How much to nationalise ?

[servodude]

When the purse strings were held by the government any expenditure became low on the list of government priorities.

And therein lies the problem - and hence point that I'm making about taxation and national debt. There is nothing about a public enterprise that would make it less good than a private one were it not for the holy war over tax, which works over time to make governments inevitably privatise them, aided by the public's misunderstanding of "government debt".

There is a completely different incentive model in place between the private and public sector. If you think that doesn't translate into different potential outcomes and that "tax" drives the difference in behaviours then I think you are mistaken.

Could you compare the operational performance of Scottish Water with the equivalents South of the border and explain what you find with respect to your statement?

[gryffron]

I don't see any reason why a public service can't been managed to the same standard of efficiency and quality as a private one.

In theory you’re right. But historically the UK nationalised industries all ended up being run for the benefit of their workers, not the public.

And for governments too there is the problem of how to price nationalised services. Is an industry that makes a profit from the public, serving the interests of that public? Even if the profit goes to the public purse? And if it doesn’t make a profit then how much govt cash should it be funded with?

I think the real problem is monopolies. It is very very hard to police a monopoly. Regardless of whether it is a public monopoly or a private monopoly. But true competition is hard to achieve in many industries. And the fragmentation it causes not necessarily desirable either

Gryff

[dealtn]

When the purse strings were held by the government any expenditure became low on the list of government priorities.

And therein lies the problem - and hence point that I'm making about taxation and national debt. There is nothing about a public enterprise that would make it less good than a private one were it not for the holy war over tax, which works over time to make governments inevitably privatise them, aided by the public's misunderstanding of "government debt".

There is a completely different incentive model in place between the private and public sector. If you think that doesn't translate into different potential outcomes and that "tax" drives the difference in behaviours then I think you are mistaken.

Could you compare the operational performance of Scottish Water with the equivalents South of the border and explain what you find with respect to your statement?

Glad to (although I have no real knowledge of Scottish Water - are they a public enterprise, I assume so given your question?). That is, once you have put your specific question in the context of the statement I responded to. It was postulated that "nothing" could make something "less good". To challenge that, and disprove it, requires the discovery of a single "something". It doesn't require every instance of comparison between a public and private enterprise, or even most, to make that point invalid.

Different incentive motives between those types of organisational and operational structures are likely to lead to different outcomes. I propose that all instances of "private" being worse than "public" is unlikely statistically.

[Nimrod103]

When the purse strings were held by the government any expenditure became low on the list of government priorities.

And therein lies the problem - and hence point that I'm making about taxation and national debt. There is nothing about a public enterprise that would make it less good than a private one were it not for the holy war over tax, which works over time to make governments inevitably privatise them, aided by the public's misunderstanding of "government debt".

There is a completely different incentive model in place between the private and public sector. If you think that doesn't translate into different potential outcomes and that "tax" drives the difference in behaviours then I think you are mistaken.

Could you compare the operational performance of Scottish Water with the equivalents South of the border and explain what you find with respect to your statement?

Glad to (although I have no real knowledge of Scottish Water - are they a public enterprise, I assume so given your question?). That is, once you have put your specific question in the context of the statement I responded to. It was postulated that "nothing" could make something "less good". To challenge that, and disprove it, requires the discovery of a single "something". It doesn't require every instance of comparison between a public and private enterprise, or even most, to make that point invalid.

Different incentive motives between those types of organisational and operational structures are likely to lead to different outcomes. I propose that all instances of "private" being worse than "public" is unlikely statistically.

Performance of nationalized Scottish Water relative to privatized English ones?
How about leaks as a metric?
https://www.nationalworld.com/news/envi ... ns-3812613

Water is nationalised in Scotland but leakage is still an issue. Figures sent to NationalWorld by Scottish Water show 169 billion litres were lost to leaks in 2021, the equivalent of 68,000 Olympic sized swimming pools.

Judging from the graph just above it in that article, it puts the Scottish leakage at c. 75% of Thames Water (England's worst performer by a long way) for a customer base of c. 66% of Thames Water. Pretty appalling performance really by Scottish Water, but then I guess leakage in such a rainy place does not much matter.

[servodude]

When the purse strings were held by the government any expenditure became low on the list of government priorities.

And therein lies the problem - and hence point that I'm making about taxation and national debt. There is nothing about a public enterprise that would make it less good than a private one were it not for the holy war over tax, which works over time to make governments inevitably privatise them, aided by the public's misunderstanding of "government debt".

