Theresa May wants to appear to be concerned and doing something about housing and tuition. However, her aim is to save her own and the Tory government’s skin while the pain of austerity continues to overwhelm millions of people.
Socialist Voice Editorial – International Socialist League
Taking Thatcherism into the 21st Century, the aim of the Cameron-Osbourne austerity programme and now May’s is to accelerate neo-liberal capitalism with the sell-off of remaining public services, so big business, billionaire investors and private equity companies can make vast profits.
What is described as ‘light touch regulation’ actually means ‘hands off’, and has allowed Britain to become a “Treasure Island” for native and foreign capitalism, which Brexit will reinforce. The crisis facing the government is they want to use Brexit to cut more social benefits and force lower living standards on workers, including retaining the pay freeze and removing the little regulation over capital that exists. However, they cannot put their hands up to admit this.
Essential public services were and continue to be handed over to the privateers, to justify this we are told it will increase competition, attract investment, increase efficiency and performance and lower prices, however, workers experience worsening or disappearing services, higher prices while generally, profits increase. Furthermore, the risk element is not privately owned but passed onto the public via the state. According to the Financial Times (FT) ‘Lax regulation has turned Britain into a rentier’s paradise’, with many rentiers linked to the Tory party, and some the Labour Party.
One example is the UK’s terrestrial TV transmission networks, including security and emergency communications, 90 percent of which is owned by Arqiva whose shareholder loans give 13-14 percent profit.
As the FT explained, bizarrely the company (as in many other cases) pays out more in financial charges than it earns in profit. “In the three years to June its income was £822m but paid out £1.5bn, roughly half went to service loans, the gap was financed by yet more borrowing, in three years it had net losses of £900m.”
Gas distribution companies do the same thing, such as Macquarie its shareholder loans receive 15-21 percent.
Macquarie relentlessly focus on investment returns and profitability. While loan interest is tax deductible and therefore reduces corporation tax no doubt some cases off-share accounts are used for tax avoidance.
But it shows a strong tendency of privatisation is to create monopoly and not Thatcher’s share-owning democracy nonsense, and further regulation does not control monopolies.
If these monopolies get in trouble they will demand the government bail them out, just as the banks did.
The FT warns that if the government allows this to continue “public consent may break”.
The ISL warns that ‘reforming’ capitalism, as proposed by Labour’s Jeremy Corbyn and John McDonnell, does not address the ownership of public services by big industry, private equity or the banks, nor does it address “public” services that are being driven deeper in debt. Without removing power from these capitalist institutions nothing will change. Reform will allow capitalism to find new ways to bring the hammer down on the poor and workers.
However, the Labour leadership runs scared of international finance and domestic banks, including the pro-privatising wing of the Labour Party, by encouraging Labour councils to continue implementing the cuts and austerity.
The need to increase the use of zero hour contracts (today 10 million casual jobs in the UK) has arisen because of pressure from super profit makers, and their need to maintain super profit levels to pay shareholders and their loans. The indebted balance sheets are used to create the pressure for more causalisation, from McDonalds and Amazon to the railways and privatised public services, guaranteed profit for shareholders is integral and is creating ever-growing economic bubbles that will eventually burst.
The problem with the Labour Party ‘solution’ is that banks and multi-nationals will be left alone. McDonnell has said that PFIs will end, but the important question is how? The only way is through full and immediate nationalisation and the only force capable of carrying that through is the working class, with public ownership and control of big business and the banks. Nothing short of that can lead to socialism.
The answer must be a match against the forces attacking us, we call for:
- Co-ordinated strike action!
- Building a general strike from below!
- Building a revolutionary party that can lead the fight for Socialism!
Originally published in SV #29, Nov/Dec 2017.