'We knew we were going to be hit by a tsunami’: John McDonnell Interview

Source The Guardian

John McDonnell arrives with his shirt open at the neck. As the photographer sets up, he says: “I must put a tie on. I want to look respectable.” He rummages in his rucksack and draws out a tie of a very conservative deep blue. As he puts it on, the man who once declared his mission to be “generally fermenting the overthrow of capitalism” jokes: “I’m trying to look more like a central banker.”

This fellow veteran of the Bennite left is Jeremy Corbyn’s closest ally in a shadow cabinet that contains very few true friends of the new Labour leader.

The cartoonish version of his shadow chancellor is a belligerent, divisive, leftwing firebrand. He certainly has a history of incendiary rhetoric and he is unquestionably leftwing. He is not humourless and, if he can be abrasive, today he is doing his best to turn his most emollient face to the world.

He acknowledges that many senior Labour MPs were appalled by his appointment and influential trade union figures urged the Labour leader to make a less contentious choice. The rightwing press have raged against him even more than they have about the election of Corbyn himself. “It was a difficult decision for both him and me” and “we knew we were going to get a tsunami hit us.”

He is a man many love to hate. Why is that? He puts it partly down to “swimming against the tide” for all those decades when his brand of leftwing politics was despised and ignored by successive leaders of the Labour party. He reveals that his wife and family had their doubts about whether he should take it on: he had a mild heart attack two years ago. “I had warnings from them: ‘Come on, look, are you sure?’ But it had to be done.”

After many conversations with Corbyn, they concluded that they had to “ride the controversy” because it was essential that leader and shadow chancellor were as one on economic policy. “We didn’t want to go through a Blair–Brown era again where leader and chancellor are falling out all the time or what went on with Ed [Miliband] and Ed Balls. I think Jeremy’s point of view is ‘I’ve got to have someone who I one hundred percent trust.’ ”

The composition of the rest of the shadow cabinet, he argues, shows that they are not being militantly factional and are genuinely interested in having “a really broad-based team” representing all strands of Labour opinion. “As big a tent as we possibly can.” They started making overtures to people before it was announced that Corbyn had won and he is still appealing to some who quit the shadow cabinet for internal exile on the backbenches. He hopes that they will think again and cooperate on the development of policy. “I’m still having that conversation now with people to see if we can get them back into some role. I think we might be able to.”

Like who? “I would like Chuka [Umunna] to come back, desperately.” He mentions some more of those who have refused to serve. “Shabana Mahmood is a brilliant talent for the future. People like that I’d really like to get back. If we could get them back on board it will send a message that we really are a big tent.”

His friend’s debut week as leader has not been a smooth ride. Even sympathisers have been tearing out their hair over an often shambolic first seven days of unforced errors and forced U-turns which gifted a lot of ammunition to their many enemies in both the press and the Labour parliamentary party. McDonnell acknowledges that it has been “a bit rough” and puts the mistakes down to naivety. Whatever mutinous colleagues say to the contrary, he claims to be completely confident that his friend will lead Labour into the 2020 election.

His own appearance on Question Time involved two apologies. Once for saying that he wished he could have assassinated Margaret Thatcher – “an appalling joke”. And again for a notorious speech in which he commended the bravery and sacrifice of the IRA for using their bombs and bullets to bring “Britain to the negotiating table”. Some of the audience applauded his expression of regret. Others have found his explanation for the IRA speech – that he was praising them to try to sustain the peace process – utterly unconvincing. “I set up the all-party group on conflict prevention and conflict resolution. I chaired it,” he says, but acknowledges: “There’ll be some I’ll never convince.” Part of his problem with presenting himself as one of nature’s peacemakers is that he has a lot of form when it comes to suggesting political opponents should meet violent ends, talking about “lynching the bastard” in reference to the Tory Esther McVey and having “a recurring dream about garrotting Danny Alexander”.

He smiles: “I know.”

Where is that coming from? Liverpool, is his answer. “I’m from the north. You can take the boy out of the north but you can’t take the north out of the boy. I’m a plain speaker.”

Does the mellow version of McDonnell extend to having anything pleasant to say about the man he now shadows, George Osborne? “I’ve tried to get to a situation where you mature, where you don’t personalise your politics. But I go back to my constituency and you should come to my surgery some time, you’d sit down and weep. I have people begging me for a house. I’ve got families living in beds in sheds. Shanty places. So I think Osborne is cut off from the real world. I’m going to challenge him to come down to see them. What angers me is that they don’t have any understanding of the consequences of what they’re doing.”

This promises lively fireworks ahead when he clashes with a Tory chancellor he calls “immoral”. But to opponents within his own party, the message is relentless conciliation. A manifesto he wrote three years ago called for a tax raid on the wealthiest 10%, banning companies from paying their chief executives any more than 20 times the lowest wage, and a new top rate of tax set at 60%. But he says he is not going to dogmatically impose his ideas. What he will instead announce is policy commissions to investigate various areas and he hopes for participation from a wide range of opinion not just confined to the Labour party.

He wants to change the Bank of England’s target so that it considers not just inflation when setting interest rates, but also the effect on jobs, investment and inequality. One of his biggest and most hotly contested ideas is forcing the bank to print money to fund infrastructure projects: so-called “people’s quantitative easing”. The governor of the bank, Mark Carney, has suggested that this would so compromise its independence that he could not remain as its governor. Rather than upbraid Carney for straying into political partisanship, McDonnell mildly responds that he is “going to try to meet him as soon as possible”.

