I am not letting you off the arguments about nationalisation, as they are central to getting out of the financial mess the government is in. Most of you agree government is spending and borrowing too much. Many commentators openly worry about how the government goes on borrowing so much, and official sources talk of more tax rises to come. I have talked before about migration control and benefit changes to help curb spending.
Your wish to reduce spending and borrowing makes it odd that many of you want more nationalisation. Nationalisation means more public spending and borrowing . Heavy loss makers like the Bank of England and the railways send huge bills to government who have to borrow more to pay these bills. Profitable nationalised industries usually need access to state borrowing to pay for their large investment programmes.
Privatisation cuts public spending and borrowing in two main ways. There is a capital receipt, accounted as negative public spending. There is the removal of all the costs of capital investment and any losses from public accounts.
I agreed with the current government selling the remaining Nat West shares. It was an obvious way to cut spending and borrowing I had long recommended. If there is no follow on asset or share sale this year the spend and borrowing level goes up to adjust for this on top of all the planned spending increases. Tomorrow I will look at the high costs and financial risks of the growing nationalised portfolio.
August 6, 2025
We all agree tha5 everything the government does it does badly. Therefore the less it does the better. That means privatisation but there must be Regulators who cannot be ‘captured’. Therefore the income of the Regulators must be integral to the efficient running of the industry.
Best if they are insurers who benefit when the industry performs well.
An insurer of water who loses money for leaks, dumping of sewage etc.
An insurer acting on behalf of the British population would sort out the NHS. They would NOT be paid for treating uninsured (foreign or illegal) people.
We need to do what Blair did in reverse. Entrench Capitalism so that without it everything crashes.
August 6, 2025
I agree that privatisation cuts public spending but if the taxpayer is on the hook for failure then it makes mo sense. Dozens of energy companies were allowed to compete and went bust
Wr the consumer then had a levy to recompense the other energy companies.
Industries must be allowed to fail and the shareholders take the hit
Privatisation of profit and nationalisation of losses is wrong
August 6, 2025
“Privatisation of profit and nationalisation of losses”
Interesting comment. Either way, losses always seem to have be covered by the taxpayer in the end.
Perhaps your impression from some comments here as being “in love with” nationalisation is rather a frustrated demand for something that nobody can remember or have maybe never experienced; something that actually works!
Talking about water there specifically. In terms of spending and borrowing problems, not sure the water industry is that relevant. Net zero is…
August 6, 2025
The energy companies were bankrupted by Government intervention in the market.
So that is not a true reflection of private industry providing the market.
There must be some means of containing Government intervention in any market, maybe a binding referendum of taxpayers only. They after all have to pay and referenda are not part of our constitution, so if they were introduced they could include a ‘qualified franchise’.
August 6, 2025
Indeed the UK government is currently wrecking the markets and freedom on choice in nearly everything:- energy, cars, transport, housing sales and letting, schools, healthcare, universities, banking, pensions, the internet, employment, free speech… hardly anything is no hobbled.
August 7, 2025
The small (and not so small – Bulb) retailers who went bust did so because they were under capitalised and economised on hedging for price insurance. Since they were not insured they had had lower costs which had allowed them to undercut other retailers. However, when prices increased rapidly under-capitalisation meant they could not afford the collateral for price insurance, even if they could find someone to sell it to them – and their bids simply drove prices higher. On the other side, the OFGEM price cap assumed they had purchased price insurance at much lower prices. The result was heavy losses and bankruptcy.
I never saw the case for other more prudent customers who had not been seduced by the no frills no insurance offers to bail out those who found themselves with a bankrupt supplier. OFGEM had of course failed to regulate properly and were trying to maintain a fiction about their cap. Heads should have rolled there, but the new last resort suppliers should have been entitled to charge market costs to the bailed out customers month by month.
The only silver lining from the fiasco was that OFGEM were forced to shorten the cap period to a quarter, thus at least avoiding the worst effects of buying very costly hedges at the top of the market. The government were faced with being the insurer of last resort.
August 6, 2025
Interesting article in Guidofawkes yesterday how civil Serpents are running a forum on how-to beat the back to the office directives
Culling at least 50% of the civil Serpents would be a really good way to save public money.
August 6, 2025
Indeed start with the 50% who do no net good or net harm. Cancel Net Zero, cancel HS2, cancel the war on motorists, small business, farmers, the self employed, private schools, drill, frack and mine, cancel carbon capture…
My goodness I actually agree with Corbyn on something do not scrap the allotments they do a great deal of good for people’s health, diets and mental health for the community.
August 6, 2025
All the ones who cannot show decent productivity should automatically be fired at the end of each year of their own employment. It probably indicates a fake job.
August 6, 2025
Productivity only counting when it produces something of value (positive not negative that is). Negative like net zero, the Covid Lockdowns, the Covid “Vaccines”, HS2… plus all the market rigging, OTT health and safety, employment market rigging…
August 6, 2025
Neither are good for the general oik – unfettered capitalism is what facilitated the offshoring of our assets, industries and commerce.
August 6, 2025
Corporatism! You really must be able to distinguish between the fascist Continental system and the British system. They are chalk and cheese.
Corporations are run by employees, the ‘owners’ don’t know what is being done in their name, it’s called ‘big business’ colloquially.
Capitalism is where the owner risks his own money and is the decision maker. He rises or falls on his own work ethic, judgement and agility to provide what the market wants at the best rate, quality and timing.
