
> Policy summary
Some public infrastructure is vital to the life of the nation and should not be a profit-making venture (water and sewage, highways, railway tracks, gas pipelines, electricity grid, network backbone).
Privatisation works well where a genuine competitive market can be established, but where large-scale fixed infrastructure is concerned, consumers (whether private individuals or businesses) are forced to purchase their supply from whomever provides that infrastructure in their geographic region without access to alternative suppliers. This leads to grotesquely profitable monopolies, running contrary to the core Conservative belief that the fair operation of the free market will ensure an equitable price for the product supplied.
The natural Labour approach would be to nationalise these companies and put them under state control, which experience suggests would lead to equally indifferent performance and doubtless increase the overall cost of their services.
As Conservatives nationalisation is not our natural instinct, so what can we do? Increasing market competition is difficult due to the exclusive nature of fixed infrastructure so how about encouraging the corporations that manage these infrastructures to restructure themselves as charitable organisations operating not for the profit of share-holders but for the most efficient delivery of services to the public?
These corporations would be encouraged to raise capital for large-scale projects through bond issues, would continue to be regulated to ensure quality of service, and would charge service-providers for access to the infrastructure. Removal of the profit motive would encourage lowering of prices and greater investment in infrastructure, both desirable outcomes.
> Political risks and opportunities
> Questions for ConservativeHome readers
- How best to create effective free markets for the provision of commercial services over these non-commercial infrastructures?
- How to manage the transition to non-profit status without damaging market confidence?
- Could the same principle be applied to Local Government and/or the worthier organs of the welfare state?
> Costs

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