Link to this page: http://www.socialistparty.org.uk/issue/189/8072
PUBLIC-PRIVATE Partnership (PPP) is the government's preferred mechanism for privatising the infrastructure of London Underground. London Underground worker Bill Johnson explains how PPP offers huge profits to the private sector but will result in attacks on workers' pay and conditions, more overcrowding at peak times, higher fares and the slashing of safety standards on the drive for profit.
Safety goes down the tube
NEW LABOUR are fighting for PPP in the face of overwhelming public opposition, because profit is at stake.
After Southall, Paddington and Hatfield, rather than calling a halt to the privatisation of public transport, Blair and Prescott are insisting on the sale of the underground's infrastructure with a criminal disregard for safety. Everyone except the government and rail industry can see that privatisation was responsible for the Hatfield disaster.
The broken track that caused the derailment had been known about for months but between Railtrack and its sub-contractors, repairs had been put off with fatal consequences. While transport unions and the public call for safety to be put before profit the government invites tenders to maintain London Underground from the same firms that were responsible for maintaining the track at Hatfield.
Under the PPP plan, the trains, track and signalling of the tube system will be sold, on 30-year leases, to these private companies. The tube will be split into three and 4,500 workers will have their jobs transferred to the private sector. Blair's priority is pouring millions of pounds of public money into the coffers of these private rail firms.
In five years of private operation the private rail industry has paid out over £X million in dividends to shareholders while claiming £x in public subsidies. In a crowning insult to the dead and injured of Hatfield, Railtrack is to pay between half a million and a million pounds in 'compensation' to former chairman, Gerald Corbett. The families of those killed at Southall and Paddington still wait for compensation that will be only a fraction of Corbett's payoff.
The government claim PPP will be a more efficient way of funding London Underground. These claims have been rubbished by two independent reports, one by transport experts at University College London and the other by The Industrial Society.
Both reports show that the government's 'efficiency savings' are unspecified figures drawn out of thin air by managers and economists. They assume major cuts in costs and increases in revenue will be achieved just by privatising the tube infrastructure.
Private firms will have to pay higher interest charges than the government does and still make a profit for shareholders. New Labour feels a private company is in a better position to cut wages, further intensify the working day and raise fares than an elected government.
Labour went to great lengths to stop Ken Livingstone getting a platform against PPP as London mayor. And they have hidden the real implications of the scheme.
But the tube has been run like a private company for years. Already the service is bad, overcrowded and sometimes unsafe. As recent letter from a safety professional to the Evening Standard said:
"Remember in August 2000, even the government's own Railway Inspectorate pointed to serious system safety flaws under the proposed privatisation scheme. And in October 2000 the same inspectorate...had to order London Underground Ltd to carry out safety checks on its underground trains. Staff cuts, especially the removal of guards had reduced these checks and the inspectorate urgently acted to 'protect the public.'"
PPP can be defeated
THE TWO main London Underground unions, ASLEF and RMT are balloting for strike action because of the poor safety arrangements planned under PPP. The City loses millions every day when the underground is on strike and the pressure will be on the government to back down.
Socialist Party members working on London Underground are calling on the unions to organise joint union workplace meetings to build for the strike and to step up the public campaign to win support from passengers for our action. A strike could take place in early February.
This will be no ordinary strike. Tube workers can expect enormous support from the travelling public. Transport in the capital and London Underground in particular is an explosive issue. Commuting for three hours a day is commonplace in London. House prices are forcing workers further out and despite the overcrowding, delays and regular service breakdowns, commuters pay the highest fares in Europe, probably the world. A monthly travelcard (season ticket) from the suburbs of Zone 6 to central London now costs over £130.
How are passengers going to react when they find out that for PPP to raise money to carry out a backlog of repairs, already high fares must increase by 40% over 15 years?
What will the public think of the performance target for the private firms being set below the current train service level? The lucky winning firms in the tube privatisation lottery will get their full management fees for running a worsened service, 5% below present performance. Any 'improvement' on this will win them jackpot bonuses!
