Corbyn pledges more public ownership: Nationalise utilities and banks!

Submitted by Matthew on 14 February, 2018 - 12:23

Editorial from Solidarity 462

Speaking at a Labour Party event on 10 February, Jeremy Corbyn reaffirmed Labour’s 2017 manifesto pledge “to bring energy, rail, water, and mail into public ownership and to put democratic management at the heart of how those industries are run”.

“By taking our public services back into public hands”, he said, “we will not only put a stop to rip-off monopoly pricing, we will put our shared values and collective goals at the heart of how those public services are run”. He promised “a society which puts its most valuable resources, the creations of our collective endeavour, in the hands of everyone who is part of that society”. He argued that the energy industry must be remodelled to abate carbon emissions, and declared that “in public hands, under democratic control, workforces and their unions will be the managers of this change, not its casualties.

“The growth of green energy and green tech offers huge opportunities for job creation. Our publicly owned energy system will ensure a smooth transition and protect workers and communities, seizing those opportunities for the many, not the few...

“The next Labour Government will guarantee that all energy workers are offered retraining, a new job on equivalent terms and conditions, covered by collective agreements and fully supported in their housing and income needs through transition”.

Speaking to BBC Radio 4 the same day, shadow chancellor John McDonnell refuted claims that the nationalisations would be unaffordable. He said that shareholders in privatised utilities, which include pension funds, could be given newly-issued government bonds in return for their shares.

A survey by YouGov around the time of the 2017 election showed that these policies are popular. It showed an 84% to 5% majority for the NHS being in the public sector; a 65% to 21% majority for Royal Mail; a 60% to 25% majority for rail; 53% to 31% for energy; 59% to 25% for water; and 81% to 6% for schools. The case for public ownership, and against outsourcing to private contractors, has been strengthened since then by the Carillion scandal.

Carillion bosses siphoned off huge sums in salaries and bonuses for themselves, and dividend payouts to shareholders, and let the services they were supposed to operate run into a wall. At present, in Britain, 60% of all financial wealth — stocks, shares, bonds, and such, as well as cash — is owned by the top 10%. That financial wealth represents the accumulated proceeds of the profits and other surplus value extracted from workers’ labour over years, decades, and centuries. It is not something that the rich have generously brought to the economy from a stash of their own creation.

Ownership and control of corporate wealth by the rich few means that all our labour, all our productive efforts, are geared to and shaped by the drive to get bigger profits for those few. It means wages are held down, and that we are bossed around and controlled, in jobs which are made ever more draining and stressful, for the sake of those few.

Since the 2008 crash, profit rates have revived nicely. Top pay has zoomed again. The High Pay Centre’s report in August 2016 found that average pay for a top company (FTSE 100) CEO was 33% up on the 2010 average of £4.1 million. The ratio of FTSE 100 CEO pay to the median full-time worker across the whole UK economy had risen to 183:1 in 2014 from 160:1 in 2010. Real wages rose a bit in 2015 and 2016, for the first time since the crash, but since then have been falling again.

The worst-hit have been the lower-paid -often suffering also from big cuts in working-age state benefits — and younger workers. Since 2008, young people’s wages have fallen 16 per cent, taking their pay to below 1997 levels. The gearing of economic life to the competitive profit drives of a few also brings market chaos in crashes like 2008’s, and short-sighted spoliation of the environment.

Corbyn and McDonnell are right to put public ownership back on the agenda. Labour activists should take up two particular questions. Corbyn’s pledges of “democratic management” and “democratic control” of a renewed public sector are welcome. They should be amplified. The commercial books of these public utilities should be open to inspection.

Managers should be elected by the workforce, and serve on workers’ wages, rather than remaining the same sort of people as under private ownership, with similar privileges and similar lack of accountability. And the banks should be added to the list to nationalise. In 2012 the TUC voted for nationalising the banks and creating a “publicly-owned banking service, democratically and accountably managed... [to] play a central role in building a sustainable economy”. The banks are not just one big economic sector alongside others. They are hubs of the economy. They determine where investment goes in times of prosperity, and they are central to crashes and slumps. The TUC has never campaigned for that 2012 policy.

Despite a series of big scandals about the banks coming out since 2008 — mis-selling of pension protections, rigging of key interest rates, and more — public support for public ownership of the banks has been allowed to fall to 28% for (53% against). Even more fundamentally, the labour movement needs to build up the ideological, political, and organisational strength to push through such pledges.

In 1981 the French Socialist Party took office with a pledge to public ownership. The government took over the major industrial groups CGE, Péchiney, Rhône-Poulenc, Saint Gobain, and Thomson; arms manufacturers Dassault-Bréguet and Matra; steel companies Usinor and Sacilor; computer firms Bull and ITT-France; the pharmaceutical firm Roussel-UCLAF; and the country’s thirty-six biggest banks. Then, faced with a flight of capital in 1983, the Socialist Party government did a u-turn and started privatising. Syriza in Greece was long committed to wide public ownership. By the time it took office in 2015 it had sidelined those commitments. In office, it has privatised rather than taken sectors into public ownership.

Necessary to push through public ownership and win real democratic control, in current conditions, is a labour movement which is strongly organised and which, through open debate and education, has made its activists aware and mobilised on the fundamental issue of socialism (public ownership, democratic control, social solidarity as the guideline) versus capitalism. To play our part in this, Solidarity supporters are canvassing activists with, and seeking discussions on, our new book Socialism Makes Sense.

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