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Treasury spokesman, must reflect that there has to be some relationship between prices, profitability and investment. There must be some reasonable understanding across the Floor of the House of what is a proper return on capital in capital-intensive industries. The hon. Gentleman is too intelligent not to understand the point and so he decided wisely to skate over that bit of the thin ice. We cannot ignore all the underlying principles of Labour party policy. Clause 4 is still in place, which bears on control of the means of production and exchange. We know that if a Labour Government were formed who inherited the Labour party's present shopping list, there would be the inevitable argument about whether they would move down the road of clause 4.Uncertainty is destructive of industry, of competitive international industry and, above all, of the needs of
companies--including management and the work force--and of consumers. The Labour party has introduced the element of uncertainty into our debate, against what I believe is a general trend.
We have had a chance to get the flavour of some of the real problems that would be created if a Labour Government were ever able and unwise enough to carry forward the Labour party's present ideas. I hope that those of us who had to suffer the appalling period of external intervention by people who knew little of the businesses in which some of us worked will never forget what ensued. Businesses would be helpless in the hands of a structure that will never succeed in our country.
12.43 pm
Mr. David Evans (Welwyn Hatfield) : I do not think that anyone could sensibly deny that there are certain services that only the Government can provide. Defence is an example. The recent conflict in the Falklands and the even more recent conflict in the Gulf showed the world the great strengths of my right hon. Friends the Members for Finchley (Mrs. Thatcher), who was Prime Minister, and for Huntingdon (Mr. Major), who is now Prime Minister, and their Cabinet colleagues. They provided firm leadership and reassurance and, most importantly, implemented the co- ordinated employment of huge resources of military hardware and manpower.
One shudders to think what would have happened had the Labour party been in power at that time. I believe that the Argies would still be in the Falkland Islands and Kuwait would still be occupied by Hussein's forces. We had strong leadership, which took decisive action. That is the contrast between that lot opposite and the Conservative party.
I admit that the Labour party has given this country great service from time to time. For example, four years of socialist rule at the end of the 1970s displayed, to a greater extent than ever before, the gross inefficiencies of nationalisation. Who can forget the beer and sandwiches at No. 10 every week? They are a legend. Deals were made between union leaders and the Prime Minister of the time. The International Monetary Fund --the receiver, although it is now referred to as "the administrator"-- arrived on the shores of this land to tell the Labour party how to run an economy. What did we get? Cuts, cuts, cuts.
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The Labour party's fundamental arguments for nationalisation are always political and economic. As long ago as 1933, Herbert Morrison said of nationalised industries :"the quality of service will tend to advance and the price charged will tend to fall".
Nearly 60 years later, the Labour party still has not realised that he was talking rubbish, and it is still talking rubbish. It is as simple as that. Far from prices falling, between 1971 and 1982 prices in nationalised industries increased by 380 per cent., and in the retail sector prices rose by 310 per cent.
Nationalised industries, as we all know, were a colossal drain on the public purse. In 1979, £50 million a week was being lost. The steel industry was losing £3 million. I recently visited British Steel with Lord Hesketh. It is now the finest maker of steel in the world. I asked the managing director what the Government could do to help the industry. He said, "You can do one thing : keep out of our business," I pass that message to the hon. Member for Newcastle upon Tyne, East (Mr. Brown) : the best thing that we can do for the industry is to keep out of its business.
The crippling rates of taxation imposed by the previous Labour Government, far from providing funds for a prosperous and efficient national health service, were being used to prop up state monopolies. They did not provide more money for education or health. In 1979-80, the industrial state sector consumed more than a third of the national health service budget. It was clear to the man in the street--although not to the Labour party--that those organisations were not geared to international competition, consumer services or productivity. They were the overstaffed fiefdoms of militant trade unionists. That is what we were faced with, so the economic argument falls.
What of the political argument? We were told that public ownership would be accountable ownership. However, nationalised industry became unaccountable. When Ministers were questioned in the House, they declined to answer on matters that they considered commercial. The poor consumer got nowhere, market forces did not operate, and nor did political forces. The result was that so-called public services served no one.
