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SERCO’S resumption of shareholder dividends after recording bumper profits is a scandal that tells a story about modern Britain.
The disgraced privateer — for how else can you describe a company fined more than £20 million as recently as 2019 for defrauding the taxpayer? — is on a roll.
Earlier this month it announced the $295m acquisition of a firm providing services to the US military, which chief executive Rupert Soames purred was “the largest defence market in the world.” Wherever vast sums of public money are available to be tapped you will find this company.
Serco has been widely panned as one of the private companies commissioned to deliver our test-and-trace service by Dido Harding. The project was a botched mess, the company having no prior experience in the area and hiring untrained workers on just over the minimum wage, who, unsurprisingly, underperformed compared with schemes run by local NHS public health teams.
Serco denies this, complaining that the criticism of its performance is “wildly unfair,” though many associate Britain’s failure to build a functioning test-and-trace system during the first lockdown with the inability to identify and isolate subsequent infection outbreaks, leading in due course to second and third waves of the virus — and one of the highest death tolls anywhere in the world.
Soames has also shrugged off the negative headlines. “The important thing is what does our customer think, and it seems to us that the government is pretty pleased.”
The truth is that if the government cared about the quality of the public services it commissions, it wouldn’t have hired a firm with a record of fraud and contract breaches like Serco in the first place.
Nor would the test-and-trace scheme be headed by a Tory crony like Harding, the failed TalkTalk executive whose inept reign at the company — during which hackers exposed personal and banking details of up to four million customers — prompted the trade magazine Marketing headline “TalkTalk boss Dido Harding’s utter ignorance is a lesson to us all.”
Harding has close links to the Tories, being married to a Conservative MP and having gone to Oxford with former Tory prime minister David Cameron.
So does Soames, whose brother is Tory grandee Sir Nicholas Soames and whose grandfather was the grandest of Tory grandees, Winston Churchill.
Applying “customer satisfaction” to Serco’s performance when the Tory government is the customer is a pointless exercise. As economist Grace Blakeley recently argued in Tribune, “Government contracts are written up by consultancies handed out to ministers’ friends, whose companies are being advised by those very consulting firms. Billions of pounds’ worth of public money is then thrown at a few giant outsourcing companies, which deliver sub-par services at eye-watering prices.”
Serco’s dividends illustrate the fact that even if infections and deaths are through the roof and unemployment is soaring, many big businesses have made a fortune out of the pandemic.
This is true both of those with the contacts for contracts and for firms well placed to dominate the surge in online shopping and deliveries, like Amazon.
Swiss bank UBS found last autumn that the super-rich have done well out of coronavirus, with billionaires increasing their wealth by more than a quarter between April and June last year.
The International Labour Organisation reported in December that the pandemic has conversely driven wages down. It has increased inequality.
The trends are linked. This is why the labour movement must approach Britain’s political dilemma in terms of class struggle: are working-class people going to pay for the crisis, or are we going to take on the corporate profiteers?
With Labour currently winning plaudits from Rupert Murdoch’s Sun for opposing Tory proposals for corporation tax rises, this is a battle that must be fought outside Parliament.
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