Aditya Chakrabortty writes:
Steel yourself, for an unlikely source is about to spout
a highly unfashionable idea. This week, George Osborne will come out for
renationalisation.
You won’t hear the N-word from
his lips, of course. Nor shall the chancellor go full Corbyn and seize some of
the FTSE’s crown jewels.
Instead, you can expect something far more in keeping
with the spirit of 21st-century Britain.
The government will indeed put some of
our most vital infrastructure under state control – but the states in question
will be France and China.
At some point during this week’s visit of president Xi Jinping – perhaps sandwiched between lunch at
the palace and a trip to Chequers – Osborne shall confirm that nuclear plants
will be built at Hinkley in Somerset and Sizewell in Suffolk, by the energy
giant EDF, nearly 85% owned by the French government, and China.
What’s more,
Beijing will get a shot at designing and building its own nuclear facility at Bradwell in Essex.
Even as that announcement is made with all the fanfare
available to the British state, the promises of privatisation will be revealed
as lies.
What were voters guaranteed by Margaret Thatcher and John Major, as
they flogged off electricity and the rest of our publicly-owned utilities?
More
competition, lower bills and greater investment: all the plump fruit of a more
dynamic capitalism.
Take Hinkley, which at £24.5bn
will cost as much as the London Olympics, Crossrail and a new terminal at
Heathrow put together.
Osborne will proudly blare that taxpayers aren’t
chipping in a penny towards the costs. True enough, but his civil servants will
quietly admit that we are guaranteeing up to £17bn of the total cost.
In the
screwy logic of Britain’s renationalised capitalism, the public assumes the
risk while the corporations get to scoop the profits. Because rest assured, there will
be profits – all of us will be making sure of that.
To secure EDF as a builder,
Cameron guaranteed a fixed price for electricity from Hinkley of £92.50 per
megawatt hour.
That is around double the going rate for electricity
on the wholesale markets, a price so high that equity analysts term it“financial insanity”.
Change your supplier as
often as you like, you and everyone else in Britain will be paying for that de
facto subsidy in your electricity bills for decades to come.
Britons will in
effect be paying more for their energy so that French households can pay less.
Indeed, so generous are the terms of this deal that the government of Austria
is currently taking Britain to court on the grounds that it’s handing out state
aid to EDF.
Yes, you read that last sentence right: the UK stands
accused of dispensing state aid – to another state.
How many times have you
read about some age-old manufacturer and thousands of jobs going down the
swanee, while ministers wrung their hands over European state aid rules?
Now we
know that such rules can be tested – provided the recipient is headquartered
not in Port Talbot, but Paris.
When questioned about these
eye-watering numbers, ministers will inevitably defend them as a price worth
paying to stop the lights going out.
But like the sanctity of the state-aid
regulations, this is a bogeyman deployed to shut down conversation.
True,
Britain has a clapped-out generating system. Realistically, the price we face
for that is not our TVs going dark in the middle of Gogglebox, or our
smartphones no longer charging, but paying a lot more for our electricity.
Except, with Hinkley, we’re guaranteed to be paying a lot more anyway.
As James Meek points out in his
prize-winning book Private Island, the publicly owned
energy-generating system was in very good nick, enjoying both investment and
domestic engineering expertise. A generation of privatisation has seen off both
of those.
Sue Ion, a fellow of the Royal Academy of
Engineering who has spent over 30 years in nuclear power, says, “We have no
capacity to make a reactor design from scratch.”
Hinkley’s boss, Nigel Cann, boasted to this paper last year of
the thousands of local jobs his plant would bring.
He gave just one example:
“We’ve already seen a local food co-op … set up in preparation for feeding what
we estimate to be the 25,000 people” who’ll move through the site.
One insider
predicts that the British will largely be employed “digging ditches, laying
concrete and running the pie wagon”.
The big-boy jobs will go to those calling
the shots – that is, the French and the Chinese.
A share-owning democracy, Thatcher promised, as she
auctioned off BT. Britons were about to be put in charge of their economy.
Another fib: in 1981, ordinary Britons owned over 25% of the stock market; they
now hold less than half that.
She offered a capitalism in which
private firms took risks and reaped rewards, while the customer benefited. What
she delivered was very different.
A system in which you can’t get 3G on trains,
can’t rely on broadband or buses in the countryside, and in which train
operators and energy firms compete not on service – but on how many tariffs
they can bamboozle customers with.
In which parastatal organisations from
France and China,
Germany and the Netherlands take an easy clip from ordinary British customers
and plough the bare minimum back.
This isn’t a dynamic capitalism, it is lazy,
arthritic and very expensive.
And still Whitehall and
Westminster, and their mini-mes in town halls up and down the country, carry on
down the same road. Cameron proposes to sell anything left in the cupboard,
even old student loans.
Civil servants let Redcar and thousands of steel jobs
go down the drain, as they lend millions to Roman Abramovich to keep his
foreign steel plant going.
Nuclear power is merely the punchline to this whole
rotten joke. We won’t build it, we won’t own it, we certainly won’t control it.
But we will pay for it: in lost jobs, in vanishing taxes, in whopping great winter
fuel bills.
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