “the problem is all men”) or they are on the make for them and their mates and are often dishonest (both to the electorate and in even more fill you boots ways. Almost none seem understand logic, science, business, economics… almost all are for ever larger government, ever more taxes and ever more red tape.
I see Mad Ed is wasting money on National Grid adverts talking drivel.
“The faster we go, the more secure we become. Every wind turbine we put up, every solar panel we install, every piece of grid we construct helps protect families from future energy shocks.”
ED MILIBAND, SECRETARY OF STATE FOR ENERGY SECURITY AND NET ZERO, UK GOVERNMENT
(Electricity is only about 1/5 of our energy ED!)
Miliband, this government and Kemi are is totally deluded. If we all switch to renewables, heat pumps and EVs the grid will need to be 10-20 times the capacity (for the winter peak demand) and connect up far far more places with all the wind and solar panels. The agenda is mad, why waste the excellent existing gas grid asset we have and all those gas and oil boilers and spend billions and billions of more electricity and grid capacity (with huge disruption too). Houses that use gas for heating, hot water and cooking and have petrol cars need very little electricity at all with modern LED lighting and IT. Ones that have heat pumps, three EVs and are all electric might need perhaps 200 times as much electricity and most of this in the cold winter months too wasting much the grid and generating capacity/investment for the rest of the year.
https://movingthegridforward.co.uk/
We are led by moronic donkeys! Either that or they are crooks!
Reply Kemi has made a speech pointing out the follies of current green policy
April 10, 2025
Currently 14% of electricity is coming from wind (and zero from solar). 61% from Fossil fuels (including the young coal burnt at Drax). So about 3% of our total UK energy needs is coming from so called “renewables”.
Great plan Ed PPE, Kier Law, Kemi Computer Eng., the Climate Change Committee, Emma Pinchbeck Classics, the head of a new Mission Control centre for clean energy one Chris Stark (sort of a Law degree)… Kemi the only one with any “engineering” but that gives her even less excuse for getting it so wrong!
April 10, 2025
We still need the trains for lots of reasons. Like all Western countries do. And government has to be involved like with roads. I agree its frustrating. But we need to focus on things that could make a real difference and in a realistic way. Over-focusing on the trains is like flogging a dead horse. Let’s look at thd Swiss and others and see what they are doing right and try and replicate if poss
April 11, 2025
How many trains would the real demand support on a level tax/subsidy basis with train ticked prices would be perhaps 3 to 4 times more and cars half the current price per mile?
April 10, 2025
The UK government are appalling at running almost everything and appalling at regulation of things in the private sector – like rail, banks, water, energy, broadcasting, education…too.
So King (do as I say not as I do) Charles in Italy thinks his climate etc. predictions have come true! Perhaps he should tell us which ones, almost nothing he has said has come true. In 2009, Prince Charles claimed that society had just 96 months left to save the world from the runaway impacts of rising temperatures.
His 33rd Richard Dimbleby Lecture in 2009 was full of drivel as was the Dimbleby introduction wrongly informing us that he studiously kept out of party politics.
So the Health Sec. does not want people to point out that Lucy Letby clearly should not have been convicted of any offence (let alone given 15 life sentences) lest this upsets these victims of NHS negligence. He now want to roll out prostrate screening with some net test. Fine it probably makes some sense, but breast screening in the UK is only every three years when sensible practice would be more like every year. There is no real need for this to be very expensive at all given modern scanning equipment and AI analysis. Three years kills some women as it is often detected rather rather too late!
Cancer rates, like many heart issues, have also risen post the Covid “Vaccines”. But the government seem not to want to release the data broken down by vaccination status for some reason. One can only surmise what their “reasons” might be as it is such a simple, beneficial and rather cheap thing to do.
April 10, 2025
Some figures on Trains,
£33 billion tax payer subsidy PA
circa £12 billion of ticket sales PA
circa 40 billion passenger miles PA
Cost per passenger mile £1.12 ticket prices only about 25% of this the rest is tax payer subsidy. Yet a car despite far higher taxes on cars and vast subsidies for trains can take 7 people door to door for about 4p a mile per person! Actually worse than this as they take indirect routes Birmingham to Cambridge for example often VIA London then you have the often double taxi or wife pickups at each end!
Why should car drivers subsidise train and bus users? What would train demand really be if the ticket prices went up about 400% so as to cover costs and cars were taxed on the same basis as trains?
April 10, 2025
That makes it £500 each for all of us Brits. When shall I expect to see my free tickets for my contribution?
April 10, 2025
Hold on a second. Who pays for the roads you drive on? The tax payer! Including people who commute to work everyday to The City by train
Reply Drivers pay far more than the cost of the roads in all the extra taxes inc fuel duty and VED. Train travellers are not taxed for the fuel of the train.
April 11, 2025
Self driving car and taxis will become far cheaper when no driver needed and will shift the balance ever more towards door to door car travel.
April 11, 2025
Trains – frustrating but over-focusing on them though is flogging a dead horse. Lots of things we can prioritise our time, focus and energy on. Best we can do is look at what other countries such as Switzerland, and others, are doing best and try and replicate.
