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Chapter 1
The debate over whether utilities should be managed by the public or private sector has been hotly contested in the UK for many years. It has long been accepted as settled fact that views about state ownership of utilities are passionately and ideologically held, but little is known about people’s real preferences when it comes to the management of services. To understand them better, the Tony Blair Institute for Global Change commissioned Deltapoll to ask the British public about their views on the ownership, management and delivery of key public services. Our results challenge some assumptions on the preference for public ownership.
Most people regard the privatisation of public services over the past 40 years as a failure – bad for customers, taxpayers, people on low incomes and the economy as a whole. Privatisation is also unpopular because respondents think the profits achieved by the main utilities are higher than they should be. Yet, interestingly, this is based on the belief that the profits achieved by service providers are higher than they actually are. On average, respondents believe that water, train and energy (gas and electricity) companies enjoy a profit margin of around 50 per cent of what customers spend on their services. In fact, it is 2 per cent for water companies, 2 per cent for train operators and 1 per cent for gas and electricity retailers.
At a surface level, voters across the political spectrum would prefer privatised utilities to return to the public sector. Dissatisfaction with services and a negative verdict on the legacy of privatisation lead to clear majorities in favour of the main privatised industries returning to the public sector. The proportion who prefer them to stay in the private sector rather than return to the public does not reach even 20 per cent. It is also noticeable that there is no great party divide on these issues. The numbers for Conservative and Labour voters differ, but only by small amounts. They agree far more than they disagree. This applies to all the questions in this poll.
However, the fact that most respondents want the main privatised industries to return to the public sector is not the end of the story. This poll looked in more detail at the future of water, train and energy companies and whether those polled were committed to ideological policies over pragmatism. When a third option was added stating “I am less concerned by which sector provides the service, than whether it is run well, provides a reliable service and offers good value for money”, only a minority of people polled stuck with the principle of a private- or public-sector future. When presented with a scenario in which renationalisation adds to the government’s costs, support for renationalisation falls further.
Below the surface of public attitudes, pragmatism trumps ideology. The challenge for all parties is to persuade voters that they offer practical solutions to people’s daily concerns. This is not just a matter of devising the right policies. Voters need to be persuaded of the competence of the party proposing them. Public support for any major reform in the utilities depends not just on the policy itself but on people’s faith in the ability of the party to make it work. Without that trust, even the most popular policies will bring little electoral benefit.
Both Conservative and Labour voters agree that the private sector is more likely to be “keen on innovation” and the public sector “stuck in the past”. What people want most from their trains, water and energy supplies are affordable prices and a reliable service. This points to a new theory of the state for the 21st century that is not about size or role but practical solutions on how the government can best operate and deliver for citizens.
Chapter 2
The Private Sector Is Innovative, the Public Sector Is Stuck in the Past – but Only up to a Point
First, we asked a series of general questions about perceptions of the two sectors.
Overall, only a minority of respondents say that one sector is generally better or worse than the other on each of the 12 statements about the delivery of services. With two exceptions (“they are keen on innovation” and “they are stuck in the past”) the largest proportion say the statements apply to both the public and private sectors equally. Note, for example, that although customer choice is commonly assumed to be a quality that is strongly associated with the private sector, just 24 per cent of respondents say the private sector offers more customer choice while 16 per cent say the public sector does. Moreover, the proportion of respondents who didn’t take a side far surpasses those who do, with 60 per cent saying “both equally” (33 per cent), “neither” (13 per cent) or “don’t know” (14 per cent).
Among those who do take a side, the most common views are that private-sector companies pay people at the top far too much, and (or but) that they are more innovative than the public sector. Meanwhile, the public sector is seen as “stuck in the past”.
To drill down into these perceptions, we analysed them according to which political party respondents currently support. Figure 2 shows the extent to which the Conservative and Labour voters we polled supported certain statements, as well as the extent of support across all people polled, including voters of other parties and those who didn’t express a party preference. By looking at the difference between the proportion who said a quality was more associated with the public or private sector, we were able to establish net scores for each and compare partisan support. For example, the electorate as a whole divides 32 per cent private and 13 per cent public on which sector is keener on innovation, giving a net rating of plus-19 (32-13=19).
There are plainly differences between supporters of the two main parties. Conservatives are more likely than Labour supporters to regard the private sector as efficient and innovative, while Labour supporters are more likely than Conservatives to say the public sector is honest, keeps prices down and cares for the environment. That confirms a traditional divide between the attitudes on the right and left of the political spectrum.
