The Austrian Way

This column, by CPO co-founder Neil Clark, appears in the Morning Star.

I SPENT this Christmas in Austria, a country which, thankfully, has been wise enough not to follow the British path and privatise its entire economy.
In Austria, not only are the railways still in public ownership but prices are determined by a simple distance-based system, with the price you pay determined by the number of kilometres you travel.
At rush hour, instead of fares rising to price people off the trains, Austrian State Railways simply lays on more trains with more carriages.
Even at the busiest times, travellers always get a seat, as they do in other European countries which operate under the same model.
Compare this to what happens in Britain, where commuters, having forked out a fortune for their season tickets, face years of overcrowding, because the train companies prefer to ram people like sardines into trains rather than lease extra carriages from the rolling stock companies.
It was disclosed recently that overcrowding on Britain's trains was so bad that commuters were being allocated less space than the EU minimum for transporting farm animals.
The late "One Nation" Tory Sir Ian Gilmour, a staunch critic of privatisation, called his party's proposal to privatise the railways "crazy." He was putting it mildly.

Gatwick - a living nightmare

It used to be said that the most stressful part of flying was the flight itself. But flying is now a doddle. The real stress comes with having to deal with a privatised British airport.
On my way to Austria, I experienced the living nightmare that is Gatwick.
Herded like sheep, my family, together with thousands of other weary passengers, were told that we had to queue outside due to the lack of space inside the terminal.
And just why is there so little space inside the terminal? Because Britain's privatised airports are first and foremost shopping malls from where you can also fly, as opposed to being places to fly from with one or two shops.
The difference between the BAA-owned airports and those still in public ownership could not be more different.
While Britain's privately owned airports are widely condemned as an international disgrace, municipally owned Manchester airport is regularly voted one of the world's favourite airports by its users.
For privatisation zealots, that is, of course, unwelcome news.
Tory MP Graham Brady acknowledges that Manchester airport is a "magnificent gateway" to northern England, but still calls for its privatisation.
"Next door to my constituency, there is a thriving modern plc worth £3 billion which remains in the public sector without anyone batting an eyelid," he complains. Brady lambasts Manchester airport's "anachronistic ownership structure" as "a monument to old-fashioned municipal socialism."
As opposed of course to being a monument to old-fashioned Thatcherite dogma, like Gatwick.

Rail companies provide lousy new year tradition

IN Germany, a long-standing new year tradition is the television screening of the classic 1960s comedy sketch Dinner For One, starring Freddie Frinton as an inebriated butler.
In privatised, neoliberal Britain, we have a different and less humorous new year custom - the announcement of above-inflation price rises by Britain's profiteering train companies.
This week, fares on Britain's railways, already by far and away the most expensive in Europe, have gone up by average of 7 per cent, with some season ticket prices rising by as much as 11 per cent.
Train companies say that the increases are necessary to pay for "much-needed investment."
If you believe that one, then I'm sure that you also believe that Israel is a force for peace in the world, that Tony Blair is a man who never tells lies and that Father Christmas is a real, living person.
The truth is that the companies are raising fares to boost their already obscenely high level of profits and to pay even higher dividends to their shareholders.
In its most recent half-year figures, the Go-Ahead Group made a pre-tax profit of £58 million, while Stagecoach recorded a £105 million surplus.
Arriva made £66 million, First Group £54 million and National Express £47 million.
These profits have been at the expense of Britain's long-suffering commuters and taxpayers who pay around four times more in subsidy to the private rail operators than they did to the much-maligned British Rail.
Only when the railways are bought back into full public ownership and run once more for the benefit of the travelling public and not wealthy shareholders will Britain's great train robbery come to an end.

