Skepta will make a video on a skateboard park with his crew, singing ‘I’d do anything to please her, my Theresa, got a smile like Mona Lisa, as strong as Julius Caesar, as long as DUP get money to appease her’
Mark Steel in The Independent
This is a wonderful development: a youth group has spontaneously erupted to support the Conservatives, and calls itself Activate. It’s surprising this has taken so long, as you often hear young people in nightclub queues saying: “Listen up blud, a man Hammond getting bare fiscal growth yu get me, him one sick chancellor bruv.”
The plan must be for Chris Grayling to appear on Radio 1, interviewed about Brexit by Jameela Jamil, who says: “Wow, your riff with the Danes about butter tariffs was like totally AWESOME.”
At their conference, Conservative members will be told to wander into random locations chanting “Oooo Andrea Leadsom”, as this will result in young people joining in until it’s a Christmas number one featuring Stormzy in a duet with Amber Rudd.
Skepta will make a video on a skateboard park with his crew, singing: “I’d do anything to please her, my Theresa, got a smile like Mona Lisa, as strong as Julius Caesar, as long as DUP get money to appease her.”
Or the Conservatives may concede that the grime scene has committed itself to Labour, so they’ll have to co-opt a different style of youth music – such as thrash metal.
Then at fundraising garden fetes, the local Conservative MP can announce: “Thank you so much to Thomas and Frances Diddlesbury for such generous use of their grounds as ever, and for Lady Spiglington who surpassed herself this year with her delightful vol-au-vents and exquisite cranberry salad, and now I’m sure you’ll all join me in welcoming our special guest band to see us through the evening – let’s hear it for ‘Skull-crushing Death’.”
Then the singer will inform the crowd: “This first song is about the need for a tough stance on Brexit – sing along with the chorus that goes ‘They’re gonna crush your bones, crush your bones nnnnnygggggghaaaa vrrrrrr the European single market will lead us to Satan Satan Satan Luxembourg is run by Satan’.”
It’s typically astute that the spontaneous young Conservatives chose Activate as the name of their group, proving their sharp sense of youth culture, because like Momentum, this has the crucial quality of being three syllables.
They probably had lengthy discussions on which three-syllable word to choose, from a shortlist that included Caliphate, Urinate, Camper van, Rwanda and Wheelie-bin.
The next stage will be for Activate to collect millions of followers on Twitter, posting pithy youthful Tory tweets such as: “OMG! David Davis negotiation Gr8 massive love bro”, and “Bring back da hunt dem fox get merked proper lol.”
Because what the Conservatives have worked out, is that Jeremy Corbyn succeeded in appealing to millions of young people because he put stuff on Twitter.
No one was bothered about what he said on Twitter; it could be abolish tuition fees, or quadruple them – but the main thing is he said it on Twitter.
Then lots of young people said, “Oh look, like wow that old dude is on Twitter and shit”, and started singing his name.
So the Conservatives just have to copy the Corbyn image and they’ll win back the youth vote. Michael Fallon will grow a beard, and when he’s asked about Trident, he’ll say, “Talking of massive weapons, look at this beauty” – and display a prize-winning radish from his allotment.
This is why they’re promoting Jacob Rees-Mogg. Corbyn may be naïve enough to think he won popularity amongst the young by opposing zero-hour contracts, but the real reason was that young people are won over by anyone who seems a bit quirky.
So if Mogg doesn’t work, they’ll pick a leader from the people who go out on the first heats of Britain’s Got Talent, choosing someone who dresses as an ostrich and eats bees.
The Conservatives have a problem in trying to create an organisation that copies Momentum. It’s that Momentum didn’t just enrage the Tories – it also infuriated most Labour MPs, by backing someone who had spent his life on the edge of the Labour Party (usually in opposition to the leadership).
So it’s handy that they claim Activate has sprung up spontaneously, in a vast surge of natural youthful enthusiasm for working without a contract and having nowhere to live.
Amongst this energised adolescence is Activate’s National Chairman, Gary Markwell, who has suddenly decided to pull together these young forces who are crying out to be led.
