The Conservatives continue to appear resolutely divided; the Prime Minister has still not agreed with her Cabinet the proposed “end state” of our ideal relationship with the EU, while the almost possessed Brexit rebel Anna Soubry talks about storming off into some imaginary new party if Theresa May does not stand up to the likes of Boris Johnson and Jacob Rees-Mogg and “sling ’em out”.
The PM herself has lost significant credibility following a dreadful election campaign, a chaotic party conference, and two senior cabinet resignations leading to a botched reshuffle – while her Chancellor continues to talk down the nation’s spirits. If you wanted a governing party to look at war with itself, the last six months has been building up to a perfect storm.
Why then is Jeremy Corbyn’s Labour Party not ten points in the lead? At this period in the election cycle opposition parties are usually well out in front, but instead Labour has now fallen from a four point lead in September to this weekend trailing four points behind (YouGov: Conservatives 43 per cent (+1) / Labour 39 per cent (-3)). Even attempts at developing a cuddly uncle Corbyn cult of personality (front cover of GQ magazine) leaves him eight points behind May in who will make the best Prime Minister.
I have argued before that if Labour asks why it could not beat the worst Conservative election campaign in modern history, then it should be looking to Corbyn as at least part of the explanation. There is of course more to it than that, and the Shadow Chancellor, John McDonnell, the bad-cop to Corbyn’s attempt at a good-cop act, must carry a significant share of the blame.
Now, rather than give reassurance to floating voters or reluctant Tories, McDonnell has doubled down on his talk about nationalising private industries by confirming that a Labour government will borrow to buy utility, energy, infrastructure and transport companies. When quizzed about the cost McDonnell, without any self-awareness of his ignorance and naivety, responds that it will be “absolutely nothing”, because the borrowing costs will be funded out of the profits of the state-owned businesses.
McDonnell’s nationalisation policy is rather like a smart-talking, sharp-suited chancer buying a football club by borrowing against the TV income and gate receipts but having no money of his own and nothing to invest to develop the club. It only takes a bad run, some trouble in the dressing room or a few players to lose form, and the team moves towards relegation, attendances drop and income plummets. Players are sold but duds are bought and relegation becomes a reality. The workers, the players that care about the club, are utterly demoralised, but most of all “the many”, those loyal and hard done by supporters who were given false hope, are devastated. It takes a new owner, this time with real capital, to turn the club around and offer its players and supporters the chance of success.
McDonnell refuses to accept that such borrowing creates greater public debt, but that’s indeed what it does, against what would undoubtedly become a wasting asset as political interference would ensure each company becomes less and less commercial and able to fund the interest. Talk of having workers’ co-operatives that can genuinely direct and take decisions is little more than window dressing. The nationalised Network Rail has a CEO earning over £745,000 per annum and 52 more staff receiving over £164,000.
McDonnell has refused to put a cost on his nationalisation spree but the Centre for Policy Studies has done it for him and priced it at £176 billion. The cost aside – which must mean less funding for the NHS and other services desperate for investment – the scheme is doomed to fail and will punish the many while rewarding the few. Those of us who can remember the days of nationalised industries in the 1960s, 70s and 80s will recall they were not owned by the people in any recognisable sense – but were dictated to by trade union barons who extorted unsupportable wages and protected rigid work practices that ensured high prices and poor productivity, resulting in falling demand, rationing of products and massive losses that required endless taxpayer subsidy.
The state’s bosses did not respond to millions of shareholders (the many) looking for a return on their investments that could bolster their savings and pensions – but instead had to relegate commercial decisions to the whims of government ministers who acted like political commissars, putting electoral bribes and political correctness before all else. When Labour was in power leaders of nationalised industry had to accept deals that bought off the unions and punished the customers, and when the Tories were in power those leaders had the constant threat of strikes and working to rule. The UK’s reputation for poor workmanship, industrial strife and appalling build quality quickly became an international joke.
We do not need to look far to find examples of how nationalisation has repeatedly failed and how privatisation has transformed ailing industries for the better. One only has to look at a chart of rail passenger numbers to see the downward trend from a peak in 1910 being reversed in 1995 to the highest since 1920. Rail freight too has been a huge success story. These results have been achieved in the face of exponential growth in automobile ownership and the success of domestic budget flights – either of which should have continued the decline in rail passenger numbers.
This is not to say that privatisation is an unmitigated success without its problems, but when we explore what these are, more often than not is has been the failure of governments to keep to their share of commercial bargains. In particular, privatisation has not opened up enough competition that helps improves services and drive down prices.
It would appear the public has rumbled Jeremy Corbyn after he admitted he would not have written off student debt after all, and tries to be both for and against remaining in the EU’s single market. Now we have a Shadow Chancellor who does not believe public borrowing creates a liability for us. It is no wonder then that they believe the problems faced by Venezuela is a lack of socialism rather than too much of it.
I simply ask again, if Labour had a more attractive double act than Corbyn and McDonnell, would it not now be well ahead in the polls?
Brian Monteith is a director of Global Britain