Brandon To is a Politics graduate from UCL and a Hong Kong BN(O) immigrant settled in Harrow.
When the Government brought British Steel into public ownership last week, many Conservatives felt uncomfortable.
After all, nationalisation has long been associated with inefficiency, political interference and the economic malaise of the 1970s. Yet in this case, the decision was difficult to oppose. Britain was facing the loss of its last blast furnaces capable of producing virgin steel, a capability vital to our defence and industrial resilience. Since intervening in 2025, the Government has spent hundreds of millions of pounds, now more than £640 million, to keep production going, at a cost of over £1 million a day, while protecting around 2,700 direct jobs at Scunthorpe.
Sometimes, the national interest demands exceptional measures.
The danger is that we draw the wrong lesson.
Two columns ago on ConservativeHome, I argued that the Thames Water saga exposed a deeper problem than privatisation itself. Britain’s debate had become trapped between two ideological poles: privatisation or nationalisation, when the real issue was accountability. In sectors where consumers cannot simply take their business elsewhere, competition cannot discipline failure. Regulation must do that job instead.
That argument, I’m afraid, was proven all too quickly. Watching Andy Burnham and his deputy leader, Lucy Powell, toy with the re-nationalisation of Thames Water shows just how entrenched this false dichotomy remains.
And I understand their train of thought. If nationalisation saved British Steel, will it not Britain’s water companies too?
The answer is simple: no – because ownership is not the real problem.
Britain has already tried this experiment. Before the Thatcher revolution, state-owned water, rail, and energy were the norm. I may not have lived through the 1970s, but many of our readers did. And few, I suspect, remember it as a paradise of efficiency.
Chronic underinvestment existed, together with poor customer service. Governments, constrained by public finances and electoral cycles, frequently delayed long-term investment in favour of short-term fiscal priorities. Consumers had nowhere else to go, and managers faced little pressure to improve.
National ownership did not solve the accountability problem then. It will not automatically solve it now.
This is where Conservatives should seize the initiative.
Rather than lurching between privatisation and nationalisation whenever a crisis emerges, we should focus on building regulators that are capable of holding utility providers to account, with the following measures:
First, early intervention.
By the time ministers are discussing emergency rescue packages, £20 billion of debt has already accumulated, and public confidence has collapsed. Regulation has become reactive rather than preventative.
We should instead establish clear statutory “circuit breakers.” If the company’s financial health, measured by debt, liquidity, and credit ratings, deteriorates beyond agreed limits, regulators should automatically gain enhanced intervention powers. Just as financial regulators conduct stress tests to prevent banking crises, Britain’s utility regulators should prevent monopoly failures long before taxpayers are asked to step in.
Second, moving beyond price control.
Britain’s regulatory philosophy also needs updating. For decades, economic regulation simply focused on price caps. But households care about far more than the number printed on their bill.
Do the pipes leak?
Does the network remain resilient during drought?
Are sewage spills falling?
Is ageing infrastructure actually being replaced?
Is customer service improving?
The objective should not simply be cheaper utilities. It should be better ones.
Ofgem’s RIIO framework, which increasingly rewards outcomes rather than expenditure alone, points towards the kind of performance-based regulation that could be expanded across Britain’s natural monopolies.
Third, treating monopoly status as a privilege.
Hong Kong offers an intriguing lesson on this matter.
Its electricity monopolies operate under long-term Scheme of Control Agreements. Companies enjoy the stability needed to invest billions in infrastructure, but they also ensure that monopoly status is continually reviewed. Operating under 15-year terms, the government conducts interim reviews every five years. These enable ministers to renegotiate contract terms, adjust permitted rates of return, tighten performance obligations, and mandate new investment. If performance proves unsatisfactory, the government can force a licence restructuring or transfer at the end of the term.
Operating a monopoly should never become a permanent entitlement. It should remain a privilege that must continually be earned.
Fourth, creating a tiered regulatory toolkit.
Today’s regulatory system is surprisingly blunt. The only question that lies in front of regulators is simply “to fine or not to fine”. And, maybe submitting another hand-wringing report to Westminster.
Instead, they should possess a graduated set of powers.
They could begin with improvement notices and mandatory governance reforms. Persistent underperformance could trigger long-term restrictions on executive remuneration or dividends until investment milestones are met. Again, in the most serious cases, regulators must have the teeth to review or revoke the operating licence entirely.
Finally, transparency.
Every regulated monopoly should publish a standardised annual scorecard covering infrastructure investment, executive remuneration, debt levels, customer complaints, environmental performance and resilience to natural disasters.
Consumers may not be able to switch suppliers, but Parliament, investors, journalists and regulators should immediately know which companies are fulfilling their responsibilities, and which are not.
Transparency cannot substitute regulation, but it’s one of our strongest allies.
The choice facing Conservatives is no longer between Thatcher and Attlee. It is between clinging to an outdated ownership debate, or building a twenty-first-century regulatory state that makes monopoly providers answerable to the public. The party that first privatised Britain’s utilities should now be the party that ensures they can never again become too big, too indebted, or too unaccountable to fail.