All the tripe about industries that are owned by the public being taken away from the public is nonsense. They constitute a drag on the public purse and the poor consumer has no say in the matter and no means of redress. The state dips its fingers into his pockets to shore up an inefficient and unaccountable utility. Between 1956 and 1972, the five major nationalised industries lost £1.25 billion. There was only one year in that period when those five industries recorded an overall profit. There is no economic or political case for maintaining or, even more stupidly, resurrecting those state monopolies. It is laughable that the hon. Member for Newcastle upon Tyne, East should say that he wants public ownership to be extended to provide quality services. It is a good job that he is not in charge of the Humber bridge : if he was, there would be cars from there to Acton.
The hon. Member for Newcastle upon Tyne, East and his Labour colleagues cannot grasp the fact that privatisation forces economic efficiency and, more
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importantly, results in consumer accountability. Public services do not need the warm and sweaty embrace of the state ; they need the cold wind of market forces.Until my right hon. Friend the Member for Finchley entered No. 10 Downing street, the United Kingdom was paying through the nose for Mickey Mouse experiments in economic management. I thank God that the state-owned sector has been reduced by no less than 60 per cent. since the Conservative party came to power. In all, 44 major businesses have been privatised. Their fortunes, as a result, have been rejuvenated.
In 1978-79, the nationalised industries that have since been privatised received Government subsidies of £19 billion. In 1989-90, those same companies back in the private sector contributed £1,500 million to the Exchequer in corporation tax. That money will be spent on hospitals, schools and the individuals in our community who are most in need of care.
Privatisation also provides funds for other social projects that are vital for our quality of life. Today the environment is quite rightly at the top of the Conservative party's political agenda. Last year's environmental White Paper "Our Common Inheritance" lists a number of challenging, but expensive, targets for industry. The most crucial of our natural resources is water. Since privatisation, the water industry has invested huge sums in its infrastructure. A record £28 billion will be spent over the next decade cleaning water and providing better facilities. Without setting the industry free, such investment would not have taken place. Perhaps the Opposition, who want to snatch the water industry back into the state's clutches, will tell me where they would get the money. It will not come out of a tap ; it will come from the taxpayer.
It is astonishing that the Labour party wants us to return to the mess of the 1970s. The Labour party does not want to free us ; it wants to regulate us. A new quango is proposed on virtually every page of Labour's new policy document. Why should British Telecom, the gas and water industries return to the 1970s?
The Conservative party wants to free citizens. We do not want to create a bureaucratic black hole into which complaints disappear never to be seen again. Bureaucrats are not the answer. This country was not made great by bureaucratic pen pushers ; it was made great by entrepeneurs operating in market conditions. Privatisation has put the "Great" back into Great Britain.
If you will excuse my phraseology, Mr. Deputy Speaker, Labour's approach to the economy can be likened to a lady of the night. On the surface there is fine dressing. It looks new and may even appear glamorous. However, on closer inspection, what is underneath is worn out and wrinkled. The Labour party still wears the old clothes of clause 4. That is closest to Labour Members' hearts. The procession of policy documents from Walworth road, where the last Marxists are to be found, is only cosmetic. Believe me, they cannot hide the fact that the Opposition, unlike Conservative Members, have not learnt the lessons of the 1970s. Therefore, like the lady of the night, they seek to con the punter. I do not think that the British people will be conned by that lot opposite.
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12.54 pmMr. Bill Michie (Sheffield, Heeley) : I wish a clarification from the hon. Member for Welwyn Hatfield (Mr. Evans) that when he talked about the Mickey Mouse experiment, he was making a general point and not making a personal reference to me.
I suppose that, in a sense, I was part of the experiment with nationalisation, because I, too, worked in the private and nationalised sectors of the British Steel Corporation and United Steel. Therefore, I have had considerable experience. However, unlike right hon. and hon. Members who also worked in the nationalised industry, I was not a high flier. Obviously, I worked on the shop floor and in research. There was considerable trauma in going from the private to the public sector. I will not allow hon. Members to mislead the House-- [Interruption.] Does the Tory Whip, the hon. Member for Sheffield, Hallam (Mr. Patnick) wish to speak? Obviously not.
There are criticisms of nationalised industries. Everyone would admit that. There are faults and failures in many industries, whether private or public. I do not want anyone to be misled. The nationalisation of the steel industry, which I know something about, was a necessity. It is not true to claim that we had a buoyant, viable steel and mining industry before nationalisation.
