Campaign notes. No. 11, General election 1955

              PRIVATE AND CONFIDENTIAL
No. 11
CAMPAIGN NOTES
GENERAL ELECTION 1955   17 MAY
NATIONALISED INDUSTRIES ..................... Page 67
LOCAL GOVERNMENT ELECTIONS .................. Page 70
THE NATIONALISED INDUSTRIES
It is still only a few years since the great basic industries were taken over for the nation by the post-war Labour Government. During that time they had made good the ravages of pre-war neglect and war-time stringency and, despite Tory obstruction, they have made a notable contribution to the improvement in the nation's economic strength on which our future prosperity depends.
Profit and Loss?
Although the Tories have been forced to admit that there is no alternative to nationalisation for most of the industries taken over by Labour, they have done it grudgingly. Nearly 50 pages of the Tory Campaign Guide is devoted to an attempt to belittle the achievements of the nationalised industries and to justify the denationalisation of road haulage and steel.
In view of the Tories obsession with profit-making, it is not surprising that one of their chief criticisms of the nationalised industries is that they have failed to make large profits. In fact there is no reason why they should do so. One of the chief arguments for nationalisation is that when an industry is publicly owned its policies will be determined by the needs of the community rather than by the profitability of an activity. This is not to say that the nationalised industries must not, as the nationalisation Acts provide, pay their way, taking one year with another, but it does mean that they will provide many services which are uneconomic but desirable on social grounds.
Consequently their success or failure cannot be considered by the profit criterion alone. Even by the profit criterion the record of the nationalised industries is much more favourable than the Tories contend. The figures given in the Tory Campaign Guide ignore the fact that, unlike private concerns, the profit or loss of nationalised industries is assessed not before but after the payment of interest (or compensation) and taxation. If the position before payment of interest and taxation is taken, transport, coal, electricity and gas have all shown substantial surpluses. In recent years too, B.O.A.C. (and B.E.A.C. in 1954/5) has achieved surpluses — in spite of the heavy initial investment involved in providing vast new air services. The position of the main publicly-owned industries in the latest year for which figures are available was as follows :—
Operating surplus (after providing for depreciation) £ million 
Surplus after payment of interest and taxation £ million 
British Transport Com. (a) 59.4  4.2
National Coal Board (a) ... 23.6  0.4
British Elec. Authority (b)  48.8  13.2
Area Gas Boards (b) ... 13.7  2.1
British Overseas Airways (c) 1.4  0.3
British European Airways (c) 0.75  0.05
(a) Year to 31 December 1953
(b) Year to 31 March 1954
(c) Year to 31 March 1955
Keeping Prices Down
The nationalised industries did not rely on high prices to pay their way. In general the increases in the prices of their products were lower than those for the products of private industry. The following table shows how the increases in the prices of the products of nationalised industries (from vesting date in each case) compared with those of other products :—
Increase in index of Increase retail prices
Electricity 1947-54 ............22%   40%
Railway fares and charges.
1948-54 ..................22%  32%
Gas 1949-54 ..................29%  27%