Public Benefit Company to replace Public Limited Company

Three-quarters of British voters want our rail, gas and water renationalised but it’s expensive – there is a business model that offers the best of both worlds


Will Hutton in The Guardian

Public ownership is fashionable again. Turning over Britain’s public assets, lock, stock and barrel into private ownership and relying only on light-touch regulation to ensure they were managed to deliver a wider public interest was always a risky bet. And that bet has not paid off.

Recent polls show an astonishing 83% in favour of nationalising water, 77% in favour of electricity and gas and 76% in favour of rail. It is not just that this represents a general fall in trust in business. The privatised utilities are felt to be in a different category: they are public services. But there is a widespread view that demanding profit targets have overridden public service obligations. And the public is right. 

Thames Water, under private equity ownership, has been the most egregious example, building up sky-high debts as it distributed excessive dividends to its private-equity owners via a holding company in Luxembourg, a move designed to minimise UK tax obligations. As the Cuttill report highlighted, at current rates of investment it will take Thames 357 years to renew the London’s water mains: it takes 10 years in Japan.

Equally, BT’s investment in universal national high-speed broadband coverage has been slow and inadequate, while few would argue that the first target of the rail operators has been quality passenger service – culminating in the most recent scandal of Stagecoach and Virgin escaping their contractual commitments. Most commuters, crowded into expensive trains, have become increasing fans of public ownership. Jeremy Corbyn’s commitment to renationalisation surprised everyone with its popularity.

The trouble is, it’s expensive: at least £170bn on most estimates. Of course the proposed increase in public debt by around 10% of GDP will be matched by the state owning assets of 10% of GDP, but British public accounting is not so rational. The emphasis will be on the debt, not the assets, and in any case there are better causes – infrastructure spending – for which to raise public debt levels.

And once owned publicly, the newly nationalised industries will once again be subject to the Treasury’s borrowing limits. If there are spending cuts, their capital investment programmes will be cut. What voters want is the best of both worlds. Public services run as public services, but with all the dynamism and autonomy of being in the private sector, not least being able to borrow for vital investment. It seems impossible, but building on the proposals of the Big Innovation Centre’s Purposeful Company Taskforce, there is a way to pull off these apparently irreconcilable objectives – and without spending any money.

The government should create a new category of company – the public benefit company (PBC) – which would write into its constitution that its purpose is the delivery of public benefit to which profit-making is subordinate. For instance, a water company’s purpose would be to deliver the best water as cheaply as possible and not siphon off excessive dividends through a tax haven. The next step would be to take a foundation share in each privatised utility as a condition of its licence to operate, requiring the utility to reincorporate as a public-benefit company.


Regulators, however good their intentions, too easily see the world from the view of the industry they regulate

The foundation share would give the government the right to appoint independent non-executive directors whose role would be see that the public interest purposes of the PBC were being discharged as promised.

This would include ensuring the company remained domiciled in the UK for tax purposes and guaranteeing that consumers, social and public benefit interests came first.

The non-executive directors would engage directly with consumer challenge groups whose mandate is to be a sounding board for consumer interests but at present are little more than talking shops, and deliver an independent report to an office of public services each year, giving an account of how the public interest was being achieved. It is important to have an independent third party: regulators, however good their intentions, too easily see the world from the view of the industry they regulate.

Because the companies would remain owned by private shareholders, their borrowing would not be classed as public debt. The existing shareholders in the utility would remain shareholders, and their rights to votes and dividends would remain unimpaired. So there would be no need to compensate them – no need, in short to pay £170bn buying the assets back. Indeed, the scope to borrow could be used to fund a wave of new investment in our utilities.

But the new company’s obligation would be to its users first and foremost, and would be free to borrow free from any Treasury constraint. Nor would any secretary of state get drawn into the operational running of the industries – one of the major reasons Attlee-style nationalisation failed. Inevitably decisions get politicised. 

The aim would be to combine the best of both the public and private sectors. If companies do not deliver what they have promised, there should be a well-defined system of escalating penalties, starting with the right to sue companies and ending with taking all the assets into public ownership if a company persistently neglected its obligations. But the cost would be very much lower, because the share price would fall as it became clear it was operating illegally.

Britain would have created a new class of company. Indeed, there is the opportunity to start now. If Virgin and Stagecoach are unable to fulfil their contractual obligations on the East Coast line, the company should be reincorporated as a public benefit company. The shareholders would remain, but the newly constituted board would take every decision in the interests of the travelling public guaranteed by the independent directors, empowered consumer challenge groups and the office of public services – so that the taxpayer can trust her or his money is spent properly. Corbyn and John McDonnell have a way of delivering what the electorate want – and still keeping the industries off the public balance sheet. The circle can be squared.

British banks can’t be trusted – let’s nationalise them

Owen Jones in The Guardian


Sometimes the case for a policy is as overwhelming as the level of ridicule it will get from the punditocracy. The nationalisation of Britain’s failed banking industry – the sector responsible for most of our country’s current ills – is one such example. According to a recent poll, half the electorate support nationalising the banks, despite almost no one arguing for such a policy in public life.

It may well be because the banks plunged Britain into one of its worst economic crises in modern history, spawning, according to the Institute for Fiscal Studies, perhaps our worst squeeze in living standards since the 1750s. The fact that they have been bailed out by the taxpayer but allowed to carry on as though little happened – including more top British bankers in 2013 being gifted bonuses worth over €1m than all EU countries combined – while public services are gratuitously slashed, has rightly riled some British voters. 

Nationalisation of the banks is not about vengeance, though. Sure, the rip-off inefficiency of rail privatisation, or the failure of the great energy sell-off, or the fact that even the Financial Times has argued that privately run water is an indefensible debacle – all are testament to the intellectual poverty of the “private good, public bad” argument. None quite compete, however, with the matter of the banks leaving the entire western world consumed with the gravest series of crises since the second world war.

Would Brexit, Donald Trump, or the gathering demands for Catalonia to secede from crisis-ridden Spain have happened without the financial collapse? Almost certainly not. It is now somewhat darkly comic to note that most commentators and politicians claimed Labour lost the 2015 election because it was too leftwing. It is notable, then, that over four in 10 voters back then believed Labour was too soft on banks and big business, compared to just over one in five who differed.

Economist Laurie Macfarlane says the banks make a mockery of the nostrums of free-market capitalism. Because the banks were given state bailouts after their catastrophic failures, there is the assumption that, when another crisis hits, the same will happen again.

No other industry enjoys the same protection. They are “too big to fail”, which means they benefit from an implicit subsidy – worth £6bn in 2015. The Bank of England is their lender of last resort. State-backed deposit insurance of up to £85,000 per consumer is another de facto mass public subsidy.

As the New Economics Foundation says, it is commercial banks who are now responsible for creating the vast majority of money in economies like the UK, a source of vast profit. This is called “seigniorage” and – as the foundation puts it – it represents a “hidden annual subsidy” of £23bn a year, or nearly three-quarters of the banks’ after-tax profits. And banks are an essential public utility: it is almost impossible to be a citizen without a bank account, and there is no public option when it comes to making electronic payments.