Passengers will be furious as the full implications of privatisation are revealed. The immediate battle for the tube will be fought as Labour is launching its general election campaign. The fear of industrial action, mass opposition and serious electoral losses in London will concentrate Blair's mind and could force a U-turn.
What privatisation will mean
STAFF PRODUCTIVITY, (passenger miles per worker) has increased by over 70% since 1985. As a reward, workers in the infrastructure sector will have their jobs transferred to private firms. Wages and conditions are not fully guaranteed and new staff will face inferior terms. Of course, much of the work will be farmed out to the cheapest sub-contractor going.
Probably armed with a specialist hammer from Homebase, unskilled workers on the minimum wage could be sent out to dodge the live rails and maintain the system. Most staff will, for now, remain employed by London Underground. But if the mass transfer of jobs is not defeated at this stage, management are likely to come back for more.
Station cleaning has already gone to private firms who pay as little as £3.70 an hour, the minimum wage. Some cleaners are working daily double shifts to try and earn a living.
A significant increase in passenger numbers without an increase in capacity will stretch the tube beyond breaking point. All staff, including those still employed in the public sector, will have to deal with more passengers fainting, complaining, fighting and who knows what else? Most underground workers have a pride in the tube and want resources to expand the system so as more people can travel without overcrowding, in clean, pleasant conditions.
PPP AIMS to raise £8.3 billion for investment on the Underground. Only £2.44 billion is forecast to come from the private sector. The remaining £5.9 billion will come from increased fare revenues. This is most likely to be attempted by a combination of forcing even greater numbers of people onto trains and charging higher fares. Overcrowding is already at crisis levels in central London.
Investment targets for PPP are only enough to renovate the existing network, which runs beyond capacity at peak times. Any new lines to speed up journeys and relieve congestion will have to be paid for from additional revenue or the mayor's budget.
Higher fares will insult passengers but safety will be the main concern. The deaths at Southall, Paddington and Hatfield, were all avoidable had automatic train protection been fitted and maintenance schedules been followed. It is a scandal that the government still wants to privatise the Underground.
A socialist programme for the tube
THE SOCIALIST Party believes that the Underground must be fully funded from central government revenue. The entire £8.4 billion investment backlog could be met from the current government surplus.
Many will look towards Ken Livingstone's alternative bond scheme as a way to stop the immediate transfer of jobs and infrastructure into the private sector. But Livingstone's appointment of former CIA man Bob Kiley raises serious doubts about what London's mayor is trying to achieve.
RMT activists have been contacted by workers from the New York Transit Authority who say Kiley spearheaded a drive against union agreements and working conditions on their system. At an RMT rally earlier this month, Livingstone said he would issue bonds to raise £2 billion, private partners would be asked to come up with £2 billion and like the government's plans, a further £6 billion would be raised from fares, giving £10 billion in all.
The use of private sub-contractors could still increase but they would have contracts with London Underground rather than long-term arrangements through private infrastructure companies.
Keeping the system under one single management would be preferable to the government's crazy fragmentation under PPP. But Livingstone's scheme doesn't tackle the question of government support.
Much has been made of the New York Subway's bond scheme but the New York's subway receives 46% of its budget from local and national government. The Paris Metro gets 58% of its money from government while London Underground gets only 23% of its budget from government, half the level of New York.
Bonds have to be repaid, interest must be paid on them, where will this money come from?
Livingstone has called for congestion charges and council tax increases to finance his bonds. But socialists should oppose any attempt to increase taxes on working-class Londoners when corporations pay the lowest tax in the developed world and Gordon Brown is sitting on a cash mountain.
The Socialist Party says:
- Oppose PPP and any attempt to privatise any part of London Underground. Not one job to be transferred to the private sector.
- Full government funding of London Underground. Raise the cash from the massive profits of the City firms.
- Slash fares, make safety and reliability the top priority, not profit.
- Establish one London transport authority to co-ordinate investment, safety and the service.
- Expand in-house maintenance. Take back previously privatised Northern and Jubilee depots under public control.
- For a properly funded, integrated public transport system across the whole country, planned and democratically controlled by the working class.
In The Socialist 19 January 2001: