Guest 640- Registered: 21 Apr 2007
- Posts: 7,819
9 September 2008
07:125796#1
Only this week the leading capitalist nation in the wide world resorted to nationalising their mortgage industry...two leading companies who had the nations(USA) purse strings in their unsteady grip have been virtually taken over by central government in the name of stability.
This is the very area of finance that caused the world wide economic slump..brought about when the average joe couldnt afford to pay back his mortgage.
I think the time has come to re-nationalise our service utilities here in the UK and there is a wide call for it from the man/woman in the street. I had my ear bashed only the other day on this by a very nice elderly lady I was chatting to in town.
People are feeling a severe financial pinch...then they read of shareholders getting a 20% increase in their annual payout...so shareholders are laughing all the way to the bank. But this increase is paid for by the pain of others who cant afford their gas or their heat. We see stories on this everyday on TV.
Sadly our weak government are caught in the galloping headlights of huge profits and wont issue a windfall tax...even though everyone is calling for it...even Caroline Lucas of the Greens is calling for windfall taxes.
Most of these companies. Gas, Water, Electricity, etc have a complete monopoly, "a license to print money" as we used to call it in the past, so shareholders and executives creaming off large financial gain in this arena is suspect in my view.
So re-nationalisation could emerge again as a real way forward.
Guest 645- Registered: 12 Mar 2008
- Posts: 4,463
9 September 2008
07:215797#2
I agree.These services should never have been sold off by Thatcher in the first place.The promised competition did not materialise.X company announces an increase in prices only to be followed by Y company making a similar announcement a few days later.
Gas,electric and water are natural resources and are services that every household in the UK cannot live without.The fact that these resources and services are being marketed at such high prices in order to satisfy the greed of a small but rich minority to gain profits is obscene.Others are profiting whilst pensioners and the poor suffer.In the 21C this should not be happening nor should it be allowed to continue.Re-nationalise these services which are the life blood and veins of our country and this in turn will pump life back into the economy.
Marek
I think therefore I am (not a Tory supporter)
Guest 675- Registered: 30 Jun 2008
- Posts: 1,610
9 September 2008
08:355803#3
Quite right. Basic needs such as water, sewerage, heat and light should never have been made subject to profit seeking competition. Any pretence that it would reduce costs was a clear deception as the main thrust of Thatcherism was a drive for ever increasing profit. Between her and her disciple Blair we are left with a rapidly degenerating culture of pure greed, with too little thought for others.
Politics, it seems to me, for years, or all too long, has been concerned with right or left instead of right or wrong.
Richard Armour
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
9 September 2008
09:185804#4
Anyone who think nationalisation of these industries would work lives in a dream world. It would be utter madness. Prices would probably go up further due to inherant inefficiencies. The main driving force for price increase are world energy prices and a nationalised utility is not somehow immune from them. As far as the water and sewerage companies are concerned they are having to make huge investment for environmental reasons and this must be funded by investors, profits and borrowing.
If you had you way where would the money come from, how much would have to be borrowed to buy the shares? Just think how that boost to the money supply would stoke more inflation. Perhaps you would want the Government to confiscate the shares... in other words steal them from your (yes, your..) pension schemes and ISAs.
The dividends paid on these shares are benefitting many people who have 'income drawdown' pension or who are taking income from equity ISAs. These are far from being all rich people, many are living on a smallish income that is just above the benefit levels, remember I have direct knowledge of many such people. These are elderly people who depend on this income. These utilities are not an exciting share for investors. Those who invest in them do so for a steady reliable income stream from the dividends. being shares they also carry the potential for capital growth and an increasing income stream to offset inflation. These shares are simply a mainstay of the income stream for millions of low income pensioners.
The result of doing what you want will be more inflation, higher energy prices and lower incomes for many, throwing thousands more onto subsistence living on State benefits.
The US example is not a good one to be citing. Sadly this was a necessary move that has some potentially serious consequences for the American taxpayers but with an even worse alternative. There have certainly been some serious failings in the American credit system that has given rise to this that will need to be addressed to prevent similar problems in future.
