An old I.L.P. pamphlet How Socialists would run Industry (1925, p. 14) asked “Why should not Labour hire capital and devote the whole of the surplus to the improvement of the service?” and went on to propose that “the surplus earnings after paying a fixed rate of interest for the hire of loan capital, should . . . be reserved for specific purposes . . .” (Our italics).

In another I.L.P. pamphlet Socialism in the Village (1920) we read :–

“The owners will receive Government Bonds in return for their land, the interest on which will be more than covered by the rents paid to the State.” The pamphlet went on to express the view that “there is every reason to expect that agriculture will yield a far better return to labour and capital than it now does.” (Our italics).

Though the above quotations are taken from publications more than 20 years old it will be found that the theory on which they are based is still held in its entirety by the Labour Party and trade unions to-day. Their proposals for nationalisation or State control are still framed on the principle of depriving the capitalist of his control of industry while guaranteeing him a fixed return on his capital.

Subsequent programmes of the Labour Party adhere to this illusory change of form while retaining the substance of the exploitation of the workers by the capitalists. The Labour Party programme For Socialism and Peace (1938) contains the following:–

“The public acquisition of industries and services will involve the payment of fair compensation to existing owners ; but thereafter the former owners as such should have no further part of any kind in the control or management or policy or finances of the publicly-owned concerns. The suggested basis of compensation, broadly, is the net reasonable maintainable revenue of the industry concerned” (p. 19).

It was on this basis that London’s buses, trams and tubes were merged into the London Passenger Transport Board on the initiative of Mr. Herbert Morrison in the Labour Government of 1929-31 (though the merger was actually not completed until 1933, by the National Government). The capitalist investors who had their money in the private companies were compensated on the basis of the average net profits for the preceding three years. The stock of the new undertaking, London Passenger Transport Board, pays interest at 4½%, or 5% in the main, though what is known as “C” Stock pays whatever amount is available fro ; profits but in any event not more than 5½%.

Under the Labour Government’s Bill to nationalise the Bank of England (October 1945) the stockholders are to receive as compensation the same dividend, 12%, as they have received each year for the past 20 years. For each £100 of Bank Stock they will receive £400 of Government Stock paying 3% a year.

In an article demanding nationalisation of the railways the Scottish journal Forward, which professes to have “advanced” Labour views, instanced the L.P.T.B. as a model for railway nationalisation – “after all, nationalisation of railways would not be a leap in the dark. It is many years now since the London Passenger Transport Board came into existence, and nobody can seriously argue that this has been a failure either as a public service or as a commercial undertaking.” (Forward, 11 March, 1944).

 It may be remarked in passing that the employees of the Board who have several times come out on strike over wages and conditions, as well as the users of the service, know very well that the Board is not different from any other profit-making concern. Despite the claim of its originator, Mr. Herbert Morrison, that it is a form of “socialisation”, it is merely one of the many forms of capitalism. Only when industry and transport, etc., are owned and democratically controlled by the whole community can service to the whole community be a reality.
 Nationalisation or State capitalism is not the solution to the problem.

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