The Privatisation Con – Guest Post By Rick Evans

Beginning as far back as the early 1980’s the Tories sold us a lie.

Nothing unusual there you might think and you would be right. But this was a very big one; in fact a massive one and it was one of the cornerstones of the Thatcher Revolution. Thatcher and her government told us privatisation was the solution to many of the countries problems.
We were told that more wealth would be created so investment could go up; that bills and fares would go down; that everything would be more efficient; that somehow the magical profit motive would revitalise the whole country, and that competition between a range of providers for customers would force them all to provide a better value service.

So what has happened? Well according to Corporate Watch, just the Energy, Rail and Water Privatisations alone cost each UK household on average £250 extra a year. So we are paying more for something that the Tories claimed would be cheaper. In the case of the Railways, we the Taxpayer put £3.8 billion into subsidies in 2014. Yet Rail fares are the most expensive in Europe. But soaring prices are only a part of the problem of privatisation.

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Most Privatisations have occurred within our Public Services and herein lies the biggest problem of all. When a Private Company runs a Public Service it’s overriding number one objective is to make a profit for the companies shareholders, not to run the service in the best possible way in the public interest. For those who think you can achieve both it simply doesn’t work. Invariably corners are cut to get the job done in the cheapest way and investment is reduced so the bulk of the profit can be paid to the shareholders. The Tories said we would become a shareholding economy but that hasn’t happened. Only 11 per cent of the total value of UK traded shares is owned by individuals today, compared with 20 per cent in 1985.

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Something else that is a major problem is that in many instances, the terms, conditions and pay for staff have been eroded. Often there are job cuts or people aren’t replaced leaving less people to do the same amount of work. Qualified staff leave and are often replaced with casuals on less money. One of the intended by products of this whole project was that it was another way to attack Trade Unions as they had always been strong in the Public Sector. Another problem is that private companies aren’t democratically accountable to us the public. Again it’s the shareholders who they are accountable to, and the voices of the public are all too often ignored.

So let’s get to the crux of why it was done? To put it simply it was another way for the Tories to help their rich friends by making these services and industries open to the market. So our money is siphoned from the Public to the Private Sectors so certain individuals/companies can get richer off the backs off us, the Taxpayers. An elaborate Con Trick. The vast majority of the Public Corporations that were privatised were profitable. They had to be to be sold. All that public money that could have benefitted us all is now in private hands. Do you see why I call it a Con? As I said at the beginning we were sold a lie.

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Now to me this is really important stuff but I appreciate that not everyone thinks the same. But I think this question of Privatisation or Social Ownership is fundamental to how we view society and therefore how we run it. Not everything in life can be made a profit out of. Does that mean it’s useless or not needed? Can everything always be left to the market and will the market right the wrongs in society? If say an unprofitable Bus route is axed is that right or inevitable? Do we just say ‘ah well that’s a shame but it was losing money it had to go.’ What about the people who relied on that service? What are they supposed to do? These are usually country routes and they are some peoples only access to the outside world. As the late Tony Benn said “the Tories know the price of everything but the value of nothing”.

For Public Services, I would always argue that there is more to running a quality service than just making a profit. That’s not to say you let something lose money indefinitely but to look at it just one way misses a big part of what life is about. Surely some things have value in other ways? Not everything can be just measured by the cash that it’s worth. Also in some public service like Royal Mail, Bus Services, Railways etc there are some remote areas that could never make a profit in a million years. That’s the whole idea – the more profitable parts balance out the other places so everyone – no matter where you live – can have the same service from London to Manchester, from the Yorshire Dales to the remote parts of Scotland.

Most people would agree there shouldn’t be a profit motive in Healthcare and Education but the Tories have been doing that for years via the back door. But it’s not just the NHS and Schools that have changed. Energy, Water, Rail, The Royal Mail and many other services have been privatised in the last 30 years. Locally, many council services, including such essential things like care services, have been put out to tender and are run by private companies. I honestly cannot think of one example where consumers or the workforce’s are better off. The whole thing has been a rip off.
Well you might say that’s the way of the world now and nothing can be done. And you would be right to say changing some of this will be more than difficult. But it’s not impossible. What we need now is a debate about how society is run. We shouldn’t shy away from the big questions. Also it’s not just public services I’m talking about, but basically how everything is owned and run. We need to argue there are alternatives to Casino Capitalism.