He’s a reflection of how this is a grassroots movement, because up until now Gary has had no connection whatsoever with the hierarchy of the Conservative Party – except for being a campaign manager for Theresa May and Boris Johnson for ten years.
Now he’s suddenly decided to spontaneously set up Activate, in the same way that Nigel Farage might announce: “It’s never occurred to me before, but I think I might start campaigning to leave the EU.”
They’ve made an excellent start, because the way to win young people over, according to any faint study of the nation’s youth, must be to prove the Conservatives are the party of compassion and spirit and youthful energy.
So a Whatsapp group, described as a “precursor” to Activate, has been revealed to have had a fascinating discussion about the issue of “chavs”. An event in a working-class area is described as: “A fine opportunity to observe homo chav. And gas them all.”
It’s then suggested they could have medical experiments performed on them, to see how “they’re good at producing despite living rough”, and “substituted for animals for testing” and on and on.
That should do it. The Tories are already on 17 per cent of the under-24 vote, and Activate should guarantee it goes a long way down from there.
'People will forgive you for being wrong, but they will never forgive you for being right - especially if events prove you right while proving them wrong.' Thomas Sowell
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Saturday, 2 September 2017
Friday, 1 September 2017
Demonetisation has totally failed to curb black money
Editorial in The Hindu
On November 8, 2016, when Prime Minister Narendra Modi announced to the nation that ₹500 and ₹1,000 currency notes would cease to be legal tender from midnight, he was unequivocal in asserting that the measure was aimed at breaking “the grip of corruption and black money”. Explaining how the shock move would work, he said: “The... notes hoarded by anti-national and anti-social elements will become just worthless pieces of paper.” The premise then was that a sizeable part of the ₹15.44 lakh crore of the two high-value banknotes would remain in the hands of the holders and would not be tendered back into the banking system due to fear of punitive government action. There were hints that the windfall gains made from the scrapped currency notes that couldn’t be deposited in banks, estimated at anything between ₹3 lakh crore to ₹5 lakh crore, would be deployed for larger purposes — social welfare schemes and infrastructure projects, for example. This would be effected with the Reserve Bank of India, which bears the liability to honour the value of the country’s currency, paying as dividend to the government the majority, if not all, of its extinguished liabilities. But with the RBI’s annual report, released on August 30, showing that as much as 98.96% of the demonetised currency had returned to the central bank as of June 30, the gains in the form of cancelled liability from the note ban have been piffling.
For the Finance Minister to now claim that the “confiscation of money” had not been an objective, and for his Ministry to say that the government “had expected all the SBNs [specified bank notes] to come back to the banking system to become effectively usable currency,” is disingenuous. If that were indeed the case, the rationale behind the various stop-go announcements that followed in the wake of the November 8 decision are hard to fathom. For instance, the RBI circular setting a ₹5,000 limit on deposits of withdrawn notes unless done under the government’s amnesty scheme, tendered for the first time or explained otherwise was clearly a measure intended to dissuade bank customers from returning the demonetised currency. True, demonetisation has had some beneficial spin-offs such as arguably fostering greater compliance with the tax laws and reducing the economy’s reliance on cash through increased adoption of digital payments. But such gains could have been achieved by other and less self-defeating ways. As things stand, it is unclear how many of those who have laundered their black money will be punished. Despite the large amounts that were deposited in banks post-demonetisation, it is doubtful whether the Income Tax authorities have the necessary resources to track down and penalise the corrupt. All in all, the costs of demonetisation, which has resulted in robbing the country of its economic momentum, are far greater than the benefits it has bestowed.