Even now, as Macfarlane notes, the British state technically owns a fifth of the retail banking industry because of its stake in Royal Bank of Scotland. Repeated RBS scandals, and the aftermath of the EU referendum result, have dented the worth of the company’s shares, meaning that the state selling its stake would result in eye-watering losses. Meanwhile, small businesses have struggled to get the credit they need, and escalating household debt threatens the foundations of the stagnating British economy. But the state’s arms-length approach means RBS has failed both its customers and the broader economy. A profit-driven banking sector closed 1,150 branches in 2014 and 2015; about a third of those were owned by RBS. The bank once promised never to close the last branch in town; the pledge was broken, and 1,500 communities have been left with no bank branch. Vulnerable customers and small businesses inevitably suffer the most.

By contrast, foreign publicly owned banks are self-evident successes. Take Germany: KFW, the government-owned development bank, is crucial in developing national infrastructure as well as the renewable energy revolution. On a regional level, state-owned Landesbanken are responsible for industrial strategy. Then at the most local level, there are Sparkassen: they focus on developing relationships with local businesses and consumers. They’re not beholden to shareholders – instead, they have a stakeholder model, focused on helping local economies – indeed, their capital has to remain in local communities.

It is impossible to understand Britain’s current plight without examining the country’s rapid deindustrialisation in favour of a financial sector concentrated in London and the south-east. And according to New Economics Foundation, while foreign stakeholder banks lend two thirds of their assets to individuals and businesses in the real economy, that’s true with only a tiny proportion of British shareholder banks. Overwhelmingly, it goes to mortgage lending and lending to other financial institutions.

Our current banking system is rigged in favour of a crisis-ridden City. The New Economics Foundation suggests transforming RBS – in which the state still has a three-quarter share – into a network of local banks. Labour’s 2017 manifesto backed a review into these plans. A management board would run the network day to day, but a board of trustees would ensure the bank was accountable to the broader economy and customers, not shareholders.

A third would be elected by workers, a third by local authorities and a third by local stakeholders. The mandate of each local bank would be to promote local economies – not least their small businesses – rather than the City of London. Here is a model of democratic ownership that can, in time, be extended to the rest of the economy.

Can it really be argued that private ownership of the banks is a case study of the glorious success of free market capitalism? The principle architect of Labour’s recent manifesto, Andrew Fisher, called for the nationalisation of Britain’s banking sector in his 2014 book The Failed Experiment: And How to Build an Economy That Works. He was surely right then and he is right now. As Macfarlane notes, there are different possible routes to the banks’ nationalisation: whether it be swapping corporate shares for government bonds, using quantitative easing to buy up shares, or simple nationalisation without compensation. Labour is right to call for a German-style public investment bank, backed up by similar publicly run local banks.

But such proposals are not in themselves sufficient. Britain’s privately run banks have proved a disaster for everyone except their shareholders. The only good alternative is public stakeholder banks, run by workers, consumers and local authorities, with an obligation to defend the best interests of our communities. Privately owned banks have proved a catastrophic failure – for our economy, our social cohesion and our politics. There is surely no alternative to public ownership.

The pendulum swings against privatisation

Evidence suggests that ending state ownership works in some markets but not others


Tim Harford in The Financial Times


Political fashions can change quickly, as a glance at almost any western democracy will tell you. The pendulum of the politically possible swings back and forth. Nowhere is this more obvious than in the debates over privatisation and nationalisation. 

In the late 1940s, experts advocated nationalisation on a scale hard to imagine today. Arthur Lewis thought the government should run the phone system, insurance and the car industry. James Meade wanted to socialise iron, steel and chemicals; both men later won Nobel memorial prizes in economics. 

They were in tune with the times: the British government ended up owning not only utilities and heavy industry but airlines, travel agents and even the removal company, Pickfords. The pendulum swung back in the 1980s and early 1990s, as Margaret Thatcher and John Major began an ever more ambitious series of privatisations, concluding with water, electricity and the railways. The world watched, and often followed suit. 

Was it all worth it? The question arises because the pendulum is swinging back again: Jeremy Corbyn, the bookies’ favourite to be the next UK prime minister, wants to renationalise the railways, electricity, water and gas. (He has not yet mentioned Pickfords.) Furthermore, he cites these ambitions as a reason to withdraw from the European single market. 

Privatisation’s proponents mention the galvanising effect of the profit motive, or the entrepreneurial spirit of private enterprise. Opponents talk of fat cats and selling off the family silver 

That is odd, since there is nothing in single market rules to prevent state ownership of railways and utilities — the excuse seems to be yet another Eurosceptic myth, the leftwing reflection of rightwing tabloids moaning about banana regulation. Since the entire British political class has lost its mind over Brexit, it would be unfair to single out Mr Corbyn on those grounds. 

Still, he has reopened a debate that long seemed settled, and piqued my interest. Did privatisation work? Proponents sometimes mention the galvanising effect of the profit motive, or the entrepreneurial spirit of private enterprise. Opponents talk of fat cats and selling off the family silver. Realists might prefer to look at the evidence, and the ambitious UK programme has delivered plenty of that over the years. 

There is no reason for a government to own Pickfords, but the calculus of privatisation is more subtle when it comes to natural monopolies — markets that are broadly immune to competition. If I am not satisfied with what Pickford’s has to offer me when I move home, I am not short of options. But the same is not true of the Royal Mail: if I want to write to my MP then the big red pillar box at the end of the street is really the only game in town. 

Competition does sometimes emerge in unlikely seeming circumstances. British Telecom seemed to have an iron grip on telephone services in the UK — as did AT&T in the US. The grip melted away in the face of regulation and, more importantly, technological change. 

Railways seem like a natural monopoly, yet there are two separate railway lines from my home town of Oxford into London, and two separate railway companies will sell me tickets for the journey. They compete with two bus companies; competition can sometimes seem irrepressible. 

But the truth is that competition has often failed to bloom, even when one might have expected it. If I run a bus service at 20 and 50 minutes past the hour, then a competitor can grab my business without competing on price by running a service at 19 and 49 minutes past the hour. Customers will not be well served by that. 

Meanwhile electricity and phone companies offer bewildering tariffs, and it is hard to see how water companies will ever truly compete with each other; the logic of geography suggests otherwise. 

All this matters because the broad lesson of the great privatisation experiment is that it has worked well when competition has been unleashed, but less well when a government-run business has been replaced by a government-regulated monopoly. 

A few years ago, the economist David Parker assembled a survey of post-privatisation performance studies. The most striking thing is the diversity of results. Sometimes productivity soared. Sometimes investors and managers skimmed off all the cream. Revealingly, performance often leapt in the year or two before privatisation, suggesting that state-owned enterprises could be well-run when the political will existed — but that political will was often absent. 

My overall reading of the evidence is that privatisation tended to improve profitability, productivity and pricing — but the gains were neither vast nor guaranteed. Electricity privatisation was a success; water privatisation was a disappointment. Privatised railways now serve vastly more passengers than British Rail did. That is a success story but it looks like a failure every time your nose is crushed up against someone’s armpit on the 18:09 from London Victoria. 

The evidence suggests this conclusion: the picture is mixed, the details matter, and you can get results if you get the execution right. Our politicians offer a different conclusion: the picture is stark, the details are irrelevant, and we metaphorically execute not our policies but our opponents. The pendulum swings — but shows no sign of pausing in the centre.

Silicon Valley has been humbled. But its schemes are as dangerous as ever

Sex scandals, rows over terrorism, fears for its impact on social policy: the backlash against Big Tech has begun. Where will it end?


Evgeny Morozov in The Guardian


Just a decade ago, Silicon Valley pitched itself as a savvy ambassador of a newer, cooler, more humane kind of capitalism. It quickly became the darling of the elite, of the international media, and of that mythical, omniscient tribe: the “digital natives”. While an occasional critic – always easy to dismiss as a neo-Luddite – did voice concerns about their disregard for privacy or their geeky, almost autistic aloofness, public opinion was firmly on the side of technology firms.

Silicon Valley was the best that America had to offer; tech companies frequently occupied – and still do – top spots on lists of the world’s most admired brands. And there was much to admire: a highly dynamic, innovative industry, Silicon Valley has found a way to convert scrolls, likes and clicks into lofty political ideals, helping to export freedom, democracy and human rights to the Middle East and north Africa. Who knew that the only thing thwarting the global democratic revolution was capitalism’s inability to capture and monetise the eyeballs of strangers?

How things have changed. An industry once hailed for fuelling the Arab spring is today repeatedly accused of abetting Islamic State. An industry that prides itself on diversity and tolerance is now regularly in the news for cases of sexual harassment as well as the controversial views of its employees on matters such as gender equality. An industry that built its reputation on offering us free things and services is now regularly assailed for making other things – housing, above all– more expensive.

The Silicon Valley backlash is on. These days, one can hardly open a major newspaper – including such communist rags as the Financial Times and the Economist – without stumbling on passionate calls that demand curbs on the power of what is now frequently called “Big Tech”, from reclassifying digital platforms as utility companies to even nationalising them.

Meanwhile, Silicon Valley’s big secret – that the data produced by users of digital platforms often has economic value exceeding the value of the services rendered – is now also out in the open. Free social networking sounds like a good idea – but do you really want to surrender your privacy so that Mark Zuckerberg can run a foundation to rid the world of the problems that his company helps to perpetuate? Not everyone is so sure any longer. The Teflon industry is Teflon no more: the dirt thrown at it finally sticks – and this fact is lost on nobody.

Much of the brouhaha has caught Silicon Valley by surprise. Its ideas – disruption as a service, radical transparency as a way of being, an entire economy of gigs and shares – still dominate our culture. However, its global intellectual hegemony is built on shaky foundations: it stands on the post-political can-do allure of TED talks much more than in wonky thinktank reports and lobbying memorandums.

This is not to say that technology firms do not dabble in lobbying – here Alphabet is on a par with Goldman Sachs – nor to imply that they don’t steer academic research. In fact, on many tech policy issues it’s now difficult to find unbiased academics who have not received some Big Tech funding. Those who go against the grain find themselves in a rather precarious situation, as was recently shown by the fate of the Open Markets project at New America, an influential thinktank in Washington: its strong anti-monopoly stance appears to have angered New America’s chairman and major donor, Eric Schmidt, executive chairman of Alphabet. As a result, it was spun off from the thinktank.

Nonetheless, Big Tech’s political influence is not at the level of Wall Street or Big Oil. It’s hard to argue that Alphabet wields as much power over global technology policy as the likes of Goldman Sachs do over global financial and economic policy. For now, influential politicians – such as José Manuel Barroso, the former president of the European Commission – prefer to continue their careers at Goldman Sachs, not at Alphabet; it is also the former, not the latter, that fills vacant senior posts in Washington.

This will surely change. It’s obvious that the cheerful and utopian chatterboxes who make up TED talks no longer contribute much to boosting the legitimacy of the tech sector; fortunately, there’s a finite supply of bullshit on this planet. Big digital platforms will thus seek to acquire more policy leverage, following the playbook honed by the tobacco, oil and financial firms.

There are, however, two additional factors worth considering in order to understand where the current backlash against Big Tech might lead. First of all, short of a major privacy disaster, digital platforms will continue to be the world’s most admired and trusted brands – not least because they contrast so favourably with your average telecoms company or your average airline (say what you will of their rapaciousness, but tech firms don’t generally drag their customers off their flights).

And it is technology firms – American companies but also Chinese – that create the false impression that the global economy has recovered and everything is back to normal. Since January, the valuations of just four firms – Alphabet, Amazon, Facebook and Microsoft – have grown by an amount greater than the entire GDP of oil-rich Norway. Who would want to see this bubble burst? Nobody; in fact, those in power would rather see it grow some more.

The culture power of Silicon Valley can be gleaned from the simple fact that no sensible politician dares to go to Wall Street for photo ops; everyone goes to Palo Alto to unveil their latest pro-innovation policy. Emmanuel Macron wants to turn France into a startup, not a hedge fund. There’s no other narrative in town that makes centrist, neoliberal policies look palatable and inevitable at the same time; politicians, however angry they might sound about Silicon Valley’s monopoly power, do not really have an alternative project. It’s not just Macron: from Italy’s Matteo Renzi to Canada’s Justin Trudeau, all mainstream politicians who have claimed to offer a clever break with the past also offer an implicit pact with Big Tech – or, at least, its ideas – in the future.

Second, Silicon Valley, being the home of venture capital, is good at spotting global trends early on. Its cleverest minds had sensed the backlash brewing before the rest of us. They also made the right call in deciding that wonky memos and thinktank reports won’t quell our discontent, and that many other problems – from growing inequality to the general unease about globalisation – will eventually be blamed on an industry that did little to cause them.

Silicon Valley’s brightest minds realised they needed bold proposals – a guaranteed basic income, a tax on robots, experiments with fully privatised cities to be run by technology companies outside of government jurisdiction – that will sow doubt in the minds of those who might have otherwise opted for conventional anti-monopoly legislation. If technology firms can play a constructive role in funding our basic income, if Alphabet or Amazon can run Detroit or New York with the same efficiency that they run their platforms, if Microsoft can infer signs of cancer from our search queries: should we really be putting obstacles in their way?

In the boldness and vagueness of its plans to save capitalism, Silicon Valley might out-TED the TED talks. There are many reasons why such attempts won’t succeed in their grand mission even if they would make these firms a lot of money in the short term and help delay public anger by another decade. The main reason is simple: how could one possibly expect a bunch of rent-extracting enterprises with business models that are reminiscent of feudalism to resuscitate global capitalism and to establish a new New Deal that would constrain the greed of capitalists, many of whom also happen to be the investors behind these firms?

Data might seem infinite but there’s no reason to believe that the enormous profits made from it would simply smooth over the many contradictions of the current economic system. A self-proclaimed caretaker of global capitalism, Silicon Valley is much more likely to end up as its undertaker.

We need to nationalise Google, Facebook and Amazon. Here’s why

A crisis is looming. These monopoly platforms hoovering up our data have no competition: they’re too big to serve the public interest

Nick Srnicek in The Guardian


For the briefest moment in March 2014, Facebook’s dominance looked under threat. Ello, amid much hype, presented itself as the non-corporate alternative to Facebook. According to the manifesto accompanying its public launch, Ello would never sell your data to third parties, rely on advertising to fund its service, or require you to use your real name.

