Public ownership

Labour's new plans

Michael Hatfield

The reason why Labour's vaguely termed moderates have conspicuously failed to stand up and be counted, the cynical theory has it, is because they would immediately collapse through under-nourishment. So much energy, to switch the metaphor, has been spent in a rearguard action against the onward march of the so-called militants that the intellectual marrow has been drained from their backbone. There is, however, a more plausible theory to explain the relative silence of the alleged 'silent majority' and one worthy of an airing in the context of the campaign document to which the Labour Party is this week to give birth after two years of troublesome gestation.

The present economic-industrial crisis has cemented the dominance of the left inside the party. Promises on social spending, to which all factions are wedded, have had to take a back seat (the commitment to pension increases will soak up all the immediately available cash to an incoming Labour government) and first priorities, one hears, will be given to structural change of society. Which means industrial change and unparalleled economic management.

All this will no doubt provoke another bout of erroneous allegations that the Marxists are in control. Harold Wilson, when Prime Minister, laid down a timeless philosophy on Marxist theories way back in 1966: "We cannot afford," he said after the trauma of the Summer Squeeze, "to fight the problems of the 'sixties with the attitudes of the Social Democratic Federation, nor, in looking for a solution to these problems, seek vainly to find the answer in Highgate cemetery." Mr Wilson's approach to the problems of the 'seventies has not dramatically changed and this view is shared by the vast majority of his parliamentary colleagues.

Mr Wilson, nonetheless, has been pushed, partly willingly, a long way down the road to extensions in public ownership by the concerted activities of the Public Sector Group of the national executive whose sweeping measures for state interventionism have been championed by Mrs Judith Hart and Mr Wedgwood Benn. The avoidable fracas over the 'twenty-five companies,' however, is seen to have obscured the fundamental issue at stake and one which has confronted all parties: if modern governments, however much against their predilections, cannot escape from some measure of intervention in industry in order to secure the essential investment needs, how far should they pursue their conclusions?

In the past year or so, with the Government's reversal of its own lame duck concept, the argument at the centre of politics has shifted away from questioning the necessity to one which asks what kind of instruments there should be and what should be their objective and purpose. The Times contributed to the debate recently, devoting the whole of its leader column to the subject. It suggested a major reconstruction of British industry between now and 1980 with investment to the tune of £20,000 million. The name of the body to supervise this astronomical amount, it proposed, should be a National Investment Board. The title, it so happens, is forty years old, first appearing in Labour's election manifesto of 1935, although at the time the party had in mind the board running in tan dem with a national banking corporation.

Contemporary Labour thinking has moved from an Industrial Reorganisation Corpora tion (for, as Edmund Dell points out*, the Labour Government found, like Frankenstein, it had little control over its monster)through

a State Holding Corporation with wider functions, and ultimately to the National En

terprise Board. The latter's functions haVe tended to be obscured (deliberately?) by most senior Labour politicians because, like Mr Roy Jenkins, they do not believe it to be "remotelY sensible" although they are in favour of an extension of the public sector.

Harold Wilson, with his eye on the caul' paign document, has promised, "the return to public ownership of assets and undertakings transferred by the present Government for, private profit, and the creation of the National Enterprise Board, with the structure and functions approved by Conference." Why the reticence? What are those functions? Mr Wilson is not believed to be enamoured of the

concept of the NEB as laid down and he, Ilk_ e many others, certainly sees the reference to the public ownership of twenty-five leading manufacturing companies as electorally ernbarrassing. As for the structure, the party document, Labour Programme 1973, has this to say: "The structure for NEB consists of a base in exist ing State shareholdings such as BP, Rolls, Royce, and Short Brothers, with a substantial

addition of companies from the presen.t

private sector." (Author's italics.) It continues: "Its value in securing the wider ac"

ceptance of Government economic targets and forward planning would only be felt if its holdings are spread across leading firni,s, throughout the different sectors of industry., The NEB would be state-owned and woulo always take a controlling interest in its par ticipating firms. The proponents of the agencY

believe it is essential if the next LaboUr Government is to succeed with an econonnc

strategy it should be created in the very earlY days. But will it happen? Even on the as: sumption that it does, the matter would n°`

rest there, for much would depend on the personal determination of the Secretary ,°f State responsible to push through Cabinet its principal objectives. It is at this juncture that the moderates would get on their feet, and no doubt manY of them would lend impetus to the proposal for a para-government agency made by Mr Dell. Mr Dell, it must be remembered, was highlY

respected as a Minister by Mr Wilson and Ills

views on industry carry much weight among his Parliamentary colleagues. Mr Dell believes that "selective intervention is now respecta ble." His agency would be answerable t° Government and to the Public Accounts

Committee. It would discriminate betwee° companies and "might well appear to he, discriminating between regions." It woul° have much wider powers than the old Indus,'

trial Reorganisation Corporation. It woul° not, he says, be a single-purpose agencY„, concerned only with mergers. Neither woul° it be subject to the limitations imposed on the IRC in respect of the holding of equity. His view is that a responsible agency for the conduct of selective interventioff might "quite soon become not so much acceptable to 111; dustry — that was one of the faults of the IR': — but a respected source of a new compeltion from which industry generally and th,e, national economy would be felt to beneftt. Those who support the National Enterprise Board are scathing about Mr Dell's proposals. Mr Dell, however, heads his first chapter, `The Importance of Pragmatism,' and recent precedent suggests it will be the compass-bearing of the next Labour admirilstration. * Political Responsibility and Industry Ed. mund Dell (George Allen and Unwin £3.75)

Michael Hatfield is on the political staff of the Times