Is nationalisation a ‘left-wing’ idea?

By Mike Newland.

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The BBC said recently that nearly two-thirds of the public now favour re-nationalisation of the energy industry.

One of the advantages of party meetings, at which anything can be advanced for discussion, is that it will often throw up questions which needed to be thought about but which have received little attention. Not something the big parties incline to with their stage managed ‘conferences’ now largely abandoned by ordinary members in favour of becoming lobbyist fairs.

When the question of the energy industry was raised at the BDP’s recent AGM it provoked furious debate which continued for days afterwards. A surprise to those present! Opinion divided strongly between those seeing the dangers of letting the state take over anything and a general feeling of ‘had enough of the private energy companies’.

Would it be practical for government to re-nationalise energy? Would it be beneficial? Is there any place in the nationalist outlook for the state to run any part of the economy. ‘Communistic confiscation’ was one view at our meeting.

Why is there such a strong feeling of opposition to private energy supply? We don’t hear such views much expressed about other industries supplying necessities – food for example – except among the extreme-left who would like a state owned economy period.

The energy companies seem to have a rare gift in their ability to upset customers. Every week brings new stories about people being overcharged or mistreated in other way (cold calling a speciality) while they are sent on a glorious run round between endless telephone lines and letters are ignored. One feisty lady successfully sued British Gas for harassment.

Large price rises for energy are also a source of irritation. Here customers are on weaker ground. Global development is raising energy costs, and bills are also being bumped by politicians’ vanity schemes involving alternative energy produced at vast cost.

Easy to get angry and say take the beast back into public ownership. Most did not experience the glory days of the nationalised industries when you waited months for a telephone to be installed. The attitude to customers was that they were receiving a bounty from the state and should be grateful rather than their paying for a service.

There are two major difficulties when the state runs anything. They may not be insurmountable but it’s perilous to ignore them. The temptation to use nationalised areas of the economy for short-term political advantage is huge. Pack them with your client voters on salary is an obvious temptation.

The Coop was not state-owned yet even its relationship with the Labour party was sufficient to assist its downfall. The celebrated ‘Crystal Methodist’ would probably have never been made up to boss if he’d not been a Labour apparatchik and the fact that the Coop lent money to the Labour party. Beware involvement with politicians!

You also face the fact that anything run by a state bureaucracy tends to become paralysed by civil servants covering their backs and enlarging their paperwork labyrinth to empire build their own departments.

On the other hand, private firms now are generally run on the basis of short-run profit and bonuses based on it rather than their long-term viability and investment. That is what happened to the banks. We still live with the cataclysmic results. There is no simple answer as to whether private or state is overwhelmingly best under all circumstances.

The strength of feeling against the energy companies may be partly rooted in an unarticulated unease about loss of vital national sovereignty. Often foreign companies and interests own and control our access to the hearth. Chinese firms are now involved in plans to build new nuclear power stations.

The future planned for us by our major political parties is clear. We are to have no real control over our economy which will be mainly foreign owned. Our population will have no clear national or cultural or racial identity being composed of transient workers. In short, no social system.

In such a world, whether to state run parts of your economy may be subject to other than purely an economic calculus. One can see people saying that it might not be most efficient to state-own industries but at least it’s ours! Those running them might be bastards but at least they are our bastards… Our place at the hearth is a very primal force for humans.

In such a world, nationalisation could become very much a nationalist or conservative idea rather than the socialist one it’s mainly perceived as due to Labour‘s nationalisation programme during the 1940s. Karl Polanyi famously said that free market systems don’t last long since they are socially intolerable.

But it’s certainly not the case that nationalisation has been exclusively something historically associated with socialism. As our Chairman pointed out, the ‘well-known Marxist’ Joseph Chamberlain municipalised water and gas in Birmingham during the latter part of the 19th century. Councils frequently took over local electricity supply around the time of the First World War. My own ancient supply bears a plaque saying ‘property of the borough council‘.

The second half of the 19th century in Britain saw a huge rowing back from free markets. Factories legislation began to control workplace conditions. The free market no longer supplied poison anonymously to those wishing to bump off their relatives for the insurance money. From 1868, you had to sign a poison book at the chemists.

What is it in particular about utilities – gas, water and electricity and telephones – which propelled them into public ownership for a very long period? It’s because they are natural oligopolies or monopolies.

