Lord Robens on whatever happened to nationalisation

British Nationalisation 1945-1973 R. KelfCohen (Macmillan £5.50)

Once again Mr Kelf-Cohen has made a momentous contribution to the many volumes that have been written about the nationalised

industries. With his two previous volumes, Nationalisation in Britain (1958) and Twenty Years of Nationalisation (1969), these make

perhaps the most comprehensive survey of the nationalised industries over the years to date. He does this with a directness and an economy of words that make this volume easy and pleasant reading. For all those with

an interest. in the changed nature of the nationalised Industries, and this must include Ministers of the Crown, politicians and trade union leaders, quite apart from the researcher and student, this book is comprehensive and thought provoking. If I felt a twinge of disappointment at all, it was that I had half hoped that his final chapter might have been an exposition, based upon his unrivalled knowledge, of his personal views as to how the nationalised industries could be more efficiently slotted into the economic structure of the nation, with lessened government intervention. Maybe one day he could be persuaded to do this. It would make a splendid fourth volume upon what must be admitted to be a distinctly difficult problem.

No one could do this better than Mr KelfCohen. For the thirteen years he spent as an under-secretary at the Ministry of Fuel and Power, he was almost exclusively involved in the nationalised energy industries. I worked with him as Parliamentary Secretary for four of those years, and I can affirm from my own personal knowledge to the degree of intense, detailed thinking he gave, to his task and the solid amount of work he could encompass in a minimum of time.

In four parts the reader is treated to a very lucid account of the origins of nationalisation, then a potted history of each of the nationalised industries up to 1973, and perhaps the most important part of all the difficult, sensitive and changing relations with government and Parliament. His final section deals with the 'mixed economy' in which he traces the inevitable involvement of government in private enterprise.

What he makes so clear, particularly to those who missed the Morrisonian era, is the tremendous change that has taken place from the days when the modern architect of .nationalisation, Mr Herbert Morrison, first launched his philosophy of how the nationalised industries should be managed and their relation to government and the situation today. In 1945, as Lord President of the Council, Mr Morrison was the senior minister responsible for formulating and carrying out the policy of nationalisation to which the first post-war Labour government was committed. Morrison had already said that the management of the industries should be left, broadly, to get on with their difficult management job without let or hindrance and be judged by results. His assumption was that the nationalised industries should operate on purely commerical lines as good employers and with due regard to the public interest. He anticipated that quite informally the relevant Minister would maintain a close contact with the industry through discussion with the chairmen principally, but that at no time should the state get itself involved in actual management. It was the task of the govern

ment to appoint men of ability and wide experience to the boards of nationalised in dustries and thereafter leave them to do the job in accordance with their statutory obligations.

But this was not to be, as Mr Kelf-Cohen so 'dearly shows as he leads the reader skilfully through the labyrinth of select committee reports, annual reports, financial out-turns, the concern of the Treasury over financial control, the use of the nationalised industries to keep prices down because of consumer and thus political reaction, and as a result a steady inflow of public money in one guise or another to finance deficits.

This substantial change from Morrison's original concept to government involvement is graphically and bluntly, but fairly described in his chapter dealing with the electricity industry. In this he describes how the Government, worried at the shortage of coal, (a familiar bell ringing just now), decided in 1955 on a programme of two million kilowatts of nuclear power. Hardly was the ink dry on this decision then, as a result of the Suez crisis, the programme was trebled to six million kilowatts. These are the trenchant words in which he describes those events:

The nuclear power programme was the most ill-considered and expensive mistake any govern ment has made in the public sector. The electricity industry cannot be blamed for it as the programme was thrust upon them by the government. Gone for good was the doctrine of commercial independence and the fiction that it was for the industry to plan its capital development programme and submit it to the government. In fact, the Electricity Act 1947, provided only for 'consultation with the Minister'; formally he was not in control, but he held the purse strings.