On November 8, 2016, when Prime Minister Narendra Modi announced to the nation that ₹500 and ₹1,000 currency notes would cease to be legal tender from midnight, he was unequivocal in asserting that the measure was aimed at breaking “the grip of corruption and black money”. Explaining how the shock move would work, he said: “The... notes hoarded by anti-national and anti-social elements will become just worthless pieces of paper.” The premise then was that a sizeable part of the ₹15.44 lakh crore of the two high-value banknotes would remain in the hands of the holders and would not be tendered back into the banking system due to fear of punitive government action. There were hints that the windfall gains made from the scrapped currency notes that couldn’t be deposited in banks, estimated at anything between ₹3 lakh crore to ₹5 lakh crore, would be deployed for larger purposes — social welfare schemes and infrastructure projects, for example. This would be effected with the Reserve Bank of India, which bears the liability to honour the value of the country’s currency, paying as dividend to the government the majority, if not all, of its extinguished liabilities. But with the RBI’s annual report, released on August 30, showing that as much as 98.96% of the demonetised currency had returned to the central bank as of June 30, the gains in the form of cancelled liability from the note ban have been piffling.
For the Finance Minister to now claim that the “confiscation of money” had not been an objective, and for his Ministry to say that the government “had expected all the SBNs [specified bank notes] to come back to the banking system to become effectively usable currency,” is disingenuous. If that were indeed the case, the rationale behind the various stop-go announcements that followed in the wake of the November 8 decision are hard to fathom. For instance, the RBI circular setting a ₹5,000 limit on deposits of withdrawn notes unless done under the government’s amnesty scheme, tendered for the first time or explained otherwise was clearly a measure intended to dissuade bank customers from returning the demonetised currency. True, demonetisation has had some beneficial spin-offs such as arguably fostering greater compliance with the tax laws and reducing the economy’s reliance on cash through increased adoption of digital payments. But such gains could have been achieved by other and less self-defeating ways. As things stand, it is unclear how many of those who have laundered their black money will be punished. Despite the large amounts that were deposited in banks post-demonetisation, it is doubtful whether the Income Tax authorities have the necessary resources to track down and penalise the corrupt. All in all, the costs of demonetisation, which has resulted in robbing the country of its economic momentum, are far greater than the benefits it has bestowed.
Wednesday, 30 August 2017
We need to nationalise Google, Facebook and Amazon. Here’s why
A crisis is looming. These monopoly platforms hoovering up our data have no competition: they’re too big to serve the public interest
Nick Srnicek in The Guardian
For the briefest moment in March 2014, Facebook’s dominance looked under threat. Ello, amid much hype, presented itself as the non-corporate alternative to Facebook. According to the manifesto accompanying its public launch, Ello would never sell your data to third parties, rely on advertising to fund its service, or require you to use your real name.
The hype fizzled out as Facebook continued to expand. Yet Ello’s rapid rise and fall is symptomatic of our contemporary digital world and the monopoly-style power accruing to the 21st century’s new “platform” companies, such as Facebook, Google and Amazon. Their business model lets them siphon off revenues and data at an incredible pace, and consolidate themselves as the new masters of the economy. Monday brought another giant leap as Amazon raised the prospect of an international grocery price war by slashing prices on its first day in charge of the organic retailer Whole Foods.
The platform – an infrastructure that connects two or more groups and enables them to interact – is crucial to these companies’ power. None of them focuses on making things in the way that traditional companies once did. Instead, Facebook connects users, advertisers, and developers; Uber, riders and drivers; Amazon, buyers and sellers.
Reaching a critical mass of users is what makes these businesses successful: the more users, the more useful to users – and the more entrenched – they become. Ello’s rapid downfall occurred because it never reached the critical mass of users required to prompt an exodus from Facebook – whose dominance means that even if you’re frustrated by its advertising and tracking of your data, it’s still likely to be your first choice because that’s where everyone is, and that’s the point of a social network. Likewise with Uber: it makes sense for riders and drivers to use the app that connects them with the biggest number of people, regardless of the sexism of Travis Kalanick, the former chief executive, or the ugly ways in which it controls drivers, or the failures of the company to report serious sexual assaults by its drivers.
Network effects generate momentum that not only helps these platforms survive controversy, but makes it incredibly difficult for insurgents to replace them.
