This article is part of ourEconomy's 'Public ownership in times of coronavirus' series with TNI.
There have been dramatic and contradictory swings in the politics of public services in the UK in 2019 and 2020. The unfolding story can be told in five parts.
Firstly, as in other countries, the UK has seen a steady flow of re-municipalisation of local services as contracts expire, and rejections and reversals of privatisation at regional level, including public sector water services in Scotland and Northern Ireland, and the renationalisation of Cardiff Airport in Wales. At national level there have been continued privatisation policies, although campaigns by We Own It and others succeeded in forcing the abandonment of some proposals, and even forced some reversals, for example the probation service.
Secondly, after the election of Jeremy Corbyn as leader in 2015, the Labour Party developed detailed policies for strengthening and democratising public ownership and public services, based on detailed economic and political cases. In the general election of June 2017, Corbyn’s Labour party won 40% of the vote and denied the Conservatives an overall majority. The policies themselves, instead of being perceived as unrealistic or undesirable, were clearly a major reason for the strong result, and led to a much wider public discussion of the reasons for rejecting the failed privatisations and instead building a strong, democratic public sector.
The Labour manifesto for the December 2019 election included even stronger commitments to extending, strengthening and democratising the public sector, as part of a fully costed economic strategy. This included the return to public ownership of the water, energy and telecoms networks and the postal system under transparent and democratised regional bodies, bringing all rail operations back under a unified public rail system, enabling local governments to run their own services, creating a new national care service, the creation of a new public sector development bank, and of a post office bank, the ending of PPPs at all levels, bringing all outsourced contracts back inhouse by default. This would be the framework for a comprehensive set of ‘green new deal’ policies to address climate change, the provision of free full-fibre connections to every home, and a programme for 1 million new public sector homes.
The manifesto represented a full-scale rejection of the policy consensus established by the Thatcher government and accepted by successive Labour party leaders from Blair onwards. It remains an example of what is politically and economically possible, even in a country which has hitherto been regarded as a bastion of privatisation.
Thirdly, the December 2019 election was a decisive defeat for Labour, and led to the resignation of Corbyn. The election was called to resolve the issue of Brexit, and the Conservatives made that the single issue of their campaign, to ‘get Brexit done’. They won with a large majority, but the key factor for voters was, overwhelmingly, Brexit – not Labour’s public ownership policies.
Rather the opposite: direct surveys of voters carried out at the same time as the election showed that a substantial majority of UK voters support nationalisation and public sector operation of post, water, energy, rail and buses – as proposed in the Labour Party manifesto (see Figure 1). The surveys also showed that support for these policies had grown measurably stronger since the 2017 election, and even extends across political parties; Conservative voters support public ownership in rail and water, and Liberal Democrat voters favour public ownership in energy, buses and post too.
Moreover, this majority support for extending public ownership was very consistent across all age groups, regions, class, income, gender and ethnicity (see Figure 2). This is very different from the divisive role of Brexit, which was heavily supported by the old and those outside cities, and heavily opposed by the young and those living in cities. Since the divide on Brexit is in effect the UK version of the divide over right-wing populism elsewhere, this finding should be of considerable political interest beyond the UK. A progressive programme for building a new strong public sector can form the basis of a unifying political programme.
This widespread public support for a stronger public sector was acknowledged even by the establishment media. The demand for public ownership was described as a new “political consensus among voters” by the Independent; The Times warned that “the business world must accept that some of Corbyn’s policies appealed to the public”; and the political correspondent of the Financial Times said that the Labour Party under Corbyn had “succeeded in shifting the debate. Nationalisation has ceased to be a dirty word in British politics… Labour has managed to ally nationalisation with consumer interest.” Corbyn was right to say that “we have won the arguments and rewritten the terms of political debate. But I regret that we did not succeed in converting that into a parliamentary majority for change.”
The policies of the main parties have, ironically, moved in opposite directions since the election. The Conservative party no longer offers a general defence of privatisation, and within 6 weeks of the election, the new Conservative government terminated a private rail operating franchise and transferred the concession to a state-owned company. But the new leader of the Labour Party, Kier Starmer, has avoided giving anything more than token support for extension of public ownership.
But the fifth great unexpected factor, as in other countries, has been the Covid-19 crisis. It has led to a great surge in the role of the state, acting for the public good to control the impact of the pandemic, including the compulsory suspension of normal economic activity by firms and by people, while maintaining the income of people through the ‘furlough’ scheme and the solvency of companies through various subsidies and guarantees, despite the massive surge in public spending and deficit. It also involved the official recognition that healthcare and other public service workers are ‘essential workers’, which reinforced public opposition to the ‘gig economy’, and a wave of direct action by outsourced public service workers. One short-term result was government improving sickness benefit entitlement of such workers. The FT observed that, in the UK and globally, “Coronavirus puts worker rights and protections top of the agenda”. The government has also effectively forced private hospitals to prioritise supporting the public NHS rather than private patients.
One major shift in economic policy is that the huge financial cost of supporting workers and businesses across the economy is being financed not by borrowing but by the government using the Bank of England to create the necessary money. This policy is anathema to the traditional Conservative/neo-liberal view of public finances, but is rather in line with Modern Monetary Theory developed by left politicians and economists as a way of financing a green new deal. The Financial Times duly gave its seal of approval, adding that such policies “may be here for the long term”.
So far, like the election, the pandemic has shown the strength of public support for public sector action. There are increasing signs of people organising to demand longer-term improvements – like the group of dissident scientists critical of the government’s handling of the crisis, who have published their own ‘Independent Sage’ report. The future holds opportunities.
A longer version of this article appears in the TNI book The Future is Public, which can be downloaded free of charge here, and includes 15 full-length stories contributed by remunicipalists and de-privatisers around the world.