Sir Michael Marshall : I am listening to the hon. Gentleman with great interest. Like him, I am an ex-United Steel man and, by extension, a BSC man. The hon. Gentleman must be careful about what he is saying. The profit record of the steel industry at the time of nationalisation in 1967 was made during a long post-war boom. We can argue about whether we were riding with the tide, but the problem is that if one threatens to nationalise a company, investment dries up. That is the nature of things. One cannot justify putting forward more money when one does not know what compensation one will receive. That was one of our big problems with nationalisation. I have much fellow feeling with the hon. Gentleman, but I hope that he will play it straight on that point.
Mr. Michie : I am grateful to the hon. Gentleman. I understand what he is saying. Of all private steel companies at that time, United Steel was making a profit. Also, by coincidence, it was investing more than others in research in the private steel industry. I think that there was about £9 million profit in the year before nationalisation. In those days, that was quite a lot of money. I do not think that that can be said for general steels which were obviously going through problems, particularly investment, which nationalisation helped to some extent.
We saw some of the mistakes that were made on nationalisation. Although I am still very much a supporter of public ownership in certain crucial industries, I am not happy with the practice of state capitalism, which is precisely what nationalised industries were. Although the Government appear to be hostile towards taxpayers having shares in crucial industries, they do not seem to have the same hostility towards crucial industries being literally controlled by foreign investment.
The obvious case that comes to mind and which was redressed slowly but surely concerns Kuwait and the shares in British Petroleum. We must bear in mind that there are interests in this nation that we should look after without being too dogmatic one way or the other.
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On the demise of the steel industry in Sheffield, the hon. Member for Arundel (Sir M. Marshall) referred to the east end of Sheffield, which he knows as well as I do. I accept that it has been devastated. Similar devastation of industries and areas occurred in the private-sector system also as a result of the lack of investment and--I have a bee in my bonnet about this--because the Government allowed Europe to dictate the steel and engineering closures that should be made in this nation. I believe that the British suffered an unfair proportion of such cuts as a result of the edict from Europe and that our Government should have resisted that more fully. It was not only the nationalised industries that were falling apart--those in the private sector were closing at the same rate, if not faster. Many who know my area know that it used to have large, proud steel and engineering firms, but they no longer exist. They have been bulldozed and, in their place, we have the retail sector which is the theme of the day. A strong manufacturing base is, however, a darn sight better than a whole load of leisure centres and supermarkets. We should not get this out of proportion and say that the failure of our steel and engineering companies was due to nationalisation, because the failure would have been equal if not greater had they remained in the private sector.Conservative Members have said that the first "smell" of a future Labour Government intervening in industry--I use the word "intervene" advisedly rather than the words "take over" or "renationalise"--will have an immediate effect on share prices and will rock the market, causing all sorts of problems. Out of sheer fascination I read most of the financial pages in the Sunday newspapers instead of the normal news which I find pretty boring. The financial pages, however, are interesting with share prices rising and falling all the time at any little smell or rumour, never mind one of a Labour Government taking over.
Even now the share price of fairly large industries can drop because someone like Lord Hanson decides to buy 2 per cent. of a company. Is that a hostile bid or not? Should ICI defend it or not? If it does, it is admitting that it is weak ; but if it does not defend the bid, it will be in even greater trouble and the share price will drop. What does Lord Hanson do then? He not only says, "I am not interested," but, "I am not interested, so it must be no good." The share price then drops and in come the predators. We should not worry about a few share prices dropping because a Labour Government may intervene in industry. Every week the interventions of the power bosses and financial houses cause more problems for the share price than could any future Labour Government. It is a red herring for Conservative Members to use that argument. People make a fortune buying and selling shares--not to enhance the company because most of the time the company is of no interest to them, but to break it up and strip its assets which is how the financial houses get fatter and richer while the workers in the industries finish up on the dole. Unemployment is the biggest scandal today
Mr. Dennis Skinner (Bolsover) rose --
Mr. Irvine Patnick (Sheffield, Hallam) : The hon. Gentleman has only just arrived.
Mr. Skinner : I was here first thing.
