Nationalisation or National Crisis? 5 reasons why it could be harmful to SMEs

May 23, 2017

With just under 3 weeks to the General Election, Claire Morley-Jones, MD and founder of HR180, takes a look at Nationalisation (as proposed in the Labour Manifesto) and why it could well be harmful for SMEs and workers alike. 

By Claire Morley-Jones


Whilst the thought of yet another three weeks of election blurb fills me with dread, as an HR professional I am very much interested in the debate of nationalisation versus privatisation. There are problems in relation to both, but in my opinion and from a SME point of view, I see nationalisation as the more harmful of the two and here’s why!

Nationalisation – effect on business ‘hazardous’

Despite the promised economic benefits, from a leadership and employee point of view I see this huge hazard around which hundreds of warning lights should be strung! It has been proven globally time and again that nationalised industries fare less well, in the long term, than private industry. They are frequently ineffectually managed, are huge monolithic beasts that cannot adapt course in uncertain or changing times and are beyond inefficient. This cannot be good for worker rights, development or prospects.

General Election 17 Nationalisation bad for business

Nationalised industries creates ‘lack of choice’ for workers

Government appointed managers would be forced to follow the wishes of the government of the day, leading to changes in direction every five years, without considering the wishes of consumers. The result is lack of choice, quality, convenience and alternatives, not just for the consumer but also for employees working in those sectors. As a Water Treatment Engineer, for example, how do you improve your training prospects, working conditions and income when there is no-one else to get a job with if you are dissatisfied.

Non-competition ‘stifles invention’

To introduce nationalisation would require managers to have clear objectives and KPI’s for which they would need to be held accountable. Without the prospect of competition (given that they would be entirely protected from any such thing), it is very easy to rest on one’s laurels, lose the impetus of creativity and innovation or even the requirement to do a more than adequate job. The result is the stagnation of the industry and the stifling of invention. Where does that leave green energy for example, without the capital investment a private company would make to ensure its future survival in an open market?

‘Inefficient behaviour’ leads to operating losses

Also, if we take a look at the huge organisation that is the NHS (as a case in point although I have the utmost respect for front line staff), wherever organisations have little or no negative consequences of their own inefficient behaviour then there are always huge operating losses. And who, in the end, subsidises those?   These factors lead to worker de-motivation, consumer dissatisfaction and a potential sense of entitlement for poor performance. There is no reason to strive for more, to do better, to be better.

Nationalisation prevents collaborative leadership

Finally, as in any organisation, we need to be clear on the culture and identity of our society. Nationalisation in my mind, stems from an authoritarian leadership style that believes and espouses, “I know better than you, therefore, it is my way or no way.” I have always believed in a more collaborative leadership style, termed by Robert Greenleaf as Servant Leadership, whereby a Governments role (or indeed a leaders) is to create the opportunities for success and remove the barriers to failure. In Robert’s own words “do those served grow as persons? Do they, whilst being served become healthier, wiser, freer, more autonomous, more likely themselves to become servants”?   I do not believe that Nationalisation would see these lofty goals met.


At HR180 we help SMEs achieve business goals through helping create people strategy. Our HR experts are able to provide full, professional HR services at a cost accessible to businesses – businesses which normally would rely on senior managers to ‘muck in’, even though it takes them away from their operational roles, thus costs the business in other ways. Help is at hand! Our super star team have decades of experience over a vast range of industries. Talk to us – see details below.

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