However, the larger truth is not that Labour and Conservative voters differ, but that they differ so little. On ten of the 12 statements, the association with either the private or the public sector is the same for Labour and Conservative voters. Take the two statements that produced the sharpest overall divide:
“They are keen on innovation”:
Conservative voters: private sector 37 per cent, public sector 12 per cent, net score plus-25
Labour voters: private 26 per cent, public 18 per cent, net score plus-8
“They are stuck in the past”:
Conservative voters: private 6 per cent, public 39 per cent, net score minus-33
Labour voters: private 13 per cent, public 25 per cent, net score minus-12
On both of these two statements (as on all the others except “they pay the people at the top far too much”), less than half of both Labour and Conservative voters take a side; among those that do, there is more agreement than disagreement. Neither those who prefer the public or the private sector can claim to be a majority of the British public.
Chapter 3
Thumbs Down From Both Labour and Conservative Supporters
The results above concern the private and public sectors as a whole. The next set of questions relates to the sectors of the economy that have been privatised – moved from the public to the private sector – in recent decades.
The verdict is damning. This time, most voters do take a side, and privatisation comes out badly on every measure. In light of the previous results – indicating that only a minority of respondents believe the private sector gives customers choice and keeps prices down – we should not be surprised. And again, the differences between Labour and Conservative voters are less than the similarities, with respondents of both party preferences agreeing on how privatisation has affected all groups our polling identified as well as the economy as a whole – four of them negatively and only one positively.
One important reason for this harsh view of privatisation is that most people think private companies are making much higher profits than they should. Deltapoll asked how much profit respondents thought water, train and energy companies were making and how much they thought was reasonable for these service providers to make. Figure 5 shows these estimates – and the latest actual profit for each industry.
With the exception of profits for gas and electricity distributors, estimated profits are much higher than the levels regarded as “reasonable” – which in turn are far higher than the profits actually earned. It is clear that there is a gulf between perception and reality that might contribute to the overall verdict on privatisation.
Two further points are relevant to this verdict. The first is that the average numbers conceal a diversity in the range of answers given, especially on the estimated level of current profits. This is what tends to happen when many people simply guess at the amount. When people have a clear idea of what is going on (even if mistaken), responses tend to cluster around a central estimate.
The second is that Labour voters tend to give higher numbers than Conservative voters for estimated profit although voters of both parties estimate profits to be far higher than they are in reality. However there is little difference between supporters of the two parties for what is considered a reasonable profit level.
One lesson is that whatever type of management policy is pursued for our utilities, there would be a significant benefit in better public understanding of service providers’ basic finances and the way they work. Trust and transparency will be vital. Since voters have an inflated perception of profit margins, we cannot be surprised that privatisation is unpopular – and, as the next chapter demonstrates, many regard nationalisation as a good idea.
Chapter 4
Voters Across the Spectrum Like it in Principle
To explore attitudes about individual industries, Deltapoll asked whether respondents thought certain services were currently provided by private-sector companies, public-sector organisations or a combination of both, as well as which they would prefer to provide the service.
Most people correctly identify the current sector for each service. The main exception is the Royal Mail, with 40 per cent not knowing that it has been privatised. On the other hand, 40 per cent also think that rail infrastructure is owned by the private sector, even though most tracks and large stations now belong to a not-for-profit state-owned company.
Even when most people correctly identify whether services are run by private or public enterprises, a significant minority remain unaware of the sector to which each service belongs.
When it comes to the preferred sector, a majority of voters want each of the currently privatised services to be public: Royal Mail, water, trains and energy. In each case, fewer than one-in-five voters want the service to remain in the private sector. Once again, a comparison of the net scores (per cent saying public minus per cent saying private) of Labour and Conservative voters is telling, as Figure 7 shows.
Not surprisingly, the NHS stands out as a state-owned organisation that a government of either stripe would tamper with at its peril, with little difference between Conservative and Labour voters. Nor is there great enthusiasm for nationalising sectors that have always or, in the case of banks, normally been in the private sector. However, here there is a clear party divide, with Conservatives overwhelmingly in favour of private ownership. On the other hand, Labour voters are evenly divided on whether the government or the private sector should control banks, supermarkets or broadband services.