As a result, we have witnessed the rise of increasingly formidable platform monopolies. Google, Facebook and Amazon are the most important in the west. (China has its own tech ecosystem.) Google controls search, Facebook rules social media, and Amazon leads in e-commerce. And they are now exerting their power over non-platform companies – a tension likely to be exacerbated in the coming decades. Look at the state of journalism: Google and Facebook rake in record ad revenues through sophisticated algorithms; newspapers and magazines see advertisers flee, mass layoffs, the shuttering of expensive investigative journalism, and the collapse of major print titles like the Independent. A similar phenomenon is happening in retail, with Amazon’s dominance undermining old department stores.
These companies’ power over our reliance on data adds a further twist. Data is quickly becoming the 21st-century version of oil – a resource essential to the entire global economy, and the focus of intense struggle to control it. Platforms, as spaces in which two or more groups interact, provide what is in effect an oil rig for data. Every interaction on a platform becomes another data point that can be captured and fed into an algorithm. In this sense, platforms are the only business model built for a data-centric economy.
More and more companies are coming to realise this. We often think of platforms as a tech-sector phenomenon, but the truth is that they are becoming ubiquitous across the economy. Uber is the most prominent example, turning the staid business of taxis into a trendy platform business. Siemens and GE, two powerhouses of the 20th century, are fighting it out to develop a cloud-based system for manufacturing. Monsanto and John Deere, two established agricultural companies, are trying to figure out how to incorporate platforms into farming and food production.
And this poses problems. At the heart of platform capitalism is a drive to extract more data in order to survive. One way is to get people to stay on your platform longer. Facebook is a master at using all sorts of behavioural techniques to foster addictions to its service: how many of us scroll absentmindedly through Facebook, barely aware of it?
Another way is to expand the apparatus of extraction. This helps to explain why Google, ostensibly a search engine company, is moving into the consumer internet of things (Home/Nest), self-driving cars (Waymo), virtual reality (Daydream/Cardboard), and all sorts of other personal services. Each of these is another rich source of data for the company, and another point of leverage over their competitors.
Others have simply bought up smaller companies: Facebook has swallowed Instagram ($1bn), WhatsApp ($19bn), and Oculus ($2bn), while investing in drone-based internet, e-commerce and payment services. It has even developed a tool that warns when a start-up is becoming popular and a possible threat. Google itself is among the most prolific acquirers of new companies, at some stages purchasing a new venture every week. The picture that emerges is of increasingly sprawling empires designed to vacuum up as much data as possible.
But here we get to the real endgame: artificial intelligence (or, less glamorously, machine learning). Some enjoy speculating about wild futures involving a Terminator-style Skynet, but the more realistic challenges of AI are far closer. In the past few years, every major platform company has turned its focus to investing in this field. As the head of corporate development at Google recently said, “We’re definitely AI first.”
Tinkering with minor regulations while AI companies amass power won’t do
All the dynamics of platforms are amplified once AI enters the equation: the insatiable appetite for data, and the winner-takes-all momentum of network effects. And there is a virtuous cycle here: more data means better machine learning, which means better services and more users, which means more data. Currently Google is using AI to improve its targeted advertising, and Amazon is using AI to improve its highly profitable cloud computing business. As one AI company takes a significant lead over competitors, these dynamics are likely to propel it to an increasingly powerful position.
What’s the answer? We’ve only begun to grasp the problem, but in the past, natural monopolies like utilities and railways that enjoy huge economies of scale and serve the common good have been prime candidates for public ownership. The solution to our newfangled monopoly problem lies in this sort of age-old fix, updated for our digital age. It would mean taking back control over the internet and our digital infrastructure, instead of allowing them to be run in the pursuit of profit and power. Tinkering with minor regulations while AI firms amass power won’t do. If we don’t take over today’s platform monopolies, we risk letting them own and control the basic infrastructure of 21st-century society.
Nick Srnicek in The Guardian
For the briefest moment in March 2014, Facebook’s dominance looked under threat. Ello, amid much hype, presented itself as the non-corporate alternative to Facebook. According to the manifesto accompanying its public launch, Ello would never sell your data to third parties, rely on advertising to fund its service, or require you to use your real name.
