Nationalisation

The second major plank of the Labour platform, next to social welfare, was national ownership of key sectors of the economy. Clause IV, part 4 of the constitution of the Labour Party stated the aim:

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.

This was put into practice by the Attlee government primarily with regard to energy, heavy industry, and transport.

Attlee’s government opted not for the “Post Office model” of state ownership (an organisation run by a government department, with the Post Master General a political appointment), but for “State-owned Corporations” (the government bought up private companies, amalgamated them, and turned them over to a board of directors, the government taking the place of shareholders rather than of management). Attlee called this “a mixed economy developing toward socialism”. The policy was not entirely new: immediately prior to the First World War Winston Churchill, as First Lord of the Admiralty, had talked the government into acquiring a 51% stake in the Anglo-Persian Oil Company (renamed British Petroleum in 1954, now BP), in order to ensure the supply of oil for the needs of the Royal Navy. The British Overseas Airways Corporation (BOAC) was a state-owned company established in 1939 to control civil air communication between Britain and the Empire overseas. Attlee's government adopted the policy on a new scale.

The state became the major shareholder in key national industries but appointed a board that in its daily decisions was supposedly free of political control, and to some extent was expected to run the companies profitably and efficiently much like the board of any other company. When the Bank of England was nationalised in 1946, the directors already in place were simply appointed as the new board. The Labour government did not by any means consider the "best obtainable system of popular administration and control" to be a workers' co-operative.

For the government to take these steps required a raft of new legislation.

• The Coal Industry Nationalisation Act 1946 empowered the government to buy out the numerous private mine owners (for a total of £164 million) and amalgamate the mines under the National Coal Board (established 1 January 1947).
• The Electricity Act 1947 merged over 600 private electricity companies, municipal electricity departments, and the Central Electricity Board under the auspices of the British Electricity Authority (established 1947). In the following years electrification reached many rural areas that had not previously received electricity because it would have been unprofitable for private companies and prohibitively expensive for local authorities.
  
• The Gas Act 1948 merged over 1000 private and municipal gas companies into twelve regional, state-owned corporations, the “Area Gas Boards” under a Gas Council (established 1948), what later became British Gas.
• The Iron and Steel Act 1949 merged 80 of the main iron and steel companies under the Iron and Steel Corporation of Great Britain (established 1951), leaving around 2000 smaller companies in private ownership operating under a system of licences and government oversight. This was the first target for denationalisation after the Conservatives returned to power in 1951.
• The Transport Act 1947 gave the government the authority to bring the railways, road haulage companies and ports under state ownership and control through the British Transport Commission. It amalgamated the existing, privately-owned railway companies - the Great Western Railway (GWR), the London, Midland and Scottish Railway (LMS), the London and North Eastern Railway (LNER) and the Southern Railway (SR) - under the control of the Railway Executive of the British Transport Commission. From 1948 the railways operated under the name British Railways (eventually shortened to British Rail).
• The Civil Aviation Act 1946 established government control of commercial flights within the British Isles and to Europe and North Africa through British European Airways (BEA). BEA was eventually merged with BOAC to form British Airways (in 1974).
  

To provide modern management for these massive state-owned corporations, the government also set up the British Institute of Management (1947), which in 1951 began to award the Diploma in Management Studies, the first accreditation for professional managers available from a British institution.

A useful study (in French) of the nationalisation policy pursued by Attlee's government is Kenneth O. Morgan, "La politique de nationalisation en Grande-Bretagne", Le Mouvement social 134 (1986), pp. 37-54, which for those on the university network can be accessed on JSTOR.