Guest 675- Registered: 30 Jun 2008
- Posts: 1,610
9 September 2008
10:065808#5
While I can agree with you on the effect such a move would have on ISA's etc and those investors that have come to depend on them you do have to remember that this is also a vestige of Thatcherite policy. The bold dream of putting shares into the hands of everyone was always doomed to failure because of the other great legecy, greed. It was always inevitable that, once distributed all other economic factors were going to result in those shares accumulating into the hands of a monied few and the large financial institutes they support. Those same people that were bailed out in the Lloyds fiasco when their incomes were threatened as a result of the very wagers they were living off. They 'bet' that Lloyds would always profit and then cried when their 'bet' did not win, if I went to the bookies three days in a row, won the first two and then lost on the third would I get my money back?
As to 'inherent inifficiencies', how are nationilised industries any different to private? The work force, those that keep every business going, are the same, working for the same wage. The only difference is in the management who would be working to a different set of rules whereby profit would go straight back into improving the business. Are you saying that without greed there would be no motivation to do a good job, and, if so, what does that say about doctors, nurses, teachers, health care assistants, PCSO's, firemen, lifeboatmen etc. etc.?
Politics, it seems to me, for years, or all too long, has been concerned with right or left instead of right or wrong.
Richard Armour
Guest 645- Registered: 12 Mar 2008
- Posts: 4,463
9 September 2008
10:145809#6
Thatcherite privatisation and "competition" has resulted in less efficiency, fragmented industries, higher prices and most of our national infrastructure being owned by foreign companies making massive amounts of profit from the UK population.
The trains being another perfect example. We the taxpayer SUBSIDISE the private companies for BILLIONS, they then make a lot of profit and deliver a crap service with high ticket prices. What a con.
British Gas owners Centrica revealed profits of £5million per day.Profits were £992 million for the 1st 6mths of 2008 down 2% to £1.23 billion per annum.British Gas responded by raising gas bills by 35% to restore ''reasonable profitability''.
What amazes me is that all the infrastructure the digging of holes the laying of pipelines the building of reservoirs was all undertaken at tax payers expense but then sold off for peanuts to private companies.It really baffles me that some measure the service they provide by profit and put this before the poor consumer.Nationalisation is now in vogue even though the word (as one journalist put it) is taboo.It's already happened with Northern Rock so lets take it one step further and reclaim our energy,water and sewage services before its too late.
Marek
I think therefore I am (not a Tory supporter)
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
9 September 2008
10:415814#7
Chris, nationalised industries do indeed have a very different ethic to private ones and that is the achilles heel that dooms them to inefficiency. If they worked you would have seen one of the many nationalised industries we had in the 1970's being regarded as an example of good managment, none were. We moaned, rightly, about the railways when run by the old BR which, yes were heavily subsidised and inefficient then. Remember the old phone system run by the Post Office, waiting times and what a wonderful choice of phones were available (not)... Remember the Austin Maestro? not to mention many other dreadful and inefficient cars produced by nationalised car producers. I could go on.
I note that neither you or Marek have actually addressed fully the issues that I raised of the impact of nationalising these companies on ordinary people.
Before you can advocate such a move you must be able to fully answer the points I made or you cannot justify the problems and pain you would be causing.
To be honest if anything I have considerably underestimated the problems of such a move. The economic consequences and the impact on the broader economy would be a disaster. Foreign investors would run a mile from this country, the market would collapse and many vulnerable people would suffer. It would make our present economic difficulties look trivial.
The world has moved on from Atlee's crazy nationalisation programme and the suicide economics of the Wilson/Callaghan days.
Brown has said himself that we have a global economy, though it seems from his comments that he has only just realised it!!!
Guest 645- Registered: 12 Mar 2008
- Posts: 4,463
9 September 2008
11:055817#8
If we renationalise anything, let's not pay compensation to those who have exploited and profitted from the public purse. The structure for a nationalised industry doesn't have to be the megalomanic bureaucracies that were previously created. Laws, like treaties, are only cited by governments when it suits them, at other times they break them without a second thought.