The hype fizzled out as Facebook continued to expand. Yet Ello’s rapid rise and fall is symptomatic of our contemporary digital world and the monopoly-style power accruing to the 21st century’s new “platform” companies, such as Facebook, Google and Amazon. Their business model lets them siphon off revenues and data at an incredible pace, and consolidate themselves as the new masters of the economy. Monday brought another giant leap as Amazon raised the prospect of an international grocery price war by slashing prices on its first day in charge of the organic retailer Whole Foods.
The platform – an infrastructure that connects two or more groups and enables them to interact – is crucial to these companies’ power. None of them focuses on making things in the way that traditional companies once did. Instead, Facebook connects users, advertisers, and developers; Uber, riders and drivers; Amazon, buyers and sellers.
Reaching a critical mass of users is what makes these businesses successful: the more users, the more useful to users – and the more entrenched – they become. Ello’s rapid downfall occurred because it never reached the critical mass of users required to prompt an exodus from Facebook – whose dominance means that even if you’re frustrated by its advertising and tracking of your data, it’s still likely to be your first choice because that’s where everyone is, and that’s the point of a social network. Likewise with Uber: it makes sense for riders and drivers to use the app that connects them with the biggest number of people, regardless of the sexism of Travis Kalanick, the former chief executive, or the ugly ways in which it controls drivers, or the failures of the company to report serious sexual assaults by its drivers.
Network effects generate momentum that not only helps these platforms survive controversy, but makes it incredibly difficult for insurgents to replace them.
As a result, we have witnessed the rise of increasingly formidable platform monopolies. Google, Facebook and Amazon are the most important in the west. (China has its own tech ecosystem.) Google controls search, Facebook rules social media, and Amazon leads in e-commerce. And they are now exerting their power over non-platform companies – a tension likely to be exacerbated in the coming decades. Look at the state of journalism: Google and Facebook rake in record ad revenues through sophisticated algorithms; newspapers and magazines see advertisers flee, mass layoffs, the shuttering of expensive investigative journalism, and the collapse of major print titles like the Independent. A similar phenomenon is happening in retail, with Amazon’s dominance undermining old department stores.
These companies’ power over our reliance on data adds a further twist. Data is quickly becoming the 21st-century version of oil – a resource essential to the entire global economy, and the focus of intense struggle to control it. Platforms, as spaces in which two or more groups interact, provide what is in effect an oil rig for data. Every interaction on a platform becomes another data point that can be captured and fed into an algorithm. In this sense, platforms are the only business model built for a data-centric economy.
More and more companies are coming to realise this. We often think of platforms as a tech-sector phenomenon, but the truth is that they are becoming ubiquitous across the economy. Uber is the most prominent example, turning the staid business of taxis into a trendy platform business. Siemens and GE, two powerhouses of the 20th century, are fighting it out to develop a cloud-based system for manufacturing. Monsanto and John Deere, two established agricultural companies, are trying to figure out how to incorporate platforms into farming and food production.
And this poses problems. At the heart of platform capitalism is a drive to extract more data in order to survive. One way is to get people to stay on your platform longer. Facebook is a master at using all sorts of behavioural techniques to foster addictions to its service: how many of us scroll absentmindedly through Facebook, barely aware of it?
Another way is to expand the apparatus of extraction. This helps to explain why Google, ostensibly a search engine company, is moving into the consumer internet of things (Home/Nest), self-driving cars (Waymo), virtual reality (Daydream/Cardboard), and all sorts of other personal services. Each of these is another rich source of data for the company, and another point of leverage over their competitors.
Others have simply bought up smaller companies: Facebook has swallowed Instagram ($1bn), WhatsApp ($19bn), and Oculus ($2bn), while investing in drone-based internet, e-commerce and payment services. It has even developed a tool that warns when a start-up is becoming popular and a possible threat. Google itself is among the most prolific acquirers of new companies, at some stages purchasing a new venture every week. The picture that emerges is of increasingly sprawling empires designed to vacuum up as much data as possible.
