Category Archives: Privatisation

The consequences of the Grenfell Tower tragedy could be profound

I have a strong feeling that the atrocity at Grenfell Tower this week (and my sympathies are with those affected) will prove to be both another nail in the neoliberal coffin and the beginning of a sweeping Labour revival.

This I have thought not for a very long time, but the longer I ponder the prospect, the more convinced I am that it is correct. At least, this is what the signs point us to.

There is something going on in Britain. Sections of the population are mobilising in profound ways, workers are demanding action where their voices were once muffled.

Who knows where this renewed energy will lead? I hope not towards the violence we saw at Kensington Town Hall. The poor know better and can get their messages across in more constructive ways.

Corporate failure to provide suitable, non-flammable cladding has sparked intense anger. But the emotion provoked is about more than just that. It is being more widely aimed at four decades of neoliberalism.

Public mistrust of the private sector was certainly aroused in 2008 after the financial meltdown. There came a turning point for the west, which I believe has swayed slightly to a more Left-wing, interventionist economic consensus.

The neoliberal agenda is treated by the working classes with understandable disdain. It promotes individualism over the maintenance of a social conscience and has represented a sustained attack on democracy.

There is also an interesting parallel at play here. When Margaret Thatcher was in power and she introduced ‘right to buy’ (a form of housing privatisation), homelessness right across rural England soared.

This has been recorded quite brilliantly by my friend Anthony Clavane in his new book A Yorkshire Tragedy. Though Grenfell Tower is a wholly separate problem, it does reflect a certain disregard for the housing needs of the country’s poorest.

I noted yesterday, also, the scurried way in which Mrs May climbed into her convoy 4×4, choosing, perhaps understandably, to avoid the baying crowds demanding both answers and leadership.

I can of course imagine that such a situation would be nerve-wrackingly intimidating. Local residents, bereaved families and angry demonstrators do not make for the ideal public meeting after such a painful week.

There was, though, something slightly symbolic about the Prime Minister’s forced departure from Kensington yesterday. Mrs May appears weak and biding her time, and this crisis could be the beginning of her end.

That is not to say that Grenfell Tower’s blaze was her fault. I think there have been very cynical attempts by hard leftists to associate her with the deaths of, at the time of writing, an estimated 58 people.

The idea that Mrs May ought to be blamed for the fire is fanciful and unhelpful nonsense. Leftists who have genuine (and I think reasonable) grievances with corporate ineptitude will undermine their cause by engaging in this useless finger-wagging.

I have defended the importance of protest at this blog as an important avenue of expression in any democracy. But there can be no excuse for ensuing demonstrations to erupt into savage carnivals of violence.

I also believe that the Labour Party will win the next General Election, whenever it is called. If contemporary British politics tells us anything, it could be as soon as this autumn. There are a few reasons why I think this.

The first is that the myth and fakery of Tory strength and stability has been left helplessly exposed, both by the party’s incompetent leader and their throwing away of 21-point polling leads in one of the worst political campaigns in modern history.

The second is its potentially disastrous dealings with the Democratic Unionist Party, which could completely hollow out Tory support in more urbanised, metropolitan areas of the country.

Social and moral conservatism, but for occasional stirrings, has been more or less wiped out in Britain. The Conservatives have instead presented a more liberal agenda for many years.

This has been because they have no alternative. The Tories are electable if they mouth conservative sentiments but advocate liberalising policy. They are able to tap in to a wide range of the electorate this way.

Of course, there are setbacks. The popularity of UKIP over the last three years (though now decaying again) was a result of Conservative Party failure to address problems caused by mass immigration and Brussels-imposed attacks on our sovereignty.

Theresa May tried to pose as the rescuer of the party; the woman to restore the winning ways of the 1980s, but her personality-centric campaign only managed to reveal her fatal weaknesses.

The mess she now finds herself in, combined with negotiations with the DUP, who don’t subscribe to the Tories’ more liberal agenda, will cost her party dearly at the next election.

More progressive Tory members, voters and activists have already begun questioning their support for the party. LGBT Tories, many of whom I know, will be particularly uneasy with this unfortunate (and thoroughly unnecessary) alliance.

There is also the question of Jeremy Corbyn, whose stock has changed significantly since last Thursday. He now looks the part, talks the part and oozes refreshing confidence.

Something resembling stability has returned to Labour over the last week. I am also convinced that Mr Corbyn’s party would have garnered many more votes from the electorate on June 8th had people genuinely thought he was within a chance of winning.

