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Theresa May's defence of “free market capitalism” puts her at odds with the public

Polls have repeatedly shown voter discontent with a system that is not working for the majority. 

After Theresa May became Prime Minister, she cast herself as a critic of free market Thatcherism. Unlike many Conservatives, she spoke of the state as an ally, rather than an enemy, and vowed to intervene to fix "broken markets". May recognised that the Brexit vote was a symptom of economic and social discontent, rather than merely hostility to the EU. 

The 2008 financial crisis led to an enduring loss of faith in economic elites. Capitalism has since failed to deliver on its promise of rising living standards for the majority. And voters have grown ever more weary of public spending cuts. In recognition of this, the 2017 Conservative manifesto declared: "We do not believe in untrammelled free markets. We reject the cult of selfish individualism. We abhor social division, injustice, unfairness and inequality. We see rigid dogma and ideology not just as needless but dangerous." (Though the policies were not as radical as the rhetoric.) 

May was denied a majority at the election. But Labour's surge confirmed that she was right to recognise the public's grievances. The sustained support for Jeremy Corbyn suggests that this is no mere electoral blip. Yet the day after Corbyn's conference speech, which promised "21st century socialism", May has launched a full-throated defence of "free market capitalism". 

In a speech to mark the 20th anniversary of Bank of England independence, she declared: "A free market economy, operating under the right rules and regulations, is the greatest agent of collective human progress ever created. It was the new combination which led societies out of darkness and stagnation and into the light of the modern age ... That is unquestionably the best, and indeed the only sustainable, means of increasing the living standards of everyone in a country."

Though this is not strictly at odds with May's earlier position (she never questioned the fundamentals of the free market), it is a marked shift in rhetoric. Rather than challenging Thatcherite orthodoxy, May now appears to be affirming it. As Ed Balls (no Corbynite) tweeted: "I'm surprised by today's Theresa May speech. I'm all for open markets. But championing 'The Free Market' feels bad economics & bad politics."

May's new stance puts her sharply at odds with the public. All of Labour's headline policies (frequently denounced as "hard left" by the right) enjoy majority support from voters. A YouGov poll, for instance, found that 58 per cent support renationalising the railways, water companies and other utilities (with 17 per cent opposed), 61 per cent support increasing the minimum wage to £10 (with 19 per cent opposed) and 52 per cent support increasing the top rate of tax to 60 per cent (with 23 per cent opposed). There is also majority support for policies such as rent controls (59 per cent), abolishing zero-hour contracts (64 per cent) and introducing universal free school meals (53 per cent). A 2016 YouGov poll found that the public view socialism more favourably than capitalism. 

Labour's 2017 manifesto, which owed more to Keynesianism than Marxism, did not in fact propose the overthrow of the market. Many of Corbyn's policies would be regarded as mainstream in other European countries (Germany, France and the Nordic states). But that May now feels the need to defend capitalism itself is a measure of how terrified the Tories are by Labour's rise. 

George Eaton is political editor of the New Statesman.

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Labour’s renationalisation plans look nothing like the 1970s

The Corbynistas are examining models such as Robin Hood Energy in Nottingham, Oldham credit union and John Lewis. 

A community energy company in Nottingham, a credit union in Oldham and, yes, Britain's most popular purveyor of wine coolers. No, this is not another diatribe about about consumer rip-offs. Quite the opposite – this esoteric range of innovative companies represent just a few of those which have come to the attention of the Labour leadership as they plot how to turn the abstract of one of their most popular ideas into a living, neo-liberal-shattering reality.

I am talking about nationalisation – or, more broadly, public ownership, which was the subject of a special conference this month staged by a Labour Party which has pledged to take back control of energy, water, rail and mail.

The form of nationalisation being talked about today at the top of the Labour Party looks very different to the model of state-owned and state-run services that existed in the 1970s, and the accompanying memories of delayed trains, leaves on the line and British rail fruitcake that was as hard as stone.

In John McDonnell and Jeremy Corbyn’s conference on "alternative models of ownership", the three firms mentioned were Robin Hood Energy in Nottingham, Oldham credit union and, of course, John Lewis. Each represents a different model of public ownership – as, of course, does the straightforward takeover of the East Coast rail line by the Labour government when National Express handed back the franchise in 2009.

Robin Hood is the first not-for-profit energy company set up a by a local authority in 70 years. It was created by Nottingham city council and counts Corbyn himself among its customers. It embodies the "municipal socialism" which innovative local politicians are delivering in an age of austerity and its tariffs delivers annual bills of £1,000 or slightly less for a typical household.

Credit unions share many of the values of community companies, even though they operate in a different manner, and are owned entirely by their customers, who are all members. The credit union model has been championed by Labour MPs for decades. 

Since the financial crisis, credit unions have worked with local authorities, and their supporters see them as ethical alternatives to the scourge of payday loans. The Oldham credit union, highlighted by McDonnell in a speech to councillors in 2016, offers loans from £50 upwards, no set-up costs and typically charges interest of around £75 on a £250 loan repaid over 18 months.

Credit unions have been transformed from what was once seen as a "poor man's bank" to serious and tech-savvy lenders where profits are still returned to customers as dividends.

Then there is John Lewis. The "never-knowingly undersold" department store is owned by its 84,000 staff, or "partners". The Tories have long cooed over its pledge to be a "successful business powered by its people and principles" while Labour approves of its policy of doling out bonuses to ordinary staff, rather than just those at the top. Last year John Lewis awarded a partnership bonus of £89.4m to its staff, which trade website Employee Benefits judged as worth more than three weeks' pay per person (although still less than previous top-ups).

To those of us on the left, it is a painful irony that when John Lewis finally made an entry into politics himself – in the shape of former managing director Andy Street – it was to seize the Birmingham mayoralty ahead of Labour's Sion Simon last year. (John Lewis the company remains apolitical.)

Another model attracting interest is Transport for London, currently controlled by Labour mayor Sadiq Khan. TfL may be a unique structure, but nevertheless trains feature heavily in the thinking of shadow ministers, whether Corbynista or soft left. They know that rail represents their best chance of quick nationalisation with public support, and have begun to spell out how it could be delivered.

Yes, the rhetoric is blunt, promising to take back control of our lines, but the plan is far more gradual. Rather than risk the cost and litigation of passing a law to cancel existing franchises, Labour would ask the Department for Transport to simply bring routes back in-house as each of the private sector deals expires over the next decade.

If Corbyn were to be a single-term prime minister, then a public-owned rail system would be one of the legacies he craves.

His scathing verdict on the health of privatised industries is well known but this month he put the case for the opposite when he addressed the Conference on Alternative Models of Ownership. Profits extracted from public services have been used to "line the pockets of shareholders" he declared. Services are better run when they are controlled by customers and workers, he added. "It is those people not share price speculators who are the real experts."

It is telling, however, that Labour's radical election manifesto did not mention nationalisation once. The phrase "public ownership" is used 10 times though. Perhaps it is a sign that while the leadership may have dumped New Labour "spin", it is not averse to softening its rhetoric when necessary.

So don't look to the past when considering what nationalisation and taking back control of public services might mean if Corbyn made it to Downing Street. The economic models of the 1970s are no more likely to make a comeback then the culinary trends for Blue Nun and creme brûlée.

Instead, if you want to know what public ownership might look like, then cast your gaze to Nottingham, Oldham and dozens more community companies around our country.

Peter Edwards was press secretary to a shadow chancellor, editor of LabourList and a parliamentary candidate in 2015 and 2017.