Is it time to re-nationalise energy firms?

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  • weegie.geek
    weegie.geek Posts: 3,432 Forumite
    Necessities should be nationalised, and run at fair prices. Enough profit to reinvest, but not the levels of profits companies need to keep shareholders happy.

    If you force private companies to drive down prices, customer service will suffer, and that means putting staff out of work. They'll strive to still deliver the same profits to their shareholders, they'll just cut corners in other ways to make up the shortfall.
    They say it's genetic, they say he can't help it, they say you can catch it - but sometimes you're born with it
  • Gaberdeen
    Gaberdeen Posts: 20
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    edited 30 October 2012 at 1:04PM
    Wizo wrote: »
    Nationalisation is a very bad idea. We know from many many failures that having civil servants and/or politicians run business simply does not work. The West Coast Rail Franchise is a recent example of why Government and business should not mix.

    Government can look to control industries where there is a national interest and clearly utility companies fit this bill. They also need to look at the incestuous wholesale / retail supplier chain and how this impacts costs.

    Regulate by all means but nationalise absolutely not !!!

    Government can do much more in terms of green issues where they can legislate new house builds must have solar power or alternatives energy systems installed.

    Sorry to rain on your parade Wizo, but privatisation has been proven to be the worst idea in a generation of bad ideas.

    You cite the West Coast Rail Franchise as an example - when all that it shows is that civil servants who are not experts on Rail Franchises should not be writing the rules on tendering contracts for rail franchises.

    Railtrack on the other hand, the private company that took over from British Rail to maintain the national rail infrastructure sat on their !!!!!! collecting bonuses for 20 years while doing NO preventative maintenance on the infrastructure up and down the country. It wasn't until The Hatfield and Potters bar rail disasters that this was revealed. 20 years of creaming profits from passengers to private owners, yet no maintenance was done and the end result was 11 deaths and over 140 injured fare-paying passengers who DESERVED BETTER than what Thatchers privitisation gave them.

    As far as energy is concerned, only a disingenuous person, or simple idiot would suppose that the divestment of energy infrastructure like Dinorwig, Cruachan - engineering marvels that collectively cost the Taxpayer £1bn to build in 1984, would be given away to the private sector with nary a thank you in return.

    If privatisation works, explain why in 2007 the Forties pipeline had to shut down due to an industrial dispute between the workers at Grangemouth Oil Refinery and the INEOS company owned by latent Thatcherite Jim Ratcliffe. INEOS stole £40m of the workforces pension money it inherited from former owners BP to refinance petrochemical plants in China - when the workers found out (after INEOS tried to change the terms of their pension scheme) They went on Strike, forcing the Kineal Terminal adjacent to Grangemouth to shut down and with it, the Forties. That stunt directly cost the Taxpayer £1m an hour for every hour that Forties was shut down (a fortnight), because it facilitated the throughput of 1/3rd of the UK's Oil production. No government in its RIGHT MIND would condone or allow a course of action that would lead to nationwide fuel shortages and pressure on an already volatile hydrocarbon wholesale market. I have no problem with private companies selling or producing energy - but how it's distributed and controlled needs strong government control.

    Energy security & affordability, safe and reliable transport infrastructure and clean water provision are essential facets of life on these isles. They should NEVER have been divvied up to create profit. I don't give a crap if a newly nationalised Rail Board or water authority only ever broke even for the duration of it's life - I'd rather have stability and safety than allow private companies to undermine the fundamental rights we as citizens are entitled to and profit richly from doing so.
  • wiggers
    wiggers Posts: 83
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    Privatization is probably the best model provided the regulation doesn't tie the companies up in knots and distort the market. So the poll needs another option, 'Privatised but with sensible regulation.' Remember that many of the suppliers are mainly retailing a product bought at wholesale, so prices reflect fluctuations. Trying to legislate to sidestep market forces opens it up the the law of unintended consequences. Everyone thought the huge subsidies for FIT for solar was a Good Thing, until they realised it was simply pushing up electricity prices for everyone else.
    If your outgoings exceed your income, your upkeep will be your downfall.
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  • Wizo
    Wizo Posts: 11 Forumite
    Gaberdeen

    Nationalisation will not ever resolve the issues you raised below. It will simply become an over manned tax burden. I'll also ask you to give an example of any nationalised industry that has ever worked and/or has benefited the customer or society? Nationalisation is a 'pie in the sky' ideology that will always fail because you have the wrong people with the wrong mentality driving it.

