An open letter to Sir Keir Starmer on public ownership

Dear Sir Keir Starmer,

In 2020 we asked all of the Labour leadership and deputy leadership candidates to sign the 10 We Own It pledges on public ownership. We were very happy that you signed up to those pledges.

In 2020 you also made your own pledge for ‘common ownership’ in which you said ‘Public services should be in public hands, not making profits for shareholders. Support common ownership of rail, mail, energy and water; end outsourcing in our NHS, local government and justice system.’ We were very happy to see that too. 

In your recent pamphlet for the Fabians, ‘The Road Ahead’, public or common ownership is not mentioned. We’re writing to ask for clarification on why this is the case, and to offer five reasons why public ownership of public services must continue to be a core policy for the Labour Party.

1. Public ownership is popular

In your pamphlet, you talk with conviction about the values that, for us, sit behind strong public services working for people not profit. It is encouraging to see you recognise that ‘The plan to strip back the state has come at immense cost to the social fabric of our neighbourhoods, our communities and our country.’ And to read that ‘Where Tory individualism decrees there is ‘no such thing as society’, we believe the opposite.’

Labour’s public ownership policies are an opportunity to prove what those values mean in practice, and we know that these policies resonate with people. 

• 64% of us want the railways to be in public ownership
• 69% want the Royal Mail in public ownership
• 52% want energy in public ownership
• 63% want water in public ownership
• 84% want our NHS fully in public ownership
• 55% want to see services run in-house by councils
• 55% want buses in public ownership
• 62% want prisons in public ownership
• 64% want social care in public ownership

The evidence suggests that Labour’s public ownership policies were always popular and became even more so from 2017 to 2019. Direct surveys of voters from the 2019 election show that Brexit and leadership were the key issues influencing the way people voted, not party policies on public ownership. Support for public ownership is found across all age groups, regions, class, income, gender, and ethnicity. Even Conservative voters support public ownership of rail and water. Labour’s public ownership policies are an asset.

2. Public ownership can help Labour tackle key challenges

In your Fabians pamphlet you talk about how in government ‘A failure to actively shape and strengthen the economy means that vast potential is being wasted.’ You explain that ‘a Labour government would provide a level playing field, a skilled workforce and a modern infrastructure, from transport to public services.’ Public ownership can help to achieve these goals.

You highlight particular areas where Labour would take bold action.

• On health, you rightly draw attention to how drastic government cuts have damaged our NHS. A key aspect of this story is that NHS money is also being wasted on private companies and their shareholders, both in the pandemic and more generally. As Labour has highlighted, £96 billion of NHS money has been spent on private providers in the past decade. Labour should claim its reputation as the party of the NHS by promising to reinstate our NHS as a fully public service after the pandemic. Again, our polling shows that 76% of voters support this. 
• You talk in your pamphlet about education and the importance of social mobility. Strong public services working for people not profit will strengthen this as they boost and bolster our economy and society. It is great to hear you say that your parents ‘could never have afforded private education or private healthcare – but we never felt we needed it. That made it possible for me to follow my ambitions and have a family of my own.’ Universal, high quality public services across the board create more opportunities for everyone.
• On energy, it is brilliant to see you promising that ‘We would get more offshore wind turbines built, powering our homes with clean energy.’ Currently, UK offshore wind is dominated by public and private companies from other countries like Denmark. We should be developing our own publicly owned offshore wind power. What’s more, public ownership of energy networks would save £3.7 billion a year, enough to buy 222 new offshore wind turbines.

3. Public ownership saves money

In your new ten principles you say ‘The economy should work for citizens and communities. It is not good enough to just surrender to market forces.’ You also ask in your pamphlet ‘Why when government departments are funded by taxpayer money are we so lax about ensuring that money is spent appropriately?’

For nearly forty years now, an ideological commitment to privatisation and outsourcing wherever possible has meant that the public is getting a bad deal.

Privatisation costs more because it means spending money on shareholder dividends and the higher cost of borrowing in the private sector (the government can borrow more cheaply). Creating artificial markets where they don’t belong also often creates wasteful fragmentation and duplication.

Where public ownership involves buying back assets, this does have a cost, but it pays for itself over a relatively short timeframe because we are acquiring assets and we stop wasting money on the costs mentioned above. 

Where public ownership involves taking contracts in house as they come up for renewal, there does not need to be a cost.

In both cases, we the public save money and this is a sensible decision from a financial point of view.

• Public ownership of water would save £2.5 billion a year - investing this could reduce leakage levels by a third.
• Public ownership of energy networks would save £3.7 billion a year - enough to buy 222 new offshore wind turbines.
• Public ownership of rail would save £1 billion a year - enough to buy 100 miles of new railway track.
• Public ownership of buses would save £506 million a year - enough to buy 1,356 new electric buses.
• Public ownership of Royal Mail would save £171 million a year - enough to open 342 new Crown Post Offices with postbanks.
• Public ownership of broadband would save £500 million a year - enough to pay for full fibre broadband for 6 million households.
• Ending the internal market in the NHS would save at least £4.5 billion a year - enough to pay for extra staff - 72,000 nurses and 20,000 doctors.

We're wasting £13 billion on privatisation every year. That's £250 million every single week. These are statistics that Labour should be talking about.

4. Public ownership can give people more control

In your pamphlet you say ‘Labour in government would show that we take seriously people’s demands for more control. We will deliver social justice, stronger communities and unlock potential by unlocking power, wealth and opportunity across the United Kingdom. But we will not do that by decree – we will put power and control in the hands of the people, whether at work, in accessing public services, or over the decisions that affect their lives. Where the current Tory government has muddied the waters of transparency on the money it spends or the things it does, I want to make it easier to hold government to account.’

You also say ‘One of my burning desires is to rethink and improve our public services.’

All of this is brilliant to hear. In 2019, we responded to Labour’s consultation on democratic public ownership with a report ‘When We Own It: A model for public ownership in the 21st century’. In this report we looked at how we could make sure public ownership was efficient, effective, accountable, caring, green, innovative - and so successful that it couldn’t be dismantled in the future. We looked at governance structures that would give a voice to the people who use public services, workers, communities and civil society alongside democratically elected politicians. We looked at new public duties for the 21st century. You might find this report useful. Here is the 2 page summary and here is the full report.

5. Public ownership is a common sense policy

There are numerous examples of successful public ownership, in the UK, in Europe and around the world. Examples in the UK include, of course, the NHS (although it’s being privatised) but also Scottish Water, Reading Buses, Channel 4, Ordnance Survey, the Land Registry, the Met Office, the Royal Mint - and those railway lines that have been taken back into public ownership after failing in private hands. Most of these institutions turn a profit every year that gets reinvested back into better services.

Across Europe there are many examples showing how public ownership is the norm, from water in France, to energy in Germany, to the railway in Switzerland. In fact, the Transnational Institute shows that around the world, cities and communities are taking back control over public services.

We are arguing here for a mixed economy rather than the ideological extremism that insists the private sector must do everything. The majority of people in the UK don’t support this ideology; they believe in public services for people not profit and are frustrated by high rail fares and energy bills, cuts to bus services, polluted rivers - because these problems have a real impact on their everyday lives. Privatisation has failed to live up to its promises of lower prices and better services. Public services tend to be natural monopolies where there isn’t much of a consumer market. The private sector is good at many things - running public services isn’t one of those things.

I hope you will find these arguments useful and would love the opportunity to discuss them with you.

Cat Hobbs

Director - We Own It