Looted Britain by Frontline

Public utilities like telecom and gas and essential industries such as British Airways were sold off by the Tories in the closest thing, post-war, to legalised political corruption. What we all owned was taken away from us, flogged off at a cheap price to win votes, and the proceeds used to fund tax cuts. In fact, it was a unique form of corruption, since we were bribed with our own money.” The speaker is Tony Blair, a decade before he became Prime Minister and continued the looting of “what we all owned”.

  Harold Macmillan called it “the family silver”; the post-war Labour leader Ernest Bevin called it something different, but in the same spirit, the welfare state; and for centuries it had been known as the common wealth – some sense of national asset, belonging to the country and the people. Until three decades ago, the notion of family silver and common wealth informed the social fabric, so that certain industries and services were regarded as integral to the responsibilities of state: the essential infrastructure, railways and public transport, water, gas, electricity, health, security and the resources that produced energy, some keystone industries such as coal and steel.

   They were seen as something for which those elected by the people were responsible for providing and managing for the people, not as means of fabulous wealth for the few which the people were meant to underwrite. Until, that is, the looting of Britain. “First, all the Georgian silver goes,” Macmillan told the Tory Reform Group in November 1985, “and then all that nice furniture that used to be in the saloon. Then the Canalettos go.” How bitterly quaint but irrevocably lost they sound now: the National Coal Board, British Steel, British Rail, the Gas Board, the Water Board.

  And this is not nostalgia: this is to lament the loss of something precious to this country, to a smash-and-grab. The looting began with Margaret Thatcher. It continued with John Major, was enthusiastically embraced by Tony Blair, is keenly inherited by Gordon Brown and will be carried on by David Cameron. It has been seamless, with no party-political colour, for all the ersatz and meaningless distinctions the media, think-tanks and what Ivan Illich called “the knowledge stock” seek to establish between politicians and parties. Looting is the product of national hubris as well as seamless ideological zeal between 1979 and the present, for it has no parallel on the continent of Europe from which Britain is arrogantly detached, and its legacy is plain to see: the IMF and OECD put Britain clear bottom of the league of world recession- proofing, more vulnerable than any other nation to the ravages of unemployment, and economic decline. The philanthropist billionaire George Soros adds that Britain itself, never mind the banks, will need a bail-out – Soros, the man who made a billion dollars by speculating against sterling in 2000, just as Blair and Chancellor Gordon “Safe Pair of Hands” Brown were boasting of the currency’s impregnability, against the perils of conjoining the whimsical fortunes of the euro, then worth 60p.

   In the present round of bank bail-outs, Britain’s will have cost the taxpayer the equivalent of 19% of the total turnover of gross domestic product, by far the highest in the G20. The US taxpayer has been sent a bill of 6.3% of GDP; the French, 1.5%. Meanwhile, the super-rich whom Labour rewarded – created, even – with its version of the looting of Britain count their blessings, bonuses and benefits, including Blair, Brown and their cronies, while the cosmetic “re-regulation” comes way too late.

   At the G20 in London, President Obama could say that “the United States certainly has some accounting to do with respect to a regulatory system that was inadequate” and helped cause the crisis, because he is talking about the Bush administration. Brown could not, because he would be talking about himself and his predecessor. Margaret Thatcher was of course the foremost ideologue of looting with regard to manufacturing industry and the family silver and common wealth. The first looting, from 1981, was of British Aerospace, National Freight, Sealink, the airports and Jaguar cars. But the big adventure was the flotation of British Telecom from 1984, at almost £4 billion the biggest privatisation in British history and intended to epitomise the forging of a nation of mini-capitalists, just as Alistair Darling wants now to create “a nation of bankers” – with about as much effect.

   The result is an arrogantly overpriced telephone service that operates as close to a monopoly as is legal, keeping its wretched customers listening for hours to the following payment options before being transferred to Mumbai or Hyderabad. Thatcher famously proceeded to the pitheads of the coal industry, for which she hired Ian Kinloch MacGregor from the Amax corporation of America, who had successfully broken the back of the US coal miners’ union (though unlike Britain, the US kept a coal industry), and British Steel.

   The shipyards, markedly Cammell Laird and Vickers, and car factories – Rover, Rolls-Royce – followed. So Birkenhead, Belfast and Tyneside are graveyards while Vigo thrives; Renault and Citroën are troubled but remain French; Saab, Scandia and Volvo, Swedish; BMW, Audi and Mercedes, German – while not a single car of the few still made in Britain is British. Lancia-Alfa- Romeo-Fiat emerges as another matter altogether – a powerhouse which will not only remain Italian, based in the quintessential European manufacturing city of Turin, but also deal with overcapacity by engulfing Opel, GM Europe and Vauxhall, to the cost of British jobs.

