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Showing posts with label PFI. Show all posts
Showing posts with label PFI. Show all posts

Wednesday 18 March 2015

Let’s not fool ourselves. We may not bribe, but corruption is rife in Britain

George Monbiot in The Guardian
It just doesn’t compute. Almost every day the news is filled with stories that look to me like corruption. Yet on Transparency International’s corruption index Britain is ranked 14th out of 177 nations, suggesting that it’s one of the best-run nations on Earth. Either all but 13 countries are spectacularly corrupt or there’s something wrong with the index.
Yes, it’s the index. The definitions of corruption on which it draws are narrow and selective. Common practices in the rich nations that could reasonably be labelled corrupt are excluded; common practices in the poor nations are emphasised.
This week a ground-changing book called How Corrupt is Britain?, edited by David Whyte, is published. It should be read by anyone who believes this country merits its position on the index.
Would there still be commercial banking sector in this country if it weren’t for corruption? Think of the list of scandals: pensions mis-selling, endowment mortgage fraud, the payment protection insurance scam, Libor rigging, insider trading and all the rest. Then ask yourself whether fleecing the public is an aberration – or the business model.
No senior figure has been held criminally liable or has even been disqualified for the practices that helped to trigger the financial crisis, partly because the laws that should have restrained them were slashed by successive governments. A former minister in this government ran HSBC while it engaged in systematic tax evasion, money laundering for drugs gangs and the provision of services to Saudi and Bangladeshi banks linked to the financing of terrorists. Instead of prosecuting the bank, the head of the UK’s tax office went to work for it when he retired.
The City of London, operating with the help of British overseas territories and crown dependencies, is the world’s leading tax haven, controlling 24% of all offshore financial services. It offers global capital an elaborate secrecy regime, assisting not just tax evaders but also smugglers, sanctions- busters and money-launderers. As the French investigating magistrate Eva Joly has complained, the City “has never transmitted even the smallest piece of usable evidence to a foreign magistrate”. The UK, Switzerland, Singapore, Luxembourg and Germany are all ranked by Transparency International as among the least corrupt nations in the world. They are also listed by the Tax Justice Network as among the worst secrecy regimes and tax havens. For some reason, though, that doesn’t count.
The Private Finance Initiative has been used by our governments to deceive us about the extent of their borrowing while channelling public money into the hands of corporations. Shrouded in secrecy, stuffed with hidden sweeteners, it has landed hospitals and schools with unpayable debts, while hiding public services from public scrutiny.
State spies have been engaged in mass surveillance. And the police, adopting the identities of dead children, lying in court to assist false convictions and fathering children by activists before disappearing, have infiltrated and sought to destroy peaceful campaign groups. Police forces have protected prolific paedophiles, including Jimmy Savile, and – it is now alleged – a ring of senior politicians who are also suspected of the murder of children. Savile was shielded too by the NHS and the BBC, which has sacked most of the those who sought to expose him while promoting people who tried to perpetuate the cover-up.
There’s the small matter of our unreformed political funding system, which permits the very rich to buy political parties. There’s the phone-hacking scandal and the payment of police by newspapers, the underselling of Royal Mail, the revolving door allowing corporate executives to draft the laws affecting their businesses, the robbing of the welfare and prison services by private contractors, price-fixing by energy companies, daylight robbery by pharmaceutical firms and dozens more such cases. Is none of this corruption? Or is it too sophisticated to qualify?
Among the sources used by Transparency International to compile its index are the World Bank and the World Economic Forum. Relying on the World Bank to assess corruption is like asking Vlad the Impaler for an audit of human rights. Run on the principle of one dollar, one vote, controlled by the rich nations while operating in the poor ones, the bank has funded hundreds of white-elephant projects that have greatly enriched corrupt elites and foreign capital while evicting local people from their land and leaving their countries with unpayable debts. To general gasps of astonishment, the World Bank’s definition of corruption is so narrowly drawn that it excludes such practices.
The World Economic Forum establishes its corruption rankings through a survey of global executives: the beneficiaries of the kind of practices I’ve listed in this article. Its questions are limited to the payment of bribes and the corrupt acquisition of public funds by private interests, excluding the kinds of corruption that prevail in rich nations. Transparency International’s interviews with ordinary citizens take much the same line: most of its specific questions involve the payment of bribes.
How Corrupt is Britain? argues that such narrow conceptions of corruption are part of a long tradition of portraying the problem as something confined to weak nations, which must be rescued by “reforms” imposed by colonial powers and, more recently, bodies such as the World Bank and the IMF. These “reforms” mean austerity, privatisation, outsourcing and deregulation. They tend to suck money out of the hands of the poor and into the hands of national and global oligarchs.
For organisations such as the World Bank and the World Economic Forum, there is little difference between the public interest and the interests of global corporations. What might look like corruption from any other perspective looks to them like sound economics. The power of global finance and the immense wealth of the global elite are founded on corruption, and the beneficiaries have an interest in framing the question to excuse themselves.
Yes, many poor nations are plagued by the kind of corruption that involves paying bribes to officials. But the problems plaguing us run deeper. When the system already belongs to the elite, bribes are superfluous.

