John McDonnell doesn’t understand, does he?

More than £37bn has been paid to shareholders of privatised rail, telecoms, energy and water companies which could have been invested in public services, according to the shadow chancellor John McDonnell.
….
Speaking in Lincoln on Saturday, McDonnell will say that tens of billions paid to shareholders should have been used to bring prices down for consumers. “These figures show what could have gone into investment in these public services in order to expand and improve them or keep their charges down,” he will say at the event to mark the 800th anniversary of the Charter of the Forest, which, in 1217, enshrined the rights of people to the lands they lived and worked on.

Before privatisation those companies which made a profit paid them into the Treasury. Where they didn’t get spent upon investment in the services. Which is why capital expenditure rose after privatisation – because the government hadn’t been investing in them.

Sure, it’s theoretically possible that government will devote the socially optimal amount of investment, the fact is though that it didn’t. For the usual political reasons, there were always things likely to buy more votes to spend the money upon.

Sadly, all that is so long ago that a quick google doesn’t bring up the numbers. But it would indeed be interesting to see how much was being paid to the Treasury rather than on services, wouldn’t it?

33 thoughts on “John McDonnell doesn’t understand, does he?”

  1. Also interesting to know how much the treasury got for privatising these companies. Might be more or less, and that would be relevant. Finally also how much it would cost to renationalize them, because that amount then won’t be available for other spending until it’s earned back over future years. he’s up his bum on this one. But it has a dangerous Guardian-pleasing ring to it.

  2. tens of billions paid to shareholders should have been used to bring prices down

    Nope, would not. ‘Cause if the government, of any flavour, had been running it, there wouldn’t have been any profit. Because the govt is shit at running things.

    Even the things we, mostly, agree it ought to run – the military, law enforcement, justice (see Julia).

  3. John McDonnell ? a Wolfie Smith from central casting.

    It’s abundantly clear I reckon that what you see isn’t what you get. He clearly isn’t dim enough to to believe his tinpot “revolutionary socialism” is palatable to voters – so we are treated to a succession of whiny episodes usually playing on “evil capitalism”, the politics of envy and spiced up with a bit of class war.

    I listened to him on BBC R4 Today about a week back and even Humphries tried to provoke him into a prescriptive Commy diatribe – what resulted was incoherent flanneling from the “Shadow Chancellor” and predictably the attack wasn’t pressed home.

  4. From Giles Coren’s restaurant review in today’s Times:

    Guardian readers […] are the left-wing version of Daily Mail readers: politically monotheistic, allergic to paying for news, interested only in seeing their own prejudices parroted back to them every morning by writers who look and sound exactly the same as they do

    My opinion of Giles has just gone up (albeit there was no other direction for it to go …)

  5. John McDonnell is confused about the purpose of the 1217 Charter although his boss would likely think that the 12:17 charter was a train with lots of seats just for him.

  6. What’s the average age of voters who can remember what State utilities were like? 50? Older for telecoms, i.e. who remember using them as adults.

    You can see why the public aren’t laughing in his face. They have no personal recollection of how shit everything was. Why wouldn’t see it as just a moronic “capitalists fleecing the public” issue?

  7. As opposed to the glorious reign of the malicious dimwits who bribed the electorate by selling council housing cheap then inflating house prices only to find that the next generation is priced out and has to pay £800– £1000 a month rent so have nothing left to spend in the shops= pre-revolutionary capitalist meltdown .
    Keep up the good work; you are bringing the end of British dimwit capitalism nearer and the restoration of good order in the pre-Thatcherite mixed economy /welfare state (supported and exemplified by good Conservatives).

  8. It surprises me that railway enthusiast Corbyn doesn’t seem to have clocked the stop go investment in British Rail that caused a lot of damage. One year it would be: we want to keep a steelworks open, buy some more trains. Shortly afterwards it would be: oops budget crisis, cut all that spending.

    One of the major advances of privatisation has been the longer term investment plans that were locked in to franchise terms. But note as it gets more government controlled with Network Rail back under the government plans get cut again.

  9. Violet Elizabeth Reed, maybe the next generation will realise that they should pay attention in class so as not to end up as miserable as sin in a Northampton bedsit surrounded by…errr…nothing.

  10. @DBCReed

    “As opposed to the glorious reign of the malicious dimwits who bribed the electorate by selling council housing cheap then inflating house prices only to find that the next generation is priced out and has to pay £800– £1000 a month rent so have nothing left to spend in the shops= pre-revolutionary capitalist meltdown .”

    Funny you should mention cheap council houses: I see Liverpool council are flogging 6,000 homes off for a pound, as they’ve fucked their budgets up so badly they can’t ford to renovate or maintain them.

    Think they are advocates of that mixed economy you speak of.

    Or are Liverpool’s council funds the fault of someone else?

  11. Scottish Water is nationalised and the cheapest in the UK. I think John McDonnell is unaware their pricing may be a political strategy – hey look up here, nationalisation works.
    But a lot of their investment is loans from the Scottish govt.
    Welsh Water is a not for profit and mid-table on Ofwat prices.

    There’s no pot of gold in nationalisation, just a crock of shit.

  12. @DBC

    It’s funny how you and Murphy are pant dampingly desperate for the economy to collapse. Endlessly predicting it, pouncing on every bump in the road and claiming it’s a chasm.

    And yet it doesn’t. Every day is a further disappointment. Like claiming that tomorrow the sky will be green and the sun blue.

    Every day a reinforcement of the nagging doubt you have that the reason your life is crap is not because of a gigantic neoliberal plot but simply because you are crap.

