The Labour Party and Nationalisation

The Labour Party and Nationalisation

Nationalisation was an election commitment of Clement Attlee, the Labour leader, in the build up to the July 1945 election. Nationalisation was where the state took over control of the main industries in Britain (coal, steel, electricity, rail etc) and where any profit made by these industries went to the country and not to share holders. The logic was that nationalisation benefited everyone, as they were publicly owned, and not the few who owned shares in those industries. Nationalisation was a long-held belief of the Labour Party, putting people before profit. If profits were then ploughed back into the nationalised industries, they would, in theory, always be in a modern state.


The Conservatives opposed nationalisation and all it stood for. To some it smacked of Stalin’s industrial policy in Russia. The Conservatives put forward a motion of censure in the House of Commons, which stated:


"(We deplore) the pre-occupation of His Majesty’s Ministers, impelled by Socialist theory, with the formulation of long-term schemes for nationalisation."


The motion failed and nationalisation went ahead.


The first organisation to be nationalised was the Bank of England in 1946. This had been owned by private individuals since 1694. However, by 1946, the Bank had worked very closely wit the Treasury and few complained about what seemed to be a natural move – bringing two bodies that worked together under government control.


The next organisation to be nationalised was Cable and Wireless Ltd. This was the dominant force in long distance communications in Britain.


Nationalisation gave the government, on behalf of the people, control over it.


The coal industry was nationalised in 1947; railways in 1948 and iron and steel in 1949.


There was little opposition to coal and the railways being nationalised as both were unprofitable but there was much greater opposition to iron and steel being nationalised as it was making a reasonable profit at this time. The Conservatives were against iron and steel being nationalised as it had a decent record of management/worker relationships which many industries could not boast of. Their philosophy over the iron and steel industry was why change something that was working well? However, by using their large majority in the Commons, the Labour Party pushed through the 1949 Iron and Steel Act, which transferred the right to run the industry to the Iron and Steel Board. However, the delay that the Conservative-dominated House of Lords could operate, meant that the board did not come into operation until 1951.


Did nationalisation change anything? For miners, there were clear improvements. The National Coal Board offered paid holidays, sick pay and rest homes for miners to recover after mining accidents. Safety also became an important issue. But the pay of miners did not improve as the strikes in the coal mines clearly indicated.


To avoid the claim that these industries were mere tools for the government, Labour introduced what were called boards, or public corporations, to run these industries. The boards were given the necessary freedom to operate outside of government ‘interference’ and they were only indirectly answerable to Parliament. Though the Conservatives had opposed nationalisation and had championed private ownership, when they returned to power in the 1950’s, they did not de-nationalise these industries (road transport excepted). This was to only occur in the 1980’s and 1990’s.


MLA Citation/Reference

"The Labour Party and Nationalisation". 2014. Web.

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