Privatisation is almost always sold as a way to save money, usually through ‘efficiency savings‘. They claim it will improve services and shake up unaccountable bureaucracies. In practice, however, privatisation generally fails on all counts. Privatisation plans cost government and taxpayers more money, severely limit accountability and transparency, and ultimately leave people who depend on public services worse off.
Case in point from the Private Eye;
Privatisation promised to turn the UK into an island of small shareholders. It failed. It produced a small amount of shareholders who now own an island, many of whom are foreign investors.
Faceless state bureaucrats have been replaced by faceless (and much better-paid) private bureaucrats – along with big, unaccountable, largely tax avoiding multi-national corporations. For an example of this you need look no further than the system of quangos…
In the last 20 years this system which is so open to cronyism and corruption has seen the money it spends skyrocket from £35bn up to £195.3bn as of last year’s figures.
A closer look at quangos today;
Quasi-Autonomous Non-Governmental Organisation, or quango, are organisations that are funded by taxpayers, but are not controlled or overseen directly by elected officials. Before the 2010 election, we had 1,148 quangos spending £90 billion a year. Whilst the coalition government promised a ’bonfire of the quangos’, abolishing 192 and merging a further 118 (a target they massively failed to meet), too many unnecessary groups remain, costing money and causing inefficiency.
There is also the problem of the lack of accountability for quangos. While they are all notionally accountable to a parliament or assembly, there is an excessive cost involved in monitoring such bodies which means that, in practice, accountability is minimal to non-existent. Quangos are routinely used by ministers to avoid taking responsibility for their failures.
“Before he took office Mr Cameron promised a “bonfire of the quangos” by slashing the number of arms length government bodies and slimming salaries.
But figures released by the Cabinet Office yesterday showed some 58 bosses of government agencies are being paid more than Theresa May, compared to 42 paid more than the Prime Minister last year.”
A breakdown of current quangos and the money involved…
As as 31st March 2016:
463 public bodies of which: 40 are executive agencies; 399 are non-departmental public bodies; 24 are non-ministerial Departments. £195.3 billion gross resource spend* for public bodies. £183.4 billion net^ resource spend for public bodies. 266,137 staff employed (full-time equivalent) by public bodies”
Some examples of how that money is used…
“A quango handed millions of pounds of taxpayer money to boost training in the building industry doled out more than £8million in redundancy payments last year.
The little-known Construction Industry Training Board (CITB) paid £8.3million to 129 staff who departed in 2016 – an average of £64,400 each.
Seventeen of those who left were handed more than £100,000 each – including four who got ‘exit packages’ of more than £400,000 a head.”
“More than 600 NHS quango chiefs are now on six-figure salaries, with a doubling in the number earning more than the Prime Minister in just three years, new figures show.”
“QUANGO bosses have been blasted for spending thousands of pounds of public money on stays in dozens of luxury five star hotels across the globe.”
And if you want an idea of how tight a club it is…
“According to research from my organisation the New Local Government Network, we discovered a depressing centripetal tendency for the great-and-good living near Westminster to be appointed to these positions of power and influence. If London represents 14.8 per cent of the population of England, how come it provides more than a third of quango board members?
Another example of outsourcing and a British government flogging off assets on the cheap to a capitalist crony with a complete lack of foresight and regard for the national interest…
“The Ministry of Defence (the Department) has committed itself to annual rental bills of nearly £200 million and lost out on billions of pounds of asset value as a result of selling and leasing back the majority of its married quarters estate to Annington Property Limited in 1996 because of the subsequent steep increase in house prices and rents.”
Annington Homes is wholly owned by the private equity firm Terra Firma Capital Partners, which is headed by the financier and speculator Guy Hands and is one of the largest private equity firms in Europe.
In 2009 Guy Hands abandoned Britain to become a tax exile in Guernsey. Terra Firma has a few other ventures, owning a health care business, cinemas (Odeon and UCI), motorway services, an energy company, an aircraft leasing firm and garden centres.
Annington Homes is the largest private owner of residential property in England and Wales.
Terra Firma also owns the Four Seasons Health Care group, Britain’s largest care home operator, which it bought for £825 million in 2012. Four Seasons runs 445 care homes and 61 hospitals and specialist centres, looking after more than 20,000 people; it gets most of its income from local council referrals that place patients with Four Seasons.
