The U.K. 2022

Katie59

The Problem is that energy prices are too high, I was suggesting the energy producers might be nationalized, they are mostly UK based - Nuclear, Offshore Gas, Renewable. Then costs could be controlled to a large extent, currently they are free to charge whatever they can get. I’m not sure how the £2.85bn was calculated, taking over the energy industry has to be valued at a lot more than that.

This is where I wonder about the cost. To me, this should be about, as you say Katie nationalising the producers. I would have thought that, although a larger entity could influence the cost of energy, it could not be able to bring it down to only a 5% increase. The reason France can, for instance, is because they are so much more self-sufficient.

You would have to be setting about this self-sufficiently for it to work. If you had self-sufficiency, you would not need to nationalise the companies, although you could choose to.

If we are going to invest, and if nationalising could be nearer to £0, I would have thought we should be demanding the investment in the provision, not distribution.

^ Why will nationalising the Big 5 help? They have to pay market prices.^

They also have to pay huge salaries to their executives and dividends to their shareholders. Nationalisation can curb the first expense and completely cut out the second.

Oh, and nationalisation cuts out the need for a regulator.

Regulators were supposedly set up to protect the consumer. They have shown themselves to be more willing to protect the privatised companies' profits.

www.theguardian.com/business/2022/aug/17/ofgem-director-christine-farnish-quits-over-energy-price-cap?CMP=fb_gu&utm_medium=Social&utm_source=Facebook&fbclid=IwAR0RhYtWhsDiN4A7YVtlUJT5ArjdqtmUJQ5rcdfvR2qYwmLRUFD9PHKZndg&fs=e&s=cl#Echobox=1660763839

DaisyAnne

Whitewavemark2

This tweeted by Dr. Moderate

Nationalisations are usually achieved via a bond swap - newly created government bonds are exchanged for shares of the same value. The net cost on the government balance sheet is not £2.85bn, it's zero.

Who is Dr Moderate Whitewave? As a non-economist, I would say that look right.

Thank you to all who have brought the knowledge of those who know about these things to the table.

I still feel less than sure about nationalisation. Why will nationalising the Big 5 help? They have to pay market prices.

I don’t know who he is but he posts regularly on Twitter.

I posted that in the hope someone knew whether it was correct.

It sort of makes sense to me, but how the actual mechanics work I don’t know.

A skilled worker on J O'B yesterday talking about pay increases.
The staff were offered 4 -5% whilst the Director of Operations took 28%.

MaizieD

^ Why will nationalising the Big 5 help? They have to pay market prices.^

They also have to pay huge salaries to their executives and dividends to their shareholders. Nationalisation can curb the first expense and completely cut out the second.

I find my supplier works very efficiently. I am still not won round to nationalising them when it is so much more important, from both fuel security and a climate point of view to spend any money and time on making power in this country. I do appreciate this government will do nothing about that. However, I hope the other parties wanting our vote will if they get into power.

We may have to agree to differ on this, at least for the time being. More information is coming to the surface as we find out just what a mess a second "12 years of Tory misrule" have made of our resources and economy. I will keep trying to have an open mind and am glad GN has so many who can direct us to facts and general information.

Dinahmo

A skilled worker on J O'B yesterday talking about pay increases.
The staff were offered 4 -5% whilst the Director of Operations took 28%.

I don't know if it was the same person. One chap described the wages he got, when he came in as a trained and skilled person. It seemed that his skill was no longer as valued as it once was.

Like so many things in the last ten years, the lack of upskilling is showing. It affects the person, the companies and us, as the country is less productive.

Once, those calling themselves Conservative would be the very people who you would expect to save when things are good and invest, from those savings, when things are not so good. Now they are the "it's just about me" crowd. It must be very sad for old-style conservatives.

Somehow "we", whoever we are, need to get over to those less interested that these people are not conservatives. They are cuckoos in the nest. Perhaps that's it. They are the Completely Cuckoo Party - and that very much includes Liz Truss.

We need public ownership of energy companies and wealth tax now.

m.youtube.com/watch?v=Za7IQn6EEe0&t=633s
This lady explains about nationalising energy

Starmer is wrong on cost of nationalisation

Apart from the cost of compensation the government would the loose the taxation income that it gets from the energy producers and need to provide investment for future development. This would be a massive amount in the short term and I really don’t see any government seriously considering it.

Grany

We need public ownership of energy companies and wealth tax now.

m.youtube.com/watch?v=Za7IQn6EEe0&t=633s
This lady explains about nationalising energy

Starmer is wrong on cost of nationalisation

OK, Grany, let's translate what you are saying.

We need public ownership of energy companies and wealth tax now
= I think my opinion is a 'truth' equal to anything and everything anyone else can offer and I want public ownership and a wealth tax now.

Starmer is wrong on cost of nationalisation
= I will always think Starmer is wrong because I haven't got over the party not wanting Corbyn (or whatever it is that makes you attack your party). It doesn't matter that what he is talking about is the short-term and what others are talking about is a long-term solution.

In the first part of her answer, the young woman does not say he is wrong about the cost. She refers to what it cost to salvage one company and says the Conservatives could choose a different way to their current plan to sell Bulb on to Octopus - nothing to do with Starmer and the Conservatives are never going to choose nationalisation.

I didn't bother to go on after that, but I may later.

Katie59

Apart from the cost of compensation the government would the loose the taxation income that it gets from the energy producers and need to provide investment for future development. This would be a massive amount in the short term and I really don’t see any government seriously considering it.

I'm not sure about that one Katie. In the place of tax wouldn't profit be returned to the government or the nationalised company structured to invest?

