Benefits of privatisation

Support for renationalisation of the railways, energy companies, water systems and Royal Mail has grown in popularity in recent years: a 2017 poll showed 60, 53, 59 and 65 per cent support for renationalisation respectively.[1] The Labour Party’s support for mass renationalisation in both their 2017 and 2019 manifestos is arguably indicative of voter frustration with these industries.

Common arguments for renationalisation are that the private companies who run these industries pay their shareholders dividends, which encourages them to put up prices for consumers to extract more profit for shareholders. State control of industry will therefore lower the cost of living and provide better levels of service in the absence of these factors.

When the railways were first nationalised under the 1947 Transport Act, British Railways was established by the government. This Act saw shares in the railway companies exchanged for British Transport stock and serves as a potential model for contemporary renationalisations. Other suggestions have been made as to how such renationalisations across multiple industries could be carried out. These include buying a majority stake or buying out shareholders completely, to paying net book value of company assets and paying under the market value. Cost estimates therefore vary. In the case of the railways it has been proposed that it would cost nothing to renationalise as the tracks and station owner Network Rail is already state-owned which means any government would just need to wait for the train operator franchises to lapse.

Read the benefits of privatisation in full here.


[1] Smith, M., Nationalisation vs privatisation: the public view, 19 May 2017,, (accessed 22 October 2019).

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