When Stephen Byers' renationalised Railtrack, the write down on Railtrack stock ensured that the acquisition cost for HMG was zero!
BT Group plc has been living on state subsidies for years. Around £500m of state funds have been paid to date to bankroll the Openreach FTTC rollout programme. That public subsidy should be converted into a state holding in BT stock, so we get to see a financial return on our investment.
BT's market capitalisation is £18bn today.. At least £500m of BT stock is rightfully ours as taxpayers, as are all the dividends on that shareholding. Yet BT's 2011 end-of-year share dividend was a bumper 9% on the previous year. That's not cricket and it's definitely not free market economics. When a company is surviving on state handouts, it shouldn't be paying a penny in dividends to private investors.
In theory, HMG could impose any rules it wants to accelerate FTTC/P rollout. Since Openreach cannot source City funding within a reasonable time-frame to rollout a fibre programme to our towns, the state should step in. The Government should fund the rollout itself as part of a Public Works Programme, using a public credit system.
It's not that long ago when the state routinely raised money in that way for important infrastructure work. My grandparents recall investing in public works programmes as late as the 1970s. State funding was raised through the issuance of municipal bonds for specific purposes.. the building of new schools, or hospitals etc. It was a great boost for communitarianism as well. "This hospital built through public subscription.."
Today, public credit could fund an accelerated FTTC rollout to every town and village in Blighty. The obstacle is the bankrupt City of London which cannot deliver the financing but refuses to move aside and let the public take over.
Where there's a will there's a way!