Posts Tagged ‘‘Great Britain in the Post-War World’’

John McConnell Promises National Investment Bank and £500 Billion Credit for UK

July 19, 2016

Mike over at Vox Political has put up another piece today, which reports that Jeremy Corbyn’s deputy, John McConnell, has promised to set up a National Investment Bank, tied in with a network of regional banks, to regenerate Britain’s communities and revive Britain’s industries after years of neglect. The bank is based on the German Development Bank. In addition, he promised £500 billion of investment. This follows Owen Smith’s promise when launching his leadership campaign this week end, to introduce a British ‘New Deal’, and an investment programme of £200 billion.

See Mike’s article:

Both McConnell and Smith are right about investment in British firms by the British state being sorely needed. But McConnell is absolutely correct about the necessity of a special British investment bank to channel the money and provide the necessary credit. It’s been needed for decades. The authors of the 1s987 book, Socialist Enterprise, noted that the British financial sector was structured into investing abroad, and recommended the creation of such a bank. Neil Kinnock, in his 1987 book, Making Our Way, recognised the need for it. G.D.H. Cole, in his book, Great Britain in the Post-War World, written as long ago as 1942, recommended a similar radical reform of the banking industry. That should tell you how desperately it’s needed, and why McConnell is right.

Han-Joon Chang, in his book, 23 Things They Don’t Tell You About Capitalism, argues in one of his chapters that it simply isn’t true that we are living in a post-industrial society. Britain still has a manufacturing industry, and it’s still immensely important. It only appears unimportant, because it hasn’t grown as much as the financial sector. It is, however, still of fundamentally vital importance to our economy.

All of this, of course, will be unwelcome news to the Tory party and New Labour. Both of these turned to subsidising and supporting the financial sector as an alternative to, and at the expensive of, manufacturing. One of the functionaries Blair appointed to the Bank of England was an American banker, Deanne Julius, who stated that Britain should give up manufacturing products and leave that to America. As for the Conservatives, half of their funding at the last election came from the City of London. They have no interest and absolutely no desire to aid a British manufacturing revival. Not if it means having to spend government money, rather than rely on a bail-out by a foreign firm.

Way back in the 1970s the late Tony Benn tried something similar. The government set up various zones, and schemes in which firms could receive government grants to renovate and modernise plant and equipment. I don’t think it was taken up, and British firms continued to lag behind their foreign competitors. And the result has been the decimation of British industry in the decades since Thatcher took power.

McConnell and Benn stand for British industry, and investment to create real jobs and economic growth. All Maggie Thatcher did was cut, and hope foreign firms would come in to invest in what was left. All the while favouring the financial sector and her friends in the City. It also shows the hollowness of the Tories’ claim to represent British industry. They don’t. Labour represents industry, and the people who work in it. The Tories simply represent capital and those, who own it. The very people, who seem to enjoy increased bonuses and share options by cutting down to the point of destroying the very firms they manage.

G.D.H. Cole on the Nationalisation of the Utility Industries

March 22, 2016

I found these arguments for the nationalisation of the utility industries in G.D.H. Cole’s 1942 book, Great Britain in the Post-War World (London: Victor Gollancz).

Road and Rail

But these two types by no means exhaust the list of industries and processes which call for early socialisation. The third group consists of industries which, though they include too many separate units to fall under the first group, have nevertheless been shown by practical experience to be incapable of serving the public interest under private enterprise. The outstanding member of this group is the coal industry, which, unable to create a monopoly by its own efforts, has been erected into a private monopoly by legislation, under conditions which have improved its own profits without providing any better for the public service. To this group belong also the public utility services – railways, electricity, gas and water-which are, like the coal industry, so essential to the satisfactory working of the other industries and services and to the health and comfort of the community that inefficiency in their conduct is intolerable and their exploitation for private profit plainly against the public interest. the industries and services in this group are already in various stages of transition from private to public control. The railways resemble the coal industry, in that they have been erected into a virtual monopoly by legislation, after having failed to achieve monopoly by their own efforts. they differ from coal in that no sooner had the State made them into a capitalist monopoly than this monopoly began to break down on account of the developing competition of road transport. But this, so far from improving the situation from the public standpoint, has led to chaotic competition between the rival means of carriage. The railways, tied down by rate-fixing regulations which were intended as safeguards against the abuse of their monopoly, have been unable to adapt their rate structure so as to achieve a sensible distribution of traffic between road and rail in accordance with relative costs; and the road transport agencies, having begun to threaten the railways with bankruptcy, have in their turn been hobbled by restrictive licensing regulations designed to prevent them from capturing from the railways the amount of traffic which would have gone by road under conditions of unrestricted competition.

There appears to be no way out of this impasse but by co-ordination between the two transport agencies, so as to provide a single carrying concern which will transport goods by road or rail according to its own judgement of expediency and cost. But it is clearly out of the question to place this power of judgement in the hands of a profit-seeking monopoly; and there is accordingly a clear case for the unification of both forms of transport under public ownership and control.


