‘British Steel can’t be a one-off. Labour should nationalise more key services’

“When there is foreign investment or involvement in critical infrastructure we need to have a high level of scrutiny” James Murray said on Radio 4’s Today programme.

The government’s decision to recall parliament to pass emergency legislation to protect British Steel makes sense.

But it raises questions for other key national assets which have been sold off to the highest bidder over a 40 year period.

Older readers might remember the ‘Tell Sid’ campaign and Thatcher’s vision to create a nation of small shareholders. Inevitably those early buyers had their assets gobbled up by international investment firms, foreign states and billionaires. Water, energy, rail, buses, Royal Mail and the NHS, all are up for grabs today, with dire consequences.

The government is saying that in the new world order, national security is the top priority. But privatisation on this scale doesn’t feel safe or secure. We are gambling on investors whose sole focus is to make a profit. And many are not even doing so from the UK, our essential infrastructure is just a part of their portfolios, an investment opportunity on the other side of the world.

‘British Steel not the first time interests of private sector not aligned with country’s interests’

The government might argue that the alleged sabotage planned by the Chinese government is in a category of its own, a uniquely dangerous and deliberate attempt to undermine the UK’s interests. But this would be missing the point. What has happened with British Steel is not the first time that the interests of the private sector, or of other countries’ governments, have not been aligned with the interests of this country.

We handed over our vital energy infrastructure to foreign owners, from generation to transmission and distribution, to supply. Norway and Denmark profit from our coastline’s renewable energy while German, French and Spanish companies own our retail companies. Our energy grid was almost unique in Europe in being entirely privatised, although the Conservative government decided to buy back a part of the National Grid for planning purposes, at a cost of £630 million.

We know that the government has concluded there are no security risks from having our 500 year old Royal Mail owned by Czech billionaire Daniel Kretinsky. And yet we also know that his plan is to compete in the parcel delivery business. He does not care about our letters being delivered.

And when Australian asset management firm Macquarie extracted as much profit as possible from Thames Water, it didn’t care about its 16 million customers or about our rivers. This was not sabotage, but it was not careful stewardship either.

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‘Government is allowing money to be poured into pockets of shareholders’

It has never been so affordable for the government to step in to bring Thames Water into public ownership using existing legal ‘special administration’ powers, just like the Blair government protected the public interest when Railtrack went bus. Thames Water’s debt could be halved and refinanced more cheaply, while the shareholders have already been saying the company is worthless.

Instead, after the chaos, after the bailout that will cost every household in the region £250, the government’s plan is to hand over Thames Water to KKR, an American private equity firm that was the inspiration for a film called ‘Barbarians at the Gate’.

The government is allowing money to be poured into the pockets of shareholders who couldn’t care less about the UK public. New Greenwich University research shows that even if you compensate water shareholders at full “market” value (which is based entirely on ripping us all off) public ownership is still a better deal for the public purse, freeing up funding for bill reductions, more investment in stopping sewage, or both.

This new research undermines the government’s argument about the cost of public ownership being too expensive, so it is time for Steve Reed to allow the question of ownership to be at least discussed in the “biggest review of the water industry since privatisation”.

Currently he is forbidding discussion of nationalisation, which is nonsensical, particularly given what is happening with British Steel, and indeed with the railway.

‘We deserve to profit from our national assets’

Tomorrow the government’s consultation on Great British Railways closes. Rail franchises are being brought back in house because this is acknowledged to be “pragmatic”. But the plan is for the rolling stock (the trains themselves) to continue to be owned by Canadian pension funds and Hong Kong based CK Hutchison. As this is the most profitable part of the railway, this is a mistake – the government could save a huge amount of money by setting up Great British Trains. Readers can respond to the consultation here.

We deserve to have public services and assets whose owners actively look after them.

We deserve to have dividends from our public services flowing back for reinvestment, and cheaper public sector debt instead of PFI 2.0.

We deserve as a country to profit from our national assets, as other countries do, instead of just picking up the pieces when privatisation goes wrong.

This doesn’t mean ministers directly running public services. Publicly owned public services should be run by experts – and they are, just look at the Met Office, the Ordnance Survey, the Royal Mint, the Land Registry. All run by professionals but making a profit for the public purse, and accountable to the public.

Our public services are essential, natural monopolies, just as much critical national infrastructure as British Steel. The government should step in to protect them.

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