The Mancunion

Britain's biggest student newspaper

Taking the power back: why we need to renationalise private sectors

Basic commodities and services are increasing in price and not quality – it’s time to take back control.

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Last month, news broke that an academy trust running schools across Yorkshire and Humber requested to cease management of all its institutions. Wakefield City Academies Trust stated that the decision to pull out of its 21 schools was made on the basis that it “does not have the capacity” to make required improvements to its institutions.

This comes in the wake of other reports which have questioned the effectiveness of academy trusts more generally to responsibly handle their finances, to properly run their schools, and to effect the positive results they claim to create.

The academies — though run as not-for-profit trusts — operate as independent, rather than council-run, businesses. Are these, therefore, simply the latest in a long line of examples documenting the failure of privatisation?

These reports should not be surprising; privatisation has failed the public across the UK. In 2006, economists at UBS bank claimed that train travel in the UK was the most expensive in the world. Since then, prices have not ceased going up; with each new year comes a new rise in rail fares.

In 1995, a single from London to Manchester was £50. In 2013, the average price was £154 — a 208 per cent increase, over triple the rate of inflation. Peak fares are unregulated by the Department for Transport, meaning that rail companies get the say in setting them. Because of this, commuters often face the brunt of the increases.

As a postgraduate student from South London, many of my friends now have full-time jobs and have to commute to the city’s centre. While earning only graduate salaries, ridiculous fare prices leave many of them spending between a quarter to a third of their income on travel alone, even with a 16-25 railcard.

This is even more dangerous in the midst of a housing crisis with rent prices soaring and the likelihood of getting on the housing ladder dismally low. Nor can the service be said to justify these price increases — at the beginning of this year, there was speculation that Southern Rail could be temporarily renationalised after the abysmal service it subjected its passengers to in 2017 with almost a third of services running late.

Nor can the water sector boast any better success. The Thatcher government intended to diversify share ownership and boost efficiency through privatisation; however, most British water shares are owned by a handful of international investors.

Prices have also gone up by as much as 40 per cent in the last 30 years, explaining how water companies have been able to afford the billions of pounds given to shareholders in dividends despite their outstanding debt.

The energy sector demonstrates a largely similar scenario. Instead of market competition leading to competitive prices and better service, the Big Six energy providers have established hegemony over the sector. People are forced to pay extortionate prices or, worse, are forced to go cold in the winter because they simply cannot afford the bills.

This begs the question: is it morally permissible to run essential services for profit in the first place? These are not luxury commodities but the most basic resources and services that people need to live.

Is it any wonder, then that in such an economic climate with extortionate prices for even the most basic services, that the rates of homelessness are rising so rapidly, that people are struggling to pay bills and afford basic amenities?

To run these services for profit is at best unwise and at worst clearly exploitative, putting the most vulnerable among us in a position where they literally cannot afford to live.

However, it does not have to be this way. In 2013, Hamburg, Germany voted in favour of nationalising their gas, electricity, and heating grid. The aim of doing this was to ensure that the service was being run in the public interest rather than for the purpose of making a profit.

Prices were planned to drop and any profits made would be returned to the city as opposed to lining the pockets of CEOs and shareholders. As of today, the city is still in the process of finalising the transition, but all signs point to positive change.

Perhaps one of the most controversial elements of Labour’s election manifesto was their decision to do just this: take essential services out of the hands of private businesses and put them back in the rightful hands of the people.

If we are to have a country that is indeed ‘For the Many, not the Few’ then we must seriously address the ills privatisation is inflicting on the British public, and work towards reclaiming our water, energy, rail, and various other sectors through renationalisation.