The costs of nationalisation

The Shadow Chancellor has come up with new economic doctrine. Apparently if you borrow money to pay for something this means it does not have a cost to you. He accepts that were a Labour government to be elected, it could nationalise say the water industry by offering government bonds to the current shareholders. The good news about this is he does recognise that in a free society and democracy the state does have to offer compensation or a price to asset owners, if it wishes to acquire their asset. The bad news is he thinks issuing government bonds to acquire the shares means taxpayers do not pay!

There are good reasons why advanced democracies do not usually elect governments that say they will confiscate assets held by private owners. Whilst in the first round of any such policy it might prove popular with those who benefit from the confiscation, the second round effects are very negative for many. Investors will be put off buying and building assets in the UK if they think a government might simply steal them. Anyone living in the Uk with savings or a pension fund will be very unhappy, because they are likely to hold some shares in the utilities or large companies the state wishes to confiscate. So one cheer for the Shadow Chancellor that he sees it would be a very bad policy to say the state will simply take companies and assets over without payment.

The idea that offering shareholders a bond in return for their shares must mean for it to work that the state would pay fair levels of compensation. The shareholders will only accept the bond as compensation if it is at a realistic level, and if the bond can immediately be converted into cash, as many may not want to hold the bond. They may wish to sell the bond on to someone else. Whichever way you look at it, the government will be in effect paying cash for the shares they buy, and borrowing all the money. That means taxpayers have two big bills to face. They have the annual interest bill on the debt incurred to buy the shares, and the repayment of the bond in due course when the entire cost of the shares falls due. This will mean higher taxes to meet these bills.

Labour may argue that they will enjoy the benefits of the profits of the companies they buy, which they hope will cover the interest cost of the bonds. Here, if we look at history, we see that unfortunately many nationalised industries in the past did not earn enough to pay the costs of their capital. There had to be frequent injections of new capital and writes off of old at the expense of the taxpayer. It is difficult to avoid the conclusion that this will be an expensive policy for taxpayers. After all, if Labour also wishes to cut prices and boost wages in these nationalised businesses, that means they will not be making profits.


  1. Peter Wood
    February 12, 2018

    And yet, with an adversary as incompetent as the Labour Party under Corbyn/McDonnell the Conservative Party under Mrs. May couldn’t win a majority….

    1. mancunius
      February 12, 2018

      They weren’t incompetent, PW, they were actually quite cunning. They promised every student, ex-student, and parent of a student in the country to repay every penny of their university fees. That’s quite a lot of voters. (The ex-student recompensation in particular was a wily touch aimed at a broad demographic.)
      Meanwhile, May promised to take away the savings and assets of the middle-class (also quite a lot of people) to pay for care fees, while continuing to subsidise the care fees of those have not saved for their old age or contribute to the nation’s wealth.
      It’s amazing she got such a large (42%) share of the vote despite all that.

      1. Lifelogic
        February 13, 2018

        May’s vote for us and we will kick you in the teeth manifesto was breathtakingly insane and shows that May certainly cannot be allowed to lead the party into the next election. Unless they want to go over the cliff John Major way. No change no chance!

        But surely the youth voters are not really so stupid as to fall for McDonnall’s and Corbyn’s magic money tree con trick are they? If they are then they certainly are not bright enough to be at any university.

        1. Lifelogic
          February 13, 2018

          But then that is true of some university lecturers I know too.

    2. Pragmatist
      February 12, 2018

      It hurts me saying so but you do have a point actually 🙂

    3. Hope
      February 12, 2018

      Hang on, May agreed in phase one to pay the EU £100 billion pounds, yes £100 billion according to Davis’ reply to Patel in parliament, to talk about trade when it is known the UK does owe a penny. Worse she has disguised this amount as £40 billion plus add ons! May agreed to regulatory alignment for the whole of the U.K. , Dennis points out on this site the ridiculous economics around this point, May agrees to ECJ oversight to citizens in this country and freedom of movement for families continues, about 20 million. What are other countries going to make of this mad woman prepared to give away to talk about trade! Worse she did this deal in the dead of night in an underhand way and was caught out on one part by the DUP. She wants s curtly to continue, i.e. European,Arrest,Warrant overseen by the ECJ giving away our freedoms and liberties without recourse to any U.K. Court! Do not worry about McDonnel, the fruit cake is in office. If you need further examples look no further than the overseas aid madness, Mordaunt still appearing economically stupid claiming it is I need the national interest! She also fails to say that a sixth of the budget, about£2 billion, is give to the EU to spend as it pleases without any recourse to the U.K. And without any regard for our national interest. Hammond still on a drive to tax us more and more! Tories have taxed us more than Labour per head, fact. All public services, including trains in a complete dire state.

      1. Mark B
        February 13, 2018

        The problem is, that parliament is living in a bubble that is totally unaffected by their own policies. That is why I argue for Direct Democracy. We need to be able take their toys away as and when we want in order to keep their feet on the ground.

  2. Fedupsoutherner
    February 12, 2018

    Your comments here make the prospect of a Labour government more frightening than ever John. Corbyn and his Shadow Chancellor would be the demise of the UK. All the more reason for this government to come together and save us from this dire prospect.

    1. Hope
      February 12, 2018

      How about the £40 million waste and fiasco of the west coast line? Energy companies in an EU Climate Change Act straight jacket that May wants to build on! Water costs are extortionate with price rises year on year about three times inflation. Community charge is soaring, they already have add ons to circumvent price caps i.e. Adult social care ad on, flood defence add on, even the new urban cities expect home owners to pay an additional yearly charge to private management companies to look after communal green areas even though they receive CIL and NHB per House because councils claim they cannot afford it! Now we are being told councils to soar again! What is Javid doing? Perhaps nationalisation will cut costs from the taxing Tories.

    2. Adam
      February 12, 2018

      Opinions vary, yet two dynamics probably had major effect on Labour’s surge in the last General Election:

      1: Jeremy Corbyn’s claim of substantive removal of Student costs & debt, achieving efficient voting mobilisation via social media.

      2: Older Conservative voters’ fear of Theresa May’s intent to remedy the cost their elderly care via extracting money from their estate after their demise (impacting on their offspring legacy).

      Both were high value monetary influences. Whereas Brexit is of higher importance than monetary issues alone, its post-Referendum path was widely regarded as secured. That in itself removed potential ex-Labour voter loyalty from UKIP.

  3. Peter
    February 12, 2018

    A couple of points.
    Many large business owners have been happy in the past for governments to nationalise losses. Some mine owners, for example, were happy with a takeover by the National Coal aboard.
    The policy has also previously proved popular with the electorate also. The landslide election of the postwar Labour government is an example of this.
    Many think certain industries are better in public ownership. The complicated shambles that exists in Britain’s privately owned rail industry means that there is a demand for franchises to be renationalised.

    1. libertarian
      February 12, 2018


      Please give an example of a nationalised industry that was taken over and has worked better than previously.

      Oh and the postwar landslide victory was soon overturned when it failed to deliver by 1951, there then followed a “golden period ” under the conservatives until Wilson came back in the 60’s promising more nationalisation whilst shutting coal mines and shipyards.

      I agree that rail is a shambles, because the network and infrastructure is nationalised and the operators aren’t. The whole thing should be privatised.