Over the last 40 years transnational companies have got even bigger and more powerful. We aren’t run by governments or even the EU; it’s global corporations that call the shots. Their power is immense. But we have to regain some control in regard to ownership of the economy because decisions made in boardrooms don’t help ordinary people. In fact this is a major way inequality has been increased. We have been told it’s the wealth creators that help society and benefit us all when in reality they are mainly helping themselves. Profits go up but do wages? Do the people at the bottom gain? Do they heck! They are probably told be grateful you have a job.

While the power of capital gets ever bigger, inequality will continue to increase. We have been sold “competition, greed and deception” and it only benefits the few at the top. We need to reorganise society so the wealth benefits us all. All of us need to have a say in this. This would be real democracy in action and what socialism is about.

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So what are the alternatives? I would argue that Social Ownership is the answer. It’s not just Public Ownership, although that should be part of it. The old Public Corporations used to be heavily criticised – with some justification – as bureaucratic and top heavy. If anyone has seen the brilliant film ‘Spirit of 45’ they will know that the Attlee Government made a massive mistake when they started taking things into Public Ownership. They pretty much kept the same people running things so not enough changed. It was almost the same old same old, and in some cases the workers and public were disappointed with the results. Public or State Ownership on it’s own doesn’t add up to Socialism. What it needs for that to happen is for the whole of society to benefit when it makes a profit. Also we need it to be more accountable so everyone can have a say. All this is about giving more power to ordinary people so power is in the hands of the many not the few.

The other main form of Social Ownership is Cooperative Ownership where everyone is a member and has a share in the company so sharing the dividends. There are many different sorts and they all need to be extended and encouraged. For example, for our Gas and Electric we use ‘The Cooperative Energy’. One of the things everybody can do is look into alternatives like this which are available now. Of course this only goes so far but it’s a good first step. There are other models of Social Ownership that we need to look into as well such as Employee Ownership.

The ideas behind Social Ownership are not new but we need to get them back into the public arena. The rise of what was called Thatcherism (which was really Neo Liberalism) took them off the table. What was particularly disappointing was the way the Labour Party gave up any aspiration for it, and took up the Tory Consensus. So it has been especially pleasing to see Jeremy Corbyn saying Labour would take Rail and the Royal Mail back into Public Ownership. This is more than a welcome development. Taking the Railways back into Public Ownership is a very poplar policy, and even a majority of Tory voters are in favour of it.

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But we do need to debate this more and we mustn’t be afraid to get the idea out that we can have a different way of doing things. That profit doesn’t always have to be the number priority: that workers and consumers can both gain instead of private shareholders. In my view this is an essential way of moving forward. I don’t see this as old fashioned but rather an exciting way to go, and to make sure we do it right this time. Privatisation has been proven to be both morally bankrupt and a con. It can only help the rich minority. By changing the ownership of some of society we can lay the road towards a more equal society where power and wealth isn’t so concentrated in so few hands. Of course these things need to be done worldwide to be fully effective. But we can make a start here. The right wing would like the debate to centre on immigration so that immigrants can be the scapegoats for all that is wrong here, when really it’s the obscene level of wealth in so few hands that is really the main block on progressive change happening. This is something that will take time, so we must be patient. But by the same yardstick we have got to get the message out there. That we can all profit from everyone’s endeavours.

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I know some will dismiss this as pie in the sky rubbish but i say to them, do you really think everything is Hunky Dory? That increasing inequality is ok or there isn’t another way? Because we have to change the direction of travel we are in. Because if we don’t where is it all going to end? It is an illusion to think Capitalism can be a fair system, so why should we put up with it’s gross unfairness and inbuilt exploitation? But the only way we will ever improve things is if we fight for them because the powers that be will at best only give us crumbs. Movements can and have changed things before. The establishment want us to be apathetic and demoralised. That’s why united we are so much stronger. Together we have more power than we realise.

As one great man said once ‘You may say I’m a dreamer but I’m not the only one.’

 

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2 comments

  1. africanherbsman1967 · September 9, 2016

    One of the cons in the 1990s was seeing government ministers and senior civil servants – who approved the sell-offs – working for these private companies on mega deals as consultants. IT privatisation across govt was one of the costliest blunders by both Tory & Labour govts. Tube privatisation fiasco still a sore point.

    Like

  2. Pingback: The great privatisation swindle | Red Labour

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