UNITED STATES (OBSERVATORY NEWS) — The opposition Labor Party of Jeremy Corbyn, if it wins the December election, pledges to nationalize all utilities – water, electricity, rail, post, internet and more – turning the page of Margaret Thatcher’s reign.
The party says in its election platform published Thursday that the privatization of the Conservative Party decades ago was a “catastrophe” for the country, has led to lack of competition and high prices and “depletion of billions to pay benefits to wealthy shareholders.”
Although the workers are still second in the polls by a large margin with the Conservatives, and far from reaching the premiership, but what are the pros and cons of their plans to return those sectors to the state?
– “Strong arguments” –
Britain’s service sectors under Margaret Thatcher, who came back to power in 1979, were largely privatized because of the resentment of the British after a series of strikes, from public services then held by the state.
That determination to nationalize Britain’s service sectors may seem like a 40-year turn.
But all privatizations in recent decades have not gone as expected.
In the water sector, for example, “overpayments to shareholders, accumulated debts, and poor network maintenance” are being criticized with massive water leaks, notes Jonathan Portes, a public policy professor at King’s College in London.
These failures, coupled with the lack of competition in the eyes of consumers, are “strong arguments for nationalization” of the sector, Portes told AFP.
For high-speed Internet, the network is working poorly in most areas outside London, hurting local activity.
In terms of trains, the sector suffers from frequent delays and high prices, and complaints are almost daily, with the rail sector benefiting from heavy subsidies.
– High debts and disturbances –
Prime Minister Boris Johnson’s effort to criticize workers’ projects “has irresponsible costs that will hit the British economy.”
The Labor Party says it will finance its program by raising taxes on the wealthiest and on companies, but repurchasing the companies involved (OpenReach Communications, Royal Mail Mail …) will undoubtedly lead to a significant rise in public debt.
Employers, for their part, raised the risk of investment leakage in the face of the threat of new nationalizations that could harm shareholders’ interests.
According to Jonathan Portes, workers must prove, especially on the railway issue, that “they have a plan to regulate the sector if it is nationalized.” If they do not, there will be a risk of serious disruptions in a network already troubled.
Economists also raise questions about Royal Mile’s nationalization plans at a time when mail is no longer popular.
John van Reenen, a professor at the London School of Economics, said workers’ election promises focused on the short term and undermined the substantive debate on structural investments.
– What’s the real problem? – Hey.
“The debate over the public versus the private is not appropriate,” he said, explaining that what is more important in this context is not who owns the sector.
It is noted that it is often the way of organization that leads to the solution of the problem.
For everyone to benefit from free or low-cost high-speed Internet, it is enough to pay “high subsidies” and oversee the current private operator, rather than nationalize it, according to Portes.
In the area of electricity, and to put an end to abuses, the government re-imposed “price limits”.
“The question is, do we want more competition? How can long-term investments be made?” Van Rijnen concludes, “especially will it be a better outcome for consumers?”
This article is written and prepared by our foreign editors writing for OBSERVATORY NEWS from different countries around the world – material edited and published by OBSERVATORY staff in our newsroom.
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