A prime minister with ambitious plans for state ownership. Private companies that put profits before investment. A country struggling with onerous debts.

The UK in 2026 with a new prime minister weighing up how and what price public utilities can be nationalised? No, this was Clement Attlee’s government in 1945, committed to taking over the commanding heights of the economy at a time when the country was on its uppers.

History shows Andy Burnham would not be the first Labour politician to have plans to nationalise parts of the economy. Nor would he be alone in trying to do so at a time when the public finances are under pressure. The man certain to succeed Sir Keir Starmer thinks – as Attlee did – that state ownership forms part of the solution to Britain’s economic woes.

He will have to go some to match the record of the postwar Labour administration.

By 1951, Attlee’s government had nationalised 20% of the economy, as well as creating the NHS. In the 1970s, nationalisations were often emergency rescues of companies – such as Rolls-Royce and British Leyland – or sectors such as shipbuilding deemed too big to fail; in the 1940s they formed part of a plan to transform the workings of the economy.

The Labour party had long argued for nationalisation. The original clause IV of its constitution – dating back to 1918 – called for the “common ownership of the means of production, distribution and the best obtainable system of popular administration and control of each industry or service”.

It took the best part of three decades for wholesale common ownership to come about.

In 1934, Labour drew up a radical programme to nationalise banking, land and those “basic industries” – fuel and power, transport, iron and steel – that had “failed the nation”.

At the time, prospects for state ownership were bleak. Labour had been reduced to a rump in the 1931 election and was heading for another big defeat in 1935. But supporters of nationalisation had some things going for them. One was the legacy of the Great Depression, which – as with the 2008 financial crisis – had severely dented faith in free-market economics. Another was that the Soviet Union, with its command economy, had grown faster and had lower unemployment in the 1930s than the west.

But what really counted was the experience of the second world war, when large chunks of UK industry were taken over by central government, which directed how resources and manpower should be used. As George Orwell noted in 1941: “The fact that we are at war has turned socialism from a textbook word into a realisable policy.”

Booming wartime production meant the public was receptive to the idea that the government should have a bigger role in running the economy in peacetime. As a result, between 1945 and 1951 the Attlee administration pushed through the whole of the 1934 programme, with the exception of land and the commercial banks.

The first nationalisation was of the Bank of England, which was brought under state control in 1946, followed by civil aviation in the same year. The nationalisation of coal and the telecommunications company Cable and Wireless took place in 1947, with British Rail, road haulage and electricity in state control by the end of 1948. Gas was nationalised in 1949, with iron and steel the last to be taken over by the state in 1951.

Despite the poor state of the government’s finances after the second world war, there was no question of assets being appropriated by the state. Compensation to the owners of the mines and the big four rail companies was actually quite generous, which is why the nationalisation programme was relatively trouble-free.

The government had no spare cash and was forced to be creative. It compensated owners by issuing them government bonds, in effect paying for private assets with fixed-interest IOUs.

Ironically, the stiffest opposition was against the one nationalisation that survived the privatisations of the 1980s and 1990s: the NHS. Doctors were fiercely resistant to Nye Bevan’s plans – fearing that state control would adversely affect their relationship with patients and would cost them money through the loss of private patients. To get his proposals through, Bevan had to buy the doctors off – famously noting that he had been forced to “fill their mouths with gold”.

For the next three decades, there was broad cross-party consensus about which parts of the economy should be in state hands. The coal and rail industries had been unprofitable for many years and it was thought by the Attlee government that they would be more efficient if less fragmented. A wartime report on coal said the industry required massive investment and extensive reorganisation – both of which were deemed more likely if they were run by the state.

The idea that the nationalised industries in the 1970s were massively inefficient and grossly overstaffed compared with a leaner private sector is a myth. The coal and rail industries shrank in the 1950s and 1960s, with pits shut, lines closed and jobs lost. Between the oil shocks of 1973 and 1979, productivity growth in the nationalised industries as a whole compared favourably with privately run manufacturing companies. Gas, telecoms and airways recorded especially strong performances.

What the nationalised industries certainly had in the 1970s was an image problem but this was as much to do with their ownership structure as their actual performance.

Herbert Morrison, the Labour politician responsible for steering nationalisation through parliament in the 1940s, had set up public corporations with arm’s length control from Whitehall, a format that made state-run companies overseen by boards seem bureaucratic and remote from the public. As one commentator noted the boards “paid inadequate attention to the public image of the nationalised industries, their corporate identity and their achievements”.

By this stage, enthusiasm for widespread further nationalisation was confined to Tony Benn and the left of the Labour party. Benn’s plans to nationalise 25 leading private sector companies came to nothing amid the stagflation of the mid-1970s.

The National Enterprise Board set up by the 1974 Harold Wilson-led government had some success in sponsoring small firms, particularly in the growing hi-tech sector but had to devote most of its time and the bulk of its budget on providing support for British Leyland. Nationalisation had became synonymous with bailing out lame ducks.

Burnham, unlike recent Labour leaders – Tony Blair, Gordon Brown and Starmer – gives the impression that he sees state ownership as more than simply a last resort.