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Should UK Railways be nationalised (again?)

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Nationalised -UK-Railway -Train (2)

(Image credit: http://ukrailways1970tilltoday.me.uk)

Renationalisation of UK industries and services seems to be on the agenda again - Railways being one of them.  According to who you listen to the Labour party’s plan to renationalise the British rail network is either the best or worst idea they've ever had!

Leaving all the politics of it to one side we decided to take a look at the History, advantages and disadvantages of nationalisation with a specific eye on Rail transport.

What does nationalisation mean?

In business terms, as defined by businessdictionary.com, nationalisation involves...

“(The) takeover of privately owned corporations, industries, and resources by a government with or without compensation.”

Probably not music to many capitalist’s ears then (depending on the size of compensation, of course!) - But whilst nationalisation is often thought of as a Socialist response, historically the process has been carried out by a wide variety of political and economic systems.

There is a page on wikipedia dedicated to listing nationalisation made by different countries (Which the UK seems to have the longest listing!).

The common business reasons that nationalisation might occur given by businessdictionary.com are;

  • Prevention of unfair exploitation and large-scale layoffs
  • Fair distribution of income from national resources
  • To keep means of generating wealth in public control

One reason they don’t include is a general feeling among the train going population that the current privatised system isn’t performing too brilliantly.

This might explain why, when Labour included it in their manifesto for the 2017 even some voters of the opposite political opinion had to admit it had it’s attractions (even if it was of the “Could it be any worse?” variety!)

When and why was the UK railway nationalised?

Nationalisation began in the United Kingdom in the aftermath of the Second World War - several countries were moving along the same lines, some as a ideologically socialist move, some (like the UK) to protect and develop industries in a delicate time.

After WW2 the Big Four railway companies in Britain were bankrupt and were in danger of complete collapse so the government took action to take over running the railways (just like with the more recent 2008 banking crisis - though, arguably, more successfully!)

Railways were nationalised as part of the Transport Act in 1947 under Clement Atlee’s Labour government, control being given to the newly formed British Transport Commission.

There is a whistle-stop tour of the British Rail from private, to nationalised and back to private from 1948 to 1997 on rail.co.uk

What are the advantages and disadvantages of nationalisation?

Like any socio-economic measure, nationalisation has historically had it’s advantages and disadvantages.

The current affairs website important india list the following when summing up the common advantages and disadvantages given:

Advantages

  1. Safeguards the interests of Laborers
  2. Technical efficiency and lower cost of production:
  3. Cooperation and prosperity for all:
  4. Increased earnings of the State:
  5. Control over prices of war supplies:
  6. Employment opportunities:
  7. Economic and political growth

Disadvantages

  1. Lack of individual initiative:
  2. Lack of freedom:
  3. Lack of Spirit of competition:
  4. Rigid system:
  5. Less intervention of public in economic affairs

India’s rail network, nationalised in 1951, is the second biggest in the world operated under a single management company (get in touch if you think you know what the first biggest is - I couldn't figure that out!) so they seem like a good place to get an overview of the plusses and minuses! 

Is there anything we should’ve mentioned?

Do you have any thoughts, comments or views on Nationalisation of Railways?

Is there anything you think we should have mentioned?

If there is get in touch and let us know – you can also do it on Facebook or Twitter.


By Alastair Baker at 24 Jan 2019, 00:00 AM