Wednesday 24 July 2013

For Tories, privatisation is still a matter of dogmatic faith

Dogmatic in the face of all the evidence; backing fringe policies embraced by obscure minorities; pushing failed ideas which, if implemented, would be nothing short of disastrous. Here are accusations long thrown at the left by level-headed advocates of such moderate proposals as, say, illegally invading countries prompting hundreds of thousands of deaths, or introducing cuts Mrs Thatcher could only have dreamt of.

So how about this for an extreme, unpopular policy? According to YouGov, the proposed privatisation of the Royal Mail is opposed by over two-thirds of Britons; even Tory voters are more likely to be against than in support. Just 4 per cent strongly support the flogging off of yet another public service, which gives an indication of how few hardcore free-marketeers there are.

The breadth of opposition is hardly surprising. Britons have endured a three-decade-long experiment of selling off our utilities and public services. After a fair run, the cheerleaders of free market extremism must now accept that they have failed to win the support or consent of the British people. A poll in April found that 61 per cent believed major public services such as energy and water were best run by the public sector; only just over a quarter opted for private companies. Every poll going shows that we want the railways back in public ownership. That so few MPs echo these calls in Parliament is a damning indictment indeed of our political elite and the state of British democracy.

The public’s verdict is undoubtedly based on pragmatic experience. The taxpayer is paying around three times more subsidising private railways than when they were run by the state. Ticket prices soar above inflation, pricing out millions of families, and the service is fragmented and chaotic. Energy and water companies are ripping off consumers when workers’ pay packets are facing the biggest squeeze in modern times.

This latest bout of free market extremism comes after a torrid week for the dogma of “private sector good, public sector bad”. Security companies G4S and Serco have both been accused of overcharging the state for the electronic tagging of offenders, including billing government for people who had died or never even been tagged. During the Olympics, G4S failed to deliver enough security guards, leaving the state – who else? – to fill the vacuum. At the time, Tory Cabinet minister Philip Hammond admitted that the episode challenged his “prejudice that we have to look at the way private sector does things to know how we should do things in government”.

The list could go on. Take the likes of A4e, the welfare-to-work company: on top of being investigated for fraud, its former chief executive Emma Harrison stood down after paying herself a £8.6m share dividend at the expense of the state. There are the PFI schemes that exploded under New Labour, leaving the taxpayer saddled with billions of pounds worth of debt. And then, of course, there’s the small matter of the banks that collapsed. It wasn’t free market dogma that rescued them – it was the state.

The case against privatising our Royal Mail is overwhelming, even disregarding other failures. It is a profitable business, making £440m last year. It is a natural monopoly. The right-wing think-tank Bow Group suggests that rural Post Offices could close and the price of stamps could be hiked.

The truth is the free market extremism pushed by the biggest party in Britain – the neo-liberal centre of Blairites, Cameroon Tories and Orange Book Lib Dems – is riddled with hypocrisy. Modern capitalism depends on a big state, on government largesse. Bailed out banks; PFI contracts; tax credits that subsidise bosses paying low wages; housing benefit subsidising landlords because of the mass sell-off of council houses – the list goes on.

Many of the free market extremists have benefited directly from their dogma. Take Patricia Hewitt, who journeyed from left-wing firebrand to Blairite health secretary: she was recently appointed board director at Bupa, a health company that stands to benefit from the privatisation of the NHS. Lord Norman Warner, a “Labour” Lord who supports the Tories’ dismantling of the NHS, is a non-executive chairman of UK Health Gateway and an adviser to technology firm Xansa, all of which government plans have guaranteed a bright future. The revolving door of free-market extremists is profitable indeed.

Evidence that shatters the demonisation of the public sector is routinely ignored by our media and political elite. The Government is planning to reprivatise the East Coast mainline, despite the Office of Rail Regulation finding it to be the “most efficiently run franchise”. None of this means opponents of free market extremism should be defensive, allowing themselves to be painted as conservative opponents of “reform” (a term stolen and redefined as “privatising” and “cutting”). When the post-war Labour government nationalised key sectors of the economy, it created top-down, undemocratic public corporations. Without meaningfully involving users and workers, there was little resistance when Thatcher sold the family silver.