Mr Hands is a close friend of the Conservative Party having been President of the Oxford University Conservative Association in 1980. William Hague, the former Conservative party leader was also best man at Hands’s wedding.
Make of that what you will.
“That privatisation is occurring in the NHS, as in education, council services, and a host of other areas, is indisputable. Privatisation involves the transfer of public assets into private hands or the transfer of public functions to the private sector. There is no shortage of examples. Patients are transported in ambulances with a G4S logo. Laboratory and pharmacy services are outsourced, as well as administrative functions, cleaning, and catering to companies like Serco and Capita. Private companies like Virgin Healthcare are winning contracts to run healthcare and sue the NHS when they are not awarded them. The Private Finance Initiative is itself a form of privatisation, where Government abdicates its role to raise cheap finance publically, instead outsourcing this to private arrangements at higher interest rates. A recent report from The Centre for Health and the Public Interest found that between 2010 and 2016 £831 million haemorrhaged from the NHS as PFI company profits.”
If you were looking forward to “taking back control” you’ll be sorely disappointed because we’ve sold it off.
Look at the railways. The Germans run Chiltern, Cross Country, Grand Central, London Overground, Northern, Tyne & Wear Metro and Wales & Borders. The French State runs (or part-runs) Docklands Light Railway, Gatwick Express, London Midland, Southern, South Eastern and Thameslink. The Italian State runs Essex Thameside. The Dutch State runs Greater Anglia and Scotland The French and Belgian State co-run Eurostar.
Take a look:
The ‘catastrophic’ privatisation of Britain’s railways has cost the taxpayer £5bn per year and driven up fares by 20%, with government subsidies of the railways increasing fourfold since 1993.
It’s the same with the bus services…
“Fares have gone up 55% on average since 2008, far outstripping pay growth. Some passengers have even been hit by increases of 100% and bus use is at a 12-year low. Arriva, FirstGroup, Go-Ahead, National Express and Stagecoach carry 70% of all bus passengers and have paid an average £149million a year in dividends in the past 10 years.”
Then there’s our power suppliers. The new nuclear plants will be run and controlled by the French and Chinese governments; the French own EDF; German companies run EON and NPower; Scottish Power is Spanish.
Water companies: Northumbrian Water, Cambridge Water, Essex and Sussex Water…all run from Hong Kong; Affinity Water is US owned; Anglian US and Canadian; Bristol Water is Canada, Spain and Japan; Bournemouth Water run by a Singapore-based company; South Eastern Water is joint Canadian and Australian.
And who do we have monitoring the sector?
The All Party Water Group, a cross party MPs group which just happens to be funded almost entirely by the water industry.
A prominent member of this group is the Blairite Labour MP Angela Smith who can regularly be found sticking up for the interests of private water firms against her own Party’s nationalisation plans. Smith argues that her views count because she is co-chair of the All Party Water Group.
Never mind the fact that through 2016-17, Angela Smith and her husband were repeatedly treated to corporate seats at Sheffield Wednesday FC and dinner by Whitehouse Construction – a subcontractor to Anglian Water and a member of the “Future Water Association”, an industry group led by private Water firms … which also funds Angela Smith’s “All Party Group”
Angela Smith even delivered a speech undermining John McDonell, based on her article for Rupert Murdoch’s Times, at a conference in the Manchester Hilton, again funded by the Water Industry.
Most of the criticism comes via ‘The cost of nationalising the water industry in England’, an assessment report from the Social Market Foundation who claim it will cost £90 billion to nationalise the Water Industry.
Guess who funded the report…
“This report was commissioned by Anglian Water, Severn Trent, South West Water and United Utilities, and was produced independently by the Social Market Foundation.”
When Paris re-municipalized its water supply in 2010 it was able to cut costs immediately by $46 million (p.169) and reduce prices by eight per cent – all the while increasing the democratic involvement of staff, users and local non-profits.
It’s hardly surprising the lengths they’ll go to when it comes to keeping private control of the nations water supply.
Private shareholders in British water companies made £6.5 billion in just five years. Dividends worth £1.4 billion were paid out in 2017 alone. All this at a time when water bills have increased by 40% and 2.4 billion litres of water is wasted daily through unfixed leaks.