He confirms the view of many people, including myself, that the nationalised industries have in effect become departments of the Government. I was conscious myself in the latter years of my chairmanship of the National Coal Board, that we were fast becoming the extended arm of our parent ministry. This is in itself a source of great weakness; neither ministers nor senior civil servants who advise their ministers are in their respective roles long enough to understand in depth the disastrous effects of ad hoc decisions in basis industries and services which above all need long term planning, carefully co-ordinated. As the author says "they (the nationalised industries) have lost the reality of financial control over their operations and are subject to the decisions made by their political masters — who have regard only to political considerations".

Pretty strong stuff this, but coming from a man with so much civil service experience and from one who has closely followed the fortunes of the nationalised industries since his retirement, as his previous works and this book show, he cannot be ignored. Unfortunately, whatever those who have been heavily involved in the control and management of the nationalised industries may think, I am afraid that politics being what they are, politicians in authority will steadfastly refuse to recognise any other role for the nationalised industries but this.

Mr Kelf-Cohen sums up in the final paragraph of his concluding chapter: "If one tries to peer forward into the later 'seventies, the future of the nationalised industries does not look at all bright. Beset by growing financial troubles, increasing government control and more and more difficult industrial relations, the boards and their staffs will find the task of competent management most difficult." That, to my mind, is certainly not an overstatement.

The final section on a mixed economy is a thoughtful consideration of the development

of government intervention in private in

dustry. Tracing the events which compelled a Conservative government, pledged to reduce

the public sector, into a complete reversal of

policy, the author recalls the White Paper on Employment Policy in 1944, based on the Keynesian doctrines; which laid down as a primary aim of Government the maintenance of a high and stable level of employment after the war. This was the product of a coalition government and this was an aim that n° political party could eschew. The bitter memories of the 'twenties and the 'thirties were too recent in people's minds at that time for any political party to survive that did not make this objective a first priority. This meant the state assuming the management of the national economy. The nationalised industrie.s were one instrument but not sufficient in themselves so that new institutions were set up. The Labour government produced the Industrial Reorganisation Corporation, which concentrated on mergers in the modern in; dustries. The National Board for Prices an' Incomes was designed as an instrument f0,t government intervention in industry an aimed at increasing efficiency and productivity. Then came the Industrial Expansion Act which empowered the Government t° give loans and grants for purposes such as developing technological improvements; increasing efficiency and productivity an some use was made of this in the computer and aluminium industries, the Shipbuilding and Industry Act provided substantial help hY grants and subsidies for shipbuilding. When the Conservative Government tool( office in June 1970, the IRC and the Prices and Incomes Board were disbanded. But not for long. Despite the desire for non-intervention in the private sector and the intention off cutting down the public sector, the collapse Rolls-Royce produced a much more revolutionary Act of Parliament than has ever been, seen, except in times of war. A short Act 01 one clause authorised ministers to spend stum! of money, undefined, to acquire "any part 01 the undertaking and assets of Rolls-Royce off of any company which is a subsidiary part 0, it." The reasons were obvious but what wa' proved by these events was that even a Government committed to lessening the ex' tent of the public sector was compelled t°, reverse its policy under the lightning blow °I the Rolls-Royce failure. The IRC had been disbanded but under the Industry Act of 197,2; it came back in a different form. Financla' assistance was to be provided to promote employment and the provision of this finance included the acquisition of a companns,. shares. By these and other methods, Kelf-Cohen concludes that the Conservative government is taking "control over all in" dustry and commerce on a scale never before reached in peacetime." This chapter, factual and analytical, if'. dicates the speed at which the mixed econ001): is developing, and would seem to show that despite the fact that the political doctrine is against widening the public sector.arld increasing government intervention in priv.a.'" industry, the facts of the economic situation have dictated the ends. the I hope I have written enough to whet t, appetite; I have a shrewd suspicion t113.1., consciously or unconsciously, Mr Kelf-C91 is holding up a crystal ball which may weltand showing the pattern of economic affairs Government involvement for the rest of tft; 'seventies and who knows for how mat.' years beyond. Lord Robens, formerly chairman of the Na., tional Coal Board, 1961-71, is now chairrna" of Vickers Limited.