It would hardly be efficient to have power cables laid separately for umpteen companies in the same street using different voltages and so on. And separate appliances for each one. Yet right up to the end of the last century there were still curious pockets of non-standardisation of electricity supply in Britain.

The same does not apply to food supply or most other industries. You can have a very large number of competitors without great difficulty.

Natural oligopolies and monopolies in private hands lend themselves to profiteering and poor customer service. 98% of UK energy is supplied by the big six firms. So energy is something of an unusual case.

Suppose we decided to renationalise energy. Could it practically be done? Where is the money to come from is an obvious question.

Funding re-nationalisation is actually not quite the problem it might appear to be. I think we can rule out simple confiscation from the private sector. Too many vital interests like pension funds are involved and it would create a very nasty precedent for investing in anything. It would also not be fair.

We can leave simple confiscation to communists. The Mafia lost their stake in Cuban gambling casinos when Castro seized the country. You may say ’serve them right’ but where do you stop once state seizure is accepted?

The Government is borrowing huge sums and the national debt is exploding. Could it really borrow the vast sum needed to buy the energy companies? A constant complaint is that the borrowed money is not being employed for capital investment. That would provide a return enabling the money to be repaid. It’s largely being spent on current consumption.

But borrowing to buy firms making a profit would not be so unattractive especially when government debt yields such low returns. It would be even more attractive if the funds were raised specifically for the purpose – maybe a National Energy Bond.  A lot of people might be willing to participate in ‘owning our own power’.  All that would really be happening is a change of ownership with one group receiving money and another paying it.

This article is not intended to provide an answer as to whether the energy industry should be nationalised. There are pluses and minuses. But the way the wind blows it’s certainly not an issue for a political party to ignore.

 

12 thoughts on “Is nationalisation a ‘left-wing’ idea?

  1. Good thought provoking article.

    Thought one, separate the various arms of the energy industry, ie petrol companies blaming the costs on the oil producers, when in fact another part of their own business is actally producing the oil at prices they ‘complain’ about!!!! Electricity and gas are not much different. What a crazy world we live in.

    Thought two. Limit the top pay in any company to a percentage linked to the lowest paid in that company.

    Thought three. Pass a law that 51% of any company/firm must be British owned. (Malaya did this when I was out there in the 60s, so it can be done.)

    Thought four. Limit the influence of bulk shareholders, ie pension funds, hedge funds, union funds and ensure all voting is done on an individual basis, ie no block votes.

    Enough for now. Past my bedtime and no one will listen anyway.

  2. (Party Member) In a world of ever dwindling resources the whole energy production and supply industry is something that is vital to the well being, indeed survival, of our people. I have a natural aversion to ‘nationalisation’ Labour Party style, but we would run things properly for the benefit of our people. Also suits our ‘National Preference’ way of thinking and general view of life.

  3. Very good article. They say that ‘everybody’s property is nobody’s property’ which could be applied to housing. People usually take care of things they have a stake in so for me energy should be run a bit like John Lewis and Waitrose where everyone who works there has an interest in the efficiency and prosperity of the companies.

    They say that water should be free as it falls from the sky by and large, but the pipes that carry it to our homes cannot be free as they have to be installed, maintained and repaired.

    Perhaps some kind of mutuality could be applied there?

    I think we must have some control over such vital supplies otherwise we could be at the mercy of foreign powers who may choose to use those supplies as a form of control.

    So I think Edward Homes has some good ideas there about part-ownership of energy companies.

    How we could bring these powerful companies into line I leave to those with a much higher IQ than mine – of which I sincerely hope we have an abundance in the party!

  4. Things that effect UK citizens are neither left or right. All citizens need affordable utilities. I’d like to see re-nationalized utilities. Also I like to see alternative energy supplies like recycled waste plants.

    Birmingham, UK

    1. Absolutely right Chris; nationalisation of utlities isn’t left or right wing, its common sense.
      No nationalist party should agree with gas, electricity, railways etc being privately run for German and Japanese profiteering – nationalise it all for the national good.

      Free market capitalism works excellently for markets that can effectively support it – consumer goods, non-essentials, multi-lateral industry. It doesn’t work where there is no effective choice. You can’t “decide” that you arent going to have water out of your tap, just as you can’t “decide” to get a different brand of train from home to work because its cheaper – where the market is incapable of effectively supporting choice and competition then nationalisation is the best way forward.

      This is purely an efficiency and economics argument and has nothing to do with political view or ideology.

