PUBLIC UTILITIES AND THE STATE
THE three experiments which Mr. O'Brien takes as the subjects of his study are the Central Electricity Board, the B.B.C. and
the London Passenger Transport Board. He approaches each of them in the light of two fundamental questions. Can
such institutions be entrusted with vital public services and yet be removed from direct political control ? If so, can they evolve means of making themselves " adequately and continuously accountable to the public ? " Mr. O'Brien answers both of these questions in the affirmative, but his approach is essentially that of the scholar, not of the propa-
gandist, and he leaves it to the reader to decide for himself how far the models presented by the three corporations under review are susceptible of adaptation to the requirements of other industries. He points out that the B.B.C. stands alone from the nature of the service which it supplies, while the Central Electricity Board's uses as a model are restricted in that the Board is essentially an organiser and broker of main transmission, not a vendor of commodities or services to the public, and that at its inception it was comparatively free from the need of negotiation with vested interests. He expresses no view as to whether the electrical supply industry is unsuitable for organisation by a public utility corporation, as the McGowan Committee held, or whether it urgently requires Socialisation, as the consulting engineer, whose eminence is thinly veiled by the initials " G. H.," has opined.
Mr. O'Brien discusses each of the three corporations under various heads, the most important of which are Ministerial control, relations with Parliament and the public, relations with staff, internal economic efficiency and the compensation of those whose interests are acquired. He thinks that the directorate of a public utility corporation should be appointed by the responsible Minister, and he is justly critical of the London Transport method of selection by " appointing trustees," which seems to be a half-hearted attempt to substitute City control for public control ; he expresses some doubt as to whether the Minister of Transport is the appropriate Minister to deal with the Central Electricity Board. He is critical of the B.B.C.'s mysteriousness to the public and paternalism to its staff, while he praises the Transport Board both for its initiative in making contacts with public opinion and for an enlightened and progressive policy towards its staff. In view of the findings of the Court of Inquiry in con- nexion with the recent 'bus strike, his opinion of this last is, to say the least, rather odd, and it suggests that Mr. O'Brien has been prone in his investigations to examine the working of machinery mainly in the light of discussions with high officials.
The book examines in considerable detail the administrative and commercial problems with which each of the three undertakings is faced. Each should be an independent economic unit, but should be prepared to give Parliament and the public very full details of its workings ; the Civil Service, rather than the ordinary commercial organisation, should be the model for the recruitment of staff. The author is at his best in describing the problems of London Transport; at his least constructive in suggesting a solution. It is difficult to appreciate the reasons for his view that the expropriated interests have not been treated with undue generosity.
Such, emphatically, is not the opinion of Mr. Ernest Davies.
His pamphlet, though written before the 'bus strile, shows clearly the unfairness to consumers and workers alike of not taking into account the superior credit of a public corporation to a private concern in assessing the compensation payable, and, in particular, how the necessity of paying a dividend of
51 per cent. on its " C " Stock in respect of the current financial year is hampering the proper operation of the London
Transport service. He criticises the Labour Party's adoption of " net maintainable revenue " as a universal basis of com- pensation on the common-sense ground that in many industries it is not easy to foresee what revenues can be maintained ; and he suggests an alternative method based on earning power and the value of assets. Expropriation without compensation he regards as both inexpedient and inequitable, but it is a little difficult to reconcile his emphasis on the need for maintaining capitalist confidence with the drastic character of his proposals for dealing with the holders of " equities."
Mr. Davies writes very clearly about intricate subjects, and his pamphlet will be of interest to all who wish to under- stand the more serious aspects of Labour policy. Mr. O'Brien is too technical to command a wide public, and he makes an unnecessary difficulty by the length and complexity of his sentences. The student of administration will find his book most valuable, and he must hope that the other studies of kindred subjects which the Institute of Public Administration is promoting will maintain the same standard. W. T. ways.
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