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| Photograph: Future site of the Library of Birmingham, from 2009, by Elliott Brown (License) (Cropped) |
Carillion, a services behemoth, has collapsed. With it, it takes billions in government contracts and puts tens of thousands of jobs at risk. The construction and services company accrued £1.5bn in debt - of which £600m was owed to it's pension fund.
Fortunately, despite Carillion's own recklessness, the Pension Protection Fund (PPF) has stepped in to assure workers that their pensions will be protected - despite the complete failure of the company to meet it's commitments to workers.
However, numerous government projects, and smaller businesses to whom Carillion outsourced work, face an uncertain future. A result of what David Lammy described as, "privatise profits when things go well and nationalise risks so the taxpayer picks up the bill when things go wrong".
This government has tried to convince us of, or slip past us, a privatisations agenda, trusting private companies in the public sector. But how cane we back privatisation, when private sector providers keep proving so inept and unethical?
Carillion is not the only major private concern, even in the past year, to go bust and to do so revealing a massive pensions deficit - having taken profits for executive pay, but left workers' futures in peril, in what must surely be a major ethical breach.
When the steel industry nearly collapsed with the Tata Steel decision to close it's plants, workers' pensions were a huge block on a deal to save the industry. Incoming buyers did not want to take on responsibility for the pensions.
The unwillingness of private sector companies to take up their responsibilities in this case left workers with steel pensions in uncertain circumstances, where they have been prey to financial advice groups - now under investigation over their predatory behaviour.
The thing is, the government isn't just pushing privatisation for services, but for things like social insurance and pensions. It wants us all to do these things on personal, private terms, rather than in big collective government funds.
Yet, how can we trust the government's much vaunted workplace pensions scheme, when private companies treat workers' pensions as the first thing to drop when their isn't enough money for every commitment the company has made.
And what about Virgin? A global corporation that bitterly scraps for government contracts, even to the point of suing commissioners when they don't get them - suing parts of a cherished health service in financial distress. It was later awarded a huge contract, to much public outcry.
The government must now move to salvage what it can of Carillion, nationalising projects and departments to keep their vital work going and keep people employed. But what shape that takes is yet to be seen.
The speculation is that the government will continue to it's neoliberal trend of nationalising failure and debt, while returning the profitable parts to the private sector for executives to enjoy the benefits.
It would be refreshing to see something. Like the private sector picking up the tab for it's colossal failure? Yeah, right. Perhaps less fanciful would be consolidating parts of Carillion into a cooperative, run by it's workers?
As a cooperative, the still functional, still profitable parts could serve workers. The profits would deliver dividends for the workers, that would be of direct benefit their communities.
Whatever the government chooses to do, take note. This is one of those 'true colours' moments, where the rhetoric is paper transparently thin and the tropes are well known, enough to allow us to see what the governing party really values.
References
'Carillion collapse raises job fears'; on the BBC; 15 January 2018.
Daniel Thomas' 'Where did it go wrong for Carillion?'; on the BBC; 12 January 2018.
Lucy Warwick-Ching's 'Will I lose my pension if my company goes bust? ‘Lifeboat’ scheme could protect final salary retirement scheme'; in the Financial Times; 1 February 2018.
'Carillion: Banks call for government help'; on the BBC; 14 January 2018.
'Unite's Jim Kennedy: "There are serious questions that need to be asked and answered about Carillion's conduct" | Unite calls for urgent inquiry into feared #Carillion collapse'; from Unite, on Twitter; 14 January 2018.
David Lammy's 'Carillion becoming another tragic case study in what happens when we privatise profits when things go well and nationalise risks so the taxpayer picks up the bill when things go wrong. Vulture capitalism underwritten by the taxpayer. And don’t forget hedge funds made millions too'; on Twitter; 14 January 2018.
'Firms' steel pensions advice investigated by regulator'; on the BBC; 14 December 2017.
'Tata Steel UK's pensions deal approved by regulator'; on the BBC; 11 September 2017.
Denis Campbell's 'Richard Branson's Virgin healthcare firm scoops £1bn of NHS contracts: Virgin Care's success highlights fears over role of private companies in NHS and casts doubt on recent assurances by Jeremy Hunt'; in The Guardian; 29 December 2017.
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