The hype fizzled out as Facebook continued to expand. Yet Ello’s rapid rise and fall is symptomatic of our contemporary digital world and the monopoly-style power accruing to the 21st century’s new “platform” companies, such as Facebook, Google and Amazon. Their business model lets them siphon off revenues and data at an incredible pace, and consolidate themselves as the new masters of the economy. Monday brought another giant leap as Amazon raised the prospect of an international grocery price war by slashing prices on its first day in charge of the organic retailer Whole Foods.

The platform – an infrastructure that connects two or more groups and enables them to interact – is crucial to these companies’ power. None of them focuses on making things in the way that traditional companies once did. Instead, Facebook connects users, advertisers, and developers; Uber, riders and drivers; Amazon, buyers and sellers.

Reaching a critical mass of users is what makes these businesses successful: the more users, the more useful to users – and the more entrenched – they become. Ello’s rapid downfall occurred because it never reached the critical mass of users required to prompt an exodus from Facebook – whose dominance means that even if you’re frustrated by its advertising and tracking of your data, it’s still likely to be your first choice because that’s where everyone is, and that’s the point of a social network. Likewise with Uber: it makes sense for riders and drivers to use the app that connects them with the biggest number of people, regardless of the sexism of Travis Kalanick, the former chief executive, or the ugly ways in which it controls drivers, or the failures of the company to report serious sexual assaults by its drivers.

Network effects generate momentum that not only helps these platforms survive controversy, but makes it incredibly difficult for insurgents to replace them.

As a result, we have witnessed the rise of increasingly formidable platform monopolies. Google, Facebook and Amazon are the most important in the west. (China has its own tech ecosystem.) Google controls search, Facebook rules social media, and Amazon leads in e-commerce. And they are now exerting their power over non-platform companies – a tension likely to be exacerbated in the coming decades. Look at the state of journalism: Google and Facebook rake in record ad revenues through sophisticated algorithms; newspapers and magazines see advertisers flee, mass layoffs, the shuttering of expensive investigative journalism, and the collapse of major print titles like the Independent. A similar phenomenon is happening in retail, with Amazon’s dominance undermining old department stores.

These companies’ power over our reliance on data adds a further twist. Data is quickly becoming the 21st-century version of oil – a resource essential to the entire global economy, and the focus of intense struggle to control it. Platforms, as spaces in which two or more groups interact, provide what is in effect an oil rig for data. Every interaction on a platform becomes another data point that can be captured and fed into an algorithm. In this sense, platforms are the only business model built for a data-centric economy.

More and more companies are coming to realise this. We often think of platforms as a tech-sector phenomenon, but the truth is that they are becoming ubiquitous across the economy. Uber is the most prominent example, turning the staid business of taxis into a trendy platform business. Siemens and GE, two powerhouses of the 20th century, are fighting it out to develop a cloud-based system for manufacturing. Monsanto and John Deere, two established agricultural companies, are trying to figure out how to incorporate platforms into farming and food production.

And this poses problems. At the heart of platform capitalism is a drive to extract more data in order to survive. One way is to get people to stay on your platform longer. Facebook is a master at using all sorts of behavioural techniques to foster addictions to its service: how many of us scroll absentmindedly through Facebook, barely aware of it?

Another way is to expand the apparatus of extraction. This helps to explain why Google, ostensibly a search engine company, is moving into the consumer internet of things (Home/Nest), self-driving cars (Waymo), virtual reality (Daydream/Cardboard), and all sorts of other personal services. Each of these is another rich source of data for the company, and another point of leverage over their competitors.

Others have simply bought up smaller companies: Facebook has swallowed Instagram ($1bn), WhatsApp ($19bn), and Oculus ($2bn), while investing in drone-based internet, e-commerce and payment services. It has even developed a tool that warns when a start-up is becoming popular and a possible threat. Google itself is among the most prolific acquirers of new companies, at some stages purchasing a new venture every week. The picture that emerges is of increasingly sprawling empires designed to vacuum up as much data as possible.

But here we get to the real endgame: artificial intelligence (or, less glamorously, machine learning). Some enjoy speculating about wild futures involving a Terminator-style Skynet, but the more realistic challenges of AI are far closer. In the past few years, every major platform company has turned its focus to investing in this field. As the head of corporate development at Google recently said, “We’re definitely AI first.”


Tinkering with minor regulations while AI companies amass power won’t do


All the dynamics of platforms are amplified once AI enters the equation: the insatiable appetite for data, and the winner-takes-all momentum of network effects. And there is a virtuous cycle here: more data means better machine learning, which means better services and more users, which means more data. Currently Google is using AI to improve its targeted advertising, and Amazon is using AI to improve its highly profitable cloud computing business. As one AI company takes a significant lead over competitors, these dynamics are likely to propel it to an increasingly powerful position.

What’s the answer? We’ve only begun to grasp the problem, but in the past, natural monopolies like utilities and railways that enjoy huge economies of scale and serve the common good have been prime candidates for public ownership. The solution to our newfangled monopoly problem lies in this sort of age-old fix, updated for our digital age. It would mean taking back control over the internet and our digital infrastructure, instead of allowing them to be run in the pursuit of profit and power. Tinkering with minor regulations while AI firms amass power won’t do. If we don’t take over today’s platform monopolies, we risk letting them own and control the basic infrastructure of 21st-century society.

The Corbyn Effect

Part 1 Andrew Murray interviewed byTariq Ali

Part 2

British voters support every point on it, but the public square echoes with summary dismissal - The mystery of Jeremy Corbyn

Tabish Khair in The Hindu

How does one account for the fact that most U.K. voters support every point of the Labour manifesto, but the Tories, despite fumbles, are still leading in opinion polls by about 10 percentage points?

It is two weeks since the Labour manifesto was ‘leaked’. Immediately all the tabloids and most of the broadsheets went to town decrying the manifesto. It is the “second-longest suicide note in history”, they scoffed.

The hara-kiri reference was to the disastrous and divisive Labour manifesto of 1983, dubbed the “longest suicide note in history”. It is not an accurate reference. This 2017 manifesto is not protectionist like the 1983 one, and it promotes very restrained nationalisation. Moreover, the 1983 Labour manifesto was anti-Europe, anti-NATO (North Atlantic Treaty Organisation), and uncompromisingly pacifist.


Not quite a ‘suicide note’

The 2017 manifesto is not anti-NATO; it even endorses NATO’s defence requirements. Jeremy Corbyn, the Labour leader, has repeatedly explained that sometimes collective military interventions can be justified, though he has also criticised the hasty wars of recent years.

Similarly, his plan to nationalise the railway services is not necessarily an ‘old-fashioned leftist idea’. It is a bid to bring government-controlled railways back onto a level playing field, thus undercutting the monopolies of private companies and providing commuters with more options. Most voters support this, as they do his plans to abolish education fees, provide more and cheaper housing, and improve the National Health Service. And yet Corbyn is expected to lose — narrowly by some sympathisers, hugely by his opponents. Why is that so?

Some of it has to do with Corbyn. He comes across as a severely honest but uncharismatic leader from the past, someone who engages with ideas (whether you agree or disagree with them) and not sound bites. The media does not like such politicians, as we know in India too. They provide boring copy.