But with the services that are the subject of greater debate, notably water, trains and energy, there is a clear preference among both Conservative and Labour voters for ownership to revert to the state. This has led some, especially within the Labour Party, to argue that renationalisation would be a vote-winning policy at the next election, firming up Labour’s support and attracting a significant number of Conservatives. But the evidence across this report suggests a focus on how services are delivered rather than by whom would be a stronger electoral strategy.
For Most People, Pragmatism Trumps Ideology
Nationalisation is an issue that lurks in the political undergrowth, of great interest to a small minority of political horticulturalists but of little concern to most voters most of the time. It leapt up the agenda during the financial crisis of 2008, when the state took a majority stake in three banks to stop them going bust. But this was an emergency measure, not an ideological act. Were Labour – or any other party aspiring to govern Britain – to pursue nationalisation as a central plank of its manifesto, the plan would become a major controversy. Instead of speaking about public versus private management in broad strokes, the public would be forced to engage with the granular detail of arguments for and against nationalisation that have largely lain dormant for at least three decades.
Nobody can predict with certainty how those arguments would play out and affect party support. But we can consider two of the major factors that would be likely to loom large in a general election campaign.
The first is valence. Political scientists tend to divide public attitudes into “positional” views and “valence” views. Consider tax-and-spend. Someone who believes strongly that both taxes and public spending should rise holds a positional view, as does someone who believes with equal passion that both taxes and spending should be reduced. But many voters would accept a modest change, either up or down, providing that the tax policies were fair and public services delivered efficiently. Theirs is a valence choice. Figure 8 shows how respondents replied to a question that offered two positional choices and a valence choice.
As those numbers show, the introduction of the valence option, focused on quality of delivery rather than sector, reduces support for both “ideological” options compared to the choice between private, public or mixed ownership (as indicated in Figure 6). Without the valence choice, support for public management of these three utilities is between 53 and 55 per cent and support for private management is between 15 and 17 per cent. But when the valence option is added, this becomes by far the most popular choice, with support for public ownership falling to between 34 and 37 per cent and private ownership to between 9 and 11 per cent.
Among Labour supporters, the valence option is the most popular (though it is a narrow margin for energy). Support for public ownership falls to between 41 and 44 per cent, compared with between 56 and 59 per cent without the valence option.
These numbers suggest that an election commitment to nationalise these industries would need to convince the public that the service would in fact improve. In 2019, Labour promised to bring “our energy and water systems into democratic public ownership” and “our railways back into public ownership”. These were presented as popular policies. Our poll shows that the picture is more complex. To win the nationalisation argument, it is necessary to be a valence victor, not just to present ostensibly popular policies.
There is another critical element to the politics of nationalisation. What if it adds pressure to the public finances? Supporters of public ownership say that taking over an industry is not like, for instance, building a hospital. Their argument goes that a well-run nationalised company would make profits, which could be used to pay interest on the debt incurred in buying the company in the first place. Their argument therefore suggests that as far as the financial markets are concerned, nationalisation should be a neutral or better-than-neutral act, which those markets would take in their stride.
But nobody can be certain of how things will work out in advance. We can be sure that the opponents of nationalisation would emphasise the financial and operational risks, including the danger of political interventions, such as capping prices or not prioritising capital investment, reducing the effectiveness of state-operated companies. These fears might prove unfounded. But until the financial and delivery record of newly state-owned companies is demonstrated, the risks are bound to feature strongly in an election campaign. Unless the party campaigning in favour of nationalisation has a solid reputation for economic competence, it could find its campaign unravelling.
The next two questions demonstrate the danger of promising to nationalise basic utilities without first winning the valence battle and securing a solid reputation for economic competence.
We now have three measures of public support for nationalisation, and they produce different results:
All respondents
Prefer public ownership rather than private or mixed ownership: between 55 and 57 per cent
Prefer public ownership, when “valence” option is offered: between 35 and 37 per cent
Would definitely remove from the private sector if nationalisation cost money: between 27 and 28 per cent
Conservative voters
Prefer public ownership rather than private or mixed ownership: between 50 and 54 per cent
Prefer public ownership, when “valence” option is offered: between 27 and 29 per cent
Would definitely remove from the private sector if nationalisation cost money: between 24 and 26 per cent
Labour voters
Prefer public ownership rather than private or mixed ownership: between 56 and 59 per cent
Prefer public ownership, when “valence” option is offered: between 41 and 44 per cent
Would definitely remove from the private sector if nationalisation cost money: between 26 and 31 per cent
These numbers show two things. First, support for state ownership falls markedly when valence issues are introduced and further still if voters believe that nationalisation will put pressure on public finances. We should note that when respondents were asked what the government should not do if such pressures arose, they could pick more than one option. So, the proportion of people who say the government should nationalise a sector despite the cost represents the ceiling of support for nationalisation in all circumstances. When a cost implication is introduced, less than one-in-three Labour voters remain firmly committed to nationalisation.
