Friday, May 26, 2017

The Conservative equivalent of nationalisation

The bogeyman of nationalisation stalks threateningly around the Labour party. Memories of strikes, poor service and inefficiency are deeply imbedded in our national consciousness, and both the (right wing) media and right wing politicians are more than happy to remind us.

It has struck me recently that what is particularly disingenuous about this is that the Conservative party are more than happy to substitute their own analogue of nationalisation - ultimately, no better for the consumer.

The public logic is as follows: a nationalised industry is uncompetitive and inefficient, likely offering poor service. If it is privatised and opened up to competition, this will drive prices down and result in an improved service. That was the historical logic - the Conservatives of the 1980s had many faults, but this was their agenda, and there's little doubt that the big privatisations of that era - BT, British Airways, British Gas, BAA - have ended up doing the job better as private companies than the were doing as effectively parts of the government.

However, the more recent privatisations seem to have been less about the ideology of the most effective way to run a public service and more to do with transfer of wealth to a de facto plutocracy. Privatisation of electricity, water boards and the railway have not apparently resulted in genuinely open and competitive markets. Employees have suffered, and customers have seen little benefit. The biggest beneficiaries have been a comparatively small wealthy class. In the case of the railways, for example, this report points out that whilst the railways still require a public subsidy of billions of pounds (that is, taxpayer money), and ticket prices have consistently increased faster than inflation, they are paying hundreds of millions of pounds to shareholders. It is hard to believe that the taxpayer is gaining value for money from this arrangement - but since it is the government ideology, securing value for money for the taxpayer is secondary to detaching these entities from the government. If it benefits the plutocracy, so much the better.

Can you see how this is similar to nationalisation? The policy is ideological - it has little concern with the customer or the taxpayer - it is what the government is going to do anyway. Unlike with nationalisation, the folk memory of privatisation is generally good, still - "Tell Sid", the spread of share ownership and dividends, improving customer service. But that's not what is going on now. Instead, we see markets with no competition, and money being transferred from taxpayers not to a bloated public service but to shareholders. But the effect is the same.

This is the model the Conservatives wish to pursue if they continue in power. Public money goes to pay for school places in academies, which whilst state schools are struggling and having to cut budgets, still anticipate being able to make a profit. The same for the health service - public money again being used to pay for medical work, but rather than state-owned enterprises collecting the money (at cost), private companies (making a profit for the benefit of shareholders) will collect it instead. And this is what is planned for old-age social care. Companies will be invited to provide financial products and the net effect will be a large proportion of the capital from a significant fraction of the housing stock of the country being transferred for profit to them.

This is blatantly serving the interests of people within the government. I read a report that the prime minister's husband works for the company with one area of expertise being the sort of equity release product that will form the staple of the Conservative proposal about social housing. Extensive connections between private healthcare companies and government ministers have been reported (it should be noted, though, that some of these are donations, and politicians have little control over who gives them money).

What's the alternative? Is it possible to have a middle ground between nationalised entities, with their risk of inefficiency, and private companies, transferring money from the public purse to shareholders and overpaid executives?

Friday, May 05, 2017

This is not about Brexit

My fear ... These elections are not about Brexit. Brexit is a distraction, a means of capturing votes with a big sideshow. After all, what is guaranteed to stir the British public from apathy more than a perceived threat to its sovereignty from the outside? What is more guaranteed to turn them away from a party than the suggestion that it is prepared to appease them?
Whilst the EU negotiator sounds conciliatory, and says there is no punishment, the media report the risks of a cost of 100 billion Euros, and the tories are happy to suggest that was the threat. WHO IS GAINING FROM THIS SUPPOSED INTERFERENCE IN THE ELECTION?
So the conservatives are about to be given a huge electoral mandate, and with that, they are going to dismantle the remaining vestiges of British society, under the guise of the need for austerity. The NHS, state education, social welfare, none will exist in a form that we would recognise by 2022. The apparatus is already in place. The conservatives engineered the majority they needed in the marginal constituencies in 2015 by cheating the finances. The potential sting to them has been drawn by the fact that they are about to secure their majority. Money is already being diverted away from state schools, the NHS and welfare towards privately owned schools and grammar schools, healthcare companies and other companies. With a majority of over 100 in the next parliament, there will be nothing that can stand in the way of them legitimately completing the job.
http://www.bbc.co.uk/news/education-39786477 - the poor lose out as a result of the 11+
http://www.independent.co.uk/…/dwp-fit-to-work-assessments-… - companies gain more than the government saves
http://www.mirror.co.uk/…/selling-nhs-profit-full-list-4646… - (old report) people in government who benefit from private health companies