Of the public utilities, usually so called, water supply is pre-eminently a public health service, though it is also of great importance to industry. It is already for the most part in public hands; and the problem which it presents is mainly that of extending adequate supplies of pure water to those areas of the country which are at present without them- mainly the rural areas. This clearly will not be done by private enterprise: nor is private enterprise a likely way of ensuring that proper use is made of local resources before water is brought from a distance, or of securing a right allocation of distant sources between rival claimants. It is, moreover, a clear point of principle that public health services ought to be publicly operated and not made the sport of private interests.


Electricity supply is already partly socialised, under the Central Electricity Board, which controls main-line transmission; and a large part of the business both of generation and of retail distribution of current to consumers is already under municipal control. But there remain both a number of large private Power Companies, generating current which is sold both to big industrial consumers and to municipal and private distributors, and also a large number of interlocked private companies engaged in generation and distribution. In addition, a number of big concerns, including railways, own their own power-stations. It seems clear that the extremely complicated provisions under which the Central Electricity Board, instead of operating its own generating stations, has to buy current from Power Companies and from municipal and private stations and then re-sell it, often to the very concerns from which it has been bought, is uneconomic and foolish, and that it would be very much better for the Central Electricity Board to take over the whole business of generation, except perhaps where a private station exists solely for supplying the big industrial enterprise which owns it. Given this unification, it would be possible for the ‘Grid’ to institute a national system of charges throughout Great Britain; and the task of electrifying the countryside and the remoter areas generally would be immensely simplified. I do not suggest that the Central Electricity Board should take over the job of the retail distribution of current, which would probably be best organised on a regional basis, under public ownership by some sort of Joint Board or ad hoc authority for each region, subject to a general system of national co-ordinating control. What is clear is that there is no room in this industry for the continuance of private profit-making. The case is one for complete unification of the basic supplies, and for regional public control of the end nearest the consumers.


Gas supply, again, is already under municipal public ownership in a considerable number of areas. But there are both very big private concerns, such as the Gas Light and Coke Company, and many smaller private concerns, often controlled by the larger companies or holding companies which have bought out the original owners. There is, I think, no clear case for a national unification of the gas supply service, which is destined to remain mainly local. Only in a few areas is long-distance transmission of producer-gas from industry likely to be practicable. Indeed, it becomes less practicable as industries achieve greater efficiency in using up gases that formerly ran to waste. Nor is there any necessary economy in increasing the size of gas undertakings beyond a certain point, which is fairly soon reached. The economy that is important is that of unified technical administration and research; and this can probably best be achieved by regional rather than national consideration. The right solution seems to be the amalgamation of gas undertakings on a regional basis, under regionally unified technical direction. And this could best be achieved by regional public ownership, parallel to the ownership of the system of electricity distribution.

G.D.H. Cole on the Demand for Welfare Reform and Its Use by the Tories

March 8, 2016

I found this piece by the radical Socialist G.D.H. Cole on the rising demand for the introduction of increased welfare provision in his 1942 book, Great Britain in the Post-War World (London: Victor Gollancz 1942).

Social reformers naturally echo this mood. The greater part of the progressive legislation of recent years has had to do with the removal or mitigation of the terrible insecurity which besets the lives of men; and programmes of progressive parties follow the same trend. Old age pensions, workmen’s pensions, health insurance, unemployment insurance, widow’s pensions, the assistance board, and many more specialised reforms are examples of the growth of what is sometimes called ‘eleemosynary’ legislation; and the demands for family allowances, guaranteed minimum wages, a national medical service, and a general tuning up of the existing social services figure largely in the reconstruction programmes of advanced parties, and seem likely to appeal to conservative opinion as well, as still the best way of foiling demands for more radical social change. it is widely felt that as long as capitalism can continue to make the concessions in the direction of social security, a large part of the electorate will rest content with the general structure of things as they are, and the more fundamental proposals for social change will meet with no great response among the main body of the people. (pp. 136-7).

Cole was writing while Beveridge was still working on his Report, and that passage shows the great demand there was from working people for what became the Welfare State. He’s also right in that the left wing of the Tory party did support it, although there was still opposition to it within Tory ranks. And Owen Jones made much the same point as Cole in his book Chavs: The Demonisation of the Working Class, when he described how a Tory MP visiting Oxford confessed that his party hung on to power by conceding ‘just enough’ to satisfy the working class hunger for change.

Since then, the Tories have found, following Thatcher, that they were able to repeal all the reforms that have benefited the working class over the past half-century and more, and since Thatcher have been trying to privatise the health service. It stands in the way of corporate profit, and they have learned that they can roll back welfare provision if they maintain the illusion that they are somehow retaining or reforming it at the same time.

And so they’re destroying not just the health service and the welfare state, and plunging millions into poverty, in order to restore the corporate order and social hierarchy.