Lessons from two decades of privatisation in the UK

Private Island: Why Britain Now Belongs to Someone Else

by James Meek

Well here we are, with over twenty years' experience of privatisation, and it seems a reasonable thing to enquire if the outcomes resemble what was promised.  In many respects, they do indeed, but only in so far as dire warnings have been vindicated.  Take the railway network for example. A House of Common select committee examined the proposed privatisation and predicted it would be irresponsibly risky, and in particular that it depended irrationally on a technology that promised to revolutionise signalling, eliminating the need to spend tens of billions of pounds replacing century old track, signals and infrastructure, but which did not yet exist and would have to be field tested on the world's most complicated railway. Sure enough, the technology was never delivered and after costly chaos, including several fatal train crashes, the network was taken back into public ownership. With electricity generation, the prediction was simpler: to quote a union leader: "There's only one country that's stupid enough to sell off its electricity industry and that's Britain." But he also observed that things have improved now with the system back in public sector control - except that it is the French electricity generating authority that now owns and operates Britain's entire nuclear power industry (surely that has to be astonishing) and much more besides.

The recent privatisation of the postal service turned out to be seriously under priced, because the financial sector understood what the government did not wish to admit, which is the profits to be gained by eliminating decent, secure and properly paid employment terms for postal workers and substituting casual, low paid home workers on zero hours contracts. The model exists and is probably inevitable, because British postal workers cannot hope for the government protection they were given in Holland when the same process was in train. <b>The British do not protect their workers any more than they protect their major industries.</b>

We must go on, I can't go on, I'll go on. The water supply industry has been transformed into a licence to tax English customers for the benefit of foreign investors. The largest privatisation of all (worth over £40bn in twenty years) was the sale of council housing at massive discounts to better off tenants, much of the stock ending up in the hands of property companies renting to low income tenants at inflated rents which are subsidised or fully paid by the state through Housing Benefit. The government will be losing money on this transaction forever. I refuse to mention the National Health Service as I am still too upset. It is no longer a service, having been reduced to a brand name. The slow motion disaster is unfolding and some of it is described here. As Meek observes, it is perfectly possible to praise and admire the NHS and even to promise to spend more money on it - while destroying it. If the electorate chooses to be confused, it is not for want of warning.

Actually, the insanity seems beyond description, yet James Meek provides a very calmly stated, rational and even amusing description of the consequences of privatisation after twenty years and demonstrates that privatisation has delivered none (none at all) of the benefits promised by Thatcher and other advocates and instead imposed worse than the worst case predictions of its opponents.  None of this seems to have altered the attitudes of either the political class, or the media or indeed the electorate. He looks for explanations of this absurdity in a number of places, but one small hint may, I think, merit more attention.  It is a suggestion that Britain's policies and approach are rooted in pure theory, while leaving British industry and services open to predators who are practical minded and politically astute. In simpler terms - they really do not know what they are doing but think it sounds fine.

The emperor has no clothes. The idea that these people (and that includes New Labour with the Conservatives and their recent Liberal allies) can be trusted to manage our economy beggars belief. Shame there is no opposition to point this out in simple terms. Neoliberalism is not just bad economics - it is sadistic and stupid beyond belief. After twenty years, privatisation is a policy that has been fully tested and failed every test, so where is the accountability? There is none it seems.

How James Meek wrote this calm and reasonable book without having a complete and total nervous breakdown defeats me. I recommend not reading more than one chapter in a day if you wish to stay sane and don't read any of it at night before trying to sleep. Yet as many people as possible must read it if we are not to continue with this madness. We are in a terrible bind.