My hon. Friend the Member for Sheffield, Heeley (Mr. Michie) is absolutely right about asset stripping. My
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constituency contains the 100-year-old firm of Reeve-Burgess, which has been taken over by Plaxton, which is headed by David Matthews. Reeve-Burgess was a winning manufacturing firm, with sky- high productivity and profits of £60,000 in May which looked like being repeated this month, yet 180 jobs are going down the road in July because Plaxton has decided to strip its assets and transfer the work to Scarborough. In addition to facing the Government's inflationary policies and massive unemployment, we have to listen to Conservative Members talking like that.Mr. Michie : I could not agree more with my hon. Friend. The loss of a firm is bad enough, but those 180 jobs will never be replaced. The employees end up on the dole, with the taxpayer paying. Strangely enough, the Tories do not seem to moan about profits from asset-stripping which affects people's jobs and livelihoods and makes them a burden on the state. We hear nothing from Conservative Members about the private sector in that regard, except the occasional proud boast that those marvellous big private companies give more to charities than the nationalised industries used to give. I much appreciate the kind hearts that lead the large industries to give to charity. If we had a much more socialist economy and a more caring society, we would not need so much money to be given to private charities. But, of course, the Conservative Government do not recognise that.
Both large and small successful firms can be taken over by predators. That affects jobs and the value of shares. How will the Government protect essential industries, such as the water industry, from such predatory takeovers in future? I accept that regulations may be used, but I shall deal with that point later.
My hon. Friend the Member for Bolsover (Mr. Skinner) is right about small firms. I worked in small private companies before I joined United Steel, as it was known before the steel industry was nationalised. Those small firms had family concerns and some accountability to the work force, but most of them have disappeared--not because they were inefficient, had production problems or lacked orders, but because predators bought and sold shares above their heads. The people who thought that they owned the factory woke up one morning and found that they no longer owned or controlled it. Within weeks or sometimes months those companies disappeared.
The classic example of what I described is a company called Tyzack Sons and Turner Heeley, for which I worked as an apprentice. There was nothing wrong with the company. It still had orders for exports. Hostility between companies forced people to buy shares and then the company simply to obtain the trademark. Not only does that company no longer trade, but the whole site has been bulldozed to save rates, taxes and so on. What good is that to the work force or, indeed, the country?
The Government favour such a predatory attitude in our essential industries. That is wholly unacceptable. The marketplace should have no say in our crucial industries or economic planning because at the end of the day if it does, it means that foreign companies and financial houses dictate the odds when the elected Government of the day should make the decisions. There is no accountability to the nation or to the consumer.
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We are being held to ransom by private monopolies which are there for all to see. There is no real competition in water prices, despite the claims that are made. In telecommunications there is no real competition with British Telecom. More or less the same monopoly persists, but it operates all for profit and not for anything else. Conservative Members have said that British Telecom is much more efficient and up to date than a few years ago when it was nationalised. With hand on heart I agree that that is the case. British Telecom had been neglected over the years. There was some mismanagement, but I remind right hon. and hon. Gentlemen that the telephone companies that were nationalised in the first place were a byword for quality. They set standards in cable and everything else in the electrical and electronic industries. All the standards were set down by the nationalised industry years ago and the system worked correctly then. The reason why the industry went a little wrong later was neglect on the part of management. It was not the fault or the philosophy of public ownership.Although this is on a smaller scale, there is a prime example of how the Government are irresponsible in allowing some of our crucial industries to go directly into the private sector. Over the years we all must have received complaints from people seeking to buy or sell a house that the estate agents forced their clients into bidding up blind. People do not know the customer or the price and they are screwed by the estate agents. Many hon. Members, including me, took the matter up many years ago. I finally received a telephone message from the Minister responsible who said that he was sorry for the delay but that he could not get agreement from the estate agents on a code of practice. Estate agents were screwing consumers and the taxpayers, yet the powerful Government could not persuade them to agree to a code of practice.
That was only estate agents. If the Government cannot control estate agents, despite some statutory instruments that will protect customers to some extent, what hope do they have of controlling financial powers, such as international and multinational companies? They have no hope whatever. It is irresponsible to follow the dogma that no public intervention in crucial industries should take place. If the Government have trouble with small companies, there is no way in which they will be able to deal with the big multinationals. I want to make one point plain : although we may have differences over private and nationalised industries, it would be totally irresponsible of the Government, because of dogma, to allow the nation's crucial industries to be at the mercy of the fat cats of the City. That is not good for the nation and I do not believe that the nation will allow it.
