It’s time to debunk the nationalisation myth: it’s cheaper than the government lets on.
Labour Business minister Jonathan Reynolds has claimed the government’s emergency takeover of British Steel is justified because, in his words, “the value of the company is zero.” Here he is, saying it:
That logic, some argue, could apply to the water sector too — so why is the government not acting in the same way to nationalise water companies?
Buy Cruel Britannia in print here. Buy the Cruel Britannia ebook here. Or just click on the image!
The answer lies in selective honesty – by governments of all colours – about the true cost of renationalisation.
“The value of the company is zero.” So why not apply that to water?
Reynolds’ blunt statement about British Steel makes sense, at least on the surface.
After years of mounting losses and massive debts, the company is now largely a financial liability.
In essence, the market value of British Steel is near zero — meaning the government doesn’t need to pay exorbitant sums to take control.
If the company’s only value is in its infrastructure and the jobs it supports, that’s what the government is safeguarding with its intervention.
But what if that same logic applied to water companies?
Like British Steel, many water firms in the UK are mired in debt, and some are barely profitable.
The government’s answer to why it hasn’t moved to renationalise the water industry in the same way is simple: the cost would be astronomical.
According to the government, the nationalisation of water companies would cost up to £100 billion — a figure frequently cited by opponents of renationalisation to argue that it is simply unaffordable.
So, is that cost really the main issue here? Let’s take a closer look.
The real “cost” of renationalisation: Why the government is not being honest
-
The £100 Billion Myth: The government claims nationalising the water industry would cost £100 billion.
But that figure comes from a highly inflated market value approach — a method that includes paying for anticipated future profits of private owners, which is legally unnecessary.
In practice, the government would only need to compensate shareholders at book value — that is, the original investment minus depreciation, or what the companies are worth now.
This approach has been used in previous nationalisation cases, such as when Labour nationalised Railtrack for just £500 million.
The inflated £100 billion figure is a scare tactic, and it’s not how nationalisation is done. The real price tag would be much lower — and the return on investment would be substantial.
-
The “Cost” of Infrastructure Investment: The other cost often cited by critics is the need for substantial infrastructure upgrades.
It’s true that the water sector requires major investment — estimates suggest the total cost of renewing water infrastructure over the next 30 years could be between £60–100 billion.
But this investment is inevitable, regardless of ownership. The infrastructure is aging, and water companies have historically underinvested in it while extracting profits for shareholders.
The government could either fund these repairs with taxpayer money — or continue to allow private companies to underfund the necessary upgrades while collecting high dividends.
Public ownership would mean the government could direct that capital back into the system, at a much lower long-term cost to consumers.
The point is, we’re paying either way. But public ownership would ensure that the investment goes into the system, not into private pockets.
-
The “Bailout” Argument: Critics argue that nationalisation would be akin to a “bailout,” with taxpayers footing the bill for failing private companies.
But this overlooks the fact that taxpayers already are paying for the failures of privatisation.
Water bills are inflated because companies continue to extract profits from consumers — nearly 35p of every £1 paid for water in England goes to shareholders, rather than reinvesting in the service.
Under public ownership, these profits would stay in the system.
In Scotland, where water companies are publicly owned, customers pay £113 less annually for water than English households, and the Scottish water system is better maintained.
Nationalising water would reduce bills and ensure that the investments needed for the future are made without relying on private companies to pass on the costs to customers.
The bottom line: public ownership pays for itself
It is clear that the government is not being upfront about the costs or the benefits of water renationalisation.
Yes, there would be significant investment required to modernise the system — but that investment is needed regardless of who owns it.
What’s missing from the conversation is the fact that public ownership would generate substantial long-term savings.
These savings would come from reducing waste, cutting out profit extraction, and bringing the sector’s performance up to standard.
A report by the University of Greenwich found that nationalising key utilities like water, rail, and energy would save UK households billions every year — even after compensating shareholders at book value.
This report estimates that households would save up to £7.8 billion annually, with water customers in England alone seeing savings of up to £5 billion.
The government is framing nationalisation as a costly, risky choice.
But the truth is that the costs of inaction — including ever-increasing bills, deteriorating infrastructure, and the cost of climate change mitigation — are far higher.
Public ownership may cost upfront, but it would save more in the long run.
Time for a change: why nationalisation is the only logical step
The current system isn’t working.
Privatisation has failed to deliver the promised improvements, and we’re stuck paying higher bills for a system that doesn’t serve us.
Whether it’s steel or water, the argument for nationalisation is clear: it’s not about ideological purity, it’s about practical, long-term benefits.
The government can’t afford to ignore the reality any longer.
It’s time for a serious conversation about how to rebuild and own the services that matter most to the UK — and for the government to stop hiding behind inflated numbers to defend an indefensible status quo.
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The first collection, Strong Words and Hard Times,
is still available in either print or eBook format here:
The nationalisation myth: it’s cheaper than the government lets on
It’s time to debunk the nationalisation myth: it’s cheaper than the government lets on.
Labour Business minister Jonathan Reynolds has claimed the government’s emergency takeover of British Steel is justified because, in his words, “the value of the company is zero.” Here he is, saying it:
That logic, some argue, could apply to the water sector too — so why is the government not acting in the same way to nationalise water companies?
Buy Cruel Britannia in print here. Buy the Cruel Britannia ebook here. Or just click on the image!
The answer lies in selective honesty – by governments of all colours – about the true cost of renationalisation.
