Good morning. At the height of the privatisation bonanza of the 1980s, Margaret Thatcher’s government was spending vast sums on TV and billboard adverts urging us to “tell Sid” that he could pick up shares in British Gas. It was the era of the Great Flog-off, and “Sid” was promised a stake in a bright, shareholder-led future.
Now, in 2026, the sheen has well and truly come off Sid’s investment. Whether it is the state of our railways, or our rivers in England and Wales, the argument for private ownership of public essentials is looking increasingly threadbare.
But, as Dr Simon Griffiths, reader in politics at Goldsmiths, explains for me in today’s newsletter, nationalisation isn’t a “magic wand” either. We spoke about the fiscal trauma of the Liz Truss era, the “pragmatic” case for public ownership of the railways, and why Keir Starmer is so terrified of spooking the markets even when the public is on his side. First though, this morning’s headlines.
Five big stories
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Middle East | Donald Trump defended himself against criticism from fellow Republicans on Sunday as he appeared on the verge of agreeing a deal with Iran to end the war.
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UK news | Parts of the UK are officially in a heatwave as temperatures soared to within reach of May records.
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Ukraine | Russia used its powerful hypersonic Oreshnik ballistic missile for a third time in Ukraine as part of a massive attack on Kyiv and its surrounding region that killed at least four people and injured about 100.
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UK politics | Andy Burnham has sought advice from Keir Starmer’s former chief of staff, on how to manage a potential transition into Downing Street if he succeeds the prime minister.
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UK news | Police investigating Andrew Mountbatten-Windsor are looking into an allegation that he behaved inappropriately towards a woman at Royal Ascot, according to a report.
In depth: ‘The public mood has shifted, the government’s hand remains hesitant’
The 80s Tory promises of a “shareholding democracy” feels like a lifetime ago. Today, we are less concerned with dividends and more concerned with whether our trains turn up on time, or if our local beach is safe to swim at, as shareholders appear to be raking it in. But while the public mood has shifted, the government’s hand remains hesitant.
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What did Keir Starmer promise on nationalisation?
During the 2024 general election campaign, Starmer’s Labour pitched a vision of “national renewal” that included significant moves toward public ownership. The pledges were specific: a state-owned Great British Energy, the renationalisation of the railways as private contracts expired, and a “tougher” stance on the water companies. It was a platform designed to look radical to the base but “fiscally responsible” to the City. But, Simon Griffiths points out, “as [Starmer’s] position became more secure he became increasingly cautious.” That was already a step back from his leadership campaign, and nationalisation was slowly replaced by the “pragmatism” of the doorstep.
Optics are another consideration. “Nationalisation implies a left-of-centre government rather than the centrist one Starmer is leading. It also costs an awful lot of money. With the exception of rail – which you can do as the contracts run out, a sort of ‘nationalisation on the cheap’ – nationalising steel or water would be a massive financial commitment when money is very tight.”
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What has Labour done in government?
So far, the results are mixed. The railways are the big win for Starmer: as Great Western Railway and others see their contracts lapse, they are being folded back into public hands. Cambridge South station will open shortly, the first station to be badged Great British Railways (GBR), and trains with the new livery have been seen on the network. Derby’s labour market will be the beneficiary of the new GBR headquarters, and Aberdeen is set to benefit from the creation of a Great British Energy HQ there.
Elsewhere, the government has been forced into more “activist” roles. The recent Steel Industry (Nationalisation) Bill – introduced this month as Starmer promised yet another government reset following the disastrous May elections – gives the government the power to bring British Steel into public ownership to prevent a total collapse at Scunthorpe. It’s not an ideological choice; it’s a “break glass in case of emergency” measure.
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How popular is nationalisation?
The short answer: very … in certain spheres. “Nationalisation was popular with Labour members in particular, but it isn’t necessarily popular overall,” Griffiths says. Campaign group We Own It argue that “support for public ownership has increased substantially between 2017 and 2024”, gathering together a range of polling stats from YouGov to make their case – for example 66% of people want buses in public ownership, 64% want care homes in public ownership, 64% want energy in public ownership, 55% want to see more services run in-house by councils and 76% want to nationalise the railways.
“The demographic of the electorate who associates inefficiency with nationalisation is a shrinking one,” says Griffiths. To a voter in 2026, the private sector hasn’t delivered the efficiency it promised; it has delivered high bills, sewage and a struggle to find an Avanti West Coast train that runs.
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Why has Labour been so cautious?
This is where it gets complicated. Nationalising a company like Thames Water would be an “easy win” with voters. In a rare moment where a Guardian journalist found themselves agreeing with Jacob Rees-Mogg, I found myself nodding along when he argued for allowing Thames Water to simply go bust, letting administrators take over while shareholders lose their equity.