Second, the preferences among Labour and Conservative voters are broadly similar. The one significant difference is that the valence option does more to dent Conservative than Labour support for nationalisation.
Chapter 5
Affordable Prices and a Reliable Service
Given the clear finding that most voters want pragmatic rather than ideological policies on utilities, what issues should these policies address? Deltapoll asked respondents what they thought the priorities for utility providers should be as well as asking whether they had encountered a bad personal experience with any of the utilities in the past two to three years. This question was posed to find out whether individual interactions with utility companies influence whether people prefer for them to be run by the public or private sector, and the open-ended nature of the question allowed us to capture organic reflections on respondents’ most salient experiences.
The public’s two main priorities are clear, and they are the same for water, train and energy companies: affordable prices and a reliable service. After that, some differences emerge: care for the environment is a real concern when it comes to water companies, while respondents identify customer service as a priority for train operators. These are not surprising. Water companies have been criticised for the way they dispose of sewage. Many people interact regularly with train companies, but they generally experience customer service, good or bad, with energy and water companies only when things go wrong.
Once again, there is little difference between the views of Labour and Conservative supporters or indeed by gender, age, region, social class and other demographic markers. There appears to be a national consensus around the agenda for future action.
Those numbers report the breadth of public views; but an effective public policy will also need to address the problems that arise when customers think a service has let them down. Figure 11 shows how many people have had a bad experience in recent times. Deltapoll asked those who had such an experience to describe in their own words what it was. Their answers are summarised below. We show the numbers rather than the percentages in each case as weighting is theoretically possible but can be less illuminating when reporting qualitative data.
Not surprisingly, by far the largest categories of complaint related to energy prices and delayed or cancelled trains. These reflect the sharp rise in gas and electricity prices and strikes and staff shortages on the railways.
Customer service is clearly a bigger issue for energy companies than for the railways and water companies. As noted above, more people come into contact with the customer services of train companies than those of other utilities. The fact that only 51 people out of more than 2,000 say that they have had a bad experience – around the same number as with water companies and just one-third as many as energy companies – suggests that the railways have a better record than the other utilities.
Chapter 6
Can Rishi Sunak Rescue the Conservative Party From Their Toxic Reputation?
It is clear from this research that people judge parties and policies not so much on their ideological purity as on their ability to get things done and make life better. This applies to plans to make radical changes. Proposals to shake up major public utilities fall squarely into this category, along with many other policy ideas. Perceptions of competence are key to this judgement. Few voters will support politicians who are thought to be incompetent, even if their policies appear to be popular. So, as Prime Minister Rishi Sunak’s administration settles in, who is winning the competence war? Here are the net scores (competent minus incompetent) that show how the contest has evolved since Boris Johnson was prime minister.
Three points stand out. First, the Conservatives’ reputation for competence – historically one of their great assets – has been hugely damaged. Its net rating of minus-43 in the dying days of Johnson’s premiership was disastrous. It declined to a catastrophic minus-57 during Liz Truss’s brief time in Downing Street. It has since recovered fractionally, to minus-47: still disaster territory. It is very unlikely that the party can win the next election without a huge improvement on this.
The second point is that an improvement is not completely out of the question. In June and October the competence ratings for Johnson and Truss were as bad as their party’s. But Sunak’s first weeks as prime minister transformed their relative scores. A much larger proportion of voters say he is competent compared with Johnson or Truss, while the numbers condemning him as incompetent are also half of those of his two predecessors.
The difference between Sunak’s reputation and that of his party is remarkable – plus-7 for him, minus-47 for his party. It’s not unusual for poll ratings for party and leader to differ by a few points, but modern polling offers no precedent for a gulf this wide. By the time of the next election, Sunak’s administration will have been in office long enough for the impact of dramas of recent months to diminish. The gap between Sunak and his party is likely to narrow, but by how much and in what direction? Will Sunak lift his party’s reputation or will public condemnation of his party persist and drag him down? The answer to this will go some way towards determining the outcome of the next election.