   In his famous speech, Macmillan called the sale of British Telecom and British Gas that of “the two Rembrandts still left”. The privatisation between 1986 and 1990 of public utilities – gas, water and electricity – which were split into regional companies before full-blown “competition”, has a special irony. Not only did it lead, logically, to the highest domestic utility bills in Europe by far, but it also led to money flowing from British households to state-run French and German companies, which had quickly and sensibly spotted an easy and lucrative way to buy up British utility-providers such as Thames Water and London Electricity in order to subsidise their rates at home.

   EDF (Eléctricité de France) even needs to use a cosmetic British name, whether supplying homes or buying up the nuclear power industry. The fault is not French or German but British, with the almost comic twist that those who most fervently advocated selling off utilities were equally fanatical in their Euroscepticism and insistence on what they called “independence” from Europe – as they still are, as the still ‘little England’ Conservatives prepare for power. Tell Sid, indeed. Thatcher had the sense to see that even by her standards, some things were wisely left in the state sector – such as railways, a natural infrastructural monopoly, and British Energy, whose long-term liabilities involved the running and decommissioning of nuclear power stations. But with the decadent corporate boardroom government of John Major came the wholesale and thoroughly fl awed privatisation – at a bargain price – of a railway network that had been the pride of Europe, for immediate and corrupt gain of individuals close to the cabinet: a brazen lunacy unthinkable on the continent. British Rail valued the track and stations floated on the stock exchange in 1996 at £6.4 billion – and they were sold for £1.8 billion.

   The result, utterly predictable, is manifest: a once magnificent railway system has become a national disgrace, of enor
mous financial benefit to those who bought it and claim to run it with silly slogans such as Love Every Minute (Virgin) and Transforming Travel (First). Transformed it they have, with every hateful minute costing the taxpayer more than British Rail did. Britain now suffers the shocking embarrassment of having by far the worst, and by even further the most expensive, railway service in Europe – the trains inefficient, sporadic, lurching, filthy, cramped and crowded, and in some cases taking longer to reach a destination, if at all, than they did during World War One. While in Europe, superfast TGV trains and sturdy iron horses, operated by dedicated expert railway managers paid by the state, carry the people reliably, speedily and at fractions of the British fares.

   By way of a postscript in the present, when railway companies complained about the rigour of law insisting that to have 10 out of 100 passengers standing constituted overcrowding, Labour, instead of telling them to shut up and put on more trains, simply changed the law so that 30 passengers – or “customers”, as they now are – per 100 standing is acceptable on a British train. Yes, Transforming Travel. This is but metaphor, because after victory in the 1997 election, Tony Blair’s Labour accepted the orthodoxy of looting – even with a majority of 179 – and continued the sacking of national assets, so that the transition from a Conservative to a Labour epoch was without interruption or even interregnum.

   One of the flagship projects of the new Chancellor, Gordon Brown, was unthinkable anywhere else in Europe or even the US: privatisation of the capital city’s metropolitan subway system Not to a single company, but to three giant consortia who would be assured the windfall of a 30-year guaranteed contract. The so-called PPP that followed was so complicated that it cost the taxpayer £500m in lawyers’ and accountants’ fees alone. The very personal politicisation of the process by Brown scuppered any hope there might have been of any tangible improvement to the Tube: current upgrades to the system merely paper over cracks at vast cost.

   The result is plain to see: while civic owned, subsidised European metro systems whiz about in relative silence for an average fl at fare of a euro (half that on Madrid’s wonderful system), London suffers Europe’s worst, lurching subway service to the sound of cacophonic announcements about never finished “planned engineering works”, while the profits, lavish bonuses and pensions pile up for Brown’s friends at Tube Lines and Metronet. The Blair-Brown doctrine continued Thatcher’s belief that manufacturing was nothing to do with Britain, worshipping instead at the temple of quick money. “Service industries” and, above all, financial services were to be the bedrock of the economy, the bankers unleashed to make as much money as they could thanks to Brown’s fanatic belief in deregulation.

   He constantly lambasted European countries for not following his lead and that of the USA, but they stuck with what Labour saw as their archaic regulation. European governments were chastised by British and American politicians and self assured newspaper columnists and told to “liberalise” (as the jargon put it, offensively to liberalism) their economies and state assets – ergo, to loot them too, for quick money.

