Brian Monteith: Labour has learnt nothing

The bad old days of British Rail would return if renationalisation were imposed to recreate the sad state monopoly of yesteryear. Picture: Getty

Does the Labour party have a death wish? As it hurtles towards electing Jeremy Corbyn as its new UK leader the announcements of how he would run his party become more and more bizarre.

Having revealed he would work with the SNP in Westminster if it was required to form a government – an offer that would only serve to seal the fate of Labour in Scotland by making it unnecessary to ever vote for them again – he has now raised the prospect of recommitting Labour to the public ownership of British industry.

Not only does Jeremy Corbyn live in political denial, for it was the threat of the SNP working with Labour that drove enough Ukip and Liberal Democrat supporters over to the Conservatives so that David Cameron could secure an unexpected overall majority, but also his memory recall has abandoned him. It was Labour’s offer of greater public ownership and unconstrained trade union power that contributed to four consecutive defeats at the hands of Margaret Thatcher and John Major. Whatever one thinks of Tony Blair’s record as prime minister it was Blair’s understanding of realpolitik that changed Labour’s fortunes and made his party electable again.

Unlike Tony Blair, Jeremy Corbyns platform is bound to doom Labour. Picture: PA

Politicians and strategists among Labour’s opponents will greet a Corbyn victory with great rejoicing, but none more so than the Conservatives.

The Liberal Democrats, now once again at the margins of British politics, will seek to present themselves to the professional classes as the saner voice of the Left while the youth-orientated Greens are unlikely to be troubled by Old Labour nostrums that do not address their view of the contemporary world.

Many Tories believe, possibly correctly, that with Corbyn at Labour’s helm they will be able to propose even more robust policies than before, allowing them to move the common ground further to the right. It would be a cruel irony for the weakest in society that a Labour party that claims to represent their interests elects a leader that makes right-wing Conservative governments more likely, but politics is full of unintended consequences like that.

Another is how Ukip will see Corbyn’s election as a strong opportunity to grow its base in Labour heartlands by offering a blend of mildly leftist interventionist policies with immigration controls, stronger defence and more robust policing. In the race to see who benefits the most from a Corbyn leadership the first by-election of this parliament to be held in a Labour constituency will become a real test for any new Labour leader.

It is Corbyn’s latest promise of nationalising British industry, however, that is most likely to cost Labour votes. You do not need to look far to find successful people in business who want to support Labour, people who see nothing contradictory in making a profit through the honest toil of delivering a service or product that the public wants. Already Labour business donors have signalled they will be walking away from the party and taking their online transfers with them. A debt-ridden Labour party that has to rely even more on trade union munificence – just when the Conservatives are about to make donations from political funds opt-in rather than opt-out – will find it far harder to campaign and be heading for insolvency.

The received wisdom is that advocating the nationalisation of soft targets such as the railways and the Royal Mail can prove popular, but this is the politics of sloganeering. Once the details are known, the historical context recalled and finances considered a policy that might seem attractive at first glance can leave a party open to ridicule and become a vote loser.

Nationalisation of industry is one such policy. This is because for all we can moan about privatisations over the years they have generally been successful by delivering an improvement in service levels and putting customer care ahead of producer interest while attracting substantial investment and reducing the burden on the taxpayer. Where they have struggled it has often been due to subsequent political interventions that have resulted in significant new costs or restricted competition. Privatisation without competition is no more than the transfer of ownership from one monopoly to another and both are required for any reform to have a chance of success. Corbyn’s promise will mean less competition too.

The success of past privatisations was not just about taking as many decisions away from politicians who are open to the corruption of making investment decisions based upon political considerations – what is commonly known as pork barrel politics – but because a greater ability to attract investment and the introduction of real competition helped services improve through innovation and technological advance.

Think post office phones and recall those party lines as the state-rationed telephone lines. Think railways and remember the line closures as the state-rationed provision. Now witness the vast expansion of communications through the privately-funded cellphone network and the ability of governments to focus on subsidising new railway lines rather than carry the up-front cost of rolling stock and staff.

All politicians, including Conservatives who have their own interest groups to protect, are apt to see the running of industry through the prism of the electoral cycle, party advantage and the marginality of constituency majorities. All of these influences distort economic performance.

Nor are politicians good at providing dynamic response, requiring to first build political consensus and gain the agreement of procedural committees and self-interest groups they are slow to exploit opportunities and deliver change. When the railways were introduced by the private sector in the 19th century they spread very quickly, for the costs, risks and benefits were borne and shared privately while compensation was secured through private parliamentary acts. Contrast that progress with the decades that the building of HS2 is expected to take for just one line between Birmingham and London at great public expense.

The rest of the world has not been slow to learn from the success of privatisations introduced by Conservative governments in the eighties, with European and North American countries repeating the process and now developing countries doing the same – irrespective of a government’s political ideology.

By taking Labour back to the days of curled-up British Rail sandwiches and the rationing of public provision Corbyn is not going back to the future but forward into the past, a past of political defeat that will be borne of putting politics into business and taking business people out of Labour.