      1. Peter
        February 13, 2018

        The most recent example of a successful nationalisation was when the East Coast mainline rail franchise was taken back under public control. This was not allowed to continue by the government for purely doctrinaire reasons.

        You agree that the railway is a shambles. You correctly identify fragmentation as a key problem, but then assume that it would all be fine if the whole thing was privatised. Yet privatisation did not last long until the government realised disaster was imminent unless a sizeable chunk was brought back under public control.

        No, the current system is a very profitable franchise operation where the government load the dice so there is little risk for private firms.

        Better for travellers to have a publicly owned joined-up system. Better for rail workers to see a long term career with a well-run capable employer where they can progress, develop and take satisfaction in a job well done. Franchises run by short term chancers do not offer that.

        1. libertarian
          February 13, 2018


          The East coast line is your example of a good nationalised industry ???? Blimey you have low standards. The railways were built and operated very successfully until they were nationalised. Nationalised rail, closed 2,363 stations and 5,000 miles of railway line , 55% of stations and 30% of route miles, with an objective of stemming the large losses being incurred during a period of increasing competition from road. British Rail was a disaster, yet you want to try it again. The worlds best railway system is Japan…. its privately run mostly.

    2. NickC
      February 12, 2018

      Peter, “Britain’s privately owned rail industry” was mostly nationalised in 2003. The train operators are private (up to a point, Lord Copper) but the infrastructure (the most valuable part) is already state owned.

    3. John
      February 12, 2018

      Labour nationalised investment bank losses.

      Labour via Gordon Brown was in hock to the investment bankers ‘Masters of the Universe’ they used to call them, they lent the Labour Government the earnings of future generations of youngsters and were grateful for it.

  4. Sir Joe Soap
    February 12, 2018

    There are indeed good reasons why advanced democracies don’t usually elect governments which say they will confiscate assets held by private owners.

    However, get into the mindset of a 20 something year-old:
    He/she has a debt of tens of thousands of pounds, and the perception (nigh truth) that the state has bundled him/her into that debt by encouraging him/her into tertiary education.
    He/she is earning, let’s say, £20K a year and the state is “stealing” NEST, tax, NI and interest on the student loan, leaving them with barely £1k a month.
    He/she is intelligent enough to know that land came free to their forefathers, but they’re being charged half their monthly income to rent a grotty room in a grotty part of town. Owning somewhere is a pipe dream.

    Their perception is that the state/older generation has confiscated their present and their future.

    So, do they climb out of that by voting Tory for even more of the same, or for an old chap and a few happy-clappy followers who sound sympathetic, pretend to understand their predicament and say they’ll do something about it?

    1. Sir Joe Soap
      February 12, 2018

      I realise that I’m offering no solutions for you poor dyed in the wool Conservatives here, so how about:

      1 Blaming the whole student loan debacle on T Blair and Labour. Never again etc. Offset student loan payments and interest against UK income tax, meaning students working in the UK pay no income tax on any loan repayments and interest in a given year. Just make sure you recover that debt. From now on, no more student loans for dodgy courses. Make loans available for courses where we have a need, then get students to sign up to pay UK income tax at a de minimus level p.a. until the loan is recovered.
      2. Declare an end to Help to Buy or any other dodgy schemes to help housebuilders. Bring back MIRAS to help under 35s cope with mortgage payments. Allow only bona fide workers in the UK amongst non-UK residents to buy houses. CGT on all non-UK resident buyers. Stiff citizenship test for immigrants who wish to become UK residents, including good knowledge of English.
      3. Demand regulatory equivalence in Scotland and Wales vis a vis costs of University for students, and indeed the whole tertiary education system. No more looking over the border from England to see a far more beneficial scheme for students elsewhere.
      4. End silly NEST scheme by absolving under 35s from it. Totally irrelevant to them. Tie NI and income tax to perceptible benefits from them i.e. hypothecation.
      5. Increase surveillance of rented property to ensure it meets H and S standards, and set up a tighter regulatory regime to ensure that young people don’t get ripped-off when renting.

      Just some proposals as a start.

      1. Peter Parsons
        February 12, 2018

        Student loans were introduced by the Education (Student Loans) Act 1990 by a Conservative government. I’m not sure how you’d be able to blame the Labour party for a Conservative creation.

        1. getahead
          February 12, 2018

          John Major? A wet, not a proper conservative.

        2. Know-Dice
          February 12, 2018

          We are talking about tuition fees not just loans, not only that but the interest charged is completely out of line with normal Bank of England rates.

          And don’t mention what Scottish/Welsh or EU students pay or don’t pay…

          1998 The Teaching and Higher Education Act is passed into law – setting an annual tuition fee for England of £1,000. Means testing means a third of students will not pay anything.

          1999 A committee led by Lord Cubie begins a comprehensive review of higher education funding in Scotland. The Cubie report recommends in December that tuition fees in Scotland should be scrapped and the Scottish executive should fund higher education in full. Students would be required to pay £3,000 of it back when their earnings reached £25,000 a year.

      2. alan jutson
        February 12, 2018


        You mention far too many sensible solutions for it ever to be government policy.

        Perhaps you could also add, private healthcare and education fees to be set against tax at the going rate.

        Free university education for nurses, doctors, teachers, providing they spend and sign up to 5-10 years service in the UK state system after qualification.

      3. mancunius
        February 12, 2018

        All far too sensible, Joe.

      4. L Jones
        February 12, 2018

        How about Sir Joe for Chancellor of the Exchequer?

      5. Bob
        February 12, 2018

        Slash the foreign aid budget and let the charities seek voluntary donations instead of handouts from the taxpayer to fund their dubious activities.

      6. Original Richard
        February 13, 2018

        We need to be out of the EU to be able to implement some of your proposals.

  5. James neill
    February 12, 2018

    Don’t know how you want us to comment on this.. first if all if Labour do get into govetnment it will be mainly because of the complete chaos and dysfunction that is going on in the Conservative party at present time and the tories will have no one to blame but themselves….secondly even if Corbyn gets in he is unlikely to let this lunatic McDonnell get his hands on the levers of power..very likely they might give him the job as secretary of state for international trade to keep him out of harms other sit him a bit like the americans have to do with Trump. You might not agree with everything Corbyn says or does but he is not stupid

    1. libertarian
      February 12, 2018

      James Neill

      “You might not agree with everything Corbyn says or does but he is not stupid”

      Oh dear I’m a fraud he very much is, oh and Mcdonnell & Milne tell Corbyn what to do, not the other way around

  6. Newmania
    February 12, 2018

    Having spent the last year arguing for policies that will self-evidently make us poorer you are not in a very good position to tell anyone anything about what might be best for the economy.
    Furthermore; as you have decided that experts know nothing forecasts are inventions and that a shadowy ”elite” are responsible for these clever clogs notions the way ahead is clear.
    One merely requires the people to express their ”will” by electing Jeremy Corbyn and his imbecilic ideas will not only become the new best plan, but any attempt to dilute the damage will be the ”worst of all worlds “
    Anyway by then , as you have done with austerity you will say the reverse

    In the world of the insane , Corbyn`s ideological religion is no madder than the Nationalist version.
    I advise voting Corbyn , lets go down laughing

    1. libertarian
      February 12, 2018


      “Having spent the last year arguing for policies that will self-evidently make us poorer ”

      Provide a shred of evidence for that statement or shut up

      Two things from yesterdays news

      Citigroup to invest in a new innovation and technology hub in London ( FT)

      Britain’s factory production extends its record run to cap the strongest year since 2014 ( Bloomberg)

      To be rightly labelled an expert it would help if you had a track record of accuracy !! The Treasury doesn’t nor does the Bank of England therefore they are not credible as experts

    2. Richard1
      February 12, 2018

      Its reassuring to hear such an ardent advocate of EU membership as yourself argue in such a sneering and irrational way – makes me (having been a floater) think the majority must be on the right track having voted for Brexit

    3. NickC
      February 12, 2018

      Newmania, The vast majority of nations now and throughout history have yearned for independence. Independence is worth paying for. Ironically history also shows that nations which become satrapies are actually the poorer for it.

