Nationalisation.

[MadAmster]

Read this morning that, since privatisation, the various companies have racked up £48Bn of debt costing £1.3Bn to service each year. That 1.3 will rise as interest rates rise.

In this time, they have also paid out £57Bn in shareholder dividends.

Not bad for companies that plough far too little back into repairing the myriad of leaks in the water system so we stop losing more than we use. Those same companies pour raw sewage into rivers and the sea at an alarming rate.

I'd love one of our accountants on here to explain how this is a good example of the free market working to the public's advantage.

Same goes for the gas, electricity companies and the railways.

Do you remember that the Dutch NS is owner of a few of the franchises and that they get millions in dividends each year? Money they use to keep fares down here in NL (thank you all BTW). Yesterday, the rail workers started a series of 1 day strikes in a pay dispute. Sound familiar?

[Geoff Parkstone]

I can't explain the logic other than to say that I believe service companies should be in state ownership. But to throw a few bones to the dogs - private companies piling up debt gets it out the state national debt at least.

The 57b in dividends is presumably across all denationalised industries over as much as 50 years, so let's not get it out of perspective. By far the biggest investors in these companies are the pension funds, so the biggest beneficiaries of the largesse are "Joe public" via workplace pensions and the government who can thus afford to minimise spend on pensions. So all in all I don't have a problem with dividend levels.

I do share your objection to the heavy remuneration and bonus packages in these industries although I suspect were they still nationalised these levels wouldn't be much different.

The level of infrastructural investment is however appalling and the handing over of key industries to Johnny foreigner to exploit is/was a huge mistake - although the remainers here may not agree. The powers that be should have warranted the retention of these companies in British ownership at the outset, but clearly missed a trick. The primary sell off was, IIRC, restricted thus but as soon as the shares hit the open market, whoops.....

[ramAnag]

I can't explain the logic other than to say that I believe service companies should be in state ownership. But to throw a few bones to the dogs - private companies piling up debt gets it out the state national debt at least.

The 57b in dividends is presumably across all denationalised industries over as much as 50 years, so let's not get it out of perspective. By far the biggest investors in these companies are the pension funds, so the biggest beneficiaries of the largesse are "Joe public" via workplace pensions and the government who can thus afford to minimise spend on pensions. So all in all I don't have a problem with dividend levels.

I do share your objection to the heavy remuneration and bonus packages in these industries although I suspect were they still nationalised these levels wouldn't be much different.

The level of infrastructural investment is however appalling and the handing over of key industries to Johnny foreigner to exploit is/was a huge mistake - although the remainers here may not agree. The powers that be should have warranted the retention of these companies in British ownership at the outset, but clearly missed a trick. The primary sell off was, IIRC, restricted thus but as soon as the shares hit the open market, whoops.....

So there you go. The accountant has spoken and there are grounds for agreement with those usually less cynical.
I can’t argue with GP over economic matters because he understands much more. How far that understanding extends as regards morality and ethics is perhaps for others to decide.
All I’ll say, probably idealistically according to some, is that we have to stop seeing money spent on such things as health, education, care for the elderly, clean water, sewage treatment that doesn’t jeopardise our rivers and seas, public transport etc as a drain on the public purse, and rather as essential prerequisites of any modern civilised society.
There is obviously a case for free enterprise and profit but it shouldn’t, imo, extend to any of the above and the lessons learned (or probably not) from the disaster that private ownership of service/utility industries is currently seeing seems to support such a view.

As for ‘bonus packages’. Never understood why people get a bonus for doing their job.

[Geoff Parkstone]

In a perfect world, rather than privatising the state companies in the 80s I would have left them in state ownership but opened up competition and removed their monopoly status. Thus the inefficiencies would have been exposed and hopefully trimmed as the private sector pressured the state owned market share. But that wouldn't have given the cash boost needed by the Treasury after the nightmare of the mid-late 70s and early 80s

[Geoff Parkstone]

rA, I note you skirt round the question of European ownership of key industries in UK. Does the remainder in you agree that this is OK, or is there a little brexiteer in there trying to get out?

Noone needs to decide on my morals and ethics, they are as far down my list of priorities as they are as high up yours 😃

[ramAnag]

rA, I note you skirt round the question of European ownership of key industries in UK. Does the remainder in you agree that this is OK, or is there a little brexiteer in there trying to get out?

Noone needs to decide on my morals and ethics, they are as far down my list of priorities as they are as high up yours ��

Tbh, GP...I never understood how European (or other foreign) ownership of key UK industries was ever a good idea or allowed to happen but then I seldom understand such matters fully and I similarly don’t really understand your ‘Remainer/Brexiteer’ reference.

You provide the economic knowledge and I’ll provide the moral guidance. Job done.

P.S. On bonuses. Glad we nearly agree. Tips and bonuses are a bit different aren’t they? I understand your point but in ‘my world’ the ‘bonus’ for doing well was a combination of approval/recognition, keeping your job and, ultimately, promotion.

