Nationalisation—the tuning point
It is now clear that the Labour Party’s attitude to nationalisation resembles that of a woman towards her husband after she has seen him for the first time without his false teeth and wig.
Labours’ love affair, and the subsequent honeymoon, lasted a long time. In a past which it would prefer to forget, it has declared for nationalisation of, among other things, banking and credit, water, agriculture, iron and steel, shipping and shipbuilding, chemicals and insurance. At their 1934 Conference Herbert Morrison advocated a programme of persistent nationalisation “. . . until within a reasonable time we are substantially masters of the economic fabric of the community and the means of production and distribution”. And of course there is the famous Clause Four, still there in the Labour Party Constitution, which is a commitment to nationalise all British industry and commerce.
They were heady days, when Labour leaders often spoke with the delirium which comes from spending too much time out of power. Since then, their ardour has declined; the 1945 government pushed through nine major nationalisation Acts and the list of candidates for state control has now dwindled into almost nothing.
Those nine Acts of the Attlee government were the high spot for nationalisation. Labour Party propaganda during the 1945 election was clear about the intention to nationalise, although it put special emphasis on the coal mines—and with good reason. It was easy enough to prove that the miners had suffered under the private owners; the Labour Party drove the point home with plenty of pictures of idle mining villages and unemployed miners picking on slag heaps for scraps of coal. The implication behind this was that the way to solve unemployment in the coal industry was to nationalise the mines. (This was still Labour’s case in 1959, when their election manifestos claimed “The nationalised industries are one of the country’s main defences against unemployment.’’) Subsequent events have shown up this line of propaganda for what it is.
Labour’s 1945 election machine faced obvious difficulties in putting a similar case for taking over other industries. There were, for example, no authentic old photographs of starving clerks from the Bank of England raking with their umbrellas among the dustbins of City restaurants, it was very hard to stir anyone’s emotions over nationalising the Bank and in any case as the late Lord Pethwick Lawrence, who was a member of the Labour government, put it, it was “. . . already very largely a department of the Treasury and its nationalisation will not make a pennyworth of difference to the bulk of the people . . .”
But however little the difference it made, the Attlee government pushed on and by 1951 the State had taken control of the Bank of England and of Civil Aviation, Coal, Cable and Wireless. Transport, Land Development Rights, Electricity, Gas and Iron and Steel. The programme had been fulfilled. We had, apparently, at last reached the Promised Land which Labour pioneers had sung and worked and sulfered for.
In all the excitement, it was inevitable that certain facts should escape popular attention. In the first place, the Labour Party had no patent on nationalisation. Even in 1945, there were plenty of State-run concerns to testify to this fact. Some were like the Post Office, the public houses and the brewery in Carlisle, and the B.O.A.C., which were all examples of complete nationalisation carried out by a Conservative government. Others were cases where the State had a powerful influence, as in the British investments (again the work of Conservative and Liberal governments) in the Suez Canal and the (then) Anglo-lranian Oil Company. As the Industrial Editor of The Guardian once put it. “. . . public control in 1947 was nothing new.”
Secondly, the real motive for nationalising certain industries had nothing to do with the conditions of the people who worked in them. The Reid Report on the mines, published in 1945, pointed to British industry’s dependence on coal, and to the poor state of the mines under private companies. It also showed how the separate control of many collieries prevented valuable coal seams from being worked to the full, and how the old coal masters could not hope to invest the massive amounts of money the mines needed to put them on their feet.
What this amounted to was the industrialists of Britain in 1945 needed coal desperately and, whether it was by nationalisation under a Labour government or by State control from the Conservatives, they were going to get it. After nationalisation, enormous amounts of money were pumped into the State industries. A National Coal Board publication — The Root of It All — of 1950 said that it was then proposed to invest some £520 millions in the mines. In other spheres it has been the same story: in 1964 the nationalised electricity industry was investing enough money in its equipment to build the Channel funnel every ten weeks. By 1967 it plans to he using up £2 millions every day.
The hunger of the massive, basic industries for capital is still one of the arguments used to justify State control, the While Paper on the steel industry published last May said:
“The iron and steel industry occupies a focal and dominating position in the British economy . . . A single new large integrated works may cost £ 150 million . . . There are difficulties in raising private funds for projects of this sort which lake many years to complete and which, when completed, have to go through a long commissioning period before they can earn a return on capital sufficient to attract private enterprise.”
The gratitude which the capitalist class feel for all that the state concerns are doing for them was expressed by Lord Chandos, who was once a Minister in a Conservative government, when he spoke up on 8th January, 1962:
“Nationalisation of a fairly substantial sector of industry has come to stay . . . As an industrialist I want cheap fuel and reliable supplies and I believe that with a little more working together that is what (the National Coal Board) will secure for us.”