    4. libertarian
      February 13, 2018

      Dear Newmania , Tasman , Andy and the rest of the remain crew

      In the reality based community this is todays economic news

      Over the weekend US bank Citigroup announced a massive investment in London, its first since the referendum result. They plan to establish an innovation centre with 60 high quality jobs and room for expansion. James Cowles, the bank’s EMEA CEO, told the FT:

      “Regardless of Brexit, the UK remains one of the world’s largest pools of diverse talent when it comes to hiring advanced technologists with a strong business background.”

      Meanwhile, Bob Dudley of global energy company BP says Brexit has “not diminished” Britain’s standing on the world stage and is bullish on trade deals. He told The Times:

      “There are a lot of countries around the world that would like trade deals with Britain bilaterally down the road, I hear that a lot. I don’t think British influence is diminished. BP works all over the world and I see the importance of Britain in what we do and how they view BP.”

      In manufacturing, British engine makers are experiencing an unprecedented boom and production is at an all-time high. According to the Society of Motor Manufacturers and Traders:

      British engine manufacturing rose 6.9% to all-time high of 2.7 million units in 2017;
      Home demand is up 9.7%, while global demand rose to almost 1.5 million units;
      UK engine manufacturing is now worth £8.5 billion, supporting 8,000 British jobs.

      It seems you and your so called “experts” are talking nonsense , it must really hurt that the economy is doing well , despite the fact you wish it wasn’t just so that you can virtue signal

  7. Lifelogic
    February 12, 2018

    Nothing run and owned by a Labour government (or indeed most governments) will make a real profit for more than a few months. They will all need endless tax payer subsidies (they will call it “investment” but there will never be any return from it).

    Taxes already absurdly high and increasing under the dire Hammond will increase further (and killing the tax base they will raise less not more) the economy will go into a death spiral like Venezuela.

  8. Mark B
    February 12, 2018

    Good morning.

    I have no problem with privately owned utilities providing they meet certain criteria :

    a) They must not be majority owned by a foreign government.

    b) There must be real choice for the consumer as to which provider they wish to have.

    c) That the market is fair and open to others to enter.

    d) It is properly regulated by the government, with a government minister responsible and not some toothless, and really rather pointless QUANGO.

    e) That the UK government owns the fixed assets and only allows the management of said utilities. Thereby allowing ease of transfer to another provider if necessary.

    1. Mitchel
      February 12, 2018

      Unlike the useful idiot Osborne we should certainly avoid letting China take control of our essential infrastructure unless we want something of a “century of humiliation” visited upon us-a period in their history-not so long ago-for which they hold us primarily to blame.

      1. Prigger
        February 15, 2018

        Mitchel. U.S. crude exports to China rose from zero prior to 2016 and are now in January 400,000 barrels per day (bpd) , = $1 billion. Half a million tonnes of U.S. liquefied natural gas (LNG) = nearly $300 million headed to China from the U.S. in January.
        So, do not be alarmed at Fake News. The world is dangerous alright but to coin a phrase “not as we know it”

  9. Mark B
    February 12, 2018

    Sorry off topic.

    Yesterday our kind host mentioned that the Conservative Party is majority Eurosceptic and that there are more than 35 MP’s that oppose any form of Soft Remain. Votes in the HoC suggest that he may indeed be correct but, I cannot help wonder this. If this is indeed the case, and there is such a large pool of Tory Eurosceptics, why is the Cabinet stuffed with mostly Remainers and not people much like himself ?

    1. sm
      February 12, 2018

      Mark B:

      One supposes that an influencing factor is that old (but I consider ill-advised) adage about tents and basic animal functions?

      Usually ends in tears.

    2. alan jutson
      February 12, 2018

      Mark B

      Why so many Remainers in the Cabinet ?

      Because the Prime Minister picks who they like to serve, no other reason.

      1. getahead
        February 12, 2018

        And the Prime Minister was picked by the faceless ones who truly hold power.

    3. Paul
      February 12, 2018

      Because we have a tradition in this country where no politician with principles, talent, conviction and a belief in our nation ever make it to the top. We’re afraid they might actually change things.

      1. libertarian
        February 13, 2018


        Totally right, Its why the Tories won’t let the last few members they have pick anyone to stand for anything

    4. Mark B
      February 12, 2018

      Thank you everyone for your comments.

      Would our kind host wish to comment, or is discretion going to be the better part of valour ?


  10. eeyore
    February 12, 2018

    Shareholders will get no choice about whether to accept Labour’s offer. It’s hardly necessary to stress the wickedness of stealing someone’s property and, by way of “compensation”, forcing them to lend to government on terms of the government’s own choosing.

    Even if an exhausted Tory party does get back at the next election, it can’t be in power for ever. Labour under Mr Corbyn, though, is irretrievably (left wing ed). All it has to do is wait.

    Two consoling thoughts: Mr Corbyn is 68 and cannot go on for ever. His successor may lack his magic appeal to the young and naive. And Labour has as yet no private army to strong-arm subversion of the state. But it’s not a happy situation.

  11. Chris
    February 12, 2018

    You can lead a Socialist to logic, but you cannot make him think

    1. Anonymous
      February 12, 2018

      Ho ho

    2. Chris
      February 12, 2018

      Please, Mr Redwood, can you ensure that the identity of posters is kept secure i.e. once a user name has been registered to an email, please do not allow someone else with a different email to use that name. This is simply basic security measure which most other websites enforce so that comments are not attributed to the wrong person.

      I have been posting on this site for some years as “Chris” and then suddenly the above comment appears which is not from me.

      Reply I cannot change people’s chosen names

      1. Original Richard
        February 13, 2018

        The same happened to me.

        It is a pity that user/chosen names cannot be made unique.

      2. Mark B
        February 13, 2018

        I first posted as Mark on this website. A gentleman had already started to use that name and asked me to use another. I consider it polite to do so.

        To the first, Chris, could you please use another as I do ?


  12. Sakara Gold
    February 12, 2018

    McDonnell wishes to nationalise key infrastructure industries because he and the Labour party object to these assets being owned by foreigners. They are mostly highly profitable monopolistic enterprises and are making massive payments in the form of profits and dividends to their shareholders, by making extortionate charges to British consumers.

    In many cases the consumer has no choice about who to buy water, energy etc from and are forced to pay these charges regardless. These industries suffer from a lack of investment as it is not in their shareholders interests to improve services and reduce costs to British consumers; their owners are often ultimately foreign governments who are delighted at the pricing power they have over their customers.

    The sums of money that leave these shores as dividends and profits are gigantic, they distort the forex markets and impoverish us all.