It’s time to argue for a new form of democratic, social ownership. Take the railways. They could easily be taken into public ownership if the political will was there: the state could simply take over each franchise as it expires. But instead of being run by bureaucrats in Whitehall, passengers and workers could be given the right to vote for representatives on the management board. The same argument could be made for, say, the banks, the NHS, or Royal Mail, forcing services to be more responsive to the needs of users, without selling them off to companies who are solely interested in making big bucks – not in delivering a quality service.

As the free market extremists once again ignore the will of the British people, it’s time to go on the offensive. Yet another disastrous sell-off doesn’t mean simply sticking to the status quo. Democracy, not privatisation: that should be our call.

Saturday 31 March 2012

The Bradford Spring

This was Bradford's version of the riots

Bradford's peaceful democratic uprising that elected me comes from the wellspring of discontent that swept Britain last summer
George Galloway Bradford West
George Galloway addresses the media after winning the Bradford West byelection. Photograph: Andrew Yates/AFP/Getty Images
The Bradford spring. No matter how seemingly powerful, no corrupted, out-of-touch elite can last forever. The people of Bradford West have spoken, and politics in the city and in this country will never be the same again. Anyone who took part in this historic campaign, or who observed it dispassionately, knew by last weekend that something spectacular was going to take place.

A 5,000 Labour majority was transformed into a 10,000 majority for Respect – the same total vote for me as the outgoing MP had in a general election – winning across every ward in the constituency. It was the most spectacular byelection result in British political history.

The word revolution was on many lips in this deprived and hitherto disenfranchised city well before Friday morning's result. And, like the Arab revolutions, this is a movement, above all, of the young. Bradford has a young population. By 2020 half the population will be under 25. They have grown up in the years when Tony Blair and his successors murdered the real Labour tradition, taking for granted the loyalty of working people – nowhere more so than in this city, where the precursor to the Labour party, the Independent Labour party, was founded in 1893.

A rotten combination of complacency, incompetence, opportunism and rule by clique has presided over Bradford's decline. It was going down even during the 13 years of New Labour government, which included the richest decade in British history. Now it is in danger of sinking under the sado-monetarist austerity of the Con-Dem coalition.

Labour's opposition in parliament is feeble to the point of paralysis, because so many share so much of the grim orthodoxy that has plunged the world into the great recession.

This, and the continuing support of all three old parties for war and occupation abroad, has created a chasm between the political class and so many working people, especially the generation that faces a future of extortionate tuition fees, a privatised NHS, mass unemployment – and, for those who find work, an ever diminishing pension and a rising retirement age. So, while support came from all quarters in this election, it was young people who moved first and created a critical mass, which drew around it ever wider layers until it became unstoppable.

Many had never voted before, including in their 40s. As hundreds of them threw themselves into the campaign, those who remembered what a real party of labour should look like could see it forming before their eyes and they too moved. Among them were activists who had held the labour movement together through the dog years of Thatcherism.

Mass face-to-face campaigning was combined with the tools of this century – Facebook, YouTube, Twitter, mass texting, bespoke apps – all run by the generation for which they are as familiar as a printed political leaflet once was. Every night, and late into the night, hundreds gathered at our headquarters provided by Chambers solicitors to rally, plan and organise on and offline.

This peaceful, democratic uprising comes from the same wellspring of discontent and alienation that fuelled disturbances in British cities last summer. But it is a positive counterpoint – bringing forth a new generation of political leaders, not another cohort trapped in the criminal justice system. Every politician should take notice, as they did not last summer.

Labour, above all, should learn this rude lesson. It cannot continue on the disastrous path set by Tony Blair, of war and occupation abroad and inequality at home. That's what lay behind the loss of a "safe seat", held for 38 years, just as the party lost London's East End in 2005.

The real Labour values I stood for in this election swept the Tories and Lib Dems away, and swept into every part of the constituency – including those areas where some voters, only a few years ago, had succumbed to the siren calls of the racists and fascists.

The media, especially the London media, should also smell the coffee. Something is happening in this country outside of the echo chamber. The council elections take place in May in many parts of the country: prepare for more shocks to come as people find their voices at the ballot box and in mass, democratic opposition to an elite that is failing them.

