Jeremy Corbyn tells us all it would be lovely if the gas and energy companies were nationalised:
The cost to taxpayers of renationalising the UK's gas and electricity sector, as desired by aspiring Labour leader Jeremy Corbyn, would total as much as £185bn, according to city experts. Peter Atherton, analyst at Jefferies investment bank, said that the cost to take control of just the UK assets of companies, which include British Gas owner Centrica and network operator National Grid, would drain about £124bn from the nation's coffers. Mr Corbyn has stated that he would nationalise British Gas, SSE, Eon, RWE, Npower, Scottish Power and EDF if he became Prime Minister in 2020. He said he would also put National Grid back into public hands.
This is because public policy should decide how these companies work, not the cut and thrust of the purely commercial world.
It was not too long ago that Gazprom, Russia’s state-controlled energy conglomerate, was one of the Kremlin’s most powerful weapons. But those days now seem like a distant memory. Today, Gazprom is a financial shadow of its former self.
The speed of Gazprom’s decline is breathtaking. At its peak in May 2008, the company’s market capitalisation reached $367bn (£237bn), making it one of world’s most valuable companies, according to a survey compiled by the Financial Times. Only fellow Exxonmobile and PetroChina were worth more. Gazprom’s deputy chair Alexander Medvedev repeatedly predicted that within a decade the Russian energy giant could be worth $1 trillion.
That prediction now seems foolhardy. Since 2008, Gazprom’s value has plummeted. In early August it had a market capitalisation of $51bn – losing more than $300bn. No company among the world’s top 5,000 has suffered a bigger collapse, Bloomberg Business News reported in April 2014, and by the end of the year net income had fallen by an astonishing 86%.
Why's that then?
Experts say Gazprom’s main problem is that it continues to serve as Putin’s favoured geopolitical weapon. Examples include the company’s purchase of major Russian media outlets that were then turned into Kremlin mouthpieces, bullying or buying the loyalty of neighbouring states and sponsoring the egregiously expensive Olympic Games in Sochi.
Most ominously for the company, the Putin administration still keeps pushing Gazprom to implement new projects that are important for the Kremlin but risky from a financial viewpoint. Two prominent examples concern Ukraine and China.
Because Gazprom is run according to public policy, not the cut and thrust of a purely commercial world.
That it would be public policy running the energy companies is exactly why Crobyn suggests their nationalisation. That it would be public policy running them is exactly why it's a bad idea for them to be nationalised.