Clem Sunter

To nationalise or not

2010-09-29 10:25

"To secure for the workers by hand and by brain the full fruits of their industry and the most equitable distribution thereof that may be possible upon the basis of the common ownership of the means of production, distribution and exchange, and the best obtainable system of popular administration and control of each industry or service."

These words comprise Clause IV of the British Labour Party Constitution in 1918. They were written by my great-great aunt Beatrice with her husband Sidney Webb. They are the only ordinary married couple to be interred side by side in Westminster Abbey. That clause called for the widespread nationalisation of British industry 92 years before Julius Malema’s slightly less ambitious call for the nationalisation of South Africa’s mining industry.

Beatrice’s nephew, Stafford Cripps, who was Chancellor of the Exchequer in Clem Atlee’s government after the Second World War, faithfully carried through her recommendations. The nationalisation programme started with the Bank of England and progressed through the creation of the National Coal Board and National Health Service to the state taking over electricity, railways, canals and the iron, steel and gas industries.

While some of these institutions survive, the clause was amended at a special conference in 1995 under pressure from Tony Blair. It now reads as follows: "The Labour Party is a democratic socialist party. It believes that by strength of our common endeavours we achieve more than we achieve alone, so as to create for each of us the means to realise our true potential and for all of us a community in which power, wealth and opportunity are in the hands of the many, not the few, where the rights we enjoy reflect the duties we owe, and where we live together, freely, in a spirit of solidarity, tolerance and respect.”

With that amendment, New Labour was ushered in and the revised clause still forms the guiding vision of the party that Ed Miliband has just been chosen to lead. Personally, I prefer the later version as it comes close to the “third vision” which I was advocating in last week’s article. Of course Beatrice, who also co-founded the London School of Economics, launched the New Statesman and served on the pivotal Royal Commission on the Poor Law between 1905 and 1909, had no idea how inept government could be at service delivery.

Yet she probably would not have changed her mind, which brings me to my position. I am not a privatisation freak following slavishly in the footsteps of Maggie Thatcher among others. I think the state can run some industries better than the private sector, particularly where the alternative to state control is a private monopoly or an ill assortment of non-cooperative smaller companies which fail to achieve the synergy of the larger organisation. For example, British Rail has never been the same since it was split up. The privatised model is more expensive, less safe and generally offers a shoddier service than its predecessor. Equally, the British can be proud of their National Health Service.

The mining industry, however, is for me an improbable target for nationalisation. You have to make long-term bets based on a few boreholes, and who knows what the price of the commodity you are going to mine will be in five to six years’ time when production commences? Does government really want to put taxpayers’ money at risk especially when there is plenty of competition to stop extortionate behaviour? Does the state, as owner, really wish to take on the burden of health, safety and the environment in an increasingly stringent framework of its own laws and regulations?

Besides these questions, there is a little matter called opportunity cost. Money spent on acquiring mines cannot be spent on national health insurance. I am exceedingly proud of being related to Beatrice. Nevertheless, to use Trevor Manuel’s expression of the moment, nationalisation of the mines is a “flavourful curry” that could bite back in unexpected places!

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