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George Galloway: The political rebel with a cause

Indefatigable in the pursuit of his causes, formidable in taking on his many opponents, he has ridden the political roller coaster for 25 years. And now he’s back as an MP after a sensational by-election victory
There is no one in politics who can whip up a crowd quite like George Galloway can. Nor are there many with his special talent for falling out with political allies. His is a long political biography, which had lurched from controversy to controversy, and has seen a series of setbacks any one of which would have finished off a less resilient character. Somehow whenever the world of politics thinks they have seen the last of "Gorgeous George", he bounces back.
Bradford West is now the fourth constituency to have George Galloway for its MP – itself an unusual record in modern politics. There is a cruel saying in Westminster that no one is more "ex" than an ex-MP. Galloway was expected to take on that unwanted status after being expelled from the Labour Party in 2003, but made an extraordinary comeback at the 2005 general election as MP for the hastily formed Respect party in Bethnal Green and Bow.

In 2010, Labour jubilantly saw him off when he ran against Jim Fitzpatrick in Poplar and Limehouse, and again expected him to vanish from the scene. Even on Thursday evening, after voting in Bradford West was almost over, Labour officials were quite sure that they had held the seat, though they acknowledged that Galloway had made an impact and expected him to come second.

Instead, after Easter, Galloway will return to Parliament, where he first made a mark 25 years ago. In the 1987 general election, he reclaimed Glasgow Hillhead, which the Labour Party had lost in a by-election in 1981 to Roy Jenkins, leader of the SDP. Most new MPs have to wait years before they make the front pages of the national press. Galloway achieved national fame straight away – but not in a good way.

As early as 1981, newspapers had started taking an interest in this political prodigy who described himself as having been "born in an attic in a slum tenement in the Irish quarter of Dundee, which is known as Tipperary". He had joined Labour's Young Socialists at 13, and was still in his teens when, remarkably, he was made secretary of the Dundee Labour Party. At 20, he was a member of the Scottish Labour Executive, and at 22 was Dundee's youngest councillor, despite being denounced by a local priest for "living in sin" with his future wife, Elaine. By 1981, he was one of the most articulate voices in Scotland of what was then known as the Bennite left, and before he was 30, he was general secretary of a major charity, War on Want.

At first, the charity thrived from having this dynamic, gifted, politically astute young boss. He improved its political connections and, when aid to the Horn of Africa increased dramatically in the wake of the Live Aid concert, he made War on Want the lead charity in channelling aid to the war-torn Eritrean and Tigris provinces of Ethiopia.

But towards the end of his time there, word began to spread that there was another, less attractive side to this charismatic figure. The Sunday Mirror carried damaging allegations of how Galloway had been conducting himself, written by Alastair Campbell. Just after his election to Parliament, Galloway called what was to be his last press conference as head of War on Want and, under persistent questioning from journalists, admitted that he had had sexual relations with two women during a conference in Athens in 1985 – a revelation that earned him the nickname "Gorgeous George".

"My wife won't leave me," he predicted. Actually, the relationship was soon over. Four years later, Galloway met the Palestinian-born biologist Amineh Abu-Zayyad. They married in a civil ceremony in 2000, but she divorced him in January 2009, citing his relations with other women. By then Galloway had a one-year-old son by his Lebanese researcher Rima Husseini.

Galloway's commitment to the Arab cause dates back at least 30 years, when he was instrumental in the unusual decision to "twin" Dundee with the Palestinian town of Nablus. After the first Gulf war, he began a campaign to end British sanctions against Iraq, which would bring him further attention. In 1994, he visited Baghdad and was filmed telling Saddam Hussein: "Sir, I salute your courage, your strength, your indefatigability."

Four years later, he set up the Mariam Appeal, named after a four-year-old Iraqi girl, Mariam Hamza, whom Galloway arranged to bring to Glasgow to be treated for leukaemia. The appeal, which paid for a number of Galloway's overseas trips, was never registered as a charity. Nonetheless, the Charities Commission looked into it after it was wound up in 2003, and again in 2007.

The second time around, the commission alleged that £230,000 out of the £1.4m raised by the appeal came from "improper" sources, via Iraq's food for oil programme. Galloway, who has never been coy in his own defence, described the commission's findings as "palpably false".

The Daily Telegraph thought it had Galloway bang to rights when, in the ruins of Baghdad's foreign ministry building, it found a document that referred to what were alleged to be payments to the MP, measured in barrels of oil. It has never been disputed that the document itself was genuine. However, the Telegraph read too much into its find, and ran an editorial implicitly accused Galloway of treason, for which he was later awarded £150,000 in libel damages.

Though he was by no means the only Labour MP to be opposed to the Iraq war, nor the most important, Galloway was the only one expelled from the Labour Party. With his usual love of a resounding phrase, he described George Bush and Tony Blair as "wolves" and, in Labour's views, had incited foreign armies to fight against British troops.

After his expulsion, he remained an independent MP for Glasgow Kelvin and joined forces with the Socialist Workers Party and others to create the Respect Party.

