Nationalise building societies - it will slash mortgages - Nigel Nelson

One Boomer who appreciates the bind the current Chancellor finds herself in is a former one.

Kenneth Clarke told LBC’s Andrew Marr: “The country is in a grave economic and financial crisis, and whoever won the election was going to have to do some very tough and unpopular things.”

Few new governments have gone through the baptism of fire this one is engulfed in. And naturally, ministers blame the Tories for the mess they inherited.

Lord Clarke sympathises with that, too, saying: “To have Boris Johnson and Liz Truss as prime ministers proved to be quite the biggest political disaster of my lifetime.”

But this PM must also contend with promises he made while running for the Labour leadership coming back to haunt him. No longer is he proposing tax rises for the top five per cent of income earners or the abolition of universal credit or university tuition fees.

But the one promise Starmer is keeping is to nationalise the railways. This should be welcomed after the chaos privatisation caused.

And it should be relatively easy and cheap because all he has to do is bring train operators into permanent public ownership when their existing franchises run out.

My view is that all public services should be in public control because they are there to serve the public not to line the pockets of private investors. That means using any profits to improve those services.

But Starmer has had to go back on his pledge to nationalise energy because it is so eye-wateringly expensive. An analysis by Union Unite last year showed it would cost £90billion just to pay back shareholders what they invested.

And the price tag would come to double that if they were to be compensated at current market value. It makes the £22billion black hole left by the Tories look like small change.

One sector I had never thought about nationalising is building societies. And the idea was put into my head by PR guru Piers Pottinger as we were waiting to go on Britain’s Newsroom the other day with GB News presenters Andrew Pierce and Nana Akua.

If this comes as a surprise you are not alone. It did me. I had never thought of Piers as a natural nationaliser.

There are now around 40 building societies in the UK whose primary purpose is to make loans secured against residential property which means three-quarters of their business is dishing out mortgages.

That was their sole function when they first emerged in the 18th Century and, in those days, they were wound up once all their members had been housed.

Margaret Thatcher’s deregulation of the finance industry in 1980 meant they became more integrated into the overall financial system and began to operate a lot like ordinary High Street banks.

In many cases they have been taken over by banks, or turned into banks, and an amendment to the 1986 Building Societies Act earlier this year put them on a level playing field with banks.

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Building societies once had a near-monopoly on mortgages before the banks twigged there were rich pickings to be made out of the home loans market.

At the same time those who ran building societies licked their lips at the huge bonuses bankers could get.

Nationalisation is not impossible. Northern Rock was taken into public ownership during the 2008 financial crisis because panicking savers were rushing to get their money out.

But unless a building society is about to collapse, it is a highly complex area. The question is whether state control might make home ownership easier and mortgages cheaper.

Starmer is already setting up Great British Energy as an investment vehicle to make Britain a green superpower. He also plans to build 1.5 million homes by the time the next election comes around.

He might care to look at the creation of the Great British Building Society to fill them.

Anything to take minds off the forthcoming Budget next month which is going to be, to use another Gen Z term, a bit icky.