But here we get to the real endgame: artificial intelligence (or, less glamorously, machine learning). Some enjoy speculating about wild futures involving a Terminator-style Skynet, but the more realistic challenges of AI are far closer. In the past few years, every major platform company has turned its focus to investing in this field. As the head of corporate development at Google recently said, “We’re definitely AI first.”
Tinkering with minor regulations while AI companies amass power won’t do
All the dynamics of platforms are amplified once AI enters the equation: the insatiable appetite for data, and the winner-takes-all momentum of network effects. And there is a virtuous cycle here: more data means better machine learning, which means better services and more users, which means more data. Currently Google is using AI to improve its targeted advertising, and Amazon is using AI to improve its highly profitable cloud computing business. As one AI company takes a significant lead over competitors, these dynamics are likely to propel it to an increasingly powerful position.
What’s the answer? We’ve only begun to grasp the problem, but in the past, natural monopolies like utilities and railways that enjoy huge economies of scale and serve the common good have been prime candidates for public ownership. The solution to our newfangled monopoly problem lies in this sort of age-old fix, updated for our digital age. It would mean taking back control over the internet and our digital infrastructure, instead of allowing them to be run in the pursuit of profit and power. Tinkering with minor regulations while AI firms amass power won’t do. If we don’t take over today’s platform monopolies, we risk letting them own and control the basic infrastructure of 21st-century society.
Britain is still a world-beater at one thing: ripping off its own citizens
From energy and water bills to exorbitant rail fares, we’re all busy lining the pockets of wealthy ‘investors’
Aditya Chakrabortty in The Guardian
And so to the big question. The one that has dogged us ever since the EU referendum and haunts every Brexiteer’s chlorinated daydreams. What is Britain for? Cliche-mongers will tell you that Britain lost an empire then couldn’t find a role. They are wrong. After careful study of recent newspaper articles, I have discovered just that new part – and today, dear reader, I am going to share it with you.
The British are now world-beaters at paying other people to rip them off. We are number one at handing over cash to “investors” who do no investing, to “entrepreneurs” who run monopolies – and who then turn around and tap us up for a bit more on the way out.
Consider two stories from the past few days. British Gas announces its electricity prices will rise by 12.5%, starting next month. Just as the cold nights start drawing in, more than 3 million Britons will find their bills are more expensive. Never mind that the competition watchdog judged last year that British Gas and other energy giants were taking well over a billion pounds a year through “excessive prices”. This privatised industry has a tradition of ripping off loyal customers to uphold.
Think about the scandal of people having to pay huge ground rents just to stay in their own homes. For years, big property developers have been flogging the freeholds on newly built estates to speculators, often based offshore, whose only relationship with the people living there is to hit them with ever-larger bills. Tens of thousands of families have been bundled up and turned into human revenue streams. Nor are they alone. Whether as taxpayers or consumers, pretty much everyone in Britain is now human feedstock for Big Capital.
This may not be how you see yourself. After all, you’re a customer and in our dynamic, choice-stuffed markets the customer is king. Except that the propaganda doesn’t match reality. If, like me, you live in London and use water, you are forced to give your business to Thames Water. The same Thames Water that is owned by a consortium of international investors, whose interests were until recently managed by Macquarie, an investment firm with headquarters in Australia. I have reported before on this arrangement, which ran from December 2006 until March of this year. Between 2006 and 2015, Thames Water divvied up £1.6bn in dividends to its small circle of shareholders, who in turn loaded up the company with billions in debt.
These “investors” were not doing much investing – indeed, they will shoulder neither the costs nor the risks of building London’s £4bn super-sewer. Much of the money will come from me and Thames Water’s 15 million other customers, through our bills. Between 2011 and 2015, the company paid no corporation tax at all. Someone bagged a bargain, and it wasn’t the taxpayer.