Angela Smith can to this day be found championing the privatisation of our water, even though this is in direct contradiction of her current Party policy.
We won’t be “taking back control” of our money, either. That was privatised a long time ago.
Josiah Stamp (1st Baron Stamp) was President of the Bank of England in the 1920’s and the second richest man in Britain. Source of quote: Speaking at the Commencement Address of the University of Texas in 1927. Ref: ‘The Legalized Crime of Banking’ (1958) by Silas W. Adams.
If you really want to “take back control” of our money, this is how you do it, not by listening to certain Brexiteer charlatans…
“The Swiss Federal Council has just announced the date of the referendum on the Sovereign Money Initiative (or “Vollgeld-Initiative” in German) will be 10th June 2018.
Swiss voters will be asked who should be allowed to create new Swiss francs: UBS, Credit Suisse and other private commercial banks or the Swiss National Bank which is obliged to act in the interest of Switzerland as a whole.”
Most MP’s (1 in 10 to be precise) don’t actually know how “money” is made.
Let that sink in.
“In the modern economy, most money takes the form of bank deposits. But how those bank deposits are created is often misunderstood: the principal way is through commercial banks making loans. Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.”
“Commercial [i.e. high-street] banks create money, in the form of bank deposits, by making new loans. When a bank makes a loan, for example to someone taking out a mortgage to buy a house, it does not typically do so by giving them thousands of pounds worth of banknotes. Instead, it credits their bank account with a bank deposit of the size of the mortgage. At that moment, new money is created.”
Essentially you are credited with money that doesn’t physically exist. And as part of any loan transaction arrangement you are now obliged to pay back interest on that loan. This money doesn’t exist either. So you’re paying back money that doesn’t exist to cover money that doesn’t exist.
Do you see the problem with this model?
And as you can see by the latest ‘Global Economic Briefing: Central Bank Balance Sheets’, business is booming;
And let’s not forget…
“More than £1tn of public money was poured into the banks following the financial collapse. The emergency package came with few government-imposed conditions and with little calling to account…Much of Britain’s public sector has now become a funding stream for profiteering companies. According to the National Audit Office (NAO), around half of the £187bn spent by the public sector on goods and services now goes on private contractors.”
And after the third banking scandal this year, perhaps the argument for nationalising the banks and really ‘taking back control’ of our money should be debated…
“By contrast, foreign publicly owned banks are self-evident successes. Take Germany: KFW, the government-owned development bank, is crucial in developing national infrastructure as well as the renewable energy revolution. On a regional level, state-owned Landesbanken are responsible for industrial strategy. Then at the most local level, there are Sparkassen: they focus on developing relationships with local businesses and consumers. They’re not beholden to shareholders – instead, they have a stakeholder model, focused on helping local economies – indeed, their capital has to remain in local communities.”
The Tories are obsessed with privatisation. Take the latest example, Hastings Pier. £12.4m of public money was used to rebuild it, but the charity that rebuilt it after the most recent blaze in 2010 collapsed into administration last year. Now the Eastbourne hotelier Sheikh Abid Gulzar has bought it for £50,000. His first acts include banning dogs, cycles, picnics, and fishing from the pier. He is also charging a £2 entrance fee.
This sale went ahead despite local residents group, Friends of Hastings Pier, raising more than £477,000 of a £500,000 target (10X more than Gulzar paid) to buy the pier and keep it open to the public for free.
“Britain is an extreme oddity regarding privatisation: nowhere else in the advanced world is there such a willingness to sell everything that isn’t nailed down. Time and again the British public is ripped off and sold out by its leaders.”
It was under Thatcher that the British terms for privatisation and regulation were set. These are the terms that have allowed private companies to rob the British taxpayer silly…
“Stephen Littlechild, then a little-known academic, was commissioned by Margaret Thatcher’s government in October 1982 to design a regulatory mechanism that would prevent Britain’s soon-to-be privatised telecoms monopoly, BT, from exploiting its position and gouging the public …
Fortunately, “RPI minus x” passed muster not only with Mrs Thatcher, but also with BT’s investment bankers, SG Warburg, which thought it vastly preferable to the profit ceiling used by US utilities. “It was politically defensible and even attractive,” recalled Prof Littlechild. It won the day.