  13. @Chris Miller

    I have a crush on Coren.

    Also- I do like the way he can stick stuff like that in a restaurant review.

  14. @ tomo – November 11, 2017 at 10:01 am
    John McDonnell ? a Wolfie Smith from central casting.

    Nonsense.

    Wolfie Smith was likeable.

  15. Besides SE’s point about profits not being there if an industry remains nationalised (and a monopoly at that!) I think it is better if the poacher and gamekeeper are not on the same side. Regulation should not be carried out by the one providing the service.

    There are fresh dangers with this of course, forcing unnecessary regulation for example, but it still leads to greater efficiency.

  16. “tens of billions paid to shareholders should have been used to bring prices down”

    … upon which corporation tax and dividend tax were paid to the tune of billions of pounds…

    But then you’d have to actually know how taxation works and not have imbibed from

  17. ‘“These figures show what could have gone into investment in these public services in order to expand and improve them or keep their charges down,” he will say.’

    Can you quote future speak?

    McDonnell is saying . . . uh will be saying . . . not sure about this verb tense, “Give us control; we’ll do it better.” The example he gives is an example of how they will do it better.

    Millions will die.

  18. Reedy you are the dumbest leftist twat of them all. Even Arnold wasn’t as thick as you.

    Corbin is going to restore your mixed grill paradise is he?

    You fucking simpleton–the only result of Corbin and McNasty will be Venezuela UK. Hopefully a useless fool like you will be among the ruined which would likely count as the one good deed those two twats ever have or ever will do.

  19. “Every day a reinforcement of the nagging doubt you have that the reason your life is crap is not because of a gigantic neoliberal plot but simply because you are crap.”

    The communists are selling universal misery. They will be okay with life being crap if everyone else’s life is crap. It is a mental disease. Schadenfreude isn’t supposed to be shared.

  20. JH: Too true. Wolfie Smith was a well-drawn character poking fun at the idiocies of revolutionary politics in the 70s. John McDonnell is a Commissar. He would have done very well ‘stiffening the sinews’ as Nikita Khrushchev’s right hand man at Stalingrad.

  21. So instead of borrowing money from investors and paying them back for their money and risk through dividends, the rail companies could have borrowed money from commercial lenders, and then instead of paying the loans off reduced ticket prices. I’m sure that would work.

  22. Jack Hughes

    would agree there – McDonnell isn’t a harmless buffoon and is very keen to keep his actual political beliefs and intentions under wraps, presenting himself as a democrat.

    a poisonous version Wolfie Smith?

  23. Investment Gov’t didn’t do example:

    BT Floated 1984 – exchanges still clockwork Stowger

    1988 – Most of UK upgraded to digital System X & System Y [iirc Plessey X, Erricson? Siemens? Y] Cost: more than BT sold for.

    Note: BT price increases were capped at RPI-X% – prices fell each year.

    Better service at lower cost.

  24. What doesn’t add up for me about Labour being pro nationalisation is-

    When a gvt body is privatised, the wealth is transferred from the government to actual people (by the same argument that the incidence of tax cannot fall in a company) Nationalising a publically-traded company takes wealth from people and transfers it to government.

    That’s exactly the opposite of Labour’s stated intention.

    Or could it be that the torrid actually care more about elevating the poor from penury?

    An alternative posit is that Labour are lying totalitarian shits.

  25. Bloke in North Dorset

    Investment Gov’t didn’t do example:

    BT Floated 1984 – exchanges still clockwork Stowger

    1988 – Most of UK upgraded to digital System X & System Y [iirc Plessey X, Erricson? Siemens? Y] Cost: more than BT sold for.

    Note: BT price increases were capped at RPI-X% – prices fell each year.

    Better service at lower cost.

    I’ve said it before but is worth repeating, the privatisation of the telephone networks wasn’t ideological it was absolute necessity. It wasn’t just that the exchanges were analogue and just about the rest of the rich countries and already digitised, it was mainly because they couldn’t get Strowger exchange parts and had stopped routine maintenance on those and the crossbar exchanges had run out of capacity and they had been warned that the manufacturers were about to discontinue those.

    Businesses were screaming blue murder because they couldn’t get enough lines to be able to do business and the costs were so expensive that they had to limit staff to making calls in the afternoon unless it was absolutely business critical.

    To coin a phrase – there was no money, so all that was left was privatisation.

    And anyone who thinks a Tory party under pressure, let alone Labour, is going to prioritise Capex spend to BT rather than on schools ‘n’ ‘ospitals is deluded and needs to be taken out and shot.

  26. — “Before privatisation those companies which made a profit paid them into the Treasury. Where they didn’t get spent upon investment in the services.”

    Same, for example, in New Zealand with its ‘state-owned enterprises.’ These were the power companies expected to return a healthy and, under Labour, increased return to government. Labour, in other words, ran them as an abusive monopoly, imposing an unavoidable regressive tax to pay for electoral bribes. The principle beneficiaries were the Labour politicians operating this scheme which so royally fucked-over the workers.

  27. Maybe we should nationalize DBC Reed and then his predictions would come true.

    Or they may remain the rantings of a bitter failure in life.

  28. @Bloke in North Dorset, November 11, 2017 at 10:19 pm

    Agree and that was my point.

    Successive Gov’ts wouldn’t/couldn’t spend on modernisation/upgrades. They treated every nationilsed business as a trophy cash-cow even if it made a loss.

    Mrs T knew the solution and was ideologically driven to do what those before would not countenance.

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