The Financial Times reports that Labour MPs Jon Cruddas, Frank Dobson, and Austen Mitchell have told it that nationalisation should be extended into the construction industry. The FT reported on 18 October: 'Gordon Brown has been urged by senior Labour MPs to nationalise parts of the housebuilding industry in the wake of this week's rescue of the big banks. Jon Cruddas, who recently declined the post of housing minister, pushed for state intervention in the housing industry, arguing there was a case for wholesale nationalisation. Backbenchers, former ministers and left-wing pressure groups have told the Financial Times that the time has come for the prime minister to seize housebuilders, a move that only a year ago would have been inconceivable.'
According to the paper Jon Cruddas said: 'There's a danger that we look reactive. Now is the time to get ahead of the curve. All the indicators are going one way. We need to reintroduce a mixed economy in terms of supply. The question is the political will... What seemed off-piste a few months ago should now be centre stage in terms of policy options."
Frank Dobson told the FT he: 'backed the nationalisation of housebuilders to increase the level of social housing. Mr Dobson said this move would be an effective way to reduce the impact of recession. "I think he [Mr Brown] has got an appetite for this. He is attempting to minimise the impact on everyone else from banking lunacy and he'll be looking for anything practical. It is back to Keynes, spending money in a way that creates useful wealth."'
Also according to the FT: 'Austin Mitchell, MP for Great Grimsby, said the government should act swiftly to nationalise the builders and "put them to work" making council homes.'
This is an impoortant issue. In a recession there are two key tasks:
First, to stop the attack on the living standards of ordinary people and the attempt to transfer their resources to capital through higher unemployment, lower wages, social spending cuts, increased discrimination against the lowest paid workers, who are women and from ethnic minorities, and other measures.
Second, in a recession, due to the fact that the majority of investment decisions are still taken in the private sector of the economy, investment collapses by far more than consumption. The state must therefore intervene as far as possible into the economy with the aim of keeping up investment. Nationalisation of all or sections of the construction industry, and embarking on a large programme of house construction, would be an important way of doing this.
These proposals are therefore important and SEB will feature any policy developments in this field.