“In the leaflet – the Haggerston Rose – Labour are claiming to have solved problems that they themselves caused,” said IWCA (Hackney Independent) activist and candidate Carl Taylor. “And they have claimed that things are getting better when all the evidence is that they are getting much, much worse.”
The leaflet claims that the £30 million secured by the council from central government has ended the threat to libraries and nurseries, that Labour were responsible for terminating the costly ITNet revenues and benefits contract and that they have brought improvements to schools, street cleaning and social services.
“The news that the threat to libraries and nurseries has been ended must be news to workers and users,” said Carl Taylor. “Each week in the Gazette we read about the ongoing libraries dispute and renewed threats to existing nursery provision. The ITNet contract was brought in by Labour in the first place and they were forced to sack them only in the face of the anger and misery of Hackney tenants. Thanks to Labour, ITNet nearly bankrupted this borough. Rather than claim credit for sacking them they should be apologising to all of us for their own incompetency. The massively overspent Service Team street cleaning contract and the Initial school meals fiasco shows that they haven’t learnt anything from ITNet. As for social services, how can anyone claim that reducing home care for the elderly and cutting Freedom Passes to the disabled are ‘real improvements’!?”
The IWCA (Hackney Independent) have also condemned labour councillors claims to have ‘worked hard to keep open the Apples & Pears Adventure Playground’. The IWCA’s Peter Sutton – another election candidate in Haggerston Ward – said “the only reason this valuable site is under threat in the first place is because Labour councillors are determined to sell off our facilities. Apples & Pears was only saved from the hammer at auction because volunteer workers and parents got a court injunction which has delayed the sale. Are Labour now saying they have no plans to sell the site, or do they intend to push the sale again after the election when it will be less electorally damaging? Whatever their plans are they should come out and say so. No wonder people are increasingly fed up with this kind of dishonest ‘politics’.”
The IWCA (Hackney Independent) believes that Labour’s claim that they will ‘continue to stick up for local people and vital community facilities’ is nothing more than a joke, and not a particularly funny one. “Labour’s record on community facilities is abysmal,” said Peter Sutton. “They have broken their promise in their last newsletter, put out over a year ago, to reopen Haggerston Pool. Why should people believe what they read in this one? We share people’s frustration at this kind of ‘economy with the truth’ and are committed to campaigning with local people to prevent more cuts and sell-offs. We will continue to do so whatever happens at the elections. Fortunately people now have a choice in Haggerston.”
News like this would once have brought down the government. First, the company we all think of as the Post Office announced 15,000 workers would lose their jobs – the first strike in what could be a cull of 40,000 staff. That staggering figure overshadowed the second axe to fall: 750 naval workers laid off after the government decided to hire private companies to refit British warships. To cap it all, the biggest headline grabber: a Cabinet minister forced to make a full-speed, skidding u-turn by handing £500m of public money to the shareholders of the late and unlamented Railtrack. All of that on a single day: Black Monday.
What explains the change? It’s partly a tribute to Britain’s success: our official unemployment rate is the lowest in the European Union, hovering at 1975 levels below a million. We no longer think of joblessness as a problem. But there is a deeper explanation, too.
Industry mattered to politics when politics mattered to industry. Two decades ago, whole sections of the economy were under the direct control of the state. Now, in the era of privatisation, ministers are able to shake a fist or shout the odd plea from the sidelines but rarely to make the decisive difference. They can beg BMW or Motorola not to pull out of Britain – but if the boardroom has made up its mind, there’s little even a phone call from the PM can do.
So voters no longer look to government to make the industrial weather. Two decades of Thatcherite economics have persuaded us that the market is king: governments are powerless to resist. On this logic, politicians have a choice between doing nothing or making things worse. Their role is to stand aside and let the market sort it out. We are all laissez-faire liberals now.
And so the very phrase “industrial policy” – such a staple of 1970s political talk – has disappeared. And yet it’s worth examining Labour’s stance on industry, for inside it lies a glaring, increasingly risky contradiction – and Black Monday illustrates it perfectly.
The government believes in blending the lean efficiency of the private sector with the social goals once exclusively associated with public ownership. The result is a new industrial landscape littered with strange, hybrid creatures – part private, part public, they look and behave like neither. They are the “third way” made flesh.
Railtrack was one. Inherited from the Major government, this company walked like a private business, talked like a private business – but never quite escaped its genetic origins in the public sector. So it had shareholders and sought profit, but as soon as things went wrong it held out the begging bowl for handouts from the government. Of course it got the money: how could any country let its rail system go under? So Railtrack had all the fun and perks of life as a private company – safe in the knowledge that, whenever the chill wind of the market got too nippy, the nanny state would be there with a blanket.
That’s why so many voters, commuters especially, feel resentful about forking out an extra £500m in compensation to Railtrack’s shareholders. They know that reason is probably on the shareholders’ side: they owned assets which the government could not simply grab from them. But the admittedly emotional response of many is to ask: if your company was worth so much, how come you kept coming to us for more cash? More viscerally, why should we bail you out, just because your shares went down; how much did you give to us, the taxpayers, when they soared up? And isn’t that the whole point of shares: you do well if they go up, but you expect to take a bath if they go down? Railtrack shareholders placed a one-way bet: win if you win, but don’t lose if you lose.
And this is the core problem: we were asking a private company to take on an essentially public task. Railtrack was designed to follow the profit instinct of private enterprise when its real job was to provide a public service. It was meant to be governed by the iron disciplines of market forces, but it always knew its risk was more hypothetical than real: if trouble struck, the government would step in – as Stephen Byers duly did this week.
There is a direct lesson here for the public-private partnership plan still dogmatically pursued by Labour for the London Underground. Once again, the government will pretend that the private infrastructure companies are taking on the risk that things might go wrong. They will certainly be handsomely rewarded for it. But if things do go off the rails, we all know who will really pay the price: the government cannot let the tube collapse, so it will step in – with our money.
Consignia is a different strain of mutant company. It too was meant to behave like a private outfit, even though it remains government owned. And it, too, suffers for being neither fish nor fowl. It faces competition for key services, like a private company, but it cannot do what any private business would do if strapped for cash: it cannot raise the price on its core product. The price of a first-class postage stamp has gone up just once in six years, even though it costs a penny more to deliver a letter than it costs us to post it. The regulator has capped the price, on the reasonable logic that monopolies can’t just up their charges whenever they like: after all, the customer has nowhere else to go.
So the Post Office is sort of private, sort of public: exposed to competition, yet obliged to perform public duties (like delivering letters to remote rural locations) that cost them badly. Its rivals are full-blooded private businesses, able to cherrypick the profitable bits, unhindered by costly obligations. The Post Office is neither one thing nor the other – and soon 40,000 workers will pay the price.
The government needs to have a rethink. It should follow the logic of Gordon Brown’s speech last week on the NHS, and declare that some tasks are public by their very nature. Health is one, said the chancellor. Why not add railways, which will always require a public subsidy, and a collective, social need like delivering mail?
“The plain fact is, there are certain natural monopolies, best run by the state,” says director of the Industrial Society, Will Hutton. That does not mean, he adds, that they have to be run like the “organisationally dysfunctional” nationalised industries of the 1970s. Network Rail, the successor company to Railtrack, could be a step in the right direction. Its directors will be rewarded not for boosting share price, as with Railtrack, but by their performance on the “public” aspects of the service: safety, reliability, punctuality.
That may be a new way of doing things. But only if the government ends this unhappy experiment in asking private companies to do the public’s work. That experiment has failed.