    Conservative governments have a sorry record of undervaluing national infrastructure assets when they were sold off, their pension liabilities (which are deferred salaries) are now huge because their new owners were not forced to make adequate provision. BT for example could be described as an enormous hedge fund that has a minor interest in a telecoms company.

    McDonnell is a self admitted (left winger ed). I do not agree with his views, but I never agreed with privatisation in the first place. It’s time the UK took back direct control of key infrastructure assets and uses their profits for the benefit of British consumers and not the German and French governments.

    1. acorn
      February 12, 2018

      True SG. I was hoping I had taught Redwoodians a bit about how a fiat currency economy works? We are not on the Gold Standard any more. The government does not borrow its own fiat currency from anybody, it is the “currency issuer”! The Shadow Chancellor, like the Chancellor has no understanding of this fundamental fact; or, they continue to perpetuate the neo-liberal myth, that the government’s accounts, are the same as the “currency using” non-government sector.

      As Prof Mitchell says: “Owners of previously privatised companies would be compensated in return for the resumption of public ownership, but the value of the companies would be discounted by the net present value of the public subsidies that the companies had received over the course of its operations. In other words, this era would reverse the neo-liberal rule where returns are privatised and losses socialised.” On that basis, the government would get a hefty discount, particularly on railways.

      The fundamental fiat fact is, there is nothing the government can’t afford to buy, that is available for sale in the government’s own currency. It could make its life a lot easier by getting rid of the Budget Responsibility and National Audit Act 2011 and the Debt Management Office, there is no rationale for the “full funding rule” in a fiat currency economy. That is, issuing Gilts etc., to match government spending,

      Gilts are just risk-free savings certificates for the finance and insurance industry; they do not fund government spending. Remember the government spends first before it taxes; and, its taxes don’t fund government spending either, they are meant to do a totally different job.

      1. Edward2
        February 13, 2018

        This is the Zimbabwe school of economics.
        Just keep printing until the economy collapses.
        Plainly the UK would take longer than Zimbabwe to collapse but it’s the same path.
        Your claim “There is nothing the government cannot afford to buy” is breathtaking in its stupidity.

        1. Mitchel
          February 13, 2018

          It’s an “end of history” type theory that relies on one world government being achieved ie a global monopoly that the bankers would love to impose.It ain’t gonna happen.

        2. acorn
          February 13, 2018

          In 2008/9 the government spent £1,400 billion on buying commercial bank liabilities that those banks couldn’t cover. This to stop them going bust, (it would have been much simpler to just nationalise them).

          It used the Treasury’s bottomless pit full of Fiat Pounds Sterling, and a keyboard connected to a spreadsheet in that bottomless pit, to send the “money” to those banks. Nobody in the non-government economy felt a thing, it cost the government nothing apart from wages of the keyboard operator.

          Zimbabwe did not go “bust” because it issued too much currency. It went bust because there was less and less life support commodities left to buy. And, what there was left to buy suffered massive price inflation in a so called “market” economy.

          1. Edward2
            February 13, 2018

            Yeah but…
            Check out the value of the Zimbabwe currency versus the USA dollar when Mugabe came to power and today.

    2. Mark B
      February 12, 2018

      Marxist ? Communist ? Trot ? Maoist ?

      These are not rude words and if applied to any of the aforementioned MP’s I would doubt that even they would object.

      Nay, even one of them held up a Maoist Little Red Book in the HoC.

    3. mancunius
      February 12, 2018

      ” and uses their profits for the benefit of British consumers”
      Since when did UK governments ever make a profit out of infrastructure assets? Were they ever to learn how to do so, I’d happily let them.

    4. NickC
      February 12, 2018

      Sakara Gold, Actually McDonnell objects to any private ownership of key industries, not because the ownership happens to be by foreigners.

  13. Alan
    February 12, 2018

    Thames Water shares are paying a dividend of over 4%. The government can borrow at rates far lower than that, so the government would make a profit if it bought Thames Water with borrowed money.

    Not that I am arguing that the government should run companies: it seems to me they have enough to do just deciding and running policy and should leave commercial operations to private companies which have some experience in the area, where at all possible. In fact right at the moment the government seem to be in trouble even deciding on policy, and implementing it seems beyond their capability. The idea of the present cabinet trying to work out how to run the railways, for example, is laughable.

    1. NickC
      February 12, 2018

      Alan, Your example depends on the government running Thames Water as efficiently as now. All the evidence is that it won’t.

  14. Richard1
    February 12, 2018

    It is incredible that in the C21st, with decades of evidence from the U.K. and around the world as to the failure of nationalised state monopolies and the success of privatisation, the main opposition party can come up with such a policy! Incredible too that Mr McDonnell apparently genuinely thinks that issuing bonds in consideration is somehow different from offering cash. I believe he has also said the value “will be determined by Parliament” – ie he intends to expropriate property from private investors at an arbitrary value which he determines, a policy we haven’t seen anywhere in Western Europe since 1945.

    This absurd policy announcement should at least be a wake up call as to the terrible damage a Labour government led by Marxists could do as they attempt to implement their ideological nonsense. It should be good news as at the next election it will be clear that any vote for anyone other than a Conservative candidate makes putting Corbyn and McDonnell in power.

    1. Dennis
      February 12, 2018

      “the success of privatisation, ” tell that to water/electricity consumers in Africa, S. America etc. for a start.

    2. getahead
      February 12, 2018

      I would suggest that apart from ideology, the main opposition party is chasing the young person’s vote. Young people have no knowledge of the disastrous times of the 70s before Maggie got in to sort things out. State ownership appeals to our left-wing indoctrinated youth.

  15. agricola
    February 12, 2018

    Nationalisation as we have known it is a dead hand to totally inefficient disaster. The predatory self serving behaviour of some examples of private industry are equally undesirable. For our national service providers of rail and power there is a third way worth exploring. It is the John Lewis/ Waitrose model, a partnership of workforce and management in which all individuals involved have a vested interest in the success of the company. Worth exploring I think, discuss it with Mr Rose the West Midlands mayor who should know how it works.

  16. rick hamilton
    February 12, 2018

    When ……. McDonnell, Member for Hayes and Harlingrad, says nationalisation costs nothing he means it costs Labour nothing. He knows they will never pay off the debt incurred and will just roll it over until the Tories get back in again. Then in opposition scream about Tory cuts and austerity until naive new voters elect them again for free beer tomorrow and the magic money tree.

    By then the pound will be worth $1.00 or worse. Will somebody please break this destructive cycle ?

    1. APL
      February 12, 2018

      rick hamilton: “By then the pound will be worth $1.00 or worse. ”

      The pound is only worth a few pennies when compared to its 1930 sterling zone value. The only reason it’s not noticeable against the US$ is because the US government has been engaging in the same tactic.

      I suppose, there is even a case to be made that the UK had to devalue the pound sterling to neutralise the devaluation competition of the US.

      rick hamilton: ” Will somebody please break this destructive cycle ?”

      Very difficult to do in a democracy, for the exact reason you lay out in your post.

      The problem is, eventually, governments will be forced to reverse the century long inflation. Then ‘unpopularity’ at the polls will be the least of our worries.

  17. Dave Andrews
    February 12, 2018

    “the state does have to offer compensation or a price to asset owners, if it wishes to acquire their asset”
    I don’t remember being offered free shares or compensation when my share of a public utility was privatised.