August 6, 2025
I fully endorse private enterprise and agree corporatism is to be abhored, the term capatalism covers both though.
August 6, 2025
Capitalism does NOT cover them both. It causes you to throw the solution out with the killer.
August 6, 2025
The Office for National Statistics (ONS) for the period of March to May 2025:
The number of unemployed people aged 16 and over in the UK was 1.67 million
August 6, 2025
More than 600,000 graduates are claiming benefits
https://www.thetimes.com/uk/education/article/more-than-600000-graduates-are-claiming-benefits-sl59dfrzg
August 6, 2025
Morning Sir John.
Some privatised businesses have proved very lucrative, when taken out of public ownership and have provided much better services however, some have not.
I suppose the obvious question is why can a business which runs losses and poor services, suddenly become a well run and lucrative concern once it is taken out of public ownership? Why can’t a business owned by the state also be profitable and make a good return on the nation’s capital? Is it purely rubbish state managers or is it the infestation of jobsworth trade unions within the public sector or is it something else?
Reply Its culture and attitudes at all levels of the business.,
August 6, 2025
Reply to reply,
You want ‘privatisation’ and then criticise the private management ‘culture and attitudes’ for maximising the return to shareholders. This is possibly the key difference between public ownership and private investment/enterprise.
IF an essential service, water, rail, health, police etc cannot have free and fair competition in private ownership then it will abuse its position. The nonsense ‘public/private’ ventures simply transfer public money to the private side to pay bonuses and dividends. Stop proposing being ‘a bit married’.
Thames Water needs to be left to fail, and then rescued from insolvency by an SPV under treasury ownership, with nothing paid to existing shareholders and unsecured bondholders. Other creditors need to take shares or notes for their debt unpaid. This should be in preparation now, with resources and management available to move as soon as needed.
August 6, 2025
Yes, I agree about Thames Water being allowed to fail. But would their creditors, and the people that gave them money?
August 6, 2025
isn’t that the risk shareholders and unsecured creditors take?
August 6, 2025
I should have said bankruptcy not insolvency. Yes, don’t lend unsecured if you don’t understand the risk. That’s the deal, you risk getting nothing back if the borrower goes into bankruptcy. What happened to the rail operators when they failed, did their lenders/shareholders get anything from government? I hope not.
August 7, 2025
How many of their shareholders are our isas and pension funds? Compulsory workplace pensions?
August 6, 2025
Cliff
Family members have worked in both the Private sector and Public sector versions of Healthcare and the Prison Service.
The attitude of the staff and management in both sectors are light-years apart, the private sector work to timescales and budgets, with staff having to complete what is expected for a full days work.
The Public sector tends to work at and with the slowest staff performer, budgets have to be spent in full, as any surplus cannot be carried forwards to the next year, indeed if there is a possibility of a surplus, then they are told budgets would be cut for the following year, so spend it they must is the mantra, no matter how inefficient or wasteful it may be.
Absenteeism is many times worse in the Public sector, not because of pressure of work, but because it is regarded as a fully funded perk, that is allowed and expected.
I could outline much, much more, but you get the drift !.
August 6, 2025
@ Reply so start by properly punishing the bad culture and attitudes, don’t just promote them sideways. Use the carrot and the stick.
But this will not happen with the current “leadership” or general political culture in the UK.
August 6, 2025
How can you punish mental health? stress? many days off to do all sorts of family errands?
August 6, 2025
If someone truly has mental health issues or finds the job impossible due to stress then they are in the wrong job and should seek help.
There are established practices for managing under-performance fairly.
If staff will not meet objectives or job requirements they should be let go in the normal way, if management make unrealistic demands then management are in the wrong job and should be let go also. Letting go for cause does not entitle the leaver to compensation.
If the job is inherently stressful then compensation and conditions should reflect that aspect but the job holder should know this is a stressful occupation going in.
August 6, 2025
Easy hire and easy fire is what is needed. Employment rights often mean the right for some employees to have to carry other feckless employees, for people to have duff surgeons, doctors, judges, police officers,teachers… who cannot get fired. It helps no one not even employees in general and kills productivity and the UK’s ability to compete!
August 7, 2025
I agree with you dixie. But reality is a different thing. Business legal advisors on Employment and HR tell you to give more time and more time, maybe pay for an occupational health assessment which will tell you they need more time off. Then you need to seek and pay for specialist help for them. Don’t check up on them yourself! That would land you in trouble, even if colleagues tell you they’ve gone on holiday that helps their recovery.
Often the stress and mental health issues have nothing at all to do with the job but family life, debt (they’re always the people who think nothing of blowing £1000 on fabulous tattoos). They may have an underlying health condition, such as Crohn’s, that gives them a free pass to whatever time off they need.
Fancy a week off on sick pay at a peak holiday week when you know your employer is struggling to cover the work, no sweat just call in with mental health self certificate. Want a Friday off before every bank holiday, just take it with a flare up. Their GP would back them up if you wrote to them.
August 12, 2025
@a-tracy – just saw your comment ..
I agree the situation is untenable for the small business employer who cannot afford the cost, time and energy for HR and lawyer b-s.
My last business operated by mutual project contracts between a small group – project planning and management was slightly more challenging but no HR or lawyers involved and payment was for services rendered. If illness or circumstances impacted a commitment and timescales then reasonable accommodation made. Strangely we didn’t try to game each other, the goal was achieving project deliverables with mutual benefit.