Great Sage of Wokingham

REMEMBER John Redwood - the wild-eyed free-market fanatic who once challenged John Major for leadership of the Conservative Party?
On his blog, the Great Sage of Wokingham reflects on why Britain's trains are so expensive.
"There is one simple reason why train fares are so high and rising so fast - the costs of train travel are too high and rising too fast," he opines. Sorry, John, but the simple reason why train fares are so high and rising fast is because our trains are operated by profiteering plcs.
Nowhere in his article does Redwood mention the fact that Britain's railways, unlike those in Europe, are in private ownership.
Writing an article on why Britain's trains are so expensive without mentioning their ownership structure is as ridiculous, and dishonest, as writing an account of World War II without mentioning Adolf Hitler.

It's time for nationalisation

THE Campaign for Public Ownership's new website will be up and running very shortly, with details of our latest campaigns and how you can get involved.
Let's make 2009 the year that nationalisation is put firmly back onto the political agenda, not as an emergency measure to bail out failing banks and building societies but as an integral part of economic policy.

Press Release on the Planned Part-Privatisation of Royal Mail

The Campaign for Public Ownership strongly opposes the government’s plans to part-privatise Royal Mail, which were announced yesterday.

The idea that selling off part of the Royal Mail to foreign owned companies, such as the Dutch firm TNT, will improve our postal service, simply ‘beggars belief‘, to use the words of Jim McGovern MP, who has resigned from the government on this issue.

The current problems at Royal Mail are to do with the government not investing enough in the service over the years; instead of spending the money on our postal service, they have preferred to spend money on unnecessary wars and other costly projects, such as the Millenium Dome.

The idea that privatisation will improve matters is naive to say the least: has privatisation improved Britain’s railways- or brought lower prices and better service to gas, electricity and water consumers? The reality is that the opposite has occurred and if we do privatise Royal Mail we will get a worse, not better service- with cutbacks in deliveries and hiked prices.

Every country in Europe that has been foolish enough to privatise parts of its postal service has experienced this.

It’s time to call an end to the Great Privatisation Rip-Off and for all concerned citizens to fight to keep the Royal Mail in full public ownership.

English Water, anyone?

This article about the neoliberal Adam Smith Institute's call for water in Wales to be privatised is by the pro-public ownership blogger Charlie Marks and appears on his blog. The CPO thanks Charlie for allowing us to reproduce his article in full here.

The Stonemason has blogged about the eagerness of the Adam Smith Institute to see Glas Cymru (which owns Welsh Water) subjected to the “disciplines of private sector ownership”.

While it’s no surprise that they are calling for a successful publicly-owned company to be used as a cash-cow for shareholders, I feel I must unpick this particular assumption.
The issue of “discipline” relates to the principle-agent problem. How can those running a company be held accountable to its owners?

The Adam Smith Institute may argue that privatisation has been a wonder - but this is only true for shareholders. And some of these shareholders are ordinary people who are facing huge bills because of prices that go up when costs go up and stay up even when costs go down - yet they cannot as shareholders demand this of the company.
Because Glas Cymru is a company limited by guarantee its purpose is not to maximise the dividend paid to shareholders but to meet its objectives of providing high quality water and sewerage services to customers. This year each customer of Glas Cymru will recieve a dividend of £21.

Now, I’m not saying that it has the most socially-just model of ownership.

The company’s workforce - and the employees of contractors - should be regarded as stakeholders just as much as consumers. The objective of high-quality service cannot be met if workers are disempowered; good wages, working hours, and democratic representation ensure that high standards are maintained.

The remit should also include efficient use of energy and minimising any negative effects on the environment or natural wildlife.

Though Glas Cymru may not be perfect, it looks a damn sight better than what we have in England! We are being told that the only way to lower our bills is to have the profiteering water companies competing with each other. We have this with our gas and electricity suppliers - but do our bills come down? No, they compete with each other to squeeze as much money out of customers!

Privatisation has been a disaster. Public assets sold off at knock-down prices to the friends and sponsors of the governing party (Tories, now New Labour). Prices have been allowed to skyrocket -natural monopolies are milked for profit by colluding suppliers in gas, electricity, and railways. Rather than seeing greater private investment in our railways, more public money is invested in rail than ever before!