The problem facing Labour is that of credibility: voters agree with their manifesto, but they do not believe it can be implemented. This is especially true of the ‘middle’ voters, who usually sway elections: many of them feel that Mr. Corbyn is idealistically leftist.


Deviating from core principles

It has to be said in Mr. Corbyn’s defence that for decades Labour has been diluting its pro-worker platform and the Tories increasing or sustaining their free-market platform. This has not been held against the Tories by many in the ‘middle’, while Labour, because of its compromises, has lost ground to the far right, even when it has won elections.

It is also a morbid world in which many ‘middle’ voters feel that something absolutely necessary for citizens cannot be done for fear of offending capital! Surely, a nation is not a corporation or an individual, both of which can go bankrupt, and a politician’s first responsibility is to citizens?

In that sense, Mr. Corbyn’s manifesto is a gamble — to attract more ordinary voters back into the folds of Labour, on the assumption that concrete policies will count for more than xenophobic rhetoric for many of them.

But are the policies outlined by Mr. Corbyn ‘sustainable’? Many papers and all tabloids seem to claim that they are not.

One way to answer this is to look at the general outline of what Mr. Corbyn is promising: he is promising to “transform” the lives of ordinary Britons. This, in effect, was also what Donald Trump had promised the Americans, and both Marine Le Pen and Emmanuel Macron had promised the French.

Interestingly, at least some of the tabloids that have dismissed Mr. Corbyn’s promise were far less critical of similar claims to shake the cart by Mr. Trump. As interestingly, Mr. Trump, Mr. Macron (at least until he got elected) and Ms. Le Pen, in very different ways, had offered less concrete policies to induce us to believe that they could make any significant dent in the status quo.

Mr. Corbyn’s 2017 manifesto has clearer ideas: a pledge not to increase middle class taxes but to tax the top 5% more heavily, action to shrink the growing wage gap between employees and top management, a better housing policy than the Tories, etc. Even his position on the European Union seems to be more concrete than Tory leader Theresa May’s vacuous statement, redolent of colonial hubris, that she will be a “bloody difficult woman” during Brexit negotiations!


The media’s role

It remains perfectly valid to ask whether these Labour measures are enough or fully ‘sustainable’, but that is not what is being done by much of the U.K. media. Instead, the very effort is being dismissed.

Is it the case that, being paid huge salaries by the neo-liberal dream, which is becoming a nightmare for many, British media leaders (who are not necessarily editors) do not wish to question its myths. Especially the cardinal myth that ‘national bankruptcy’ can be avoided only by passing on public debts to individuals, as private debts, while nationally subsidising banks and corporations.

The economic argument against neoliberalism

Owen Jones meets Ha Joon Chang

In his victory speech Jeremy Corbyn spelled out exactly why the establishment hates him so much

Youssef El Gingihy in The Independent

Jeremy Corbyn's conference speech yesterday underlined exactly why he has been subjected to a ferocious smear campaign. We have heard an endless catalogue of critiques: That Corbyn lacks leadership; that he is not electable; that Labour has become a protest party infiltrated by the far left. Yet the real reason behind these attacks is that Corbyn is a clear and present danger to powerful, vested interests.

For the first time in a generation, a Labour leader is truly challenging the cosy political consensus extending through the Thatcher-Blair-Cameron axis. The policies taking shape represent a clean break from several decades of deregulated free market economics.

Corbyn has positioned Labour as an anti-austerity party. He emphasised that the financial sector caused the 2008 crisis not public spending. This is important as Miliband and Balls mystifyingly failed to make this argument. One can only surmise that they were eager not to offend the City of London.

Corbyn promised to reverse privatisation of public services. This would mean renationalisation of the railways. It would mean restoring a public NHS reversing its privatisation and conversion into a private health insurance system.

It would mean an end to the outsourcing of council services. It would mean returning public services into public hands. And none of this is radical. Polling shows the majority of the public, including Conservative voters, is in favour.

It is no surprise that Richard Branson and Virgin seemingly used Traingate in an attempt to discredit Corbyn. Virgin would stand to lose billions in contracts if such policies went ahead. As would many other corporate interests - the likes of Serco, G4S, Capita and Unitedhealth to name a few.

Corbyn promised Labour will build enough social housing and regulate the housing market. Again, property developers, investors and construction firms would stand to lose from the restoration of housing as a social good rather than a financial instrument.

Corbyn vowed that bankers and financial speculators cannot be allowed to wreak havoc again. Regulation of the financial sector will have the City running scared - the party may well be truly over for them. Deregulated finance has resulted in industrial scale corruption profiting a tiny elite at the expense of ordinary people. This was evident not only during the crash but in the raft of scandals since, including LIBOR and PPI.

Corbyn added that the wealthy must pay their fair share of taxes. Labour would take effective steps to end tax avoidance and evasion. This would need to start with winding down the offshore empire much of which comes under the influence of the UK and the City of London.

Corbyn highlighted the grotesque inequalities driven by neoliberalism. The result has seen millions of ordinary people abandoned by a system that does not work for them. Here, Corbyn again broke with the consensus pointing out that immigration is not to blame. Scapegoating of migrants is convenient for elites keen to distract from the damage that they are causing. Corbyn emphasised that it is exploitative corporations, which are to blame for low wages not migrants. Over-stretched public services are down to Conservative cuts not immigration. However, after years of xenophobic anti-migrant rhetoric, winning this argument will require plenty of hard work.

On the economy, Corbyn promised investment with £500bn of public spending and a national investment bank. He also promised investment in research and development, education and skilling up of the workforce.

Yet none of this is especially controversial. Much of it is increasingly accepted as common sense amongst economists.

It is Corbyn's reset on foreign policy, which is truly intolerable for the establishment.

Corbyn spoke of a peaceful and just foreign policy. There would be no more imperial wars destroying the lives of millions; generating terrorism and migration crises. Arms sales to countries committing war crimes would be banned starting with Saudi Arabia. This will have set alarm bells ringing amongst the nexus of intelligence agencies, defence contractors and corporates. Corbyn is directly challenging the Atlanticist relationship paramount to the US-UK establishment and its global hegemony, particularly in the Middle East.

It is no surprise that the Conservatives and their mainstream media cheerleaders have therefore attacked Corbyn. The most damaging attacks, though, have come from his parliamentary party. The process of disentangling from the New Labour machine captured by corporate interests may still generate more damage.

As Corbyn and McDonnell have both made abundantly clear, socialism is no longer a dirty word. Corbyn's Labour - the largest party in Western Europe - is powering forward with a vision of forward-looking 21st century socialism.

What could train company owner Richard Branson possibly have to gain by attacking pro-nationalisation Jeremy Corbyn?

Holly Baxter in The Independent

Watching the absurdity that is TrainGate unfold last night, I couldn’t help but feel that this was a real David and Goliath moment. Isn’t it nice when a billionaire tax-avoiding business magnate with a knighthood takes on a cruel and calculating powerhouse like Labour’s autocratically-minded leader of the opposition and wins? Isn’t it heartening to see the mainstream media take Richard Branson’s side for once, rather than deferring to the statements of a political figure who probably has lots to gain financially from the renationalisation of the railways? After all, it’s not like Branson, the owner of a private company that operates trains, would be affected by things like that. So I think we can all agree that, at the very least, his motives are pure and driven by a rigorous pursuit of objective justice and truth. As for Corbyn, who knows what devious schemes he could have up his sleeve once he’s allowed to hand control of some public transport back to the taxpayer? Isn’t that how Nazi Germany started?