1.9 pm
Mr. Steve Norris (Epping Forest) : This has been an interesting debate, not least because of the speech made by the hon. Member for Newcastle upon Tyne, East (Mr. Brown). He is, as we have all remarked, kind and generous, and he is obviously bright. During his hour-long ramble, one thing became overwhelmingly clear to me : he is too bright to believe the nonsense that detains the Labour party in its time warp on the question of ownership. However, he is perhaps not bright enough--God knows, no one in the Labour party is--to see a way out. He should take the one great intellectual bound
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which, with one leap, would set him free. He should accept some of the simple truths about state and private ownership that are clear not only to a narrow minority on the far right of the political spectrum in Britain, but, as my right hon. Friend the Member for Chingford (Mr. Tebbit) and my hon. Friend the Financial Secretary to the Treasury made clear, are lessons that are becoming clear throughout the world.I shall not detain the House with what is surely common ground, but let us consider some of the lessons that we in the centre and on the centre right of politics might learn about ownership either by the state or by private individuals. The debate should not be a philosophical ramble about the ownership of shares. It should be about ordinary people and how they receive the services offered by state-owned enterprises or those liberated into private ownership. It is ordinary people who matter.
Ultimately, the issue is about how well the trains run, whether they arrive on time, whether they are clean, and whether one can buy a hot cup of tea at a reasonable price or a decent sandwich that does not taste like cardboard. To me, it does not matter whether the service is provided by a Labour Government or a Conservative Government, by a state-run enterprise or by a private company. I want basic standards of service. Any intelligent person does not consider the dogma of whether a service should be owned by the state or by a private individual or a combination of the two. He wants to consider the combination that delivers quality of service to individuals. While seeking the answers, we should not make the mistake of assuming that the arguments in favour of private ownership are so clear that they do not need to be restated. One thing that is clear is that in the days immediately after the second world war, when the Labour Government set themselves on the path to nationalisation, they had a great justification for doing so. I believe that one of the things that Conservative Members are not sufficiently able to accept is that there were great deficiencies in the old management styles which were the norm in the 1940s. There was a sense of them and us, and of managers or owners--or at least, those who were directors being disengaged from the business and not being involved with those whom they employed in a co-operative effort to ensure better quality and standards. They were paternalistic.
I remember a wonderful description of that sadly peculiarly British feature of the relations between the board and the shop floor. It was in the first book ever published in this country that considered the theory and practice of management called "Up the Organisation", by Peter Townsend. He had a marvellous way of subdividing the book in headings from A to Z and I shall never forget the first sentence of chapter B, which said "B is for the board of directors. It is useful to have someone on the board of directors who knows where the factory is." One could sense that that was a reflection of a spirit in British industry of directors who dined in their own dining rooms, who wore suits while the workers wore overalls, and who no doubt studied business plans and met regularly with their bankers but had little practical involvement in the management of their companies. Not only was that a cynical abdication of their responsibility, but, more important, when a vacuum was created at the top of those businesses, the trade unions said, "Thank you" and quickly filled them.
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I will give examples of that, the first from the motor industry, which I know well from personal experience. Only recently, companies such as the old British Leyland the British Motor Corporation and now the Rover Group--accepted that it was a good idea for draughtsmen, who are referred to as professionals in the industry, to visit the shop floor to see how the designs that they put on the drawing board could be manufactured.That was the single greatest lesson the Japanese taught the British. When one sees it applied in factories such as that which I used to have the honour to represent, in Oxford, East, at Cowley, one appreciates the way in which British workers can--surprise, surprise--produce goods of just the same quality as their Japanese counterparts, because it is not a function of how intelligent or willing they are but of how organisation and management can make a business sparkle.
My first warning to the Government is that we should not assume that there is any automatic merit in the word "private" and that somehow, because something is private, it must work. That is not true and there are many cases to show that where management abdicated its responsibility and allowed a vacuum to be created, it was quickly and willingly filled by the trade unions.
The process of nationalisation, understandably enthused over by the Labour Government after the war, simply replaced bad with worse. Nationalisation carries with it inherent technical faults. That should by now be common cause between us and no longer be regarded as even worthy of debate.
There is the technical fault of reliance in nationalised industries on funding determined essentially by the size of the public sector borrowing requirement. My right hon. Friend the Member for Chingford (Mr. Tebbit) brilliantly exposed that. It is a sorrow that he will not be with us in the next Parliament, and that is the best possible justification for postponing the date of the next general election for as long as possible. That would enable us to have a few more speeches like his, brilliantly witty and hitting the point absolutely.
That reliance on public capital has, under successive Governments of both complexions, resulted in chronic capital underfunding. That underfunding and underinvestment in nationalised industries across the whole spectrum have in turn led, in effect, to a subsidy of running costs rather than to the provision of capital for investment. That, in turn, has led to a whole culture of further reliance, following another abdication of responsibility, this time not even to a definable source of authority but into the limbo of the civil service, and that has been to the detriment of all the nationalised industries.
