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Last edited 25 Feb 2019
|In November 2018, the Institution of Civil Engineers (ICE) published a discussion paper on the potential effects that nationalising parts of Great Britain's economic infrastructure, namely rail, water and energy, would have on investment and service delivery.|
In the Labour Party’s 2017 manifesto ahead of that year’s general election, details on the following were outlined:
- Rail networks would be nationalised as each private franchise expires;
- The water ownership system would be replaced with a network of regional publicly-owned companies;
- The ‘Big Six’ private energy firms would have operator license conditions changed, and there would be a gradual transition to a publicly-owned, decentralised energy system.
With this in mind, alongside high public support for nationalisation, it’s important to examine the potential implications that public ownership on this scale may have on Great Britain’s infrastructure. This includes finance and investment, the jobs infrastructure sustains and creates, as well as the long-term viability and need to meet future challenges.
In compiling this discussion paper, ICE has conducted desk research and spoken with key stakeholders in the rail, energy and water sectors, as well as political parties and independent infrastructure experts.
The paper itself doesn’t represent a series of ICE policy positions. Instead, it outlines the potential costs, benefits, practical and technical implications that could result from nationalisation, providing a source of impartial advice for policymakers.
One key area of focus for ICE’s paper was to contrast the possible implications of nationalisation within the context of public perception. In opinion poll after opinion poll, the public is often overwhelmingly in favour of public ownership of the utilities and rail.
Questions have been asked around market competition, excessive dividend pay-outs and executive pay, public subsidies, rising consumer costs, corporate governance arrangements and levels of company debt. These are valid concerns, with some recognised by the government and action now underway to address them.
But there’s another side to this coin. As anyone in the media will say, good news doesn’t always sell.
The day-to-day safe and reliable operation of the utilities and railways, something that didn’t always occur under public ownership, and huge increases in investment and productivity are often not recognised.
While backing for nationalisation is a simple binary answer to give to a poll question, it’s unclear what real risks the public are prepared to take in enacting sweeping changes to the country’s infrastructure systems.
 The bigger picture
Hence, one of the central arguments that’s put forward in ICE’s paper states that whether services are in public or private ownership, consideration must be given to these investment requirements and how they are to be best delivered.
This article was written by David Hawkes, ICE Policy Manager. It originally appeared as ‘Nationalisation of infrastructure: what could this mean for the sector?’ at: https://www.ice.org.uk/news-and-insight/the-infrastructure-blog/november-2018/implications-of-infrastructure-nationalisation
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