Who Owns Britain?

The country has been remade by a radical political project. From the late 1970s, privatisation has reshaped Britain, transforming public wealth into private power on an unprecedented scale.

We live in the shadow of that unique experiment: no other G7 country privatised its essential services and infrastructure as much as Britain. In fact, since the 1980s, the only advanced economies that experienced a faster and deeper decline in gross public wealth than Britain were those affected by the “shock therapy” of the oligarchic and corrupt post-Soviet transition.

Water. Energy. Transport. Mail. Parts of the care system. Housing and land.

To name everything that went from public hands to private control is to state quite how profound the experiment has been.

The results are now in. The verdict is damning.

Our rivers and seas are polluted. Bus services are unreliable. Train infrastructure is starved of investment. Energy bills are crushing. The high cost of childcare forces parents to choose between staying in work and staying at home. Adult social care is eye-wateringly expensive. Millions are priced out of a secure home and pay more to their landlord than they keep for themselves. 

Life’s essentials are now unaffordable for many. A grinding cost of living crisis is inseparable from the “privatisation premium” — where the public pays a double penalty to access basic services. First, in the form of higher bills to fund corporate profits and shareholder rewards, and then again, via their taxes to provide public subsidies that backstop private rewards.

No wonder they are furious.

Since the 1990s, almost £200 billion has been sent from billpayers to the shareholders of the privatised water, energy, Royal Mail and transport companies, money that should have funded investment to improve services and reduce bills.

Families using essential services have been turned into cash cows for international investors.

Privatisation picked our pockets and sold our wallets back to us. But it’s not just about the money: what are our lives like when we lack control of the basic services we all rely on?

Navigating fragmented and bureaucratic service provision is a bewildering and disorientating ordeal. Accountability has evaporated. Nobody seems to be able to fix obviously broken systems. Pride in a shared, collective life and set of common experiences has slowly disintegrated.

Nothing seems to work properly anymore. Basic infrastructure is falling apart, from exploding substations and gas pipes to collapsing waterways and a lack of affordable housing. We no longer build with scale or ambition. Britain feels like a country in decline.

If the public is losing, who’s winning?

We were told that selling off essential services would create a shareholder democracy where ordinary people would have a stake. Instead, we got oligarchy and the concentration of power.

The owners of what we once held in common are now an assortment of billionaires, international asset managers and pension funds, and private equity giants, with control now in the hands of a tiny number of institutional investors. Perhaps most topsy-turvy of all, utilities that were in our hands are still technically publicly owned — but now by foreign state-owned companies.

Britain was put up for sale and sold out on the cheap.

The beneficiaries defend a system that works for them. Utility bosses rewarded for failure. Politicians and regulators who enable this failed experiment. The investors profiting from ownership of our essential services.

The privateers promised us a miracle: competition, lower bills and better services. Instead, we got inefficient monopolies, rising costs and worsening outcomes, as ordinary people struggle to afford the essentials.

The dream of privatisation has turned into the nightmare of Rip-Off Britain.

What went wrong?

The poor state and high cost of essential services in Britain are not an accidental byproduct of an otherwise effectively functioning system.

This is not a morality tale of wrong-doers, greed and bad apples. Instead, failure is systemic.

This is the system working as it was designed. The cause is a fantasy at the very heart of privatisation.  

The privateers and their ideological allies assumed that the pursuit of profit and shareholder returns would always incentivise investment and improvement in essential services. This was and is damagingly naive.

Shareholders and their elite managerial allies instead found a shortcut to enrichment — piling the companies with debt to pay themselves rising dividends and exploding pay, skimping on maintenance and investment, securing subsidies or derisking guarantees from the state, and lumping us — the captive public — with higher bills to fund it all. 

Some of these novel techniques exploited specific details in the regulations of privatised industries. Closing those loopholes, though, can’t solve the fundamental tension between private profit and public need, or the operational inefficiencies created by private monopolies.

The logic of this new system — profit maximisation over public purpose — drove a deep change in corporate behaviour: from physical engineering to financial engineering, from asset building to asset sweating, and from investing to extracting. 

Privatisation reduced the incentive to invest because borrowing costs were higher and companies could boost profits by delaying capital expenditure. Even when private companies have invested, the higher cost of capital means the public pays more. 

Hollow firms with overleveraged and fragile balance sheets have struggled to deliver the investment needed. The endless game of cat-and-mouse between private companies and the regulators further delays desperately needed investment — regulatory bureaucracy is a feature, not a bug, of privatised utilities. Breaking up the constituent parts of our transport and energy systems has undermined coordination, and they now require extensive and expensive state intervention to function. 

Reversing decline requires rebuilding Britain to make life secure and affordable for everyone. Abundant housing. Homegrown clean power. High-quality transport. Modern water systems. Twenty-first-century infrastructure for a free and decent society.

But privatisation has undermined our ability to act with the ambition and scale we need and made the investment pipeline in our essential services and infrastructure more incoherent, less certain, and more costly. The public pays the price. 

We are weaker, poorer and less equal as a result.

Britain can no longer afford to indulge in fantasies, if it ever could.

Renewal requires reckoning with reality.

The reality is that who owns and controls our essential services and infrastructure — the background pattern of our lives — profoundly matters. Whoever does will always have immense power over society, power that can be converted into private wealth at the public’s expense.

This fact informs the purpose of Common Wealth’s new project: to help us understand who profits from ownership of our essential services and how, so we are better equipped to remake them, by and for the public.

We know democratic public ownership works. Not only from successful, publicly owned energy, housing, water and transport systems in rich and dynamic economies across the world. Nor just from examples from our own past that transformed the country, when public ownership built millions of homes, transformed the energy grid and upgraded our infrastructure.

We know, also, from our present: from award-winning municipal bus services in Nottingham delivering innovation and affordable fares, Scottish Water investing more but costing less, to public rail already beginning to deliver more reliable services.

This is not about nostalgia or a sepia-tinged vision of the past. We are not content to diagnose decline; we want to work out how things must change.

Today, it is the defenders of privatisation who are clinging to an out-of-date ideology which is failing the country.

They are out of touch and out of time. 

Our project — Who Owns Britain? — interrogates the present so we can build a better tomorrow: a society where manufactured scarcity is replaced with shared abundance; a country that meets the aspirations of all its people, where everyone can afford life’s essentials and we can collectively rise to meet our greatest challenges.  

We all want a society where everyone enjoys security and freedom, affordable essentials and a sense of pride in what we build together. These are the foundations of hope. Privatisation was given a chance to deliver for us. The evidence is now clear. The experiment has failed. Enough.

It is time to put ordinary people first. We can fix what’s broken — it’s time to reclaim the services that belong to the public. 

Let’s end the rip-off and take back our future.