Another technical inherent flaw in nationalisation is the sense in which civil servants--who are employed by Government to regulate the affairs of Government and who are sympathetic to the specific and discrete concerns of Government--are inherently unsympathetic to the needs of individual businesses. My right hon. Friend the Member for Chingford gave an amusing account of the processes of meetings, disagreements and second-guessing that is commonplace wherever there is that interface between the civil service and industry. Intelligent Governments recognise that it is not a question of personal antipathy and ideology--that it is not a question of liking or disliking--but that it is a structural impossibility to have two groups of intelligent people, both
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of whom have separate priorities, and imagine that they can come together and work as one with the single priority of making sure that the business operates properly.The third structural and inherent flaw in the concept of nationalisation is the total absence of incentives--not only monetary but even of encouragement by a management that is dedicated to making a discrete business work. The death knell of socialism is the fact that the technical and structural defects in the underlying principle of socialism-- nationalism--mean that it simply does not work in practice. It is dreadfully sad to have to recognise that we live in a world in which financial incentives must play a part. However, given that it is so clear that people must be given a stake in the enterprises in which they work, so that they work a little harder for themselves and their families, we should recognise that that concept is now the reality of the world. Those of us who accept that and build on it to make a better basis for British industrial management are those who have come to terms with reality.
Mr. Skinner : Will the hon. Gentleman give way?
Mr. Norris : Before I give way to the hon. Member for Bolsover (Mr. Skinner), who is a regular attender, may I point out for the benefit of those who will read our proceedings in Hansard that he joined us only a few moments ago and therefore missed the pleasure of hearing the hour-long speech of the hon. Member for Newcastle upon Tyne, East and the significant contribution of my hon. Friend the Minister. The hon. Gentleman no doubt has something interesting to offer.
Mr. Skinner : Does the hon. Gentleman believe that the national health service should be privatised?
Mr. Norris : Of course not, and neither do my right hon. Friends the Prime Minister or the Secretary of State for Health. I believe that the health service should remain free at the point of delivery to those who need it. However, I do not believe that a pound of the money that is expended on the national health service should be wasted by the chronic overmanning and inefficiency inherent when it was run more by the National Union of Public Employees and the Confederation of Health Service Employees than by efficient managers who want the best out of the service. I am disappointed that the hon. Gentleman is so locked into the neolithic idea of delivering services that he makes that greatest of all errors. He imagines that only a cleaner employed by the Government can clean properly. The dreadful irony is exactly the reverse--only a cleaner employed by a company which cares enough about its work, because its contract may not be renewed, will do the job properly.
Mr. Bill Michie rose --
Mr. Skinner : Will the hon. Gentleman give way?
Mr. Norris : I cannot allow a further intervention because it would be extremely discourteous to my hon. Friends, who have been here throughout the morning, and because Opposition Members, too, wish to speak-- [Interruption.] Did I hear my hon. Friend the Member for Amber Valley (Mr. Oppenheim) refer to the embarrassment of some Derbyshire Members over the Bookbinder affair? I am sorry that my right hon. Friend the Member
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for Chingford is not here at the moment as I know that he has a passing interest in the matter. It may be more instructive for the hon. Gentleman to consider that.The greatest lesson of the nationalisation debate is not the fact that, in 1979, publicly owned businesses were costing the taxpayer £50 million a week, which the taxpayer no longer has to find, although that was dramatic enough. Neither is it the fact that the proceeds of denationalisation have raised £33,000 million, which can be spent on much more needed public services, including health. It is not even the fact that so many more people now participate in the ownership of those companies and therefore have an interest in the quality of service offered. When we consider the long list of nationalised industries that have been privatised, such as British Telecom, British Airways, British Steel, British Aerospace and Cable and Wireless, we see that the losses, underinvestment, intelligent and practical management starvation, have given way to success so that those companies now lead the world in their own sectors in investment, innovation and their desire to expand into new markets, often overseas.
I shall make my final point briefly as hon. Members, particularly my hon. Friends, have been extraordinarily indulgent in allowing me to speak for so long.