He should, though, refrain from overtly politicising tragedies of the kind we have seen this week. I don’t think he should, for instance, spend two minutes on Sky News berating cuts to local authority budgets and fire services without the causes of the fire being properly established.

If the election were held tomorrow, Labour would undoubtedly outperform themselves. Nobody believes that the Tories are adequately prepared for governing.

And nor are they in a strong enough position to negotiate our withdrawal from the European Union effectively. No wonder there is such anger.

 


All together now…there are more than two types of production ownership

A fascinating YouGov poll entitled ‘Nationalisation vs Privatisation: the public view’ has been published, with results in brief accessible here: https://yougov.co.uk/news/2017/05/19/nationalisation-vs-privatisation-public-view/ and a more detailed, in-depth table here: https://d25d2506sfb94s.cloudfront.net/cumulus_uploads/document/uufxmyd8qm/InternalResults_170518_nationalisation_privatisation_W.pdf that showcase the country’s views on ownership of several of the country’s most important industries.

It is a relatively mixed bag produced by a cross-party sample of slightly fewer than 2,000 adults. Some results, such as the substantial support for renationalising the energy companies and privatisation of the telephone and internet providers, surprised me. Others, like the tiny percentage in favour of privatising the NHS, did not.

I like studying polls of this sort because they offer quite a clear picture of the economic consensus embedded in the population. I have a feeling that much of the growing support for state involvement in major sectors of the economy is down to a mistrust of the market; exacerbated by both the 2008 financial crash and other consequences of the neo-liberal period, such as the ripping apart of the middle class.

Admittedly, the sample is quite small, but I don’t think larger samples would suggest that this poll is especially anomalous. It appears to me that the country has steered slightly to the Left on the economy, but since most do not think in terms of ideology, it means very little for Jeremy Corbyn’s electoral prospects. A party breakdown of beliefs is provided and yields quite interesting results. Labour and Tory voters, more alike on policy issues than they will ever care to admit, are most sharply divided over rail ownership.

There is, though, something else about polling such as this that concerns me. The title of it and the options given to those who took part are very misleading and assume that only two different kinds of production ownership exist. It is crucial for the sake of informing political debate over public policy that people are reminded of the forgotten third option. The means of production in a society can be arranged through nationalisation, privatisation or worker control of industry; which can itself be described as the very core of socialism, where producers take control of production.

Omitting the third option in polling is to be understood, of course. Adding in ‘worker control of industry’ may create unnecessary confusion and boost the likelihood of a ‘don’t know’ response. But polling is not the only incentive for this post. This past week, the country’s major parties have all released their manifestos ahead of next month’s General Election.

Much of the commentary since particularly the Labour and Tory manifesto reveals has circulated around whether or not Britain can afford to renationalise certain sectors of the economy and whether it is a viable solution to the problems we are facing. Plans to bring the Royal Mail, railways and National Grid back under public ownership, as well as introducing a National Investment Bank and National Education Service, have prompted misleading newspaper headlines about the 1970s and the now conventional bashing of state socialism, which is less electable than it has ever been (in part due to the UK’s staggering levels of public debt).

Direct worker control of industry, therefore, ought not to be left out of public debate because it may represent the alternative to neoliberal capitalism that the Left has been searching for over the last forty years. The Labour Party of the last two years has openly referred to itself as a socialist party, so why doesn’t it support producers taking control of production instead of managing industry itself?

As long as the Left pushes for government programs which increase borrowing, public spending and taxes, it will not be able to formulate a constructive alternative to neoliberalism. It must recognise the value in low-tax, democratising policies like worker control of industry if it is to avoid further swelling of our national debt and more hits to its voter base.

I make no comment about whether worker control of industry is preferable in each individual sector or to the efficiency of production as a whole. To make judgement would be difficult at this stage. I also reaffirm that I am not a socialist. I merely think clarification is useful where it is not being applied by politicians or by the media.


How do we renationalise already-public railways?

It is extremely disheartening to see the country that gave the world the railways so vastly inept at running them. It is also rather painful that, in addition to our inadequate rail system, we seem totally incapable of understanding what kind of structure we currently have in place and how to improve upon it.

Last week I wrote at this blog about grammar schools and how the argument surrounding them has been deliberately skewed to fit a certain agenda, and that we weren’t arguing about what we were ought to be arguing about. The railways debate is similar in this regard. We are told something about our railways (that they have been privatised) that isn’t true, and have to put up with figures in authority arguing over how to potentially make them worse, at considerable expense to the taxpayer.

