The legacy of Margaret Thatcher lives on

[Chester1]

Electricity, gas, telecoms, water, rail (and post) are alike in that there is only one trunk network, and in a lot of cases only one local distributor. Even the firms pretending to compete with Royal Mail have thrown in the towel, apart from the ones collecting pre-sorted mail and dumping the delivery on the post office.
The pretend "market" in gas and electricity supply is a fraud because the various grids' prices are just passed on. The water companies make their regulator a laughing stock.
The only competition is between gas from the north sea and gas imported from the middle east, but I recognise that there are a lot more sources of electricity nowadays. I still think that the pretence of competing suppliers costs us more than a managed supply to a National Gas board would, though.

I support nationalising natural monopolies but Labour choice of industries to nationalise is motivated by internal politics (i.e. which has the most union members) and the public by what was nationalised in the good old days... Gas is a natural monopoly and electricity transmission is but its production is not. Electricity generation is moving progressively towards microgeneration and exchanging electricity with Europe to balance out variation in supply and demand. A nationalised electricity generator would be competing with every person with a solar panel on their roof and every community hydro project etc. Post is not a natural monopoly either. The universal letter service is surviving due to junk mail and there are companies that provide door to door delivery of parcels without any involvement by Royal Mail. No one would seriously consider nationalising Royal Mail if did not have a very large union membership and did not play into peoples desire to return to a mythical golden age.

There is some sense in nationalising open reach but why BT retail? Socialist ideology and nostalgia?

The left is blind to how deep Thatchers market policies have altered society and how difficult it will be for them to alter it. 70s socialism will be ripped apart today and policies for a 21st century socialism are only at an embryonic stage. Big heavily unionised companies are not suited to competition and technology makes it harder to force people to use one company. A new BR would be competing against a larger number of airlines than 25 years ago, against coach companies and against ride share apps like BlaBla Car and app based taxis services e.g. Uber. Every attempt to force people to use nationalised companies will just encourage attempts to break through economic controls elsewhere. To force people to use a nationalised BT it would have to take over the 4 physical mobile networks, Vodafones business broadband network, Virgin Media and every satellite broadband company opperating in the UK...

 

[Moonshot]

That is next to impossible to argue with. Still someone is losing out though on something produced pretty equally. In an ideal world someone will find a way of quoting the cheapest price to everyone and then there will be no point in various companies providing it, or rather selling it.

Interstingly , Ryanair have a gross margin of some 22% on their air fares .....the margin comes about from an almost zealous approach to cutting out costs.

 

[AndrewE]

Interstingly , Ryanair have a gross margin of some 22% on their air fares .....the margin comes about from an almost zealous approach to cutting out costs.

... like not paying their staff a fair wage (or giving them security), not planning their business-critical needs (pilots) or even training replacements to make sure they have the staff needed when a retirement bump arrives.. Does this sound familiar?
Employers exploiting the gig economy get what they deserve. The directors ought to be prosecuted (or sacked) for ignoring the shareholders' interests (their only legal responsibility.)

 

[Moonshot]

... like not paying their staff a fair wage (or giving them security), not planning their business-critical needs (pilots) or even training replacements to make sure they have the staff needed when a retirement bump arrives.. Does this sound familiar?
Employers exploiting the gig economy get what they deserve. The directors ought to be prosecuted (or sacked) for ignoring the shareholders' interests (their only legal responsibility.)

Well shareholders in Ryanair have certainly done well over the last few years, and indeed the CEO is the 3rd largest holder. As for us passengers, we clearly like the very low fares they offer.

 

[AndrewE]

Well shareholders in Ryanair have certainly done well over the last few years, and indeed the CEO is the 3rd largest holder. As for us passengers, we clearly like the very low fares they offer.

The descriptions "Short-termist" and "get-rich-quick" come to my mind. The whole cheap flights charade is based on unloading costs onto others, like not paying tax on fuel, ignoring (and not paying for) the environmental consequences of their activities, freeloading on artificially-cheap (subsidised) airport provision etc etc...
I think it was GEC that had a long heritage of engineering in the UK, including training and research. They also had a big cash cushion against hard times... until a "shareholder revolt" in the Thatcher years forced them to distribute the cash to shareholders and maximise shareholder returns... the company soon went down the pan.

 

[Moonshot]

The descriptions "Short-termist" and "get-rich-quick" come to my mind. The whole cheap flights charade is based on unloading costs onto others, like not paying tax on fuel, ignoring (and not paying for) the environmental consequences of their activities, freeloading on artificially-cheap (subsidised) airport provision etc etc...

Get rich quick ?? Ryanair started off 30 years ago.

 

[AndrewE]

Get rich quick ?? Ryanair started off 30 years ago.

OK, how about "milk it while you can?"

 

[Moonshot]

OK, how about "milk it while you can?"