When Galloway took Bethnal Green and Bow by 823 votes, in an abrasive, bad-tempered race against Labour's Oona King, it was the first time since 1951 that a party avowedly left of the Labour Party had won a seat in the Commons. The east London seat, like Bradford West, had a high proportion of young Muslims who admired Galloway's opposition to the Iraq war.

His five years as a Respect MP were marked by two highly publicised appearances in places where British MPs are not normally to be found. In May 2005, he went to Washington to confront a Senate sub committee which had accused him of profiting from Iraqi oil. The senators were accustomed to dealing with witnesses who treated Congress with reverence, and were completely at a loss in the face of Galloway's abrasive way of using attack as the best form of defence.

In 2006, Galloway went on Celebrity Big Brother, under the illusion that it would allow him to relay his political views to the show's vast audience. Actually, most of his political remarks were cut out, and all that most viewers recalled was his bizarre impersonation of a cat.

Another high-profile appearance was his public debates with the writer Christopher Hitchens, who said of Galloway: "He looks so much like what he is: a thug and a demagogue, the type of working-class-wideboy-and-proud-of-it who is too used to the expenses account, the cars and the hotels – all cigars and back-slapping. He is a very cheap character and a short-arse." Galloway was equally insulting in return.

The Respect Party split apart when Galloway fell out with the SWP. When Galloway failed to be re-elected to the Commons in 2010, it looked as if Respect was heading for terminal decline, and that there was no future for George Galloway except as a star of the Iranian-owned Press TV and one of the last people in the UK to offer a qualified defence of the regime in Syria.

When he announced that he was running in Bradford West, it appeared to be a desperate attempt by a half-forgotten man to draw attention to himself. Almost the only people to spot what was actually happening were punters who bet so heavily on a Galloway victory that the bookies are saying the result is costing them £100,000. George Galloway is back on the scene.

A life in brief
Born: 16 August 1954, Dundee.
Family: His father was a Scottish trade unionist. Twice divorced, since 2006, Galloway has been married to Rima Husseini with whom has a son. Has a daughter from his first marriage.
Education: Harris Academy, Dundee.
Career: Elected MP for Glasgow Hillhead in 1987. Expelled from the Labour Party in 2003 over his stance on Iraq, and the following year co-founded the Respect Party. Won Bethnal Green in 2005 election, but at the 2010 election lost out in Poplar and Limehouse. This week he won Bradford West.
He says: “By the grace of God we have won the most sensational victory in British political history.”
They say: “He looks so much like what he is: a thug and a demagogue.” Christopher Hitchens

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by Tariq Ali


George Galloway's stunning electoral triumph in the Bradford by-election has shaken the petrified world of English politics. It was unexpected, and for that reason the Respect campaign was treated by much of the media (Helen Pidd of the Guardian being an honourable exception) as a loony fringe show. A BBC toady, an obviously partisan compere on a local TV election show, who tried to mock and insult Galloway, should be made to eat his excremental words. The Bradford seat, a Labour fiefdom since 1973, was considered safe and the Labour leader, Ed Miliband, had been planning a celebratory visit to the city till the news seeped through at 2 am. He is now once again focused on his own future. Labour has paid the price for its failure to act as an opposition, having imagined that all it had to do was wait and the prize would come its way. Scottish politics should have forced a rethink. Perhaps the latest development in English politics now will, though I doubt it. Galloway has effectively urinated on all three parties. The Lib Dems and Tories explain their decline by the fact that too many people voted!

Thousands of young people infected with apathy, contempt, despair and a disgust with mainstream politics were dynamised by the Respect campaign. Galloway is tireless on these occasions. Nobody else in the political field comes even close to competing with him – not simply because he is an effective orator, though this skill should not be underestimated. It comes almost as a shock these days to a generation used to the bland untruths that are mouthed every day by government and opposition politicians. It was the political content of the campaign that galvanised the youth: Respect campaigners and their candidate stressed the disasters of Iraq and Afghanistan. Galloway demanded that Blair be tried as a war criminal, and that British troops be withdrawn from Afghanistan without further delay. He lambasted the Government and the Labour party for the austerity measures targeting the less well off, the poor and the infirm, and the new privatisations of education, health and the Post Office. It was all this that gave him a majority of 10,000.

