Britain: New Labour in the bosses pocket
[Workers Power Britain January 2001]
Jeremy Dewar reviews Captive state: the corporate takeover of Britain, by George Monbiot, MacMillan, 2000, 430pp, £12.99
New Labour: New Britain. This is what Tony Blair promised the electorate in the run-up to the last general election. What he delivered was a string of broken promises: further privatisation, the erosion of democratic rights, multiplication of government-appointed quangos, privileges for businesses and corruption in high places.
As election time comes round again, George Monbiot has done us all a great service in documenting to just what extent Blair's government has deepened the “Thatcher revolution”. Monbiot has also, in Captive state, gone some way to demonstrating how and why Labour's various policies stitch together to form a pattern which has one central purpose: to maximise the profitability of big business.
The Private Finance Initiative (PFI) was developed by the Tories as a means of financing large road, hospital and school building schemes without burdening the treasury with a massive debt. At the same time it hands over hugely profitable areas of the public sector to private companies.
As Sir Alastair Morton of the Private Finance Panel puts it, PFI is "the Heineken of privatisation – taking the private sector to the parts of the government machine not reached by previous privatisations" (p86).
How PFI works is complex and deliberately misleading. The story of the Skye Bridge, one of the first PFI deals, shows just how dangerous it is, however.
Islanders on Skye used to have to rely on a 24-hour ferry service for getting to and from the mainland. The service got worse and worse until the proposal for a privately financed toll bridge, which would cost no more than the ferry and cost nothing once its outlay had been repaid, seemed very attractive.
Once agreed, however, the terms began to change.
Firstly, the bridge cost £25m to build. But the private consortium received at least £16m in subsidies from the government. According to the Public Accounts Committee, the private companies spent a mere £500,000 of their own money.
Next, the toll was raised to £5.60 each way, making it the most expensive toll road per metre in the world and far more expensive than the government ferry, which stopped running a week after the bridge was opened, giving the toll bridge a monopoly.
Finally, the consortium was guaranteed the toll would last 18 years, bringing in an estimated £37m. This would come mainly from islanders (among the poorest communities in Britain) and would severely damage their main trade, tourism.
The people of Coventry lost their easily accessible city centre hospital and got a new one on the edge of town courtesy of PFI. This reduced the number of beds by 25 per cent and the number of staff by 20 per cent.
Of course, the city centre site can now be redeveloped at a huge profit. The new hospital will cost far more than the residents' preferred option of renovating their two hospitals: renovation would cost £30m; the PFI scheme will cost £36m a year for the next few decades plus £25m for new equipment.
But why were the wishes of the Coventry people ignored? Asked in a consultation exercise what health services they wanted, they replied: renovate the two existing hospitals. They wanted far cheaper and less wasteful options than they got. But these responses were not, in government-speak, "PFIable".
Once the Labour government had decided it was going to use private capital for public projects, the need for a profitable return for the privateers has to override the needs of the public – even if this means giving the public what they don't want!
Linked to this is outright corruption and bribery. Local councils have been progressively starved of funds from the mid-1980s onwards. Their one remaining asset in many cases is their land; their one remaining power, their ability to grant or deny planning permission.
So when a supermarket chain applies for a new superstore and offers to build a leisure centre on the other side of town for free, it will get its way nine times out of ten. When a housing company wants to build on a greenfield site and offers to pay £100,000 towards legal and consultation costs, the council will usually promote the new town against the objectors. As one such objector remarked, "It's legal, but it's bribery." (p138).
As with PFI, many of the details of consultation exercises and planning applications are shrouded in secrecy; "commercial confidentiality" weighs heavier in the scales of New Britain than public accountability.
This is illustrated well by the story of the victory of Monsanto and the invasion of genetically modified organisms. Despite the fact that millions of consumers are concerned about the levels of toxins that may be in foods containing GMOs as well as the effect GM food production may have on the environment, it is illegal for any retailer to label foods as such.
But the real scandal of GMOs is the way governments, both here and in the USA, have colluded with multinationals like Monsanto, AgrEvo and Zeneca to force their products on the population. These companies have gained an absolute majority on boards such as the Food and Drug Administration in the US and the Biotechnology and Biological Sciences Research Council in the UK.
As a result, the very bodies which are supposed to regulate corporations, defend the public interest and direct public resources to areas which will benefit society as a whole have been taken over by those same corporations.