The Littlechild formula has gone on to serve as the template for all UK regulation of privatised utilities. In modified form, it sits at the heart of the mechanisms that still regulate prices set by electricity and water companies …
What makes Britain’s regime different from the one for private US utilities, for instance, is that these returns are not capped. “We didn’t like the idea of an effective 100 per cent tax on efficiencies over a fixed rate of return,” recalls Prof Littlechild. “Margaret Thatcher’s economics adviser, Alan Walters, was particularly offended by the cap. He said: ‘We can’t do this. It’s socialism!’”
Instead, every few years the watchdog estimates the costs the company is likely to face in the next regulatory period. If the company can achieve greater savings, it is permitted to keep 100 per cent of the extra it makes.”
But this latest term of Tory reign has seen the ideology kicked into overdrive…
“George Osborne is on course to sell off more public assets than any Chancellor of the Exchequer for more than 30 years – including all those who served under Margaret Thatcher. New figures from the House of Commons library reveal that in the five-and-a-half years Mr Osborne has been Chancellor he has made £37.7bn in privatisations – and intends to sell off another £20bn by the end of the next financial year.”
It was pointed out by the ONS that this privatisation blitz was the only reason that Osborne was able to hit his debt targets:
A point furthered by the Lords Economic Affairs Committee on post-school education:
“368. In the 2013 Autumn Statement the coalition Government announced plans to sell the pre-2012 student loan book. The sale of the first tranche of loans was concluded in December 2017. Loans with a face value of £3.5 billion were sold for £1.7 billion, with £1.8 billion (51 per cent of the face value) written off. The Government plans to sell off £12 billion of loans over the next five years.
369. Why was the Government prepared to make a sale at such a large loss? It prefers cash today over a larger sum of cash tomorrow. This preference is a result of another of the Government’s targets: to reduce the national debt.”
All of which helped maintain the Tory rhetoric of being fiscally and economically responsible when nothing could be further from the truth, allowing them to push on with their nefarious policies.
He then moved on to the Land Registry, which had more than a whiff of cronyism and corruption to the whole affair…
“If you’re a homeowner, your personal data on the most valuable asset you’re ever likely to buy – your home – will be sold off to the highest bidder: not held as a public service but sold by a private company. Integrity, impartiality and accountability are all at risk of being overridden by profit. And a recent investigation suggests that all bidders for the Land Registry have links to offshore tax havens.”
And this is especially important as the Tories are destroying social housing by selling off (privatising) over 60,000 Council houses, whilst only replacing 1 in 4, going directly against David Cameron and the Tories promise to replace every house sold when the policy was first introduced. This has also lead to a £1billion temporary accommodation bill for the taxpayer;
In 2012 David Cameron promised that any council house sold would be replaced within three years. In that time 63,518 Council house have been sold off. 6 years later and only 15,981 replacements have started to be developed, here is why;
“Less than half the £4.8bn raised through selling off council housing at giant discounts since 2012 has gone to replacement housing … The remaining £2.57bn has been split between the Treasury, the repayment of historic council debts and the administration of the scheme … administration costs total £107m and councils have spent £50m buying back properties previously sold under the policy”
And what does this lead to?
And it doesn’t help when;
“Tory ministers decided not to spend £72 million set aside to build affordable homes because it was “no longer required”, despite the housing crisis gripping Britain.”
Much like with the NHS, this is a Tory manufactured crisis that helps funnel money into the pockets of private profiteers.
For some reason, Brandon Lewis thought Capita would be the ideal candidate to provide fire and emergency response training.
“Fire Minister Brandon Lewis has today announced the completion of the sale of the Fire Service College to Capita”
In fact Capita…”deliver recruitment to the British Army, as well as e-learning and support services to the UK Defence Centre for Languages & Culture, and technical support to the Astute class Submarine build programme. We’re the prime contractor acting as the Defence Infrastructure Organisation’s (DIO) strategic business partner, responsible for the leadership and direction of the DIO and the management of its delivery partners and contractors.”
More lately; “another privatisation is going ahead under the radar: the Ministry of Defence are planning to sell-off our military firefighting service.”
That sale went ahead. To Capita.