How did we get here? Following the collapse of communism in 1991, Edmund Burke's notion that "In all societies, consisting of different classes, certain classes must necessarily be uppermost," and that "The apostles of equality only change and pervert the natural order of things," became the commonsense wisdom of the age. Money corrupted politics, and big money corrupted it absolutely. Throughout the heartlands of capital, we witnessed the emergence of effective coalitions: as ever, the Republicans and Democrats in the United States; New Labour and Tories in the vassal state of Britain; socialists and conservatives in France; the German coalitions of one variety or another, with the greens differentiating themselves largely as ultra-Atlanticists; and the Scandinavian centre-right and centre-left with few differences, competing in cravenness before the empire. In virtually every case the two- or three-party system morphed into an effective national government. A new market extremism came into play. The entry of capital into the most hallowed domains of social provision was regarded as a necessary reform. Private financial initiatives that punished the public sector became the norm and countries (such as France and Germany) that were seen as not proceeding fast enough in the direction of the neoliberal paradise were regularly denounced in the Economist and the Financial Times.

To question this turn, to defend the public sector, to argue in favour of state ownership of utilities or to challenge the fire sale of public housing was to be regarded as a dinosaur.

British politics has been governed by the consensus established by Margaret Thatcher during the locust decades of the 80s and 90s, since New Labour accepted the basic tenets of Thatcherism (its model was the New Democrats' embrace of Reaganism). Those were the roots of the extreme centre, which encompasses both centre-left and centre-right and exercises power, promoting austerity measures that privilege the wealthy, and backing wars and occupations abroad. President Obama is far from isolated within the Euro-American political sphere. New movements are now springing up at home, challenging political orthodoxies without offering one of their own. They're little more than a scream for help.

Respect is different. It puts forward a leftist social-democratic programme that challenges the status quo and is loud in its condemnation of imperial misdeeds. In other words, it is not frightened by politics. Its triumph in Bradford should force some to rethink their passivity and others to realise that there are ways in which the Occupiers of yesteryear can help to break the political impasse.

Thursday 29 March 2012

A short history of privatisation in the UK: 1979-2012

 From the first experiments with British Aerospace through British Telecom, water and electricity to the NHS and Royal Mail


 

Richard Seymour

guardian.co.uk, Thursday 29 March 2012 11.03 BST larger
 

Royal Mail is being auctioned, and not necessarily to the highest bidder (and stamp prices are going up). The London fire brigade is outsourcing 999 calls to a firm called Capita, at the behest of the oleaginous chair of the capital's fire authority, Brian Coleman. Multinationals are circling hungrily around NHS hospitals. Schools are already beginning to turn a profit. In the technocratic nomenclature of the IMF, this would be called a "structural adjustment programme", but that doesn't really capture the sweeping scale of the transformation. We can see this through a potted history of privatisation in the UK.



• 1979-81: Experimentation



 

The Tories had long been committed to some policy of de-nationalisation. In response to the prolonged crisis of the 1970s, in which the Tories had struggled to maintain their parliamentary dominance, the Ridley report devised for the Thatcher shadow cabinet recommended a policy of breaking up the public sector and dismembering unions. Privatisation was at first subordinate to other policy themes, above all wage suppression to control inflation. But the first Thatcher administration did successfully introduce a degree of privatisation in some large public sector companies, above all British Aerospace and Cable & Wireless. At this stage, however, the focus was on privatising already profitable entities to raise revenues and thus reduce public-sector borrowing.



1982-86: Lift-off




Amid the early 80s recession, the Tories had begun to propose privatisation as a potential panacea. Conservative MP Geoffrey Howe extolled the "discipline" of the marketplace. The emerging doctrine was that privatisation would make the large utilities more efficient and productive, and thus make British capitalism competitive relative to its continental rivals. In this period, the government sold off Jaguar, British Telecom, the remainder of Cable & Wireless and British Aerospace, Britoil and British Gas. The focus had shifted to privatising core utilities.



This policy did not emerge out of nowhere; it was fully embedded in the Hayekian ideas that had guided Thatcher and her cohort in opposition. But it did develop in relation to specific policy objectives. It was not just a question of stimulating private sector investment, but also of culture war intended to re-engineer the electorate along the lines of the "popular capitalism" vaunted by Thatcher, and announced in the infamous "Tell Sid" campaign.



• 1987-91: Leaps and bounds




Following the Tories' third election victory, they were sufficiently confident to roll out their most aggressive privatisation programme yet. British Steel, British Petroleum, Rolls Royce, British Airways, water and electricity were among the major utilities for sale. These privatisations provoked serious opposition, perhaps sufficient to curb any tendency toward privatisation in the NHS. Nonetheless, market-driven measures continued to be imposed in the public sector, from the "internal market" in the health service to Major's ill-fated citizen's charter.



