Scotland has already tried ‘Manchesterism’. It won’t solve Britain’s economic crisis alone

As Andy Burnham moves closer to becoming the next Prime Minister of the United Kingdom, questions surrounding his plans for public control over essential services like water and energy have taken center stage. This focus comes amid growing dissatisfaction with the current state of these industries, which critics say have suffered from years of privatization and mismanagement. Feargal Sharkey, a prominent musician and activist, once believed that Keir Starmer would address these issues, but now he looks to Burnham to initiate change. Sharkey argues that the privatization of the water industry, particularly the troubled Thames Water, has resulted in a catastrophic situation where consumers bear the brunt of poor infrastructure and excessive profits. Burnham’s potential leadership has sparked concern among utility companies, while simultaneously exciting activists who see an opportunity for reform. Advisers within Burnham’s camp suggest that the time is ripe for a shift toward public ownership of vital services, especially in sectors like water and energy distribution. According to insiders, Burnham is contemplating a comprehensive 10-year initiative aimed at regaining control over the essentials of daily life. A spokesperson for Burnham emphasized the need for “stronger accountability and better standards” in managing these critical services. They noted that the water industry exemplifies a scenario where shareholders benefit at the expense of consumers, leading to frustration over rising bills linked to inadequate infrastructure and high profit margins. The debate around nationalizing these services centers on the belief that private entities can extract profits that would be better invested in improving infrastructure, with no competitive pressure to elevate service quality. Conversely, the water industry asserts that private ownership brings necessary investments without increasing public debt. However, the thinktank Common Wealth, supported by Burnham ally Mat Lawrence, highlights that the higher cost of capital for private firms compared to government borrowing contributes to inflated utility bills. Even if Burnham supports the notion of public ownership, implementing it would involve complex decisions regarding the method of transition. A legislative proposal to seize private assets without compensation seems improbable due to concerns about deterring international investors. Instead, the government might wait for companies to violate their license terms—such as Thames and South East Water—before asserting control. Economists like Chris Hayes from Common Wealth note that the government could opt for acquiring assets at fair market value, thus reducing legal challenges from affected companies. Hayes suggests that initiating numerous legal battles may not align with the government's interests. The estimated cost of nationalizing the sector is another contentious issue. Sharkey claims that imposing actual cleanup costs on the environment would render the companies worthless, while the Labour government estimates the cost at £100 billion. Campaign groups such as Common Wealth and We Own It argue that the initial expenses would be offset by revenue-generating assets. Dieter Helm, an Oxford University professor who has advised previous governments on energy and water policy, points out that Burnham previously managed bus planning and pricing as mayor of Manchester. Burnham’s proposed economic strategy, dubbed “Manchesterism,” aims to enhance living standards by decentralizing power from London and ensuring affordability of essential services. This approach seeks to counteract the perceived failures of recent decades, including deindustrialization, privatization, austerity, and Brexit. Burnham envisions a “rewired Britain” that delivers prosperity to every region. However, this vision echoes existing practices in Scotland, where significant devolution has already occurred. Scotland's water industry remains publicly owned, and initiatives like the return of ScotRail to public hands reflect a similar ethos. Despite these parallels, Scotland still grapples with economic challenges akin to those faced by the rest of the UK, indicating that merely adopting these policies may not guarantee success. Nevertheless, the push for public control over essential services represents a crucial step towards addressing longstanding issues related to infrastructure, affordability, and equitable resource distribution. As Burnham prepares to lead, the coming months will reveal how effectively he can translate these ambitious ideas into tangible improvements for the nation.