As a born-and-bred Geordie who moved to London for university and stayed for work, I’ve taken the same Newcastle-bound train from London that Jeremy Corbyn sat on the floor of more times than I could count. In case anyone’s actually interested, I can categorically state that it was a lot more pleasant affair when East Coast Trains – the last nationalised arm of British railways – was running the show. The first thing that happened when it was sold off to Virgin was that prices went up and the loyalty scheme which allowed you to accrue points and use them to buy future journeys was stopped (it was replaced with a Nectar Points collaboration and a scheme that encourages you to collect Flying Club miles – two laughable air miles per £1 spent – which, you guessed it, can only be used on Virgin Atlantic planes).

Virgin might have released a press release (yes, for real) about Jeremy Corbyn’s journey this week, claiming that he’d find brilliantly cheap rail fares on their trains in future if he booked in advance, but the £120 return ticket to Durham that I bought weeks in advance for a friend’s wedding this weekend isn’t an anomaly. London to Durham is a journey of two and a half hours. The ridiculous fact that £90 is the cheapest I’ve ever seen a return ticket for it since Virgin took over speaks for itself.

Whether Corbyn sat on the floor to make a point, or because he didn’t look properly in all of the coaches for free seats, or because there were a couple of seats dotted about but he needed a few together for his team is immaterial to me. I’ve spent more than one Christmas Eve sitting curled up inside the luggage rack on the four-hour slow service back to my hometown because even the corridors are too packed to fit into, and I’ve paid extortionate amounts for the privilege. I know what Virgin Trains’ service on the east coast lines are like, even at their least crowded and their very best. A chirpy press release is, of course, going to talk up the “excellent offerings” available from London to Newcastle – but those people have never tried to eat one of their microwaved paninis or operate their on-board wifi, which, to put it kindly, exists more in the conceptual than the physical plane.

Privatised railways are a win for big businesses for obvious reasons: you can’t operate more than one train on one part of a railway line at one time; it’s not like selling a number of competing products together in a shop. Since new lines are hardly ever built, all a business really has to do is have enough money to buy up a monopoly on people’s journeys through whichever part of Britain it chooses. Then – hey presto! – guaranteed sky-high prices with the potential to increase exponentially, since your customer base has very little choice in the matter but to pay up or not travel at all. It’s a naturally uncompetitive business, which makes it a very good candidate for nationalisation and a very good profit-maker for companies with their eyes on the prize. Rail ticket prices, after all, go up like clockwork every year.

Astounded as I am by the fact that people have leapt on what is essentially one of the most boring political stories to have ever hit the headlines, I do support Corbyn’s policy of rail nationalisation in theory. Whether he sat on the floor and announced to camera that ram-packed trains are “a problem that many passengers face every day” as a publicity stunt or after only a half-hearted poke around for seats doesn’t concern me; the simple fact is that the statement is true.

What does concern me, however, is the way in which a discussion about one man sitting on the floor of a packed train has escalated into something which people are now referring to as TrainGate by anti-Corbyn factions, as if accidentally walking past a couple of unreserved seats on a train is genuinely comparable to one of modern America’s most controversial political scandals. I know this has been said a lot in the last few weeks, but really, Labour, have you lost your mind?

Schoolmates used to ask me about Indian trains. I can now confirm British ones are worse

Nish Kumar in The Guardian

Protesters against Southern Rail in London last month: a 2015 poll revealed nearly 60% of the public supports public ownership of the railways. Photograph: NurPhoto/Getty Images





Last week Southern Rail staff went on strike, leaving thousands of commuters facing a slightly improved service. Southern’s non-stop calamities this summer have added support to the idea of renationalisation. This debate is something I watched with great interest. I’m a standup comedian who can’t drive. I have never learned. I don’t trust my hand-eye coordination. You’re looking at someone who once dropped a cricket ball on to his own head during a routine catching practice; I don’t think it’s a great idea to have me in control of a high-speed metal death robot.

So I rely on the train system in this country. And I can tell you from firsthand experience that our train system is a mess. Carriages are full of unhappy travellers packed together like sardines, who have inexplicably paid for the privilege of being incarcerated. Periodically, everyone has to flee for cover, either by lying across the laps of the passengers lucky enough to have a seat, or by climbing into the luggage racks on the ceiling to allow the optimistically named “buffet” cart to pass through just in case anyone wants to spend £50 on a packet of crisps or a single fruit pastille.

And it’s not cheap, either. Train fares have increased way out step with inflation, meaning the percentage of our salaries we spend on train fares is now six times higher than many of our European counterparts – and that’s if you plan ahead. If you want to travel from London to Manchester, and have not booked a ticket, be prepared to sell a kidney or stay at home. Frequent train travellers have to plan ahead, booking months in advance to avoid massive fares. But there is still the risk that you will turn up on the day and the train will have lost its seat reservations for no apparent reason, and you will end up wedged between the door and the bathroom. Other than a music festival, a train is the only thing you might have to buy a ticket for and still end up spending an hour standing next to a toilet.

I feel sorry for the commuters affected by the Southern Rail chaos, especially because I hail from Croydon and have experienced that mayhem firsthand. As if being from Croydon wasn’t bad enough. When I was growing up, and periodically going to India to visit my grandmother, my classmates would often ask me about the trains. There was an exotic fascination with people sitting on top of the carriages. v

I was once ejected from a Southern train for sitting in first class when the train was full. I informed the guard that, as the section was empty and I would have happily moved for people with first-class tickets, I didn’t see what the problem was. He said: “It’s far more serious than that – you have to keep that area clear in case people in wheelchairs get on.” I apologised and said: “I didn’t realise people in wheelchairs were allowed in that section.”

He replied: “Yeah – only if they have a first-class ticket. Otherwise we kick them off as well.”

Virgin Trains East Coast staff to strike in row over jobs

It’s interesting how far we have moved on in our attitude to renationalisation. In the 1980s and 1990s, we consistently elected governments that essentially based their economic policies on the boardgame Monopoly, where public services were flogged off to the highest bidder. We were in thrall to Rich Uncle Pennybags, the moustachioed, monocle-wearing mascot we now call Mr Monopoly. (This is clearly a terrible name, by the way. It’s like me changing my name to Grandpa Nishy Mouthjoker.)

But there has been a change in public opinion, if not in government policy. A 2015 poll revealed nearly 60% of us support public ownership of the railways. Last year, the East Coast service was reprivatised. The government had taken over the running of the line after the collapse of the previous private ownership and, in public control, it had become profitable to the Treasury and reported positive customer satisfaction. It is now run by Virgin Trains and, on Friday morning, staff announced strike action over two weekends in August. This means that I can’t get back to London from the Edinburgh Fringe. Once again, comedians are punished. Truly we are the most oppressed people in society.

Frustration with the trains is inevitable, given the daily difficulties commuters face. In France, a near fully publicly owned rail system managed to give its passengers fares far lower than the UK for almost exactly the same amount of public rail subsidy between 1996 and 2010. Furthermore, the French government has invested profits in private rail companies, which then invest in companies that run British trains. Including – surprise! – Southern. As we haemorrhage money, we are lining the pockets of Riche Oncle Sacs d’Argent.