For the first time in many decades, Labour has a shadow chancellor committed to the nationalisation of some strategic industries. Polls suggest that taking the railways back into state control is popular with a majority. He is likely also to strike a chord when he describes the recent sales of shares in chunks of the Royal Mail and Royal Bank of Scotland as “complete rip-offs” that have left the taxpayer seriously short-changed.

What is perhaps most interesting in terms of his personal ideological development and the way in which debate has shifted over the decades is that he no longer advocates, as the left did back in the 1980s, a return to nationalisation across the board. BT was once a state company. Would he seek to bring it back into public ownership again? “Too late,” he says. “Love to but too late.”

Lack of voter faith in Labour’s economic competence lay at the heart of the party’s defeat back in May as it also did when they were thrown out of office in 2010. If the public did not trust Gordon Brown and Alistair Darling with the economy, nor Ed Miliband and Ed Balls, why are they going to trust Jeremy Corbyn and John McDonnell?

“They’re not going to have to trust me or Jeremy Corbyn or whatever. They’re going to have to trust the Labour party.”

He says he wants the membership, which grew during the leadership contest and has drawn in more Corbyn enthusiasts since the result, to get involved in policy making. This also hints at how he and Corbyn think they can mobilise support in the party as a counterweight to the hostility of the great majority of Labour MPs.

“We’ll go on the stump immediately after the party conference, get as many members out there as possible, in the same way that Jeremy went on the stump before. But the difference now will be not urging people to vote for us, it’ll be about urging people to get involved in the discussion. I think Labour MPs will be shocked at the way in which they will be engaged in a democratic process of determining our policies.”

His admirers say McDonnell is a serious thinker about a radically different way of approaching the economy. Asked which writers have most influenced him, he rattles off several names of contemporary, leftwing economists, but at the top of his list he places Karl Marx. ‘You can’t understand the capitalist system without reading Das Kapital. Full stop.’

He says this with a knowing twinkle. That is not an answer you would have got from any previous Labour shadow chancellor in living memory. Nor from any central banker.

Fables of Modi’s first year in power

Jawed Naqvi in The Dawn

Some left-wing activists these days are worriedly discussing post-16th May India. According to them Narendra Modi’s consummate victory on this day last year marked a paradigm shift in the nation’s politics — for the worse, they assert. Others who shared the traumatic perspective changed their view earlier this year after Arvind Kejriwal emerged as Modi’s unlikely foil and bête noir.

Before we continue with Kejriwal’s near mythological role in stalling the rightist juggernaut led by Modi, let us briefly look at the prime minister’s Achilles heel, which, ironically, happens to be the clear majority he won exactly a year ago. In other words, a majority in parliament in the Indian system is no assurance of stability, a weakness that was best illustrated by Rajiv Gandhi’s turbulent tenure.

Gandhi’s four-fifths majority in the Lok Sabha remains unmatched to this day. Ideally, it should have given him five years of solid, stable government between 1985 and 1990. Instead, what he got was a crippling defence procurement scandal that haunted him till his death. His own party acolytes deserted him and some even conspired to topple the young prime minister.

Amitabh Bachchan, Arun Singh, Arun Nehru were among the younger lot who had come close to the prime minister after his mother’s assassination. They left him before his term was over. Others from the Gandhi Camelot moved over to the opposition Bharatiya Janata Party (BJP). His trusted aide Vishwanath Pratap Singh subsequently became prime minister in 1990. The BJP and the communists supported him.

Look at the contrast. Indira Gandhi who split her party to be able to become prime minister at the head of a minority government in 1966, ruled with far greater confidence with support from communists and other assorted liberals.

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Worried leftists should unequivocally thank Kejriwal for relieving them of their trauma over the Indian PM.

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Her legacy still energises Indian politics, its economy and culture too. The banks that were nationalised by her remain state-owned. The two words she added to the preamble of the constitution — secular and socialist — have resisted periodic assaults from the right. The liberal arts and the scientific spirit she gave the academia with no impressive majority in parliament is planted as firmly as a sturdy molar that can only be uprooted by a painful surgery.

Easily the best example of someone without a majority who completed three full terms, first as finance minister and two as prime minister, is Manmohan Singh. He introduced sweeping economic reforms though his government had to bribe a few tribal MPs to stay in majority. He got support from the communists in his first tenure as prime minister and earned enough brownie points to win a second term. He faltered after he evicted the left, not because he did not have a majority in parliament.

Atal Behari Vajpayee was invited to form a bizarre minority government in 1996. It lasted all of 13 days. How could the president invite anyone who did not have the remotest proximity to finding a majority? Indian presidents have not always been transparent. Anyway it was a two-week government that signed the damaging Enron electricity deal, majority or no majority.

My worried leftist friends should unequivocally thank Kejriwal for relieving them of their trauma over Modi. The Aam Aadmi Party he heads has single-handedly changed the contours of possibilities for India’s political cobblers. When I see former BJP minister Arun Shourie laying into Modi on the eve of his completing his first year in office, the criticism reminds me of Rajiv Gandhi’s disloyal friends. However, Shourie could only speak because of Kejriwal’s amazing victory, which took the wind out of the prime minister’s sails.

