Problems of Nationalised Industries
| DOI | http://doi.org/10.1111/j.1467-9299.1951.tb01426.x |
| Author | Rt. Hon. Lord Citrine |
| Published date | 01 December 1951 |
| Date | 01 December 1951 |
Problems
oj'
Nationalised Industries
By
THE
RT.
HON.
LORD
CTTRINE,
P.C.,
K.B.E.
This
is
the Sidney Ball lecture delivered in Oxford on
the
30th October,
1951.
Lord Citrine has been Chairman
of
the British Elzctricity Authority
since
it
was
established in
1948
and previously was
a
member
of
the National
Coal
Board.
HE
problems of nationalised in-
T
dustry are many and varied, and
it would be impossible in the scope
of a single lecture adequately to
examine them. The most that can be
achieved is to concentrate on a few
of the major problems.
Certain of the problems of nationa-
lised industry are common to large-
scale industrial enterprises, whether
privately
or
publicly owned. To some
extent these are accentuated in
nationalised industries because
of
their greater size, each covering, as it
does, a whole industry. The fact that
the industries are publicly owned and
are ultimately responsible, through a
Minister and Parliament, to the
people, does create additional and
different problems from those with
which private industry is faced.
Although there are material
differences in the structure of the
various nationalised bodies,
so
much
so
that scarcely any two of them are
identical, there are certain common
features characterising the legislation
which brought them into being.
They are public corporations, en-
dowed with a considerable measure
of
independence of the Government,
and are expected to operate on broad
commercial principles. They are very
different from the earlier form
of
state
ownership operated through a
Government Department, such as
the Post Office, although there
is
still
a considerable amount of confusion
on this point in the public mind.
Their broad structure, functions
and responsibilities are laid down by
Parliament, their administration is
entrusted to Boards appointed by the
appropriate Minister, and the
Minister in every case retains
a
general oversight of the work of the
Boards. They must consult him
on
certain aspects of their work, and he
may give them written directions on
matters where the public interest is
affected.
The evolution of the public cor-
poration type of organisation shows
unmistakably the desire to ensure that
the nationalised industries should be
able to operate free from undesirable
political restrictions, whilst at the
same time preserving an ultimate
responsibility to Parliament for their
general policy and operation.
In
the pre-war types of public
corporation, none
of
which was
comparable in size to those created
in the post-war period, the charac-
teristic of quasi-independence was
more strongly marked.
In
all the
public corporations established since
1945,
increasing power has been
vested in the appropriate Minister in
respect of the personnel, policies,
and programmes
of
the Boards, the
exercise of their financial powers, and
the provisions for the representations
of consumers and the public
on
matters of policy and complaint.
More detailed prescriptions as
to
the structure and conduct of the
industries have been laid down in
respect of the industries and services
nationalised since
1945
than was the
case with their smaller predecessors.
Their functions have been more
precisely defined and their account-
ability to the public increased.
317
PUBLIC
ADMINISTRATION
Problems
of
Transition
Most of those industries prior to
nationalisation consisted of many
separate
units
which, by the process
laid down in the legislation, were
*consolidated into what may be re-
garded as substantially singk
units.
In coal there were some
800
separate
colliery companies. In electricity
there were 362 municipal and publicly
lowned bodies, in addition to 179
companies, and in gas 1,037 under-
takings which were transferred to
national ownership. In transport,
despite the considerable measure of
concentration which had taken place
before the advent of nationalisation,
there were in certain sections, particu-
larly
in
road transport,
many
com-
paratively small bodies which had to
be placed under the control of the
Transport Commission.
The process
of
transferring these
organisations to public ownership
and consolidating them into far
larger units
was
a formidable task
which necessitated a good deal of
improvisation. The legislation cer-
tainly provided guidance as
to
what
was
to be done, but the detailed
methods had to be evolved by the
various Boards. That this was
accomplished with an almost complete
absence of friction, says much for
the
care and forethought devoted to the
subject by the various Boards prior to
the actual transference and for the
measure of co-operation which was
provided by the many affected
interests.
I
have been associated with two
Boards, i.e., the National Coal Board
and the British Electricity Authority,
and in both
cases
the transference was
accomplished with great smoothness.
This is
all
the more remarkable when
one remembers the controversy which
318
preceded the passing of the legislation.
The method employed in both these
cases was similar. Some months
before nationalisation took place, the
appropriate Minister had already
designated persons to plan the general
structure of the organisation which
would be required to operate the
industries under public ownership.
It
was a conscious aim
of
both of the
Organising Committees of which
I
was a member, to make the organisa-
tions sufficiently flexible to be capable
of adaptation in the light of the
experience which would be derived
from actual operation under public
ownership.
Profiting by the experience derived
from the Coal Board,
it
was
resolved
in the electricity supply industry that a
review of the organisation should be
undertaken at the end of the
trksi-
tional period.
It
was emphasised
that there must be a readiness to
profit by the experience of the
transition, and a real effort was made
to stimulate a desire
on
the part
of
all concerned to establish the most
efficient form of organisation.
It
was
recognised that whilst keeping
within
the framework laid down by the
legislation, the Boards were
in
a state
of evolution which required a syste-
matic review at the end of the transi-
tion. Certain changes have already
taken place
in
the coal mining
industry, and in electricity supply a
committee has been reviewing
organisation and methods.
I
must not
be
taken to imply that
anything in the way
of
a drastic
change was envisaged. One
of
the
greatest handicaps to overcome in the
process of transition was to reconcile
people to the inevitable changes
accompanying nationalisation.
It
would be inimical to the best interests
of the industry to create a state of
To continue reading
Request your trial