But the government is spooked, and the culprit is Liz Truss. The memory of the 2022 mini-budget – and the market’s violent reaction to it – is baked into the Labour psyche. “It demonstrated that there were limits to what you could do without the market getting involved and pushing up interest rates,” Griffiths says.
Even if, as I suspect, all money is somewhat fictional, the reaction of the bond markets is terrifyingly real. Labour fears that “seizing” assets or ignoring shareholders would trigger a crisis of market confidence. They are governed by a fear of the markets that, as Griffiths says, exists “perhaps for very good reason.”
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Would an alternative prime minister make a difference?
Andy Burnham is all but certain to join the challenge for the Labour leadership, and therefore Number 10, should he win the Makerfield byelection next month. He has suggested that a programme of mass renationalisation would be at the centre of his policy platform.
“We need a different path completely. Put more things back under stronger public control: energy, housing, water, transport,” Burnham said earlier this month. With deindustrialisation, privatisation and deregulation, the policy decisions of the 80s have left services that, he said, “just work for the private shareholders and not for the paying public.”
Whether the supposed “King in the North” trumpeting his achievements in uniting Manchester’s public transport into the Bee Network, can actually persuade the bond markets remains the £40bn question. Burnham’s pitch is a direct challenge to the “ultra-caution” that has defined the last two years of Labour in government. Thames Water has already said Burnham even floating the idea of nationalisation is damaging its prospects for recovery.
For decades, the ghost of the 1970s was used to scare us away from public ownership. But as sewage flows and bills rise, it seems more and more voters are deciding that the only thing scarier than the past is more of the same.
What else we’ve been reading
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Russia-watchers Pjotr Sauer and Shaun Walker have a deeply reported piece speaking to Kremlin insiders, intelligence officials and business leaders on the wavering faith in the “increasingly isolated” Vladimir Putin. Charlie Lindlar, newsletters team
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Hannah Murray was in Skins and Game of Thrones, but the main focus of this interview by Charlotte Edwardes is her recovery after being drawn into a wellness cult. Martin
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This week’s advice column from Annalisa Barbieri is a belter: what do you do if you suspect your colleague is lying about having cancer? Charlie
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Photographer Taryn Segal spent an evening in Arkansas at the somewhat bewildering – to British eyes – event of mass auditions to become one of the Dallas Cowboys cheerleaders. Martin
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Sport dorks and public transport dorks alike will love Benton Graham’s report on how Amtrak is preparing for a boom in ridership from the hordes of fans from public transit-adoring nations during this summer’s World Cup. Charlie
Sport
Football | Arsenal celebrated being Premier League champions for the first time since 2004 by recording a comfortable victory at Selhurst Park, where they beat Crystal Palace 2-1.
Tennis | Emma Raducanu lost 6-0, 7-6 (4) against Argentina’s Solana Sierra but Fran Jones won at a slam for the first time, beating Beatriz Haddad Maia in three sets.
Formula One | Kimi Antonelli won the F1 Canadian Grand Prix, his fourth consecutive win for Mercedes, with Lewis Hamilton and Max Verstappen completing the podium.
The front pages
“US close to peace deal with Iran as Trump faces fury from own party”, is the Guardian’s splash today. The FT leads with “Trump warns US will not rush into peace deal with Iran as talks drag on”, while the Telegraph’s headline is “Iran to give up uranium for peace, says US”.
The i Paper’s top story is “‘Embarrassing’ texts to expose ministers’ cosy relationships with Mandelson”. The Times says “Money for parents spur young into work”.
The Daily Mail runs with “Soft justice makes police ‘caretakers for criminals’”, and the Express writes “Criminals are taking over our high streets”. Lastly, the Mirror says “Russian spies … for real, Nige?”
Today in Focus
The death penalty returns to Israel
The Guardian’s senior Middle East correspondent, Emma Graham-Harrison, discusses a pair of laws recently passed by the Israeli parliament to bring back the death penalty – seemingly only for Palestinians.
Cartoon of the day | Tom Gauld
The Upside
A bit of good news to remind you that the world’s not all bad
The River Wye’s entire catchment has been granted intrinsic rights in a new charter – the first full river‑catchment charter in the UK. Adopted by Herefordshire and Powys councils and expected soon in Gloucestershire and Monmouthshire, it recognises the Wye’s rights to flow, biodiversity, freedom from pollution, regeneration, and representation. The move aligns with the global rights of nature movement, echoing similar protections in New Zealand, Ecuador and Canada.
The Wye has suffered severe ecological decline, largely blamed on nutrient pollution from intensive poultry farming and sewage. More than 4,500 residents have joined a high court claim against Avara Foods and Dŵr Cymru, who deny responsibility.
Jackie Charlton, the county council’s cabinet member for a greener Powys, said: “This is about working together with partners and communities to restore the river and safeguard it for generations to come.”
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Bored at work?
And finally, the Guardian’s puzzles are here to keep you entertained throughout the day. Until tomorrow.