If Mufti Mohammed Sayeed in Indian Jammu and Kashmir got the BJP MLAs to swear by the Kashmiri constitution they were loath to, he had his way because AAP’s victory in Delhi had emboldened him. Sonia Gandhi, ever so reclusive since the drubbing of her party by Modi, suddenly found spring in her walk. She led the entire opposition, including communist leader Sitaram Yechury, to the presidential palace to protest Modi’s land acquisition bill. Mamata Banerjee in West Bengal and the backward caste satraps in Bihar and Uttar Pradesh have benefited from Kejriwal’s humbling of Modi. Even Modi’s ally the Shiv Sena is now growling thanks to AAP.

Modi’s choreographers, which include the bulk of the media, are projecting his foreign policy in glowing terms not the least to mask his reneging on most domestic promises — rural, urban, rich, poor. With his claims of head transplants in ancient India, the prime minister has also become a caricature of the tough cookie he was thought to be. His gag measures against certain NGOs have boomeranged, inviting an earful from foreign governments.

He might have felt close enough to President Obama to call him by his first name, but it was more gracious for India that Obama called Manmohan Singh his learned guru.

Examples are galore of leaders being spurred by domestic difficulties to make foreign policy choices, and visits. Rajiv Gandhi was laying into Pakistan with Operation Brass Tacks before the Bofors scandal broke. When the scam raged he found himself signing a major agreement with Benazir Bhutto for nuclear safety with Pakistan.

Modi can wear any headgear in China, but he can’t approach the simple handshake between Deng Xiaoping and Rajiv Gandhi nor Narasimha Rao’s game-changing 1993 agreement with premier Li Peng for “peace and tranquillity on the borders”. In Mongolia, as I write, Modi is having a great time. Who showed him the way?

Indira Gandhi got Mongolia to second the resolution for the recognition of Bangladesh at the UN in 1972. The job done, she invited the Mongolian prime minister to Delhi, took him out for a quiet chat under a tree at Teen Murti House. When she offered him a cigarette, the guest hesitated. She lit one herself, helping her friend to pick one from the pack.

Mobile phone companies have failed – it's time to nationalise them

It may sound like off-the-wall leftiness, but there are clear and convincing arguments for a nationalised mobile phone network

• 
• • Owen Jones
  • The Guardian, Monday 11 August 2014

Mobile phone companies put profit before the needs of the consumer. Photograph: Alamy

Nationalisation is a taboo among the political and media elite, its mere mention guaranteed to provoke near-instantaneous shrieks of "dinosaur!" and "go back to the 1970s". Imagine the Establishment's horror, then, when a succession of recent polls found that nearly seven out of 10 Britons wanted the renationalisation of energy, and two-thirds of the electorate wanted rail and Royal Mail back in public hands. Even Ukip voters – those notorious bastions of pinko leftiness – overwhelmingly backed the renationalisation of key utilities. While our political overlords are besotted with Milton Friedman, on many issues the public seem to be lodged somewhere between John Maynard Keynes and Karl Marx.

Previously state-owned services are one thing: but what about the mobile phone network? Even the very suggestion is inviting ridicule. But if people are so keen for public ownership of rail, why is the case any weaker for mobile phones? They are a natural monopoly, and the fragmentation of the telecommunications network is inefficient. Their service is often poor because they put profit ahead of the needs of the consumer. And rather than being the product of a dynamic free market and individual plucky entrepreneurs, their technological success owes everything to the public sector. It might seem like barking leftiness on speed, but the arguments for nationalising phone networks are less absurd than they might appear.

The eternal irritation of any mobile phone user is the signal blackspot. They affect everyone. Even David Cameron has had to return early from his holidays in Cornwall because of problems with signal "not-spots". Nor is it only a problem for people in rural areas. Richard Brown lives at the top of a hill in Brighton, and he can't get a signal withVodafone, despite its database claiming excellent coverage. "So for £100 I bought a 'Sure Signal' device – or in other words paid £100 to enable Vodafone to deliver me the core service that I am already paying upwards of £30 a month for." It plugs into the router and drains power, but seems to make little difference.

In his south London flat, EE customer Ben Goddard's mobile phone almost always registers no bars. With missed calls from hospitals and family members, he's been forced to install a house phone. "Zero signal in east London," says fellow EE user Dom O'Hanlon. "No attempt to fix, help or offer customer service." EE seem to have abandoned its earlier incarnation as 'Everything Everywhere' because it was so widely mocked as 'Nothing Nowhere'. When Ben Parker switched from EE to Vodafone, he found that his signal did improve, but his data access died, forcing him to depend on Wi-Fi.

If you have tried to deal with the customer service arm of the mobile phone giants, then please do not read on, because you will only relive traumas you would rather forget. After Grace Garland was signed up to EE from her Orange contract, her 4G and internet access all but vanished for several months. Errors at EE's end left her being charged double, and its system believed she had run out of her data allowance, leaving her with no access to crucial work emails. "No one took my concerns seriously," she says. "They told me they had actually subcontracted a lot of their technical support to outside parties who can only be contacted by them by email, making everything slow and ineffectual." Of course, mobile phone companies do not provide detailed data about their national coverage, leaving customers to choose on the basis of factors such as price.

According to OpenSignal – a company that is ingeniously working out national signal coverage by tracking data from mobile users – the average British user has no signal 15% of the time. And here is where the point about a natural monopoly creeps in. Mobile phone companies build their masts, but don't want to share them with their competitors. That means that rather than having a network that reflects people's needs, we are constantly zipping past masts we are locked out of. In many rural areas, mobile phone companies are simply making the decision that there are not enough people to justify building more masts. Profit is prioritised over building an effective network that gives all citizens access.

