There is something poignant about Andy Burnham’s campaign for water nationalisation. In a previous life, the ‘King of the North’ was Health Secretary in the twilight days of Gordon Brown’s government.

From his throne on Victoria Street, he saw the NHS groan under chronic underfunding and managerial sprawl. Now, with his eyes set on Downing Street, he is promising that placing sewage pipes under government control will somehow produce a different result to what he saw when running the health service.

Instead of knee-jerk nationalisation, politicians should be encouraging more of the nation’s water companies to return to the public markets

Instead of knee-jerk nationalisation, politicians should be encouraging more of the nation’s water companies to return to the public markets

This is as though the lesson of the public sector’s relationship with capital-intensive infrastructure is that we simply have not tried hard enough. The argument has a certain populist elegance: the private sector is ‘bad’, therefore the wise and moral state (or “the people”) should run things instead, and we can forget about why we needed to privatise the whole thing in the first place. Which is roughly the logic of a man who, finding his newly refurbished but bumpy car has a puncture, concludes that cars are inherently unfit for purpose and resolves to walk.

While walking is basically free, nationalising and running some of the most complex and expensive infrastructure in the country is not. The government’s own estimate in 2024, based on Ofwat’s Regulatory Capital Value, said that compensating shareholders and debt-holders would cost over £99 billion, while DEFRA now projects it would reach £106.7 billion (which is over 180 per cent of the defence budget).

WeOwnIt, a vocal but amnesiatic lobby group, has said that this bill can simply be discounted by toughening environmental regulation until company valuations fall. This is the........

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