There have been calls from the Labour party to renationalise the railways, in order to cut out the greedy, capitalist profit-takers. Those of us who are old enough to remember British Rail, the Central Electricity Generating Board, the Gas Board, and other nationalised utilities, will remember the lacklustre customer service, the take-it-or-leave-it prices, and the indifference of the management to progress or new technology that was endemic in state-run institutions. Not many people will want to go back to those days, so just how do we get the best of both the privatised and nationalised worlds?
Perhaps we should look for some way of mixing the two. Perhaps the government should set up an organisation, and call it something like: “National Enterprises Ltd”. Such an organisation would have to be run on strictly commercial lines, with the main aim of making a profit, and it would be able to bid for public service contracts and franchises in the same way as any other commercial organisation. Care must be taken to ensure that any bidding process is scrupulously fair and above board, and that National Enterprises Ltd has no unfair advantages over other commercial bidders. If National Enterprises fail to deliver proper service on a contract or franchise they should have it terminated and it should then be given to another bidder. All profits made by National Enterprises Ltd would go into a Sovereign Wealth fund, which can be used as a bank to fund various national projects such as infrastructure, and also to help pay off some of the humungous national debt that is hanging over our heads.
The beauty of this system would be that the standards of service expected from private enterprises would be maintained through competition, yet any profits made from the contracts and franchises that National Enterprises Ltd wins would go into the public purse instead of being paid to shareholders as dividend. Hopefully this would go some way to satisfying both the proponents of private enterprise and the nationalisers. The big problem will be keeping National Enterprises Ltd from becoming a taxpayer’s money pit that is kept going whether it is profitable or not, and this will require constant vigilance and ruthless enforcement. National Enterprises Ltd will obviously need a kick-start of taxpayer’s money to get it going, perhaps by taking over some other existing commercial companies that are failing, but this needs to be rigorously monitored, and once it is up and running it must obtain its finance from the markets in the same way as any other commercial enterprise.
National Enterprises Ltd would have to have a proper commercial leadership team, and I would suggest that someone like Lord Sugar should head the team. He is an entrepreneur of proven ability, and has made a success of business in the past. The board should consist of proven business executives, and politicians must be kept off the board of directors at all costs, as service on the board should be no sinecure where politicians can fill their pockets with taxpayer’s money. If National Enterprises Ltd does become a commercial success by discharging public service contracts in things like the health service and transport franchises, perhaps it could move into bigger projects such as the construction and operation of infrastructure such as power stations. In the foreseeable future we are desperately going to need more generating capacity.
If we stick with the current insanity of building expensive, useless, wind turbines whilst closing existing, efficient, power stations, we will find ourselves in the situation where, by the time the HS2 “white elephant” line is in operation, if the wind isn’t blowing somewhere, the passengers will have to get out and push if the train is to go anywhere. Our industry is also in desperate need of a reliable, affordable source of energy. Gas fired power stations can be constructed relatively cheaply and quickly and would be able to plug the inevitable gap in our generating capacity if the current idiotic energy policy doesn’t change. Such projects would be ideal for National Enterprises Ltd as the other bidders are almost certainly going to be foreign companies.
All this may sound a bit pie-in-the-sky, and the record of government controlled enterprises is lamentable, but we need to do something to keep our wealth and industries within our borders. We need competition to maintain performance standards and operational efficiency, but we also want to see profits flowing into the public purse instead of into (often) foreign corporate coffers.
I would invite readers to come up with any better ideas if they have them.