A fast, efficient, cheap public transport system is essential if we are to reduce carbon emissions. Whilst our government pays lip service to this, it appears that it's policy moves in directly the opposite direction, and that it's words are just a glib mask to enable them to take more money from the public.
As far as water is concerned, the systems were created by the urban conurbations for their citizens. Thatcher stole the rights and sold them to her cronies, but with a high court judge in her pocket she got away with the crime.
Marek
I think therefore I am (not a Tory supporter)
Guest 645- Registered: 12 Mar 2008
- Posts: 4,463
9 September 2008
11:135820#9
Just hours after imposing a 35 per cent price hike on their cash-strapped customers, British Gas spent an exorbitant £25,000 entertaining 1,000 staff.
The personnel attended a conference in Birmingham, in order to train staff how to explain the huge price rises to customers.
But the managers and sales advisers were treated to a champagne reception followed by a four-course meal complete with free wine and beer.
Jimmy Carr joked while the BBC's Steve Ryder's compered at the party
The lavish dinner was complimented by entertainment and a free bar all night.
Carr even reportedly joked about the price rises - saying he was going to put his fee up by 35 per cent in line with British Gas.
News of the party emerged as ministers were considering a windfall tax on energy giants after the 'big three' made combined profits of £15.6billion.
Soaring bills have allowed Shell, BP and Centrica, which owns British Gas, to make
£1,000 a second for the first six months of the year, a figure described as 'grotesque'.If there was ever a time to re-nationalise it's NOW.
Marek
I think therefore I am (not a Tory supporter)
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
9 September 2008
11:475821#10
Marek. You really have no conception of the economic disaster that would result from such a theft of private businesses. It is inconceivable that any modern Government could even contemplate such a thing. The economic chaos and hardship you would cause is, well unimaginable. Frankly nobody serious would advocate it.
If the Government wanted to help people pay their power costs they remove VAT and cut prices instantly. That would be far more effective than a load of expensively administered handouts. This would be paid for by the windfall gains they have made as a result of increased fuel prices.
Guest 645- Registered: 12 Mar 2008
- Posts: 4,463
9 September 2008
13:545827#11
Barry
I remember the tories singing the same song about the introduction of a minimum wage and how it would ruin the the economy.Well it hasn't(except for poor old Peter at Blakes).
However the abolition of vat on energy would be greatly appreciated.Are the Tories advocating this idea as policy?
Marek
I think therefore I am (not a Tory supporter)
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
9 September 2008
14:025828#12
Marek.
If you dont care about the impact on the broader economy (you should!) Perhaps you should consider this when you refer to 'greedy shareholders'.
By coincidence I have been looking at the circumstance of a lady. I will not say anything that give away her i.d. for obvious reasons and fortunately she does not live in Dover (or Kent in fact...)
She has a State pension of a little over £90 per week. She has some interest from accounts providing a little under £10 per week.
She and her (deceased) husband scrinmped and saved all their life and she has some Unit Trusts and Share ISAs that provide a total income of about £60 per week.
A fair proportion of those Unit Trusts are invested into UK Equity Income Funds for two reasons, they are of lower risk than many other types of UK and international equity funds and they provide a reasonable income stream with the potential for capital and income growth over the long term to offset the effects of inflation.
The underlying investments of these equity income funds include a significant amount in utilities. I have previously explained why utilities are good for this type of fund.
How would you explain to her what you have said about no compensation to utility shareholders?
How would you tell her how greedy she has been?
How can you justify the State theft of a large proportion of her savings?
What you would propose would result in her becoming dependant on increased State benefits, subject to the Minimum Pension Guarantee, when her savings fall enough in value, which they would quite quickly.
Imagine the impact on her capital and income, it would be destroyed by what you easily propose. Your comments and dismissal of people who are investing into utilities is so insulting towards ordinary decent hard working people.
Make no mistake there are many, many people like her.