  5. Very good article provoking a debate that needs to be had! In an ‘ideal world’ (Yes, ‘Utopia’ – it ain’t gonna happen!), as nationalists, we would like wholly British-owned private companies providing goods and services to our people including vital utilities, like energy and water. We could then be sure and confident that we were not being ripped off for the profit of foreign interests and that we were fully independent from a security point of view. Given that in today’s globalised economy, we cannot have that, then ‘nationalisation’ of those utilities is much preferable, in my view.

    Whilst the British people are often described as ‘small c’ ‘conservative’, in their collective political outlook, the BBC survey – saying two-thirds favour re-nationalisation- is to my mind un-surprising, yet the ‘Conservative Party’ regard it unequivocally as a ‘socialist’ idea and are viscerally opposed. Furthermore, the Tories are very keen to brand British Nationalist parties as ‘far left’, as opposed to ‘far right’ – the preferred epithet of the Labour Party and the media. The convenient excuse, then for the disillusioned Tory voter is: “Yes I agree we must stop immigration and get out of the EU, but I couldn’t vote for you because you are ‘socialists’ – you want to re-nationalise the utilities for a start!”. Of course, they are looking at individual political ideas and policies in isolation and not seeing the bigger picture. As the world is becoming more ‘globalised’ in terms of trade, economics and more especially governance, where sovereignty is becoming more remote diluted and dissipated to bodies like the EU, our freedom, democracy and accountability are being eroded.

    Nationalism is the only logical ‘antidote’ to this freedom-snatching globalist ‘ideology’. As part of the overall strategy of reclaiming Britain, for the benefit of the British people, I would suggest re-nationalising the utilities is an essential component. We should not worry whether it is perceived as ‘left’ or ‘right’. It is either, it is neither, but it is ‘Nationalist’!

  6. Nationalisation of anything is counter productive. Monopolies always are. But what we do need is for our utilities to be owned by us, our railways as well. Owned by us but a degree of competition as well. So actual regulation with teeth. Leasing off by tender to the best bidder. Must be British though.
    This requires our getting out of Europe and not paying compensation to those big players in the privatisation that Thatcher knew were hovering in the wings snapping up the small shareholder’s bits. Just as is happening now with Royal Mail.

  7. I wouldn’t be in favour of wholesale nationalisation of industries. The vast majority of businesses should be in private hands. Utilities which are natural monopolies should be considered in a different way and at the very least must be British-owned

    Is nationalisation inherently leftwing? That depends on what end its purpose is directed towards. If an enterprise is taken into state ownership in order to keep that asset in British hands then it is a nationalist policy.

    David is right to assert that the Tories try and paint nationalist parties as left wing but we are not. Economically, we may be slightly leftist but only in so far as we want private business to be the nation’s servant and not its master ie we don’t believe in totally unregulated capitalism.

    Before Mrs Thatcher arrived on the scene, the Tories would have understood this to a certain extent. Ted Heath, for instance, took Rolls Royce into public ownership in order to keep it British. If he hadn’t have done this then we would have no British-owned aeroplane engine makers!

  8. I was at the meeting and I only remember a couple of people being against nationalisation, most including myself were for it.

  9. The problem with nationalization is the Unions. Anyone old enough to remember when we had a Gas Board, Electricity Board and when the GPO ran the telephone company will know only too well that it was necessary to take a morning or afternoon off work to ring the Gas Board! Yes, really! And on getting through, nobody knew what they were talking about or didn’t care or promised action/a return call which never happened.

    Getting a telephone connected took months so most companies who needed telephones installed/repaired urgently had a ‘pocket’ GPO engineer to whom one paid cash. They were there in minutes! And the strikes! Constant walk-outs because of minor slights, missed tea breaks, justified sackings….it was endless. The Communist Unions, of course, were using all this as part of their agenda to impoverish the country and bring about a Red Utopia. Don’t even consider going back there.

    Suggestion: nationalize ONE company in each area – gas, electricity, communications etc., – and leave them to compete with the non-nationalized outfits. Customers could vote with their feet (in either direction whenever they wished), the private companies would be kept on their toes as far as prices are concerned and the nationalized outfit would soon find itself out of business if they were rampantly inefficient and/or if the unions took over. Just an idea.

    1. I think people make many of the same complaints against the privatised companies.

      But the idea of going slowly and setting up state competitors is a good one.

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