Thursday, April 22, 2010

The German state buys Britain’s ‘privatised’ trains- and why it won’t stop there

This article by CPO co-founder Neil Clark appears in The First Post.

When the sell-off of Britain's state-owned companies started in the early 1980s we were told it would be much better for publicly-owned assets to be transferred to the private sector.

State ownership was bad and inherently inefficient, private ownership was good. That was the Thatcherite mantra.

Thirty years on, however, large sections of our economy are back in state hands - only it's not the British state that's the owner, it's the governments of other European countries.

Today's £1.59bn takeover of the bus and rail firm Arriva, Britain's second largest transport provider, by Deutsche Bahn, which is 100 per cent owned by the German government, is just the latest in a series of deals in which publicly-owned European companies have taken over privatised British companies, or firms running services previously operated by the British state.

Even before today's transaction, Deutsche Bahn already owned Britain's largest rail freight company (which operates the Royal Train) and Chiltern Railways: in addition they have a 50 per cent stake in London Overground and the Wrexham, Shropshire and Marylebone Railway and, since April 1, have also run Tyne and Wear Metro.

It's not just the Germans who are operating British trains: the Netherlands' state-owned railway, NS, is a joint owner of Northern Rail and Merseyrail. France's state-owned railway SNCF, who missed out on Arriva, are keen to enter the UK transport market too.

As for British utilities, EDF Energy, a subsidiary of the French state-owned EDF, supplies 5.5m customers in the UK. Last year, EDF Energy also took control of the privatised British Energy, the UK's largest electricity generator and operator of Britain's nuclear power stations.

The German state running trains in Wales? The French Government providing your gas and electricity? Such a prospect would have seemed incredible in the mixed economy Britain of 40 years ago, but it's the reality of life in the 'everything is for sale' Britain of today. years ago, but it's the reality of life in the 'everything is for sale' Britain of today.

In the next few years we can expect to see this process continue, as the last few assets which remain in public ownership are put onto the market. In the general election, all three of our main parties advocate further privatisation, with the Royal Mail, the Tote, the Dartford Tunnel, and the Channel Tunnel rail link likely to go under the hammer whoever wins the election.

There is, of course, an enormous irony in all of this. Privatisation in Britain in the 80s was aggressively pushed by extreme neo-liberal think-tanks, such as the Adam Smith Institute, who abhorred the idea of public ownership of the country's assets and who were keen to roll back the frontiers of the state.

In the next 30 years, their pro-privatisation views, regarded as beyond the fringe before Margaret Thatcher's arrival in Downing Street, became 'mainstream' among Britain's political elite - with New Labour dropping Clause Four and the Liberal Democrats, under the influence of their 'Orange Book' faction, abandoning their plans to renationalise the railway network and aping the anti-state rhetoric of Thatcherite Tories.

The rest of Europe, however, has followed a different path. As their powerful state-owned companies buy assets which were once owned by the British people, those European countries who were not foolish enough to sell off their family silver have undoubtedly had the last laugh.

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