Privatisation of essential utilities doesn’t just mean directly more expensive bills and transport for households. It also has a domino effect on the rest of the economy through higher industry costs for utilities like water and energy.
Efficient energy, efficient food, more inclusive economy
Take the UK agriculture sector. 40% of a farm’s total costs can be attributed to energy. Since privatisation of electricity began in 1990, average prices have more than doubled from around 6p per kwh (14p in 2023 prices) to 30p per kwh in 2023, according to Ofgem and Hansard figures. Meanwhile, analysis shows that average gas prices increased by 143% between 1992 and 2022.
When it comes to the food we eat everyday, over 60% is produced in the UK. These statistics demonstrate that that there could be a significant reduction in food prices through the nationalisation of energy. On top of that, all businesses would benefit from the democratisation of essentials through cheaper running costs. In fact, the government could mandate a national price drop throughout the economy via such public ownership of utilities.
As well as cheaper bills, the government made a profit from public utilities in the 1960s and 70s. This amounted to tens of billions per year in today’s money. That could be reinvested into improving utilities, such as through upgrading our crumbling sewage systems.
Privatisation: the train heist
Instead, we have worse and more expensive services. Earlier in March, rail fares increased by 4.6%. The UK’s privatised system already had the highest fares in Europe by far for a single ticket. And when taken as a proportion of UK wages, our season ticket fares were also already 7.5 times higher than other European countries.
Keir Starmer’s government has plans to nationalise the rail network, but he will leave us renting the trains themselves from private companies. Given the actual trains won’t be nationalised, this olive branch to progressives is closer to a stinging nettle.
Featured image via the Canary