We should relate this philosophical debate to the service offered to ordinary people. Anyone who imagines that the service level provided in a cafeteria in socialist Russia is better than here, or is or was better in any of the central European countries where the state regulated standards and provided facilities and services, has obviously never been to those countries. The wonderful American philosophy, "Have a nice day"--vulgar and even, on occasions, mildly offensive though it may be to us reserved Brits- -expresses one of the greatest and most important truths of nationalisation and denationalisation. When one has to care whether the customer will return because, if one does not, one's business and ultimately one's job might be on the line, the service offered tends to be more generous, efficient and better regulated. That is the key to this debate and on that basis I earnestly pray that, to the list of nationalisation, denationalisation and renationalisation--the Government have embarked on a further process of denationalisation--we shall never have to add the word re-renationalisation.
1.27 pm
Mr. Harry Cohen (Leyton) : The hon. Member for Epping Forest (Mr. Norris) gave us, as usual, a lively and entertaining speech. He said that financial incentives were always necessary--some of us would dispute that. My hon. Friend the Member for Bolsover (Mr. Skinner) referred to that in relation to the health service--a public service. But the Tories have a funny idea about financial incentives. They give the rich more tax cuts and more money, while making the poor poorer. That is their idea of financial incentive, but it does not work.
The hon. Member for Epping Forest talked about the 1940s and the idea of the owners being against the workers and detached from them--the "them and us" mentality. What has changed? We only have to look at those huge pay rises to which my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Brown) referred to see that the owners take the attitude, "Do what we say, not
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what we do." That concept is inherent in the private ownership system that the hon. Member for Epping Forest was defending. The title of this debate is interesting. The Government dare not include the word "privatisation" in the title because people know that privatisation equals a rip-off and public squalor, and they are right. The Government put the emphasis on nationalisation which, at its best, is public ownership. We all know that there have been problems with that in practice, but the aim of nationalisation is public ownership, which is achieved when nationalisation works. Its objective is to secure for the workers the fruits of their labours. They do not get them now, and they certainly did not get them in the past, when there was massive exploitation of working people, with huge profits for a few and low pay, long and arduous hours and conditions of work and poverty and unemployment for the many. The purpose of nationalisation was to do something about that system and to take industry into public ownership. The theory was that we could not control what we did not own. At its best, public ownership is perceived to be necessary--for instance, to secure worthwhile jobs and to protect whole industries.My colleagues from the north-east regularly mention shipbuilding, which has been destroyed in this country. We are now at the mercy of ships built by other nations, yet we are supposedly a maritime nation. The Government wiped out that industry with their dogma. It is perfectly sensible to plan. We all plan for the future, both for the short term and for our old age. Planning is recognised as a virtue in private life, but somehow it is believed that capitalist nations should not plan the running of their economies--they must be left to market forces.
Of course there have been problems with nationalisation in the past, and Conservative Members have made hay with them. In the well known phrase, "Nationalisation plus Lord Robens doesn't equal socialism," as the left used to describe putting one man in control. Such nationalisation failed ; the compensation given to the previous owners loaded a huge debt on the new ones.
The corporate model failed, as did the Stalinist model, because it was too centralised. Herbert Morrison based the running of such enterprises on the big private corporations, so, like those corporations, they lacked a democratic element.
The Stalinist model as seen in the Soviet Union also failed, but we must remember that, with its programme of nationalisation, the Soviet Union achieved huge growth to emerge from its feudal status of the early years-- so much so that its economic growth rate still places it in the top 10 European countries. However, its system failed for three main reasons, the first of which was the huge arms race on which it embarked to try to keep pace with the United States. All that useless production meant that the money was not available for economic development.
In the main--this is another, perhaps good, reason for failure--the Soviet Union was not imperialist-- [Interruption.] I concede that there were exceptions such as Czechoslovakia and Hungary, but the Soviet Union was nothing like as imperialist as the west, which exploited third-world resources by taking them over lock, stock and barrel without paying for them, thereby imposing debts on the third world which are still being paid off.
The third reason for the failure of the Stalinist model was the bureaucratic elite centred on the control of one
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man--Stalin--and the central committee. But that merely mirrored what happens in the west--a few people control these organisations. At any rate, these factors led to enervation on the part of the workers and the failure of the model.Neither model let in the workers or the consumers ; it did not let in the public or any elements of democracy. That is what must change in our industry. Privatisation will certainly not bring about that change. It is, as Harold Macmillan said, like selling off the family silver. I remember a councillor shouting across the council chamber that privatisation was like eating the seedcorn and that we would reap the consequences in the future.