Now it is reasonable to say that, if the nationalisation which the 1945 Labour government introduced had had the effects which they promised (perhaps expected, even), if it had indeed opened the road to the Promised Land, then the Labour Party would have had every reason to make it a larger and larger part of their election programme, for it would be one of the greatest vote-catchers ever.
But the opposite has happened. Nationalisation of the land has gone forever; it is not even discussed any more at Labour Conferences. At one election after another, the nationalises’ shopping list has grown shorter. In 1955 it covered only steel, road haulage and sections of the chemical and machine tools industries. By 1964 this had shrunk to steel and water supply. And now it is clear that, despite the government’s hand-on-heart declarations, steel nationalisation is all hut forgotten, there was no mention of it in the last Queens’ Speech; as James Margach wrote in the Sunday Times of 9th January last, “. . . the Steel Nationalisation Bill is further away than ever.’
Whatever this retreat proves about the Labour Party’s readiness to abandon what it once called its cherished principles, there should be no regret at the passing of nationalisation. It had little to offer the people who get their living in the State industries; “. . . the Postmaster General,” wrote a postman’s wife to the Manchester Guardian (6.5.54). “Gets the most important work done by almost slave pay and labour.” At the time that letter was published, the National Coal Board was also doing its best to dispel any delusions about the Promised Land by claiming damages of over £60,000 from some miners who had been on unofficial strike.
The Labour Party’s claim that nationalisation is a defence against unemployment has been defeated by the widespread cuts by British Rail, and by the National Coal Board’s programme of closing pits and sacking workers. Only half as many pits are working today as there were when the National Coal Board look over; since 1957 the number of miners has been cut from 700,000 to 450,000 and the number of clerical and administrative staff has been reduced by ten thousand. More cuts are planned.
Many workers in the mines and the railways have been sand-bagged by the cuts, as well they might be. In 1956 the National Coal Board was planning to employ 672,000 miners by 1965 and to be producing 250 million tons of coal by 1970. But the rapid contraction of the market for coal, under pressure from other fuels, has left the industry lighting desperately for a 1970 production quota of 170/180 million tons under the National Plan and has forced it to cut its work force.
The reason for this is that nationalisation does nothing to solve the economic and social problems of capitalism. State industries have to employ workers, and to dispute with them over their pay and conditions. They also have to sell their products, often in competition with other industries in this country or with those abroad. They are, in other words, just as dependent on the anarchies of capitalisms’ markets as private industry. The class division of society remains unaffected by nationalisation; indeed. Labour spokesmen continue to make propaganda out cf the fact that, in the words of one of them, “One per cent. of the population stills owns about 50 per cent. of the nation’s wealth,” — as if this was not one of the problems nationalisation was supposed to solve.
It would be foolish to pretend that the decline in support for nationalisation is due to a widespread appreciation of these facts. Many workers passionately believe that the highest form of industry is a profitable one and, equally misguidedly, think that State industries fail to make profits. In fact, these industries often make large profits from the exploitation of their workers but their obligation to provide for fixed interest payments also often turns a working surplus into an accounting deficit. In 1962, for example, when the National Coal Board declared a deficit of over £13 million, Lord Robens pointed out that had they been a “normal commercial company” the mines would have declared a dividend of 2½ per cent.
The result of all this is that nationalisation has become something of an embarrassment to the Labour Party, connecting it in the voters’ minds with trains which are dirty and late, or coal which is scarce or electricity which is dear. A Colin Hurry poll in 1959 claimed that 63.5 per cent. of the electorate was opposed to more nationalisation, and that 30.7 per cent, of Labour voters also thought that way. An Aims of Industry poll in 1964 concluded that 49.7 per cent. of the electorate, and 23 per cent. of Labour voters, were against nationalisation in principle.
The present seems, then, to be something of a turning point. The British capitalist class are now clear that nationalisation has gone far enough and that there must be no more of it for political reasons. At the same time, they recognise that it is in their interests for the State to have a say in important industries like iron and steel. Future state intervention will probably be in the form recommended by the Plowden Committee for the aircraft industry, with the government acquiring large or majority shareholdings, bringing off mergers—or perhaps break-ups—and generally having a say in the policies of industries which affect the fortunes of British capitalism as a whole.
Nationalisation was once offered as a cure-all, as the road to prosperity. Since then it has been replaced as speechwriter’s favourite by Science and Technology. How long will it take before this, too, is exposed as another sham designed to cover up the fact that there is no way of solving our problems short of changing society?