Public-Benefit Utility Companies, Not Nationalisation or Privatisation, Should Define 'Public Control'
Source: Will Hutton and Andy Haldane. "Andy Burnham talks about ‘public control’ of the utilities but it’s a minefield. We can lead him through it | Will Hutton and Andy Haldane | The Guardian." September 25, 2026. www.theguardian.com
The Gist
The authors argue that instead of nationalizing failing utilities like Thames Water or leaving them under current private ownership, the UK government should turn them into 'public-benefit companies' — private companies legally required to prioritize public service over profit, with government holding a symbolic £1 'golden share' for oversight. They say this middle path would fix the misaligned incentives seen in privatized utilities and the incompetence often seen in nationalized industries, all at a fraction of the cost of full nationalisation.
Conclusion
The government should clarify that 'public control' of utilities means restructuring them as public-benefit companies with governance aligned to public interest, rather than pursuing full nationalisation or maintaining the current privatised model.
Premises
- Privatised utilities like Thames Water have governance structures where investor incentives (especially from highly leveraged hedge funds) are badly misaligned with public good, despite having financial expertise
- Full nationalisation aligns incentives with public good by statute but historically lacks commercial discipline and expertise, as shown by British Rail, British Steel, and British Leyland
- Current government uncertainty about what 'public control' means is imposing real financial costs, including deferred bond issues, rising borrowing costs, and pressure on UK government debt markets
- A public-benefit company structure with a constitutional objective of service quality (profitability subordinate) could align incentives with the public good while preserving commercial expertise
- This restructuring could be implemented within the current ownership and licensing regime via a nominal 'golden share' (£1), avoiding expensive shareholder compensation
- Additional governance enhancements—public share listings, executive pay linked to public-benefit outcomes, independent customer groups—have evidence of improving utility outcomes
- A public-benefit approach would cost far less than nationalisation (single pounds vs. hundreds of millions) while achieving better alignment of incentives and expertise
Assumptions
- Governance structure (incentive alignment plus expertise) is the primary determinant of utility service quality and cost, more so than ownership form per se
- Historical failures of nationalised industries (decades ago, in different economic contexts) are still predictive of how a newly nationalised utility would perform today
- Golden-share and constitutional 'public-benefit' obligations would be legally robust and enforceable in practice, not merely symbolic
- Existing shareholders would not have strong legal grounds to demand compensation if profitability is constitutionally subordinated to public benefit
- Regulators and public-benefit companies could shift from adversarial to cooperative relationships in practice, not just in principle
- The 'privatisation premium' and current utility problems stem primarily from misaligned governance rather than from insufficient regulation or resources