In another strange deal, Lincoln’s fire engines sold its UK fleet for £2 to a company which was set up one month before the purchase to an old Etonian, Sir Aubrey Thomas Brocklebank, a man who “has been the Director of 69 Companies. 5 of which have been in liquidation, and 38 have been dissolved”
And then we have the continuous spurious claim that they have no intention of privatising the NHS. This is demonstrably an outright lie.
To see the privatisation assault on the NHS:
And then there is the current assault on Policing and probation;
The latest ridiculous Tory idea to address a policing crisis of their own making is to fast track detectives in 12 weeks, forgoing the usual years of on the job training and experience, which will only add more pressure to a highly pressurised situation.
This will lead to a further deterioration of the service and the results that they produce. A classic tactic of privatising a public service when they know the policy to be unpopular with the electorate. Defund, demoralise, make sure things don’t work, outsource it out or sell it on, usually on the cheap.
The Tories plan was laid bare in a 2015 analysis from the Police and Crime Commissioners;
“The police service will have to make fundamental changes to how it is structured and the role it carries out, Police and Crime Commissioners in England and Wales have said in their analysis of possible budget reductions for the next five years … with reductions in staff levels and support services already made, further budget constraints will lead to difficult questions on how best to structure police forces to respond to changes in crime, and what this would mean for the local service provided to the public.”
You can see the capitulation to methods of privatisation within their analysis, for example;
“While further savings in running costs, procurement and ICT can be delivered over the next five years a fundamental reconfiguration of roles will be needed.”
“Stronger powers for PCCs to promote cross sector working;”
“A national scheme to provide support for the voluntary sector and local volunteers.”
Essentially, reducing the role, power and function of the police. There has also been a demoralising assault on remaining staff, doing more and more for less and less and in worsening conditions.
“John Apter, Hampshire Federation chair, told her: “In my force we have a police welfare fund which is a registered charity. Officers are now going to the welfare fund for food vouchers so that they can put food on the table or fuel in their car to get to work …
Federation chair Steve White contrasted the situation with that of MPs who received an 11% pay increase the year before last, and highlighted how in real terms, officer pay had fallen by 15%.”
And all this has its ‘adverse’ effects…
“Brutal cuts have seen thousands of police signed off with long-term mental health issues. More than 9,000 officers have been given leave since 2015 – and experts say things will continue to get worse. Soaring work demands, disrupted days off and cancelled holidays all add to pressure which is driving cops “over the edge”.”
That’s 9000 stressed people unnecessarily put on to an already severely underfunded and demoralised mental health sector. You begin to see how it all ties in…
The next assault on British policing is due to kick in at the end of next year when the new programme will require anyone who joins the force to be degree level educated, or to join as an apprentice.
The current programme will come to an end in December 2019 and all Forces MUST use one of the three new entry routes from 1st Jan 2020. This is mandatory. Forces have flexibility over how many new officers they recruit and which entry route(s) they use. The entry routes will now be;
* Police Constable Degree Apprenticeship (PCDA)
* Degree Holder Entry Programme (DHEP)
* A Pre-join Degree in Policing
And then there is the current assault on Policing by consent…
A private ‘police force’ known as ‘My Local Bobby‘ is expanding nationally after “success” in three affluent London areas where they’ve been able to hand-pick crimes.
Or other firms like Atlas, already at work in the Southwest;
“The private security company would carry out patrols, gather evidence and hand over offenders to police. They wear uniforms including “tactical vests” equipped with handcuffs and body-worn cameras. Atlas has already been working in the Somerset village of Martock, where residents have reported a reduction in antisocial behaviour.”
This is the result after new policing policy announced by the Tories:
“Essentially, the proposals would see G4S grunts given the powers of Civilian Enforcement Officers. That is, authorised officers/employees of Her Majesty’s Courts and Tribunals Service becoming vested with the power to seize and sell goods to recover money owed under fines and community penalty notices, and to execute warrants of arrest, committal, detention and distraint.”
Police forensics has already been privatised…
“Last month, the MP’s Science and Technology Committee reported back their findings of the government proposal to fully privatise the forensics service. Having digested its contents they demanded the Government redraft its strategy; criticising it as vague, incomplete and lacking a vision for forensic services.”
And what do you think has happened?
“Ten thousand criminal cases in England and Wales are being reviewed after it emerged that data at a forensic laboratory in Manchester may have been manipulated, causing the biggest recall of samples in British criminal justice history.”
