POLITICAL COMMENTARY

New look at the corporations?

ANGUS MAUDE, MP

It is generally agreed that the Conservative government's honeymoon period will be at

an end when Parliament meets again on 27 October. Mr Heath and his colleagues will then be expected to announce decisions-and initiate action over a wide range of sub- jects.

There are enough problems in the economic and social fields—and enough elec- tion pledges to redeem in them—to keep Ministers and their advisers thinking pretty hard during the recess. Inflation, wage claims, taxation, trade unions and housing will presumably be getting top priority, with agriculture also near the top of the list.

Yet there is another area of immense im- portance in which policy decisions are urgently needed—the future and organisa- tion of the nationalised industries. It is to be hoped that Mr Noble, Mr Davies, Mr Peyton and Mr Chataway are doing some hard thinking about them. A government that has made so many promises of increased effi- ciency cannot afford to ignore the complaints of their consumers; it will also gain much support if it takei effective action.

There can be little doubt that the services provided by the public corporations to con- sumers—except perhaps in the case of domestic coal supplies and inter-city trains—have deteriorated in the past five years. The Post Office provides the most ob- vious example, but any MP knows that con- sumer complaints about electricity, natural gas and bus services in particular have in- creased prodigiously of recent years.

The Conservative party left its options wide open in its election manifesto. The single relevant paragraph could mean almost anything or almost nothing:

'We will progressively reduce the in- volvement of the state in the nationalised in- dustries, for example in the steel industry, so as to improve their competitiveness. An in- creasing use of private capital will help to reduce the burden on the taxpayer, get better investment decisions, and ensure more effec- tive use of total resources.'

`Progressively reducing the involvement of the state' could mean a measure of dena- tionalisation in some industries. Presumably this is what Ministers would like to achieve at some time during their period of office: if it is not, then they are a long way behind the majority of their supporters. The question is whether any of the corporations are likely in this period to become profitable enough, and in a sound enough financial position, to at- tract private buyers if an attempt is made to sell off the whole or part of their capital.

In the present state both of the cor- porations and of the capital market, this is probably out of the question. The experience of steel denationalisation in the 1950s was not encouraging. Ministers are therefore. for the present, saddled with the responsibility for the corporations. If they ever want to get rid of them, they must find the managers and the policies to make them successful. At the same time, political common sense suggests that they must get something done to pacify the increasingly dissatisfied consumers.

Hitherto, ministry and corporation think- ing seems to have regarded these two aims as mutually contradictory. It seems to have been assumed that giving better service to consumers must always reduce profitability, while any attempt to reduce costs must always be at the expense of consumer

service. The results have been in every way deplorable. After all the ballyhoo about `cheap' natural gas, consumers have suffered considerable inconvenience and are facing bigger gas bills. Public transport under- takings seem sometimes to be following a deliberate policy of making certain services so unattractive and uncomfortable that the number of passengers falls, after which the services are pronounced 'uneconomic' and either cut further or abolished altogether.

Attempts to save labour by automation nearly always seem to involve increased in- convenience to users. (Have you ever got a suitcase stuck in an automatic barrier at a 'modernised' Underground station, or tried to retrace your steps when you took the wrong turning at an interchange?) Meanwhile the morale of existing staff is further strained by the short-tempered com- plaints of exasperated members of the public. When telephone calls go astray, for example, it is nearly always the fault of the automatic system; but it is the operators, cheerfully trying to give the best service they can, who ultimately get sworn at.

Of course, this kind of situation is not con- fined to nationalised public service. Some of the big.banks have got themselves hopelessly bogged down in it, to the increasing ex- asperation of their customers and the despair of their staffs. But at least there are still—though one fears only just, and not for long—one or two banks that are trying to provide good service to customers. Public monopolies are a more serious matter.

On the face of it, there seems no likelihood of an end to this progressive process of deterioration, unless and until someone applies real imagination to the problem of somehow breaking the vicious circle. No doubt this is easier said than done: but to say that it is impossible is to admit that the wonders of modern technology can do nothing but provide a worse service than was regarded as commonplace by our parents and grandparents. If the experts do regard this as inevitable, then for heaven's sake let them admit it frankly; then we should know where we were.

What is needed, no doubt, is much better management, which is presumably why 'the Government made the otherwise politically inexplicable decision to bump up all the cor- poration heads' salaries while simultaneously urging them to refuse comparable increases to their employees. Whether all the existing heads are worth the money, and whether the increases will in the end improve manage- ment, is another question.

In some sectors of public enterprise, the problems are now so large as to go far beyond the details of day-to-day manage- ment. Here Ministers will have to find their own imaginative solutions and take some pretty far-reaching decisions of policy. On past form, they are unlikely to get much help from their traditional advisers.

For example, is it really possible to go on trying to make sense of the fuel and Power industries while the economic law s that

should govern them have been deliberately suspended? It is true that Lord Robens has done far more to reduce the size of an uneconomic coal industry than might hate been expected under a Labour government; but industrial costs are still being inflated by the uneconomic use of coal. It was a Con- servative government that deliberately distorted the whole fuel and power economy by clapping a duty of twopence a gallon on heavy fuel oil; as a result, enormous coalfired power stations have been built which are bound to become hopelessly uneconomic unless coal continues to be artificially protected. Surely this nonsense ought soon to be brought to an end?

Another sector in need of radical policy decisions is passenger road transport. Chronic staff shortages, grossly exacerbated by the recent regulations on working hours, have made the efficient operation of most rural—and some urban—bus services virtually impossible. Not only are fares soar- ing, but scheduled services on some routes are frequently cancelled without notice. Life for carless housewives and old people in country villages is becoming intolerable. Sooner or later the Minister of Transport will have to do something to arrest this decline into chaos, either by recognising the need for a subsidy or by radically changing the licensing regulations to allow far more small private operators into the field.

Then there are the airlines. Mr Noble has taken a small step towards allowing some more private competition in a field w here competition is notoriously necessary if service to passengers is to be reasonable. But he has allowed his Board of Trade officials. who have been continuously and obscuran- tistly wrong about this, to talk him out of the kind of gesture that was urgently needed. The arguments in the Edwards report. in favour of much more private competition in scheduled services, were—and remain—un- answerable. Conservative Ministers made a timid botch of this business when last in power; they really must not do it again.

Finally, the Post Office, which seems to combine the maximum expenditure on inept advertising with the most howling errors in public relations. It is already obvious that the new corporation, under its present top management, is going to make things worse rather than better. If it has got to continue. then the Act will have to be changed to give the Minister more control over its policies and management. The present degree of cor- poration autonomy is just tolerable in the case of transport and power, where each of the corporations is faced with some form of competition from an alternative service. But the Post Office is a total monopoly—except perhaps to the extent that commercial and industrial organisations are now being forced to deliver their own letters and parcels to ensure that they get there on time (or even at all). When the public's complaints are Con- tinually met with arrogant unhelpfulness by the top echelons of the Post Office, it will no longer do for Mr Chataway to tell min that he 'is unable to intervene'. They will ultimately demand that he takes powers to enforce some measure of public control On an inefficient monopoly.

All this should give Ministers plenty to think about this autumn. I hope they come up with some original ideas.