A policy paper titled 'The Productive State', authored by Mathew Lawrence, an ally of Labour leader Andy Burnham, proposes a long-term strategy to reverse decades of privatisation in the UK. The paper, released as Burnham prepares to enter Parliament, outlines measures such as taking over failing utilities, issuing 'bonds for shares', and establishing state-owned competitors. It criticises privatisation for contributing to high costs and poor productivity.
The paper argues that essential services like water, energy, and transport are organised to extract wealth from households, creating a 'privatisation premium' that forces the government to subsidise inflated costs. It calls for public control to make life affordable, though it stops short of advocating blanket nationalisation, which could cost hundreds of billions.
Burnham's allies have previously discussed a 10-year project to bring water and energy sectors under public control, starting with Thames Water. The paper suggests using special administration for distressed companies and 'bond-for-share exchanges' to acquire healthy utilities without upfront cash, though this would require legislation and likely face legal challenges.
Miatta Fahnbulleh, a former minister advising Burnham, described the paper as an important contribution to fixing the economy. Lawrence, director of the thinktank Common Wealth, drafted it independently but inspired by Burnham's agenda for national renewal.
