How much to nationalise ?

[didds]

Moderator Message:
Moved to The Economy from DAK (leaving a link) as this is unlikely to result in a definitive answer. - Chris

Thers a good reason for asking this question in DAK

Ive no idea where one could ascertain this hence asking you clever people.

Assuming that shareholders would have to be bought out, and CEOs etc paid off etc

How much might it cost to nationalise (in the UK)

- electricity
- gas
- water (includes sewage etc)

individually as subjects. I appreciate this is a very open ended question and has many caveats attached.

didds

[dealtn]

Thers a good reason for asking this question in DAK

Ive no idea where one could ascertain this hence asking you clever people.

Assuming that shareholders would have to be bought out, and CEOs etc paid off etc

How much might it cost to nationalise (in the UK)

- electricity
- gas
- water (includes sewage etc)

individually as subjects. I appreciate this is a very open ended question and has many caveats attached.

didds

Unless you define cost better its impossible to answer.

Would you include the opportunity cost of overseas investors choosing to invest in non-uk alternatives?

Would you include the inflationary impact of the change in exchange rate?

Would you include the additional rise in gilt yields to finance the nationalisation?

Would you include ...

[Bminusrob]

Wouldn't you just base it on the Market Capitalisation of the companies invloved?

On the other hand, it could cost as little as nothing (i.e., we're siezing that in the name of the United Kingdom and it's people)

Aha. You are Jeremy Corbyn. I claim my £5.

There are lots of people talking about nationalisation. I am old enough to remember some of the down sides. I remember what it was like trying to get a telephone comnnected to a house before BT was de-nationalised. Two months? You have got to be kidding.

However, the other thing which always puts me off nationalisation goes back to my first job. My first employer was Ferranti - a moderately successful (at the time) company in the defence industry. Amongst their various products was one which nobody else in the world could make. The MOD needed these products, and Ferranti contracted to sell the products to the MOD at an agreed price. It turned out that the profit margin was rather high - quite excessive in fact, but then, if you are the only supplier, you can charge what ever you want. So, that's is one of my disagreements with nationalisation. The second and more important reason goes back to how the government and MOD decided to fix the Ferranti excess profits issue. They implemented a scheme which would ensure that they would never be ripped off again. It was caled "cost plus". Whenever a defence supplier wanted to sell a widget to the MOD, a cost plus contract would be drawn up. Then, the development and manufacture of the widget would be monitored down to the cost of every man-hour, paperclip, staple and photocopied sheet (yes, really). The MOD would then pay all this, plus an agreed profit margin. What could possibly be wrong with that? In my first boss's words, "the more cost, the more plus".

And that's why I think mationalisation is not the answer.

[pje16]

On the other hand, it could cost as little as nothing (i.e., we're siezing that in the name of the United Kingdom and it's people)

Try that view with a shareholder's hat on

[pje16]

Thers a good reason for asking this question in DAK

Ive no idea where one could ascertain this hence asking you clever people.

Assuming that shareholders would have to be bought out, and CEOs etc paid off etc

How much might it cost to nationalise (in the UK)

- electricity
- gas
- water (includes sewage etc)

individually as subjects. I appreciate this is a very open ended question and has many caveats attached.

didds

No, No and No
and lose the chance to sniff out the cheapest deal

[mc2fool]

Wouldn't you just base it on the Market Capitalisation of the companies invloved?

For those publicly traded companies, but some of the electricity, gas and water suppliers are privately owned and a fair number are subsidiaries of larger companies, indeed, often non-UK state owned companies.

[Alaric]

Wouldn't you just base it on the Market Capitalisation of the companies invloved?

,

Some of them are now privately owned. But in any event, it's usually necessary to pay a premium to market value for control.

There's an argument that if you can act like a dictatorship, it costs nothing. You seize all the shares and offer government bonds in compensation. That's a massive increase in nominal borrowing, but you finance the interest payments out of the profits from the newly nationalised companies. There are several flaws, but I do seem to recall this as a Labour proposal in the Corbyn era.

[Urbandreamer]

It's a can of worms.

Take for example National grid. Can you just use the Market cap? What of it's US holdings and business?
That's the simple case of a UK company.

As said, what of overseas companies who operate in the UK, like Eon?

So, some UK dictator decides to forcibly nationalize parts of a German company, how would that affect other German companies investment and relationship with the UK. SURE it did happen in WWII, but I think that we can agree that might just have been a special case. I strongly suspect that the German government and the EU would become involved.

I'm fairly sure that those who suggest the idea either have little concept of who owns the companies that provide the services, or simply don't care about the UK's relationship with the rest of the world. I'm not talking about speculation about the costs or difficulties, but those who state that we should nationalize such things.

[pje16]

On the other hand, it could cost as little as nothing (i.e., we're siezing that in the name of the United Kingdom and it's people)

Try that view with a shareholder's hat on

Aha. You are Jeremy Corbyn. I claim my £5.