Thames Water has announced profits of about £220 million, and that is all to the good. The company has been built up by the high bills charged to the public in the past. Those profits will be siphoned off to a few shareholders. When Thames Water announced its profits, it also announced another price rise of 15 per cent., which is well above inflation. That shows how privatisation works.
The public transport system outside London has been deregulated and privatised, and that dreadful prospect looms for London. There are 16 per cent. fewer buses and a worse service is being provided, certainly at off- peak times and in unprofitable areas. When the Government end all public service provision, especially in transport, the travel card and the old-age pensioners' card will disappear because matters will be referred to the Monopolies and Mergers Commission, which will say that such benefits are a restriction of trade. Unprofitable routes will be closed and people will have to pay higher fares and accept lower standards. Those things are already happening outside London.
My third example relates to the national health service. The formation of NHS trusts is the first of a two-stage process of privatising the national health service. The so-called provider, the trust, can require the GP and the district health authority to buy service contracts. Eventually, the trusts will lead to people having to pay for the health service.
Cleaners in the health service received low pay and did a terrific job, but when the Government privatised that service, the contractors put those cleaners out of work and employed people on even lower pay. The result has been dirtier hospitals. Those are three examples of how privatisation is bad. It leads to the sort of asset stripping of which Harold Macmillan spoke. The public services cannot be left to the market, because the market is interested only in profit. The result is much more public squalor and severe damage to the environment. The Government have run down the public services in preparation for privatisation, and such a policy shifts the burden to people and makes them pay more.
Mr. Skinner : My hon. Friend says that public services cannot work if they are privatised. He also spoke about the national health service and the fact that a Tory said that he did not believe in privatisation and financial incentives in the NHS. Another Tory Member said that she was in favour of privatising it. My hon. Friend would do well to emphasise that, if the Tories are returned to power, the majority of Tory Members who believe in privatising the health service would win the day and would also privatise social security benefits. That is what they would be up to if they got a chance. Thank God they will not get it.
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Mr. Cohen : My hon. Friend makes an effective point. Privatisation of the NHS would result in more and more people paying for their treatment.
The market is chaotic and unplanned. It is also harsh and grossly unfair and, as we see, that causes many companies to go bust. The result is vast wealth for fewer and fewer people, and mostly undeserving people at that. For others--the majority--there is rising unemployment and poverty. The process contributes to environmental devastation if it is allowed to continue unchecked.
In reality, we are talking about class and the preservation of inherited wealth. Most of the ancestors of the members of the powerful class elite were robber barons. They either obtained their wealth by robbing or they engaged in a huge programme of exploitation, including the exploitation of workers. Most wealth is passed on from one generation to another, and those who control that wealth now have done nothing to earn it.
I accept that there are a few self-made people who have created great wealth in a lifetime, but I would be critical of half of those who come within that category. Many of them are speculators, especially in finance capital. They are making money out of money. Only a few have gained their wealth from production that benefits the country.
Privatisation furthers the unmerited class elite. Some of those who have the money to buy out the nation's assets sell them on to foreign capitalists so that they can enjoy the high life here. The system must not continue if we are to maintain living standards. It must not be maintained because of its impact on the world environment.
Mr. Skinner : My hon. Friend has talked about shareholders. It is an interesting fact that 15 years ago, private individuals owned 30 per cent. of all shares. Despite all the privatisation measures and the so-called spread of wealth through share ownership, private individuals now own only 20 per cent. of shares. The Government have certainly spread some wealth.
Mr. Cohen : My hon. Friend has made the point well. Most of those who bought shares in privatised industries could see that the Government were engaged in a great rip-off. They said to themselves, justifiably, "Why shouldn't we get some of it?" They bought shares and then took their profit. The shares went back to the large corporations. Privatisation has not led to the spread of wealth. The competitive system must not be maintained, because of the threat that it presents to the world's environment. It leads to pollution and threatens other countries. There is competition on a huge scale between countries when there is a recession, and that can lead to war. When third-world countries say, "We shall not put up with this any longer," that sometimes leads to war in the long term. That is where the private market system will take us. There is every danger that it will take nations into war.
Against that background, it is reasonable for the public to take control and to take some of the profits that are made, so that the moneys can be reinvested to create jobs. We must plan for the future, change direction and invest in worthwhile production. Control is a political concept. It must not rest with one man or a central committee.
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