    1. NickC
      February 12, 2018

      Dave Andrews, You got the monetary benefit of the sale in the form of lower taxes, and/or lower government borrowing (leading to lower taxes).

  18. Ian wragg
    February 12, 2018

    If we had a proper Tory government there woud be no point in discussing ‘re nationalising industry. With Mays pseudo socialist policies some people think that we may have the genuine article. Coupled with fiasco around Brexit all is lost.

    1. Lifelogic
      February 12, 2018

      Exactly if we are to suffer daft interventionist, green crap socialists like Hammond and May how can they defend us against the appalling prospect of Corbyn and McDonnall?

  19. Bryan Harris
    February 12, 2018

    Well put JR

    Let’s face it – labour are trapped in a time warp – they don’t understand why the policies they regurgitate, time and again always fail, and they have not the mental capacity to work out anything that would work.
    They rely on stirring up hatred to get into office, but they fail even their hardened supporters once in power…
    The Shadow Chancellor relies on the old belief of something for nothing. Mechanically speaking, that never works.

  20. Iain Moore
    February 12, 2018

    I am glad there is someone in the Conservative party prepared to look at the costs of Labour’s loony policies , because I had wondered, due to the complete absence of Conservative Ministers rubbishing McDonnell’s plans , whether the Conservatives had thrown the towel in on another policy area.

  21. The Prangwizard
    February 12, 2018

    Did McDonnell say he would allow people to sell their bonds? If he wasn’t asked and if he didn’t say, why should anyone assume he would allow it? No-one should underestimate the malice and hatred at the heart of his politics and beliefs.
    Reply He implied the bonds would be additional gilts which are freely traded

    1. The Prangwizard
      February 12, 2018

      I think we all ought to keep a close eye on on this. Implied isn’t good enough is it?

  22. Prigger
    February 12, 2018

    Well put JR. Should not this kind of argument be included in all teaching in schools?
    Why does this country, full of immigrants from former Socialist countries, former being the operative word, and with Venezuelans as I write, eating Marxist food garbage from wheelie bins not show something?

    Should our children and indeed even adult victims of our school system be fed this moronic nonsense of Socialism? If our media served us, it would at worst make fun of the Shadow Chancellor’s ideas, at best educate our people.

    No-one says the free enterprise system and democracy are the bees knees but the well-trod way points that all other systems are infinitely worse.

    1. Dennis
      February 12, 2018

      At the moment at least the media, MPs and those at the BBC cannot educate our people as they cannot even understand the meaning a simple English as shown by their misinterpretation of that Red bus poster.

  23. alan jutson
    February 12, 2018

    Afraid its the usual magic money tree economics, with compensation under threat, with probable low valuations.

    One could argue a possible case for not renewing train franchises, as they are of limited time duration.
    One could also argue that the very basics of living (water, power, health and possibly transport) should not be in commercial, of even foreign company ownership.
    One could also argue that Government should be able to borrow at a lower rate than any commercial company.
    Problem is Government running of anything it has any sort of control over, has a very, very poor history, just look at the shambles of the NHS, HMRC, Foreign Aid, even the Justice Department of late.
    Our armed forces are also starved of cash funding.

    1. Dennis
      February 12, 2018

      I don’t understand about everyone saying that a magic money tree doesn’t exist when all of them believe in a magic biosphere tree.

  24. Bert Young
    February 12, 2018

    Where McDonell gets his ideas from I’ve no idea ; one way or another if Labour were in power they would completely bankrupt the country . There is sense in having an overall system for trains – but not under public ownership ; being able to buy a ticket from one place to another ought not to be frustrated by the various charging systems of the different rail companies today .

    I do lament the fact that households cannot change their choice of water company supplier ; if one can switch energy supplier why not the same for water ? . My objective would be to get away from the high cost Thames Water ; they are foreign owned with extremely high returns going abroad . I regard water as a natural resource that ought to have the same charging base throughout the UK .

    Reforms are long overdue in the supply of all public resources ; private ownership has not shown the efficiency expected and needs to be brought under a much tighter control mechanism .

    1. graham1946
      February 12, 2018

      Think yourself lucky Bert.

      I see from Thames Water website they charge a 3 bedroom band 3 house without a meter (assessed charge) £346.47. In the country side, we have 2 water companies, one for supply and one for waste and they each charge a similar amount (i.e. twice what you are paying now). Its the same all over, village Council Tax is higher than London, without any amenities (street lights, police, road sweeping etc). And No I would not live in London rent free thanks, it is becoming what Trump call A s***hole.

      1. alan jutson
        February 12, 2018

        graham 1946

        We get one bill from the one supplier, but is split into two or more charges, which then makes up the total.

        First half for water used, second half for water waste, same quantities on each.

        We found a water meter cut our bills by more than half.

  25. Leslie Singleton
    February 12, 2018

    Dear John–Yes, I heard him say that and I thought to myself how can it be that somebody in his position can (a) be allowed to stay in that position and (b) be allowed to spout such utter twaddle. Does he really believe it?? Are the younger generation really that ignorant that they believe it?

    1. alan jutson
      February 12, 2018


      Oh yes some of them believe it.

      Whats more many of them are still or have been through University courses, populated by teachers and lecturers who have been in academia all of their lives.

      Living in the real world when they seek work all comes as a bit of a shock for many, hence much better, when you have little at stake to try and change the system, until that is they have to contribute in a large way to keep it going.

  26. Epikouros
    February 12, 2018

    Intellectual excellence is not an attribute that the left can claim although it is said that “some ideas are so stupid that only intellectuals believe them”. Mcdonald is not even an intellectual yet he believes nationalisation which is a very stupid idea as all the evidence tells us is not a good idea in any shape or form.

    However perversely so many of us believe that the likes of the NHS and network rail both current nationalised business in essence taxpayer owned monopolies are wonderful institutions the former even regarded as sacred. So many will applaud his idea and the gullible and credulous will believe his claim that it will be at no cost to the taxpayer as it will pay for itself. As you point out this belief is erroneous and only the opposite is true we will end up paying through the nose with taxpayer subsidies for goods and services that are neither as cheap or of a quality that the private sector can offer.

    Every time Labour forms a government we witness another episode of groundhog day as they reenact past mistakes and past tried and failed policies until everyone wakes up to the fact that they are living a nightmare and so votes them out of office again. So Corbyn as the next prime minister will be a case of here we go again another round of waste, tax and spend, incompetence and inefficiencies.

  27. Illiquid asset
    February 12, 2018

    I wouldn’t say buying shares in utility companies is the very best way of increasing ones wealth even without the Shadow Chancellor’s big-brain think.

  28. Red Sunset
    February 12, 2018

    The amount of money going down the drain, being exported, from external and internal investors including Local Authority pension funds just prior to a likely Labour government will ruin this country.
    The Shadow Chancellor is making preparations for a run on the Pound should he get into power. The run on the Pound will start with a Labour- favourable pre-election poll and his house worth as much as a secondhand army tent ( minus the metal tent pegs pre-sold for scrap. )

  29. Iain Gill
    February 12, 2018

    Yea but the railways, for example, are already largely under state control, as we have government, Jo Johnson now in CityAm, saying they are going to electrify every single line in the country and abolish all diesel trains.

    it is mad investment decisions like this that ruin nationalised industries, and there is little about the way many of these businesses are setup that prevent them now.

