Public Ownership

Part of the debate – in the House of Commons at 12:00 am on 10 December 1971.

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Photo of John Prescott John Prescott , Kingston upon Hull East 12:00, 10 December 1971

The debate has emphasised one of the fundamental differences between the two parties, one party believing fundamentally in the private sector's contribution to economic development, and the other party seeing the public sector playing the greater rôle.

I congratulate my right hon. Friend the Member for Birkenhead (Mr. Dell) on giving us this opportunity to debate this Motion. It brings out this cardinal point about the contribution of the public sector in improving the level of employment, investment and economic activity, and the desirability of the extension of public ownership by some form of State holding company or in whatever manner one chooses to do it.

We are talking about the extension of public ownership. We have heard a lot from some hon. Members opposite—I think it was the hon. Member for Enfield, West (Mr. Parkinson) who said that one could not prove that one or the other was the more desirable procedure—to the effect that if we went along this road of Socialism and greater intervention by the public sector in the economy, it would be disastrous and that we must rely on the private sector.

There are many ways in which one could illustrate this fundamental difference between the two parties. I choose to illustrate it in the manner best known to me, and I shall talk of the industry of which I am best informed. That industry provides a number of unique examples from which we can learn something. There was and still is a State holding company, although Parliament is now discussing breaking it up. I refer to the Transport Holding Company. My party is committed to owning and controlling the means of production. That is what we are here for, and this is what the Motion tends to be about. It is not only necessary for us to prove that public ownership is essential because it is the most efficient way of governing our economy, but it strengthens the argument if one can show that the private sector has patently failed to produce that level of economic activity which will give the level of full employment that we require—and I do not necessarily mean 21 per cent. which some people regard as representing full employment—and that the public sector is required to intervene in the economy to bring about the required level of economic activity.

The facts leave no doubt that the Government have had to do something about the high level of unemployment which now approaches 1 million. They are panicking in the sense of turning to the public industries and saying, "Give us some sort of public investment programmes to bring down this level of unemployment." They are turning to the old weapon of using public industries as a means of intervening in the economy when the private sector has failed to produce the level of investment and of economic activity which will reduce the high unemployment that we have at present.

I represent a part of the constituency of Hull and I am very interested in the development of the shipping and port industries. I come from the shipping industry in which I spent 10 years, and I therefore have a particular interest in it. Unemployment in my constituency is well over 9,000 and at a level of 5·3 per cent. which is a high figure for a constituency such as Hull. Shipping has played a large part in the development of Hull and I have chosen that industry to illustrate the failure of the private sector compared with the job that the public sector has been doing, in some cases in direct competition with it, despite some of the disabilities placed on it by various Governments.

The private sector has failed because it has not produced the required level of economic activity. It has reduced the potential of job opportunities in my constituency for seamen, dockers and shipyard workers and it has failed ro invest adequately. When shipping falls down, it creates a secondary effect in adding to the balance of payments difficulties. If we have to employ foreign shipping instead of British shipping we have to pay in another currency which creates a double balance of payments problem, quite apart from the effect on economic activity and employment.

The state of affairs in the shipping industry is an appropriate example to illustrate the argument. The Transport Holding Company is in process of being dismantled by the Government. What is happening to Pickfords will come readily to hon. Members' minds as an example of the Government's "payola" system, giving sweetmeats to their friends in the City for services rendered.

In the Transport Holding Company, there have been two shipping companies, Associated Humber Lines and Atlantic Steam Navigation, both publicly owned shipping companies. In 1968, the Labour Government took them into the National Freight Corporation. Now, the Tory Government are dismantling one of them, Associated Humber Lines, and selling the other, Atlantic Steam Navigation, a very profitable enterprise, to their friends in the private shipping world.

I have on a number of occasions tried to raise these matters in an Adjournment debate—hon. Members know how difficult that is—so I take this opportunity to present the case now, as it is closely relevant to the rôle of the public sector about which my right hon. Friend the Member for Birkenhead speaks in his Motion.

There is now going on a monumental squandering of public assets, the wealth of the nation, through the giving over of these companies to private interests at what I regard as knock-down prices. Moreover, it is being done irrespective of the potential and development of the shipping companies. The Government are in a frenzy to return to their friends in the City the financial plums which they so much desire.

These vents are causing considerable concern to seamen and others connected with shipping. We are concerned lest other profitable sectors of British shipping may become candidates for selling off in the near future. I have in mind here such enterprises as the British Rail Sea-link service, and I fear that that may become a candidate for sale.

Neither the public generally nor, I suspect, a good many hon. Members fully realise the size of the public sector in British shipping. The State is one of the largest owners of vessels in various ways, through British Rail and a number of other interests. When all the tonnage is taken together, the Government are the owners of enough to put them within the top six large shipping interests in this country, which, by the very nature of things, makes them one of the largest shipowners in the world.

The State owns over 500,000 tons of shipping of all types—container vessels, ferries, cargo ships and now hovercraft, In addition, there is the fleet auxiliary service, which also is a form of shipping service under the State. The concentration of the State sector is to be found largely in coastal shipping trading between this country and the Continent and in our coastal waters. The largest owner is British Rail, with over 60 vessels. MacBrayne, the Scottish ferry service company, has over 16 vessels. The Transport Holding Company has 13 vessels, and 11 on charter. The Central Electricity Generating Board has over 31 ships at present. The British Steel Corporation is now talking of building and running its own vessels up to 100,000 tons, because it would be considerably cheaper for it to operate in that way. This is another example of a substantial interest in our economy turning its eyes to the shipping sector so as to meet its individual needs. A number of the State interests are turning to shipping not as one of their main activities but for the purposes of their operations.

Let us consider for a moment the contribution which British coastal shipping has made during the past 10 years. Trade over the short sea routes is valuable for a number of reasons, for the jobs it creates for seamen and those who work in the docks and in ship repairing, as well as for the economic activity which it creates in the port areas and the multiplied effects of that in the rest of the economy, quite apart from the contribution to the balance of payments to which I referred a few minutes ago.

The traffic with Europe, East and West, is increasing tremendously, and now accounts for 45 per cent. of our exports in value and 40 per cent. of imports. A considerable proportion of this is carried in what we call British bottoms, that is, British ships as opposed to foreign-owned vessels.

What has worried the maritime unions for some time, however, is that the proportion of cargo from this country going in British vessels is only about 50 per cent. by value and 40 per cent. by tonnage, the rest going in foreign ships. This has been a cause of concern in terms of jobs, apart from the economic cost to the country in terms of the balance of payments.