 Signal failure … a woman struggles to make a call in Hythe, Kent. Photograph: Alamy

To be fair to the government, it is proposing action to compel companies to share masts. But OpenSignal's Samuel Johnson says that this would only cover phone calls and text messages, not data, and would reduce our time without signal to about 7%. Why not force them to share all data? "Well, it'd be bad for competition, because it would hit their profits," he says. Not only that, but even if the government's modest measures are implemented, the potential financial hit to mobile phone companies would deter them from clamping down on the final 7%.

Customers are ripped off in other ways. The former Daily Telegraph journalist George Pitcher has pointed out that the typical "free phone when you sign a long contract" offer is a scam. In a typical £32-a-month contract spread over two years, you're coughing up £768, even though the phone is worth just £200. Get a £15-a-month SIM card-only deal and buy a £10 mobile off eBay instead, he suggests, and you'll save £400. "Perhaps the mobile phone companies could be nationalised and given to the banks?" he concludes. Last part aside, Pitcher has it in one. And then there's the derisory cost to the company of sending snippets of data such as text messages – which can cost the user 14p a pop. Last year, Citizens Advice received a whopping 28,000 complaints about mobile phones, often from customers who could not be released from contracts even if there was no signal in their area.

Neither are mobile phones themselves triumphs of the private sector, or even close. "It's not far-fetched to suggest nationalisation," says economics professor Mariana Mazzucato, "because these companies aren't the result of some individual entrepreneur in the garage. It was all state-funded from the start." As I write this, I fiddle occasionally with my iPhone: in her hugely influential book The Entrepreneurial State, Mazzucato looks at how its key components, like touchscreen technology, Siri and GPS are the products of public-sector research. That goes for the internet, too – the child of the US military-industrial complex and the work of Sir Tim Berners-Lee at the state-run European research organisation Cern in Geneva.

"It's actually the classic case of economies of scale, or a natural monopoly, and the decision you'd have to make is whether it's one firm or the state running the whole thing," says Mazzucato. "When you chop it up, you lose the benefits of cost and efficiency from having one operator." Many network providers spend more money on share buybacks than research and development, retarding further technological progress in the name of profit. And then there's Vodafone, which has become one of the key targets of the anti-tax avoidance movement. It's cheeky, really: leave the state to fund the technology your business relies on, and then do everything you can to avoid paying anything back.

There are many reasons why a fragmented mobile phone network is bad for the consumer. Dr Oliver Holland of King's College London's Centre for Telecommunications Research sympathises with the idea of a nationalised network on technical grounds. This is how he explains it. Each mobile phone company is allotted a slice of the frequency spectrum. But at any given time, lots of customers belonging to one company may be using their mobile phones. "You will probably have a reduction in the quality of the service, because they're all competing for the spectrum." Customers belonging to another company may be using the service less at the same time, leaving their slice of the spectrum to go to waste when others need it. "If you had just one body, instead of dividing the spectrum into chunks, they can use it more efficiently," he says.

The case for nationalising mobile phone companies is actually pretty overwhelming. It would mean an integrated network, with masts serving customers on the basis of need, rather than subordinating the needs of users to the needs of shareholders. Profits could be reinvested in research and development, as well as developing effective customer services. Rip-off practices could be eradicated. It doesn't have to be run by a bunch of bureaucrats: consumers could elect representatives on to the management board to make sure the publicly run company is properly accountable. Neither does nationalisation have to be costly: Clement Attlee's postwar Labour government pulled it off by swapping shares for government bonds. So yes, it might sound far-fetched, the sort of proposal that lends itself to endless satire from the triumphalist neoliberal right. But next time you're yelling at your signal-free mobile phone, it might not seem so wacky after all.

It's time to revive public ownership and the common good

Despite its dire record, privatisation is rarely questioned. We must push for our shared interests to take precedence

• 
• • Anne Karpf
  • The Guardian, Friday 4 July 2014

Ed Balls on The Andrew Marr Show, where he said: 'I don’t want to go back to the nationalisation of the 1970s.' Photograph: Jeff Overs/BBC/PA

It might sound like an oxymoron, but this is a positive article about public services. So effectively has the coalition rebranded an economic crisis caused by private greed as the consequence of public ownership, that nationalisation has come to be seen as a universally discredited hangover from bad old Labour. So while current Labour is considering taking back parts of the rail network into public ownership the shadow chancellor, Ed Balls, last weekend was intoning the neoliberal catechism: "I don't want to go back to the nationalisation of the 1970s."

But bringing outsourced services into public ownership isn't about looking back: it's about moving forward, and is a popular idea (66% of respondents in a poll last year supported the nationalisation of energy and rail companies, including 52% of Tories). For today, in the face of the combined bungles of G4S, Serco and Atos, not even the slickest PR-turned-politician can sustain the myth that private equals efficient.

Yet privatisation is touted as a panacea and cliches are trotted out about the evils of the "nanny state". We need to develop a new language to talk about public ownership, one that detoxifies it and taps into the wide recognition that natural resources and essential public services should not be treated as commodities.

