THE BLOG
02/02/2015 06:30 GMT | Updated 01/04/2015 06:59 BST

Privatisation - Don't Believe the Hype

Privatisation, Privatisation, Privatisation; an economic doctrine sold to the British public as the golden pathway to a more efficient, productive and competitive world. Deregulate the banks, sell off those decrepit nationalised services and wave goodbye to high taxes. This is 'Popular Capitalism', and it's filled with economic buzz words such as, 'Progress, Reform, Modernise and Innovate'. Whether we, the people, have wanted it or not this has been the rhetoric used by all our recent political leaders. We have seen, British Steel, British Telecom, British Gas & Oil, British Rail and more recently the Royal Mail taken away from the inefficient hands of the state and floated upon the economic market. Yet European politics is changing, there is dissatisfaction with the traditional ruling elite and people are searching for an alternative. The French are voting for Le Pen, the Spanish Podemos and the British UKIP. It's a time where people are craving for an alternative, and if the traditional parties do not provide one, their popularity is likely to continue to dwindle.

Towards the end of 2013 a number of Yougov polls showed that 'Popular Capitalism' is not as popular as our politicians would like us to believe. In November, a poll showed that 68% of the population wanted to see the energy companies run by the public sector. This popularity is hardly surprising when, despite the Big Six increasing their profit margin by 77% in 2012, those who live in the UK pay the fourth highest electricity prices in Europe, leaving over five million British households living in fuel poverty. This greed and failure by the Energy companies, has also caused extra stress on the NHS, which continually spends £1.36 billion a year on treating victims of under heated homes. In the same year N-Power produced a profit margin of £776 million the percentage of pensioners dying in Britain, from lack of heating, was twice as high as that of Finland.

Another YouGov poll showed that 66% of the population also believe that the railway industry should be re-nationalised. The privatisation of this industry steamed ahead in 1993, with the promise of bringing capital, progression and innovation to the railway system. Yet by 2014, the average fair costs double the price of that in France, Germany, Spain and Italy. A report from 'Rebuilding Rail', shows that the cost of running the railways has doubled in real terms since 1990 and that the average age of a train is higher than it was in 1996. Between 2007 and 2011, the five largest railway companies received almost £3 billion of the tax payer's money, with this help the same companies were able to create a profit of over £500 million. Where did the money go? Well, 90% of it went straight into the shareholders pockets.

According to Billy Hayes, a man who represents more than 100,000 postal workers, the privatisation of the Royal mail, was a national scandal which left the tax payer "£1 Billion out of pocket''. It was also a move which over 66% of the population disagreed with, and why shouldn't they? In May 2013 the Royal Mail, when it was still a nationalised industry, reported a 60% increase in pre-tax profits, which was roughly £324 million. By May 2014, the now private Royal Mail's chief executive Moya Greene, stated that their ability to deliver 6 days a week to rural areas was under threat and that Royal Mails commitment to universal service would only last until 2021. A national scandal indeed.

Furthermore, there have been some recent examples of nationalization working in an efficient and profitable market. The East Coast Mainline, which ran as a nationalized company from 2009 to 2014, managed to create a pre-tax profit rise of around 40%. There is also the Nottingham City Council which is in the process of setting its own energy services up to challenge the Big Six, through this project residence are likely to save around £120 a year. We must only look over to Germany, where cities such as Frankfurt and Munich bucked the trend in the 1990s and decided not to privatise their electricity networks. These cities now have some of the most ambitious targets for renewable energy. In Munich the city council believes it will be able to satisfy the energy demands for over 1 million people with green energy by 2025.

This can be seen as an important message to Ed Miliband; whether it's the tightly squeezed middle, the underemployed graduate, or the disillusioned worker, the labour party is neither liked nor trusted. If Ed Miliband wants to truly rebuild the image of labour, win voters back from UKIP and re-establish Labour as the dominant party in Scotland, then he needs to begin to represent something real and popular. The debate for re-nationalising some of our major industries has been largely ignored since Tony Blair tore up Labour's commitment to Clause Four. Perhaps now is the time for Ed to reconsider such a move and position the Labour Party back on the side of working people.