There is a completely different incentive model in place between the private and public sector. If you think that doesn't translate into different potential outcomes and that "tax" drives the difference in behaviours then I think you are mistaken.

Could you compare the operational performance of Scottish Water with the equivalents South of the border and explain what you find with respect to your statement?

Glad to (although I have no real knowledge of Scottish Water - are they a public enterprise, I assume so given your question?). That is, once you have put your specific question in the context of the statement I responded to. It was postulated that "nothing" could make something "less good". To challenge that, and disprove it, requires the discovery of a single "something". It doesn't require every instance of comparison between a public and private enterprise, or even most, to make that point invalid.

Different incentive motives between those types of organisational and operational structures are likely to lead to different outcomes. I propose that all instances of "private" being worse than "public" is unlikely statistically.

Yeah I'm trying to tease apart the facts from the noise and "things everyone understands" myself.
Not sure where I sit yet; but I can't see the sense in giving money to overseas nationalized organisations for things that could pose a risk to national security.

[scotview]

Yeah I'm trying to tease apart the facts from the noise and "things everyone understands" myself..

Then, for water services, there's little, seemingly irrelevant details, like local authority record drawings being migrated to "centralised" bodies. Do you think these "centralised" entities really have the same integrity and dedication to local areas that the old style local authorities had with their own local engineering/record keeping/contract bidding/accountability for leakage, mains flushing and spills.

Doubt it.

[Nimrod103]

Renationaizing the railways hasn't proved a success:

A popular miniature railway "nationalised" by town hall officials who took four years to get it running again has derailed in its first week of operating.
The Poole Park Railway in Dorset was taken over by the local authority in 2018 after being successfully run by a private operator for 15 years.

https://www.telegraph.co.uk/news/2022/0 ... reopening/

[Gilgongo]

It's of course true that there's a completely different "incentive model" in place between the private and public sector. But what I am saying is that if in the case of "foundational" services such as health, education, transport and energy, that incentive model is to maximise profits as opposed to maximising investment, then it can get in the sea because the rest of the private economy suffers.

Far better to use government funding to run these properly. But the problem is that historically this running becomes caught up in political holy wars about tax and a mistaken idea of "national debt" (the NHS is the poster child for this of course).

So in the same way as you can grow prize-winning orchids in Edinburgh, if you start scrimping on the heating costs for your greenhouse, eventually they're not going win you any prizes. But in the case of nationalisation, there is a strong case to say the "heating cost" (government funding) is not only free, but spending it is beneficial to the rest of your house.

So to round back on national debt - it's only until we accept that this "debt" is (largely) not a problem that the whole issue of "how much to nationalise?" can be seen clearly. Sure - it's contested - but it's what should be talked about more in the context of nationalisation.

So again: I agree the HISTORY of nationalised enterprise is that things fall apart, but there is nothing in the PRINCIPLE of nationalisation that makes this inevitable.

[Gilgongo]

Oh and before anyone mentions sovereign debt crises: those are brought about by money supply issues in the face of largely private borrowing having to be rescued with "bailouts" and other things (bit of a simplification but hey). That's a different matter from the issuing of gilts or national savings etc. to fund utilities for example. Of course sovereign debt problems are real problems (albeit fuelled by those aforesaid holy wars about tax and "national debt" politics), but all that's another matter and not directly related to nationalisation and how to fund it.

[XFool]

Renationaizing the railways hasn't proved a success:

A popular miniature railway "nationalised" by town hall officials who took four years to get it running again has derailed in its first week of operating.
The Poole Park Railway in Dorset was taken over by the local authority in 2018 after being successfully run by a private operator for 15 years.

https://www.telegraph.co.uk/news/2022/0 ... reopening/

This sure sounds like an example of 'something' but, whatever it is, it sounds to me utterly irrelevant to any question about whether essential national services should or should not be nationalised.

Miniature railway in Dorset taken over by council derails shortly after reopening

https://www.msn.com/en-gb/news/uknews/miniature-railway-in-dorset-taken-over-by-council-derails-shortly-after-reopening/ar-AA11HUdN

A popular miniature railway "nationalised" by town hall officials who took four years to get it running again has derailed in its first week of operating.

"Just over a week after its much anticipated return, the carriage derailed after it hit stones reportedly left on the tracks deliberately."

[Urbandreamer]

I'm in favour of renationalizing former monopolies. Water and power being the priorities. What reasons can there be for a nationalized industry to be less efficient that a privatised one? The former has the huge advantage of not being beholden to shareholders as their number one priority.