Katie59

Apart from the cost of compensation the government would the loose the taxation income that it gets from the energy producers and need to provide investment for future development. This would be a massive amount in the short term and I really don’t see any government seriously considering it.

The government doesn't need taxation income in order to invest. Nor does it need to 'borrow'. It's a money issuer. It spends, then taxes back most of what it spends by way of normal taxation.

We really have to stop thinking of the state as a money making enterprise.

If this were better understood by voters it would enable better political choices to be made.

Anyway, though it would lose the tax income (which is as minimal as the producers can contrive it to be) it would get the income from the sale of energy. Or do you think that would just disappear into a black hole?

I find my supplier works very efficiently.

We're not disputing the efficiency of nationalised v privatised enterprises, DaisyAnne.

We're talking about the cost of energy and nationalisation making it cheaper because no dividends to pay and no inflated salaries.

The big issue I have is that a Tory government is so useless with regard to the. Country’s economy that I couldn’t remotely trust them to run anything, particularly if it means them getting their grubby hands on cash to give to their crony’s.

Just as I would like to see the NHS at arms length from any government, I feel that public ownership should be also at arms length from political interference.

Talk today about the sewage dumping and how the water companies haven't invested in overflow tanks and treatment centres. It seems to me that they are having a larrf right now - taking as much out as they possibly can before the eventual privatisation.

On a more serious note, if the water and energy companies (not the suppliers) were nationalised then there would be an increase in employment by these industries to make up for the lack if investment in maintaining and renewing infrastructure.

MaizieD

^I find my supplier works very efficiently.^

We're not disputing the efficiency of nationalised v privatised enterprises, DaisyAnne.

We're talking about the cost of energy and nationalisation making it cheaper because no dividends to pay and no inflated salaries.

One other major factor, is the fact so many energy and other essential facilities, have been sold to Foreign countries. Most of them our strong and close allies, France, Germany, and others- which Brexit and even more so, the insistence that those who signed it will not abide by it (NI protocol), has turned into conflictual competitors, bordering on 'enemies'.

How could the UK nationalise utilities sold to Foreign countries and companies?

I'm not disputing anything Maizie. I am trying to work out, for my own sake, whether the nationalisation of suppliers would be a good thing. I am content for you to think it is.

I think you are deceiving yourself if you believe there will not be a redistribution of any savings from those salaries you consider inflationary into others' wages and conditions. Isn't that part of the point of doing it?

I would have thought a nationalised company would redistribute any dividends into investment. I doubt the savings, were there any, would bring prices down. We would still be buying in a privatised market. As I have posted previously, the larger entity might have slightly better buying power. However, would be enough to bring the prospective rise down to 5%?

I do believe that investment in homegrown energy could make a difference in the price.

To put things into perspective. I've just received my electricity bill (258 euros) for the last 2 months. I'm pleased with it because we have been using air con during that period.

The government doesn't need taxation income to invest. Nor does it need to 'borrow'. It's a money issuer. It spends, then taxes back most of what it spends by way of normal taxation.

We really have to stop thinking of the state as a money making enterprise.

There seems to be more than one way of looking at economics Maizie. It seems to me that our political bias will sway us in the direction of one or another. It also appears that economists adapt theories to lead to their political aims. That doesn't make them right or wrong, just expedient.

I am never comfortable when we are dealing with what can only be theories and everyone else is seen to have the wrong one.

DaisyAnne

Grany

We need public ownership of energy companies and wealth tax now.

m.youtube.com/watch?v=Za7IQn6EEe0&t=633s
This lady explains about nationalising energy

Starmer is wrong on cost of nationalisation

OK, Grany, let's translate what you are saying.

We need public ownership of energy companies and wealth tax now
= I think my opinion is a 'truth' equal to anything and everything anyone else can offer and I want public ownership and a wealth tax now.

Starmer is wrong on cost of nationalisation
= I will always think Starmer is wrong because I haven't got over the party not wanting Corbyn (or whatever it is that makes you attack your party). It doesn't matter that what he is talking about is the short-term and what others are talking about is a long-term solution.

In the first part of her answer, the young woman does not say he is wrong about the cost. She refers to what it cost to salvage one company and says the Conservatives could choose a different way to their current plan to sell Bulb on to Octopus - nothing to do with Starmer and the Conservatives are never going to choose nationalisation.

I didn't bother to go on after that, but I may later.

Your translation is all wrong. No need to translate what I say.

There seems to be more than one way of looking at economics Maizie.

I'm aware of that, of course. But there is only one main way that money enters the economy, a way that is empirically proven, and that is through it being issued by the state. This is a statement of fact. Not a theory.

Most economic theory looks at how it behaves when it gets there and the effects of various actions on its behaviour.

It’s a skip fire. How anyone supports this bunch of liars and charlatans is a mystery to me.

“Anyway, though it would lose the tax income (which is as minimal as the producers can contrive it to be) it would get the income from the sale of energy. Or do you think that would just disappear into a black hole?”

Yes. But the purpose of nationalization is to reduce consumer prices, so there wouldn’t be so much coming in as revenue. Regardless however it’s done, it can be done but it won’t

Yes. But the purpose of nationalization is to reduce consumer prices, so there wouldn’t be so much coming in as revenue.

As the private companies avoid as much tax as they possibly can, and taxation is, anyway, only a small proportion of their total income, it's likely that the revenue the government would receive, even from selling at lowered prices, would more than equal what they can currently squeeze out of companies by way of taxation.

How could the UK nationalise utilities sold to Foreign countries and companies?

It’s not the utility companies it’s the energy producers, most of which are UK based, the government could just take the lot over.
It would have to pay a fair price in whatever form, or there would be retaliation from foreign governments.