Think about the train operators that are subsidised to the tune of billions by public money – only to penalise the public with eye-watering fares and crap broadband. We pay them to rip us off. Ponder the new nuclear station about to be built by the Chinese and French at Hinkley Point, at an estimated cost to British households of £30bn. Neither David Cameron nor Theresa May would countenance the British government creating a new power station, but they will pay way over the odds for foreign governments to do so.
Want more examples? Think about the giant outsourcing industry, where a multinational such as G4S can fail to lay on enough guards for the 2012 London Olympics and charge taxpayers for phantom electronic tags on dead criminals – and still be put in charge of securing the Royal Mint.
In the early 00s, the Mail and the Express would bang on and on about “Rip-off Britain” and how booze and fags and Levi’s jeans were cheaper abroad. Right under their nose a rip-off industry was getting started in the form of the private finance initiative. Tony Blair saw the arrangement as a way of funding more schools and hospitals without raising taxes or taking on public debt. As York University’s Kevin Farnsworth points out, PFIs also served an ideological purpose. “Try getting change in… public services,” he once chortled to a conference of private equity financiers. “I bear the scars on my back.” PFI – putting the private sector in charge of providing public infrastructure – was one of his ways of getting that change.
These are all examples of losing control – over our bills, over our taxes, over our water and trains and schools
Almost two decades later, we can see the results. PFIs have produced more fleecing than Millets. A PFI primary school in Middlesbrough, only opened in 2006, was demolished in 2015 because its foundations had been built on “defective fill material” – literally, dodgy ground. Children and staff moved to another site – nevertheless, payments on the contract had to be made. In Liverpool, a PFI school has been shut since 2014 – because there aren’t enough pupils to keep it open – yet taxpayers still pay £12,000 a day under the contract. These aren’t one-offs: they are inherent in the structure of PFIs, which dump all the risks on the public and hand the private sector all the rewards.
As the TES (formerly the Times Educational Supplement) found in April, one PFI school in Bristol that needed a new window blind will have to pay £8,154 for it. Another that had to install a tap is facing a bill for £2,211. Private companies get paid for the building, then get paid again for cleaning and maintenance and interest charges. Across the UK there are more than 700 PFI projects with a capital value of around £55bn. It is estimated that they will cost the public more than £300bn.
These are all examples of the public losing control – over our bills, over our taxes, over our water and trains and schools. Will freeing ourselves of the shackles of the European court of justice or EU state aid rules or any other Brexiteer hobbyhorse allow us to “take back control”? On the basics that govern our lives we have lost sovereignty. Brussels didn’t sell us down the river: Thatcher, Blair and Cameron did.
Leaving the EU won’t change any of this. Theresa May will continue to privatise chunks of the NHS. Philip Hammond will still flog Britain to foreign capital as a bargain basement of cheap workers and low taxes – one giant Poundland. And Britons will find more and more aspects of their daily lives picked over by big businesses for revenue streams.
Aditya Chakrabortty in The Guardian
And so to the big question. The one that has dogged us ever since the EU referendum and haunts every Brexiteer’s chlorinated daydreams. What is Britain for? Cliche-mongers will tell you that Britain lost an empire then couldn’t find a role. They are wrong. After careful study of recent newspaper articles, I have discovered just that new part – and today, dear reader, I am going to share it with you.
The British are now world-beaters at paying other people to rip them off. We are number one at handing over cash to “investors” who do no investing, to “entrepreneurs” who run monopolies – and who then turn around and tap us up for a bit more on the way out.
Consider two stories from the past few days. British Gas announces its electricity prices will rise by 12.5%, starting next month. Just as the cold nights start drawing in, more than 3 million Britons will find their bills are more expensive. Never mind that the competition watchdog judged last year that British Gas and other energy giants were taking well over a billion pounds a year through “excessive prices”. This privatised industry has a tradition of ripping off loyal customers to uphold.
Think about the scandal of people having to pay huge ground rents just to stay in their own homes. For years, big property developers have been flogging the freeholds on newly built estates to speculators, often based offshore, whose only relationship with the people living there is to hit them with ever-larger bills. Tens of thousands of families have been bundled up and turned into human revenue streams. Nor are they alone. Whether as taxpayers or consumers, pretty much everyone in Britain is now human feedstock for Big Capital.