On Tuesday evening’s edition of ‘Newsnight’, after the announcement of Jeremy Corbyn’s plans to reinvigorate British transport, Labour’s shadow Transport Secretary Andy McDonald failed to make the case for the renationalisation of the railways. He moped and moaned about a relatively small amount of money being paid to TOC (Train Operating Company) shareholders in the form of profit, to the tune of more than £200m last year, a tiny figure when compared with the over £9bn raised in passenger revenue.

Because, despite its obvious failings, what has been called privatised rail (a franchise system, which isn’t ideal for the running of any railway system) has benefitted the rail industry. In truth, Britain’s railways are only very partially privatised, and as the Adam Smith Institute have shown in the following series of graphs: http://www.adamsmith.org/blog/regulation-industry/what-would-we-consider-a-successful-railway-system privatisation within the rail sector has consistently boosted passenger usage numbers, satisfaction and efficiency. It is particularly interesting to see many of the counter arguments to this fact (such as the cost of driving and government subsidy) so swiftly debunked.

And here is the key: *partial privatisation* clearly isn’t good enough. Far from having private railways, we have a centrally directed or publicly regulated system of rail; insurmountably different to a free market one. Network Rail, at fault for much of the country’s infrastructure complaints, is a publicly-owned company set up by the last Labour government. All tracks, stations and signalling are serviced by the state. Let us also look at subsidy within the industry (necessary in many cases, but also a clear sign of state intervention). Pages 2 and 4 will be particularly helpful for readers:

http://orr.gov.uk/__data/assets/pdf_file/0005/18842/rail-finance-statistical-release-2014-15.pdf

You may also note that while direct state support is in relative and nominal decline, these figures were provided by the Office for Rail Regulation (ORR). Also, you guessed it, an extension of government. Britain’s railways are in large part financed and regulated by central government – and thus out of the hands of the privateers responsible for certain franchises.

So what would a further-privatised train and rail network look like? Well, personally, I’d like to see a more vertically integrated system, whereby Network Rail is privatised and TOCs are able to operate in track, station and signalling maintenance on the routes and services that they provide. This is how railways were initially organised in the nineteenth century, with small, private companies overseeing both service and maintenance. This, it seems, would allow for better communication within the system, as TOCs would not have to rely on the efforts of a separate body (who have largely proved themselves to be incompetent) to deal with issues concerning rail infrastructure.

Also, I am always baffled by the lack of competition between providers. Why are contracts necessary, for instance? And why must the government administer them? There is some limited competition between Virgin and London Midland on part of the West Coast line, and similar choice between First Hull Trains, East Coast and Grand Central between some destinations on the line to Edinburgh, so why is intra-route competition not much more common?

Of course there are physical limits to the number of services that can be run on a track at one time, for reasons concerning health and safety, but it would strike me as being reasonable to suggest that many more routes across the country, even smaller, inner-city services, could benefit by introducing more than one provider. Particularly if state subsidy is slowly withdrawn, multiple companies being allowed to run identical services would ensure that natural market forces could dictate the cost of travel.

If you look at the period between 1829 and the early twentieth century, predominantly free marketers and private capital are pumped into Britain’s growing rail industry. A large part of the problem today emanates from the fact that much of our rail infrastructure is Victorian. Britain’s railways are by far the most expensive to run in Europe, and for this very reason.

Our railways face many challenges. But they have not been ‘privatised’, in the traditional sense of the word. Anybody who bothers to look at the extent to which the government is involved in their running will slowly come around to the same conclusion. Which of course begs the question: how do we renationalise already-public railways?

 


Weighing in on the grammar school debate

I thought I’d weigh in with a few thoughts on the ongoing (and frankly rather dull) grammar school debate that has attracted quite a lot of attention in recent days. It is an argument which is often dragged to the foreground, despite a far greater problem within education looming behind it. If we are to talk about this issue sensibly, I feel a sense of perspective must be established and the possibility of real educational reform proposed.

We are told ceaselessly by the leftist egalitarians that to select by academic merit is wrong. They will often claim that comprehensives are the ideal barricade to private school dominance, despite their obvious failures, that existing grammar schools (a pathetic crop of besieged, unrepresentative institutions) are stuffed full of middle class kids and that by attending grammar schools, many children will subsequently lose out on the opportunity to mix with a vast cross-section of society.