You can’t operate medium to large businesses this way though so there has to be a major change in culture and attitudes, away from the current one of employee entitlements and lawfare.
August 6, 2025
It’s the fact that the state owned business is run by employees with short term interests and no ‘skin in the game’.
Private capitalist companies are run by their owners.
You can’t ‘buy’ a capitalist attitude. It’s beyond price.
Therefore the State and Corporate enterprises will always be bled. They can only survive by crushing competition and with advantages – like corporation tax which is lower than the taxes paid by very small business owners, who also pay 20% VAT on energy.
Think about what you would have to pay for somebody to act as a mother acts free of charge.
There is not enough only on earth.
August 6, 2025
Sir John,
Yesterday evening, it was being reported that The Lincolnshire Police were likely to be the first constabulary to become bankrupt. Is that even possible?
Reply. They cant become bankrupt as they are state owned. The government can refuse to pay future bills forcing them to make cuts.
August 7, 2025
The first thing they should cut is the police commissioner and his office/, and use it on front-line cops.
August 6, 2025
You live in a world of ideology, I live in the real world. We’ve seen what privatisation does in the water industry. Private companies siphon off the money and then hold the country to ransom because we need water, demnading the state covers their losses. Much better just to put it in public control in the first place. Same for energy, railways etc
August 6, 2025
I don’t believe the privatised water companies have performed any worse than they did under nationalisation. The problems of the water industry can be solved by a regulator with claws. If they have huge debts they can’t pay, that’s a them problem. If their creditors want to call in the debt, they become responsible for the water supply and answerable to the regulator. Might be best to accept a haircut on the debts.
August 6, 2025
You are clearly too young to remember the inefficiency and failure to invest for the future, in the nationalised water industry.
August 6, 2025
There are more options out there than the binary view of fully privatised vs. fully nationalised. The only place on the planet where water is fully privatised is in England, yet there are examples of private sector involvement in water all over the world.
The fully privatised model used in England has failed. Why not look at approaches used elsewhere and learn about what works well and what doesn’t?
August 6, 2025
PP
Maybe use that idea of yours on the NHS.
For many years now the only idea for improvement has been pouring in more money.
August 6, 2025
+1
August 6, 2025
Title statement of the obvious. Private buyers do not want national industries except under customer predatory terms, windmills for instance. Look how they rush to buy a piece of HS2.
For each NI their modus operandi needs rethinking and rewriting, and then employ the best management you can get to run them.
August 6, 2025
I’d like to start by tackling the most expensive and badly performing nationalised industry in the UK – the NHS. But since that’s not going to happen there’s not much point discussing it.
August 6, 2025
@Donna
Don’t worry, the dreadful Nigel Farage wants to sell the NHS to American health insurance companies.
Be careful what you wish for
August 6, 2025
Complete nonsense SG
You are just repeating Labour smears.
Go online and read Reform UKs policies for the NHS and numerous speeches by Mr Farage.
August 6, 2025
He can’t sell it. It makes a £250 billion LOSS every year!
August 6, 2025
SG
I have no heard that all, Farage suggests the NHS should pay the private sector to carry out operations and services if they can do so at a lower cost and better outcome than the NHS.
What on earth is wrong with that !
The NHS use private services and suppliers now, so it simply is an extension of the existing.
He has also suggested some sort of insurance scheme is looked at, and people immediately think of that as going private, when all of us already pay national Insurance AND tax to pay for the existing scheme, it is not free !
August 7, 2025
I had an interesting experience of that. I had some relatively minor surgery that the NHS contracted out to a local private hospital. Good surgeon, operating in the evening but as an NHS patient I was slung out after midnight still recovering from the anaesthetic but in considerable pain from the surgical wounds.
August 6, 2025
When you have to resort to deliberate disinformation you’ve already lost the argument.
August 6, 2025
@Donna
It is not disinformation, it’s facts:
Farage – 20Jan 2015 – “the idea of replacing the NHS with an insurance-based system is “a debate that we’re all going to have to return to” Source: BBC
Farage – Sept 2012 during his “Common Sense” tour of the UK – “I think we’re going to have to think about healthcare very, very differently. I think we are going to have to move to an insurance-based system of healthcare” Source: Sky News report
Farage has repeatedly suggested he is open to re-examining the NHS’s funding model, preferring an insurance funding model “on the American system – everyone knows we are not getting value, let’s re-examine the whole funding model and find a way that’s more efficient”
Based on median costs for equivalent treatments in the USA, under a Reform “government” a GP visit would cost £129, an MRI scan £457, an A&E visit £1,368, an appendix removal £10,958 and coronary bypass surgery £71,997. Source: the 26 January 2023 LBC interview with Mr Farage
LBC interview Sunday 26th Jan 2025 Farage said he Is ‘open to anything’ when it comes to replacing NHS with ‘insurance-based model
There can be no doubt whatsoever that Farage intends to take his NHS funding proposals to American health insurance companies. “Why should they have an appendectomy if they can’t afford it?”
Reply A lot of this is speculation, not fact
August 6, 2025
France and other nations have an insurance based system SG which work well.
They have better outcomes than our NHS
Are you for or against improving the NHS?
ps
All the costs you quote would be covered by insurance with less well off people having their government paying the costs.
pps
Where has he said he actually prefers only the American model as you keep claiming?
Looking forward to your reply giving references.
Gosh..I’m sounding like hefner!
August 7, 2025
You’ve had to resort to digging up a few remarks made ten or more years ago, when the Reform Party didn’t exist.
