Nationalisation: a flawed idea, or an economic saving grace?

Nationalisation is often seen as a buzzword. It usually has a weird effect on people that causes them to start rabidly screaming the words “Marxist” at you every time it’s mentioned. With the Labour Manifesto in the public domain, this phenomenon is becoming more and more common. However, if you’re going to make such a comparison, at least give the Communist Manifesto a read first. The Labour party has pledged to re-nationalise industries such as the Royal Mail, British Energy, as well as Broadband services. Whether the policies put forward by Jeremy Corbyn are plausible or not isn’t the point of discussion, I’m more interested in establishing how or if nationalism fits into the modern-day.

Firstly, it must be established that nationalisation is not actually that radical. Corbyn’s manifesto has been called “Radical” by the BBC and even members of the Labour Party, but the actual policy of nationalisation isn’t as extreme at all. America has utilised nationalisation in various industries, and their Government the exact opposite of socialist. Nearly nine out of ten people in the United States receive their water service from a publicly owned utility and in the last 20 years. Since then, nationalisation of the water industry has only expanded. From 2007 to 2014, the portion of people with water from publicly owned water suppliers increased from 83% to 87%. France’s mass nationalisation of its energy industry in the 1980s, Germany’s re-nationalisation of the Print Office in 2008 after it was privatised in 2001, and Iceland’s re-nationalisation of its largest commercial banks in 2008, shows that it isn’t some outlandish or outdated idea. 

This isn’t necessarily a socialist idea, it’s simply economically liberal. What is then done with nationalised industries is what takes it a step further. Even the services stated above are only a partially nationalised industry, as the state does not have a 100% market share and neither does it legally obstruct private companies from entering the industry. The common question asked is, why on earth would the government want to do this? Simple, it’s because we can’t trust the market completely to operate fairly, and when it crashes, the market won’t protect the public.

In some industries – take water for example – it just makes more sense to have fewer entities providing the service because of the infrastructure involved. The economically savvy readers will recognise this as a natural monopoly. It’s even been used to pull banks and other private entities out of trouble. This is done by temporarily buying them to ensure they don’t collapse and cause damage to the economy as a whole. A good example was when the US government took over GM Motors. When the problem is resolved, the government simply sells the company afterwards. In the case of nationalising industry, it allows the consumer to get a cheaper or even free service whilst the government tanks the cost but runs the companies, they are purchased at a profit which can then go back into your pocket.

Some of you will be reading this and think “Why don’t we just do this for everything? Cheap Nationalised Broadband? Sounds great”. Don’t jump the gun. It’s not something to be taken lightly and isn’t always a good idea. When nationalising an industry, the assumption is the government will actually be good at running the businesses in that industry. You can very easily argue that the British Government, in combination with local government, just isn’t good at it.

To paint a picture, I’m going to use the Labour party promise to provide a state-run fibre broadband service across the country. I am a huge PC gamer nerd. I play mostly League of Legends and Counter-Strike, but anyone who plays video games regularly can unite and agree upon a common enemy, bad ping. Lag spikes are actually the worst, and usually, we all have little tricks we use to try and deal with them, but if they don’t work, we are comforted by the fact that we can just switch broadband providers or upgrade our service. If Broadband is nationalised, you might not be able to do that, leaving you with bad ping and poor gaming experience. 

The state wants to purchase broadband relevant parts of BT, but the BT group also owns Plusnet and EE which have their own broadband services. If only the state broadband service is available in the area you live in, and that service just isn’t good enough, you would have to move to get to a different service provider, because currently there are only 5 providers for commercial usage, and 3 of them (BT, Plusnet and EE) could end up under the state service. To make it even worse, Openreach (a BT Subsidiary) maintains the fibre networks that the other broadband services sell, so if a state broadband service was to exist, the government would either need control of that as well or sub-contract it to Openreach. Even with all those complications, it doesn’t even touch on the fact that everyone who currently works for those companies now becomes state employees, and that’s a whole different fiasco.