I have not even tried to describe the wider implications for the economy, long term and short term that would be more broadly devastating.
I have to say that the attitudes that have come accross in this thread remind me why I so detest socialism so much and its assumption of State power. For me this discussion is not about theory, it is about very real people and is a subject of which I have direct expertise and is nothing to do with political point scoring or making challengable claims. This is real life.
Guest 645- Registered: 12 Mar 2008
- Posts: 4,463
9 September 2008
14:295829#13
Barry
You know me better than that than to infer that I do not care for my fellow human beings..thats one of the main reasons for me being a socialist.The old lady you have highlighted of course has concerns but so do all the other old ladies who don't have shares.ISA's and unit trusts.The wives who stayed at home to raise a family so their husbands could work and die down the pits.They fuelled not only the fires and power stations but also fuelled the economy of this country but were left with a pittance when maggie went on her crusade to close the coalmines.Widowed,these women can no longer afford to warm their houses,they sleep in the living room to conserve energy.They die in their armchairs by the shed load in winter because the cost of keeping themselves warm is beyond their state pension and fuel allowance.They can't even afford the coal shipped from poland that once their loved ones dug out of the ground in appalling conditions.So yes as a socialist and as a catholic of course I have compassion but others may well think that your old lady was 'well off' in comparison to themselves.
You ask how can I justify the state theft of a large proportion of her income?.Well obviously i can't but in the same way that I cannot justify the state theft of the Utility and Energy services by the Tory party.Hopefully there would be some sort of recompense for ladies such as the lady you have highlighted but multinational foreign companies would just have to ride the cost.It was the gamble they took when they decided to buy into a former state owned company always realising that a change of Govt could bring with it a change in policy.
Marek
I think therefore I am (not a Tory supporter)
Guest 675- Registered: 30 Jun 2008
- Posts: 1,610
9 September 2008
14:495830#14
And in real life people such as you describe will adjust to the change in circumstances, helped by the decrease in utility payments (something not covered by state benefits). People being in negative equity, people struggling to meet their food bills every week or wondering if they will ever afford a holiday are also very real. Not all real people like to gamble on stocks and shares, and that is precisely what it is (no matter how you dress it up). Buying shares is placing a bet that the companies will make large profits, and if they do you win in increased share prices and bonus payouts etc. Suppose those shares had been in betamax or Sinclair, might have looked good for a while but where are they now. Shares in public utilities is more like holding the jockey to ransom, you will win or all these people will lose their share bonuses. The only difference is that those holding to emotional ransom are the same ones having to pay out the cost in decreased service and higher prices.
On wider implications, France has a national rail network and investors are not staying away. Most of Europe runs along quite nicely with a large majority living in rented housing rather than rushing into the home owning market. Playing figures with shares etc is the real falsehood. Real people need real things and the countries winning out on getting in foreign currency (keeping a healthier balance of payments) are those producing real things, food and goods that people need.
Politics, it seems to me, for years, or all too long, has been concerned with right or left instead of right or wrong.
Richard Armour
Guest 674- Registered: 25 Jun 2008
- Posts: 3,391
9 September 2008
14:515831#15
On nationalisation, I have to say it does have its problems, but something has to be done, we caN'T just sit back and allow these private companies to make millions of pounds then put prices up so high people cant afford them.
There has to be a way where big business doesn't just operate for its shatrehoders/chief executive etc
but actually works in the interests of the service its supposed to provide.
believe me Iv had to 2 cases of poor quality customer care from a very big national company, but i took them on and won.
So we do need to stop companies just operating for profit and they must also work in the interests of the customer
but we also don't want the old days of just the state knows best.
somewhere in between maybe?
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
9 September 2008
16:035835#16
Chris and Marek.
You make too big of an assumption that fuel prices would come down. Even nationalised utilities would have to meet market forces and fuel will still need to be bought on the futures market.
You have provided no evidence other than blind assertions and faith that it would be better if these businesses were nationalised and in doing so you go against the hard and extensive experience of the 1970's and earlier. To do that you are willing to throw a lot of vulnerable people to the wolves at a massive cost to the public exchequer. You will also destroy investment into the UK and create chaos in the markets.