Some of these arguments are better than others. Writing as a former grammar student (I went to a bilateral school in south east London; half academy and half grammar), I am not convinced that grammar streams overproduce a certain type of student, ethnically or socio-economically. Britain is a diverse country, and grammar schools are themselves becoming increasingly socially mixed. I understand the many concerns that people have over the reinstatement of new grammar schools, but grammar education was able to pull me, a poorer, working class student, up the ladder and provide me with the necessary tools to progress.

But here lies the interesting question. Why are so many of us worrying about the possible reintroduction of a few more state grammar schools whilst, at the same time, not paying any attention whatsoever to the extensive selection that already exists throughout our society? Children (from the very beginning of their schooling, but particularly around the age of 11) are streamed according to their postcode, religious upbringing and parental income up and down the country, but do we ever hear fuss from the grammar school abolitionists? No. They are silent about it and do not ever attempt to discuss it.

Paul Mason, one of Britain’s more respectable Left-wing commentators, wrote a very intelligent piece in ‘The Guardian’ on Monday, which can be read here:

https://www.theguardian.com/commentisfree/2016/aug/08/grammar-schools-arent-fit-for-the-world-of-the-future

…in which he argues that ‘their [grammar schools] aim is to reimpose a social divide entirely at odds with technological change’, the kind of change that is taking the jobs market by storm. He writes that ‘the divide in the 21st-century economy will be between tasks you need a human for and those you don’t’, and that ‘what we need, instead of selection, is to set education free’.

His final sentence hits the nail on the head. Freedom is exactly what Britain’s education system needs, though I expect Mr Mason and I have very different takes on just how to bring freedom about. A national grammar system, rather than a fragmented system furnished with as little as 163 academically-selective schools, could well be a step up from the current structure, but a system I’d like to see implemented would be infinitely more efficient.

A full blown voucher system.

Also advocated by the libertarian presidential candidate Gary Johnson, a full blown voucher system would be similar to (though, crucially, not the same as) voucher-based, privatised systems already underway in countries such as Chile, Sweden and Hong Kong. Voucher systems are usually introduced to promote school choice, rigorous competition and involve the subsidising of the consumer, rather than (as is currently the case) the producer.

In Sweden, where around 12% of students are recipients of school vouchers, the scheme has produced generally positive results. In an article for ‘Forbes’, Adam Ozimek wrote that

“another important factor is that for each student that attends an independent school, the school received an amount equal to a large majority of the average per-pupil cost of the students public school system, and this is paid by the student’s municipality. This means that the resources available to the local public school are decreased as more students choose independent schools. This increases the competitive pressure, which the results suggest is an important determinant of improving outcomes”.

The suggestion that schools can compete in their current format in Britain is pure fantasy. During his run as Education Secretary, Michael Gove dabbled with the introduction of school vouchers, but it remains to be said that only a tiny proportion of students have actually had any meaningful access to them. Within education, the taxpayer can either subsidise the producer (schools), or he can subsidise the consumer (parents with children). At the moment, we subsidise the producer, which has lead to mass bureaucratisation, a lot of money wasted and a generally sub-standard system of education. In short, if the government is to hold its monopoly on the creation, resourcing and funding of schools, then we cannot realistically expect schools to compete, as funds provided are pegged with the school’s size, location and need.

In this context, then, there is a strong argument for the return of a national grammar school system (as was the case pre-1965, when more than 1,300 grammar schools existed in Britain, compared with just 163 today and laws preventing more from being established). If we maintain that governmental administration of schools is the best way forward, bearing in mind the three, rampant selection processes that I outlined earlier in this blog, then we must allow for bright young children, many of whom will come from poorer backgrounds, to slide into better-performing selective schools, just as we did for those politicians (Harold Wilson comes to mind) who decided to pull up the ladder behind them in the mid 1960s.

Our current Prime Minister herself benefitted from a selective, grammar school education. I hope that her posturing over the re-introduction in many parts of the country of selection-by-academic merit isn’t merely an attempt at appearing conservative. My educational utopia doesn’t look set to be introduced any time soon, and as private school dominance continues to usurp the rest of society, Britain desperately needs to re-think its strategy on education. Ideally, handing over all schools to the free market and introducing tuition fee-pegged vouchers to parents who cannot afford private schooling for their children would make for the freest, most competitive structure, but if taxpayers’ money is not rerouted, and we continue with the state-funding of schools, then I hope Mrs May acts on her conservative instincts and decides to bring back those 1,000 grammar schools, lost in the winds of egalitarian dogma.