Britain didn’t choose to become a country that mostly manages other people’s money. It drifted there, one privatisation and one foreign takeover at a time, while telling itself each individual decision was just the market working efficiently. The cumulative result is a economy where financial and business services generate a wildly disproportionate share of output and exports, North Sea oil revenue vanished into current spending instead of national wealth, and strategic industrial assets (steel, semiconductors, ports) get rescued by the state only after a foreign owner has already run them down and a crisis is unavoidable.

None of this requires abandoning markets to fix. It requires being honest that “free market capitalism” was and is never actually free of political choices. Every market has rules, and Britain has consistently chosen the set of rules that produces exactly this outcome. Here are three that could produce a different one, none of which involve pretending the state should run everything.

1. Turn windfall resources into a real sovereign fund and not merely a placeholder

The comparison to Norway has become a cliché precisely because it’s so stark and so avoidable in hindsight. Since the 1970s, Britain has pumped roughly as much North Sea oil as Norway (47 billion barrels against Norway’s 56 billion) and has essentially nothing to show for it (well, if you discount the £billions salted away in offshore accounts).

Norway’s Government Pension Fund Global is now worth over $2 trillion, holds stakes in more than 7,200 companies worldwide, and represents around $385,000 of notional wealth for every Norwegian citizen. The UK’s oil money went straight into tax cuts and current spending as it arrived, mostly through the 1980s, leaving no permanent asset behind at all.

It’s true the comparison isn’t perfectly clean. Norway’s population is a twelfth of the UK’s, and its saving discipline began from a position of an already being a stable, well-governed economy in the 1990s, not the fiscal chaos Britain was suffering from when North Sea revenue first arrived in the mid-1970s.

But that only strengthens the case for starting properly now, rather than repeating the same excuse. The government has, to its credit, already built the skeleton of this: the National Wealth Fund, launched by Rachel Reeves in 2024 with the British Business Bank’s £7.9 billion of commercial programmes put on a permanent statutory footing. What it lacks is scale, a hard statutory lock preventing future governments from raiding it for short-term spending, and a dedicated revenue stream starting with windfall taxes on remaining North Sea production, a slice of renewable energy licensing revenue, or proceeds from strategic state stakes taken under proposal two below. Norway didn’t get rich by picking better investments than Britain would have; it got rich by having a legal structure that made spending the money someone else’s problem, permanently.

2. Make strategic industrial investment proactive, not a fire emergency

The recent pattern is not really industrial strategy, it’s more crisis management dressed up as one. British Steel was nationalised this month only after its Chinese owner, Jingye, had spent over a year running down the Scunthorpe plant and the government had already sunk nearly half a billion pounds keeping the blast furnaces alight. Newport Wafer Fab, Britain’s largest semiconductor plant, was allowed to sell to a Chinese-owned buyer in 2021 without even a formal security review, and only got unwound a year later after American congressmen threatened to strip the UK of its export “white list” status which puts it down to external pressure, not domestic foresight. Liberty Steel’s Scottish plants at Dalzell and Clydebridge were “saved” from Tata in 2016 by a Scottish Government pass-through deal to Sanjeev Gupta, whose empire then collapsed amid a Serious Fraud Office investigation; the plants sit idle today (he’s under investigation, but David Cameron seems to have escaped scrutiny).

The common thread here is that in every case the state only acts once an asset is already in the departure lounge, at maximum cost and minimum leverage. A serious alternative is for a beefed-up National Wealth Fund, or a British equivalent of France’s BpiFrance or Germany’s KfW, to take proactive minority stakes (patient, non-controlling capital) in firms in genuinely strategic sectors (steel, semiconductors, grid infrastructure, defence-adjacent manufacturing) well before they’re distressed, specifically so that any future ownership change requires state consent rather than state rescue. This isn’t nationalisation; it’s the state acting as a long-term shareholder with a veto, the way sovereign funds in Singapore or the UAE routinely do in sectors they consider strategic, rather than as the insurer of last resort that only shows up once the fire’s already burning.

3. Use Britain’s own mutual model for universal services instead of debating a false binary

This is where “universal services never needed privatising” is right in spirit but slightly wrong on the mechanism because in Britain there has already been built (and quietly run for 25 years), a working middle path that isn’t private-shareholder extraction and isn’t Whitehall ownership either. Welsh Water has operated since 2001 under Glas Cymru, a company limited by guarantee with no shareholders at all. It was financed entirely through bond markets and at the time was the largest non-government sterling bond issue ever. Every financial surplus, more than £440 million over its first twenty years, goes back into infrastructure and restraining customer bills rather than dividends. It consistently holds the strongest credit ratings of any water and sewerage company in England and Wales and has never needed a taxpayer bailout.

Compare that with the rest of the privatised English water sector, where companies like Thames Water were bought by overseas investors who then loaded the debt onto the balance sheet, forcing customers to service it and pay dividends while infrastructure was neglected. Campaigners pressing for “renationalisation” now face a genuine dilemma: should the Treasury be required to buy out existing shareholders at fair value with tens of billions it doesn’t have? The Glas Cymru model sidestepped that problem entirely, because it isn’t nationalised and no government money changed hands, no shareholders needed compensating, and the company continues to raise its own capital in the bond markets on the strength of stable, regulated cash flows.

What this requires is political will: legislating an “asset lock” that lets existing water, and potentially rail infrastructure companies convert to the same not-for-profit, customer-and-employee-governed structure, that Welsh Water’s founders did when Hyder collapsed in 2000. It’s proof that “not owned for private profit” and “not run by the state” aren’t actually opposites. Wales invented the third option and then Britain simply declined to use it anywhere else.

The Common Thread

None of these three ideas require nationalising the commanding heights or abandoning markets as an organising principle. They require accepting that markets are always built on rules someone chooses, and that Britain’s rules have consistently favoured short-term capital mobility over long-term asset-building – visible in a wasted oil windfall, a habit of intervening only once a strategic industry is already dying, and a refusal to scale up the one universal-services model that’s actually worked, quietly, in Wales for a quarter of a century. Fixing any one of them is a policy choice, not an ideological leap.