Of all the Attlee governments' economic policies, it is the nationalisation programme with which they are most immediately identified. Between 1945 and 1951, gas, electricity, coal, railways, inland waterways, road transport, airlines, and iron and steel were all nationalised and established anew as public corporations. By 1951, public corporations accounted for 19.5 per cent of gross fixed capital formation. Certain characteristics were common to many of these industries: their operation was often attended by externalities and spillovers, where the social value of output exceeded its private value; many of them were important areas of fixed capital investment, often containing a natural monopoly component, where the minimum efficient scale was large relative to the size of the market, and unusually subject to decreasing costs; their output was widely used by an electorate which had a persistent interest in its availability and price.

These characteristics had prompted central and local government involvement in many of these industries which considerably pre-dated nationalisation. Since the nineteenth century, municipal government had been interested in the safety of utility supply and the external benefits of the wider supply of mains water, gas, and electricity. This concern with externalities coincided and blended with an emerging public concern to extend availability of output. This interest was sufficiently great for the number of publicly owned water undertakings to treble from 250 to 786 in the period from 1871 to 1915, with approximately 80 per cent of authorised water undertakings being in municipal hands by 1912–15.