Instead of talking about the state, Hilary Wainwright, in a powerful new booklet – The Tragedy of the Private, the Potential of the Public – describes water, health and education as "the commons" – an excellent term. What's remarkable, and hitherto fairly undocumented, is how all over the world a quiet process of remunicipalisation is taking place. Wainwright gives examples from Newcastle to Norway. In the UK, she found over half of 140 local councils bringing services back from the private sector. In Germany, by 2011 the majority of energy distribution networks had returned to public ownership. Even in the US, a fifth of all previously outsourced services have been brought back in-house.

The case of water is a particularly powerful one: to most people the idea of privatising it is alarmingly similar to the privatisation of air. Wainwright tracks struggles to resist the privatisation of water and defend it as a public good in Brazil, Uruguay and Italy.

What makes all this heartening is that new social forms of ownership are emerging in which public utilities are run by coalitions of workers and service users. Theirs isn't just a defence of public services but an attempt to democratise them so they are not the top-down bureaucracies of old or simply job-saving strategies (important though these may be). They become what Wainwright calls "new forms of collectivity" – unions and public managing common resources together for shared benefit.

There is a palpable momentum to these ideas. Last summer saw the formation of the We Own It campaign, which is lobbying for a public service users' bill. This would promote public ownership as the default option for public services and give the public a say in whether services are privatised. This week, a New Economics Foundation working paperalso set out alternatives to the marketisation of public services.

These constitute a challenge to the fatalistic there-is-no-alternative narrative that has dominated political discussion. In his recent book, Does the Richness of the Few Benefit Us All?, sociologist Zygmunt Bauman argues that the alleged "musts" of political discourse "are nothing other than various aspects of the status quo – of things as they do, but in no way must, stand at the moment".

Wainwright observes that austerity in the aftermath of the second world war applied to everything except the welfare state, which saw generous investment. In a decade or so, will we come to view the privatisation of public utilities as a brief historical interlude of market madness, of ideology trumping not only human values but also value for money?

The public sector isn't perfect but at least it doesn't fleece us

A culture in which the customer comes last will fail and fail again

• 
• • Will Hutton
  • The Observer, Saturday 8 February 2014 20.05 GMT

However friendly people working a call centre are, they are caught in a process that puts the customer last. Photograph: Murdo Macleod for the Observer

Lloyds Bank casually announced last week that it was setting aside another £1.8bn to meet potential claims from customers after knowingly selling them expensive insurance policies they could not need nor use. The grand total of provisions it has made is now nearly £10bn for claims from up to 700,000 people – a stunning indictment of its business practices.

Yet there is little public angst. Last December, Lloyds was fined a record £28m by the Financial Conduct Authority for the period between 1 January 2010 and 31 March 2012 – during which the government held a 39% stake in the bank – for having lax controls and incentivising its staff to treat its customers as milch cows. Extravagant "champagne" bonuses were offered to staff who could loot their customers with policies cynically designed to offer nothing of value, nothing less than organised theft. In Ireland at least, the former executives of the bust Anglo Irish bank are on trial. In Britain, the former head of Lloyds retail banking division, Helen Weir, has gone on to become finance director of John Lewis, but at least she has said how sorry she is. That's all right then.

Otherwise, Lloyds Bank is hardly eating humble pie. While Barclays chief executive, Antony Jenkins, is trying to engineer a massive change in his bank's culture, his counterpart at Lloyds seems to be focused on one target only – ensuring sufficient profitability to allow the government to offload more of its stake and, along the way, to vastly enrich himself. There has been zero pressure from his largest shareholder – the government – to reproduce Jenkins's initiative and do more about the mis-selling scandal than to utter bromides about winning back trust. The solution is for the bank to become 100% owned by the private sector as soon as possible, seen as an unalloyed good thing.

This combination – feckless owners, in this case HM Treasury, which cares nothing about the bank's ethics but only about its share price, alongside managers who appear to see their customers as objects to be fleeced – is deadly. But the media are hardly abuzz with sustained complaint and protest. Rather, they have helped construct the doctrine that anything done in the private sector is generally fabulous, and that £10bn scandals such as Lloyds, while deplorable, are the exception. Meanwhile, anything done in the public sector is by definition abominable, wasteful and ripe for privatisation or contracting out. The sooner Lloyds is in the private sector away from the "dead" hand of state ownership the better. But the state has not been a dead hand: it has been preoccupied with its own financial interests, like every other private owner.

Lloyds is not alone: the other banks have earmarked another £10bn for mis-selling similar products. Their investment bank arms are engulfed with charges of colluding to rig interest rates and foreign exchange markets on a global scale, along with more record-breaking fines. Meanwhile, the average customer's experience remains dismal. Staff in disempowered branches and industrialised call centres do their best to be friendly, but work within processes in which a good customer experience is plainly a low priority. Trying to exercise my right to flex a credit facility recently was a descent into a privatised Orwellian madness, while anyone who has had to look after an elderly relative's financial affairs enters a bureaucratic, time-consuming labyrinth.

This is not a culture confined to banking. Bombardier recently walked away from a £350m contract to provide signalling for London Underground: it had underestimated the technical complexity and would not commit the resource to meet its side of the bargain. But last week it picked up the £1bn contract to build 65 trains for Crossrail, with its disgraceful behaviour over the signalling contract forgotten, threatening to close its Derby plant if it did not get the business.