And then there is probation…
“Private companies are failing to enforce the sentences handed down by courts, leaving convicts to commit more crime or simply disappear, a damning report has found.”
Problems which were foreseen when the Tories sold off 70% of the probation service.
And how has it worked out?
“The system for supervising criminals in England and Wales is in a “mess” after reforms failed to meet their aims, MPs have said … In 2014 the system was partially privatised and monitoring extended to those who had served short jail terms … But the Justice Select Committee said that programme had left the system in a “mess”, with staff morale at an “all-time low” and support for prisoners leaving jail “wholly inadequate”.
And the service that’s been provided…
“Prison giant Serco hands £4million back to government since 2010 for repeatedly failing to meet standards”
A common theme, yet;
“Despite a litany of failures, most recently losing control of HMP Birmingham, G4S continues to be bailed out by the state and awarded new contracts”
“Private probation companies to have contracts ended early. Bailout totalling £500m criticised as justice secretary consults on new scheme”
All of which are contributing factors to the year on year rise in crime, especially violent crime. By 2014, the strain was starting to be felt;
“Violent offences jumped by 21 per cent last year to drive the first rise in recorded crime for more than a decade, new official figures show. The Office for National Statistics (ONS) data showed there were an extra 126,000 incidents of violence against the person recorded by police in England and Wales”
By last year…
“The rise in crime is accelerating, with the latest figures showing a 13% increase in all police-recorded offences across England and Wales, and even greater rises for violent offences including knife crime, sexual offences and violence against the person.
The crime figures show an underlying 8% rise in the murder rate, an increase of 46 victims, with 629 homicides recorded in the 12 months to June, excluding the 35 people killed in the London and Manchester terrorist attacks.”
There is a lot of taxpayer money up for grabs. Bit by bit, chunks of of the force are being chipped away and the likes of G4S are waiting to swoop…
“David Taylor-Smith, the head of G4S in Britain and Africa, said he expected police forces across the country to increasingly outsource duties to private firms. This would include companies taking responsibility for duties such as investigating crimes, transporting suspects and managing intelligence. He said more forces would follow Lincolnshire Police, which has signed a £200million deal G4S to build and run its own police station, which could also see civilian jobs cut.
West Midlands and Surrey forces had invited companies to bid for £1.5billion worth of services but in the face of fierce opposition have since put the plans out for “consultation”, with suggestions the moves could be put on hold. It has emerged that 10 more police forces were considering outsourcing deals that would see services, such as managing police cells and Information Technology programmes operated by private firms. But the moves have been criticised by rank and-file officers as a further example of the “creeping privatisation” of policing in England and Wales designed to fill the gap created by 20 per cent budget cuts.”
Make no mistake about it, just like the NHS, education and other vital public services, the Police Force is systematically being underfunded, demoralised and quietly privatised by this current Tory regime.
And in Education (though admittedly New Labour played a big part in this):
“The privatisation of education started under the New Right [Tory Neoliberal] Government (1979-1997), and continued under New Labour (1997-2010) and under the Coalition/ Conservative Government (2010 – Present Day).”
The setting up of Academies
The Building and maintaining school buildings
Running examination systems
The Expansion of the Education Services Industry
“Privatisation within education refers to the introduction of free-market principles into the day to day running of schools. This is basically marketisation and includes the following:
▪ Making schools compete for pupils so they become like businesses
▪ Giving parents choice so they become consumers (open enrolment)
▪ Linking school funding to success rates (formula funding)
▪ Introducing performance related pay for teachers
▪ Allowing successful schools to take over and managefailing schools.”
“All told, around 2 million hectares of public land have been privatised during the past four decades. This amounts to an eye-watering 10% of the entire British land mass, and about half of all the land that was owned by public bodies when Thatcher assumed power. How much is the land that has been privatised in Britain worth? It is impossible to say for sure. But my conservative estimate, explained in my forthcoming book on this historic privatisation, called The New Enclosure, is somewhere in the region of £400bn in today’s prices. This dwarfs the value of all of Britain’s other, better known, and often bitterly contested, privatisations.”
The latest yougov evidence shows shows that these policies of privatisation are in direct contradiction to what the vast majority of the populace want…
“The results of our latest research show that there are four services that the public is especially keen to have in public hands: the police (87%), the NHS (84%), the armed forces (83%) and schools (81%).