Clearly of no concern to passengers or shareholders. Ryanair have a susbstantial new plane order book ...keeping jobs going in the various Boeing factories. Those other doyens of low cost air fares ( Easyjet ) spend significant amounts of money buying Airbus jets , the same jets which keep thousands of UK employees busy making parts for them. I wonder if the RMT or Rail Pension group have shareholdings in any of the above I mentioned? I do know that 9 of the top 10 shareholders in Ryanair are in fact pension funds ....maybe yours is one of them ?

 

[Dai Corner]

The descriptions "Short-termist" and "get-rich-quick" come to my mind. The whole cheap flights charade is based on unloading costs onto others, like not paying tax on fuel, ignoring (and not paying for) the environmental consequences of their activities, freeloading on artificially-cheap (subsidised) airport provision etc etc...
I think it was GEC that had a long heritage of engineering in the UK, including training and research. They also had a big cash cushion against hard times... until a "shareholder revolt" in the Thatcher years forced them to distribute the cash to shareholders and maximise shareholder returns... the company soon went down the pan.

Nope. GEC had its cash reserves until after Lord Weinstock retired in 1996. The new management blew it on acquisitions and covering losses during the Blair Government.

 

[Moonshot]

Nope. GEC had its cash reserves until after Lord Weinstock retired in 1996. The new management blew it on acquisitions and covering losses during the Blair Government.

Indeed they did....I actually just looked that up......as always the facts get in the way of a rant

https://en.wikipedia.org/wiki/General_Electric_Company

 

[Dai Corner]

Indeed they did....I actually just looked that up......as always the facts get in the way of a rant

https://en.wikipedia.org/wiki/General_Electric_Company

I remember it well, as a Marconi shareholder who lost all his investment.

 

[Moonshot]

I remember it well, as a Marconi shareholder who lost all his investment.

Just out of interest......knowing what you do now, would you have invested in Ryanair when they floated some many years ago ?

 

[AndrewE]

Indeed they did....I actually just looked that up......as always the facts get in the way of a rant

https://en.wikipedia.org/wiki/General_Electric_Company

I read Wikipedia too. Granted a lot of US acquisitions have gone sour for UK companies, but it doesn't say what proportion of their cash reserves went that way, and how much to shareholders. I'm sure I have read that was a factor in the company's collapse (maybe in the financial section of Private Eye.)

 

[Moonshot]

I read Wikipedia too. Granted a lot of US acquisitions have gone sour for UK companies, but it doesn't say what proportion of their cash reserves went that way, and how much to shareholders. I'm sure I have read that was a factor in the company's collapse (maybe in the financial section of Private Eye.)

Dai Corner has just told you that his own investment went to nothing.......

 

[AndrewE]

So what? He didn't say what dividends he had received in the run up to it.

 

[Dai Corner]

So what? He didn't say what dividends he had received in the run up to it.

Certainly not enough to make up for the capital I lost.

No doubt some of the cash would have ended up in the pockets and pension funds of workers at the loss-making operations they kept going longer than they should and in redundancy payments.

 

[Moonshot]

Certainly not enough to make up for the capital I lost.

No doubt some of the cash would have ended up in the pockets and pension funds of workers at the loss-making operations they kept going longer than they should and in redundancy payments.

Did you reply to my post 102 by the way ? Doesnt show up on mine if you did....

 

[Dai Corner]

Just out of interest......knowing what you do now, would you have invested in Ryanair when they floated some many years ago ?

I think they floated around the time EU deregulated air travel in 1992 so there was a lot of uncertainty in the industry. I may have considered a small 'punt' though not a large investment. It wasn't as easy to buy shares listed abroad (Ireland and the US) in those days so I didn't.

Ryanair seems to provide a service just good enough, pay salaries just high enough, and negotiate with manufacturers, airports and other suppliers just hard enough to have become a profitable market leader. Good for investors.

Would I have been embarrassed by the controversy surrounding the airline? Probably not too much. We probably hear more about their problems due to their high profile and the fact O'Leary deliberately courts publicity.

 

[Moonshot]

I think they floated around the time EU deregulated air travel in 1992 so there was a lot of uncertainty in the industry. I may have considered a small 'punt' though not a large investment. It wasn't as easy to buy shares listed abroad (Ireland and the US) in those days so I didn't.

Ryanair seems to provide a service just good enough, pay salaries just high enough, and negotiate with manufacturers, airports and other suppliers just hard enough to have become a profitable market leader. Good for investors.

Would I have been embarrassed by the controversy surrounding the airline? Probably not too much. We probably hear more about their problems due to their high profile and the fact O'Leary deliberately courts publicity.

Well posted .....and in fact I had a very interesting conversation with an ex Ryanair pilot a few weeks ago who now works for TUI.....it seems that as always, what hits the headlines and what is actual reality within the bowels of Ryanair are 2 different things.

 

[AndrewE]

Certainly not enough to make up for the capital I lost.

That's not the point. In aggregate it might have been enough to keep the company afloat after the losses from poorly judged acquisitions.

No doubt some of the cash would have ended up in the pockets and pension funds of workers at the loss-making operations they kept going longer than they should and in redundancy payments.