Then there are Serco and G4S, with their litany of failures as holders of government contracts. The root of their difficulties is, whatever their original virtues, both have built a culture in which exploiting, rather than serving, the customer comes first – whether it's Serco charging the state for electronically tagging prisoners who did not exist or G4S woefully underproviding security guards for the Olympics. The same dynamic – transient, greedy owners and pay systems that over-reward short-term financial success and cutting corners – produces the same result.

Now large parts of the probation service are to be run in the same way by the same kind of company, with the justice secretary, Chris Grayling, absurdly promising more " reform" and "efficiency". He is outdone by his colleague Dan Poulter at health, selling off 80% of Plasma Resources UK, the NHS company that secures blood plasma for British patients, to Bain Capital, the private equity company built by presidential candidate Mitt Romney. Bain's sole interest is financial, constrained only by its fear of a reputational disaster if patients start dying as it cuts costs and over-rewards managers who try to fleece the NHS, as they necessarily will. Who could consign the provision of blood plasma to such custodians? Only a fool, knave or Tory politician.

The NHS takes a daily pummelling, but enter its portals and a very different culture rules. Despite all the efforts of successive New Labour and Conservative ministers intent on reproducing the private sector "disciplines" that so animate Lloyds, Bombardier, Serco, G4S et al, it still manages to combine humanity and efficiency. Its systems are not extravagant, but there is a sense, as I recently discovered with a close family member in a long spell in hospital, that the patient remains at the centre of everyone's preoccupations.

The public sector is imperfect: it is run and operated by fallible human beings. There are spectacular failings, ranging from the BBC's wasted £100m on its digital media initiative to the unfolding IT disaster over universal credit. But what it does not deserve is universal castigation because a priori it must be useless. It is accountable. It does not loot its users. It is pretty efficient. It is humane.

Nor does the private sector warrant such fawning praise or the self-pity of many of its leaders who claim that profit is still a dirty word. It can do magic – the smartphone, anti-cancer drugs, multiple apps, robots – but it cuts corners too. The headlines, as I write, are of a food scandal in which a third of sampled foodstuffs are wrongly labelled. Regulation, derided as a burden on business, is, rather, what society deploys to keep business honest, whether it emanates from London or Brussels. It is time for a reset and a rebalance. End the jihad against all things public and invite business genuinely to earn its profits.

Ed Miliband isn’t offering socialism – but the Tories are still terrified

Owen Jones in The Independent

The rule of capital is “unimpaired and virtually unchallenged; no social democratic party is nowadays concerned to mount a serious challenge to that rule.” If he was still with us, the socialist Ralph Miliband would have noted two big changes since he wrote these words not long before his death in 1994. Firstly, he’d observe – with little surprise – that capitalism has plunged itself into yet another almighty mess. Secondly, he would undoubtedly be consumed with pride that his youngest son had assumed the leadership of one of these social democratic parties. Momentous events indeed: but his wistful conclusion would have remained the same.

That in mind, I wonder what Ralph Miliband would have made of his son’s transformation from a “laughable blank sheet of paper” to “frothing-at-the-mouth Communist who is going to nationalise your mother quicker than you can say ‘Friedrich Engels had a cracking beard'”. Ed Miliband’s suggested crackdown on land-banking (once endorsed by Boris “Commie” Johnson) and a temporary freeze on energy prices (backed by arch-Leninist Tom Burke, the former Tory special adviser on energy) have provoked comparisons with undesirable elements ranging from Robert Mugabe to the Bolsheviks. After he stood on a soapbox in Brighton and indulged a bystander asking when he would “bring back socialism”, the British right have behaved as though Labour are planning to finish what Lenin was doing before he was so rudely interrupted.

In part, it is the sinister red-baiting of Ed Miliband through his dead father, culminating with the Daily Mail accusing the Labour leader of planning to drive “a hammer and sickle through the heart of the nation so many of us love”. Pass the spliff, Mr Dacre. “Like a good Marxist,” writes The Daily Telegraph’s Charles Moore, “he detects the cowardice latent in capitalists,” accusing Miliband of being “part of an ideology” which is “ultimately pauperising and totalitarian.” Jeremy Hunt odiously endorsed the Mail’s lunacy, arguing that “Ralph Miliband was no friend of the free market and I have never heard Ed Miliband say he supports it.” George Osborne, meanwhile, accuses Ed Miliband of making “essentially the same argument Karl Marx made in Das Kapital.”

This is what is really going on. The right are so drunk on three decades of free-market triumphalism, so used to the left being smashed and battered, that they believe even the mildest deviation from the neo-liberal script is unacceptable. They thought all of these battles had been won, that they were rid of all their turbulent priests, and now they are incandescent at the alleged resurgence of defeated enemies. Don’t you know you’re supposed to be dead? It’s not even the most moderate form of social democracy that the right are trying to drive from political life. Anyone who does not advocate yet more aggressive doses of neo-liberalism – more privatisation, more cuts to the taxes of the wealthy, more attacks on workers’ rights – is liable to come under suspicion, too.

The British right’s strategy is pretty clear. They want to do to “socialist” what the US right have done to “liberal”: turn it into an unequivocally toxic word that no-one in public life would want to associate with, and use it as a means to smear political opponents deemed to deviate from Britain’s suffocating neo-liberal consensus. Bemusing, to say the least, given Labour first officially declared itself a “democratic socialist party” under Tony Blair in 1995 as a sop to the left in the party’s new revised Clause IV. He even wrote a Fabian Society pamphlet entitled Socialism. Yes, granted it meant nothing more to him than motherhood and apple pie, and he had more leeway than Miliband because it was rather more difficult to pin him down as a heartfelt lefty, but the point is even New Labour could happily bandy “socialism” about.

But let’s get a bit of perspective here. Socialism? I don’t think so. Labour have – wrongly – committed themselves to Osborne’s spending plans in the first year of a new government. As Michael Gove gobbles up the comprehensive education system for dinner, Labour’s response has been, to say the least, muted. Medialand may be wailing about 1970s socialism being back with a vengeance, but given polls show 69 per cent want the energy companies nationalised, the Labour leader still found himself to the right of public opinion. No commitment on rail renationalisation, either, which some polls show is even the preferred option of Tory voters. There’s suggestions Labour would hike the top rate of tax up to 50 per cent again, but polls show the public would be happy to take it to 60 per cent. Not exactly the full-scale expropriation of the bourgeoisie, is it?

In truth, Ed Miliband strikes me as an old-style social democrat, perhaps what would have been described as the “Old Labour Right” before Blair’s Year Zero. He generally seems well-intentioned about dragging the political centre of gravity away from the Thatcherite right, but appears to fear a lack of political space to do so. He has made moves towards a mild social democracy in limited areas – but it is just that, mild, although even that is too strong for those now imitating the hysterical rhetoric of Barack Obama’s Tea Party opponents.

It is difficult, sometimes, not to be overwhelmed by the  hypocrisy of the right. They don’t mind a bit of statism, as long as, generally speaking, it’s propping up the wealthy. Banks bailed out by the taxpayer, not free-market dogma; infrastructure, education, and research and development that all businesses depend on, paid for by the state; private contractors who owe their profits solely to state largesse; even mortgages now underwritten by the state. It is only when it is suggested that the state might help those near the bottom of the pile that the right cries foul. In their world, “moderation” means the biggest cuts since the 1920s, the driving of over a million children into poverty, privatising the NHS without public consent and dropping bombs on foreign countries. “Extremism” is curbing energy prices, asking the booming wealthy to pay a bit more tax, and stopping construction firms squatting on land during a housing crisis. So let’s start telling it as it is: they are the extremists, however much they squeal disingenuously about the “centre ground”.

Real democratic socialism would not mean the odd curb on energy prices. It would mean a living wage instead of subsidises for poverty pay, and allowing councils to build housing rather than taxpayers lining the pockets of private landlords. It would mean arguing for social ownership – from banks to the railways – giving real democratic control to workers and consumers.

That is not currently on offer from Labour. But the right fear that, if even mild social-democratic populism proves popular, the door might open to more radical ideas. Their whole Thatcherite consensus could prove imperilled. And that is why the British right are starting to sound like bad-tempered Joseph McCarthy clones who stigmatise even timid social democracy as dangerous extremism to block any further shift away from free market extremism. But a word of warning to the right. Look across the Atlantic. How has the Tea Party-isation of the US right worked out for them? Because that is exactly where you are heading.

British Rail - Should it be renationalised?

Privatising the railways was a disaster. It's time to renationalise

Passengers are paying a fortune to travel in overcrowded trains, so Labour, like the Greens, should seize the initiative

• 
• • Caroline Lucas
  • theguardian.com, Thursday 22 August 2013 17.30 BST

'The solution the Green party is proposing is for our railways to be brought back into public hands, with passengers having a greater say in the development of the system.' Photograph: Bruno Vincent/Getty Images

"No direction", "dithering", "rudderless". Ed Miliband isn't the first opposition leader to hear this kind of language as an election looms, so perhaps we shouldn't be surprised that his MPs are queuing up to offer him friendly encouragement to fill the policy vacuum.

Clearly, it's not easy being in opposition, knowing that every policy announcement can and will be used against you by the government and a hostile media. But that's why politics requires courage.

Labour now has some fantastic opportunities to get behind progressive policies that would resonate with its traditional support and with voters. One in particular is about to pull into the station. With the dreadful news last week that rail fares will go up by an average of 4.1% next year (and sincere sympathies to you if you're one of the many passengers who will be hit much harder than that), it's surely time for Labour to accept that privatisation of the railways was a disastrous failure that it should have reversed when it had the chance.

With the prime minister's former speechwriter, Ian Birrell, leaping to the defence of privatised services and talking about record levels of passenger satisfaction, surely now is the time for Miliband's team to sign up to a policy that would genuinely distinguish him from the coalition. The shadow transport secretary, Maria Eagle, sounds as if she wants to head in that direction. She recently criticised the government's determination to re-privatise the East Coast service, calling it "bizarre and dogmatic". East Coast, she noted, makes one of the highest payments to the public purse, receives the least subsidy and is the only route on which all profits are reinvested in services. So why doesn't Labour go the whole way?

The Rebuilding Rail report, published last year by Transport for Quality of Life, offers a superb analysis of the mess Britain's railways are in. It finds that the private sector has not delivered the innovation and investment that were once promised, that the costs of back-room staff have massively increased, and that the costs of train travel rose by 17% between 1997 and 2010 (while the costs of travelling by car fell). It conservatively estimates that £1.2bn is being lost each year as a result of fragmentation and privatisation. The irony is that some of the biggest profiters are the state-owned rail companies of our neighbours: Deutsche Bahn, for example, owns three UK franchises.