In other words, disinformation. Labour’s doing the same with the Saville smear and for the same reason: desperation.
August 8, 2025
Reading has the Royal Berkshire Hospital (NHS) and three private ones, Circle Reading Hospital, Ramsay’s Berkshire Independent Hospital, and Spire Dunedin Hospital. I know of CRH and BIH from family and colleague’s experiences, some spine surgery and a hip replacement. In both cases these people went private because of the delay announced on the NHS, 18+ months before starting any treatment without any certainty whether they would ever get an operation or not. The colleague with huge back problems had originally been referred by his GP to some NHS-linked gymnastics sessions after a six month wait.
The prices quoted by SG are in the correct ballpark. In 2022 (spine) and 2023 (hip) they paid £255-260 to each surgeon for the introductory visit, about £500-550 for each MRI, £250 for additional blood, ECG, MRSA … testing, £240 for subsequent visit to the surgeon to discuss the possible surgery.
Then the spine operation came to £550 for the anaesthetist, £2100 for the surgeon, and £9k for two nights at CRH, then five subsequent £60 30-mn weekly reeducation/physiotherapy sessions.
One year later the hip operation was £575 for the anaesthetist, £1800 for the surgeon and £8k for two nights at BIH.
The hip surgeon also works as a private consultant in London, the spine surgeon also does NHS work. Both surgeons were extremely good in terms of how these family/colleague people came out of the surgery.
They both had some (I think international) private health insurance for more than 30 years and it covered about 90% of their expenses.
Beware: some UK-based private health insurances will not (fully or even reasonably) cover major surgery operations such as spine or hip operations before some years with the insurance company.
August 6, 2025
Where has he ever said or indicated that. There are plenty of better run healthcare systems in the world than the USA. Even JFK Jr is saying things need significant change there.
August 6, 2025
Nigel Farage did suggest about 10 years ago that the NHS might have to be replaced by private health insurance. No mention was made of American insurance companies and the Reform position (see their “Our Contract With You”) suggests a much more nuanced approach now.
Unless you can point to fact based evidence supporting your slur.
August 6, 2025
How to improve the NHS? The next time the next government has to build a new hospital in one of our biggest cities – defined as havng two or more general hospitals – do so, but have a private company run the MEDICAL aspects of the operation, with a profit-cap of 10%. We can then clearly see how the state-run hospitals are doing in comparison. PFI privatised the wrong aspects of the NHS!
August 7, 2025
At St Peter’s, Chertsey there is a private wing (actually a separate building) that conducts some procedures. The NHS portion delivers at times outstanding treatment (the intensive care team are top drawer for instance, and they have some excellent surgeons), and at others can be utterly dire. The private wing is by and large a more pleasant experience, and the srandard of care is reliable. Based on a number of family experiences, including my own dire one.
August 6, 2025
Donna
The problem with the NHS is not the Front Line staff, who by and large are excellent, but management and Administration.
Demand is now exceeding the ability to supply as the population grows, and medical science keeps people alive for longer.
August 6, 2025
The problem is the front line staff. They are part timers and massively overpaid and underperform.
Face that fact.
August 6, 2025
LA
Some may be Part time but the majority are full time from my experience, would agree more and More GP’s seem to be working less hours than they used to.
Not so sure they are ALL massively overpaid, but their pensions, sick pay, and holiday entitlement is excellent compared to private commercial standards.
August 6, 2025
Incidentally, it seems that medical science wishes you to believe they ‘keep you alive’. In fact it seems they keep more people sick than if there was withdrawal of all the so called legal drugs.
Drugs are very bad for you!
August 6, 2025
LA
Would happily agree some people are over medicated, and perhaps the idea of keeping people alive just for the sake of keeping them alive, with absolutely no quality of life at all needs to be looked at, end of life choice is being debated, and not before time !
August 7, 2025
I can foresee a considerable demand to keep elderly alive pending repeal of Labour’s IHT raids.
August 6, 2025
Would that include the front line staff who are planning to strike again demanding another 29% pay increase on top of the very generous one they received last year?
I’m not sure I consider them to be “excellent.”
August 6, 2025
Perhaps institute a commission to explore the introduction of AI and technologies into front line medicine – introduce an element of competition.
Also, invest more into medical education and training for local people.
August 6, 2025
The BMA caps the number of people allowed to be trained each year.
August 6, 2025
Hmmm. I’ve spent a significant amount of time in hospitals with my family this year. To say that front-line staff are by and large excellent is stretching what I saw, especially on evenings, nights, weekends, or bank holidays.
August 6, 2025
a-tracy
Can only go by my own and my families experience !
August 7, 2025
I agree, that is my experience. I would imagine some trusts and hospitals are much better than others.
There was one healthcare assistant would did three 12 hour days per week, fantastic lady, paid much less than the qualified nurses who are paid much more money.
A nurse at 21 straight out of uni is now on £29.969 upto £36,483 with experience within two years (which will go up each year by % too) 37.5 hours per week, plus shift allowances, plus pension, plus other benefits you can read about online. Many more men need training as ward nurses (not paramedics) they could be called wardmedics. Two exceptional male nurses worked in the intensive care unit.
August 6, 2025
You don’t start with the most complicated issue. You start with the one that you are able to address quickly and in a way that demonstrates what behaviours and attitudes will be acceptable within the target organisation, and what will happen to those who cannot or will not measure up.
