Could Jeremy Corbyn be right?

I never thought I might be saying this about a left-wing politician, but is it possible that the current frontrunner in the Labour leadership election might actually be right? At least, in part.

In suggesting that he is not against reintroducing clause four of his party's constitution, he is implying there could be a return to state wider ownership. As someone who firmly favours the centre ground of politics, I am naturally always suspicious of anything which smacks of communism or extreme left wing policies.

There can little doubt that privatising the railways, power and water, back in the heady days of the 1980s and beyond, introduced a higher level of management expertise than could ever have existed in the more relaxed environment of state control. But it also introduced a profit motive that has not always - with benefit of hindsight, perhaps - served the interests of the consumer; or indeed the nation as a whole. Conversely, it is arguable that many of most important developments during the past quarter of a century have been driven by the need for innovation that exists in a competitive environment. Consumers have therefore benefitted from technological innovations and improvements driven by the need to increase shareholders' returns - just as many scientific leaps forward are driven by war.

And that is the point, really. There seems always to have to be a trade-off: in this case between the apparent need of management to increase their earnings, on one side, and the interests of the consumer on the other. Of course, all the most successful companies know that to achieve real long-term growth, they need to serve their customers well. Unfortunately, this lesson is not always recognised - or at least acted upon - in an environment where personal remuneration is based on sales volumes, or short term rises in share prices, rather than genuine added value.

This being the case, even a centrist must ask the question whether there might be a case for some level of public ownership. Not, I would suggest, the banks - however much we might blame them for the economic woes the world has suffered during the past seven years - because they would simply move off-shore and the level of consumer protection be significantly reduced*. I am not quite sure whether this - and other genuinely commercial enterprises - was what Mr Corbyn was talking about last week, but I sincerely hope not, because that would be a step too far for most of us.

I do, however really wonder whether there is a case for (re)nationalising the most important parts of our infrastructure, such the railways, energy, water, and even control of telephones and the broadband system.

If we do, as a nation, go down this route, either in a Corbyn-led government, or one led by the LibDems, it must be as part of a wider social contract between customers, government and employees. Such a step must never become an excuse for:

(a) The return of inefficient management, devoid of a profit motive and therefore uninterested in progress; or
(b) A return to the bad old days when overly powerful trades unions demanded exorbitantly high remuneration for unrealistically little work, from an ineffective state-owned monopoly.

We need to have open minds to change; even those of us who would never have considered such an option in the past.

Stephen Phillips
10th August 2015.

* Did you know that the Financial Services Compensation Scheme will only cover deposits for each individual investor with each institution for up to £75,000 from 1st January 2016? The figure is currently £85,000, but that is simply a sterling version of the €100,000 EU wide limit and exchange rates have moved in our favour. Nothing sinister in the change.

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Stephen Phillips is a member of the Shepway Liberal Democrats, and his views are not necessarily those of the Party. He has been writing professionally for many years on investment and economic related issues, and has focussed recently on creative writing.

You can find Stephen online at www.phillips-writer.co.uk