Nationalisation might seem like the preserve of old-fashioned, duffel-coat-wearing, Red-Flag-singing socialists, but it also appears to be economically efficient. Labour adoped renationalisation as a policy at its 2015 autumn conference, and Jeremy Corbyn is trying to make this a key platform in his plans to be the next prime minister. Corbyn might be on to a winner here. Time will tell. Anyway, I had better head off – I’ve got to start booking some train tickets for October 2025.

Steel v banks: Why they're different when it comes to a government bail-out

Jay Cockburn BBC Money

The British steel industry is in a perilous position right now.

Tata Steel is looking to pull out of the UK; they own most of Britain's steelworks.

It's led to mutterings of government intervention, after all they put up the cash to bail out the banks in 2008.

Why shouldn't they do the same for the steel industry?

The thing is, they're totally different situations. 

Some of the banks were unable to balance their books with the Bank of England, and some ATMs ran out cash.

The government stepped in and first saved Northern Rock.

Image captionCustomers queue to take their cash out from Northern Rock

Then it was Bradford and Bingley, closely followed by taking stakes in RBS, Lloyds TSB, HBOS.

The reasons behind the global financial crisis were complex, countless films and documentaries have been made in an attempt to explain why it happened.

Everyone involved in the bailout assumed the banks would recover, and they did (even if it feels like it took forever).

The economy can survive without British steel

The UK is a global centre for banking. Without banks there is nobody to lend money to people to start businesses, or buy homes.

A lot depends on our banks, not just in the UK but around the world.

That's clearly not the same for steel.

One of the problems is the UK industry has been shrinking for a long time. Employment has fallen from around 50,000 in 1990 to under 20,000 today.

Image captionCanary Wharf in London is one of the world's major financial centres

Other countries, such as China, make steel, and they do it for cheaper than we do. The people in the steel industry and the towns like Port Talbot depend on the steel industry, but the rest of the economy will cope without it.

Globally we are a major player in the financial market but our steel output is actually fairly insignificant. We currently put out around 12 million tonnes a year; China's output is 822 million tonnes - although the British industry does tend to specialise in high quality, high value steel.

Does it make financial sense?

The government will be weighing up the financial cost of making thousands of people unemployed.

One think-tank, the Institute for Public Policy Research, estimates that as many as 40,000 jobs depend on the sector.

Image captionThe steel plant at Redcar which closed last year leading to 1700 job losses

During the financial crisis UK unemployment peaked at 2.7 million - a little over 8% of the total workforce. If we hadn't bailed out the banks it's likely that figure would have been even higher, costing the government huge amounts of money in benefits and lost tax revenue.

In the UK we have a workforce of around 31 million. 40,000 is just 0.12% of that workforce. When Port Talbot steelworks is thought to be losing around £1 million a day the government may find that number a little more palatable.

The government can't legally buy the plants

The Prime Minister himself, David Cameron has indicated that they're unwilling to buy the plants: "I don't believe nationalisation is the right answer".

Whether they are willing or not might be irrelevant though, because the UK is a member of the European Union.

By law EU member states cannot rescue failing companies in the steel sector.

These are rules that were agreed on by every member of the EU, including the UK.

Exceptions to those rules on bailing out companies exist, but governments have to prove their economy is in danger - that's why they allowed the banks to be rescued.

But the EU has decided that allowing failing steel companies to go bust is good for the union as a whole.

But...

Unlikely as it may be the EU does still have the final say so it's not entirely impossible for the government to step in.

The decisions on state aid are often highly political though, but ultimately the Commission can decide to approve it.

But if any of the 28 member states don't agree they can challenge the decision - and that can take lots more time.

Wait for a bus and then tell me the market knows best

Deregulation of buses in 1986 was a disaster for those unable to afford a car. Municipalisation is the key to a fairer system

Owen Jones in The Guardian


 
Liverpool’s Queen’s Square bus station. Since 1986, ‘bus trips in big cities outside London have collapsed from 2bn to 1bn a year’. Photograph: Christopher Thomond for the Guardian


Of the issues differentiating the metropolitan mindset in the capital from opinions voiced elsewhere, the starkest is probably transport. We hear much about the overcrowded rail network in London and the south east, where fares are among the most expensive in Europe. Of course we do: much of the national media works from London. And we have warm words for the buses in the capital, where since Ken Livingstone’s first mayoral administration, starting in 2000, the mayoralty and Transport for London have assumed regulatory powers, determining prices and frequency with dramatic success.

Travel outside London, however, and Britain’s deregulated bus system reveals itself as the source of widespread, justified disgruntlement – an overpriced, inefficient, poor-quality mess. According to a report to be published this week, since deregulation in 1986 – unleashed with the promise that “more people would travel” – bus trips in big cities outside London have collapsed from 2bn to 1bn a year. In London, on the other hand, where everything from how much we pay to which routes exist is decided by the mayor and Transport for London, bus use since the 1980s has gone in the opposite direction: from around 1bn to more than 2bn trips a year. Britain’s bus privatisation disaster is a story of profit before need, and a discomfiting tale for those who believe the private sector automatically trumps the public realm.

I asked Twitter for bad experiences of buses, and turned my feed into one long howl of anguish. Chronic delays, “virtually no evening travel”, old “clapped-out buses”, infrequency, poor punctuality, extortionate prices: these were common complaints. “No evening and barely a weekend bus service in Helmsley, North Yorks,” complained one. “Need a car to live here.” Another cry of frustration: “Costly, cash only, fragmented among several providers, no unified ticketing, virtually ends at 1800 hours, v[ery] poor on Sunday.”

It is the less well-off who suffer most. Fewer than one in three of the poorest tenth of the population own their own car. With our bus system in such a state, it is unsurprising that those with the least money are three times more likely to use a cab than the richest.

Our journey towards the great British bus disaster is uncovered in meticulous detail in the report, by Ian Taylor and Lynn Sloman. “Bus users in Britain inhabit different worlds,” they note, ranging from London’s centrally regulated bus system to rural dwellers who “live in a third world with a skeletal service or, in some places, no service at all”. Whatever Margaret Thatcher’s programme of deregulation in the 1980s offered, the opposite happened: fares rose, services worsened and bus use fell.

Private bus companies have one motive, after all: making profit, rather than catering to the needs of their users. Between 2003 and 2013, £2.8bn ended up as dividend payments in the bank balances of shareholders, rather than invested in improving bus services. About 40p in every pound of their total revenues comes directly from the taxpayer: yet another example of Britain’s publicly subsidised “free market” economy.

Bus services are a hopelessly confused patchwork of provision. Some tickets you can use with different providers, some you can’t. You may find enough buses at peak hours but struggle to catch one at other times. If you live in a rural area, you may struggle to find any buses to catch at all. Local authorities can pay for services deemed crucial for local communities, but they do so at great expense. Often the buses themselves are from another age: cold, noisy, rickety vehicles driven by woefully underpaid drivers. Those who can afford to insulate themselves by using their own vehicles can minimise the inconvenience, but that’s not an option for the less fortunate.

