The Labour Party as we know it today was founded in the early 20th century, founded on the socialist tenets of equality, redistribution, and solidarity. As such, the party has traditionally supported state intervention, as with public services, which Labour believed should be in public ownership. Such nationalisation ideas have been part of the Labour Party movement for generations albeit with an inconsistent history.
This piece will look at the implementation of various nationalisations during Labour periods of governments, the eventual successful attempt to rid the party of Clause IV, and the Labour Party policy in the 21st century.
Implementation of Clause IV
Fabian Society member Sidney Web drafted Clause IV in 1917.
It read that the party aimed “to secure for the workers by hand or by brain the full fruits of their industry and the most equitable distribution thereof that may be possible upon the basis of the common ownership of the means of production, distribution and exchange, and the best obtainable system of popular administration and control of each industry or service.”
The party adopted this platform the next year, with that year’s election manifesto calling for the “immediate nationalisation and democratic control of vital public services such as mines, railways, shipping, armaments, and electric power.”
The party’s 1934 adoption of the party programme “For Socialism and Peace” committed the party to the nationalisation of land, banking, coal, iron, steel, transport, and water supply.
Attlee Government Nationalisation (1945-1951)
In 1945, the Clement Attlee-led Labour government swept to power in a landslide.
The first time the party had governed with a workable majority, its 1945 manifesto, titled “Let Us Face The Future”, committed the party to widescale nationalisation.
It noted that “only if public ownership replaces private monopoly can [industries] become efficient.”
Several major industries were nationalised, accounting for 20% of the nation’s economy.
The most radical nationalisation was the National Health Service, as overseen by Health Secretary Aneurin Bevan. This created a free healthcare system underpinned by the principle of equality and humanity, with Bevan remarking: “No society can legitimately call itself civilised if a sick person is denied aid because of lack of means.” It remains in place to this day, with polling suggesting 87% of Brits are proud of our NHS, making it a more beloved institution than the royal family, armed forces, and the BBC.
The government too nationalised several raw material industries such as coal, iron and steel, and gas.
Electricity, railways, and the Bank of England were also converted to public ownership during the government’s six-year tenure.
It should be noted that in the post-war period, a “Butskellite” concensus was forged in which the Conservatives recognised the need of some nationalised industries to remain in public ownership.
The Attlee government from the years 1945-1951 remains the greatest period of nationalisation in British history.
Wilson Government Nationalisation (1964-1970, 1974-1976)
1964 saw Labour leader Harold Wilson take power on a manifesto pledging that the public sector would “make a vital contribution”, which would include fully nationalising the water supply, replacing the private monopoly on steel and expanding existing nationalised industries.
Wilson had previously helped William Beveridge on producing The Beveridge Report, seen as the blueprint for the creation of the NHS, as well as publish his own study, A New Deal For Coal, influencing coal nationalisation policy.
The Iron and Steel Act in 1967 renationalised both industries after the Conservatives renationalised iron and steel upon returning to power. An earlier attempt to renationalise had fallen short when – working with a razor-thin majority – the party had to remove the policy from the Queen’s Speech fearing it would face a parliamentary defeat.
The Post Office was nationalised in 1969, which set up new governmental departments and effectively monopolised the industry.
Upon becoming prime minister again in the mid-1970s, Harold Wilson pressed on with manifesto commitments to nationalise aircraft and shipbuilding industries. It would also part-nationalising British Leyland and the British National Oil Corporation.
Debates and Failed Reform
Perhaps the debate over Clause IV can be traced back as early as 1951 when left-wingers Aneurin Bevan, Harold Wilson, and John Freeman all resigned from the Cabinet in protest at the Labour government’s introduction of dental prescription charges.
Bevanite forces fought belligerently for the nationalisation cause for the rest of the decade, causing party in-fighting and perhaps costing the party a number of general elections throughout the 1950s.
Opposite Bevan was moderate Labour leader Hugh Gaitskell, who – after Labour’s third consecutive electoral defeat in 1959 – mulled over reforms to Clause IV in order to put the party on the path to power. The Young Fabians notes how Gaitskell wanted to change the wording as to not let Labour be dominated by a “small clique of isolated doctrine-ridden fanatics.”
As Vernon Bogdanor put it, Gaitskell saw the commitment as one that showed the party’s “reluctance to adapt to the modern world.”
In the end, the left fought back viciously and blocked the motion, with Clause IV now required to be printed on party membership cards.
Another social democrat thinker, Anthony Crosland, remained critical of Clause IV, calling it a “consolation prize, intended to appease the socialists.”
He instead emphasised a mixed economy and prioritised better public services over nationalisation.
New Labour bigwig Jack Straw has remarked that Crosland can “justly claim to have been the original inspiration for the new Clause Four.”
Perhaps one of the nails in the coffin of the passage was the public ownership-heavy 1983 Labour Party manifesto under Michael Foot. Famously referred to as “the longest suicide note in history”, the platform – including nationalising oil and BP – has been blamed for the party’s worst electoral performance in the post-war age.