    Seems to be more Conservative party making policies up as it goes along, with little joined upness, or any ideas of the reality of life in this country.

    1. Iain Gill
      February 12, 2018

      And “hydrogen trains” idea from Jo Johnson is equally stupid, there is a lot of work needed to make such things safe in a crash and not go BANG.

      Complete fantasy random policy making.

      1. Dennis
        February 12, 2018

        How do the hydrogen buses in Iceland manger this aspect?

        1. Iain Gill
          February 12, 2018

          hopefully clever design, testing, and risk mitigation and assessment, but they are smaller and worst case scenario will not be as bad. none of which for something the size of a train Jo Johnson will have a clue how to approach, or how long to budget for, or likely costs, etc.

          its likely back of fag packet high level estimates from anyone with a clue will lead to the conclusion that the risk/benefit analysis very much says keep using diesel trains.

  30. Red Sunset
    February 12, 2018

    The Shadow Chancellor is an above averagely educated person. Above average intelligence. Above average communicator. He went to Grammar School. There you go. So many Grammar Schools have bred insidious elitist…. mentalities. They come out without a shred of virtue and question basic arithmetic as if it were a dark art.

    1. Iain Gill
      February 12, 2018

      not as bad as the university arts faculties, extreme examples like “womens studies” come to mind

  31. NigelE
    February 12, 2018

    ” … many nationalised industries in the past did not earn enough to pay the costs of their capital.”

    One exception was British Gas (at least in the post North Sea natural gas era). The original company is no more, split into three, with only one part – Centrica – in independent existence. Of the other two parts, one was merged with National Grid, the other bought recently by Shell.

    If Labour re-nationalise Centrica & National Grid will they offer the full market share price for these companies? Will they pay the price the shares were BEFORE they announce this policy? Since the announcement, the share prices have tanked.

    1. Fedupsoutherner
      February 12, 2018

      And will we still get our national grid pensions?

  32. David L
    February 12, 2018

    Wasn’t there a claim back in the 1940’s that the railways made so much money from freight that, once nationalised, passengers would travel free?

    But there is no denying the railways have been a political football for all governments, and their partial destruction in the 1960’s was for the benefit of the road haulage industry. I feel it needs to be a single organisation, the current fragmentary structure has been another method of extracting profits at the expense of taxpayers and customers. How sad that many foreign governments are using it to finance their own home systems.

    1. Dennis
      February 12, 2018

      Surely the UK rail system is already nationalised if it is owned by foreign governments as stated in this post but just not by us. How are they run – by those governments only or do those governments just pay private firms to run them?

      I don’t know.

      1. Dennis Zoff
        February 13, 2018
  33. Darwin darwin darwin
    February 12, 2018

    Error. But there can be no “anticipation” in genetic change. Only S-R, stimulus- response. So you’re just going to have to wait until you’re paddling in salt water for several million years before you even think “Hey, bit wet underfoot, innit?”

  34. a-tracy
    February 12, 2018

    The government isn’t making wise decisions for us with regard to large investment spending now.

    Our Motorways are nationalised, we (the British Road users) pay for them through VED and Fuel Tax, tolls, and fines which more than covers the cost of them and would build new spurs and pay for improvements but the funds from these taxes are diverted elsewhere, we also have high vehicle insurance taxes for using our cars. Why are we investing so much in Smart Motorways when all of the technological advancements are going into self-driving cars, the smart motorways will then be defunct. The inside lane will have to be a roll-on, roll-off lane with merging lanes on and off much longer. Everything will have to be very much slowed down thus continuing the productivity problems we are experiencing now. Less than half of Transport for London running costs is covered by the ticket prices and receipts alone? Is this in line with other leading Cities in the World. So they take money from road charging and fines and then get a government grant (where is this money taken from?).

    is HS2 a nationalised project or private? – why bother with HS2 when much better technology in China has been created eg maglev, transrapid passenger transport system, we can’t just keep funnelling everything (roads, rail) through Birmingham its jammed up solid now. It’s like building more canals just at the time road building projects started. We can’t even create cheap car parks at the largest stations like Crewe where it costs the price of the train ticket to park your car and there are so few narrow spaces you can’t park and end up running for trains. You can’t connect by low-cost public transit systems either to the main rail stations we are so poor at this in this Country. Really Londoners just won’t realise how bad it is because for all the moaning your Transport for London can get you all around at costs less expensive than we pay up North, connected tickets that you can use on buses and trains and tubes.

  35. sm
    February 12, 2018

    A genuine question, please John:

    under EU legislation, did the UK have the right to refuse foreign companies the right to purchase our utility companies?

    1. mancunius
      February 12, 2018

      In case the answer is ‘No’ – as I suspect – I’d like to know how Germany, France etc got away with being so protectionist about their own public utilities.

  36. William Long
    February 12, 2018

    I do not think there is much that is new in this. The whole of socialism is based on a con: that you can have something for nothing, and this is just another example. The real problem we have is that the curreent Conservative leadership seems unable or unwilling to do anything to counter it,because, one has to suspect, secretly (or perhaps not so secretly in some cases), the agree wiht it.

  37. Ed Mahony
    February 12, 2018

    Dear Mr Redwood,

    I think the socialists are a red herring. Most people agree Corbyn’s politics is bonkers.

    I think the real debate is to be had within Conservatives about capitalism. What sort of capitalism do we want?

    – The sort of capitalism you find in California, Netherlands, Sweden, Denmark, and Germany (with a high emphasis on the high tech industry, with relatively low social problems and high public services in countries such as Sweden and the Netherlands in particular).

    – Or the sort of capitalism you find in New York, Singapore and Hong Kong (with an emphasis on the financial services, with relatively high social problems and low public services in much of America).

    A subtle but important difference.

    1. Ed Mahony
      February 12, 2018

      Although Corbyn is a blip. Socialism should be long dead. But it’s been raised from the dead again because of a problem in our capitalist model that needs tweaking (and i think the answer is to focus more on the model we find in California, the Netherlands, Sweden, Denmark and Germany, rather than looking so much at the model of New York, Singapore and Hong Kong).

      I also think this would strengthen the Tory party. Making it more appealing to voters in general.