I know the reputation NIs have compared to the private sector but I cannot believe it is impossible to turn that around.

Not sure that I have much to add much to the discussion, but feel a need to correct this mistake.

"British gas" was not a monopoly or even existed at the time that the government decided to privatise it. The sequence of events is that local "town" gas works existed, which were taken into the control of local authorities. These local works were nationalized in 1948 into regional gas boards. This state continued to exist on after the introduction of North Sea gas. In order to privatize the gas industry, the then government had to combine these boards into a country wide monopoly in order to privatise it as British gas.

One big issue as to why any nationalized "thing" may be less efficient is the legal prohibition against competition. For example, mobile phones are ONLY possible because the government decided to sell the rights to parts of the radio spectrum. Local generation in the form of roof top solar, because the government has decided to allow it. Obstacles were put in the way prior to the decision to introduce competition to the market. What of directory enquiries? Nobody but the GPO was allowed to sell the service. How many parcel delivery firms did we have in the days of the GPO?

The railway companies were nationalized in 1947 to create a monopoly, rather than a monopoly nationalized for the benefit of the consumer. The reason Mr Beaching had so many lines to get rid of was that many were set up in competition to other lines. Now a single monopoly, there was an oversupply.

Although I spoke of "legal" barriers to competition, there can be others. The state can sell or provide things at a loss, subsidized from taxes. For example, they could provide every household with free electricity. Some countries have done so, and complain when people use it for their own purposes (ie crypto mining). In such places there is no incentive to build electricity generation, so the government must do that, and demand grows faster than they can fund building.

As you can probably tell, I'm a proponent of the small state (as small as possible). Others disagree.

[Charlottesquare]

And therein lies the problem - and hence point that I'm making about taxation and national debt. There is nothing about a public enterprise that would make it less good than a private one were it not for the holy war over tax, which works over time to make governments inevitably privatise them, aided by the public's misunderstanding of "government debt".

There is a completely different incentive model in place between the private and public sector. If you think that doesn't translate into different potential outcomes and that "tax" drives the difference in behaviours then I think you are mistaken.

Could you compare the operational performance of Scottish Water with the equivalents South of the border and explain what you find with respect to your statement?

Glad to (although I have no real knowledge of Scottish Water - are they a public enterprise, I assume so given your question?). That is, once you have put your specific question in the context of the statement I responded to. It was postulated that "nothing" could make something "less good". To challenge that, and disprove it, requires the discovery of a single "something". It doesn't require every instance of comparison between a public and private enterprise, or even most, to make that point invalid.

Different incentive motives between those types of organisational and operational structures are likely to lead to different outcomes. I propose that all instances of "private" being worse than "public" is unlikely statistically.

Performance of nationalized Scottish Water relative to privatized English ones?
How about leaks as a metric?
https://www.nationalworld.com/news/envi ... ns-3812613

Water is nationalised in Scotland but leakage is still an issue. Figures sent to NationalWorld by Scottish Water show 169 billion litres were lost to leaks in 2021, the equivalent of 68,000 Olympic sized swimming pools.

Judging from the graph just above it in that article, it puts the Scottish leakage at c. 75% of Thames Water (England's worst performer by a long way) for a customer base of c. 66% of Thames Water. Pretty appalling performance really by Scottish Water, but then I guess leakage in such a rainy place does not much matter.

The main metric is probably not water leakage as far as the public is concerned (unless they run out of water) it is more erupting sewage onto a pavement or the CSO discharges into the local river in say Edinburgh (though they do ensure there are discharges in other locations in Scotland)

Scottish Water are slowly struggling through the latter with a fair bit of local outcry especially as the CSOs are mainly not monitored so they do not even know how often the discharges of raw sewage into the water courses occur.

I have met with Scottish Water re these discharges and they have expressed concern but they do not have the budgets to install properly monitored CSOs let alone redesign the system so it never needs discharges into watercourses/the sea. (A CSO discharge is intended to be a high water event, it may be with heavy downpours we get more of these nowadays)

I think they try hard but would not parade them as an exemplar of service within a private/public better argument, all water bodies inherited some very dated infrastructure that will in most cases cost billions to sort, the issue very often being neglect when publicly owned and now playing catch up.

[murraypaul]

"British gas" was not a monopoly or even existed at the time that the government decided to privatise it. The sequence of events is that local "town" gas works existed, which were taken into the control of local authorities. These local works were nationalized in 1948 into regional gas boards. This state continued to exist on after the introduction of North Sea gas. In order to privatize the gas industry, the then government had to combine these boards into a country wide monopoly in order to privatise it as British gas.