Former Labour leader Neil Kinnock favoured removing the “holy writ” clause, believing such an ideological policy could damage a party trying to win elections in the modern age.
The End of Clause IV
One of the seminal acts of Tony Blair’s early days as Labour leader was his success in editing Clause IV.
In 1995, in a vote held at the Methodist Central Hall where the original clause was adopted in 1918, the party decided to denounce its long-running socialist commitment by a 21-3 vote of the Labour Party National Executive Committee.
The new clause included a focus on “the enterprise of the market and the rigour of competition.”
It was a move to prove Blair was a slick leader with a modern constitution for an evolving, pragmatic party.
Blair called the move “a defining moment in the history of [our] party” but some were not as keen to scrap the 77-year-old pledge.
As predicted, it caused a left-wing backlash. Executive Committee members Diane Abbott and Dennis Skinner voted against it, Tony Benn stated it was “Labour’s heart…being cut out and handed to the City”, and Shadow Cabinet minister Michael Meacher voiced opposition.
As one socialist website put it, “the dropping of Clause IV was simply the end of a lengthy process to prepare the Labour Party for a capitalist future, cosying up to the fat cats.”
Nationalisation In The 21st Century
The modern Labour Party’s nationalisation commitments have been inconsistent, to say the least.
For the most part, New Labour did not nationalise private industry unless through necessity, such as when in 2008, Chancellor Alistair Darling announced the government’s acquisition of the failing bank Northern Rock.
In 2015 after a grassroots campaign, Jeremy Corbyn was elected Labour leader, opening the door to new nationalisation commitments.
During the campaign, Corbyn had expressed support for the reintroduction of an amendment like Clause IV in an interview with The Independent. He also remarked that he “supported the old Clause IV against the Blair reforms in ‘94.”
These plans would not surface, with the move facing internal opposition including from leadership rival Yvette Cooper, who accused Corbyn of trying to “turn the clock back.”
Nonetheless, under his tenure, Corbyn embarked on commitments to nationalisation, including in the six ‘big’ industries (British Gas, SSE, Npower, Scottish Power, Eon, and EDF Energy – plus the national grid). Corbyn called the privatisation of Royal Mail under the Conservatives after 500 years’ existence a “historic mistake.”
In the 2017 election, where Labour made enough gains to cause a hung parliament, nationalisation was a key feature, committing the party to ending the “great rip-off” of mail, water, and energy services.
Yet these plans underwent media criticism and scrutiny for their cost.
Plans to bring water and energy networks into public ownership were predicted by analysts to cost £125 billion, whilst the BT Chief Executive estimated nationalising its broadband arm alone would cost £100 billion.
Corbyn’s successor Sir Keir Starmer has rebuked previous pledges to nationalise water and energy. A fiscal realist, Starmer wants to highlight how the party will not make unfunded commitments like they did under his predecessor.
He has however set up GB Energy, a publicly-owned investment firm for renewable energy, as well as providing £25.7 billion to the NHS in his first budget although is more willing to engage the private sector than Corbyn who promised a “fully publicly provided and fully publicly funded” health sector “back into public hands.”
Nationalisation of the Railways
In 1993, as a part of a 1992 manifesto commitment, John Major’s Conservative government privatised the railways.
Although Tony Blair expressed support for renationalisation of the industry in 1995, it did not feature in the 1997 manifesto, with the party citing extortionate costs. Despite this, the party membership overwhelmingly supported nationalisation, supporting a motion to do so at the 2004 party conference.
In 2015, backbench socialist Jeremy Corbyn was elected Labour leader on a left-wing campaign wave. Like main opponent Andy Burnham, Corbyn pledged to nationalise the railways, plans that featured heavily in their 2017 and 2019 manifestos – alongside nationalisation of water, energy, and broadband. It was also the focus of much media attention during the so-called Traingate incident, which Corbyn publicised to raise the issue of rail privatisation.
Corbyn’s successor ran on a pro-Corbynite platform during his run as Labour leader in 2020 after the party’s 2019 defeat. He would go on to ditch many of these pledges but rail nationalisation remained one key policy that would link the two men’s tenures.
Their 2024 manifesto pledged to provide “reliable, affordable, high-quality, and efficient services” by nationalising the railways.
Their “Getting Britian Moving” document features a passage written by Transport Secretary Louise Haigh who writes: “Labour’s plan will fix our railways for the benefit of passengers and the taxpayer. It can usher in a decade of growth, innovation and service improvement, with the railways playing their part in Britain’s national renewal.”
After being a leading feature of the King’s Speech, Haigh introduced the Bill to the House of Commons, where it easily passed 351-84.
Labour have said all services would be renationalised within five years, taking companies into public ownership as contracts expire, through the Great British Railways company.
They have failed the plans as “the biggest reform of our railways for a generation.”
GRIFFIN KAYE.
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