    2. mancunius
      February 12, 2018

      Ed, your premise is wrong: Sweden has vast and increasing social problems and its society is now terribly fractured. Its creed of state-worship has led directly to its downfall.
      Singapore has comparatively few social problems because of its effective zero tolerance policy on crime. Such policies get to the root of criminal behaviour, and should be introduced here.
      Unless of course you do not regard crime as a social evil…:-)

      1. Ed Mahony
        February 13, 2018

        I agree to a degree. But at same time, i think i’d get pretty bored, pretty quick, in Singapore (unless i was married with family and had to work there out of duty). Also, Singapore’s only 5 million people. Better to compare UK with the USA. USA has terrible social problems. I think Sweden’s main problem is lack of traditional Christianity. For me, Catholic Christianity is the real solution to our country’s problems:

        – Work ethic (look at Florence, medieval guilds)
        – Allowing the strong to strive (but safety net for the vulnerable)
        – Patriotism (Catholic Church defined virtue patriotism as virtue)
        – Public duty (Connected to patriotism)
        – Love of Crown (Catholic Church gave us our monarchy)
        – Love of democracy (Catholic Church gave us Houses of Parliament)
        – Love of the judiciary (Catholic Church gave us our Legal System)
        – Love of education (Catholic Church gave us Oxford, Cambridge, Eton, grammar schools)
        – Respect for elders and employers (and respect for employees)
        – Love of family
        – Love of arts and beauty (think of all our beautiful buildings, Mozart and so on).
        – Love of science (Mendel, main founder of modern genetics, was a Catholic priest)
        – Love of pleasure (in right context), wit, cheerfulness, humour, character + personality
        – Aversion to puritanism, prudishness, gloominess, being robotic / following the crowd
        – Love of the spiritual. Love of the physical too (just as important). But in right context.
        – Modesty
        – Concept of Just War

        The best solution to problems of the modern world, I think (whether people believe in God or not)

        (Unfortunately, i’m not very humble and so a bad example of a good Catholic)

  38. mancunius
    February 12, 2018

    JR, has it occurred to you that whatever Corbyn says to gain more middle-of-the-road voters, he and particularly McDonnell are perfectly capable of reneging on it after being elected to power, and simply expropriating private bond- and shareholders.
    Even during an election campaign, a company such as Thames Water is very vulnerable to an attack from the left. Some reasons:
    1) UK private investors cannot buy its shares – they are reserved for private equity companies and largely foreign pension funds (the only UK holder seems to be BT’s pension fund – so if TW is nationalised, the BT pension fund will probably need the PPF).
    So there’s no popular ‘Tell Sid’ factor: on the contrary, Corbyn will tell Sid – without much exaggeration – that he cannot benefit from the shares. And TW is a 100% monopoly.

    2) Thames Water’s corporate structure has deliberately been made almost impossible to analyse, and its foreign shareholders (including the previous owners, the Australian Macquarie investment bankers) have been handed money that came from leveraged debt. Frankly, the governance of TW stinks.

    3) We’ve had twenty years of relentless equity-investment bashing by the private property- obsessed New Labour and the post 2010 Tory version – see for example Hammond trapping investors who moved cash into non-ISA accounts having calculated their earnings were below the tax threshold, by now reducing the tax-free dividend allowance from 5K to 2K. Can you imagine the outrage if that were done with income tax?
    Conservatives continue to ignore and abandon savers and investors having realized that debtors have gained the upper demographic hand, and must be assuaged like Moloch.

  39. graham1946
    February 12, 2018

    We do not elect governments which confiscate assets.

    No, because the rich keep getting richer with all the asset bubbles governments produce, whilst the ordinary worker and pensioners gets steadily poorer.
    However we do elect governments who confiscate our cash at every turn. They supply the banks with practically free money so they can charge us high interest rates for borrowing and pay low interest rates for savers which do not go even a fraction of the way to cover inflation, thus robbing us steadily each year.

    I fully expect the ‘Cyprus solution’ will be used eventually – i.e. just confiscate our cash from our bank accounts. Its more or less there now anyway with taxes on everything. I expect even now someone in Whitehall is working on ways to meter fresh air we breathe (the Congestion Charge seems to be the start of it.)

  40. Peter Martin
    February 12, 2018

    “That means taxpayers have two big bills to face. They have the annual interest bill on the debt incurred to buy the shares, and the repayment of the bond in due course when the entire cost of the shares falls due.”

    Or the Government could issue stock or perpetual bonds. Then it never falls due. The former shareholders can then sell these as if they were shares – if they choose.

    The question is not only whether the interest on the bonds/stock can be covered by whatever profits can be made from those nationalised industries but whether the level of any subsidies that are paid out is different from what the industry might have received when in private hands. This would be of particular relevance to the railway industry.

  41. Ron Olden
    February 12, 2018

    On a completely different matter, there were some exchanges here a few weeks ago about Bitcoins.

    People were so gung ho about them that they were ‘investing’ in them using their Credit Cards and, (needless to say), at least one Labour MP wanted to ‘regulate’ them.

    But as I forecast at the time these coins might soon be worthless, and they’ve already fallen in value by 70% in the past two months.

    This article from the BBC (see below) however, suggests to me that if Bitcoin Mining is going on, on such a scale as to use this amount of electricity , the money supply of the Bitcoins, is about to go into the stratosphere.

    How much electricity does it cost to ‘mine’ a Bitcoin? Virtually none.

    At this rate these coins won’t be worth a £1 within a couple of years. The next thing we’ll hear from the Lib Dems etc however. might be that in the interests of ‘stability’ we should merge them in with the EURO, or set an ERM style fixed Exchange Rate for them.

  42. Edward2
    February 12, 2018

    It is quite amazing that a major UK political party would promote policies which would confiscate land legally owned off citizens as well as confiscate shares legally owned off citizens.
    These are similar policies used in Zimbabwe by the tyrant Mugage.
    I think people have yet to wake up to just how awful a government under Corbyn could be.

    1. Edward2
      February 12, 2018

      I missed the b out of the tyrants name.

  43. Andy
    February 12, 2018

    Again – you highlight the problem from a pensioner’s perspective.

    If you are under 40 the chances are that you have no savings – and no significant pension either.

    Instead you are having to pay tens of thousands of pounds off your student loan while trying (in vain) to save for a house too.

    In the meantime you are paying rent to (probably a rich and old) landlord to live in substandard accommodation.

    The rich old shareholders in rail companies fleece you for several thousand pounds a year – and run a lousy service.

    Consequently you really do not care very much if rich pensioners with investments get a little less rich as a result of those investments being taken away.

    On another thread you talk about generations being more united than we think. I disagree. We have never been more divided.

    The Baby Boomers have pillaged the country and stolen its wealth.

    I am not a fan of Me Corbyn but I see why many young people are.

    As for the Tories – Justine Greening gave an eloquent speech in the House about how Brexit has to work for the young. Her seat is unsaveable for the Tories at the next election. Perhaps her Conservative colleagues should listen to her – as many of their seats may soon be unsaveable too.

    1. Anonymous
      February 12, 2018

      25% of pensioners rent. All pensioners savings have been destroyed to pay for the following generation’s by now and pay later mentality (low interest tates QE) the state pension is a measely £122 per week and many pensioners live in poverty.

      They went without in their youth.

    2. Edward2
      February 12, 2018

      Your generation has a far higher standard of living than any generation before.
      Stop moaning and get on with life.
      Paying a few pounds a month to get a degree level education is a Bargin
      Homes outside London can be rented or bought for a few hundred a month.
      Whilst the average wage per person is way over £27,000

    3. Fedupsoutherner
      February 13, 2018

      Oh dear Andy, I feel very guilty for being old! We were young once and also went through hard times. Ultra high interest rates, compulsory redundancy, no fancy holidays and no instant credit. It’s called life. Don’t begrudge the elderly a little respite in their old age. They will be leaving their assets to your generation.

    4. NickC
      February 13, 2018

      Andy, Stop thinking your own personal circumstances are typical; and stop thinking that other people or the government have a duty to see you to the standard of living you imagine you deserve. All my children are under 40 and have savings. One (an electrician) owns his home outright. One has a mortgage. Three are looking to buy in the next 1-2 years. They’ve done all this by working hard, not by inheriting any money.