Monbiot dedicates the whole of chapter eight to a "Fat Cat's Directory" – a table listing the fat cat's "previous gluttony" and "subsequent creamery". We learn that Sue Clifton, for example, is an executive at Group 4, which runs two private juvenile detention centres, and is an adviser to the government's Youth Justice Board where she can use her influence to ensure more youth receive custodial sentences.
In New Britain capitalists are being brought into government itself, not just the quangos. Lord Sainsbury is dealt with in some detail. He is not only the former chairman of J. Sainsbury plc, which has championed GM foods, but is also the head of Diatech, one of Britain’s leading biotechnology companies. In other words he has a double interest in the easing of GM products onto the market.
While Lord Sainsbury lets his family take care of the supermarket chain, he claims to have put his holdings in Diatech into a blind trust. So he claims that while being Minister for Science and Innovation: "It's possible that I may have some commercial interests in biotech firms, I simply don't know." (p271). Yet Monbiot shows this is virtually impossible since Diatech was helping pay for renovation to Sainsbury's country house at the time!
One of the strengths of Captive state is that, while focusing on Britain, it also demonstrates Britain's role within globalisation. New Britain has played a key role in shifting the European Union towards the United States' position on free trade at the expense of health and safety regulation, environmental concerns and trade union rights.
Britain was the EU member that supported the Multilateral Agreement on Investment most vigorously - a treaty which would have allowed corporations to override government legislation and force the privatisation of the NHS and the education system.
The most disappointing aspect of Captive state is the last ten pages, where Monbiot outlines a strategy for fighting back against this creeping corporate coup d'état. It is a classic middle class utopia: abandon those policies like PFI which deliver ever more of society's wealth to big business, cut all the links between the mega-corporations and government and limit the size of the biggest monopolies by breaking them up and cutting their executives' pay packets.
He is right to call for an end to PFI, for kicking big business representatives out of government and ending their access to civil servants and cabinet ministers. But this does not get to the heart of the problem, which is the concentration of the ownership of finance and industry into private hands.
Monbiot counterposes big monopolies (bad) to small companies (good) which is unrealistic and plain wrong. Small businesses are among the worst anti-trade union firms and oversee some of the worst working practices even if they may have less direct leverage on government than the multinationals.
And as for the old chestnut of breaking up monopolies, those like Monbiot who do not wish to abolish capitalism but do wish to drastically reduce the scale of its operation face a dilemma.
Sainsbury was once a small family grocer. Through the laws of the market, it is now a giant corporation. To break it up into small pieces would only lead to a rerun of history and the emergence of a new mega-supermarket chain.
If there is constant government intervention to limit the scale of operation then other results emerge: inefficiencies are locked in, trade with foreign countries has to be restricted or prevented in order for smaller companies not to lose out, investment would go elsewhere etc. etc. It is not the scale of operation but the form of ownership that is decisive. Either you have an economy run for profit or for need.
Similarly, the idea that the state can be reformed into some kind of disinterested judge presiding impartially over citizens is to ignore the whole history of the state machine. The British state – parliament, the civil service, the courts and the military – have always sided with the ruling class. That's why you can't get legal aid to defend yourself against a corporate libel suit, why you get fined and imprisoned for refusing to pay a toll, why you get beaten up for going on a demonstration.
It is also why civil servants do not tell present day elected government ministers about the reasons for why and how the decisions of previous administrations are reached. Politicians are the (willing) captives of those who hold real state power and this state machine has to be broken up by workers and replaced with a new kind of administration in which all who carry out legislative, judicial and executive tasks are elected representatives, being daily accountable and recallable.
Monbiot recognises that his alternative to this “looks wildly optimistic and unrealistic." (p356). He understands that one of the ways in which corporations beat down opposition is by fighting a war of attrition: when a local campaign beats off a planning proposal, the company comes back year after year with an identical plan until the opposition is worn out.
The alternative to this is to focus on how to mobilise class action as widely as possible for a co-ordinated attack on the enemy. This will involve rescuing the trade unions from the current leaders who are in the pockets of the bosses and the state
It will mean taking what is best about direct action: its direct democracy, its ingenuity, its courageousness. And it will mean preparing to resist the violent defence of wealth and privilege that we must expect – especially after Seattle, Melbourne, Prague and Nice – from the corporate defending state.
an action programme for revolution in Britain.