Although nationalisation isn’t a ‘pipe dream’ like some would call it. The belief that magically buying all these industries will solve itself is certainly naïve. As I have displayed by briefly exploring the result of the nationalisation of just one service, this is not a straightforward process by any means. Paul Johnson, director of the Institute for Fiscal Studies, said the nationalisation plans of the Labour Party as a whole is risky and would require a restructuring of the economy specifically in the area of taxation. This would be a slow and gradual process that would take around 10 years. This doesn’t just apply to the Labour Party’s plan, it applies the nationalisation as an idea. 10 years is two governments, maybe three, governments. Who says our economic situation doesn’t change? Who says halfway through the project it’s no longer economically viable and the whole thing gets put on hold?

Nationalisation isn’t the Marxist evil that many claim it to be, but it isn’t necessarily the undeniable saving grace of the British population that it is being peddled as either.

Labour’s re-nationalisation of key infrastructure can put the UK back on the world map

Labour’s recent policy announcement of nationalising part of BT and taxing tech giants in order to provide free fibre broadband to every household in the country has resulted in the usual displeasure from the right wing commentariat, as well as various Tory and Liberal Democrat figures implying it to be some sort of communistic experiment. Considering, though that BT was in public ownership up until 1984, this is a testament to how far the Overton window has shifted rightward as a result of the neoliberal economic orthodoxy.

The good news is that Labour is effectively challenging this at the upcoming election, as it has been doing since 2017. The pledges to nationalise rail, water, Royal Mail and telecommunications will allow for a new era of economic prosperity to be shared by the many, and are necessary to ending the post-Thatcherite consensus that has held so much back.

Firstly, Labour’s policy to bring about free broadband has already been shown to be hugely popular. YouGov’s snap poll has shown that 66% are in favour of this policy and only 22% oppose it. This follows the trend for polling other forms of nationalisation. Having the rail, water, and mail services in public ownership all seem to have more than the majority in favour.

The Tories economic policies of simply more of the status quo are clearly out of touch with a public which is lethargic of more expensive and inefficient services provided by private monopolies and oligopolies. The economic data seems to back up the public’s perceptions. For example, water prices have risen by 40% since privatisation. More than 12,000 jobs have been lost since Royal Mail was sold off by the coalition government, whilst its boss has gained a pay rise of £100,000 to his salary. These issues are inherent to private ownership, especially of natural monopolies such as rail and water, since any sort of competition is highly limited. When profit for the owners and maximisation of shareholder values become the only goals, fairness and a good service for consumers come last. This is evident in the public perception throughout the previous years.

Critics of such policies, and the large scale nationalisation and spending plans that Labour are proposing ignore the widespread need for such investment into our economy. With the case of broadband in particular the UK is in great need of investment and improvement. The Organisation for Economic Cooperation and Development (OECD) statistics show that Britain ranks 35th out of 37 countries assessed for the proportion of fibre in its broadband. Furthermore, Britain has fallen from 8th to 10th in the EU for levels of connectivity. Whereas South Korea has 97% of its country covered by broadband (number one on the list by the OECD), with a much more active state involvement in developing the infrastructure needed to roll it out, and indeed with implementing it, compared to only 8-10% for the UK.

Labour’s £20 billion investment goes further than this, it will provide broadband for free, which will save ordinary families hundreds of pounds per year, and bringing the many benefits of fast communication through broadband to every household, which is especially lacking in rural regions. Finally, this policy will be paid for by large tech giants, going some way to address the inadequacy of the tax they pay to the UK exchequer, for example Amazon, which paid only £1.7 million in taxes in 2017, despite profits of £72.3 million. This policy is effective on two fronts. The first, allowing for improvements in fibre broadband coverage in the UK. Second, for its cost burden to fall on those large corporations which are yet to pay their fair share of taxes, as opposed to ordinary workers and consumers. 

Trusting corporate interests to deliver essential services has seemed to be a policy that can no longer be relied upon. Labour’s policy to bring these into public ownership is to be encouraged if we hope to build an economy which serves the public’s interest as opposed to private monopolies who have few incentives to change the current arrangements, catering to their ability to profit off such services as opposed to investing into those services for the good of the public.

Canterbury: the gritty electoral battleground in the Tory heartlands

The resignation of Tim Walker – Canterbury’s Liberal Democrat candidate for the 2019 general election – is just the tip of the iceberg of the complex political battle current raging in this historical city in the heart of the garden of England.

