I recently discovered an old school exercise book from a subject called Civic Studies that was part of our curriculum around 15 years of age. We had to write out answers to a series of questions that went like this:
Q: Who supplies our electricity? A: The Central Electricity Generating Board
Q: Who runs the country’s mines? A: The National Coal Board
And so it went on. This was an economy that could be described more as state capitalist than socialist. Civil servants and professional managers and technocrats ran industries that successive government in the post-war period believed were essential to the national interest.
Both Conservative and Labour governments presided over publicly owned and managed industries. Two world wars had revealed the need for better run key industries. There was also a perception that the private sector had under-invested and poorly managed many of these assets in recent decades. British capitalism was deemed to have lost the drive and verve that had powered the Industrial Revolution.
Under Jeremy Corbyn’s leadership, the Labour Party was calling for rail and mail services to be re-nationalised during the 2019 general election. But go back forty years and it would amaze you to see what was under public control – though about to be privatised by the Thatcher government.
Take for example the British National Oil Corporation (BNOC). This was created by a Labour government in 1975 to ensure that the British public would have a stake in any North Sea oil licences and thereby derive a share of the profit from oil and gas exploration. This approach was very similar to what Norway did with the creation of Statoil – a government owned entity that delivered guaranteed pensions to the Norwegian population. It’s now part of a large multinational called Equinor but at the time of writing, the Norwegian state remains the largest shareholder.
The UK, however, went down a very different route. Thatcher created a rather mediocre private sector interest called Britoil that was snapped up by British Petroleum (BP). What’s now forgotten is that BP was a nationalised asset up until 1979 – having been created under a Conservative government in the early 1950s. The BP sell-off was huge and managed by the global investment firm Goldman Sachs.
British Airways (BA) was created by the government in 1974. The world’s favourite airline – as it likes to claim – was state owned and set up to take over the assets of British European Airways (BEA) and the British Overseas Airways Corporation (BOAC). This was a time when most national carriers were owned by governments in Europe. It wasn’t an early sell-off, only being privatised in 1987.
So, the “mixed economy” of state and private run companies was very different to the UK today. Ships were built by British Shipbuilders. Gas was supplied by the British Gas Corporation. Cars were made by British Leyland. And you boarded trains run by British Rail. All of these were privatised over a 20-year period from 1979. This dramatically changed the structure of British capitalism and made the idea of public ownership very alien to younger generations.
As I pointed out earlier, these nationalised interests were run by civil servants and professional managers. Relations between the boardroom and workforce could be every bit as fractious as the private sector. Indeed, some of the biggest strikes of the 1970s were in nationalised industries. And they were often taken into public ownership more out a dire need for reorganisation and urgent bail-out than any grand socialist design.
Such was the case with British Leyland, the car maker. It was created in 1968 by bolting together several auto companies in the hope of creating a British equivalent to General Motors of the United States – and saving troubled brands like Jaguar. But the company lacked a common purpose and the car designs were naff compared to what Ford and GM were producing. That said, I can remember plenty of people driving British Leyland cars in the 1970s. However – it was broken up and most of the brands are now in overseas hands.
During the economic recession of the early 1980s – coupled with a deliberate policy of “slimming down” state run assets for privatisation – there were mammoth job losses. Regardless of your political views, the impact on cities around the UK was seismic. And arguably the aftershocks are still being felt today.
British Steel saw 82,300 jobs shed between 1979 and 1983. The National Coal Board released 36,500 miners between 1978 and 1983 – with many more to go after the 1984/85 miners strike. British Shipbuilders made over 20,000 workers redundant between 1979 and 1982. British Airways also lost 20,000 staff in the same period. This changed the very nature of Britain by degrees from a manufacturing, blue-collar nation in the north and Midlands to communities with more white-collar jobs, “flexible” labour and persistent unemployment in the 1980s.