While support for nationalisation drops off beyond these services, state ownership is still the preferred option for a majority of people across most of the industries we asked about. In fact, there were only three sectors on the list that the majority of British people wanted to remain in private hands: telephone and internet providers (53% want them run by the private sector), banks (also 53%) and airlines (68%)”
If you want to see why the Tories love privatisation so much, you need only look at what’s happening with Royal Mail…
“With branches shutting, jobs axed and the price of stamps soaring, Royal Mail ’s privatisation has not been warmly received by many – except the fatcat shareholders. And that is no surprise as they are being paid £500,000 a day.”
It has absolutely zero to do with efficiency, bureaucracy or any other guff they like to claim.
Privatisation is a con, and as Peter Hitchens has come to realise…
“I am so sorry now that I fell for the great Thatcher-Reagan promise. I can’t deny that I did. I believed all that stuff about privatisation and free trade and the unrestrained market. I think I may even have been taken in by the prophecies of a great share-owning democracy … I never thought I’d yearn for the National Coal Board or British Steel or, good heavens, British Leyland. But I do begin to feel I was fooled into thinking that what was coming next would be any better. At this rate it may soon be much, much worse.”
– Peter Hitchens
This is the propaganda that was central to the neoliberal drive for privatisation, the public sector inefficiency, that it was slow, costly and that the “free market” held the answers. In actuality, privatisation is a governmentally sponsored effort to move assets and economic decision-making away from the political arena where it has public scrutiny, and into the hands of individuals or private corporations. It’s a reduction of democracy, accountability, and the privatisation of profit from the British public.
“The central myth of neoliberalism – ‘private sector good, public sector bad’ – persists in the face of all evidence to the contrary.
The private sector is held up as better, more efficient, the way to modernise… Yet worldwide, hundreds of services are being brought back into public ownership, which suggests that people aren’t buying the hype around greater private sector efficiency…
…Large scale meta-studies have drawn similar conclusions: ‘the evidence shows no significant difference in efficiency between public and privately owned companies in public services’. As researcher David Hall points out, this is particularly striking because these studies have ‘been carried out by economists expecting to confirm a theoretical argument that privatization is intrinsically more efficient’.
Some research has even shown privatised services perform worse, including one of the largest studies, whose authors include Nobel Prize-winner Joseph Stiglitz.”
And when things go wrong, the taxpayer has to pay yet again…
“The UK government has been forced to take a multibillion-pound nuclear cleanup contract back into public ownership, after a botched tender to the private sector landed the taxpayer with a £122m bill.”
Or in the case of the railways, again and again…
“The East Coast franchise, a joint venture between Stagecoach and Virgin, was intended to run for eight years between 2015 and 2023. But the private operators have complained of losing money on the line between London and Edinburgh … The decision to end the £3.3bn contract this year has been described as a “bailout” …
The franchise is the third on the mainline to fail in little more than a decade, following the collapse of GNER in 2007 and National Express East Coast in 2009.
Following those failures, the operation was taken back into public hands. Passenger satisfaction and profits subsequently improved, but in March 2015 the Stagecoach/Virgin consortium took over the franchise.”
Then there is also the latest incredible waste of taxpayer money as the people pick up the bill for Carillions irresponsible fiscal ineptitude. The American PwC partners are charging £1156 per hour for work on Carillion liquidation. This sort of thing used to be done by the Civil Service. The biggest losers from this will be employees, taxpayers, the pension scheme and suppliers.
Thatcher privatised insolvency work back in 1980s. It is now a licence to print money.
As I’ve mentioned, privatisation is about the reduction of democracy and accountability, and the increase in the concentration of wealth. This wealth allows for the further concentration of power and the cycle continues, making our democracy a zero-sum game. So it should come as no surprise to learn that the roots of privatisation policy lie within the facist movement;
“The Great Depression spurred State ownership in Western capitalist countries. Germany was no exception; the last governments of the Weimar Republic took over firms in diverse sectors. Later, the Nazi regime transferred public ownership and public services to the private sector. In doing so, they went against the mainstream trends in the Western capitalist countries, none of which systematically reprivatized firms during the 1930s. Privatization in Nazi Germany was also unique in transferring to private hands the delivery of public services previously provided by government.“