To be Truly Radical, Labour Must Forget About Nationalisation

If nationalisation were a singer, it would be Frank Sinatra. If it were a band, it would be Status Quo. If it were a movie franchise, it would be Jaws.

Every time you think it has disappeared, some new revival, comeback or sequel is announced. Each new reincarnation is inferior to the one before. And, if we’re truthful about it, the original was pretty shit in the first place.

(Frank Sinatra was a far better actor than singer. Discuss.)

Political tribes have a problem. They hark back to their “Greatest Hits” rather than forwards to new solutions.

Privatisation is to the Tories what nationalisation is to Labour. The Coalition Government privatised the Royal Mail despite Labour’s modernisation allowing greater commercial freedom being relatively successful.

In contrast, Labour most often cites Britain’s railways as ripe for nationalisation. Privatised by the Tories in 1996, Jeremy Corbyn has called it a “failure”.

Anyone who remembers British Rail might not smile upon the prospect of its return. Corbyn’s rationale is a false one. British railways are now the safest in Europe. More people use them now - after years of unrelenting decline under the nationalised company. Stations closed under Beeching are being re-opened.

The idea of nationalisation being inherently socialistic is a nonsense

In fact, Britain’s railways are ranked just behind France’s wholly nationalised service. Problems - such as above inflation fare rises or irresponsible boardroom pay - do not necessarily mean absolute failure. 

It says something about our ‘politics of simple’ - where nuance is shouted down - that we allow such discourse.

Equally, to dismiss nationalisation is over easy. Nationalised companies maintained an era of full employment. More recently, the pragmatic nationalisation of some of Britain’s banks during the financial crisis ensured stability when the private sector offered only chaos.

However, before British Telecom, GPO customers would have to wait weeks for a telephone. In forty years, British Rail never made a profit. The creation of British Leyland in 1968, then its later nationalisation, was one of the greastest manufacturing failures of the post-war era.

These “Greatest Hits” are somewhat out of key. Can’t we just admit that the picture is more complex than we are allowing for?

Accepting that privatisation was not an absolute failure does not mean accepting private companies’ dominance of public services.

If the private sector’s slavish devotion to offering dividends comes at the expense of long-term investment, British nationalisation has been associated with a lack of innovation and an unresponsive attitude to customers.

The idea of nationalisation being inherently socialistic is a nonsense - it was opposed at the time by many in Labour. It merely transfers power from the private to the state. There is no fundamental redistribution of power, or indeed wealth.

Labour is not talking about nationalising large swathes of British industry. It should stop talking about it full stop. Would not a truly progressive policy be to place the running of public utilities - such as the railways, energy, water - into the hands of those who work in them, and those who use them?

Mutualisation would allow workers and customers to elect a board from their own to run the company. It resolves the conflicts of interests that both private companies and nationalised have in running services. Mutuals would have an inherent interest in investing for the future not rewarding management with large bonuses. They would innately want to protect consumer and worker.

Unpopular industrial action would become a thing of the past. All stakeholders would have an interest in well-renumerated workers, and prices being kept as low as possible.

It also partially redresses an imbalance. Falling trade union membership means many of those on the lowest rungs of the ladder have effectively fewer rights than middle class teachers and lecturers who are trade union members. Mutualisation empowers everyone.

community ownership, unlike nationalisation, means that those with the greatest stake are making the decisions

Welsh Water is an example. It is run on a not-for-profit basis, surpluses being used to improve infrastructure. Efficiency savings have been used to build up reserves and improve credit, meaning bond issue costs are kept lower. In fifteen years, it has seen water quality improve and prices fall from the worst in the UK; other results include better beaches and sewerage.  

Welsh Water is not fully cooperative. However, it is a model for the future both as a monopoly or with competition.

This kind of community ownership, unlike nationalisation, means that those with the greatest stake are making the decisions. Their priority is improving the service. And when unpopular decisions have to be made, all sides would have greater faith in those making the decision. Their interests are alligned.

Progressive politics should be defined by empowering communities not by the size and power of the state.

Corbyn talks about a transformational politics. However, if nationalisation is his legacy then his government will have achieved a legacy less enduring than Thatcher’s and even Blair’s. It would probably be overturned by the next cash-strapped government.

Mutualisation would be far harder to reverse.

Enduring reforms are those that give. Realistically, no government can challenge the free at the point of use healthcare of the NHS.

Most of all, were Labour to adopt a policy of mutualisation, it would be redefining progressive politics for a post-Thatcher, a post-crash politics. The model could be used not only for public utilities but - maybe - some public services. The measure of success would no longer be the size and power of the state as an end in itself, but the power of the collective.

Now that is radical.

More about the author

About the author

Educated at Durham University and UCL, Graham is Disclaimer's editor and a regular contributor. He has written for numerous publications including Tribune, Out Magazine and Vice. He has also contributed to two books of political counterfactuals for Biteback Media, Prime Minister Boris (2011) and Prime Minister Corbyn (2016).

A democratic republican lefty, he struggles daily with the conflict between his ingrained senses of idealism and pragmatism.

Follow Graham on Twitter.

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