Sunday, February 24, 2008

Guest opinion: Martin Meenagh writes;

Sensible Social Ownership.

I am no mad fan of nationalisation for its own sake. There are some things government has proved bad at, for instance education in England.

However, it is time to ask why we don't have some sort of social control of utilities, transport, and energy. It is also time to ask why we have the private sector providing police services, collecting information about the public, and getting hugely rich off of what appear to be rubbish contracts to manage the affairs of the people electronically. Even Her Majesty's Revenue and Customs is now legally lowering its own liabilities by outsourcing to a companies like Mapperley, Cap Gemini and Capita.

The standard justification in England is that the way the UK outsources some of the core businesses of government to the 'private finance initiative' meets several requirements. It is meant to lower public borrowing, and therefore interest rates. It is meant to make companies more efficient. It is meant to expose the provision of services to private competition. It is meant to save the people money.

Except it does not. The interest on the national debt is now as great as spending on the army. Public sector borrowing is climbing very near to the forty-per cent of GDP mark. Vast swathes of private industry depend upon the government underwriting their loans and also, in the case of train companies, on subsidies.

If a measure of price change were used that shows how much the average family spends on bills for essential services as well as on taxes, we now spend out more of our incomes than in 1979. Here's a file of the RPI on pdf format that you can look at yourself.

If you happen to be a commuter, do you really think that you are getting the best service?

'Europe would never allow renationalisation' is another call we sometimes hear from the anti-social ownership crowd. Apparently, if we interest the commission in national affairs, they will end up breaking up the NHS and banning government control of private firms.

What nonsense. It is fundamental to European law that companies that exercise powers that others might not--like gas companies, water companies or energy companies that can come into your home or compel you to pay their charges--are implicitly state bodies. They are also natural monopolies. The thing to do is to have them controlled by elected or representative commissions, like the BBC is. They would not, in that context, be against European law at all.

Even some economists who favour the market see the sense of regulating natural monopolies in a way that sets price and incentives. To my mind, however, this is unnecessarily complex. Why have the pretence of a market when you are organising something for a bigger purpose? Commission-based control works for US baseball, why not British trains?

We should also revisit the issue of cooperatives and worker-owned businesses. They work in some places, not others. Like the UK's last coalpit (at the time of writing). Or, for a while, the John Lewis stores and Lucas aerospace in England. John lewis, which is a department store chain owned by its staff, beat the Financial Times 100 companies in terms of performance last year.

This month, the Spanish completed yet another link in their massive, high-speed, forward looking rail network which uses a state company backed by government money openly to co-ordinate others on tight contracts. The Germans pursued rich tax dodgers, with intelligence agencies--the way JFK pursued cartel-operating steel bosses in the sixties. In a typical American variation on industrial policy, the American army continued the development of airships, which are vital to a low-supply high-price oil future.

Britain? We moaned a bit, bought some secrets off the Germans and grudgingly, if sensibly, nationalised the unproductive 70% of a failed bank because Barclays would like us to and Barclays provides billion in PFI funding. Not, of course, that I am implying any undue influence, duress or any sort of backstairs shenanigan went on at all.

Oh, and we took over the debts of metronet, which was a company that was set over the London tube network. It promptly set up all number of other small companies it owned, overcharged itself so that the government had to subsidise it, and duly collapsed.

We should all get off our knees, identify what civil servants or elected commissioners could control better than management consultants and pension fund shareholders, and work with trade unions to make it a reality.

The world economy is changing and getting colder and colder by the day. The credit with which Britain has sustained its Alice in wonderland national finances (and to be fair, I have enjoyed on my credit cards) is coming to an end. This country should put itself into a position where it pays off debt, cuts down loans and subsidies to the private sector, and controls even if it doesn't own those things that are the people's business.

That makes sense. Have a look at the campaign for public ownership, and then, well, come on in--the water's fine!

Thursday, February 21, 2008

Press Release on British Gas Profiteering

The Campaign for Public Ownership condemns British Gas’ announcement of annual profits of £571m, a six times rise in its profits over the last twelve months. The massive profits, which translate to £1,200 a minute, is due to windfall profits in the first rise of last year, when British Gas was slow to cut charges to customers to reflect the big fall in world gas prices. British Gas put prices up by 36% (£299) in 2006. After that, the wholesale price of gas has dropped by 56%. However, British Gas only reduced its prices by 18%.

Despite its huge profits, last month British Gas said it would raise the amount it charges for gas and electricity by 15%.

British Gas’ primary concern is not the millions of hard-pressed Britons struggling to pay their bills, but to its shareholders. Roger Carr, Chairman of British Gas’ parent company Centrica, which has announced profits of £2.1 billion, has said shareholder value was “top of the agenda”.

It’s time for the government to put an end to this blatant profiteering by bringing British Gas back into public ownership.

Thirty years ago, utility bills were a very minor item in the household budget, now millions of Britons are struggling to afford them.

It’s clear that while proving a bonanza for the banks and wealthy shareholders, privatisation of the utilities has been a disaster for the majority of the British public.

Wednesday, February 20, 2008

£1,200 a minute Gas Profit

From THE SUNDAY EXPRESS, 17th February 2007

British Gas is making £1,200-a-minute in profits after landing customers with crippling bill rises. The Sunday Express can reveal the energy giant is poised to unveil huge annual profits of almost £600million- six times the amount it made last year. The figure is disclosed just weeks after the company imposed a 15% price hike on its 16m customers- putting annual fuel bills up by an average of £130 a year.

Monday, February 18, 2008

Northern Rock Nationalisation Press Release


The Campaign for Public Ownership welcomes the government’s decision to nationalise Northern Rock. But in truth this was a move that should have been taken months ago, before a penny of taxpayers money was pumped into the bank.

For the last 29 years, British governments of both Conservative and Labour persuasion have put the interests of capital, before those of people. It’s time the pandering to banks and big business ended. If the government can bring a failing bank into public ownership, why can’t they do the same to Britain’s railways and public utilities? The vast majority of the public would like to see renationalisation back on the political agenda, yet their wishes are ignored by our political elite.

Proponents of privatisation claimed that the selling-off of Britain’s public utilities, public transport and infrastructure would improve efficiency and benefit the consumer. In fact, the opposite has occurred. Britain‘s privatised railways are the most expensive in Europe, despite receiving four times more in taxpayers subsidy than British Rail. As prices have rocketed, services have deteriorated with commuters who have paid thousands of pounds for their season tickets being forced to stand in toilets. Railways in Britain are no longer run as a public service as they are in the rest of Europe, but in order to maximise profits for shareholders.

British householders meanwhile face massive hikes in gas and electricity prices imposed by privately owned utility companies, such as Npower, which recorded profits of £377m in 2007. Yesterday, the Sunday Express revealed that British Gas, which recently imposed a 15% price hike on its customers is making £1,200-a-minute in profits. Thirty years ago, utility bills were a very minor item in the household budget, now millions of Britons are struggling to afford them.

It’s clear that while proving a bonanza for the banks and wealthy shareholders, privatisation has been a disaster for the majority of the British public.

Northern Rock’s nationalisation should not be a ’one-off’ temporary measure but the start of a new programme of public ownership.