This may not be how you see yourself. After all, you’re a customer and in our dynamic, choice-stuffed markets the customer is king. Except that the propaganda doesn’t match reality. If, like me, you live in London and use water, you are forced to give your business to Thames Water. The same Thames Water that is owned by a consortium of international investors, whose interests were until recently managed by Macquarie, an investment firm with headquarters in Australia. I have reported before on this arrangement, which ran from December 2006 until March of this year. Between 2006 and 2015, Thames Water divvied up £1.6bn in dividends to its small circle of shareholders, who in turn loaded up the company with billions in debt.
These “investors” were not doing much investing – indeed, they will shoulder neither the costs nor the risks of building London’s £4bn super-sewer. Much of the money will come from me and Thames Water’s 15 million other customers, through our bills. Between 2011 and 2015, the company paid no corporation tax at all. Someone bagged a bargain, and it wasn’t the taxpayer.
Think about the train operators that are subsidised to the tune of billions by public money – only to penalise the public with eye-watering fares and crap broadband. We pay them to rip us off. Ponder the new nuclear station about to be built by the Chinese and French at Hinkley Point, at an estimated cost to British households of £30bn. Neither David Cameron nor Theresa May would countenance the British government creating a new power station, but they will pay way over the odds for foreign governments to do so.
Want more examples? Think about the giant outsourcing industry, where a multinational such as G4S can fail to lay on enough guards for the 2012 London Olympics and charge taxpayers for phantom electronic tags on dead criminals – and still be put in charge of securing the Royal Mint.
In the early 00s, the Mail and the Express would bang on and on about “Rip-off Britain” and how booze and fags and Levi’s jeans were cheaper abroad. Right under their nose a rip-off industry was getting started in the form of the private finance initiative. Tony Blair saw the arrangement as a way of funding more schools and hospitals without raising taxes or taking on public debt. As York University’s Kevin Farnsworth points out, PFIs also served an ideological purpose. “Try getting change in… public services,” he once chortled to a conference of private equity financiers. “I bear the scars on my back.” PFI – putting the private sector in charge of providing public infrastructure – was one of his ways of getting that change.
These are all examples of losing control – over our bills, over our taxes, over our water and trains and schools
Almost two decades later, we can see the results. PFIs have produced more fleecing than Millets. A PFI primary school in Middlesbrough, only opened in 2006, was demolished in 2015 because its foundations had been built on “defective fill material” – literally, dodgy ground. Children and staff moved to another site – nevertheless, payments on the contract had to be made. In Liverpool, a PFI school has been shut since 2014 – because there aren’t enough pupils to keep it open – yet taxpayers still pay £12,000 a day under the contract. These aren’t one-offs: they are inherent in the structure of PFIs, which dump all the risks on the public and hand the private sector all the rewards.
As the TES (formerly the Times Educational Supplement) found in April, one PFI school in Bristol that needed a new window blind will have to pay £8,154 for it. Another that had to install a tap is facing a bill for £2,211. Private companies get paid for the building, then get paid again for cleaning and maintenance and interest charges. Across the UK there are more than 700 PFI projects with a capital value of around £55bn. It is estimated that they will cost the public more than £300bn.
These are all examples of the public losing control – over our bills, over our taxes, over our water and trains and schools. Will freeing ourselves of the shackles of the European court of justice or EU state aid rules or any other Brexiteer hobbyhorse allow us to “take back control”? On the basics that govern our lives we have lost sovereignty. Brussels didn’t sell us down the river: Thatcher, Blair and Cameron did.
Leaving the EU won’t change any of this. Theresa May will continue to privatise chunks of the NHS. Philip Hammond will still flog Britain to foreign capital as a bargain basement of cheap workers and low taxes – one giant Poundland. And Britons will find more and more aspects of their daily lives picked over by big businesses for revenue streams.
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