Why is Labour now fighting shy of nationalisation?

It is bizarre that the Labour Party, or at least Ed Balls, is now tying himself up in such contortions to avoid renationalisation of the railways at any cost when the polls constantly show 70-80% of the electorate, which must include a very large number of Tories, is demanding just that.   Is the Labour Party, or at least Ed Balls, ashamed of public ownership when a great majority of the voters want it and when all the facts on the ground make clear it’s the right and sensible objective?   To suggest that when a rail franchise falls vacant, it should be re-auctioned in a competition between the State and the private sector is frankly barmy: why require the State to bid for a section of the railway which at that stage it already owns?   Quite apart from the fact that it’s unnecessary, costly and bureaucratic, it still leaves the UK rail system hopelessly fragmented, which as the McNulty Report recognised is its main problem.

It’s not as though rail privatisation has been a roaring success.   Since 1997 the taxpayer subsidy to cover all rail running costs has quintupled to £5.2bn a year.   Network which owns the track gets a subsidy of £4bn a year, yet its debts have exploded and are set to reach £50bn.   McNulty noted that UK fares were 30% higher than in France, Netherlands, Sweden and Switzerland, and UK operating costs were 40% higher because of the fatal flaw of fragmentation – a route down which no other country in Europe has gone.    The Boston Consulting Group found that the annual public subsidy per passenger is £9 in Spain, £49 in Italy, £67 in France, £101 in Germany, but £136 in the UK.   Yet despite these enormous taxpayer subsidies, the train companies have still managed to siphon off £6.2bn in profit and dividend payouts.

It’s being suggested that Labour support for public ownership of rail is somehow ‘ideological’.   The reverse is the truth.   The Tories rammed through the botched privatisation for purely ideological reasons, and to cling to that now is simply to embrace Tory ideology.   The real Labour Party, like UK voters generally and like every other country in Europe, supports the public ownership of rail for the pragmatic reasons that it’s more efficient, less costly, and keeps fares down.   Not that there’s anything undesirable about public ownership provided it is soundly based and directed at the right targets which include energy, housing, pensions, banks, welfare, to name but some, all of which have dramatically failed in the last decade within the private market.

7 thoughts on “Why is Labour now fighting shy of nationalisation?

  1. Two points, first of all and particularity in the context of that fat fraud Ed Balls gratuitously sucking up to money and the CBI last week, who exactly do you mean by, ” The real Labour Party?”

    Milliband clearly isn’t socialist in any real or meaningful sense and couldn’t give a toss about the UK; it’s railways, the NHS, social housing, unemployment, the benefit system, (particularly the way the disabled and the unemployed have and still are being treated, brutal and sickening, by the nasty bunch of spivs and con artists that Labor not the Tories first brought in,) or anything else that should properly be defining labor policy.

    Basically Milliband isn’t remotely interested in taking the railways back under public management and probably doesn’t even understand the concept, (which is probably far too un-American for his tiny little Dallas addled brain to really grasp.)

    But far more importantly in the context of the TTIP deal, (which has been described and with far too much accuracy as the EU selling on our basic rights, as British citizens, to American corporations for 400 euros a head,)like the NHS, this will probably shortly make a nationalized railway, (publicly operated and owned,) system massively illegal anyway and would leave the government, (again, as with reinstating and re-nationalizing the recently abolished NHS,) open to being sued massively by international corporations, (generally based in New York or Washington,) for loss of profits; real or imagined.

    I read the blog here frequently and with interest and what always strikes me about it, constantly and most powerfully, is the complete dis-connect between what I read here and what rest of Labor party, (still massively toxic with the Blair legacy; fellow travelers, placemen and apparatchiks,)are saying and doing.

    Yes taking the railways back into public control is a sensible policy, particularly because every time another of these operators goes bust the taxpayer gets landed with bill for it’s liabilities.

    But remember this:

    “MPs Stephen Byers, Patricia Hewitt, Geoff Hoon and Margaret Moran – who are all standing down at the next election – were secretly recorded discussing financial payment with an uncover reporter posing as a company executive looking to hire MPs for lobbying work.”

    “Mr Byers, the former trade and transport secretary, is alleged to have described himself as “like a sort of cab for hire” for up to £5,000 a day, echoing Mohamed al-Fayed’s revelation 16 years ago that you can “hire an MP the way you hire a London taxi.”

    (Thank you the DT.)

    So how many brown envelopes do you think it would it will take to stop this, (or anything else in the public interest,)from happening?

  2. Further to my comment above on TTIP:

    “National sovereignty and Investor State Dispute Settlements (ISDS)”

    “Investor-state dispute settlement (ISDS) is an instrument that allows an investor to bring a case directly against the country hosting its investment, without the intervention of the government of the investor’s country of origin. In December 2013, a coalition of over 200 environmentalists, labor unions and consumer advocacy organizations on both sides of the Atlantic sent a letter to the USTR and European Commission demanding the investor-state dispute settlement be dropped from the trade talks, claiming that “Investor-state dispute settlement is a one-way street by which corporations can challenge government policies, but neither governments nor individuals are granted any comparable rights to hold corporations accountable.”

  3. I was going to make a similar point but about the existing WTO rules that the EU Commission signed the UK up to in 96. I believe that re-nationalsation of a foreign corporation invokes the WTO version of ISDS and would breach EU competition rules.

    Personally, I’m in favour of withdrawing from the GATTS, WTO, EU and certainly not in favour of signing up to TTIP or the more serious TISA. However, that is not the LP’s current position.

  4. Michael is one of the very few left in the Labour Party that actually relates to what real Labour stood for.

    Ed Balls has history that marks him out as a modern day Neo-Liberal along with many others on New Labour’s front bench, they don’t support nationalisation because it doesn’t fit in with their avowed agenda, none will own up to Neo-Liberal allegiances but their actions tell the real story. Ed Balls also joined the conservative association saying they had better speakers than Labour, which speaks volumes about his personal politics. He was also directly responsible for the financial crash as Gordon Brown exposed in his 2006 Mansion House Speech. Worth a read to really understand where New Labour’s thinking emanates from:
    http://www.theguardian.com/business/2006/jun/22/politics.economicpolicy

    Ed Miliband lost all credibility when he brought the likes of Alan Milburn back on to his election campaign committee, leaked via his secret memo.

    Would I trust Ed, not as far as I could throw him?

  5. The main goal of privatised utilities is profit.

    Prices and Customer satisfaction come a very distant second or worse.

    The upper management take too much in wages.

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