Canterbury voted in favour of remaining in the European Union in 2016. Over 60% of Canterbury’s population voted not to leave the EU and both of it’s Universities, including the University of Kent that boasts the moniker of being the UK’s ‘European university’, openly support remaining in the Union.

While this would appear to be an advantage to Rosie Duffield, who has always vocally supported remaining in the Union, her own party’s neutral position over Brexit could cost her votes. While Tim Walker has stepped down in Canterbury, the Liberal Democrats have told Channel 4 that they still plan to run a candidate in Canterbury, potentially leeching support from the Labour MP. They have  chosen an ex-councilor to run called Claire Malcolmson. Vote shares for Canterbury predict the Liberal Democrats to gain 23% of the City’s vote, giving the Conservatives a comfortable lead of 6% on Labour. However, if just 30% of Canterbury’s remain population voted ‘tactically’ – voting irrespective of party line and focusing on a candidate’s Brexit stance – then the scales could be tipped in favour of a Labour win.

However, understanding the difficult position Rosie Duffield is currently in requires context on Canterbury as a constituency, and what makes Canterbury such a difficult city to predict in the 2019 election.

Before 2017, most election polls predicted a comfortable win for the Conservatives, making Canterbury a certain ‘safe’ seat; one that has been held by a Conservative for almost it’s entire 100-year existence. In 2017, the Tory frontman Sir Julian Brazier was looking to shore up his considerable majority in the city – a majority he had held his entire 25-year career as an MP. In 2015, Sir Brazier won by a 42% majority, beating his nearest competitor by over 9000 votes.  

The Tories were confident, given the constituencies location in the heart of Kent, they were further reassured when Brazier’s opponent was announced: an ex-teaching assistant with no prior Parliamentary experience, Rosie Duffield. Duffield’s prior popularity in the Labour Party was scarce. Her political experience was limited to an unsuccessful run for the council in 2015, as well as her work as a political satire writer.

Labour’s gains in the 2017 election surprised pundits across the political spectrum, and Canterbury was no different. With a majority of just 187 votes, Rosie Duffield beat the incumbent Julien Brazier to become Canterbury’s MP. After conceding defeat, Mr Brazier blamed Canterbury’s invigorated student population for the shock win.

On a national scale, the student vote appeared to factor heavily into Labour’s success, with reports estimating that almost 90% of the student population eligible to vote registered in the election, with a further 55% of students backing Jeremy Corbyn’s Party.

Since 2017, Rosie Duffield has cemented her place in Labour Party politics, becoming the Secretary to the Shadow Secretary of State for Women and Equalities and serving on several Parliamentary committees. In 2018, Duffield demonstrated her commitment to staying in the European Union by being one of 6 frontbench MPs to resist a Labour whip to abstain from voting to remain in the EU single market after Brexit, precipitating her exit from the shadow cabinet.

In late 2019, she made further headlines after a speech on her experiences surviving and overcoming domestic abuse during a hearing on Theresa May’s domestic violence bill – a speech which moved the Commons to tears.

Duffield also took a very vocal stance on antisemitism in the party, admitting to reporters in 2018 that Labour did have a ‘problem’ with antisemitism, leading to condemnation from Canterbury Council’s Labour chairman. Ms Duffield has shored up her meteoric rise in leftwing politics and in just two years has made herself into one of the Labour Party’s rising stars.

But her competition this year will be difficult.

Sir Brazier’s favourite was elected his successor to become Canterbury’s Conservative candidate – a veteran of local politics, Anna Firth. Firth is an ex-barrister, Councilor, and ran for the European Parliament in 2017. The avowed Brexiteer gained local infamy in October when she shared a video with Boris Johnson, promising a new hospital was being created in Canterbury, a hospital that, it was later revealed, did not even appear in the government’s plans. Firth’s highly pro-Brexit stance has led to a deep affinity with Boris Johnson and other hardline Conservative Brexiteers – an affinity which may resonate with voters in the traditional Tory heartlands.

Canterbury will serve as an important litmus test for the 2019 general election, with all of the major frontrunning parties fielding hopeful MPs. Whether Canterbury remain supporters are willing to put party allegiance aside and vote strategically to stop Firth’s election, however, is beyond prediction.