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Price of Nationalization

14th November 1958
Page 40
Page 40, 14th November 1958 — Price of Nationalization
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Which of the following most accurately describes the problem?

THE Federation of British Industries' "Report on Nationalisation" that appears this week is well timed, in that it follows the sombre thunderings of the Labour Party conference at Scarborough and, fortuitously, precedes the electioneering that may well begin in the months to come. A single report, however, is no barrage and the present work is rather a skilful, almost dispassionate, appraisal of the economics of thc past few years and an appreciation of current trends. Its impact lies less in the histrionics of the hustings than in the sober judgment of the accountant.

The distinguished working party which prepared this report examines a critical situation in the affairs of the nation with admirable detachment. The declared policy of the advocates of nationalization is stated, perhaps, with greater clarity than one might read in Industry and Society or Plan for Progress. Its fallacies are pointed out, firmly, gently, donnishly. For most people, the real shock is contained in the statistics which form a 12-page appendix at the back of the book. The inference is obvious: nationalization will never pay.

• Although such a report as this must of necessity be largely negative in its approach, the F.B.I. have no difficulty in showing that the very weaknesses in industry which Labour is so anxious to eradicate have not, in fact, been eliminated by nationalization. Labour relations, efficiency in terms of the employment of capital. service in the public interest—none can be said to have improved under nationalization to the extent which has been possible in private enterprise.

Indeed, the financial record of the nationalized undertakings makes appalling reading. Inadequate provision for depreciation, the failure to cover outgoings through charging uneconomic prices, inept postponement of price increases, and borrowing on the largest scale, are all reflected in the annual accounts. The obligation to "break even" over the years has not been met. Nor does the future look any brighter than the immediate past.

The haulier, poised uncertainly between the desire to expand his business and sitting tight and awaiting developments, will draw little encouragement from this exposition of facts. But the booklet is full of useful ammunition which may yet be used with devastatin2 effect. If facts speak for themselves, they are twicebarbed when used by an intelligent voter.


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