April 10, 2025
A comment aimed at the railway only;
The tracks for trains run all over the country. There never was a sensible way of privatising the track. They are now controlled by ‘network rail’ essentially re-nationalised.
Having different train companies running on this system causes confusion and more importantly ridiculously high fares.
When the government is doing all it can to remove private car ownership, you might think it would make rail travel rather more attractive. That would of course need joined up thinking, sadly lacking in Westminster.
Re-nationalisation of the trains would be, in my view, preferable to the current mess.
Reply 4 regions are fully nationalised and often providing a worse service
April 10, 2025
OA,
Rail privatisation supporters just cannot admit that the whole thing was a failure. Years of experience prove that. It might have looked OK in theory, but it is a complete shambles now.
April 10, 2025
If it was only rail privatisation. Do you see the type of ineptitude proffered by Sir John about water every time the subject is approached?
April 10, 2025
In my area the privatised Water Company has done a good job.
Billions have been invested to catch up after the state starved it from the investment needed.
Clean water reliably provided at a fair price.
April 10, 2025
I use SW Railways and just consistently appalling. 2 out of 10 times delayed / seriously delayed / have to take a new route that takes 3 or more hours instead of one. And then trains packed like sardines when there are carriages sitting empty in the stations. Is SW Trains nationalised or not. I don’t understand how it works. All I know is they’re rubbish. And not cheap either. And I remember train travel in old days was way better than this.
Reply All track and stations nationalised and the main cause of delays.Peak hours they allow too few train slots so trains crowded. Train company told what timetable to run and what fares to set by Regulator.
April 11, 2025
But how would private money improve station and track? They wouldn’t as no money to be made in it. Or not worth their while. So you could argue privatisation would be just as bad or worse. I agree. Not easy to solve. I think we just have to be philosophical about trains and focus on other problems to be solved. And then come back to trains. Perhaps after we’ve considerably strengthened our economy.
Reply In the early years of privatisation before bad regulation it worked well. More and newer trains and increased passengers.
April 10, 2025
If train operating companies were shareholders in the track and stations they might manage to secure better alignment of management with the interests of passengers.
April 10, 2025
The whole Liebour ethos is government ownership and control. This is adequately demonstrated by the creeping nationalisation of the railway
The power industry will be next because the private owners of the despatchable assets willstart to walk away as the gas stations become distressed assets. The government will be forced to take over to keep the lights on.
Steel is another example of ruination by government energy policy which will have to be rescued by the taxpayer.
Slowly slowly catchee monkey.
April 10, 2025
Indeed tax people to death then subsidise state service like trains, buses, the NHS, housing, schools, broadcasting, energy… thus the private providers find it hard to compete and nearly everyone is forced on to the usually second rate monopoly state provision. Hence the VAT on school fees and IPT tax on Private Medical Insurance. We have a fair competition authority but they never seem to look at grossly unfair state competition!
April 10, 2025
Do you want the American system or European (not talking about EU)? Most Europeans from Sweden to Seville to Slough don’t want the American system. That’s it. (And that includes chlorinated chicken which is really more symbolic why Europeans don’t like the American system – same for the Canadians. They’d rather eat ice than cave into Trump over tarrifs).
So instead of trying to change a whole mindset from European to American, we just need to focus more on tax payer getting better value for their money – and take things from there.
April 11, 2025
I want to life in Europe but with a state sector half the current size they waste at least 50% anyway on things we do not want or do net harm anyway.
April 10, 2025
Good Morning,
Where there is genuine competition between suppliers then there will be competitive pricing and service. All good.
However, lets not confuse producers and retailers, in those struggling industries or services. Where are all these ‘markets supplying cheapest power’? How many gas producers are there supplying nationwide retailers? In many places only one. This is not a market. How many electricity producers are supplying the retailers pretending to offer competition in your area?
The money spent on rail, surely effectively only one ‘producer’ with a number of retailers; is the extreme example of a transfer of public money into private profit/pockets. I don’t hear many compliments of its service quality and value for money – it has to be reviewed as a part of the 21st century.
Reply I agree mismanaged and badly regulated hybrids don’t work well. It is often the government input that does most damage.
April 10, 2025
The electricity system is perverse in that the most costly renewables are guaranteed to be able to harvest their subsidies and keep producing even in conditions of oversupply: it is the cheapest ones that get curtailed. The real cost to consumers on a sunny windy Sunday is much higher than the cost of gas generation. This is exactly the reverse of how many people believe the system works.
Gas supply is reasonably competitive, although Equinor’s pipeline exports are now the largest single supply. All the other North Sea producers (including minority interests in Norway) compete to sell. The other major source of supply is the three LNG terminals, each under different ownership. Owners offer throughput and storage to other shippers.
OFGEM has a list of approved parties here
https://www.ofgem.gov.uk/publications/list-all-gas-licensees-including-suppliers
It’s quite a few pages.
April 10, 2025
UK Ministry of Justice is developing an AI program to predict ‘future’ offenders.
This new tool was commissioned by Rishi Sunak, and millions in taxpayer money is being pumped into the project.