“The value of the company is zero.” So why not apply that to water?
Reynolds’ blunt statement about British Steel makes sense, at least on the surface.
After years of mounting losses and massive debts, the company is now largely a financial liability.
In essence, the market value of British Steel is near zero — meaning the government doesn’t need to pay exorbitant sums to take control.
If the company’s only value is in its infrastructure and the jobs it supports, that’s what the government is safeguarding with its intervention.
But what if that same logic applied to water companies?
Like British Steel, many water firms in the UK are mired in debt, and some are barely profitable.
The government’s answer to why it hasn’t moved to renationalise the water industry in the same way is simple: the cost would be astronomical.
According to the government, the nationalisation of water companies would cost up to £100 billion — a figure frequently cited by opponents of renationalisation to argue that it is simply unaffordable.
So, is that cost really the main issue here? Let’s take a closer look.
The real “cost” of renationalisation: Why the government is not being honest
The £100 Billion Myth: The government claims nationalising the water industry would cost £100 billion.
But that figure comes from a highly inflated market value approach — a method that includes paying for anticipated future profits of private owners, which is legally unnecessary.
In practice, the government would only need to compensate shareholders at book value — that is, the original investment minus depreciation, or what the companies are worth now.
This approach has been used in previous nationalisation cases, such as when Labour nationalised Railtrack for just £500 million.
The inflated £100 billion figure is a scare tactic, and it’s not how nationalisation is done. The real price tag would be much lower — and the return on investment would be substantial.
The “Cost” of Infrastructure Investment: The other cost often cited by critics is the need for substantial infrastructure upgrades.
It’s true that the water sector requires major investment — estimates suggest the total cost of renewing water infrastructure over the next 30 years could be between £60–100 billion.
But this investment is inevitable, regardless of ownership. The infrastructure is aging, and water companies have historically underinvested in it while extracting profits for shareholders.
The government could either fund these repairs with taxpayer money — or continue to allow private companies to underfund the necessary upgrades while collecting high dividends.
Public ownership would mean the government could direct that capital back into the system, at a much lower long-term cost to consumers.
The point is, we’re paying either way. But public ownership would ensure that the investment goes into the system, not into private pockets.
The “Bailout” Argument: Critics argue that nationalisation would be akin to a “bailout,” with taxpayers footing the bill for failing private companies.
But this overlooks the fact that taxpayers already are paying for the failures of privatisation.
Water bills are inflated because companies continue to extract profits from consumers — nearly 35p of every £1 paid for water in England goes to shareholders, rather than reinvesting in the service.
Under public ownership, these profits would stay in the system.
In Scotland, where water companies are publicly owned, customers pay £113 less annually for water than English households, and the Scottish water system is better maintained.
Nationalising water would reduce bills and ensure that the investments needed for the future are made without relying on private companies to pass on the costs to customers.
The bottom line: public ownership pays for itself
It is clear that the government is not being upfront about the costs or the benefits of water renationalisation.
Yes, there would be significant investment required to modernise the system — but that investment is needed regardless of who owns it.
What’s missing from the conversation is the fact that public ownership would generate substantial long-term savings.
These savings would come from reducing waste, cutting out profit extraction, and bringing the sector’s performance up to standard.
A report by the University of Greenwich found that nationalising key utilities like water, rail, and energy would save UK households billions every year — even after compensating shareholders at book value.
This report estimates that households would save up to £7.8 billion annually, with water customers in England alone seeing savings of up to £5 billion.
The government is framing nationalisation as a costly, risky choice.
But the truth is that the costs of inaction — including ever-increasing bills, deteriorating infrastructure, and the cost of climate change mitigation — are far higher.
Public ownership may cost upfront, but it would save more in the long run.
Time for a change: why nationalisation is the only logical step
The current system isn’t working.
Privatisation has failed to deliver the promised improvements, and we’re stuck paying higher bills for a system that doesn’t serve us.
Whether it’s steel or water, the argument for nationalisation is clear: it’s not about ideological purity, it’s about practical, long-term benefits.
The government can’t afford to ignore the reality any longer.
It’s time for a serious conversation about how to rebuild and own the services that matter most to the UK — and for the government to stop hiding behind inflated numbers to defend an indefensible status quo.
Vox Political needs your help!
If you want to support this site
(but don’t want to give your money to advertisers)
you can make a one-off donation here:
Be among the first to know what’s going on! Here are the ways to manage it:
1) Register with us by clicking on ‘Subscribe’ (bottom right of the home page). You can then receive notifications of every new article that is posted here.
2) Follow VP on Twitter @VoxPolitical
3) Like the Facebook page at https://www.facebook.com/VoxPolitical/
Join the Vox Political Facebook page.
4) You could even make Vox Political your homepage at http://voxpoliticalonline.com
5) Follow Vox Political writer Mike Sivier on BlueSky
6) Join the MeWe page at https://mewe.com/p-front/voxpolitical
7) Feel free to comment!
And do share with your family and friends – so they don’t miss out!
If you have appreciated this article, don’t forget to share it using the buttons at the bottom of this page. Politics is about everybody – so let’s try to get everybody involved!
Buy Vox Political books so we can continue
fighting for the facts.
Cruel Britannia is available
in either print or eBook format here:
The Livingstone Presumption is available
in either print or eBook format here:
Health Warning: Government! is now available
in either print or eBook format here:
The first collection, Strong Words and Hard Times,
is still available in either print or eBook format here:
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