You both should find out more about the markets and the way they work. If you dont have investments that are dependant upon the stock exchange I would suggest that you are very much in the minority. Long gone are the days when investing in the markets was just for the well off and rich. Long term investing into the markets, in a careful and thoughtful way, with advice, is not gambling but looking after your future and that of your family while providing industry & businesses the investment 'fuel' it needs.
Keith. You have to understand that profit is not the enemy, losses are. Profit is what generates employment and tax revenue along with job security. Every good business looks after their customers, but mistakes and errors do happen, we have all had experience of problems but also there is much that is good and well managed (often going unremarked). At least with the free enterprise system if something goes wrong you can complain and take your business elsewhere. Unlike State monopollies.
Guest 675- Registered: 30 Jun 2008
- Posts: 1,610
9 September 2008
17:195837#17
Fuel, as in petroleum based products, would require a global adjustment in order to reduce in price. At the end of the day it is a finite resource that will always get more expensive to produce. Utilities, which is what I thought we were talking about, such as water, sewerage and to some extent power all do have the possibility of coming down if properly managed and (I can't believe I am saying this) Kieth is right about there being some problems in nationalising but, with thought it has to be a better answer than the profit chasing competition we now have. A drop in profits is not a loss and rather than just put up prices (self defeating wherever it is used as customers just cut back usage) it should be a warning to try harder to improve services.
Politics, it seems to me, for years, or all too long, has been concerned with right or left instead of right or wrong.
Richard Armour
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
9 September 2008
17:425838#18
Energy prices include more than just petrol, there oil and gas that power a lot of electricity generation. It is a complex market and there is an energy defecit that is contributing to the costs. Oil has dropped a bit lately and may go down to $100 a barrel, still high historically. It is the futures at the time supply was secured that determine the present increases. Nationalisation would have no impact on that and being a monopoly prices are more likely to increase further and they would be hamstrung in negotiations over supply costs as any State monopoly would be.
Chris, you cannot get away from the need for these companies to attract investment and to do so by the issuing of dividends to attract investment. A reduction in profit means a reduction in investment and less potential security in supply and higher, yes higher charges to the public.
In making your argument you are still doing from the position of blind faith. to have an argument worth taking seriously you have to provide a reasoned case and that is lacking. You have also not even attempted to counter my point regarding the economic damage and the personal tradegy that would result for many vulnerable people.
I said it before, if you think we have economic problems now it is nothing to what would happen if you had your way. Everyone would suffer and there would be no upside at all....
Guest 675- Registered: 30 Jun 2008
- Posts: 1,610
9 September 2008
18:535842#19
Hate to nit pick, but oil is very much a 'petroleum based product' and most natural gas is a by product of the same and it was not the petroleum industry that anyone was suggesting nationalising. I think you will find that I did address the effect it will have on share holders, although I feel that 'personal tragedy' is only overstating the case for dramatic effect. There would, of course, be a period of adjustment for those that had become dependent on share based profits but this would be nowhere near as dramatic as you imply, given that most of the smaller ISA investors, including the example you quote, rely on them as nest eggs or top ups to their income. A few of the larger financial institutions who make their money by gambling on money might feel a pinch but as it would not be an across the board devaluation of all share prices they would quickly readjust (if they could not they would not be in that business in the first place).
Who started this thread in the first place?
Politics, it seems to me, for years, or all too long, has been concerned with right or left instead of right or wrong.
Richard Armour
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
9 September 2008
20:395849#20
getting back to earlier comments on this rather long thread, price rises from the utilities have been beating inflation for many years.
the global price rise of oil is a recent thing.
2 points to be made here.
why does a power company here, charge less for the same thing to french consumer?
more seriously, why did the people sitting back, and reaping their dividends, have to put up with jimmy carr, as their post prandial entertainment.
maybe brutish gas felt that they deserved to suffer as much as their customers.