   Europeans of all political colours were sceptical about extreme deregulation of financial markets and total de-industrialisation, prudently seeking to hold onto what was possible in a global economy. The results, again, are now plainer than ever: Europeans are better weatherproofed against recession than basket-case Britain. The pound, so jealously guarded from the euro by Blair’s false promises and Brown’s Europhobia, stumbles around at levels not witnessed for decades.

   Britain’s zealous belief in unleashing banks and bankers puts the UK bottom of the IMF’s league table for recession proofing – with all the social cost that comes with that in an already belligerent, fragmented, depressed and unpleasantly boorish society – while politicians of astounding mediocrity and inexpertise blather on about how all this is global, affecting everyone equally, which it is not. At least, not until countries with more mature policies pay the price for American and British greed. The European soccer championships in Austria and Switzerland last year were a metaphor: a gathering of 16 teams and two million fans for a feast and festival of football. But Britain was not there. Any more than it is among the nations of the Schengen treaty, whereby 400m Europeans travel across 25 countries without a passport – from Lisbon to Ukraine, from Palermo to Helsinki.

   Why, even the big football teams have been sold off: Manchester United, Aston Villa and Liverpool to Americans, Chelsea to Russians, Manchester City to Arabs, and Arsenal about to go, while Fiat owns Juventus, Berlusconi owns Milan (for better or worse, but at least he is Italian), European Champions Barcelona owns itself and the fans own Real Madrid – the metaphor intact.

   Both the looting itself and the style, culture and lexicon of management in the looted industries and services offends those who work for and still care about them. Relegated to mere cash cows, they are seen by government and managerial bosses as no different from a processed-food business, so that anyone devoted to railways or health finds it hard if passengers and patients become “customers”; and librarians do not like having their job description changed to “managers of Info Centres”.

   No lesson learnt, Labour last year co-opted none other than Gerry Grimstone to its Treasury team. This assistant secretary under Margaret Thatcher from 1982 to 1986 is back, two decades and 20 privatisations later. Next, after the Royal Mail (which even Thatcher shrank from looting, after a call from Her Majesty), come the Ordnance Survey and Royal Mint, so that even the pound can be Made in China.

   Britain has since 1981 been the laboratory for a free-market experiment that not even the USA would undertake (Reagan was determined to retain American industries such as automobile manufacturing as far as he could, as Obama is now). A British experiment in which deregulation, privatisation, “downsizing”, “outsourcing”, and cutting red tape were supposed to set the country on the road to growth and prosperity. But it has instead taken the country to ruin.

   Even in the good days, growth was no faster than in the ’50s, ’60s and ’70s, and it has been slower. Living standards have risen more slowly, and the fruits of growth have been spread more unevenly. The argument that nationalised industries and services would be made more efficient and cheaper by being sold off is a hollow, sick joke. If the idea was that privatisation would stop a drain on the public purse, that of the railways merely increased the subsidy from £900m, in the year before Major sold them, to £2 billion two years later. Hardest of all to swallow is that Britain’s standing at rock bottom in the IMF table was utterly predictable on grounds of the most basic general knowledge.

   But with their arrogance and doctrinal fanaticism, Labour’s market dogmatists – with their own personal financial interests in mind – ignored the obvious, and ploughed on towards the public abyss. On regulation and greed – the cult of which Gordon Brown now laughably claims to combat with the man who personifies greed and spin, Lord Mandelson – Brown has now to bleat the exact opposite of everything he has been preaching for years as a friend of the City, while pretending not to. The safe pair of hands was a foo
l all the while that his vast apparatus of quangos, civil servants and economic advisers conjoined and justified the smash-and-grab, squeezing every last penny they could get from the taxpayer to fund their folly, with no end in sight.

   And here comes the twist. For while all the things that should remain among the responsibilities of state, and still do in most of Europe – infrastructure, transport, fairly priced utilities, post and pensions – are looted, a massive and costly renationalisation is under way of exactly what society does not need in the public sector, in addition to the billions spent on the banks and bankers. RBS, Lloyds Banking Group, Northern Rock and Bradford & Bingley are now firmly under government control, while the taxpayer is expected to underwrite toxic loans to the tune of hundreds of billions of pounds.

   Cabinet members and Downing Street spin doctors point the finger at their erstwhile friends the bankers, even as the Labour government increases the tax burden on the average citizen. And an unapologetic Brown, steward of the economy for the past 12 years, maintains his position as Britain’s unelected Prime Minister – because in Looted Britain, the buck is passed on like a baton but never stops at the top.