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Transport Secretary, we regret to inform you that privatisation has failed

Transport Secretary, we regret to inform you that privatisation has failed

 “You may think him plain stupid,” writes the former Chair of the Infrastructure Commission, Andrew Adonis, referring to the treacherous Chris Grayling. Exhibit A is a bailout of Virgin and Stagecoach, two companies that abandoned the East Coast mainline and were susequently rewarded for their failure with contracts for other lines.

 “But that would be to mistake the ideology behind the transport secretary’s shameless rewarding of the billionaires....Grayling won’t contemplate the alternative to bailouts – because it is nationalisation.”

Yet Grayling is not the first UK government minister to be consumed with the dogma of private good, public bad. Adonis himself served for successive New Labour governments under Blair and Brown, but now “readily accepts” that they “failed to tame the wild west that is the private sector”.

Continues Adonis:

“In retrospect, too many of its [New Labour’s] leading lights were in awe of the super-rich, and indeed were determined to become super-rich themselves.”

Public-Private Partnerships (PPP), accelerated under Blair, were supposed to be a way of getting things done quickly at minimal cost. The private sector would cut through red tape and hastily build a new hospital, or take over the maintenance of a railway. In return, the companies would receive rent in the case of hospital leasing, or state subsidies, in the case of rail maintanence. The arrangement did indeed increase the number of cranes in the sky, but PPP has been of questionable benefit to the taxpayer. Payments were spread over a prolonged period of time, masking the overall outlay on treasury balance sheets. PPP acted as a kind of zero-interest credit card, the promise of something for nothing replaced by a ratcheting up of costs later on. 

These schemes were used, and are still being used, for political weapons. Witness the Blair government’s refusal to accept a US-style bond scheme for financing the London Underground,  in fear that then socialist mayor Ken Livingstone would botch it. The eventual PPP scheme imposed on London was a massive flop and delayed much needed investment. 

Labour’s relaxed attitude towards privatisation gave permission to the ideologues that followed, such as Grayling, who refused last year to do anything about Southern, a struggling rail operator that subjected its passengers to delays and poor service. He had the option to transfer the running of Southern to the far more efficient and publicly owned Transport For London (TFL), an option that several experts preferred. Adonis, for example, reviews TFL like this:

“Twenty years ago, London’s buses and tube were a byword for inefficiency and backwardness. Now, after two decades of excellent public leadership and sustained investment by government and the Greater London authority, they are an international model.”

Yet Grayling refused. Why? Perhaps the answer comes in a leaked letter to Boris Johnson where he revealed that he did not want to give a “win” for a Labour mayor, whose remit TFL falls under. To hell with the sense of the proposal; neo-liberalism (and by extension the Tories) must never be defeated. 

Adonis writes this scathing conclusion of the Transport Secretary:

“In Grayling’s warped and partisan mind, billionaire bailouts are preferable to any state control. As an arch Brexiter and neo-Thatcherite, it’s all justified as a means to victory in a bloodless civil war against Jeremy Corbyn. It is the same mentality by which, as justice secretary, he destroyed the probation service in a botched privatisation.”

Only a strong campaign against Grayling and others of his ilk, against PPP, against the needless contracting out to the private sector of valued public services, and against privatisation more broadly, will force the government to reverse course. It must see that accepting greater public involvement in service provision, and of fair consideration to public options in the awarding of government contracts, as a vote winner, which it surely now is. What is more, the record of TFL demonstrates that these public alternatives are just as likely, more likely in fact, to work. 

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