The States We're In

Over in The First Post, Neil Clark writes:

Just over 30 years ago, Britain's infrastructure, its public transport and its leading manufacturing industries were all in the hands of the British state. Who could have predicted that three decades later, much of our economy would be in the hands of the governments of other European countries? Deutsche Bahn, owned by the German state, and Nederlandse Spoorwegen, owned by the Dutch government, operate many of our train and bus services. EDF Energy, a subsidiary of the state-owned French energy company EDF, owns British Energy, the UK's largest electricity generator and operator of our nuclear power stations.

This week the French energy giant GDF-Suez, in which the French government owns a 35 per cent stake, is poised to buy International Power, one of Britain's biggest energy suppliers. The company was formed from a demerger of National Power, which in turn was formed after the privatisation of Britain's electricity-generating industry in 1990. It is one of the great ironies of modern British political history that some of the biggest beneficiaries of the free-market, anti-statist policies carried out by successive British governments in the past 30 years have been the state-owned companies of other European countries.

We were told by the Thatcherites, and neo-liberal think tanks such as the Adam Smith Institute, which pushed aggressively for privatisation, that reducing state ownership would improve economic efficiency and be good for the country. But while Britain put up a 'For Sale' sign on our national assets, other European nations have played a far more intelligent game. It's hard to imagine the French, wedded to a policy of Gaullist economic nationalism, allowing SNCF, their prestigious national railway, to suffer the fate of British Rail and allow foreign-owned companies to operate their train services. It's inconceivable, too, to imagine Germany allowing an iconic company like Volkswagen to fall into foreign hands, as Britain did with its car industry.

The political elites in continental Europe never embraced free-market dogma as enthusiastically as their British counterparts. And neither did their electorates. In France, the pro-privatisation Thatcherite Alain Madelin, leader of the now-defunct Democratic Liberal party mustered less than four per cent of the vote in the 2002 presidential election. In Germany, the Free Democratic party did return to government in last year's elections, but their calls for further privatisation have been scotched by their more moderate Christian Democrat and Christian Social Union coalition partners. In Belgium, radical free-market reforms are held in suspicion by both main parties of the left and right. While in Austria, another European country which missed out on the delights of Thatcherism, the state still runs the trains and buses - and most Austrians seem perfectly happy with the arrangement.

British neo-liberals, rather than admit that their 30-year 'Everything is For Sale' policy towards the economy has been a disaster, prefer to badger their continental counterparts to 'liberalise' their economies and call on them to stop trying to protect their national flagships from foreign takeovers. But wouldn't it be better if we simply copied the more nationally-minded - and more sensible - policies of France, Germany, Austria and Belgium?

Sadly, there's not much chance of that happening in the near future. Britain's new coalition government out-Thatchers Thatcher in its desire to roll back the frontiers of the state and its commitment to the 'free market'. "We are an open, global economy. We cannot start creating ownership barriers, trade barriers and protectionist barriers," declared David Cameron in relation to the takeover of historic British chocolate maker Cadbury's by the American Kraft earlier this year. A British Charles de Gaulle Dave most certainly is not.

Over the next few years we can expect to see more British companies bought up by state-owned companies from other countries. Our motorways operated by the German government? The Met Office run by Agencia Estatal de Meteorologia of Spain? The BBC sold to France Televisions? That might seem a trifle far-fetched. But so too would the idea, 30 years ago, of our electricity industry - and our nuclear power stations - being owned by the French state.

Our closest neighbour may have given us the phrase 'laissez-faire'. But it's been the ideologically-blinkered Brits who have been silly enough to use it as an economic mantra.