But the reality is that for gas, as for water and electric, they are natural monopolies, whether local, regional or national.

There is only one gas pipe running to my house, only one water, only one electric line.

That infrastructure level is naturally a monopoly, there is no consumer choice, as distinguished from the companies supplying gas/water/electricity through that infrastructure.

[XFool]

"British gas" was not a monopoly or even existed at the time that the government decided to privatise it. In order to privatize the gas industry, the then government had to combine these boards into a country wide monopoly in order to privatise it as British gas.

But the reality is that for gas, as for water and electric, they are natural monopolies, whether local, regional or national.

There is only one gas pipe running to my house, only one water, only one electric line.

That infrastructure level is naturally a monopoly, there is no consumer choice, as distinguished from the companies supplying gas/water/electricity through that infrastructure.

Yes. Plus there really is only one sort of gas, one sort of water, one sort of electricity to send down those pipes and wires.

So the only 'competition' there can be for the consumers was the phony competition that we had with 'suppliers' - "This week's cheapest supplier is xxx, next week who knows..." And we know how that nonsense ended.

[Urbandreamer]

"British gas" was not a monopoly or even existed at the time that the government decided to privatise it. The sequence of events is that local "town" gas works existed, which were taken into the control of local authorities. These local works were nationalized in 1948 into regional gas boards. This state continued to exist on after the introduction of North Sea gas. In order to privatize the gas industry, the then government had to combine these boards into a country wide monopoly in order to privatise it as British gas.

But the reality is that for gas, as for water and electric, they are natural monopolies, whether local, regional or national.

There is only one gas pipe running to my house, only one water, only one electric line.

That infrastructure level is naturally a monopoly, there is no consumer choice, as distinguished from the companies supplying gas/water/electricity through that infrastructure.

Was that always the case? I thought that Edison and Westinghouse did use to compete. Indeed if you look at the history they supplied different sorts of electricity*. Indeed, there was, and still is, some competition between gas and electricity. If both were available, you could use either, and still can for heating and cooking.
As I understand it, that may not be the case for heating with new houses in the UK soon. If the government decides that electricity shall have a monopoly, is that a "natural" monopoly?
https://www.edfenergy.com/heating/advice/uk-boiler-ban

Sorry, I'll allow you to claim that there may be good reasons for just about anything that a government may decide to do. What you can't get away with is claiming that this is a "natural" state of affairs, like the weather.

Ps, you could go off-grid. Generating your own electricity. It may not make economic sense, but there is NO natural monopoly just because you have the option of using all the things that you mention. There are houses without all three of those "monopoly" services that you mention. More without mains gas or mains water than electricity, to be fair.

*The statement that there is only one sort of electricity and one sort of gas is simply not true. There is some talk of using hydrogen rather than methain and town gas or Syngas is something else again. Some houses currently use LPG. Some of us are old enough that we remember when the sort of gas pumped down those pipes changed, and the odd explosion when it went wrong.
https://robskinner.net/2021/10/07/fifty ... h-sea-gas/

[murraypaul]

Sorry, I'll allow you to claim that there may be good reasons for just about anything that a government may decide to do. What you can't get away with is claiming that this is a "natural" state of affairs, like the weather.

Do you think we should have multiple water supply companies all laying their own pipes to each house? Multiple electricity supply companies with their own powerlines? It makes no financial sense.

Should Ford and Volkswagen have to build different roads for their cars to drive on?

With no government interference, a pure free market would eventually lead to companies collaborating and agreeing to share infrastructure, much as they do now, as it would simply cost them more not to do so.

[servodude]

"British gas" was not a monopoly or even existed at the time that the government decided to privatise it. The sequence of events is that local "town" gas works existed, which were taken into the control of local authorities. These local works were nationalized in 1948 into regional gas boards. This state continued to exist on after the introduction of North Sea gas. In order to privatize the gas industry, the then government had to combine these boards into a country wide monopoly in order to privatise it as British gas.

But the reality is that for gas, as for water and electric, they are natural monopolies, whether local, regional or national.

There is only one gas pipe running to my house, only one water, only one electric line.

That infrastructure level is naturally a monopoly, there is no consumer choice, as distinguished from the companies supplying gas/water/electricity through that infrastructure.

