EXCL Infrastructure tsar warns against Labour ‘rose-tinted’ nationalisation plans
The chair of the National Infrastructure Commission has cast doubt on Labour’s plans to nationalise various industries.
In an interview with The House magazine, Sir John Armitt warned against looking back with “rose-tinted glasses” and argued that taking the railways back into public ownership is not “necessarily the answer at all”.
Sir John also queried Labour plans to nationalise part of the utilities sector such as water and energy, saying companies should instead create an environment in which the public trust the private sector to deliver key services.
Labour has pledged to nationalise the railways, parts of the energy sector, water and the Royal Mail. The Government announced a “root and branch” review of the rail industry in September.
Sir John, who succeeded Andrew Adonis as chair of the commission in January, said the first challenge of nationalisations would be to find the money to “pay a fair price” to investors, and argued that a change in ownership would not necessarily mean a change in personnel.
“I think the issue here is we’re more than happy to trust Marks and Spencer and Tesco with the provision of the thing most fundamental to us, which is food. Why can’t we create an environment in which we’re equally trusting of private sector companies to provide us with those key utilities?” he asked.
“Now, there’s a responsibility clearly laid there on those utility companies and how they handle that.
“They need to recognise that if they’re not giving us notice of the fact that they’ve actually got some cheaper options we might like to use, rather than just leave us on the one we’ve signed up for three years ago, then that trust is going to be broken.
“So, I think there are behavioural issues which are needed which, in a sense, would remove the debate for believing that the only way to do this is to have it in public hands.”
He continued: “But at the end of the day, go back to my starting point, which is that utilities and infrastructure are not for engineers, it’s for the public.
“The public pay for it, 100%, in one form or another. And therefore, you need to engage them.
“If we don’t want them to sort of fall totally on one side of the argument or the other, then we need to at least have an open debate which is an honest debate about what the criteria are, what’s being paid for, how much do they want to pay, what can they afford, what can the government afford, how can we actually get more competition or more innovation by using the private sector.
“The Rail Review is going to be an interesting one. I’ve seen it as Network Rail, I’ve seen it as a train operator. I understand it pretty well, warts and all. It’s not perfect.
"But just nationalising it I don’t think is necessarily the answer at all. We tend to look back with rose-tinted glasses I think of how it used to be sometimes.”
Sir John is a former chief executive of Network Rail.
A Labour spokesperson said: "The reason public ownership of rail, water and energy is massively popular is that people are fed up of fat cat bosses running down services and hiking up prices and dividends for shareholders.
"Instead of simply asking private companies to play nicely, the next Labour government will put the public in charge."