As Yvette Cooper attempts to reposition herself politically she deliberately does down some of the New Labour government’s few legitimate successes, argues SOLOMON HUGHES
Yvette Cooper’s at it again attacking the last Labour government.
Last Month Cooper gave one of those “big” speeches meant to show new political direction. It isn’t a totally bad speech. Cooper’s trying to say how Labour should respond to economic change. She bounces between Blair-y sunny techno-utopianism and recognition of real problems — between telling us that “in Somerset, Facebook is investing to develop solar-powered drone technology” (yay!) but new industries can mean “new injustices, inequality and new forms of exploitation,” that the “new economy” can mean “precarious” temp work or bogus “self-employment.”
But Cooper put in a hook for the press, arguing: “We cannot get lost touting yesterday’s solutions to tomorrow’s problems. Things like nationalising the power industry don’t do anything to help young people trying to build a new app or older workers stuck in precarious temporary work.”
This was the “Cooper bashes Corbyn” line for the press to pick up, giving them headlines like: “Labour must move beyond policies such as renationalisation” and “a swipe at Jeremy Corbyn.”
Except Cooper is also swiping at the last Labour government, which actually did nationalise a power firm.
In 2002 British Energy, which ran eight British nuclear power stations, went bust. Blair’s government stepped in, nationalising the company.
They were completely right to do so — without nationalisation, they could not guarantee the lights would stay on or the nuclear plants stay safe.
This was not the only nationalisation by the last Labour government. In 2002 Railtrack, the private firm running the rails, failed after a series of deaths on the tracks.
The Hatfield rail crash showed Railtrack and their subcontractors were not maintaining tracks properly, leading to deaths on the line. After the crash, rail travel had to be slowed to a crawl. Railtrack couldn’t make a profit and be safe, so it went bankrupt. Blair’s government nationalised it, renaming the firm Network Rail. If they hadn’t there would have been more deaths and an end to effective rail travel.
In 2009 Gordon Brown’s government nationalised the Channel Tunnel Rail Link — the stretch of track between London and the Chunnel, because it could not survive without government funds.
And in 2008 the huge flow of state support into all the banks included the nationalisation of Royal Bank of Scotland Group, Lloyds TSB, HBOS and Northern Rock.
If Brown had not taken over these banks, cashpoints would have stopped giving cash and the economy would have collapsed. What once would have seemed a wildly left-wing call — “Nationalise the banks!” — became a New Labour reality.
So the last Labour government didn’t just nationalise a power company. It nationalised two rail firms and four banks.
They did the right thing. If they hadn’t, the lights in our houses would have gone off, nuclear power safety would have been in question, trains would have stopped running, cashpoints would have stopped working. The economy would have ground to a halt.
Now these nationalisations were not perfect. Labour did them but seemed embarrassed about it. So they let the new nationalised firms act too much like private companies. The aim wasn’t to transform them, but just bail them out and be ready for reprivatisation.
So Network Rail, the replacement for Railtrack, is too secretive and probably too expensive.
British Energy was in fact reprivatised. It was sold to France’s EDF — it was publicly owned in the first place, before the Tories privatised it in 1996. So these nuclear power stations have been privatised twice. They failed the first time and are not doing that well the second time round.
EDF, despite being gifted our existing nuclear power stations, is hesitating before building another at Hinkley — and asking for more and more money — showing nuclear just doesn’t work privately.
The banks were also allowed to carry on as if they were private firms, despite nationalisation. This means that Labour does not get enough credit for nationalising the banks and if Brown hadn’t done so there would have been a much worse economic crisis.
Far from Labour causing the 2008 crisis, they helped stop it spinning totally out of control. But because the banks were allowed to go on as before, ripping off customers and failing to lend to businesses, nobody thanks Brown.
When previous governments nationalised failing but strategic industries — like the coal industry — they consolidated the private firms into one public company. But the nationalised banks were allowed to stay as separate institutions, each with their own fat-cat board. Each acted like self-interested companies instead of public utilities.
They sucked up bailout money, but failed to pass it on to the rest of the economy — the bailouts saved the banks, stopping the immediate economic collapse but left us with Japanese-style stagnation.
Had Labour gone a bit further and turned the nationalised banks into a proper public institutions, Brown could have had a happier legacy.
So the problem isn’t too much nationalisation, despite what Cooper says, it’s that they didn’t have the courage to change the nationalised firms.
In her speech Cooper praised Harold Wilson. Her enthusiasm for technological change clearly echoes his “white heat of technology” speech. But Wilson built actual public institutions — often he did this from scratch, rather than just nationalising troubled bits of capitalism.
Wilson had faults, but his government was much more positive about state institutions than Cooper. He built a very modern, very successful bank for ordinary people, called Girobank. He built the Open University, a new, vital educational institution. He built hundreds of thousands of publicly owned houses for rent. He built social institutions and so built a future both for working people and for the Labour Party.
But Cooper, like many of the Blairites, won’t imitate Wilson’s real record. In fact, they won’t even defend their own.