Link to this page: http://www.socialistparty.org.uk/issue/266/24585
Public Services Not Private Greed
Privatisation is a con, it's official. Parliament's public accounts committee recently warned that it was impossible to tell whether the returns for industry from privatisation matched the quality of service and the risks that the contractors ran.
Twelve companies have seen their share prices rise since the Government's comprehensive spending review in July.
This is no coincidence as these are the biggest companies with their snouts in the trough of the Private Finance Initiative (PPP) or the Public Private Partnership (PPP) as new Labour's prefers to call it.
Balfour Beatty, involved in London Underground and with £4.3 billion in orders, saw its share price rise by seven per cent.
This is a reflection of the massive profits to be made out of PPP. Independent analysts KPMG estimate their returns for investors in the Tube could be more than 20 per cent and possibly as high as 25 to 30 per cent. In general, the average return is between 13 per cent and 17 per cent.
The Government's main justification for these projects is that the private sector provides extra investments and takes on the risk. This is Balfour Beatty's explanation for the high returns on the London Underground.
However one look at the Government's part privatisation of the National Air Traffic Services (Nats) shows how economical with the truth this is.
There has been no extra investment from the private sector - the building of a new control centre at Prestwick has been suspended while the computers at the Swanwick centre have crashed and been dogged with problems.
The government has had to make an emergency loan of £30 million and guarantee a further £50 million earlier this year when bankers threatened to put the service into administration.
Privatisation is simply a way of ensuring a risk-free profits for New Labour's big-business backers and shows that they have a become an out and out capitalist party.
Working-class people need a new party that will represent our interests and not those of the privatisers. The Socialist party is campaigning in the trade unions and in community campaigns to set up such a party. Join us.
- End privatisation.
- Renationalise all privatise companies and services, under the democratic control of workers and users.
- Compensation for shareholders based on proven need.
In The Socialist 23 August 2002: