UK public is increasingly in favor of the renationalization of crucial sectors of the economy due to their faulty performance, as was the case in the late 1980s and early to mid-1990s, making it a potential vote winner for the Labour or any other party that takes it up, experts told Sputnik
MOSCOW (Pakistan Point News / Sputnik - 24th October, 2022) UK public is increasingly in favor of the renationalization of crucial sectors of the economy due to their faulty performance, as was the case in the late 1980s and early to mid-1990s, making it a potential vote winner for the Labour or any other party that takes it up, experts told Sputnik.
Achieved during the premierships of Margaret Thatcher and John Major, the privatization of underperforming state enterprises has been considered one of the major policy accomplishments of the Conservatives during their tenure as the ruling party from 1979 to 1997. This process also included the country's public utilities, such as the energy company British Gas being privatized in 1986 as well as the water industry in 1989, the electricity supply industry in 1990 and 1991, and British Rail from 1993 to 1997.
The privatization policies were later upheld by the Labour government of Tony Blair who sought to shift his party away from the old-school leftist policy platform, creating a cross-party consensus on the issue that that exists today.
When enacted, those changes were presented as a way to make the privatized companies more productive and better run as well as provide additional revenue to the state budget and reduce the deficit. The effect, however, varied across different industries, with some faring better than others. Meanwhile, the opponents of privatization maintain that the policy did not do what it was supposed to do, especially when it comes to public utilities, while also enriching private shareholders.
At the same time, there has been a growing dissatisfaction with privatized utilities among the public, with the idea of renationalization gaining traction among voters. According to last week's YouGov poll, 57% of respondents think that train services should be run entirely within the public sector, while 55% and 63% believe that water and energy industries respectively should also be run in the public sector due to soaring utility bills.
"Surveys over a long period (at least since the early 2000s) of the public have supported nationalisation in key sectors but they have been at odds on this with the political elites in Conservatives, Labour and Lib-Dems (except for (Jeremy) Corbyn Labour period). Recent surveys show growing support and strong majorities (even among Tory voters) as contradictions of, and therefore faults of privatisation become more evident," Andrew Cumbers, a professor of political economy at the Adam Smith business school, the University of Glasgow.
This sentiment was echoed by Patrick Diamond, a professor of public policy at Queen Mary, University of London, who noted that the public attitude toward nationalization has changed during the last 20 years due to "the visible failure of privatisation in the 1980s and 1990s," with the outcomes for consumers being particularly poor in the water and railway industries.
"Privately-owned railways, in particular, have been a regular target of criticism and recent problems have only increased the volume of protests. The water companies have also been deeply unpopular, thanks to their poor environmental records, their excess profits, and the fact that so many of them are no longer British-owned," Mark Garnett, a senior lecturer at the department of politics, philosophy and religion at Lancaster University, stated.
Peter Dorey, a professor of British politics at Cardiff University, explained that the issue with privatized rail is the difficulty of having proper competition since "you can't have several trains from different companies simultaneously on the same tracks and the same routes, all rushing to get to the next station first to get the passengers."
"Besides, privatisation has not delivered a better service and lower fares via competition; instead, there are constant complaints about trains running late or being cancelled without advance warning, overcrowding due to too few carriages (to save money for the train companies), and some of the most expensive fares in Europe," Dorey continued.
Speaking about water and energy, the expert drew attention to a long-term attitude toward water and energy as natural resources that should not be privately owned. He went on to say that the current economic downturn as well as recent revelations about the salaries that the CEOs of these companies have only strengthened this view.
With the collapse of the Liz Truss government, it has become evident that the United Kingdom has little appetite for Thatcherism 2.0, meaning that a departure from the long-held orthodoxies, including privatization, could reap electoral benefits to whatever party is willing to risk it.
The most likely party to take up nationalization is the Labour due to its history. In fact, under Corbyn's leadership, the party committed itself to a far-reaching nationalization program. However, Starmer, who is Corbyn's moderate replacement, has been less enthusiastic about the issue, ruling out nationalization of the big six energy companies last year.
"Nationalisation could be a vote-winner, particularly for Labour. However, the party has not been clear of its intentions under Sir Keir Starmer. A key reason for his hesitation is the likely cost, and this is an even greater problem due to the sharp decline in Britain's economic fortunes," Garnett explained, adding that "re-nationalisation would mean that government would have to take the blame whenever things went wrong."
Dorey, for his part, suggested that while the party has many lawmakers who favor nationalization, Starmer is concerned that this policy is too closely associated with Corbyn and reminds voters of Old Labour.
"There is also concern about the costs of renationalisation - compensation paid to shareholders, or the cost of buying their shares off them," Dorey said, noting that this would cost billions of Pounds and that "the (Labour) leadership probably thinks that such money would be better spent on employing more nurses, police officers and teachers."
Both Dorey and Garnett mentioned the Greens as potential vehicles for nationalization policies, with the former mentioning that the party's support is growing and it even manages to outperform the Liberal Democrats in some polls. They also think the Tories are very unlikely to argue the issue.
"The Conservatives will not consider (re)nationalisation because they are too committed to privatisation and free-market economics. They also believe that any problems with privatised industries can be solved by more de-regulation and more competition," Dorey stated.
At the end of the day, however, the matter of nationalization is not about ideological tenets, but about providing better public services. After all, Thatcher's reforms also sought to address the economic and political failures of the late 1970s, thinking that privatization would improve people's quality of life and economic prospects.
"British citizens are generally pragmatic. They are less concerned about whether the industry is managed by the public or private sector. They focus on results and quality of service," Diamond concluded.
