How Much is a Corbyn?

Generali

In The City for a while, a million pounds was known as a 'Bernie'.

The reason?

Bernie Ecclestone gave the Labour party a million squids and shortly afterwards Tony Blair announced a temporary exemption of F1 (run by Bernie Ecclestone) from the laws about sports advertising tobacco.

So Mr Corbyn has a policy that means nationalising the 'Big Six energy suppliers. These are multinational companies for the most part so presumably he'll be getting HMG to buy the shares on the international markets (while the British Government could probably simply nationalise shares owned by Brits, nationalising shares owned by Americans or Germans would probably have quite severe consequences).

So how much would that cost?

Well the current market capitalisation of the Big 6 (that is number of shares in the market x market price) is:

- EDF - €41bn = £28.9 (link)
- Centrica - £13.7bn (link)
- RWE (npower) - €11.8bn = £8.3bn (link)
- EOn - €24bn = £17 (link)
- Iberdrola (Scottish Power) - €40.9bn = £29 (link)
- SSE - £15.4bn(link)

Total = £112,300,000,000.00

(figures from Google finance)

That's before he nationalises the railways of course

http://www.jeremyforlabour.com/standing_to_deliver

Public ownership of railways and in the energy sector - privatisation has put profits before people.

That figure works on the assumption that he can persuade people to sell shares to HMG at the current market price. Normally if you take over another company you pay a premium, on average 20-30% of the price of the firm to be acquired.

That would imply a cost of up to £146bn just to transfer ownership of utilities firms from a bunch of people that appear to be perfectly competent at delivering gas and electricity to the state that has no such clear competency.

vivatifosi

The Bagehot column in The Economist contains an interesting piece on Corbyn. It even mentions the Overton window.

In economic terms, it speaks of Corbyn failing to investigate new left views, sticking entirely to the past in terms of renationalisation etc. Interesting read...
http://www.economist.com/news/britain/21660599-labours-prospective-next-leader-may-be-partys-hard-left-he-no-radical-jeremy

Moby

Generali wrote: »

In The City for a while, a million pounds was known as a 'Bernie'.





- EDF - €41bn = £28.9 (link)
- Centrica - £13.7bn (link)
- RWE (npower) - €11.8bn = £8.3bn (link)
- EOn - €24bn = £17 (link)
- Iberdrola (Scottish Power) - €40.9bn = £29 (link)
- SSE - £15.4bn(link)

Total = £112,300,000,000.00


That would imply a cost of up to £146bn just to transfer ownership of utilities firms from a bunch of people that appear to be perfectly competent at delivering gas and electricity to the state that has no such clear competency.

As a 'customer' whatever that is these days....I've tarted around all those utilities above on your list and wasn't impressed with the service at all. I didn't experience much 'competency' and will gladly listen to alternatives for providing such services.

danothy

Moby wrote: »

As a 'customer' whatever that is these days....I've tarted around all those utilities above on your list and wasn't impressed with the service at all. I didn't experience much 'competency' and will gladly listen to alternatives for providing such services.

I literally cannot remember the last time I experienced a power cut.

Lungboy

In this crazy hypothetical world, why wouldn't he simply revoke the operating licences of the current power companies, then create a new nationalised company called British Power or whatever and award it sole operations for power?

michaels

Lungboy wrote: »

In this crazy hypothetical world, why wouldn't he simply revoke the operating licences of the current power companies, then create a new nationalised company called British Power or whatever and award it sole operations for power?

Plus there are lots of regulatory powers which would make the uk operations of these groups negative so he simply needs to enact a price cap at 25% below wholesale prices and then offer to take them over for a nominal sum.

And after all if socializing the economy works so well in Venezuela why shouldn't it work here?

antrobus

Generali wrote: »

...So how much would that cost?

Well the current market capitalisation of the Big 6 (that is number of shares in the market x market price) is:

- EDF - €41bn = £28.9 (link)
- Centrica - £13.7bn (link)
- RWE (npower) - €11.8bn = £8.3bn (link)
- EOn - €24bn = £17 (link)
- Iberdrola (Scottish Power) - €40.9bn = £29 (link)
- SSE - £15.4bn(link)

Total = £112,300,000,000.00

(figures from Google finance)

Some firm of stockbrokers came up with the figure of £124 bn as the minimum cost of nationalising all the Big Six plus National Grid. Or £185 bn for the whole energy industry, if you wanted to include the generators and the local distributors, which most people, including I suspect a certain J, Corbyn, forget about.

http://www.theguardian.com/business/2015/aug/07/jeremy-corbyns-bill-nationalising-energy-sector-185bn

kaflinkle

I literally cannot remember the last time I experienced a power cut.

My area gets a few and don't get me started on Scottish Power!

The problem with all these politicians (left or right) is that it's okay promising all this but sometimes the devil is in the detail.

chewmylegoff

Moby wrote: »

As a 'customer' whatever that is these days....I've tarted around all those utilities above on your list and wasn't impressed with the service at all. I didn't experience much 'competency' and will gladly listen to alternatives for providing such services.

I am glad you are willing to pay £185 billion so that you can receive poor customer service from the government rather than npower et al.

However, we will need to fund that somehow. I suppose we could just not fund the NHS for 18 months. A price worth paying?

martinsurrey

Lungboy wrote: »

In this crazy hypothetical world, why wouldn't he simply revoke the operating licences of the current power companies, then create a new nationalised company called British Power or whatever and award it sole operations for power?

ahhh the joy of just thinking in our little box.

I guarantee that if anyone did that they would be in so many international trade courts that we could power the country by burning the papers they produced and sent to Number 10.

Not to mention that if you start pulling investment from under private companies, why would anyone invest in the UK at all? The capital flight from the UK would be frightening!

Lungboy

martinsurrey wrote: »

I guarantee that if anyone did that they would be in so many international trade courts that we could power the country by burning the papers they produced and sent to Number 10.

Particularly if TTIP goes through.

At least we'd own our own power though!