Owen Jones: For Tories, privatisation is still a matter of dogmatic faith

The breadth of opposition to Royal Mail privatisation is hardly surprising. Britons have endured a three-decade-long experiment of selling off our utilities and public services

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Dogmatic in the face of all the evidence; backing fringe policies embraced by obscure minorities; pushing failed ideas which, if implemented, would be nothing short of disastrous. Here are accusations long thrown at the left by level-headed advocates of such moderate proposals as, say, illegally invading countries prompting hundreds of thousands of deaths, or introducing cuts Mrs Thatcher could only have dreamt of.

So how about this for an extreme, unpopular policy? According to YouGov, the proposed privatisation of the Royal Mail is opposed by over two-thirds of Britons; even Tory voters are more likely to be against than in support. Just 4 per cent strongly support the flogging off of yet another public service, which gives an indication of how few hardcore free-marketeers there are.

The breadth of opposition is hardly surprising. Britons have endured a three-decade-long experiment of selling off our utilities and public services. After a fair run, the cheerleaders of free market extremism must now accept that they have failed to win the support or consent of the British people. A poll in April found that 61 per cent believed major public services such as energy and water were best run by the public sector; only just over a quarter opted for private companies. Every poll going shows that we want the railways back in public ownership. That so few MPs echo these calls in Parliament is a damning indictment indeed of our political elite and the state of British democracy.

The public’s verdict is undoubtedly based on pragmatic experience. The taxpayer is paying around three times more subsidising private railways than when they were run by the state. Ticket prices soar above inflation, pricing out millions of families, and the service is fragmented and chaotic. Energy and water companies are ripping off consumers when workers’ pay packets are facing the biggest squeeze in modern times.

This latest bout of free market extremism comes after a torrid week for the dogma of “private sector good, public sector bad”. Security companies G4S and Serco have both been accused of overcharging the state for the electronic tagging of offenders, including billing government for people who had died or never even been tagged. During the Olympics, G4S failed to deliver enough security guards, leaving the state – who else? – to fill the vacuum. At the time, Tory Cabinet minister Philip Hammond admitted that the episode challenged his “prejudice that we have to look at the way private sector does things to know how we should do things in government”.

The list could go on. Take the likes of A4e, the welfare-to-work company: on top of being investigated for fraud, its former chief executive Emma Harrison stood down after paying herself a £8.6m share dividend at the expense of the state. There are the PFI schemes that exploded under New Labour, leaving the taxpayer saddled with billions of pounds worth of debt. And then, of course, there’s the small matter of the banks that collapsed. It wasn’t free market dogma that rescued them – it was the state.

The case against privatising our Royal Mail is overwhelming, even disregarding other failures. It is a profitable business, making £440m last year. It is a natural monopoly. The right-wing think-tank Bow Group suggests that rural Post Offices could close and the price of stamps could be hiked.

The truth is the free market extremism pushed by the biggest party in Britain – the neo-liberal centre of Blairites, Cameroon Tories and Orange Book Lib Dems – is riddled with hypocrisy. Modern capitalism depends on a big state, on government largesse. Bailed out banks; PFI contracts; tax credits that subsidise bosses paying low wages; housing benefit subsidising landlords because of the mass sell-off of council houses – the list goes on.

Many of the free market extremists have benefited directly from their dogma. Take Patricia Hewitt, who journeyed from left-wing firebrand to Blairite health secretary: she was recently appointed board director at Bupa, a health company that stands to benefit from the privatisation of the NHS. Lord Norman Warner, a “Labour” Lord who supports the Tories’ dismantling of the NHS, is a non-executive chairman of UK Health Gateway and an adviser to technology firm Xansa, all of which government plans have guaranteed a bright future. The revolving door of free-market extremists is profitable indeed.

Evidence that shatters the demonisation of the public sector is routinely ignored by our media and political elite. The Government is planning to reprivatise the East Coast mainline, despite the Office of Rail Regulation finding it to be the “most efficiently run franchise”. None of this means opponents of free market extremism should be defensive, allowing themselves to be painted as conservative opponents of “reform” (a term stolen and redefined as “privatising” and “cutting”). When the post-war Labour government nationalised key sectors of the economy, it created top-down, undemocratic public corporations. Without meaningfully involving users and workers, there was little resistance when Thatcher sold the family silver.

It’s time to argue for a new form of democratic, social ownership. Take the railways. They could easily be taken into public ownership if the political will was there: the state could simply take over each franchise as it expires. But instead of being run by bureaucrats in Whitehall, passengers and workers could be given the right to vote for representatives on the management board. The same argument could be made for, say, the banks, the NHS, or Royal Mail, forcing services to be more responsive to the needs of users, without selling them off to companies who are solely interested in making big bucks – not in delivering a quality service.

As the free market extremists once again ignore the will of the British people, it’s time to go on the offensive. Yet another disastrous sell-off doesn’t mean simply sticking to the status quo. Democracy, not privatisation: that should be our call.

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