August 6, 2025
There has been surprisingly little analysis and commentary on the final result from Gordon brown’s ill-fated decision to nationalise banks in 2008, especially RBC as was. At the time we were told it was a good idea to buy shares for £10s of billions in an obviously bankrupt bank the equity value of which was clearly zero in order to “benefit from the upside”. Well there hasn’t been any upside. The US recapitalisation model, while far from perfect, was better. Moreover it is now widely acknowledged that the shareholders of any bank which finds itself insolvent will be wiped out. And this is what happened eg with Silicon Valley bank and I think another bank in S-E Europe a few years ago. Nor is this being wise after the event. There were plenty of people pointing out at the time that Browns bank bailout was a terrible idea and would have negative consequences beyond just the loss of capital (although Sir John was the only MP to do so I think).
There’s always a terrible long term cost to Labour governments
August 6, 2025
Sir John I am sure that if Gas, Water, Elecricity and rail were in private ownership we would still be in a mess. It’s UK Government that is the problem. It’s the biggest loss making orgainisation we have in the country.
You have already pointed out that Govrnment controls the investment that a Nationalised industry can put into the Business. That is how much Tax payer money (Revenue) and/or Capital (borrowing) they permit the business to have. If the Utilities can make a profit for a private undertaking why not for the Tax Payer? A bit of a low risk as every one needs Gas, Water and Electricity. Rail faces very strong competition from road transport. Buses face competition from the car. So should tax payer money be used to support rail and bus transport ? Does the tax payer get another benefit which is not just financial?
The main point is do we want a non-UK organisation owning our strategic infrastructure which our day to day lives depend on ?
And perhaps their profits going to reduce the cost of Gas, Electricity and water for citizens of another country and at the same time giving a poor service to UK users.
A private company spends its own money and the Government spends tax payer money and borrows money for the tax payer.
If a private company fails, employees are out of a job. There are no job losses for Govrnment financial failure. I include the civil service here. It’s not their money they are spending. Mostly the actions are based on politics and not on profit and loss. What if Wokingham Council was a private Company would they have commissioned the art work at the Finchampstead Cross ?
So should Government be privatised and competition introduced to solve the mess we are now in ?
August 6, 2025
Privatisations works in some areas and not in others.
Privatising the rail did not work and several train operating companies have gone bust. Privatising the grid did not work and it is now in national hands. Privatising water has been a very poor outcome. Deregulating buses has provided passengers with a threadbare service. The post office could easily have been privatised when Royal Mail was sold.
Some things are required services and some things are businesses that can be privatised.
If nationalised businesses are losing money then customers can suffer as they would with private companies, hold management to account and look for an improvement plan or hypothecate a tax and charge everyone (perhaps put 1% on VAT).
August 6, 2025
Whether private or public the railways fail, the staff don’t want to work on weekends, evenings, when it doesn’t suit them. Scotland closed down much of their rail services this Monday probably because it was a bank holiday! Said it was weather.
I don’t recall having water suspended at all at home for decades.
August 6, 2025
hose pipe ban?
August 7, 2025
No hose pipe ban up North.
August 7, 2025
The grid itself remains privatised: National Grid is a plc that owns and operates the transmission grids for power and gas, but it is regulated (badly) by OFGEM. The bit that got nationalised was just the control centre and the central planning functions that produce the future energy scenarios for government called now NESO and controlled by Miliband although he likes to pretend it is “independent”. You may wonder what a supposedly private company was doing providing net zero plans to BEIS, but that was the result of lack of expertise in government and OFGEM, and an invasion of suitably ESG qualified staff hired by NG as they saw the way the wind was blowing under the Uniparty.
There are some parts of National Grid that have been quite innovative, designing new systems for trying to keep the grid stable with lots of renewables: also the control room staff are actually also highly skilled and have pulled irons out of the fire on many occasions when other grids might have suffered at least partial blackouts already. The net zero planners on the other hand continue to publish fantasies that happen to please net zero supporting politicians.
August 6, 2025
Sir John, The ongoing question of Nationalisation versus Privatisation is not actually an economic issue.
You have outlined over the past weeks and before that over the years, the merit of selling off the state owned industries, thus allowing market forces to advance the efficiency of the industry sold.
The real issue is strategic security.
The innate strength of the nation is founded on its capacity to sustain itself and its needs in times of crisis. Certain industries, are seen as key to enable government to maintain capacity and thus security.
If it was simply an economic issue, we would have a private army and private police forces. We don’t do that. Clearly there are drivers of industrial/security needs beyond the simple balance sheet economics you have identified, driving the determinant of private or public control.
In a perfect world all economic activities would be subject to market forces because that is the only long term control of efficiency. The challenge as always is in the detail. When does the national interest trump the economic discipline brought to the endeavour by the market?
In a purist economic world it would be never, because the strength of the nation and its security would continually grow with successful business growth. In reality, no government is that brave, or sufficiently well read, to allow the laissez faire of market forces to take over what they see as their role.
Not easy is it?
August 6, 2025
Failing state owned strategies industries don’t help strategic security.
Soon we will have no steel – because the State chose to allow the aggressive EU to impose quotas which meant that no mill had enough to operate. They refused to take into consideration the closure of massive mills when they allocated Britains quota.
The state must have no part in rigging the market then private industry would be producing steel still – profitably!
August 6, 2025
Sir John
All nationalisation is ‘bad’ on many levels, Governments and its Blob barely know how to run themselves, or what a budget is, what expenditure really is, so having them being in control of things they no nothing about, have no experience of, is sheer lunacy.
Equally all privatisation has been shown to have been deeply flawed, yes to an extent the off loading of taxpayer funding has been achieved. But the cost, has been magnified and the captive customer has been financially crucified. Private enterprise is about customer choice, as it is the consumer that ‘pays’. Most of what was privatised has been about just offloading, not about creating free standing dynamic competitive entities. So, it is still a failure, no from different nationalisation in that respect, still monolithic monopolies answering to no one, then to cap it all the taxpayer is still the only one on the hook.
August 6, 2025
Better more affordable, more capable results could be achieved by breaking up the big monopolies. The government ‘bailing out’ from its involvement, and would have worked infinitely better if the facilities were handed to those that do the job, know how to deliver.
The problem seems to arrive as a result of governments not knowing how to manage expenditure, so they dump assets, as knock-down prices just to get some money, any money in to waste elsewhere. They don’t think to the next stage, just the immediate headline. The only long-term thought is getting through the next election and themselves personally. The Country those they are said to represent are not even a consideration.
The UK’s steel manufacturers would be infinitely stronger if had it been those already in position and delivering had been given control. Handing steel to Foreign and Foreign Government controlled outfits always fails, they are about market manipulation, the prefer the removal of competition at all costs. Although it doesn’t help that the Conservative Government cancelled steel production in the UK preferring to import at greater cost and more pollution. Note recycling is not producing and is of limited and low value that the UK can’t compete with.
UK Governments have an anti-UK approach inbred into them, one suspects it is the Socialist WEF indoctrination whose meetings they still all make a pilgrimage to each year. I would guess by the attitude of Parliament the ‘Great Reset’ project these meetings take on is still the religious belief they all have.
Hindsight is a wonderful thing, but it doesn’t mean we shouldn’t learn from it. Keep repeating old mistakes will still keep producing the same failures.
August 6, 2025
Referring only to water and rail:
As they currently are, they’re a disaster. Nationalisation could make them work for the consumer once again.
You refuse to consider nationalisation yet offer no alternative that will improve the performance and value for money of these two privatised bodies.
If there is a better way, tell us.
Reply Rail is mainly nationalised and water a state controlled monopoly. Competition solves the problems.
August 6, 2025
We consistenly fail to invest in and build infrastructure in this country. How would private companies fare any better against the NIMBYism and short-term thinking of politicians?
How would a private rail operator be able to get permission for new tracks faster than Network Rail can? How many new reservoirs have the privatised water companies both started and completed in the 35+ years since privatisation? How long has the saga over the 3rd runway at Heathrow been dragging on?
We don’t have competing police forces or competing road networks. Sometimes, as already commented elsewhere, the national interest should come first.
Water is essential for life. It is possible to live without gas, or without electricity, or without a phone. None of us can live without water.
August 6, 2025
You don’t need a big water company (be they nationalised or privately owned) to get water.
Shops sell bottles of water.
You can harvest rain water off the gutters of your home.
You can harvest water from rivers ponds and streams.
You can dig your own bore hole or dig your own well.
And many off grid people do these things all over the world.
PS
I’ve been to EU countries where water is state owned,which you would prefer, but you are told not to drink tap water but to buy bottled water instead.
August 7, 2025
We have about the most extensive installation of CCTV for private protection as well as monitoring for the state of any country. The rich employ security guards while the nomenklatura may get protection from the diplomatic police section. Those without the money or access organise self-help via gangs. Policing to protect the public is largely abandoned now, as the PCC for Lincolnshire made clear in talking about the impending bankruptcy of the local force.
In some areas the courts have been replaced by ones outside the state system: Sharia. In others gangs mete out rough justice.
August 6, 2025
Open-access train operating companies such as Grand Central and Hull Trains are very often the cheapest where they operate. The operating rates are set by the Office of Rail and Road (ORR) and you have to assume that Network Rail are happy with what they get for the access.
August 6, 2025
We previously had this debate. Neither water or rail is 100% nationalised.
How would YOU re-organise these two bodies.
Reply Introduce competition. re unite train and tracks at rail, regional companies, right to bid to use tracks for other services.
August 6, 2025
Oh! So you would nationalise them.
August 6, 2025
I believe in a mixed economy where private enterprise is left alone and the public sector only does things where it is practical to do so.
Most roads are nationalised.
The police are nationalised.
The army is nationalised.
Public spaces e.g. recreation parks are locally socialised.
I agree that all of the above are run badly by the public sector. However, the answer is NOT to have thousands of road tolls OR have vigilantes policing us OR use guerrillas to fight wars OR have one plot at the local park owned by the Smith family and another by the Joneses etc.
The answer is to ensure that the public sector gets more efficient, productive and effective. I believe that is perfectly possible to do. It means sacking the bad managers and paying on good results.
However, I agree that the government should stay well away from private enterprise, whether that’s coal mining, steel, ship building etc. Past governments have ruined all of the above and cause thousands of people to lose their jobs.
August 6, 2025
You focus on relative cost but where UK assets are concerned I want the needs of UK citizens put first, even if that means leaving those assets in the ground and using alternatives rather than make a quick buck and kudos for some political/state flunky.
Where such assets have been privatised they have ended up in the hands of foreign companies/governments always to our detriment.
How do you prevent this happening, especially with privatisation.
Blaming Blair, while justified, is no excuse as it could be any other authority of questionable morals and character.
So how do you prevent it?