Was that always the case? I thought that Edison and Westinghouse did use to compete. Indeed if you look at the history they supplied different sorts of electricity*. Indeed, there was, and still is, some competition between gas and electricity. If both were available, you could use either, and still can for heating and cooking.
As I understand it, that may not be the case for heating with new houses in the UK soon. If the government decides that electricity shall have a monopoly, is that a "natural" monopoly?
https://www.edfenergy.com/heating/advice/uk-boiler-ban

Sorry, I'll allow you to claim that there may be good reasons for just about anything that a government may decide to do. What you can't get away with is claiming that this is a "natural" state of affairs, like the weather.

Ps, you could go off-grid. Generating your own electricity. It may not make economic sense, but there is NO natural monopoly just because you have the option of using all the things that you mention. There are houses without all three of those "monopoly" services that you mention. More without mains gas or mains water than electricity, to be fair.

*The statement that there is only one sort of electricity and one sort of gas is simply not true. There is some talk of using hydrogen rather than methain and town gas or Syngas is something else again. Some houses currently use LPG. Some of us are old enough that we remember when the sort of gas pumped down those pipes changed, and the odd explosion when it went wrong.
https://robskinner.net/2021/10/07/fifty ... h-sea-gas/

True
And I've helped put up some off grid properties and run infrastructure in places where you can't do anything else...
..but I've never had a choice of actual supply...
other than the Joycean avoidance (silence, exile and cunning) of what's there in any property I've lived in whether in Scotland, England, Eire, Sweden or the USA... now Australia is a bit different and I do know of folk who've had their cooker converted to LPG.. and we probably have more butts than average for rain.

But really.. utilities to people are for the greatest part monopolies around the planet and the choice of supplier is a fantastic illusion

[XFool]

But the reality is that for gas, as for water and electric, they are natural monopolies, whether local, regional or national.

There is only one gas pipe running to my house, only one water, only one electric line.

Was that always the case? I thought that Edison and Westinghouse did use to compete. Indeed if you look at the history they supplied different sorts of electricity*. Indeed, there was, and still is, some competition between gas and electricity. If both were available, you could use either, and still can for heating and cooking.
As I understand it, that may not be the case for heating with new houses in the UK soon. If the government decides that electricity shall have a monopoly, is that a "natural" monopoly?
https://www.edfenergy.com/heating/advice/uk-boiler-ban

Sorry, I'll allow you to claim that there may be good reasons for just about anything that a government may decide to do. What you can't get away with is claiming that this is a "natural" state of affairs, like the weather.

Ps, you could go off-grid. Generating your own electricity. It may not make economic sense, but there is NO natural monopoly just because you have the option of using all the things that you mention. There are houses without all three of those "monopoly" services that you mention. More without mains gas or mains water than electricity, to be fair.

*The statement that there is only one sort of electricity and one sort of gas is simply not true. There is some talk of using hydrogen rather than methain and town gas or Syngas is something else again. Some houses currently use LPG. Some of us are old enough that we remember when the sort of gas pumped down those pipes changed, and the odd explosion when it went wrong.
https://robskinner.net/2021/10/07/fifty ... h-sea-gas/

All the above is, of course, an entirely spurious argument. Completely beside the point.

I did wonder when posting if somebody would pop up to point out that "There are different sorts of electricity. eg. the US uses 110 Vac, 60Hz. Then there is DC..." etc. But I thought: "SURELY I don't have to...?"

Apparently - not for the first time - I was wrong.

[Urbandreamer]

All the above is, of course, an entirely spurious argument. Completely beside the point.

I did wonder when posting if somebody would pop up to point out that "There are different sorts of electricity. eg. the US uses 110 Vac, 60Hz. Then there is DC..." etc. But I thought: "SURELY I don't have to...?"

Apparently - not for the first time - I was wrong.

I take it that you don't know that Japan uses BOTH 50Hz and 60Hz?

I'll accept that there are things that it is a "public good" to provide. However, I believe that those things are few. I also stand by my argument that competition has proven to be a good way to provide services economically.

Someone mentioned the roads, ignoring I assume some bridges, tunnels and parts of our motorway system that were provided privately and a toll is charged for the use of. You don't HAVE to pay the toll, you can use an alternative route.

The issue I have is with justifications based upon "natural" monopolies. We HAD a "natural" monopoly of postage telecom and "radio" services regulated by the GPO. Strangely, this "natural" monopoly no longer IS a natural monopoly.

Roads are a "natural" monopoly, except that not all are. Gas is a "natural" monopoly, except when it isn't. Electricity likewise.

[servodude]

I take it that you don't know that Japan uses BOTH 50Hz and 60Hz

The "not a monopoly" argument would suggest a customer there could choose... and yeah they can by moving to the other side of the country