    Off Topic - but I have a strong view that there should be no-strike clause laws in any essential service. I don't have any information on the strike you mention but no business leader (or government) with a backbone should ever give in to strikes.

    Your example of Rail Track is directly related to poor regulation.
  • wiggers wrote: »
    Privatization is probably the best model provided the regulation doesn't tie the companies up in knots and distort the market. So the poll needs another option, 'Privatised but with sensible regulation.' Remember that many of the suppliers are mainly retailing a product bought at wholesale, so prices reflect fluctuations. Trying to legislate to sidestep market forces opens it up the the law of unintended consequences. Everyone thought the huge subsidies for FIT for solar was a Good Thing, until they realised it was simply pushing up electricity prices for everyone else.

    I'm sorry - but if energy companies were selling on a product at the cost of wholesale, explain why all energy companies are reporting record profits? It doesn't make sense if you're breaking even on the cost of wholesale gas or kerosene - you still have staff and maintennace / investment costs to cover.

    I suspect there is a cartel at work here. Adam Smith, the father of modern capitalism admitted as much when he said;

    "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public"

    I work in the oil & gas industry as a measurement specialist & it always surprises me how readily people will accept the notion that increasing oil prices mean increasing gas prices. They are two completely separate hydrocarbon products - there is NO correlation between the cost of producing oil and gas - except in the instance where you consider the companies that produce them. Demand for oil doesn't inherently mean an increase in demand for Gas - yet this country blithely accepts this to be the case.
  • Wizo

    I'm not allowed to post links, so I cannot cite them directly but you can google them if you are interested.

    "name a nationalised industry that has ever worked"

    That's easy - Defence i.e. The Armed Forces. Argyle & Sutherland highlanders, The Gordon Highlanders, The Black Watch et al were private armies before becoming intrinsic parts of the British Armed forces. You may Scoff, but I consider national security to be as important as the provision of clean water, fairly priced energy & safe / efficient public transport.

    Your "no strike clause" clearly shows your ideological drive. From what I can gather, A private company could wifully change the terms and conditions of someones employment without consultation and you would condone forcing them to either accept that or face destitution?

    The right to withhold labour is the last resort of any person - when they are forced to do that, they really have no other choice.

    You'd have been right at home in the era where the bourgeois got away with treating the working classes with utter contempt.
  • Yes, I agree there appears to be a cartel at work and this is another issue that needs to be regulated in order to make the market work correctly. A return to nationalisation is an ideal that is not pragmatic. We do not have the resources in exchequer coffers to buy back shares and in any case it would not be a desirable move in today's global economy. We are also facing an energy crisis in this country and if we do not want the lights to go off in the next few years we need to invest in this sector in the form of renewables but also nuclear capacity. Again, we need private and foreign investment to achieve this unless the chancellor has a secret piggy bank. I would embrace nationalisation if I believed it would have the desired effect of fair pricing for the consumer and investment in future capacity but it is just not a viable option. We need to examine options that make the market work.
  • BNT
    BNT Posts: 2,788
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    Nationalise or re nationise, I think in a civilised society these pay as you go meters are scandalous and exploitative of the most needy. I think some form of electronic system using a credit card type thing should replace 50p coins so people can keep their family warm in the winter and argue about it in the summer.

    Not everyone can get credit.
  • By a type of credit card electronic system, I meant replacing coins with cards that could be regulated by statutory bodies to ensure that people who do not pass the credit checks and so can not get their meters removed will have some collective statutory protection to ensure they can get a fair tariff rather than the rip off rates currently exacted. Also, in the event of crisis, the card could be a mechanism for negotiating leniency from the supplier e.g. in times of excessive cold or economic hardship. The ideal ofcourse, would be to outlaw meters altogether.
  • Electricity is partially nationalised anyway.

    50% of your electricity bill goes to the government. About 45% to national grid - an inefficient quango, and 5% in tax.

    It's strange how people who argue for nationalisation can never point to a country with nationalised power where the price hasn't also gone up as much. Unless that country happens to have masses of gas or oil reserves. Sadly we have more people in the world and less fossil fuels. that's the reality that no-one wants to face.

    The UK has idly sat though decades on cheap north sea gas without planing for what happens when it runs out - which it nearly has.

    Keep blaming the companies, it's good to have be able to blame someone and ignore the real problem
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