      1. Andy
        February 13, 2018

        My personal circumstances are fine thanks. Me and my wife are both big earners and, alas, I am also over 40.

        But most of my friends and all of my colleagues are younger than me and the problems I mentioned are all very real for them.

        Denying it just shows you to be completely out of touch.

        1. NickC
          February 14, 2018

          Andy, You made specific claims, applying universality to them. I have provided evidence to show that one of your claims is not universal and amounts to no more than your prejudice. Consequently the conclusions you draw are incorrect. Try reading the Gulag Archipelago to see how your prejudices work out in practice.

  44. Caterpillar
    February 12, 2018

    Labour have very dubious policies but are somehow looking like a party with leadership. The Conservatives should have a policy to confidently implement knowing that it was agreed in a referendum but instead have no direction nor leadership. This should have been simple.

  45. Dunedin
    February 12, 2018

    Mr McDonnell says he want to put public services “irreversibly into the hands of workers” so that they can “never again be taken away”. It is notable that he said “into the hands of workers” rather than some other form of words such as – “into the hands of the people”, or “into the hands of the tax payers”. Presumably he wants to see the workers, or more likely the trade unions, irreversibly in control of public services.

    Since economic modelling is topical, perhaps Mr McDonnell could let us know:

    1. how high he thinks gilt yields will rise should he ever put his plans into action

    2. why would anybody want to invest in the UK under a confiscatory regime

    3. how much of UK residents wealth he expects will be destroyed as a result

  46. MikeP
    February 12, 2018

    I note that BBC Reality Check (@BBCRealityCheck) has chosen not to do its own analysis on this, perhaps they don’t understand how it would work, whereas they’re usually hot off the mark with things from the Government and the Brexit negotiations. Labour get off lightly despite a reputation for leaving the public finances in a mess each time they take office.

  47. Lump some
    February 12, 2018

    Please sign this. More discussion can only help people.
    “Abolish the 0.7% GDP target for Foreign Aid”

    1. Andy
      February 12, 2018

      Agreed. We should abolish the 0.7% target – and make the target 10% instead.

      When there are children dying in this world of starvation and curable disease the sight of rich people quibbling over a few pence a week is more than sickening. Basically – anyone who signs the petition has failed the most basic lessons in life..

      1. Edward2
        February 13, 2018

        Should we save the children in the UK first Andy ?
        We could give all our money to other countries and still disease, poverty, wars and poor government would lead to children dying.
        But as long as you feel morally superior for your flag waving virtue signalling.

        1. Andy
          February 13, 2018

          If our current government was not so mean and incompetent then children in our country would not need help.

          In the UK child poverty, pensioner poverty and homelessness are entirely a political choice. The Conservatives have decided it is more important to help the rich get richer than it is to help the very poorest. So when you see someone on the street remember they are there because the Tories have chosen to put them there.

          And, no, we will probably never stop all wars and disease. But 0.7% is miserly. Genuinely miserly.

          You may well be the sort of person who is happy to walk on by when you see a dying kid on the road. I’m not. But then they says far more about you than me.

          1. Edward2
            February 14, 2018

            You see dying kids on the road….yeah right.
            Of course you do.
            And all this happens only under Conservative government.
            Never happened under Labour…yeah right
            Of course it was all perfection.

      2. NickC
        February 13, 2018

        Andy, Be my guest. There is nothing stopping you giving 10% of your income to foreign aid via the international charities. Indeed if you don’t already, you are a hypocrite.

  48. Rien Huizer
    February 12, 2018

    Nationalization is stupid idea in a country that has already high public sector debt and may undergo a very large external shock and has a persistent trade deficit. What will happen to that country’s already vulnerable credit rating if on top of all that, the government would decide to nationalize (seize or buy at fair value) a lot of low return assets by issuing even more debt. When one hears nonsense such as this, one wonders if the person making the statements is mad as well as ignorant or that maybe that person does not want to govern under these circumstances by coming up with an even more suicidal plan that the ones some of his opponents are peddling. . Maybe the latter.

  49. Adam
    February 12, 2018

    Nationalised business is viewed as lacking competitive spirit, & being wastefully expensive. Many with nationalisation ideology are averse to the notion of private organisations yielding profit, especially in the NHS, irrespective of cost-efficient quality performance. Their ‘Free at the point of use’ misleads, as the user’s cost is paid in full at its time of billing, such as in tax deduction.

    Higher efficiency may be achievable if all NHS users paid their own NHS bill. Govt could allocate a share of the NHS budget to every citizen’s NHS no at birth. Health services consumers could spend as much as their health needs demanded, ‘paying’ only 20% of their ‘charge’ from that budget. As now, everyone would receive the services their health needs dictate, but at age 40, individuals with unspent balances could receive that money as a health dividend.

    The method would be a personal monetary incentive gently, for citizens to maintain better weight, health & fitness, as well as discouraging waste from those who provide the service.

  50. Andy Marlot
    February 12, 2018

    If socialists understood economics they wouldn’t be socialists.

  51. anon
    February 12, 2018

    Councils etc increasingly seem to be pension fund deficits with a tax collection function attached.

    Why would a newly nationalised industry be different?

    The average private sector worker would end up paying income tax, council tax, tube fares,train fares to pay for defined benefit scheme of other, which are arguably taxed less, than money purchase plans, which he hardly has any savings to pay into.

    Still never mind the competition of never ending immigration.

    If competition worked , monopoly profits would reduce.
    The problem is where is the competition. Builders bonuses, Banker bonuses, NHS top admin salaries, Quangocrat excesses etc.

    High pay for hard work and risk taking yes.
    But lets not kid ourselves its all down to hard work and luck.
    Where value is created by the “commons” it should not be doled out by management in fashion(even shareholders) some would consider unfair.

  52. lojolondon
    February 12, 2018

    Dear John,
    On the subject of Oxfam – the whole question of the government funding charities with money taken by force from taxpayers is totally outrageous. Charities should be supported by the goodwill of the public.There is no way that taxpayers money should be taken and fed to tame charities, it is a total abuse of public money.

  53. treacle
    February 13, 2018

    Since Corbyn thinks it will cost nothing to buy up Royal Mail and the water companies, why is he not also proposing to buy Marks & Spencer, Tesco, Vodafone, GlaxoSmithKline and Next?

  54. Ron Olden
    February 15, 2018

    If all of these things can be done cost free, why don’t the Labour Party and the Trade Unions just borrow the money themselves and set up in business today.

    They could, for example borrow the money and buy enough shares in a water Company to gain control of it. I, on the othner hand have no intention of selling my £700 worth of Severn Trent Water Shares in exchange for an IOU signed by Corbyn.

    I’ve also asked John McDonnell umpteen times, why it is, that if the hospital cleaning contractors, are profiteering, and if Uber is ripping off Taxi Drivers, and running an unsafe service, why it is that the Health and Transport Unions respectively, don’t bid for the cleaning contracts, or set up their own App in competition with Uber.

    It’s not as if much capital is required to buy a brush, and a floor polishing machine, the Unions have ready access to staff, and Corbyn is supposed to have an army of volunteers who are clever with computers.

    Given the vast expertise and insights that Corbyn and all Socialists claim to have about how to run any sort of business most effectively, setting up a Taxi Drivers Co-operative and making an ‘App’ should be child’s play.

    So why do we have to wait for them to win a General Election?

    So far no reply.

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