Burnham ally to unveil ambitious plan to reverse decades of privatisation | Andy Burnham

Andy Burnham’s government must reverse 40 years of privatization with a long-term plan to take over failing public services, issue “bonds for shares” and create rivals in the state, under the new plan of “Manchesterism”.

Policy document – ​​Productive State – Released on Monday When Burnham arrived at Westminster to be sworn in as MP for Makerfield. He was expected to aim to replace Keir Starmer in the 10th spot within a few weeks.

Its author, Mathew Lawrence, who was close to Burnham and worked with him on his ideas about public control of public services, is publishing the article with Mainstream, the Labor Party group that is the vehicle for Burnham’s leadership ambitions.

Former minister Miatta Fahnbulleh, who advised Burnham on policy, called it “an important contribution to the debate about how we fix this, deliver the change people are crying out for, and start rebuilding our broken economy”.

Lawrence said the article envisions “a state that owns, invests, and makes life affordable.” “A policy that takes back control of the basics of a decent life: clean water, cheap energy, warm homes, reliable transportation, built and operated by institutions that answer to the people.”

Subtitled A Framework for Manchesterism, the article criticized the long-standing trend towards privatization of public services, saying it was at the heart of the UK’s struggles for growth and productivity due to the loss of control over basic needs making life more expensive.

Although the article, and Burnham herself, does not advocate blanket nationalization that would cost hundreds of billions of dollars, it does advocate a framework for greater government intervention to protect the public from rising costs and footing the bill for failed private companies.

Lawrence, director of the think tank Common Wealth, prepared the paper independently of Burnham, partly inspired by her arguments and agenda and seeking to provide a framework for national renewal.

The Guardian has previously reported that Burnham’s allies are talking about overseeing a 10-year project to bring much of Britain’s water and energy sectors into public control; This project will most likely start with Thames Water, which is having problems.

Ultimately, Burnham’s allies want to bring energy transmission and supply companies, including possibly National Grid, into public control.

The Productive State article argues that people face a “privatization premium,” a regressive hidden tax embedded in daily bills that transfers wealth from households to investors. The government is then forced to subsidize the inflated costs with welfare transfers such as housing benefit or energy bill support.

“For millions of households, life’s non-negotiable basic expenses – rent, energy bills, water charges, transport fees, maintenance costs – now consume such a large share of their income that insecurity has become a permanent condition,” the article says.

“The UK’s core industries cost more than similar alternatives not because they offer more, but because they are organized to get more. Working people pay the price.”

Burnham’s commitment to public control over public services (not necessarily full nationalization in all cases) was one of the measures that caused alarm in the markets. But the article argues that “rebuilding Britain’s public services systems is not an alternative to fiscal prudence, it is fiscal prudence.”

Public control, he says, can be asserted in the long run in a variety of ways; When a company like Thames Water gets into financial trouble, the government can step in to impose a “special management regime”.

For financially healthy utility companies, the law generally requires the government to pay fair market value to purchase them. The article suggests that the state could use a “bond-for-stock swap” to achieve this without a huge upfront cash outlay, but the move would need legislation and would likely lead to significant legal challenges.

Additionally, the state can gradually take control by establishing its own commercial public companies; however, this process would require potentially large amounts of debt.

“The ultimate goal of the Productive State approach is an economy where the basic elements of life are treated as rights rather than income streams, building the abundance, security and stability that society currently lacks,” he says.

The article was praised by a number of Labor figures, including Fahnbulleh and Labor’s Stewart Wood, an economic adviser to Ed Miliband. He said the article was “a valuable contribution to rethinking the social democratic case for a more active state that would help create wealth and improve lives across the country”.

Fahnbulleh said: “There is a fundamental truth at the heart of the cost of living crisis shaking this country. The basic things everyone needs to survive (a good home, clean water, electricity, transportation) have become unaffordable for many. The people have warned us: We must deliver on the change we promised in 2024.”

Labor MP Yuan Yang, a member of the soft-left Tribune group and a prominent thinker who contributed policy ideas to the Burnham campaign, said: “Change requires a diagnosis and solution appropriate to the scale of the challenges we face, and a broad consensus is emerging within Labor on the need for bolder measures to root out the cost of living crisis, reduce inflation and deliver sustainable growth over the long term.”

Luke Hurst, Mainstream’s national co-ordinator, said a new leadership in the Labor Party “cannot be business as usual”. We need a much more transformative proposal and real debate within the party about our platform and priorities. He said the article was “an urgent rethinking of Labour’s political economy”.