• 1992-96: Weakness and retreat




The fourth consecutive Tory administration was weak, and quickly divided over a range of policies, above all European monetary union. But the neoliberal premises of policy embedded by Thatcher remained intact, and the government continued to push privatisations in those areas where it felt able to. Inflicting a second defeat on the miners, the government proceeded with the final sell-off of British Coal, as well as electricity generating companies Powergen and National Power, and British Rail. Michael Heseltine's attempt to privatise the Post Office was abandoned, however, due to public opposition and resistance from a backbench fearful of electoral wipeout.



• 1997-2001: New Labour's compromise




New Labour had made electoral capital out of the Tories' unpopularity over privatisation, but only pledged to stop the sell-off of air traffic control. Even this minor promise was betrayed. For, if Thatcherism had not won the argument on public services, it had so comprehensively demolished the militant left and trade unions that there was nothing to prevent Labour from adapting to neoliberalism. The major privatisation policy introduced in this period was thus an awkward compromise between a managerial leadership and Labour's electoral base, known as the Private Finance Initiative (PFI) – a fudge originally pioneered by Norman Lamont. Introduced into the London Underground, the NHS and schools, these policies raised money in the short-term without the need for higher taxes. But there was also a streak of pro-market evangelising involved. Both Peter Mandelson and his successor at the department of trade and industry believed it was the role of government to foster entrepreneurial culture.



• 2002-8: Aggressive PFI



 

The second and third New Labour administrations pressed aggressively for further state down-sizing and privatisation. Blair had based his 2001 re-election campaign on the extremely unpopular PFI. The calculation was that even if the measure wasn't popular, his victory would prove that there was no realistic alternative. Though there were few major sell-offs, the government's policies on the Royal Mail and the NHS had, as their logical conclusion, the privatisation of these services. Even the fiscal crisis in the NHS, resulting from the high costs of PFI initiatives, did not dampen the ardour. It was not until the credit crunch and the ensuing crisis that the pendulum began to swing, if only temporarily, in the opposite direction when Brown was forced to belatedly nationalise a string of failing banks. But even then, it was clear that the intention was to restore these companies to private ownership as quickly as possible.



• 2009-: Thatcherism Mark II?




The Tories took office without a mandate, but with no lack of confidence. Their agenda, which had emerged since 2008, was to represent the crisis of global capitalism as a crisis of public sector spending. Having already privatised the Tote and announced the sell-off of Northern Rock, with other nationalised banks to follow, they have indicated that Royal Mail will be sold off, along with probation services, roads, large sectors of education and the NHS. Even sections of the police, traditionally an ally of the right, will be privatised. Outsourcing will be extended into every possible area.



But, as in the 1980s, the aim is not primarily to reduce public-sector borrowing. The Tories know that ongoing economic crisis is not just a fiscal or financial problem. The private sector is utterly stagnant. Globally, there are trillions of pounds being retained by corporations who see no viable avenue for profitable investment. US companies are holding on to $1.7 trillion, eurozone firms sit on 2 trillion euros, and British firms have £750bn doing nothing. Accumulation-by-dispossession is one way to get that money into circulation as capital. And while the Conservatives are not as ideologically confident as in the 1980s, the scale of their proposed privatisations suggests they expect to over-ride any opposition.



In historical context, privatisation seems to answer a number of dilemmas for the Tories. By spreading market incentives, it erodes the public sector basis for Labourist politics. By opening the public sector to profit, it gets a lot of capital into circulation. And by reducing the power of public sector workers, it suppresses wage pressures, thus in theory making investment more appealing. Above all, perhaps, in shifting the democratic to market-based principles of allocation, it favours those who are strongest in their control of the market, and who also happen to represent the social basis of Conservatism.



Tuesday 22 November 2011

Socialism for the Rich

George Monbiot

In the documentary series which finished on Friday evening, the heiress Tamara Ecclestone set out to prove that she isn't "a pointless, quite spoilt, really stupid, vacuous, empty human being". This endeavour was not wholly successful. Channel 5 showed her supervising the refurbishment of her £45m home in London, in which she commissioned a £1m bathtub carved from Mexican crystal, an underground swimming pool complex, her own nightclub, a lift for her Ferrari, a bowling alley with crystal-studded balls and a spa and massage parlour for her five dogs, to save her the trouble of taking them to Harrods to have their hair sprayed and their nails painted. But there was something the series didn't tell us: how much of this you helped to pay for.




In court a fortnight ago, her father, the Formula One boss Bernie Ecclestone, revealed that the fact his family's offshore trust, Bambino Holdings, was controlled by his ex-wife rather than himself could have saved him "in excess of £2bn" in tax. The name suggests that the trust could have something to do with supporting his daughter's attempt to follow the teachings of St Francis of Assisi.



