The Political Risk

Over on Comment Is Free, where he is published roughly monthly and sometimes more often than that, the famously never-published Neil Clark writes:

"A return to the 1990s with whole-scale outsourcing to the private sector – this would be unpalatable to the present administration" Tuesday's leaked memo of a meeting between business chiefs and Francis Maude, the minister for the Cabinet Office – which reveals how the coalition is having second thoughts about the scale of its ambitious and ideologically driven programme of ending the "state's monopoly" of the provision of public services – is undoubtedly welcome.

But supporters of public ownership shouldn't be popping the champagne corks just yet.

As reported in the Guardian, an aide to Maude confirmed that the government was still "committed to bringing in new models to the public sector – charities, social enterprises and mutuals".

Although the prospect of a "charity, social enterprise or mutual" running and operating your local library or health centre may not be as objectionable as a profit-hungry public limited company, it's privatisation all the same. And behind it is the same old neoliberal dogma which says that state or local authority provision of public services is inherently undesirable and needs to be ended.

In fact, there is no better provider of basic services, whether it be libraries, healthcare, public transport or postal services, than the state. Only the state can arrange things on a nationwide scale and make sure that provision is universal and standards are uniform. Only the state can ensure that the poor can enjoy equal access to the same services as the rich.

We've had healthcare in the hands of the voluntary and private sector before – prior to the creation of the NHS – and the result was that thousands died unnecessarily from diseases such as diphtheria and polio and infant mortality rates were around one in 20. We've had education exclusively in the hands of the non-state sector before too – and the vast majority were denied a proper education. And anyone who travels regularly on the privatised railways in Britain and in the rest of Europe, where state-owned companies still dominate, won't need me to tell them that the continental railways are far superior – as well as being considerably cheaper.

You won't read about it in the Economist, or on the websites of "free market" thinktanks, but the extraordinary rise in living standards and improvements in healthcare, education and public transport – and the reductions in inequalities – which Britain enjoyed during the third quarter of the 20th century coincided with the increased role of the state. As the state's role has been reduced since 1979, so services have deteriorated and inequalities risen.

Now neoliberals, determined to destroy the last remnants of the progressive mixed-economy postwar settlement, are keen to hand the state's role in delivering public services over to others.

The coalition, according to the leaked memo, is "not prepared to run the political risk of fully transferring services to the private sector with the result that they could be accused of being naive or allowing excess profit-making by private sector firms". Well, if they really aren't prepared to run that risk, then why not withdraw, with immediate effect, their plans to sell off the Royal Mail, in state hands since its inception in 1516? And why not ditch Andrew Lansley's hugely unpopular health bill too?

The truth is that we are currently in the midst of the biggest wave of privatisation since the heyday of Margaret Thatcher. In November, the coalition sold High Speed One, the Channel tunnel rail link, to two Canadian pension funds for £2.1bn. It has appointed Bank of America Merrill Lynch to advise on the sale of its 49% stake in National Air Traffic Systems. And the Tote, the state-owned bookmaker, established by Winston Churchill in 1928, is also to be sold shortly – with a private-equity-backed consortium among the two favoured bidders.

Nevertheless, the leaked memo – and the coalition's abandonment of plans to flog off England's forests – shows that public pressure can force the government to change its mind. Privatisation and outsourcing provides rich pickings for the few. But if the millions of people who benefit from having the state provide public services make their voices heard loud enough, the drive towards a wholly privatised Britain can still be defeated.

If you believe that there ought to be a middle class for social and cultural reasons, then you have to believe in the political action necessary in order to secure that class's economic basis. Look at Britain today, and you will see the "free" market's overclass and underclass, with less and less of a middle except in the public sector. Public sector haters are no more in favour of a thriving middle class than they are in favour of family life, or British agriculture, or a British manufacturing base, or small business, all of which are likewise dependent on government action in order to protect them from the ravages of capitalism.

There is no private sector, at least not as that term is ordinarily employed. Not in any advanced country, and not since the War at the latest. Take out bailouts or the permanent promise of them, take out central and local government contracts, take out planning deals and other sweeteners, and take out the guarantee of customer bases by means of public sector pay and the benefits system, and what is there left? They are all as dependent on public money as any teacher, nurse or road sweeper. Everyone is. And with public money come public responsibilities, including public accountability for how those responsibilities are or are not being met, accountability and responsibilities defined by classical, historic, mainstream Christianity as the basis of the British State and as the guiding inspiration of all three of this State’s authentic, indigenous, popular political traditions.

Privatisation, globalisation, deregulation and demutualisation have turned out, in the most spectacular fashion, to have been anything but fiscally responsible. The same is true of a generation of scorn for full employment, leading to the massively increased benefit dependency of the 1980s and the institutionalisation of that mass indolence down to the present day. The transfer of huge sums of public money to ostensibly private, but entirely risk-free, companies in order to run schools, hospitals, railways, rubbish collections, and so many other things: is that fiscally responsible? Bailing out the City at all, never mind so that it can carry on paying the same salaries and bonuses as before: is that fiscally responsible? Even leaving aside more rarefied academic pursuits, is it fiscally responsible to allow primary education, or healthcare, or public transport, or social housing to fall apart? Is that good for business? Are wars of aggression fiscally responsible? Are military-industrial complexes? Will it be fiscally responsible to allow the private health insurance companies to charge the American taxpayer whatever they like, because the absence of a public option or a single-payer system was the price of the votes of Blue Dog Democrats who still voted against the Bill anyway and of wavering Republicans who turned out not to exist at all?

Not by coincidence have those who have insisted on a Healthcare Bill without the public option also insisted on a Healthcare Bill with less protection for the child in the womb. In the same spirit did Margaret Thatcher give Britain abortion up to birth, entirely of a piece with the rest of her legacy, which is of unconservative irresponsibility, fiscal as much as every other kind. Far from our having grown richer since 1979, we have in fact grown vastly poorer: only a generation ago, a single manual wage provided the wage-earner, his wife and their several children with a quality of life unimaginable even on two professional salaries today. This impoverishment has been so rapid and so extreme that most people, including almost all politicians and commentators, simply refuse to acknowledge that it has happened. But it has indeed happened. And it is still going on.