The Guardian view on broken markets: time to take back control

theguardian.com:

When a poll finds that almost half of Conservative voters favour taking the energy industry into public ownership, and a former adviser to Tory governments describes the privatisation model for energy and water as broken, it seems fair to surmise that a laissez-faire economic orthodoxy that has lasted more than 30 years is on the ropes.

The scale of the looming energy catastrophe, as bills rise to unaffordable levels for households and small businesses, has been primarily driven by the external shock of Russia’s war in Ukraine. But as Sir Dieter Helm, professor of economic policy at Oxford University, argued in an interview with the Financial Times on Monday, the crisis has exposed the deficiencies of a market that was not, in any case, fit for purpose. Energy and water, he said, are “too essential to be treated like another commodity, as some of the architects of the privatisation, liberalisation and competition paradigm believed”.

Prof Helm is an advocate of tougher and better-crafted regulation in both sectors, rather than nationalisation. But his critique of market fundamentalism succinctly reflects the national mood, after a torrid, anxious summer in which raw sewage has blighted rivers and the sea, trains have been cancelled and private rents have soared in a broken housing market. According to YouGov’s poll, a majority of “red wall” voters who backed Boris Johnson in 2019 support the renationalisation of the energy industry. Surveys have consistently reported majority backing for public ownership of the railways and the water industry. A majority of Conservative voters are in favour of allowing councils to buy up empty properties and provide more social housing.

The experience of the pandemic has undoubtedly played a