Our rail system, we debate. We know that a decisive majority of Britons want to see our railways publicly owned. But where is the debate about rescuing Britain’s bus services?

Bringing buses into accountable, municipal ownership would transform the system. Consider France, or Germany where apparently 88% of local public transport trips are on publicly owned trams, trains or buses, but also look closer to home. In 2013, after running a £8m surplus, municipally owned Lothian Buses in Edinburgh reported satisfaction rates of 96%, beating all competition in Britain. Nottingham City Transport – majority shareholder the city council – has satisfaction rates of 92% in “one of the least car-dependent cities” in Britain.


Here’s what municipalisation can achieve, say Taylor and Sloman. A “comprehensive network” for all communities, without allowing private companies to cherrypick the most profitable routes or obliging local authorities to intervene at “disproportionate cost”. Rather than having a bewildering array of fares, there could be “simple, area-wide fares” that – as in London – could be used across all transport services, from trains to buses, with daily costs capped. Instead of passengers being stuck for the best part of an hour at a freezing bus stop after changing buses, timetables could be coordinated, and public money be spent improving services, not frittered away as shareholder dividends.

We hear so little about buses, undoubtedly, because in London they are good enough for the middle classes to use, while outside the capital those with sharper elbows often avoid them. But here is surely an issue for Labour to champion. Those who suffer the most are often in areas where Labour could do well to try to win support, such as Cornwall, and in many Tory-dominated rural communities. Municipal ownership, with bus passengers encouraged to help run services, would improve the lives of many poorer citizens. There would also be fewer cars on the road. Whether or not Lady Lindsay of Dowhill ever really said “Anybody seen in a bus over the age of 30 has been a failure in life”, the stigma could be overcome for the public good.

Putting the great bus privatisation disaster on the agenda would be another reminder that the inherent superiority of the market is not a foregone conclusion. This is a rich country. If we cannot even produce a decently functioning bus service for our citizens, we need to start asking ourselves some serious questions.

Osborne is all for renationalisation – so long as the nation isn’t Britain

Aditya Chakrabortty in The Guardian

Steel yourself, for an unlikely source is about to spout a highly unfashionable idea. This week, George Osborne will come out for renationalisation.

You won’t hear the N-word from his lips, of course. Nor shall the chancellor go full Corbyn and seize some of the FTSE’s crown jewels. Instead, you can expect something far more in keeping with the spirit of 21st-century Britain. The government will indeed put some of our most vital infrastructure under state control – but the states in question will be France and China.

At some point during this week’s visit of president Xi Jinping – perhaps sandwiched between lunch at the palace and a trip to Chequers – Osborne shall confirm that nuclear plants will be built at Hinkley in Somerset and Sizewell in Suffolk, by the energy giant EDF, nearly 85% owned by the French government, and China. What’s more, Beijing will get a shot at designing and building its own nuclear facility at Bradwell in Essex.

Britain has made 'visionary' choice to become China's best friend, says Xi


Even as that announcement is made with all the fanfare available to the British state, the promises of privatisation will be revealed as lies. What were voters guaranteed by Margaret Thatcher and John Major, as they flogged off electricity and the rest of our publicly-owned utilities? More competition, lower bills and greater investment: all the plump fruit of a more dynamic capitalism.

A generation later and their children, David Cameron and Osborne, are handing Britain’s nuclear future back to the public sector – of two foreign countries – and paying handsomely for the privilege.

Take Hinkley, which at £24.5bn will cost as much as the London Olympics, Crossrail and a new terminal at Heathrow put together. Osborne will proudly blare that taxpayers aren’t chipping in a penny towards the costs. True enough, but his civil servants will quietly admit that we are guaranteeing up to £17bn of the total cost. In the screwy logic of Britain’s renationalised capitalism, the public assumes the risk while the corporations get to scoop the profits.

Because rest assured, there will be profits – all of us will be making sure of that. To secure EDF as a builder, Cameron guaranteed a fixed price for electricity from Hinkley of £92.50 per megawatt hour. That is around double the going rate for electricity on the wholesale markets, a price so high that equity analysts term it“financial insanity”. Change your supplier as often as you like, you and everyone else in Britain will be paying for that de facto subsidy in your electricity bills for decades to come. Britons will in effect be paying more for their energy so that French households can pay less. Indeed, so generous are the terms of this deal that the government of Austria is currently taking Britain to court on the grounds that it’s handing out state aid to EDF.

Holidaymakers in Burnham-on-Sea, Somerset, across from Hinkley Point nuclear power station. Photograph: SWNS.com

Yes, you read that last sentence right: the UK stands accused of dispensing state aid – to another state. How many times have you read about some age-old manufacturer and thousands of jobs going down the swanee, while ministers wrung their hands over European state aid rules? Now we know that such rules can be tested – provided the recipient is headquartered not in Port Talbot, but Paris.

When questioned about these eye-watering numbers, ministers will inevitably defend them as a price worth paying to stop the lights going out. But like the sanctity of the state-aid regulations, this is a bogeyman deployed to shut down conversation. True, Britain has a clapped-out generating system. Realistically, the price we face for that is not our TVs going dark in the middle of Gogglebox, or our smartphones no longer charging, but paying a lot more for our electricity. Except, with Hinkley, we’re guaranteed to be paying a lot more anyway.

As James Meek points out in his prize-winning book Private Island, the publicly owned energy-generating system was in very good nick, enjoying both investment and domestic engineering expertise. A generation of privatisation has seen off both of those. Sue Ion, a fellow of the Royal Academy of Engineering who has spent over 30 years in nuclear power, says, “We have no capacity to make a reactor design from scratch.”

Hinkley’s boss, Nigel Cann, boasted to this paper last year of the thousands of local jobs his plant would bring. He gave just one example: “We’ve already seen a local food co-op … set up in preparation for feeding what we estimate to be the 25,000 people” who’ll move through the site. One insider predicts that the British will largely be employed “digging ditches, laying concrete and running the pie wagon”. The big-boy jobs will go to those calling the shots – that is, the French and the Chinese.

A share-owning democracy, Thatcher promised, as she auctioned off BT. Britons were about to be put in charge of their economy. Another fib: in 1981, ordinary Britons owned over 25% of the stock market; they now hold less than half that.

She offered a capitalism in which private firms took risks and reaped rewards, while the customer benefited. What she delivered was very different. A system in which you can’t get 3G on trains, can’t rely on broadband or buses in the countryside, and in which train operators and energy firms compete not on service – but on how many tariffs they can bamboozle customers with. In which parastatal organisations from France and China, Germany and the Netherlands take an easy clip from ordinary British customers and plough the bare minimum back. This isn’t a dynamic capitalism, it is lazy, arthritic and very expensive.

And still Whitehall and Westminster, and their mini-mes in town halls up and down the country, carry on down the same road. Cameron proposes to sell anything left in the cupboard, even old student loans. Civil servants let Redcar and thousands of steel jobs go down the drain, as they lend millions to Roman Abramovich to keep his foreign steel plant going.

Nuclear power is merely the punchline to this whole rotten joke. We won’t build it, we won’t own it, we certainly won’t control it. But we will pay for it: in lost jobs, in vanishing taxes, in whopping great winter fuel bills.