Editorial: Nationalisation of Iron and Steel (1948)

Editorial from the December 1948 issue of the Socialist Standard

The last of the big schemes of Nationalisation to which the Labour Government was pledged during the life of the present Parliament, the Nationalisation of iron and steel, is to take effect in 1950 under the terms of the Bill now being discussed. The scheme differs in various ways from the organisation set up for coal and transport and the attitude of the Government in explaining the Bill suggests that, with an eye on the next General Election, they are anxious to emphasise that it really will not make a very great difference. The Government is to take over the shares of 107 of the largest companies and place the industry under the ultimate control of the Iron and Steel Corporation but in such a way that the Corporation concerns itself with ‘‘planning the overall efficiency of the industry” without interference with the day-to-day management of each works. Unless the Corporation considers that certain directors are inefficient the existing managements will remain. Mr. Strauss, Minister of Supply, who introduced the Bill emphasised these aspects in his speech on 15th November. According to the Times (16/11/48) he described it as a way “to combine all that is best in private enterprise and public ownership.” The individual companies whose shares the Corporation will take over will retain their present identity and continue trading under their existing names. The Minister explained that "on the morning after the vesting date the only difference for them would be that the ownership of the securities had changed hands.”

The Corporation and the Nationalised Companies taken as a whole will have to pay their way like any other trading concern and will, in fact, be in competition with the smaller firms that are not being nationalised. The Iron and Steel Corporation will consist of a Chairman and from four to ten other members all appointed by the Minister. The workers employed by the Nationalised firms and their wholly owned subsidiary companies will number about 300,000 but there was no suggestion that their position will be essentially altered any more than it was when coal and transport were nationalised. The main arguments used by the Government spokesman in favour of nationalisation were that not only “prosperity” but also “security and influence on world affairs” are bound up with the production of “cheap steel in ample quantities” and these requirements cannot be met if the existing ownership and organisation continue. On the question of cheapness Mr. Strauss made the point that costs of production in this country are generally higher than in U.S.A. ‘‘in spite of the fact that American wages were much higher.” (Times, 16/11/48.) He laid emphasis on the argument that 30 per cent. of the existing industry is using antiquated and inefficient plant and that it would not be possible to secure 100 per cent. efficiency without centralisation—‘‘to rationalise the industry properly and to get the maximum efficiency a single owner must replace many . . .” Naturally the shareholders are more concerned with the amount of compensation (£300 million) than with arguments about organisation. The City editors of daily newspapers have all more or less agreed with the line taken by the Sunday Express (31/10/48) that the shareholders are being swindled because the Government “will pay £300 million for assets worth at least £600 million.” The Minister’s reply to this was to point out that the compensation is based on the prices quoted for the shares on the Stock Exchange and that “nearly all shareholders who had bought their shares any time during the last 10 years or so would receive in compensation more than they paid for them.”

Once the shareholders have received their compensation stock they will continue to receive interest on it in good times and bad while the steel workers, as in the past, will be dependent for their employment on the state of trade. The Minister incidentally let out that he at least does not count on good trade lasting for over. He claimed that in planning for the amount of steel to be produced the Government need not be as cautious as private capitalists would have to be “as soon as the present boom conditions fall off ” and he argued that it would be less disturbing to the industry to nationalise the companies now “when trade is good, than in a period of world depression.” (Daily Mail, 16/11/48.)

The Tories are opposing the scheme and threaten to undo it if elected in 1950. We need not concern ourselves with the argument whether this, or some Tory scheme of State control without State ownership, would better serve the interests of British capitalism. We can be quite certain that neither scheme will alter the wage-slave position of the workers.