How our post-Brexit trade deal could put nationalisation on the agenda

While the EU explicitly says that it doesn’t have a position on ownership (a clause introduced to reassure socialist countries when it was created), in practice the situation is complicated

Just over three in four Brits want public ownership of the railways
Just over three in four Brits want public ownership of the railways

Whether we like it or not, the Government is now moving into phase two of the Brexit negotiations, discussing what our future trade deal with the EU might look like. There are two potential futures ahead of us. Whatever happens next we need to avoid hyper-deregulation and privatisation and instead create the framework we need for new, inspiring public ownership of our vital public services.

Politically, the EU is in many senses much more advanced than the UK. If our politicians could have sidestepped European legislation on workers’ rights and environmental protection, they probably would have. If we lose those safeguards now it will be a huge step backwards.

Other European countries provide us with inspiring examples of public ownership. Hundreds of German cities and communities have taken energy into public hands over the last 16 years. French case studies, including Paris, show us how we can take water into democratic public control, taking it back from multinationals.

And as Ben Chu has pointed out, the EU means we can take collective action together to stand up to global corporations like Google, Microsoft and Apple.

At the same time, EU rules do create genuine problems for a public ownership agenda.

While the EU explicitly says that it doesn’t have a position on ownership (a clause introduced to reassure socialist countries when it was created), in practice the situation is complicated.

Campaigners had to step in to stop the European Commission from trying to impose water privatisation on Greece and Portugal as a condition for receiving loans.

More generally, the rules of the single market force public sector organisations to behave like private ones, competing in a marketplace to provide services. State aid rules mean they can’t receive any extra subsidy (state aid) or taxpayer support and they’re not allowed to cross-subsidise. Infrastructure must be separated from operations.

In energy, a retail market is required. German local municipal energy companies do provide a great publicly-owned alternative and have captured around half the market. But although the EU has allowed them to be the default option, a public monopoly is not allowed.

Local transport can be publicly owned. And of course, state-owned companies are allowed to bid for franchises – we often point to France, Germany, Italy and Holland as examples that we could follow. But it seems clear that EU rules would make it difficult to replace our wasteful franchising process with a new, integrated national public rail company.

The EU is fully, ideologically, committed to the idea of promoting market competition as an end in itself, regardless of outcomes. But this is fundamentally misguided when it comes to public services.

Firstly, because public services are often natural monopolies and it doesn’t make sense to break them up artificially to create a kind of substandard competition. Witness the failures of our privatised water and railways. Secondly, public services meet important social needs and decisions about those needs (for example, in healthcare) shouldn’t be driven by profit. Thirdly, public services are at the heart of our democracy. Energy policy, for example, is something we should all have a say over, especially when climate change will affect us all.

Public ownership is hugely popular precisely because most people understand all this on an instinctive level. They simply don’t believe that public services are just another consumer product. Eighty three per cent of us want public ownership of water, support for public energy is 77 per cent and it’s 76 per cent for public rail.

Whatever happens with Brexit, we need to find a way to move beyond the failed ideology of competition in an all-encompassing “marketplace” as the highest good, in the EU and beyond. We have to find other, more empowering ways of guaranteeing quality and accountability in our public services.

If we stay within the EU, we could do so on the condition of real economic democracy. Unlikely with this Government perhaps, but possible.

If we leave, we need to be prepared to block new trade deals which could be just as dangerous. US healthcare companies are only too ready to treat our NHS as a market opportunity.

Brexit or not, we can’t “take back control” until policy makers recognise that public services are a different and vitally important kind of economic good. Not on a par with bendy bananas, and not up for grabs.

Cat Hobbs is founder and director of We Own It

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