Michael Kidron

The Steel Scandal

(August 1954)

From Socialist Review, Vol. 3 No. 12, August 1954.
Transcribed by Mike Pearn.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

Compensation amounting to £21,350,000 was paid to the English Steel Corporation when steel was nationalised in 1949. The former owners of English Steel – Vickers and Cammell Lairds – recently bought back the control of these assets for £10,000,000. They bought back all the shares with voting rights, leaving the government Iron and Steel Holding and Realisation Agency with the remaining preference shares and debentures. The double transaction was the best deal Vickers and Cammell Lairds have made in all their profitable history. They now have complete control of their former property for less than half the amount of investment that was put in it before nationalisation; the Government, by holding preference shares and debentures, which carry no voting rights and receive a fixed sum in interest every year, is lending the corporation vast sums without having any say in their use, less say than a commercial bank has in the disposal of the loans it makes in the way of business. English Steel now decides policy for the Government, the Government provides more than half the cash for that policy. Who governs whom?

Let’s look at the Guv’nors. Cammell Lairds makes battleships in its Merseyside yards, Vickers is the giant arms manufacturer, Vickers’ profits in 1953 came to £9.5 million or one five hundredth of all profits and rents made in great Britain. At that rate Vickers would earn the total value of its assets in 7½ years. But that rate is now outdated. Vickers is going to make even more stupendous profits in the future. It now has the lions share of the steel industry to work for it. It has more than that: it has the coal industry working for it as well. Mr Jones, President of the National Union of Coalminers, told the NUM annual conference at the beginning of July that coal sold to private industry was priced at less than the cost of production. The steel industry consumes a big percentage of this and the consumer of coal for the grates has to pay.

The leadership of the Labour Party is committed to renationalise steel. But their nationalisation has something wrong with it. When nationalising coal and transport, a method was used whereby the former owners were relieved of their debit industries and provided with a regular income to be invested elsewhere. The former railway owners are satisfied to receive £32 million a year without bothering with a disappointing business; the ex-mine owners are happy to see their compensation rising to £250 million from the original estimate of £164 million and possibly not stopping there either. However, nationalised debts are one thing: nationalised profit-making industries, even when coupled with fat compensation, are another. When road haulage shows a profit, the Tories are quick to denationalise; when steel does the same, they find the moment opportune to do likewise and make a huge financial haul at the same time.

Nationalisation which feathers the bed of private capitalists is no nationalisation. We must force the Labour Party leadership to put an end to their collaboration with the propertied classes. The only way to do that is to compel them to commit themselves clearly, without reservation, to “The renationalisation without compensation of all denationalised industries!”.

Last updated on 15.9.2012