Aditya Chakrabortty writes:
Almost everyone who gives the matter serious thought
agrees that George Osborne and David Cameron want to reshape Britain.
The
spending cuts, the upending of the NHS, even this month’s near-miss over the BBC: signs lie everywhere
of how this will be a decade, maybe more, of massive change.
Yet even now it is
little understood just how far Britain might shift – and in which direction.
Take austerity, the word that
will define this government. Even its most astute critics commit two basic
errors.
The first is to assume that it boils down to spending cuts and tax rises.
The second is to believe that all this is meant to reduce how much the country
is borrowing.
What such commonplaces do is reduce austerity to a technical,
reversible project.
Were it really so simple all we would need to do is turn
the spending taps back on and wash away all traces of Osbornomics.
Austerity is far bigger than that: it is a project
irreversibly to transfer wealth from the poorest to the richest.
It’s doing the
job very nicely: while the typical British worker is still earning less after
inflation than he or she was before the banking crash, the number of UK-based
billionaires has nearly quadrupled since 2009.
Even while he slashes benefits,
Osborne is deep into a programme to hand over much of what is still owned by
the British public to the wealthiest.
Privatisation is the multibillion-pound centrepiece of
Osborne’s austerity – yet it rarely gets a mention from either politicians or
press.
The Queen mentioned it in her speech last
week, but the headline writers ignored it.
And if you don’t know that this
Thursday is the closing date for consultation on the sale of the Land
Registry, our public record of who owns what property, that’s hardly
your fault – I haven’t spotted it in the papers, either.
But without getting rid of prize
assets, Osborne’s austerity programme falls apart.
At a time when tax revenues
are more weak stream than healthy flood, those sales bring much-needed cash
into the Treasury and make his sums add up.
The independent Office for Budget
Responsibility has ruled that
the only reason the chancellor met his debts target last year was because he
flogged off our public assets.
And what a fire sale that was, with everything
from our last remaining stake in the Royal Mail to shares in Eurostar shoved out the door in the biggest
wave of privatisations of any year in British history.
And more, much more, is to come.
The all new and mostly grotesque housing bill will force local authorities to
sell “high-value” council houses once a family moves out – which will basically
hand over whatever remains of social housing in central London to investors.
Osborne also wants local authorities “to dispose of potentially surplus
assets”, of which he calculates they have £60bn “in property not
used for schools or housing”.
That would be property such as our public
libraries and swimming pools – but to a government hellbent on asset-stripping
such communal necessities are merely unsold inventory.
At Whitehall, ministers plan to
sell a big chunk of Channel 4, and the public stake
in the national air traffic control.
And that’s just the start, because here’s
something else you probably won’t have read about: Osborne has bundled up all
of our public holdings – in every company from the collapsed banks to the Royal
Mint – and put them under the control of a government organisation called UK
Government Investments.
Its CEO (what else?) is a former doyen of the City
called Mark Russell.
In a rare interview in 2013, Russell declared:
“We don’t believe government makes for a particularly good shareholder. Our
belief is that unless there is a good policy reason for government to have a
shareholding then really we should be seeking to divest those shareholdings.”
Everything must go is no longer the cry of distressed shopkeepers – it is now
public policy.
As an employee of the taxpayer, Russell earns up to £159,999, which is far more than
the prime minister’s salary.
Yet the one thing he has done that you will have
heard of was an unmitigated disaster.
He was among those in charge of selling
70% of Royal Mail three years ago – a sale that, even the government now
admits, brought in less money than it should.
We let a 500-year-old public service go at a £1bn discount, a select
committee of MPs calculated in 2014.
And that takes us to the
heart of the problem with such sales. At best, privatisation is a
short-term gain for a long-term loss.
The public sells one of its prize assets
in order to enable the chancellor to bank some cash immediately.
In a report published
on Monday, the campaign group We Own It calculates that if Osborne sells the
Land Registry, National Air Traffic Services, Channel 4 and the Ordnance Survey
the public will kiss goodbye to control over £7.7bn in dividends and profits in
the next 50 years.
Sure, we pocket a couple of billion now – but we lose far
more in the long run.
These are services that have taken many decades, even
centuries, of public investment and management to build up.
The Land Registry
dates back to Victorian times; the Ordnance Survey’s aerial photographs of
enemy territory helped Britain win the first world war.
All that accumulated effort and
ingenuity will be handed over to a small group of investors – and for what?
Better management?
A recent study of the evidence by the University of
Greenwich concludes there is “no significant difference in efficiency between public and privately owned
companies in public services”.
For more investment? Ministers selling off
everything from railways to water have promised privatisation will bring
greater investment.
It comes – but it’s always the public that ends up paying
for it.
Thatcher claimed that selling off BT, British Gas and the
rest would turn Britain into a shareholder democracy.
Official figures show
that Britons now own less than half as much of the UK stock market as they did
before Thatcher’s first privatisation.
Osborne’s privatisation, like the
rest of his austerity programme, will enable him to transfer wealth from the
public to a far smaller group of private investors.
The employees can look
forward to cuts in jobs, pay and conditions – as we have seen across the
privatised utilities.
The rest of us, the customers, will endure higher bills
and paying for hidden subsidies.
And the chancellor? He will have brought in
enough cash to enable him to make some pre-election tax cuts – to literally buy
himself votes.
Osborne calls this privatisation.
I treat it as part and parcel of austerity.
But there is another term you and I
might use.
Because this making off with our public property is nothing more
than legalised larceny.
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