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Apr
2015
Friday 10th
posted by Morning Star in Features

The PM likes to present himself as a ‘compassionate Tory’ but his actions in office show him to be a privatisation fanatic, writes NEIL CLARK


REMEMBER when David Cameron was elected as Conservative leader in the autumn of 2005?

Back then he was portrayed by his supporters in the elite media clique as a moderate “one nation” Tory — a man who was going to deliver “compassionate conservatism” and move “the nasty party” away from Thatcherism.

But, as I pointed out in a newspaper article which went very much against the tide in October 2005, there was nothing moderate about “Dave” or his policies.

Cameron’s extremism in office can be seen quite clearly in many areas, and not least in his zeal for privatisation.

The Con-Dem coalition which Cameron has led has been the most fanatically pro-privatisation government in our country’s history — privatising things which even Margaret Thatcher decided were best kept in public ownership.

With a general election looming, let’s remind ourselves of some of the national assets and public services which have been sold off in the past five years under the Con-Dems and how much British taxpayers have been short-changed by these sales.

Keep this article handy in case a canvasser from one of the coalition parties appears on your doorstep in the next few weeks asking for your support.

  •  Neil Clark is the director of the Campaign for Public Ownership
  • (www.campaign4publicownership.blogspot.co.uk, Twitter@PublicOwnership). You can also follow him on Twitter @NeilClark66.

ROYAL MAIL

HE country’s mail delivery service had been in state hands since its inception in 1516. But Cameron, the so-called “conservative,” didn’t care too much about our national heritage when there was a chance to further enrich his fat-cat supporters in the City. 

Some 60 per cent of the Royal Mail was sold off for a paltry £2 billion in October 2013 — after the government had already transferred to the taxpayer the company’s £8.4bn pension fund deficit. 

Shares leapt by 38 per cent on the first day of trading, showing the company had been greatly undervalued. The National Audit Office reported that the government’s actions had cost the taxpayer £750 million in a single day. 

One of the “investors” to make a killing on the Royal Mail sale was a hedge fund company called Lansdowne Partners — which saw its £50m stake rise by £36m by April 2014. 

On the management committee of Lansdowne Partners was a certain Peter Davies, who just happened to be the best man at Chancellor of the Exchequer George Osborne’s wedding, while Lansdowne’s former CEO Paul Ruddock was awarded a knighthood in 2012 having donated £500,000 to the Conservative Party. 

The Royal Mail sell-off was a double whammy for the taxpayer as not only was the company undervalued but post-privatisation, stamp prices were raised in 2014 and raised again last month. 

NHS

CAMERON pledged before the 2010 election that there’d be “no more top-down restructures of the NHS” but his government has introduced the most radical top-down changes to the NHS in its history. The Health and Social Care Act 2012 has enabled large-scale privatisation of NHS services.

Only last month, the private sector was given its largest ever NHS contract — an £780m deal for 11 private companies to provide a range of health services including X-rays and operations. Even the NHS blood plasma supplier has been sold — to a US private equity firm founded by far-right US presidential candidate Mitt Romney.

EAST COAST

THE public wants our railways renationalised. Cameron and his fellow ideologues in government thought they weren’t privatised enough.

The East Coast Main Line was run by publicly owned company Directly Operated Railways after its private operator National Express defaulted on the franchise in 2009.

The line was a great success in public ownership — with high levels of passenger satisfaction and over £1bn being returned to taxpayers in five years.

So the coalition privatised it, awarding it to a company owned by Virgin and Stagecoach.

In March, the government announced it was selling its 40 per cent stake in Eurostar for £750m to a consortium comprising a Canadian pension fund and Hermes Infrastructure.

This at a time when Eurostar had been posting record profits and the sensible thing would have been for the government to maintain its stake.

Even those who are usually in favour of privatisation denounced the sale.

“The sale of Eurostar is a terrible deal for the taxpayer,” declared Dr Richard Wellings of the Institute of Economic Affairs.

Wellings noted that five years ago, taxpayers spent around £800m in current prices bailing out Eurostar.
Again, it’s a case of nationalising the losses and privatising the gains.

FIRE & RESCUE

IN 2013 the government sold off the Fire Service College, which had been in public ownership and training firefighters since the establishment of a National Fire Service in 1941.

The college was sold to Capita in February 2013 for £10m.In March 2013, the government announced that Britain’s search and rescue helicopter service, carried out for 50 years by the RAF and Royal Navy, was to be operated by US firm Bristow, on a 10-year contract worth £1.6bn. 

The government, which likes to boast about its support for Britain’s armed forces, also killed off another in-house service, when as part of an army reorganisation, it was announced that the Naafi, the institution which has supplied shops, clubs and recreation facilities on British Army camps the world over for almost 100 years, was to close. 

INFRASTRCUTURE

SIX months after taking power, the coalition sold High Speed One, the Channel Tunnel rail link, to two Canadian pension funds for £2.1bn. “The most modern section of the UK rail network has been sold off for a song in what amounts to nothing more than a fire sale of the family silver to prop up the financial deficit caused by the bankers and speculators in the first place,” lamented the late RMT leader Bob Crow.

CRIMINAL JUSTICE

THE government announced plans to privatise around 70 per cent of the probation service. In May 2014, the 34 probation trusts in England and Wales were closed down and under the new system 21 community rehabilitation companies are now responsible for working with low and medium-risk offenders. The contracts to the private companies are worth around £450m a year for seven years. 

NORTHERN ROCK

THE bank was saved by nationalisation in 2008, but in 2011 the government sold the most profitable parts to Virgin Money, for an upfront payment of £748m, representing a loss of at least £400m for taxpayers. Needless to say, the government left taxpayers holding on to the “bad” part of Northern Rock, Northern Rock Asset Management, which in January was told in a court ruling to pay £258m in compensation to 41,000 customers who took out Together mortgages before the bank’s collapse.

THE TOTE

The state-owned bookmaker had been set up by that well-known communist Winston Churchill in 1928. It protected the public from fleecing by on-course bookies and ploughed its profits back into horse racing — helping to make British racing the best in the world. In 2011 the government sold the “nanny goat” to private bookmaking firm Betfred for £265m. Again, it was a bad time to sell, as Tote profits had risen by 13 per cent in 2010. Only fools and horses? Well only fools would have sold off the Tote — or fanatic privatisers. 




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