Burnham champions public ownership for Thames and greater public control for all

(by Karma Loveday)

Andy Burnham has indicated that as Labour leader, he would impose stronger public control over the water industry as well as energy and transport, using a pragmatic approach.

Speaking to Newsnight on Friday, he suggested that the Government could step in using a “spectrum of interventions” – from tougher regulation to full public ownership – depending on the situation. “I’ve not used the word nationalisation because that allows a more pragmatic approach, because it’s not the same with all of these services in all parts of the country.”

Drawing a parallel with rail, he said that for Thames Water, given its “multiple regulatory breach[es],” there is “an overwhelming case for public ownership”. He cited its ongoing financial crisis paired with what he defined as its continuing payment of dividends and asked, “how can that possibly be right?”

There was the implication that other struggling water firms could face a similar fate, but that others might warrant more modest intervention.

That said, Burnham criticised the private ownership model as a whole, arguing: “There’s a situation in the water industry where the shareholders never lose, and the bill-payers never win.”

He declined to say how he would fund the upfront cost of public ownership, except to say “you do it over a long period of time” and that the cost “pays back over time”. He said: “When you do put things under public control, you actually start to save public money because the public money can be more tightly controlled.” He cited in example no longer having to pay high rates to privatised bus companies to continue routes to remote areas, where buses are publicly run.

Under current arrangements: “The vested interest wins in this system and the public interest loses. So yes, there could be upfront cost from putting things under public control… but the country saves money for a long period of time afterwards.”

Great public control of utilities and transport, to bring bills and costs down for the public, was a key plank of what Newsnight described as “The Andy Burnham manifesto?”

Alongside that, the Makerfield by-election contender said he would cut business rates for pubs and high street businesses and seek “to change politics… the Westminster system doesn’t work”.