SOCIALISM AND STEEL
WITH his unerring flair for the penetrating phrase Mr. Churchill asked of the Government's statement on the future of the iron and steel industry whether it was business or politics. If any connotation-- of responsibility, or even respecta- bility, remains in these words, then the proposal to introduce " a large measure of public ownership " into this field was neither. It is not good business to take a very large decision (and few decisions- about the future of industry can be more far-reaching than this) without the fullest investigation into the efficiency of the existing arrangements and the relative merits of the alternatives. Nor is it good business to replace incentive to individual enter- prise by nothing better than an official declaration of doubt about futuie opportunities. It is not good politics to take decisions of this magnitude without giving facilities for full discussion both inside and outside Parliament. Nor is it good politics to trade so heavily on the continued goodwill of the electorate as to deny all opportunities for enlightenment. Government still rests on the consent of the governed, and the best kind of consent must be educated and convinced. The present decision carries little enlightenment and no conviction. These, no doubt, are hard words. No excuse is made for them. But since they are part of a general chorus of hard words it may be as well to ask, before going any further, whether anything whatever can be said for the nationalisation of steel.
The Minister of Supply said, in effect, that this was too big and powerful an industry to be left out of any scheme of nationali- sation. It has also been said that before the war the steel industry operated a policy of restriction within a protective barrier provided by the State and that it must now accept public control in return for public assistance. In addition, it has been argued that the influence of the ups and downs of the basic industries on the course of the trade cycle is so great that a full employment policy is bound to be ineffective so long as they remain uncontrolled. All these arguments carry some weight. But all of them are dangerous to the survival of personal freedom. The argument that the sheer size and importance of an industry marks it as ripe for nationali- sation is particularly perilous. If the case for nationalisation is not argued with strict reference to the industry itself but to its possible influence on others, practical argument is at an end and there is nothing left but the most airy economic speculation. Like- wise the tendency of producer goods industries to lead every boom and every slump is not a prima facie case for their public owner- ship. Control there may have to be, but it is likely to be more effec- tive and more flexible if it takes the form of general measures, such as the regulation of prices and wage levels, rather than an attempt to run great industries in detail. The iron and steel industry is a vast complex whose details are difficult to grasp but whose central tendency is to severe fluctuations. It is one thing to recognise this fact, but it is another thing to control it. The industry's own attempts at central direction have not been reassuring. In general they have aimed at the avoidance of too much surplus capacity during depression periods. But this has inevitably meant a curbing of expansion which has given the British steel industry a name for restrictive practices supported by protective duties and interna- tional price agreements. But if the organisation and policy of the industry are wrong, then every possible alternative must be con-. sidered. To jump at once to the quaking ground of "a large measure of public ownership " is an incredible over-simplification.
Whatever doubts there may be about the case for nationalisa- tion there are none whatever about the merits of the announcement in the Commons of the Government's intentions. It was absolutely and unequivocally bad. The bare minimum of information may be conceived of as the inclusion of iron and steel on a list of indus- tries to be nationalised. But Mr. Wilmot's statement lowered the concept of a minimum. Some parts of the industry will be put under public ownership some day. No amount of questioning reveals which parts, and the closest study of the structure of the industry gives no help. Some steel concerns control a whole series of productive processes, from ore and coal mining to the selling of engineering products. These are the worst possible circumstances for partial nationalisation since it would involve cutting businesses in two, leaving one part to national ownership and the rest to private firms. In fact, the Government must mutilate the whole industry in order to nationalise part of it.
- What is to be done about it? Nobody can afford to adopt a nega- tive critical attitude and leave one of the country's greatest indus- tries to fall into confusion. Nor can the big battalions be allowed to fight it out. There is no doubt whatever that the steel industry could give a good account of itself in a stand-up fight with the Government. Unlike the coal industry it is not a mere mass of fragments and it has made but few concessions to public control. The Import Duties Advisory Committee had some supervisory functions before the war, and there has been an Iron and Steel control during the war, whose functions the new Control Board is intended to continue. But it is notorious that the degree of autonomy allowed to the Iron and Steel Control within the govern- mental machine was a very large one. The fact is that the industry is well armed and organised for a merciless and exhausting battle. But the country cannot afford any such thing. There is immediate work to be done in overhauling and renewing the equipment of the industry and expanding its production as soon as possible in the interests of home consumption and the export trade. This work cannot wait. But what guarantee is there that it will be quickly done?
So far as the discussion in the Commons went there is none. By a monumental act of perversity a single Control Board has been entrusted with the functions of midwife and undertaker. On the one hand it will bring the new system to birth by paying " special attention, in consultation with the industry, to facilitating the early execution of urgent development schemes." On the other hand, it will usher the old system out by advising the Minister of Supply " on questions arising in the preparation of the scheme of nationalisation, including the definition of the sections of the in- dustry to be taken into public ownership." It is useless to expect this Board to arbitrate the quarrels all along the line to which the Government's proposals, when they become known, will certainly give rise. At the same time an overworked Parliament cannot settle every detail of the change over in the four years of life that remain to it. It may be asked if the industry is too deeply involved on one side to settle the question, if the Control Board is in no position to settle it, and if Parliament is too busy to settle it, then how will it be done at all. How, indeed. It looks as if the Govern- ment has bitten off more than it, or anybody else, can chew.
That is perhaps the answer to the whole question and a very unhelpful and pessimistic answer it is. But what are the alterna- tives? Parliament may accept, though not without misgivings and discomfort, the part of political boa-constrictor. One by one the masses of legislation may be swallowed and their digestion left to time and sleep. But no such process is possible for industry. The steel industry is large, complex, active and, at the moment, due for a complete overhaul of its capital equipment. If it is to stay on its feet, all the time of every expert executive and technician must be devoted to the task. No such devotion can be relied upon in the face of the existing uncertainty. On the other hand, the Govern- ment is clearly not ready with a parallel organisation to take over the task. Without for one moment prejudging the question whether steel should be nationalised it can confidently be said that now is not the time to do it. Some proof must be given that State owner- • ship can do the job better than private enterprise. This means two things, each of which will take time. First the instalments of nationalisation which have been accepted, the coal industry in par- ticular, must be taken to the point where practical judgement on their success is possible. Secondly, all information necessary for the full and orderly public discussion of steel nationalisation must be made available. The promised White Paper giving the Iron and Steel Federation's Report is only the first of these. Another one setting out the Government's own plan is clearly required. And probably the verdict of an official assessing-body is required too. After that, if it is decided to go ahead, a Bill could be drafted, and Parliament given a chance to exercise its proper functions, at the proper time. But let us have no more vague proposals, hatched in secret and left on the nation's doorstep to be cared for by nobody in particular. So far politics and business have been two different things. If they are to become the same thing, then let it be proved that the change has some chance of being a change for the better.
Previous page
