Wednesday 4 March 2015

Hostages To Private Fortune

Deborah Orr writes:

The government is thrilled that it has found a buyer for the Treasury’s 40% stake in Eurostar.

And no wonder. An Anglo-Canadian consortium has offered to pay £757m. In the autumn of 2013, when the coalition first announced its plan to sell, it expected to raise £300m.

Which looks like prima facie evidence that the government doesn’t have much idea about how valuable national assets are.

It’s all, says the chancellor, George Osborne, “part of our long-term plan to secure Britain’s future.” To an idiot such as myself, it looks like part of a long-term plan to secure the future of Patina Rail LLP.

I thought the long-term economic plan was to narrow the deficit. I do see how a large injection of cash can do this in the short term – by paying off some debt.

But in the long term, selling off state-owned, profit-making assets can only ever make the government all the more dependent on tax revenues.

As ever, profit gets privatised and risk or liability remains the business of the state.

If Patina Rail LLP makes a mess of running the service, it’s not hard to see who’ll be expected to pick up the pieces.

Osborne has said that this money will in part be invested in infrastructure. Great.

When that money has been spent on some infrastructure, when the risk is over and the profits are starting to flow, that in turn can be sold to the private sector, who will run it as they please, safe in the knowledge than anything too big for the private sector to invest in is also too big to fail.

Neoliberal dogma says that the private sector manages things more efficiently – often by using its magic powers of ruthlessness and cynicism.

Yet a large proportion of the national debt that is waved before the electorate like a shotgun has been amassed precisely because the private sector refuses to make long-term and strategic investments.

Why create a new rail service, when you can sit back and wait for the state to establish one, then buy it once it’s making a profit? I simply cannot imagine.

In Britain, we are all now hostages to private fortune. Even infrastructure paid for from the public purse will only get the nod if it benefits the wealthy.

The rest of the UK doesn’t have much sympathy for London. But what’s happening in London is staggering. It is becoming a place that people visit to make money or spend it, not a place where people actually live.

The whole of the UK’s capital is being privatised, and there’s no doubt plenty of money to be made in the years to come by getting people in and out of it on fast trains.

It’s a shame that Canadian business people understand this better than British politicians do.

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