Birrell seeks to paint opponents of privatisation as dewy-eyed nostalgists. But the modern, efficient, clean, affordable services enjoyed in other parts of Europe offer a much better blueprint than our own past. The solution the Green party is proposing is for our railways to be brought back into public hands, with passengers having a greater say in the development of the system. The government would take back individual franchises when they expire, or when companies fail to meet their conditions. The enormous savings generated could and should then be reinvested in rail infrastructure, and to reduce the soaring cost of fares.

My private member's bill sets out the process to make this happen, and is due to have its second reading in October. I've written to Maria Eagle asking if Labour will get behind it. As a policy for Labour, it's unlikely to play well in the Mail and the Telegraph. But I suspect many of their readers – particularly those reading their papers while jammed up against a fellow commuter on an overcrowded, overpriced train – might be more receptive. And certainly there are many rank and file Labour MPs, many of whom are already backing the bill, who are desperate to see their leader prove himself as theconviction politician he says he is.

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Forget the nostalgia for British Rail – our trains are better than ever

Passengers may be grumbling about the planned fare increases, but on balance rail privatisation has been a huge success

• 
• • Ian Birrell
  • The Guardian, Thursday 15 August 2013 20.25 BST

'For all the defects of a rushed privatisation, rail has evolved into a ­privately run public transport system playing a critical and successful role in the economy.' Illustration by Satoshi Kambayashi

There is a weary predictability to the political choreography. Once again, it's revealed,commuter rail fares are rising above the rate of inflation, squeezing the cost of living still further for hard-pressed families. Ministers claim they checked bigger increases; the opposition pretends it would have done differently; passenger groups scream in pain; and the unions demand a return to state ownership.

This is one area where union conservatism strikes a chord with the British public, long sceptical over the supposed benefits of rail privatisation. Many regular users see it as little more than a modern-day train robbery, with fat cat bosses cramming passengers into carriages and creaming off vast profits from creaking services. Surveys show two-thirds of voters would happily see the railways renationalised, an idea being considered by Labour.

As so often, conventional wisdom is wrong. For all the defects of a rushed privatisation, rail has evolved into a privately run public transport system playing a critical and successful role in the economy. The reality could hardly be more different to perception: passenger numbers booming, productivity rising, the number of services soaring, and customer satisfaction at near-record highs. Even those hated fare rises are not all they seem.

Modern vision is clouded by misty-eyed nostalgia for lovely old trains that once trundled around our tracks. As we hurtle along in slick modern trains with Wi-Fi and friendly service, it is easy to forget the poor punctuality and filthy carriages in the dismal days of British Rail. It was crippled by decades of under-investment, driving up fares and driving away freight – but even Margaret Thatcher saw the sale of the railways as a step too far. It was left to her successor, who forced it through too fast with civil servants told to privatise "as soon as practicable" and ensure the process was irreversible.

As one former rail boss said, the plan was half-hearted and half-baked; it was so unloved even Lord Whitelaw, Thatcher's long-suffering deputy, opposed the idea. The result in political and financial terms was a disaster, symbolised by executives of three rolling-stock firms handed the most obscene profits on a plate. The architecture of privatisation was flawed – an attempt to impose models from other industries on a complex transport system – but the ambition to introduce competition and private capital was sound.

Two decades later, some – although far from all – of the kinks have been ironed out. There remain, for example, issues over inflated hidden subsidies handed to the train operating companies. And while public spending on the railways has soared, Network Rail remains wasteful and guilty of inadequate management yet its bosses take big bonuses. The transport secretary, Patrick McLoughlin, should have slammed their greed rather than supported them earlier this week.

But focus on the facts. When I travel from London to watch my football team, Everton, play at home, the average journey time to Liverpool is now 37 minutes quicker than when rail was privatised. This makes a difference on a trip that is now little more than two hours. There are also more options available for travel; on some major routes, more than twice as many trains are running. Britain has an additional 4,000 services a day, a rise of one-fifth that ensures the most frequent services among eight European nations tested by a consumer group. And we have the safest railways on the continent.

The ultimate test of any market is its popularity. Here again, rail can claim success despite intense competition from bus companies and budget airlines, which only took off in this country after rail privatisation. When the plan was first promoted, Britons took on average 11 train trips a year; now we take twice that number. Since the turn of the century freight traffic has risen substantially and passenger numbers have soared by 49% – far more than under those admired state-run services in France, Germany and the Netherlands. This means the level of subsidies per passenger has fallen while revenues to Whitehall have risen by more than £1bn.

Passengers grumble with justification over a maze-like ticketing system, yet these price variations have ensured rail companies can compete on longer journeys with rivals in the air and on the roads. So yes, the cost of some fares is now ridiculous; with travellers often stung by hideous sums for peak-time travel – but away from the headlines and cries of outrage, many fares and season tickets have fallen in real terms. One test on a price comparison website found journeys in Britain mostly cheaper than similar-length jaunts in France and Germany. Overall, the average price per passenger mile has risen only 4% in real terms over the past 15 years.

More investment, more competition and more pressure on the corporate fat cats are needed. But our focus should be on improved regulation, not a reversion to failed models; indeed, in many ways rail demonstrates the potential of a part-privatised public service at a time when such policies are causing concern in other sectors. Britain should, as with other national institutions, stop being dazzled by nostalgia, ignore the groans of vested interests and focus on keeping an unlikely success story on track.