The likes of the Adam Smith Institute can try all they like to convince the public of the benefits of handing public resources over to big businesses. Their nonsense is only heeded by those politicians hoping to get cushy non-jobs in business after they leave office.

We need to return the privatised utilities to public ownership and democratic control, with the involvement of workers and consumers in the process of management.

Surveys of public opinion have never found a clear majority in favour of privatisation - and with the credit crunch being perceived as resulting deregulation and demutualisation, more and more people will begin to see the necessity of reversing the neoliberal era.

Privatisation of water and sewage services did not take place in Scotland or Northern Ireland. Scottish Water is owned by the Scottish government and both the incumbent nationalist party and the opposition Labour Party are committed to the company remaining in the public sector. The Scottish Tories are for privatisation, but are at pains to point out they don’t want what has happened in England! Northern Ireland Water priovides water and sewage services in the six counties; like Scottish Water it is still part of the public sector.

So, there’s Northern Ireland Water, Scottish Water, Welsh Water - how about English Water?

More profiteering from Britain's privatised railway compaies

The Campaign for Public Ownership condemns the decision, announced last week, to raise rail fares in Britain by double the rate of inflation.

The BBC reports:

Rail passengers face fare rises in the new year, with some tickets
going up by double the rate of inflation.

Regulated and unregulated fares are to increase by averages of 6% and 7% respectively from 2 January 2009.

Passengers reliant on Southeastern services between London and Kent and Sussex will see their fares rise by an average of 8%, which is 2% more than the national average.

The rises are yet another example of blatant profiteering by Britain's rip-off rail companies.

Britain already has by far and away the most expensive railway fares in Europe and the latest rises will further increase the misery of Britain's long-suffering railway passengers.

The reason British fares are so expensive is that Britain is the only country in Europe that was foolish enough to have privatised its railways.

It's time to bring the railway companies back into public ownership and to restore the kilometer based pricing system which is still in use in other European countries.

Press Release from the Campaign for Public Ownership on Yet Another Loss of Confidential Taxpayers' Data by a Private Contractor

Date of Release: Sunday 2nd November 2008.

Here we go again:

The Mail on Sunday reports:

An inquiry has been launched after a memory stick with user names and passwords for a key government computer system was found in a pub car park.
A spokeswoman said the matter was being taken "extremely seriously" and the Gateway website had been shut down.

She said the "integrity" of the website - which provides services including tax returns - had "not been compromised".

The memory stick was lost by Daniel Harrington, 29, an IT analyst at computer management firm Atos Origin.

The multinational company, which boasts an annual turnover of £4billion, won the five-year £46.7million contract to manage the Government Gateway in 2006.
The same company has been selected to supply IT systems for the London 2012 Olympic Games

Sounds familiar?

Back in August, data including the names, addresses and dates of birth of around 33,000 offenders in England and Wales with six or more recordable convictions in the past 12 months on the Police National Computer were lost by the private company PA Consulting, contractors for the Home Office. Also lost were the names and dates of birth of 10,000 prolific and other priority offenders, and the names, dates of birth and, in some cases, the expected prison release dates of all 84,000 prisoners held in England and Wales.

In December it was announced that US firm Pearson Driving Assessments, a contractor to the Driving Standards Agency, had lost the details of three million candidates for the driving theory test. Pearson reported that a hard drive was missing from a “secure facility” in Iowa.

And of course earlier this summer we had the news that thousands of British schoolchildren would have to wait until the autumn for key test results after the US-owned company brought in to administer the tests 'ETS Europe' failed to deliver on time.

It’s time for this nonsense to stop.

After this latest fiasco is there anyone still willing to argue that the increased involvement of the private sector in the business of government has led to greater efficiency?

