The new UK Prime Minister, Andy Burnham, has prompted howls of outrage from some of the media. His felony has been to challenge Thatcher’s almost Orwellian mantra that “Private sector good, public sector bad”. Papers rage at such an affront to the blessed Margaret’s teachings. They say it’s just too awful and beyond acceptable. Maybe the authors of the spluttering editorials and opinion pieces recognize that Burnham has called out the fictions that supported the mantra’s assertions. He’s pointed out the counter facts in plain sight to us all.
So, what was the thinking that lay behind Thatcherism? The 1970’s with strikes and 3 day weeks created the bogeyman of the selfish unions who had to be defanged. At the same time poor performance in some nationalized industries helped create the myth that the public sector always delivered worse than the private sector. And linked to that was the trumpeting of the genius of the market and competition. We were told that fiercely competing companies in an unfettered market would deliver efficiency, innovation and better customer focused services. The entrepreneurs who would lead us towards this nirvana were seen as the cherry on the cake. With deregulation such titans were wealth and job creators who helped grow the economy. And that extra wealth would, of course, trickle down like water to the thirsty less fortunate. Sadly, it turns out that the wealthy aren’t terribly keen on their gains trickling down anywhere, unless it was to their families and away from the inland revenue.
What Andy Burnham appears to have started is a proper discussion about the myths much of the press has peddled to the UK public for the last 50 years. So, what are some of the counter arguments to Thatcher’s myths described above? A starter might be the Banks serial miss-selling scandals from endowment mortgages to pensions to their crooked business model that privatized profit whilst nationalizing their losses, (in the 2008 crash). Or how about the failed delivery from the privatized water companies? A leaking shit storm, metaphorically and literally. Private equity bought up the water companies and burdened them with ruinous debt that went into profits and bonuses rather than assets and services. Via a fiendishly clever web of companies the regulator was largely sidelined as money got stripped out whilst our whilst our rivers and sea became a giant open-air sewer. And lastly there is the example of the expensively privatized national rail operations or London Underground’s asset renewal and maintenance. Most of those are now effectively back in public ownership.
But what Burnham’s honest and helpful analysis hasn’t quite got to yet is Tony Blair’s “things can only get better” contribution which built on the false narratives the Tories launched. Private Finance Initiatives (PFIs) and derivatives of the same were enthusiastically embraced by Blair’s new government. PFIs sprang up in areas like the provision of school buildings, hospital facilities, running prisons or the probation services. And in creating the PFIs many lawyers and consultants made a tidy profit. As did the private companies behind the PFIs. The deal had priced in the supposed higher risk of the services being provided. But after the deals were signed, amazingly within years the supplying companies refinanced at much lower costs, as the reality was this was all financed by the “they’ll never go broke” government. The cost savings made were pocketed, in the early PFIs, by the companies not the taxpayers.
And let’s not forget the increased migration. For centuries the UK’s economy has in part relied on migrants bolstering its workforce. And so, Blair and Boris opened the gates to solve the economy’s labour shortages. But in doing so they never made a proper assessment of what our society’s limits were on how many newcomers we could absorb and integrate. In doing so they stupidly handed those on the far right an opportunity. Working people are fed up with the zero hours gig economy assaults on their job security. They’re fed up with low wages that mean even with two people working benefits from the state are still needed to get to a living wage. They’re nervous about the reducing certainty on pensions in their old age. And they can see their grown-up children having even less opportunities than they did. And the far rights answer to all of this is to blame the migrants and pretend if they weren’t allowed in then it would be all better. Except it wouldn’t be better, would it?
There are many other economic and influencing crimes all the major UK political parties have been party to which I headline here just for the record. The fiction that all wealthy people are job creating entrepreneurs. Some are, but many are asset owners simply renting out what they inherited. The ever-expanding House of Lords whose growth is fueled by the ennoblement of MPs and advisors as a reward for their loyal service. The lobbyists showering politicians and officials with Taylor Swift concert tickets, expensive dinners and other junkets. And we maintain the fiction that those peddling sweeties are in the altruism game, instead of being honest that they’re in the whispering in the ear game. Or how about the criminally missed opportunity for government to borrow cheaply to invest in infrastructure when interest rates were low? And don’t even get me started on the helpless way in which we’ve allowed private equity vampires to get their fangs into sectors like care homes for older people, facilities for children with special needs and even the vets who look after our beloved pets. In each case the fees have rocketed, and the carers’ wages haven’t.
So, I have four things to say to Andy Burnham. 1) Thanks for starting to talk about some of the falsehoods and real issues we face. 2) Acknowledge new Labour’s part in creating this mess. 3) Clean up the cess pit of the honours system and lobbyists. 4) Get private equity under control before their shadow banking wrecks our economy.
