“We waste around £1 billion a year on privatisation. If that money was put towards rail fares, we could cut them by 18%, or we could build 100 miles of new railway track. In addition, we could plan for a railway fit for the future.”
By Cat Hobbs, We Own It
Privatisation has been failing us for decades, but the cost of living crisis has brought this to a head. There has never been a worse time to run our key services in the pursuit of profit, and there has never been a better time to bring those key services into public hands.
Critics of public ownership often call it ideological, but what is really ideological is the dogged commitment to privatisation after years of failure. Public ownership of our key services and utilities is incredibly popular, with 68% of Red Wall voters supporting public ownership of energy and rail, and 70% supporting public ownership of water. But more than that, it’s pragmatic.
Energy is the main sector on people’s minds at the moment, and rightly so. Our bills have already risen by 54% and this is expected to hit over 150% year on year by October. But it doesn’t have to be this way – and in many countries, it isn’t. In France, for example, with a government that nobody would call radical, their energy bills rises have been limited to just 4%. This is because EDF is 84% owned (soon to be 100%) by the French state, meaning that instead of prioritising payouts to shareholders they were able to take the hit for the public and keep bills down.
Around 30 energy supply companies have collapsed over the last year in the UK, and Bulb is currently being propped up to the tune of £2.2bn worth of public money. Instead of wasting money bailing out failing companies, the government could have created a publicly owned supplier and transferred Bulb’s 1.7m customers to it. When smaller suppliers fail they could be integrated into this publicly owned company. This company could make sure people aren’t ripped off, plan for fluctuations in global energy prices, and invest in renewable energy. It’s already the norm in other countries.
Additionally, it makes perfect sense to set up a publicly owned renewable generation company to drive forward water and wind energy, while creating jobs and boosting the economy. The Norwegian state owns Statkraft, the largest renewables generator in Europe and is considering setting up a state-owned hydrogen company. Denmark owns 50% of Ørsted (previously Dong Energy), the world’s largest developer of offshore wind power. Of the top 10 countries leading on the green transition according to WEF, the UK is the only one without a publicly owned renewables company. This is a huge waste of our natural resources and coastline.
Creating an energy supplier and a renewable generation company could be done at very little cost, and would be a pragmatic way to use public ownership to tackle the cost of living crisis and the climate crisis.
But it’s not just energy that we need to see public ownership of. Overall rail fares have risen dramatically since privatisation. All while rail firms are paying out hundreds of millions to their shareholders every year. It’s also important to note that the three rolling stock companies which own and lease the trains make profits. RMT research shows that Angel, Eversholt and Porterbrook paid out nearly £1 billion in dividends at taxpayers’ expense 2020-21, the equivalent of half the £2 billion in fares paid by passengers and or 23% of the £8 billion in taxpayer support to the industry in the same year. Most of the dividends disappeared overseas into opaque companies based in Luxembourg and Jersey.
Overall, we waste around £1 billion a year on privatisation. If that money was put towards rail fares, we could cut them by 18%, or we could build 100 miles of new railway track. In addition, we could plan for a railway fit for the future. A more efficient, well planned, publicly owned railway will help people leave cars and planes behind and help tackle the climate crisis. As Jonathan Tyler points out, public ownership would make it easier to coordinate a public transport timetable across the whole network. The best railway in Europe is publicly owned, in Switzerland – and that’s not a coincidence!
Water, too, must come into public hands. The privatised English water monopolies are spewing sewage into our rivers and seas, killing fish and making people ill, and allowing 2.4 billion litres of water to leak away every single day because they’d rather not spend money on investing in infrastructure. All while lining the pockets of their shareholders to the tune of around £2bn a year, and paying their CEOs millions and racking up a debt mountain at our expense. Scottish Water has spent £72 a year extra per household on infrastructure because it’s in public hands and doesn’t have to prioritise payouts to shareholders. As heatwaves and drought become more common, we simply cannot afford to allow this lack of investment in water infrastructure to continue.
If the government was serious about ‘taking back control’, having water, rail and energy companies that work for the British public would be a no-brainer. Yet England’s model of selling off water assets wholesale is unique, and the UK is almost the only country in Europe to have a privatised energy grid.
People want decent public transport. They also want affordable energy bills and rivers that aren’t filled with sewage. Taking back our national assets is popular, pragmatic, and at this point is vitally important.
- Cat Hobbs is the founder and Director of We Own It. You can follow her on twitter here; and follow We Own It on Facebook, YouTube and twitter.