Analysis indicates that UK households have transferred nearly £200bn to shareholders who own essential British industries since their sell-off.
The substantial movement of tens of billions of pounds to the owners of sold-off water, rail, bus, energy, and mail utilities comes as households confront soaring bills, contaminated rivers and seas, and costly and unreliable rail services and bus networks.
Consequently, citizens have been paying a “sell-off premium” of approximately £250 per home per year since 2010 alone.
Focus on Water Industry
Recent scrutiny has centered on the privatised water sector, which has accumulated long-term debts of £73bn and paid out dividends of £88.4bn over the last 34 years, at the same time presiding over record sewage discharges.
Major Revelations from the Study
- Around £193bn has been paid to shareholders of bus, train, mail, energy, and water firms since the 1990s.
- Almost a quarter of the average energy bill in 2024 went toward company profits.
- Energy network firms achieved an operating profit margin of 55% between 2020-24, compared with a FTSE 100 average of 15%.
- Half of the rail industry's income in 2023-24 came from public funds via direct or indirect subsidies, yet profits went to shareholders.
- One in five privately-run bus services have vanished since 2019.
- Rolling stock companies paid dividends amounting to 102% of their post-tax profits over the past eight years.
- Directors earned pay packages totaling over £662.8m between 2020-24 across water, rail, mail, bus, and energy companies.
- Energy investment as a share of GDP was double as high under public ownership compared with the privatised era.
Financial Drain Persists
The analysis shows that the diversion of wealth from the public to shareholders has continued over the last decade. Since 2010, £114.6bn has been funnelled to shareholders of energy, water, rail, bus, and mail firms from customer bills and travel fares.
This amounts to £7.2bn per year overall, or roughly £250 per home annually—a clear “sell-off premium.”
“The truth is that who controls and manages our essential services and infrastructure significantly matters.”
Past Context
The study found that between 1981 and 1996, the push to privatise key industries was faster and more extreme in the UK than in nearly any other advanced economy.
During this period, the UK shed gross public wealth at a rate of 7.4% of national income per year for 15 years. Among wealthy world economies, only Russia, Hungary, and the Czech Republic lost public wealth faster during their shift from communism to capitalism.
Arguments for Public Ownership
Numerous experts contend that some form of common ownership or nationalisation is necessary in key industries to enable medium- and long-term planning—not only to meet climate targets but also to ensure systems are resilient enough to withstand climate shocks.
“Almost all wealthier democracies have mail, transport, energy, and water in state ownership. We still do not.”
Public Opinion and Government Response
According to a recently published survey, the majority of Britons believe utilities and public transport should be run in the state sector.
In government, certain moves toward nationalisation have been made, including bringing select train operators back into state hands and establishing publicly owned energy companies.
Instances of Successful Public Models
We see increasing examples of public ownership models that provide value for money. In some regions, local councils own majority stakes in bus operations, and integrated transport systems are being rolled out under public control.
Oversight View
The financial watchdog for the water industry stated that companies must comply with all relevant legislation and standards when paying dividends, and those underperforming or facing financial challenges may need to limit or eliminate dividend payments.
In estimating the dividends paid across these sectors, economists examined dividend data from financial databases, company reports, academic literature, and regulatory bodies.