How dare you
he is the LAST person I would model myself on

[pje16]

On the other hand, it could cost as little as nothing (i.e., we're siezing that in the name of the United Kingdom and it's people)

Try that view with a shareholder's hat on

Aha. You are Jeremy Corbyn. I claim my £5.

How dare you
he is the LAST person I would model myself on

I made a mess of my quote. The Corbyn thing was directed at me earlier on.

So no. You're not Corbyn. I had you down as an Angela Raynor

How I dress at weekends is my business

[Arborbridge]

Wouldn't you just base it on the Market Capitalisation of the companies invloved?

On the other hand, it could cost as little as nothing (i.e., we're siezing that in the name of the United Kingdom and it's people)

That would be a starting point for the OP, at least. Didn't the Corbynistas have some answer for this at the previous election based on their own pay as little as possible desires? That way lies a banana republic and a run on the pound.

Quite honestly, I can't see even a Labour government embarking on serious nationalisation. We have trouble enough raising small amounts of capital, or even pocket money amounts to fix potholes. It's a dead-end in my view. Someone invent PFI to get round the capital raising, but that proved a vote loser "hospitals being ripped off".

Arb.

[gryffron]

How long is a piece of string? What part do you want to nationalise? Extraction? Generation? Distribution? Or just retail?

Extraction is the big earner at the moment. But is a global business. British companies extract overseas. Foreign companies extract here. All on long term contracts. So which bits are you proposing to nationalise?

As already pointed out, even the other parts are often foreign owned. And even if you can overcome government objections, likely future foreign investment into the uk would be hit hard.

Gryff

[Gerry557]

The cost of nationalisation is the cheaper bit. Its finding the ongoing investment. Something that generally falls to zero as there are more important things to waste tax payers monies on like schools and hospitals or whatever voters shout loudest about.

[gryffron]

Why not make all schools private (via a government voucher scheme or something)

Isn't that largely the idea of academies (in England)

OTOH the privatisation of university education has led to vast numbers of people studying the wrong subjects, at vastly increased overall cost. But since it is private cost not public cost, why should the govt care? At least until they all start officially defaulting on their loan repayments.

Gryff

[AF62]

The cost of nationalisation is the cheaper bit. Its finding the ongoing investment. Something that generally falls to zero as there are more important things to waste tax payers monies on like schools and hospitals or whatever voters shout loudest about.

That came up on a podcast I was listening to recently. It mentioned that the cost of installing a new sewerage system to replace the Victorian systems that mix rain water with household sewerage and are so causing the issues now in the press (although ironically the issue is far far better than when the water industry was under government control) would be between £350 billion and £500 billion - around £20k per household.

Now if the water industry was nationalised, would the government spend £500 billion on the sewerage system or would competing priorities in the NHS or education win out. And as for the government choosing to stick £20k on household water bills, even if spread over a decade or so, well that's not a vote winner.

[TUK020]

Thers a good reason for asking this question in DAK

Ive no idea where one could ascertain this hence asking you clever people.

Assuming that shareholders would have to be bought out, and CEOs etc paid off etc

How much might it cost to nationalise (in the UK)

- electricity
- gas
- water (includes sewage etc)

individually as subjects. I appreciate this is a very open ended question and has many caveats attached.

didds

No, No and No
and lose the chance to sniff out the cheapest deal

Was the comment about 'sniffing out' directed at the current outcomes of "water (includes sewage)" set up?

[vand]

How much to nationalise? Nothing.
Put the government in charge of running the Sahara and you'd eventually end up with a shortage of sand.

[XFool]

How much to nationalise? Nothing.
Put the government in charge of running the Sahara and you'd eventually end up with a shortage of sand.

Meaningless.

[johnstevens77]

Nationalise? I was a kitchen boy on the restaurant cars in the 1950's. At the end of one trip with a cook of left wing leanings, I asked him what shall I do with the remaining quarter of a roast rib of beef. "Dump it, plenty of money on the railways". That was one example. Admitedly, most other cooks might have told me to put it in the fridge, for a casserole tomorrow, but you get the drift. It's not my money, I don't care.

john

[Arborbridge]

Nationalise? I was a kitchen boy on the restaurant cars in the 1950's. At the end of one trip with a cook of left wing leanings, I asked him what shall I do with the remaining quarter of a roast rib of beef. "Dump it, plenty of money on the railways". That was one example. Admitedly, most other cooks might have told me to put it in the fridge, for a casserole tomorrow, but you get the drift. It's not my money, I don't care.

john

But the same attitude can be found throughout industry - especially large corporations. How they even continue to exist, I sometimes wonder as they seem so inefficient and inadequate, their employees completely disaffected and just about earning their keep. Smaller companies do not suffer quite as much, in my view.

Arb.