Andreas Whittam Smith: Wholesale privatisation is not what people voted for

Lib Dem ministers haven’t any moral authority whatever to agree to measures that change the relationship between the citizen and the state
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The Independent Online

A White Paper with a simple title that disguises a development of huge significance is due any day now. It will be called "Open Public Services". In reality it is a plan to privatise many government functions. And the question that arises is this: were the political parties that comprise the Coalition Government given a mandate to make such dramatic changes at the general election held only 10 months ago?

The key part of the legislation that the White Paper foreshadows would be the establishment of a presumption that public services should be open to a range of providers competing to offer a better service. In other words, any supplier that could show the Government that it could do a better job than the state would get the business. Only national security and the judiciary would be exempt from the possibility of privatisation.

Would it work like this? "Dear Health Minister. We are a group of brain surgeons that have secured funding for constructing a state-of-the art neurological hospital in outer London. We would like to take over all neurological procedures from the NHS in South-east England. Yours etc."

Or this? "Dear Minister for Environment, Food and Rural Affairs. The National Farmers' Union believes that it could more effectively support and develop British farming and encourage sustainable food production than your department and requests that it be commissioned to undertake this work. Yours etc."

Or even this? "Dear Minister for Work and Pensions. As Britain's leading insurance companies, we have many years of experience in providing pensions. We are prepared to form a special unit that would take over the delivery of the state pension. We would have available to us a long-established national network of offices staffed by professionally qualified people. We believe we can do a better job at lower cost than your department's pension service. Yours etc."

If my imaginary scenarios turn out to have any truth in them, and private companies do successfully invade the public sector, this would be satisfying to the author of The Shock Doctrine, the Canadian writer, Naomi Klein. Her book analysed the circumstances in which such dramatic changes would be made. She argued that the fundamentalist form of capitalism has always needed disasters to advance. In this case, the "disaster" that provides the opportunity is what the Coalition Government claims is out-of-control government spending.

Look across the Atlantic, and you see another example. First in Wisconsin, and now in Indiana and Ohio, Republican governors on the far right of the political spectrum are seeking to remove collective bargaining rights from public sector workers. Their excuse is the same – budget deficits that threaten solvency. These occur at the state level in the US and at the national level in the UK. In both situations this so-called disaster provides the opportunity for the private sector to gain ground at the expense of the public sector.

Now just because Ms Klein found an arresting title for her book and produced a neat analysis and because privatisation has become a dirty word in the UK, it doesn't mean the policy in the White Paper is wrong. That the state should provide only those essential services that the private sector either cannot supply efficiently, or which it would be inappropriate for it to do so, scarcely seems controversial. But that is not where we are.

We live in a mixed economy in which the state undertakes more tasks than are strictly necessary. But people are used to this. Many like it. Despite the inefficiencies of the public sector, people find it reassuring that the Government supplies a wide range of services on behalf of us all. It is more "We-are-all-in-this-together" than is widespread privatisation. Indeed what is at issue here is the citizen's relationship to the state. That means that the recommendations in the White Paper are essentially constitutional in nature.

Nonetheless these very important changes are being sprung on us, for they were not clearly signalled in the party manifestos published only a few months ago. The strongest statement that I can find in the Conservative Manifesto is this: "We need radical political reform. We need to change the whole way this country is run... the plans set out in this manifesto represent an unprecedented redistribution of power and control from the central to the local, from politicians and the bureaucracy to individuals, families and neighbourhoods."

I don't think this does the job. The warm phrases about transferring power from the centre to the local, from politicians to individual and families do not unambiguously point to wholesale privatisation. To read the manifesto, you would think that, yes, some services would be devolved from central government to local government and, yes, some services might even be privatised, but not that state provision was to be largely dismantled.

The Lib Dem manifesto made no references to the subject at all. So Lib Dem ministers haven't any moral authority whatever to agree to measures that change the relationship between citizen and state, as the White Paper will prescribe.

I also went back to the Coalition Agreement produced immediately after the General Election. It made the following assertions: "We share a conviction that the days of big government are over ... We believe that the time has come to disperse power more widely in Britain today. We will promote the radical devolution of power and greater financial autonomy to local government and community groups. This will include a review of local government finance. We will give public sector workers a new right to form employee-owned co-operatives and bid to take over the services they deliver. This will empower millions of public sector workers to become their own boss and help them to deliver better services." Apart from the fact that the Coalition Agreement was not presented to the electorate, was this fair warning? It is certainly nearer to what is now planned, but it withholds a lot.

The White Paper will generate a good deal of criticism, not least from the trades unions with members in the public services. But as with university tuition fees, the Government will continue on its course and move to legislation. If there are demonstrations, I should like to see two words written on the placards: No Mandate.