Polling over the weekend showed, yet again, that the public ownership of essential resources remains hugely popular, across the political divide. Half of Tory voters want Britain’s energy companies brought back into public hands, according to a YouGov poll for the Times.
This shouldn’t be a surprise for anyone. While the Westminster bubble deny it, substantial, consistent majorities for the public ownership of energy, water, railways and the post have been found for over a decade. Often this was a simple, understandable gut feeling that many voters had: that the essentials of modern life, whether water or heating for a home, shouldn’t be open to grubby profiteering. The “moral economy” of the crowd – of fixed prices for goods, and fair wages for labour, and strictures against profiteering – was supposed to have been banished with the enclosure of the common lands and the building of the workhouses. Rational choice and the profit motive are meant to rule. But our collective sense of innate fairness runs deep, including a belief in the fair provision of basic services.
The balance sheets of the privatised industries add to the moral economy case: since privatisation, for example, the water companies handed out £57bn in dividends to their shareholders – typically large asset managers based elsewhere in the world – while borrowing £48bn. Our private water companies are really financial institutions, unhappily (for them) also burdened with the requirement to supply the population drinkable water.
What’s happened in the past year is that the failures of privatised provision, from rocketing energy bills to beaches drenched in sewage, have moved from balance sheets and a vague sense of popular injustice to become glaringly, catastrophically obvious.
Climate scientists talk about “tipping points” in the earth’s atmosphere – points where, instead of smooth, relative orderly processes of gradual change, the accumulation of different tensions bursts out in wild, dramatic shifts. The earth’s biological history is punctuated with these sudden eruptions – great transitions between the eras, of mass extinctions and sudden explosions in the variety of species. Evolution has occurred not as the slow, near-imperceptible accumulation of accidental adaptations, but sudden leaps and transformations.
So, too, with human-made climate change: the rise in average global temperatures could melt Arctic permafrost, releasing billions of tons of methane gas into the atmosphere, rapidly accelerating warming. Or that the same rise in temperature could release viruses and bacteria, frozen for millennia, unknown to modern humanity. An anthrax outbreak in Siberia in 2016 was attributed precisely to this.
If the failures of privatisation have all arrived at once, it is because we have blundered into a similar tipping point for the British economy, where the accumulation of costs and difficulties arising from rapid environmental change and global instability are converted into an expansive, rolling crisis of the economic fundamentals.
Privatisation exploited an unusually calm period in humanity’s environmental history when oil and gas from the North Sea was still plentiful, average temperatures remained close to their pre-industrial range, and extreme weather events happened infrequently. Combined with rising real incomes for most people, the British privatised system could, by the mid-2000s, have looked like it would deliver prosperity forever.
Now, beset by floods, droughts, wildfires and the consequences of rapid resource depletion, the privatised system is falling over itself. Rinsing profits from the provision of essentials depended on there being a relatively low cost of providing those essential supplies, and a relatively wealthy domestic market for them to be sold into. But as the costs rise, those profits become harder to generate at low prices – and as domestic suppliers try to pass on those costs at a time of far lower wage growth, they provoke a furious reaction, with over 130,000 signing the Don’t Pay UK pledge not to pay their increased energy bills in October.
It’s not yet clear that any of the main political parties have recognised the privatisation tipping point for what it is: the moment at which the old system will either be changed from above, by a government spotting the danger and acting, or from below, by the crowd reasserting the old principle of moral economy and forcing government to act. Labour is too afraid of its Corbynite shadow to make the case – and too nostalgic for the Blair years to want to.
So despite the Thatcher imitations, it may well be the Conservatives who seize this moment. An anonymous senior Tory, quoted in Politico this morning, claimed that a Liz Truss government would have little choice but to nationalise energy suppliers in short order. Section 2 of the 1976 Energy Act to compel the supply and pricing of “crude liquid petroleum, natural gas and petroleum products” would provide the emergency powers needed.