Ecclestone has also been adept at making use of the corporate welfare state: the transfer by the government of wealth and power from the rest of us to the 1%. After the mogul made a donation to Labour's election fund, Tony Blair demanded that F1 be exempted from the European Union's ban on tobacco sponsorship. The government built a new dual carriageway to the F1 racetrack at Silverstone.



In other countries his business has received massive state subsidies. Russia, for example, has recently agreed to build a circuit for Ecclestone to race his cars, and then charge itself $280m for the privilege of letting him use it. Working in India in 2004, I came across the leaked minutes of a cabinet meeting in which the consultancy McKinsey insisted that the desperately poor state of Andhra Pradesh – where millions die of preventable diseases – cough up between £50m and £75m a year to support F1. The minutes also revealed that the state's chief minister had lobbied the prime minister of India to exempt Ecclestone's business from the national ban on tobacco advertising.



Socialism for the rich, capitalism for the poor: that is how our economies work. Those at the bottom are subject to the rigours of the free market. Those at the top are as pampered and protected as Tamara Ecclestone's dogs.



On Tuesday George Osborne decided at last to review the private finance initiative (PFI), under which the companies building public infrastructure made stupendous profits while the state retained the risks. But if you thought that the chancellor's decision represented a wider shift in policy, you'll be sorely disappointed. Two days later he agreed to sell the state-owned bank Northern Rock to Richard Branson. Under the deal, the state keeps the liabilities while Branson gets the assets – rather like PFI. The loss equates to £13 for every taxpayer.



Someone who will not suffer unduly from being touched for £13 is Matt Ridley. As chairman of Northern Rock, he was responsible, according to the Treasury select committee, for the "high-risk, reckless business strategy" which caused the first run on a UK bank since 1878. Before he became chairman, a position he appears to have inherited from his father, Ridley was one of this country's fiercest exponents of laissez-faire capitalism. He described government as "a self-seeking flea on the backs of the more productive people of this world … governments do not run countries, they parasitise them."



The self-seeking parasite bailed out his catastrophic attempt to put his ideas into practice, to the tune of £27bn. What did the talented Mr Ridley learn from this experience? The square root of nothing. He went on to publish a book in which he excoriated the regulation of business by the state's "parasitic bureaucracy" and claimed that the market system makes self-interest "thoroughly virtuous".



Having done his best to bankrupt the blood-sucking state, he returned to his family seat at Blagdon Hall, set in 15 square miles of farmland, where the Ridleys live – non-parastically of course – on rents from their tenants, handouts from the common agricultural policy and fees from the estate's opencast coal mines. No one has been uncouth enough to mention the idea that he might be surcharged for part of the £400m loss Northern Rock has inflicted on the parasitic taxpayer. It's not the 1% who have to carry the costs of their cockups.



Even in the midst of this crisis, when the poor are being hammered on all sides, the government still seeks to transfer their meagre resources to the rich. Last month the business department listed five employment rules that businesses might wish to challenge. Among them were the national minimum wage and statutory sick pay.



On Friday, David Cameron opened negotiations with Angela Merkel over the eurozone crisis. His two principal demands were that there should be no "Robin Hood tax" on financial transactions and that the working time directive, which prevents companies exploiting their staff, should be renegotiated.



Just as instructive was what he did not discuss. In fact, as far as I can tell, none of the European leaders have yet mentioned it in their summits, even though it accounts for almost half the EU's spending. It is of course the agricultural subsidy system, which now costs British taxpayers £3.6bn a year.



We like to imagine this money supports wizened shepherds who tie up their trousers with bailer twine, but the major beneficiaries are people like the Ridleys. The more land you own, the more support you receive from the state.





The common agricultural policy is a massive state subsidy to the richest people in Europe: the aristocrats and plutocrats who possess the big holdings. British politicians pretend that it is protected only by the French. This is bunkum: in February a House of Commons committee demanded not only that the existing subsidy system be sustained but also that we should reinstate headage payments, encouraging farmers to produce food nobody wants.



Last week the Guardian exposed a system which looks like state-enforced slavery. To qualify for the £53 a week they receive in jobseeker's allowance, young people are being forced to work without pay for up to eight weeks for companies such as Tesco, Poundland, Argos and Sainsbury. Some of the nation's poorest people, in other words, are being obliged by the state to subsidise some of its richest businesses, by giving them their labour.



For the corporate welfare queens installing their crystal baths, there is no benefit cap, no obligation to work, in some cases no taxation. Limited liability, offshore secrecy regimes, deregulation and government handouts ensure that they bear none of the costs their class has inflicted on the rest of us. They live at our expense, while disparaging the lesser mortals who support them.



A fully referenced version of this article can be found on wwwmonbiot.com