It involves monitoring the people of the UK their views, actions, habits. It is suggested that it is about just catching murderers before they murder someone – does anyone believe that’s the only purpose? Would our out of control Government, Parliament and State not just abuse their position as the always do?
The UK Government keeps demonstrating it is in fear of the people and they must be controlled. How great would the UK be that instead of having Governments and Parliament fighting the People we had a Government and Parliament working with and for the People – Oh I forgot that notion is reserved for Democracies.
This is not some bit of speculation it is all over the media – https://www.telegraph.co.uk/news/2025/04/09/ai-murder-predictor-catch-killers-before-strike/ & https://www.theguardian.com/uk-news/2025/apr/08/uk-creating-prediction-tool-to-identify-people-most-likely-to-kill – and elsewhere
April 10, 2025
Then to rub in the fact of a Two Tier Country the review into ‘Grooming’ by certain sectors of Society has been shelved as it might upset what is seen as natural Labour Voters.
April 10, 2025
I think somebody in government has been watching Tom Cruise film Minoity Report and that didn’t end well.
April 10, 2025
The film Minority Report brought to life. But isn’t it what Prevent was supposed to achieve?
April 10, 2025
Drift?
I’d call it an avalanche – we’ve had nothing but pervasive interference and oppressive legislation for decades, but now with labour even worse!
It would really help if there was not so much dogmatic socialist ideology focused on things like nationalisation and the concept of the nanny state. The state has failed too often to allow it to take control of so much, while we the taxpayer become impoverished with wasteful spend.
It should all be so obvious, but those moving us away from the existing economic model, and a lot of armchair socialists, believe that a big dictatorship that exists to wield 2 tier justice and a good life only for those that are part of the movement is the way forward, no matter how economically irrational it becomes.
The question of nationalisation becomes irrelevant when you ask the question: ‘how will passenger trains be powered in the future?’ and ‘with restrictions on movements and travel why will we need a railway?’
April 10, 2025
I agree with Sir John. But is steel slightly different? If the Chinese owners cannot run the Scunthorpe plant at a profit, it is worthless. In that case what would it cost to nationalise it? Otherwise, what has happened? Chinese owners buy the plant; say they cannot run it at a profit (understandably, given the subsidies China devotes to its steel production); close it; and with what consequence? The UK buys more steel from China. Well, well.
Reply If they are walking away the UK should take it over for no payment and seek bids to run it, which might entail payments.
April 10, 2025
Payments to run it have to cover green taxes it is subjected to that do north apply elsewhere. They aren’t a cost unti they exceed that.
April 10, 2025
From Guido
Kimi, on BBC Breakfast
local elections are “going to be very challenging” for the Tories. ‘Hardly shocking, given CCHQ cut nearly a third of the campaign team midway through the race…’
Though she then went on to give Tory councillors the green light to form coalitions with Reform if it’s in the interest of local people. ‘A shift from her previous stance of ruling out any deals altogether…’
In the other camp
Latest developments in Birmingham have the beleaguered Labour-run council getting let off the hook by central government. ‘It’s not just the rape gang inquiries that are being quietly dropped…’
Yvette Cooper is this morning having to defend Labour’s decision to scrap the five small-scale rape gang inquiries in Oldham, Rochdale, Telford, Rotherham, and Bradford.
YouGov has done a survey of 100 MPs, of which 72 were Labour, asking what they think of the state of Whitehall. ‘It’s not good news for the blob-lovers…’
Over half – 52% – say the civil service is working “badly”, with only 40% saying it’s working well.
But what is Government/Parliament the ones that have the power and authority going to do about it?
650 people not fit for purpose, then one wonders why Councils that take their lead from Government/Parliament are in such a mess…
“privatisation and drift to bad regulation” ?? just about sums up the hypocrisy demonstrated this Century by the ‘free-loaders’ It is always the other ‘guy’ then their failure as it is in their gift to address the situation and they refuse.
April 10, 2025
“Gordon Brown calls for ‘economic coalition of the willing’ to tackle Trump tariffs”
‘Former PM says it is also the moment for the UK to go even further in renewing ties with the EU’
Have know doubt as to what these guys are planing. Their only answer to their own fabricated breaking down of Society – It is to give the unelected unaccountable mandarins in foreign lands complete control of the UK.
The above is from the man that created half hearted devolution, sold UK gold at a loss, removed/sold the UK’s Nuclear power capability as the UK would never need it. And.. today Gordon Brown want others to listen to him!
April 10, 2025
Yes I know how you feel the Blair government was so damaging in so many ways
April 10, 2025
Dear John
Thank you for todays post
I see the BofE has announced it will not be selling long dated-bonds next week
April 13, 2025
The history of transport since the turnpike and stage coach had been one of improved access, more convenience and reducing journey times. When the omnibus and railways appeared in the 19th century they represented a step change in mobility for all. The motor car has taken people to the next step. But public transport has locked into the 19th century paradigm and not moved with the times.
Autonomous vehicles offer the opportunity for public transport to move on and provide convenient cost-effective door-to-door solutions ultimately converting existing existing rail corridors into dedicated thruways.