[Geoff Parkstone]

"As for ‘bonus packages’. Never understood why people get a bonus for doing their job."

We can agree there, which is why my bins rarely get emptied in January as our binmen still believe in getting tips.

Bonuses are a bit of a misnomer and are often both contractual and performance related, so in theory a senior employee will sacrifice an element of fixed salary in exchange for a variable amount based on performance: which may end up greater, or lesser, than the sacrificed amount.

All too often the publicity focussed on the performance related pay as if it's on top of a market rate of pay, which leads to false conclusions.

Bonuses just for turning up are clearly wrong but performance incentivised pay based on hitting targets (often sales or cost savings) do make sense

[Geoff Parkstone]

I actually don't see the difference between tips and non contractual bonuses, except perhaps one of magnitude. Each tend to be accompanied by threat to withdraw services if not granted.

Do you tip in restaurants, and does this change if the bill already includes a mark up for serve automatically? What about taxi drivers, hairdressers etc?

I remember when I was a relief postie back in the day. Only did one or two weeks at Christmas, but got more in "Christmas boxes" in those two weeks than I did in wages. I suspect the regular postie's who had worked the other 50 weeks to generate these tips were not impressed.

I take your point that in your world recognition was "non financial", same is probably true in the NHS, but whilst both are large employers, I suspect they are in the minority as regards incentivisation patterns to remuneration.... especially if you throw in share option schemes which are now very prevalent.

[ramAnag]

I actually don't see the difference between tips and non contractual bonuses, except perhaps one of magnitude. Each tend to be accompanied by threat to withdraw services if not granted.

Do you tip in restaurants, and does this change if the bill already includes a mark up for serve automatically? What about taxi drivers, hairdressers etc?

I remember when I was a relief postie back in the day. Only did one or two weeks at Christmas, but got more in "Christmas boxes" in those two weeks than I did in wages. I suspect the regular postie's who had worked the other 50 weeks to generate these tips were not impressed.

I take your point that in your world recognition was "non financial", same is probably true in the NHS, but whilst both are large employers, I suspect they are in the minority as regards incentivisation patterns to remuneration.... especially if you throw in share option schemes which are now very prevalent.

Can’t remember the last time I was in a taxi but restaurants and hairdressers? I tip in restaurants only if the service isn’t included and depending on performance, which could mean anything from nowt to generous. I also tip because there is a general understanding that waiters and waitresses aren’t very well paid. Probably do better to just pay a fairer wage and do away with the expectation of tips...especially as they are often pooled.
Hairdressers...curiously perhaps I’ve had the same hairdresser for about thirty years and she now comes to my house because she makes more travelling than paying the salon ‘hire’ costs. I used to give her a £5 tip but it’s currently much more because of her obviously increased oncosts.
Anecdotally...we have an annual festival (‘Why Not’) about five miles from where I live. I was talking to the guy who provides the portaloos, or whatever they’re called, the other day. Reckons he’s had a lean time if he doesn’t pick up £1k in lost money at the end of each festival. Bonus!

On your second point...I honestly wasn’t being evasive. Just because I believe we were much better off in the EU than out of it doesn’t mean that I agree with all things EU anymore than supporting Labour against the current government means I agree with all things Labour.
If ‘French ownership of a British key industry was a very EU thing’ then it’s not something I agreed with but neither is it something that challenges my ‘Remain’ stance and, as I suspect you know, I don’t see any parallel with Tricky’s hypothetical Slovakian barista.

P.S. I’m often in the minority which isn’t a source of concern...but I’ll readily concede that I have no knowledge at all of remuneration schemes. I’d just like to see more of a ‘fair wages for all’ mentality. Of course some are going to earn more than others but we seem to have lost the plot on this one at the moment.

[Geoff Parkstone]

"I’d just like to see more of a ‘fair wages for all’ mentality. Of course some are going to earn more than others but we seem to have lost the plot on this one at the moment."

You might be surprised to hear I tend to agree with parts of that. My problem at the moment is that there are two types of people that get the lions share of the increases - (a) those in charge who can vote themselves high increases and (b) those who shout loudest. Those on minimum wage deserve more and need more but as a rule (eg in the massive, low paid, care sector) they have no voice; those such as train drivers, who I believe are on around 60,000 a year are going to be the ones that get most, not because they deserve more, but because they shout the loudest and can hold the country to ransom more effectively - see elsethread.

If we all are to get through the inflationary/energy cost of living crisis, then its people on middle to good incomes, such as those between (say) 50k and 100k that also have to "do their bit" and suck it up, as much as those on even higher still need to moderate demands and/or actually accept an increased layer of tax to pay for those on under (say) 20k a year.

Personally I would desilk the rapacious barristers and promote another tier of worthy lawyers who aspire to that "grade"

In essence those at the bottom should receive, those in the middle stay still and those at the top give. But as we can already see, those in the middle and top grounds aren't going to settle for that. Income will soar across the board - inflation will wipe out any real benefits of the increases - as its already doing - and those on fixed incomes will lose out all round