Wholesale Outsourcing

Over in The Week, the tricontinentally ubiquitous Neil Clark writes:

It all started on a late spring day back in 1979. Delivering his very first Budget, Geoffrey Howe, Chancellor of the Exchequer in Margaret Thatcher's new Conservative administration, announced the government's support for "sales of state-owned assets to the private sector" and that "the scope for sale of assets is substantial".

Very few people listening to Howe's speech that day could have envisaged just what the government's privatisation programme would lead to. Or that, 34 years on, we'd be witnessing the wholesale outsourcing to private companies of our probation service, set up in 1907.

Chris Grayling, the Justice Secretary, says that he hopes his new plans, announced yesterday, will lead to a "steady year-by-year decline" in re-offending rates. But make no mistake - this is an ideological move, and part of the Tory mission to finish the radical 'shrink the state' economic project began by Margaret Thatcher in 1979.

Thatcher was set on destroying the genuinely progressive mixed-economy post-war model, which a succession of Labour and Conservative governments had supported prior to 1979. Influenced by free-market thinkers, she wanted to roll back the frontiers of the state and allow private companies to take over the roles carried out by public corporations.

In the period 1979-97 we saw the sell-off of numerous public enterprises, including the gas, electricity and water industries, the railways and buses and much of our national infrastructure. Under New Labour, there were no major new privatisations, though the role of the private sector was increased by outsourcing.

Now, with the Conservatives in coalition with similarly pro-privatisation Orange Book Liberals, it's full steam ahead to complete Maggie's ambitious project.

Don't fall for the line that 'public sector reforms' - a euphemism for privatisation and outsourcing - are necessary to cut the deficit. The deficit is being used as a convenient excuse to carry out further diminution of the state's role. In other words, even if our public finances weren't in the red, the sell-offs and outsourcing would still be taking place.

"Public services should be open to a range of providers competing to offer a better service," David Cameron wrote in the Daily Telegraph in 2011. "Of course, there are some areas, like national security services or the judiciary, where this wouldn't make sense. But everywhere else should be open to real diversity, open to everyone who gets and values the importance of our public service ethos. This is a transformation: it ends the state's monopoly over public services."

Lest you think this just a Tory argument, here is Nick Clegg in 2008 criticising Gordon Brown for not opening up public services to non-state providers: "We have nationalised education, nationalised health, and nationalised welfare: run by inflexible, centralised monopolies. It adds up to the nationalisation of our whole lives."

The coalition had only been in power for six months when they sold the Channel Tunnel Rail link to Canadian pension funds. In June 2011, they sold the Tote, the publicly-owned bookmaker set up by Winston Churchill in 1928. Privatisation of the police is well under way, while the coalition's controversial Health and Social Care Act opens the door for the privatisation of the NHS.

Our jails are going private too: in October 2011, HMP Birmingham became the first publicly owned prison to be privatised. Last November, Chris Grayling announced the privatisation of five more. In 2013, we are likely to see the sell-off of the Royal Mail, in state hands since its inception in 1516, while David Cameron has even mooted the idea of allowing private firms and investment funds to build, operate and maintain Britain's most important roads.

It's de rigueur to describe the Venezuelan leader Hugo Chavez as an 'ideologue', but if we're looking for genuine, hardcore ideologues we don't need to travel to Latin America to find them. The support of leading members of the coalition for 'progressive' measures such as same-sex marriage shouldn't blind us to the fact that we are governed by a bunch of ideological, uber-Thatcherite extremists, hell-bent on destroying state provision.

Does all of this really matter? Yes it does, because the transfer of the entire public sector (with the exception of national security services and the judiciary) to private companies will mean us paying much more for more basic services - as we already do with the railways, buses and our gas, water and electricity bills.

We should also not forget that the much-maligned mixed economy post-war model delivered to ordinary working-class Britons a major rise in living standards and an improvement in their relative position, whereas since 1979, it's been the one per cent who have been the major beneficiaries.

In short, 'shrinking the state' is bad news for the majority, while for the likes of G4S and Capita, and the City of London backers of the Conservative Party, it's one big financial bonanza.