The Case For Public Ownership

Michael Meacher writes:

The public’s demand for re-nationalisation is steadily growing, partly because the record of privatised companies has been so poor, partly because the excuse of globalisation is now seen not to betoken greater efficiency but rather funnelling increasing assets to the very rich and undermining job security for workers, and partly the big new outsourcing companies have so blatantly abandoned the national interest in pursuit of gross profiteering.

The Big Six energy companies have become a byword for greed and exploitation. The water companies have indulged in a bonanza for directors and shareholders, but have set aside wholly inadequate sums for necessary investment and Thames Water is even refusing to pay for the £4bn necessary new London super-sewer and demanding that the taxpayer should instead, i.e. privatising the profits but still repatriating the cost to the public sector.

The banks have repeatedly been found guilty of rigging interest rate benchmarks (Libor, Euribor, forex market), mis-selling faulty or irrelevant financial products on an industrial scale, money-laundering, massive tax avoidance across the globe, closing down viable businesses in order to profit from the proceeds (RBS) – every misfeasance you can think of except meeting the loan requirements of UK industry.

The railways were privatised, but still cost taxpayers over £2bn a year in public subsidies which still continue to be given despite soaring fares and poor performance by may franchises. The East Coast mainline, like Connex before it in the south-east, made a sizeable profit when returned to public ownership, but Tory dogma insisted on its being re-sold back to the private sector.

G4S failed momentously over the Olympics, Serco illegally claimed large-scale public funding for tagging prisoners who had already died or left prison, Atos earned an enormous public contract for assessing seriously disabled persons as fit for work in order to reduce government expenditure on incapacity benefit.

The Tories recently even sold off the blood company Plasma UK, despite the obvious risks of private investors selling contaminated blood procured from risky (though more profitable) sources. They also disposed of the student loan book to a consortium of investment funds, despite the risks of the latter exploiting a highly vulnerable group of young people.

Nor is the record of government investment in major private sector projects exactly a success story. The cost of the Olympic games to public funds turned out to be about 10 times the original estimate, with the financial contribution anticipated from private sources hugely over-estimated.

The bill for cleaning up the Sellafield nuclear plant in Cumbria is still rising north of £70bn and Nuclear Management Partners, the private sector consortium that manages the site, has just been roundly condemned as monumentally inefficient. The HS2 project, already 3 times the original cost, is now set at £50bn, though no-one believes that that will cap the final cost.

Instead of getting ‘more for less’ as Cameron continually boasts, this is an appalling record of inefficiency, ineptitude, cutting corners, mis-billing, worsening terms and conditions of employment, and bleeding the taxpayer. Time for a vigorous revival of the role of the State and the quality, reliability and ethics of the public sector.