And offering unqualified “competition” is demonstrably not a solution
Reply Golden shares and trustworthy governments are needed to stop foreign ownership.
August 6, 2025
@Reply but the former depends on the latter which is the root of the problem.
We really cannot trust any form of government at any level whether through any combinations of incompetence, dishonesty and cowardice
August 6, 2025
@dixie
Nice comment! Very insightful..
Lack of competition, lack of proper regulation, untrustworthy government, unwillingness to break monopolistic arrangements etc. etc.
These are the very stumbling blocks of the privatisation argument perhaps?
August 7, 2025
Yes, we need reform of our system of government so that those who are involved including politicians and quangocrats and civil servants are more properly answerable to the people. That means a Long March back out of the institutions for those who have captured them for other ends.
August 6, 2025
Reply to reply: Sorry Sir John but your Golden Share argument is just a pathetic excuse. France, Germany and Italy all stop sales of companies they consider strategic by various means: administrative, informal influence, bullying or whatever. We do not do this because UK governments of all stripes and the civil service all loathe British private businesses and do not care a fig what happens to them. That is why UK big business capital, a key part of our economic infrastucture, has in so many sectors been shredded.
August 6, 2025
Many who argue for public ownership believe that private operations exploit customers in order to make huge profits for directors and shareholders. They have a point. It is often true of private companies that have a captive customer base. There is only one thing worse than a public monopoly: a private monopoly. So one question is how competition for customers can be introduced to services such as utilities and railways. It is hard to see how customers can choose their suppliers of these services so ine effect they become a private monopoly. Remove the profit motive and, hey presto, no profits needed so no exploitation of customers – who are quite content to pay the costs of the services they use but not profits.
That the costs increase massively in monopolies goes unnoticed and even if statements of expenditure are issued, who bothers to investigate the detailed justification for what the money has been spent on and relate that to increases in prices charged for the services? Hardly anyone. Enter the public accounts committee and the regulator. The audience of the former is politicians and media and the latter is another cost. It is all very indirect and ineffective.
There is nothing like taking your custom elsewhere to keep suppliers on the level and efficient.
There is no concept of profit in public services, only costs, and the bulk of customers are captive. If costs exceed the budget, they simply make good the shortfall from taxation or government borrowing, all done quietly behind closed doors until the deals are done between the spending departments and the treasury.
Comparisons with private operations are difficult.
Another factor is that even where governments invite tenders from industry, they are sometimes very poor,through lack of industry experience, at judging which is the best supplier and building into the contract effective incentives. That can be disastrous for long term contracts such as rail operations.
And the bottom line is that the penalties for any of these effective monopolies, whether public or private, being allowed to go bust are horrendous. Both the companies and the government departments /agencies know this. So the taxpayer is always there to bail them out.
August 6, 2025
Management and Culture are more important than being a nationalised or private business. But both need strong leadership and clear goals, so from top to bottom, every employee knows what success is and what their role is in achieving it.
Off Topic, but connected. It is now being suggested that Rachel Reeves will need to raise £50.1 billion in the budget and will have to raise taxes substantially to get it. What utter nonsense, the government will spend about £1.2 billion in this financial year. To raise £50.1 billion, you need to cut less than 5% of government spending.
Why are the MSM not promoting that solution?
August 6, 2025
Because it would mean discussing funding illegal and ‘legal’ immigration of impoverished people.
August 6, 2025
Keith
The Government and many MP’s do not want to cut Government spending, even though much has been proven to be wasteful, encourages Benefit welfare dependance, and funds vanity projects both here and overseas.
August 6, 2025
Is the American economy going to tank? How much? When? How much due to tariffs? If it tanks, how badly could this affect the UK?
Reply Not about to tank
August 6, 2025
I think you are barking up the wrong tree Sir John. The real problem is Great Britain is not making enough money per head. A natural result of Western nations not having much use for ordinary people, we cannot put them to enough highly paid useful jobs. And more keep coming in and impossible to stop.
Anyone can manufacture anything anywhere, a concrete slab, electricity, a phone line and voila you are in business for missiles to washing machines to cars – with cheap labour and not much of it. Our alternative is online speculators, influencers, coffee makers and hairdressers and money launderers and ineffective legislators. All low value timewasting jobs. Time for Parliament to wake up and put all its clever people to work figuring out where high wage high skill jobs are coming from. TBH I don’t think parliament or the denizens of Brasenose are capable, nothing will happen.
Otherwise discussing nationalisation or railways or the BoE makes amusing work for scribblers but nothing else.
August 6, 2025
Great post.
The highest quality jobs are in High Tech (everything from Apple phones and computers to satellites and drones and Google and so on), stylish and high quality cars like the German ones, Pharma, and high quality craft objects like Swiss watches (and chocolate), and high quality online shopping such as Etsy, high quality foods, perfumes, fashion, and more (including being involved big manufacturing such as planes, defence and so on).
We can’t compete with developing countries developing cheap products (not should we try). So we have to go more high quality/ These jobs pay the most, highest quality exports and highest productivity.
You need a strong financial market (but you can’t depend on this). And strong consumer market (but can’t depend on this either. We’re over-focused on finance market and consumer market – leading to people who don’t really love their jobs (lower productivity and higher soft corruption because you wan to to earn as much as you can in a business environment you hate and to get out of it as quickly as possible – and boom and bust).