It is logical to assume that the more outside agencies that handle government data, the greater the likelihood of it getting lost. But logic, it seems, goes out of the window where Britain's political elite and their blind attachment to neo-liberal dogma is concerned.

Back in the 1960s and 1970s, before the days of privatisation and sub-contracting government work to private companies, such loss of data never occurred.

The Campaign for Public Ownership calls on the government to end the sub-contracting of government work to private companies and to keep all such work ‘in-house’.

Not only would this reduce the chance of data going missing, it would also save the taxpayer a small fortune in paying for inefficient private companies.

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Renationalisation can cure other British failures

Why Stop at the Banks? Neil Clark, co-founder of the Campaign for Public Ownership, argues for renationalisation of the railways, utilities and airports.

From The First Post, 14th October 2008.

As the economics pundit Will Hutton put it, "It was only months ago that nationalisation seemed to belong to the world of big band music, ration coupons and nylons." Now, of course, everything has changed.

The Government's acquisition of Northern Rock in February, and this week's £37bn purchase of sizeable public stakes in three of Britain's leading banks, means that the great nationalisation 'taboo', in force since the Thatcherite counter-revolution of 1979, is finally at an end. Even the Sunday Telegraph has been forced to acknowledge that "nationalisation is no longer a dirty word".

Now that the Rubicon has been crossed, the question that needs to be asked is: If the government can nationalise our banks, why can't they bring our malfunctioning railways, our profiteering utility companies and our widely condemned privately owned airports back into public ownership?

In the standard neo-liberal rewrite of Britain's post-war history, nationalisation is portrayed as an unmitigated disaster. Nationalised industries were - so the narrative goes - inefficient, badly run and a drain on the public purse.

But new quantitative research goes a long way to shattering this myth. It shows how productivity growth in publicly owned enterprises compared favourably to that in the private sector and in the US, where utilities remained in private ownership. And the profitability of the nationalised industries improved too, from decade to decade.

Advocates of privatisation claimed that the mass sell-off of Britain's public utilities, public transport and infrastructure would improve efficiency and benefit the consumer. In fact, the opposite occurred. Britain's railways are by far and away the most expensive in Europe, with fares up to 14 times higher than on the continent - despite the new train companies receiving four times more in taxpayers' subsidies than the state-owned British Rail.

It's a similar story with our privatised airports, which, with their tacky, shopping-mall atmosphere are widely regarded as an international disgrace. Thosewho hold to the dogmatic 'publicly-owned bad, privately-owned good' mantra should reflect that Manchester Airport, the one major British airport which remains in public ownership, regularly comes out top in surveys of customer satisfaction and was voted Britain's best regional airport last year.

As for Britain's energy utilities, with record price hikes in place and more on the way, is there anyone now prepared to argue that privatisation has benefited consumers?

As opposed to the arguments for privatisation, the case for re-nationalising the railways, utilities and airports is based not on ideology, but on common sense. Natural monopolies such as railways and utility companies are better in public ownership than in private hands where, because of the need to pay dividends to shareholders, prices paid by consumers will always be higher.

To see how different things could have been, we only have to look across the Channel. While Britain pursued an extremist path in the 1980s and 1990s by "selling off the family silver" - to use former Conservative Prime Minister Harold Macmillan's wonderfully damning phrase - our European neighbours preferred to take a more pragmatic approach.

No other major European country has yet followed the British example and sold off its railways. Even Switzerland, regarded by many as a bastion of the free market, has kept its railways in public ownership. And while British householders face record hikes in their energy bills this winter, the position is rather different on the continent where, due to greater state involvement, price rises are nowhere near as high.

The recent financial meltdown has done much to discredit the neo-liberal ideology that Britain has followed - under both Conservative and Labour governments - over the past 29 years. It's time to ditch that ideology and return to the common sense approach to public ownership that Britain followed after World War Two.

Our unhappy experience since 1979 shows that it's privatisation - and not nationalisation - which deserves to be regarded as a 'dirty word'.