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Oct
2013
Saturday 5th
posted by Morning Star in Features

Labour's Chuka Umunna says there have been 'successful' privatisations - but NEIL CLARK struggles to think of any


One of the funniest moments in the hilarious Blackadder Goes Forth series was when our heroes are reminiscing about their time in the first world war trenches before the going "over the top" in the final "big push."

"I mean, we've had some good times. We've had damnably good laughs, eh?" says the silly-arse public schoolboy George (played by Hugh Laurie). "Yes. Can't think of any specific ones, myself..." replies Captain Blackadder.

I was reminded of that classic exchange when reading the article on Labour's policy towards the privatisation of the Royal Mail by shadow business secretary Chuka Umunna, published on the Huffington Post website.

"It is true that there have been successful privatisations in times past," Umunna wrote.

Really? Like Captain Blackadder, I can't think of any specific ones myself. I wonder what privatisations Mr Umunna had in mind?

British Telecom is the one usually cited as a "success" by Thatcherites, accompanied with the obligatory line about how you had to wait 27 years or so to get a new phone when the industry was state-run - but the reality is that the reason phone bills went down in real terms was new technology and not selling off BT.

Perhaps the shadow business secretary was thinking of Sealink, the British Rail ferry subsidiary.

What on Earth was the state doing running a ferry company, the Thatcherites scoffed. It would be much better off in the private sector!

Sealink was privatised in 1984. In the year ending December 31 1983 this "inefficient" state-owned business had made a profit before interest and tax of £12.8 million.

Sealink was bought by a Bermuda-based US company which was then was taken over by a Swedish-owned rival.

The name Sealink passed into the history books. A profitable British-owned company had been sunk by the neoliberals. What a great success!

Or maybe Umunna was thinking of BAA and our wonderful world-class privatised airports that are so pleasurable to spend time in.

If we look at the interests of workers, consumers, rail users, bus users, airport users and indeed the great majority of ordinary people, it is hard, if not impossible, to think of a single example of a "successful" privatisation.

Privatisation has only been "successful" if we look at it from the point of view of City financial institutions and wealthy shareholders.

For these groups it has been a runaway success. That's no accident but how it was always meant to be.

For privatisation was never about trying to "improve" services. Rather it was a process specifically designed to transfer wealth and resources away from the majority to a tiny minority.

It was an essential part of the neoliberal project which commenced in 1979 to radically restructure the postwar British economy so that it worked in the favour of the financial and business elites, and not ordinary people.

The latest stage in this ongoing neoliberal project is the sell-off of the Royal Mail, which has been in state hands since its inception in 1516.

In the first part of his article, Umunna makes all the right arguments about why the sell-off is such terrible news for Britain and how taxpayers will lose out on a massive scale.

"The government, having taken on over £37.5 billion pounds-worth of pension liabilities, in essence nationalised the debt of the business and is now privatising the profit at the very time that the business is beginning to render large profits - profits that are forecast to rise. They do so at a time when Royal Mail has shown it can deliver success in public hands," he writes.

But having put forward the powerful case against privatisation, Umunna then undoes all his good work by failing to make a commitment to renationalise Royal Mail if Labour come to power in 2015.

This comes after Umunna's own party conference voted overwhelmingly in favour of renationalisation.

A firm pledge by Labour to return Royal Mail to full public ownership on taking office in May 2015 could have sabotaged the forthcoming sell-off.

Given Labour's commanding lead in the opinion polls and the fact that the party is as short as 1-2 to win the next election, investors would surely have had second thoughts before buying shares in a company which would be renationalised in just over 18 months' time.

In fact, it could be argued that given the unpopularity of the privatisation and the fact that rural Tory MPs are reported to be worried - with justification - of losing their seats over the measure, a Labour pledge to renationalise from the start might have led the government to quietly shelve its plans.

The government is in a weak position over Royal Mail as it knows public support for a sell-off that even Thatcher ruled out is lacking, but it has been emboldened by the belief that while Labour would oppose the sale, it wouldn't pledge to renationalise.

If all this sounds familiar, then there's a depressing precedent.

In the 1990s Labour opposed rail privatisation while in opposition. At the 1995 conference leader Tony Blair declared: "To anyone thinking of grabbing our railways, built up over the years, so they can make a quick profit as our network is broken up and sold off, I say this - there will be a publicly owned and publicly accountable railway system under a Labour government."

But not long afterwards the pledge to renationalise was dropped, to the delight of the privatisers.

The rest, as they say, is history. Labour could have scuppered railway privatisation in the 1990s and it could have scuppered the privatisation of Royal Mail today.

But instead of fighting tooth and claw against neoliberalism, the party's leadership is still stuck to the idea of trying to make a flawed economic model work better for the people.

So in place of a commitment to renationalise, we get a pledge "to safeguard the services consumers and businesses get from a privatised Royal Mail." That's still more than we'd get from the Tories, but way short of what Labour should be offering.

The basic problem is that a privatised Royal Mail will do what all privatised companies have done, and that is put the interests of shareholders - and profit maximisation - before customers.

A privatised Royal Mail will lobby hard for the universal delivery obligation to be dropped on the grounds that it costs it too much money to deliver the mail each day to isolated dwellings in north Devon and the Yorkshire moors.

Either the obligation will be dropped or the government will step in to pay the privately owned Royal Mail to continue with it.

Either way ordinary people will lose out. Stamp prices, which have gone up by record amounts over the past two years to fatten the business up for City investors, will carry on rising above inflation.

Within a short space of time, our postal service will be radically different from the one we have today and an important part of our history and our social fabric will have been destroyed.

For people living in remote rural areas, the privatisation will be particularly catastrophic.

The lion's share of the blame for the destruction of the Royal Mail must of course go to our privatisation-crazy Con-Dem coalition.

But unless it changes its policy on renationalisation and delivers the commitment which its own members and the vast majority of the British people want, Labour will be guilty too.

Neil Clark is the director of the Campaign for Public Ownership (www.campaign4publicownership.blogspot.com). You can follow the CPO on Twitter @PublicOwnership and at you can also follow Neil Clark @NeilClark66.




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