August 7, 2025
At the moment they are more concerned with replacIng high earners with AI. Already rife in the financial industry, where the computer not the bank manager determines who gets loans, what trading strategy to follow in financial markets, how to price insurance, etc. and coming to medicine, the law and other professions rapidly. Probably even government itself. Certainly its “digital services” which will rapidly evolve into a social credit score if left unchecked. “Battlefield ” control of spying and armed drones will be repurposed to attack “enemies of the state” rather than deal with threats to the country from outside.
August 6, 2025
SW trains were recently re-nationalised. The “service” between London Waterloo and Exeter St Davids was already slow, due in part to long stretches of single track when you get beyond Salisbury. Quite WHY successive Governments didn’t see the obvious need to fund the installation of a second rail line on the mainline to Exeter is beyond me … but it was obviously considered to be far more important to squander £100 billion on a white elephant from Paddington to Birmingham.
Anyway, the newly re-nationalised “service” is now being downgraded due to soil instability. There will now be only one train every two hours (so that’ll mean standing room only) and the journey will take an hour longer. So London to Exeter will now take anything up to 5 hours.
Marvellous. Welcome to re-nationalised SW rail.
https://www.southwesternrailway.com/plan-my-journey/west-of-england-changes
August 6, 2025
“Heavy loss makers like the Bank of England and the railways send huge bills to the government, who have to borrow more to pay these bills.”
The public is never told about the annual losses we support through nationalisation failures. How much is it?
Profitable nationalised industries usually need access to state borrowing to pay for their large investment programmes.
Why do profitable nationalised industries not borrow from the open market? Why to the State have to borrow money to them? If they’re profitable surely private sector investors will provide the loans?
August 6, 2025
The black hole just happens to be the same amount as the cost of net-zero and immigration
August 6, 2025
There is no logical reason why the type of ownership should affect the performance of a business, apart from those subsidised for national security or strategic reasons. The problem lies with those run by Civil Servants because Civil Servants are never sacked for laziness, negligence, incompetence, malfeasance, corruption, misbehaviour, insubordination, criminal behaviour or even treachery. For example despite over 983 convictions and 13 suicides of sub-postmasters in the Post Office Horizon scandal not one single person will be going to jail for these crimes.
August 6, 2025
c’est simple.We’re doomed doomed! No longer a comedy
August 6, 2025
It calls for better management including those who want to put the public purse in the black.We in the NHS have tried private managers,who quite frankly didn’t have a clue and sided with newly qualified medics because they could pass the buck.
In the 80’s and early 90’s the senior nurses had budgets and mostly kept to them to keep their jobs and NHS finances in good shape.Then along came them private sector seeing a potential for taking money out of the NHS and so have spoiled it.On top of that we have too many people who lack understanding of simple health issues which the Brits would have treated with saline and now demand that their very minor issues have the most highly qualified Dr to deal with them and if they don’t get what they want it is a stupid call for not being able to get a GP appointment.These folks spoil it for those bwith more serious problems.
August 7, 2025
I can’t immediately find a current costs estimate for NHS PFI. One from 2019 says the cost was forecast to total £80bn for £13bn worth of investment (slightly unfair as there are some maintenance costs covered I think). But inflation and charges for operation may well push the total somewhat higher. Yet another example of public sector investment failure to rank alongside dishing out renewables subsidies and support now running at around £25bn p.a. according to the Renewable Energy Foundation.
August 6, 2025
Dear Sir John, As you say, the argument against the state running commercial businesses is generally overwhelming. But it does not apply in the same way to holding assets that are not run by the government.
The dividend return alone on Natwest shares is currently 4.8 per cent. The interest cost of 10-year government bonds is 4.5 per cent. So there is no obvious immediate benefit to taxpayers in selling the Natwest holding.
The “benefit” stems entirely from false accounting by the Treasury. Nowhere else would the proceeds of an asset sale count as a reduction in spending. Even in cash flow accounting it is income.
This essentially crooked window-dressing has the malign real-world effect of making the Treasury even more short-termist. When government spending runs out of control, the Treasury can avoid the real issues by flogging off another bit of Britain as a short-term fix. “Hey Presto, we have curbed government spending without saving a penny”.
August 6, 2025
price of second hand diesel cars are through the roof, as consumers still want them, and makers have stopped making them under pressure from the government. meanwhile vast areas of countryside are filled with brand new electric cars that nobody wants.
madness
August 6, 2025
It should be remembered that conventional privatisation is only an option if private sector investors believe they can make a profit even if the nationalised industry is making a loss. Private investors will not fund a business when they see little realistic chance of making profits rather than continuing losses. Just occasionally a loss making public venture cannot be privatised for this reason – such as there were no buyers for the Settle-Carlisle railway line or for power stations with huge decommissioning costs.
However even then things can be privatised with a subsidy (where companies bid to take it on for the lowest subsidy) which is much less than the losses the public sector would otherwise make. Indeed when years ago Greater Manchester transport invited bus companies to bid for the lowest subsidy to run the supposedly socially important bus routes, that (bus subsidies) was just about the only part of the transport authority’s spending to come in at well below the projected budget.
August 7, 2025
One problem is that many tar everything with the same brush.Life isn’t like that,there are degrees of failure and similarly sucess.Much depends on individuals who make an effort to make things work .
One can see this in many university degrees where students are encouraged to focus far too much at the expense of many side factors which affect the whole.Pinpointing something is essential for some analytical processes but even then 100%accuracy cannot be guaranteed.Life is a soup of good and bad ,biaisis,lust for money and power etc