Tony Lodge

Britain’s ability to keep the lights on has just been thrown into doubt by the European Court of Justice. It has ruled that the backbone of the UK’s capacity market energy scheme, which pays power stations to generate electricity, is illegal state aid and must be suspended. To call this a body blow for energy security is a gross understatement; as you read these words Whitehall is desperately trying to reassure generators and very nervous investors. Payments to power stations through the capacity market have now been stopped until the Government can get permission from the European Commission to restart them, but this could take years.

Britain’s railways provide a striking example of how a half-baked privatisation goes wrong. The Centre for Policy Studies today introduces a new word to the political and economic lexicon: Railopoly; noun, the exclusive possession or control of train services by a single company (public or private) which faces no competition or threat of. The private train monopolies which have been allowed to replace the old nationalised British Rail have become entrenched in the safe knowledge that ministers will not object and regulators will keep preventing competition. But how and why? Quite apart from allowing bad policies, can’t Conservatives realise that preserving the current unsatisfactory system gives credibility to Jeremy Corbyn’s plans to renationalise?

Last month the Labour party moved two debates in the Commons pushing for Government to keep running the important East Coast Main Line (ECML) rail franchise between London King’s Cross, Newcastle and Scotland. The state has run this service since National Express East Coast was hit by the downturn in 2008 when it became unable to make the necessary government repayments for operating the franchise. Tory ministers want to quickly see the franchise back in private hands. Labour’s more vocal stance on rail has important undertones; the party is increasingly echoing the left-wing rail unions and the TUC in its policy towards the sector.