PolicyLens

Green - Public ownership

Nationalise water and large energy firms

Bring water companies and major energy suppliers into public ownership.

Last updated: May 2026.

Read the policy-specific methodology note

Policy baseline

Green manifesto material includes public ownership of water companies and large energy suppliers. Compensation assumptions dominate the fiscal estimate.

  • Targets utility shareholders and customers.
  • Compensation could be cash, debt or bonds.
  • Operating gains are not automatic.

Core trade-offs

The direct beneficiaries are customers if regulation and investment improve. The costs fall mainly on taxpayers or shareholders depending on compensation. The main economic question is public ownership may not fix efficiency problems.

  • Customers if regulation and investment improve gain most directly.
  • Costs fall mainly on taxpayers or shareholders depending on compensation.
  • Key risk: public ownership may not fix efficiency problems.

Fiscal impact by 2028-29

+GBP 10.0bn to +GBP 80.0bn. Central estimate: +GBP 30.0bn.

  • Positive numbers mean net fiscal cost; negative numbers mean Exchequer savings.
  • Main channel is the scored tax, spending or delivery change.
  • Offsets depend on tax receipts, behaviour and pass-through.
  • Range reflects uncertain implementation and economic response.
  • This is not an official costing.

Economic impact by 2028-29

  • Jobs: Higher public employment or procurement demand; shortages may shift workers from private firms.
  • Wages: Direct gains for funded staff or suppliers; taxes fund the transfer.
  • Prices: Public prices rarely rise directly; private prices may rise if labour is scarce.
  • GDP / productivity: Potentially positive if capacity improves; negative if bottlenecks or crowd-out dominate.

Assessment

This is a real trade-off, not a free gain. Customers if regulation and investment improve benefit, while taxpayers or shareholders depending on compensation bear most costs. Overall output depends on behaviour, capacity and pass-through.

Confidence: Medium-low. Higher on the policy target and fiscal channel; lower on behaviour, pass-through and economy-wide effects.

Main risks

  • Delivery bottlenecks: Staffing, procurement and capital constraints may stop extra money becoming better services.
  • Crowding out: A tight labour market can shift workers from private firms rather than add capacity.
  • Permanent baseline: Temporary programmes can become recurring spending commitments.

Safeguards

  • Publish unit-cost benchmarks before rollout.
  • Tie funding to measurable service capacity.
  • Use staged delivery with independent audits.

Academic evidence

Kotlikoff and Summers, Handbook of Public Economics, 1987

Tax incidence

The legal payer of a tax is not necessarily the person bearing its economic burden.

Supports incidence discussion across taxes.

Tax Incidence (1987)

Banerjee and Duflo, Review of Economic Studies, 2014

Credit constraints

Some firms are credit constrained, so public finance can support investment when well targeted.

Relevant to development banks and business finance.

Do Firms Want to Borrow More? (2014)

UK government evidence

Green Party of England and Wales, 2024

Green manifesto

The manifesto defines the tax, spending, climate, housing and public-service proposals modelled here.

Used to define the scenario, not as an official costing.

Manifesto for a Fairer, Greener Country (2024)

HM Treasury, 2025

Spending Review baseline

Public investment baselines affect whether nationalisation sits on top of existing capital plans.

Used to frame public-balance-sheet risk.

Spending Review 2025 (2025)

Sources

Other Green policies

PolicyLens estimates are illustrative and should not be treated as official costings.