Meanwhile, the third point about the competence war is that Labour has made progress in dispelling its own reputation for incompetence but is some way from fully persuading the electorate. The party’s reputation remains far better than that of the Conservatives, but it is still negative. Fewer than one-in-three voters award Labour a positive verdict, with the rest dividing equally between incompetent and don’t know. Keir Starmer’s net rating is a steady positive; but while this placed him far ahead of Truss and Johnson, he is now on a par with Sunak.
Much has changed in the past three years. At the last election Labour’s competence rating was minus-49. But its recent big leads in voting intention arguably flow as much from Conservative weakness as its own relative strength. With Sunak as prime minister, the ultimate outcome of this Parliament’s competence war is in doubt. Given this uncertainty, as Labour prepares for the coming general election the party needs to ask itself whether each policy proposal is not just right and popular, but also whether the leader and his party can persuade enough voters that they have what it takes to make it work.
Chapter 7
Debates about nationalisation often rest on two assumptions: that it is a core, ideological issue (sometimes the core issue) that separates voters on left and right, and that views about state ownership are passionately held.
Our findings suggest that both assumptions are wrong. Views across the left-right spectrum are remarkably similar and practical considerations – not least the perceived competence of the parties – trump ideological passion on both sides. Support for public-sector management of utilities seems to stem from a voter’s identity as a citizen rather than their choice of party: a sign of their patriotism rather than their ideology.
Voters have mixed views of both the private and public sectors, seeing benefits and drawbacks in both. The data show that some of the claims made by advocates from each side have failed to convince more than a small minority of the British public: for example, that private-sector companies give customers more choice, or that the public sector is more honest with citizens. By contrast, criticisms of both clearly strike a chord: that private companies pay their top people far too much, while the public sector is stuck in the past.
This is the context in which we find that support for state ownership is wide but shallow. Most voters back the proposition that public services should answer to the whole nation rather than private shareholders. However, as soon as voters are asked to consider the practical consequences of nationalisation, many of them adjust their views. Any party that advocates for a major programme of state ownership would need to persuade voters that it had practical merits and would not harm the public finances. Equally, those who have a strong commitment to the private sector also have a challenge on their hands: to persuade the public that market competition really will deliver benefits for all.
It’s not that ideology is necessarily irrelevant, but that the advantage in British politics lies with those who can persuade voters of their practical ability to make a success of radical reform rather than those who can best articulate the purity of their dreams.
Chapter 8
Peter Kellner
Peter Kellner is a political analyst, visiting scholar at Carnegie Europe and former president of the pioneering online survey-research company YouGov. He was chairman of YouGov from 2001 to 2007, during which time he was named Chairman of the Year in the 2006 Quoted Companies Alliance awards, and president from 2007 to 2016.
He has written for The Times, Sunday Times, Independent, Observer, Evening Standard, New Statesman and Prospect. He has also been a regular contributor to Newsnight, A Week in Politics, Analysis and the BBC’s election-night results programmes. He has written a variety of books and leaflets about politics, elections and public affairs – and was awarded Journalist of the Year in the British Press Awards in 1978.
Peter has also been a visiting fellow at Nuffield College, Oxford, a distinguished visiting fellow at the Policy Studies Institute, London, and served as a member of committees set up by the Economic and Social Research Council to commission research into elections and social exclusion. He has served as a trustee with various charities and also chaired the Royal Commonwealth Society and the National Council for Voluntary Organisations.
About the Deltapoll Survey
Sample Details
Deltapoll interviewed 2,129 adults in Great Britain online between 23 and 26 September 2022. The data have been weighted to be representative of the British adult population. The full results are available here: https://deltapoll.co.uk/polls/utilities221103
Additional Data
Data in The Competence War chapter come from YouGov. Find more on the methodology here: https://yougov.co.uk/about/panel-methodology/
You can find the full YouGov data here:
https://docs.cdn.yougov.com/f2i3veh1ul/P_Main_Political_Tracker_Survey_Rotation8_sr_11.pdf
https://docs.cdn.yougov.com/n25bk4o7rk/P_Main_Political_Tracker_Survey_Rotation8_sr_3.pdf
https://yougov.co.uk/topics/politics/trackers/is-boris-johnson-incompetent
https://yougov.co.uk/topics/politics/trackers/is-the-conservative-party-competent-or-incompetent
https://yougov.co.uk/topics/politics/trackers/is-keir-starmer-incompetent
https://yougov.co.uk/topics/politics/trackers/is-the-labour-party-competent-or-incompetent
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