Also irrelevant. Aren't contracts with employees worth honouring? And maybe some of the businesses they bought were worthless, as you hint. I'm sure that then, as now, the accountants' descriptions of the financial position was a fiction. I seem to remember that quite a few UK companies went down after buying US businesses.

 

[Dai Corner]

That's not the point. In aggregate it might have been enough to keep the company afloat after the losses from poorly judged acquisitions.


Also irrelevant. Aren't contracts with employees worth honouring? And maybe some of the businesses they bought were worthless, as you hint. I'm sure that then, as now, the accountants' descriptions of the financial position was a fiction. I seem to remember that quite a few UK companies went down after buying US businesses.

Ah, I see. Anything that doesn't support your argument is irrelevant. Could you present your evidence for your assertions?

 

[chorleyjeff]

Yes, I wonder why people from the north move south (!)

In my bit of the NW there is an influx of Southerners. I presume they have cashed in their bijou 2 bedroom terrace in Balham to buy a grand country house around here.
And good look to them.

 

[chorleyjeff]

That's not really fair. If, using an example, I was to study and become a neurosurgeon would I be a 'parasite' if I moved to a town that had a hospital rather than stay in my home town and flip burgers?

You could commute.

 

[Xenophon PCDGS]

So what? He didn't say what dividends he had received in the run up to it.

Some people talk of "dividends" as if these were always a source of substantial income. Most of those people who so talk so have never been in receipt of "dividends" and usually speak from a "blinkered" left-wing perspective.

 

[AndrewE]

Ah, I see. Anything that doesn't support your argument is irrelevant. Could you present your evidence for your assertions?

The loss of capital (actually share value) has nothing at all to do with the argument about how much cash was paid out to shareholders in the years before the failure, which is why I said it was irrelevant.
I said that I understood that the company went down because it hadn't got the reserves (any more) to withstand losses of various types and you implied it was the employees fault that they were entitled to wages and the redundancy provisions in their contracts. What has that got to do with the company's failure? My point was that if instead of "returning" money to shareholders the company had held on to it then it might have survived.
It might have been a Radio 4 Analysis-type documentary programme that explained the problems caused by the raiding of corporate reserves and the subsequent disasters when companies purchased turned out to be hollow shells.

 

[AndrewE]

Some people talk of "dividends" as if these were always a source of substantial income. Most of those people who so talk so have never been in receipt of "dividends" and usually speak from a "blinkered" left-wing perspective.

I may be left wing but am not blinkered. My dividends are handsome compared to the return on money in savings accounts. Unit trusts are going up by 10% a year, and that's not by them playing the stock market either.
You might find this interesting:
https://corporatewatch.org/south-west-water-privatisation-pollution-floods-and-a-lot-of-cash/ Unfortunately it's to long to paraphrase or quote

 

[Dai Corner]

The loss of capital (actually share value) has nothing at all to do with the argument about how much cash was paid out to shareholders in the years before the failure, which is why I said it was irrelevant.
I said that I understood that the company went down because it hadn't got the reserves (any more) to withstand losses of various types and you implied it was the employees fault that they were entitled to wages and the redundancy provisions in their contracts. What has that got to do with the company's failure? My point was that if instead of "returning" money to shareholders the company had held on to it then it might have survived.
It might have been a Radio 4 Analysis-type documentary programme that explained the problems caused by the raiding of corporate reserves and the subsequent disasters when companies purchased turned out to be hollow shells.

I'm not convinced that a substantial amount of the cash reserves was paid out to shareholders. You've claimed that it was in the basis of a half remembered magazine article or radio programme. I'd prefer something more substantial like the annual reports and accounts for the period in question. I think it's agreed that some of it went on acquisitions so that ended up with the previous owners of those companies.

*If* substantial dividends were being paid I'd expect that to boost the share price but in fact it collapsed.

I didn't say it was the employees fault that they expected wages and so on. I meant that because some of the cash reserves were used to keep loss-making operations going they had jobs for longer than they otherwise would have. Isn't that what you mean by 'having a cushion against hard times'?

Edited to add that those cash reserves belonged to the shareholders and they would have been quite entitled to claim them if they decided to.

 

[Moonshot]

Some people talk of "dividends" as if these were always a source of substantial income. Most of those people who so talk so have never been in receipt of "dividends" and usually speak from a "blinkered" left-wing perspective.

My own union ( RMT ) does get dividends from shareholdings....its a useful way of keeping subscription costs down

 

[SteveP29]

isnt it true that a traveller from Birmingham to London has some choice ? And some on the ECML?

You can only travel direct from Edinburgh to London without changing on the ECML by travelling with Virgin
How is that a 'choice'

 

[SteveP29]

Ryanair seems to provide a service just good enough, pay salaries just high enough, and negotiate with manufacturers, airports and other suppliers just hard enough to have become a profitable market leader. Good for investors.

Would I have been embarrassed by the controversy surrounding the airline? Probably not too much. We probably hear more about their problems due to their high profile and the fact O'Leary deliberately courts publicity.

The Mike Ashley of airlines?