Carillion: When private service providers keep proving so inept and unethical, how can we be asked to back privatisation?

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.

General Election 2017 - Tory Manifesto: Demanding unity, making no promises

Theresa May has called for unity and social harmony, but she offers little to ordinary people in return.

This manifesto is Theresa May's belated opportunity to stamp her identity of the Conservative Party. In what became her very short campaign for the role of Conservative leader, she chose to emphasise the Unionist element of the fully titled Conservative and Unionist Party.

At the 2017 manifesto launch, "Forward Together" was written on the front of May's podium as she strained to come across as a 'compassionate conservative' and the word "Unionist" was restored to the party's name on the front of the manifesto.

Inside the document, there was an effort to rewrite what it means to be conservative. It called for "commitment to country and community", "belief in national institutions", and obligations to one another stronger than individual rights as community and nation demand.

That definition is unionist to its core. In her first major speech as leader, she listed her hero as the Unionist Joseph Chamberlain. As Mayor of Birmingham, he led the modernisation of the city through public-private initiatives and the establishment of public utilities, in decisive acts of intervention.

There are some among the Tories who are perturbed by what they see as a similar interventionist streak. May's first manifesto and her launch speech seem to have been shaped to confirm that impression. But there is a real contrast between the tone and the content.

The headlines that the Conservatives drip fed to the media over night, before the launch, were all focused on what the party would do to address the dire state of social care - which critics say has seen a funding cut of over £4 billion on their watch.

Theresa May pitched a long term plan. The first step appears to be to launch a raid on the middle class: from their assets on one hand - those with holdings over £100,000 will pay more - to their winter fuel allowance, which will be means-tested to raise £1 billion.

The belt-tightening Tory plan extends down the income brackets. Pensions will again see cuts. With £8 billion already shaved across the Parliament (2015-2020) with the flat-rate pension, ending the triple-lock will be further hurt for the low paid on just the state pension.

While an argument might justifiably be made that the triple-lock has proven very expensive - pensioner incomes have risen 10% above inflation - not enough is being done to lower the cost of living, particularly in old age, to ease such a 'rebalancing'.

It is perhaps this that has motivated an intervention in the energy sector with an unspecified "safeguard tariff cap" on prices and a commission and independent review into how to ensure energy costs stay low, with a promise to ensure fair markets.

But let's be clear: social care changes brought in by raising the means-tested level to £100,000 does nothing to change the conditions for the poorest. These measures raise maybe £2 billion per year, at best, in additional funding to aid an ailing system.

That means the poorest will continue to rely on strained and underfunded care services, while the homeowning middle class will be paying far more for privatised care - and still won't be able to pass on their family homes to their children.

In fact, when you take into account hinted Tory plans to give workers the right to unpaid carers leave, it paints a picture of Conservatives intending to wean people off of state care.

Perhaps learning from the Cameron years, hard targets seem to have been replaced by lots of vague promises: to simplify tax laws, to stop tax evasion, to protect gig economy workers and to put more money in the NHS (despite having yet to meet their previous targets) - though the promises to control immigration continue to be more clearly specified.

But what does not seem to have changed is their attitude to the fiscal role of the government.

Current spending stands this year at around £720 billion to £740 billion in revenue, while Capital spending sits at around £80 billion. As the Tories combine Current and Capital spending to calculate the deficit, it stands at about £59 billion.

With further commitments to eliminate the deficit, across both Current and Capital spending, a National Productivity Investment Fund of £23 billion - even if it turns out to be rebranded rather than new money - heralds more austerity cuts to come, either from other infrastructure spending or from departmental budgets.

And that matters. Britain has already been hard hit by austerity. Yet despite in her manifesto disavowing the liberal conservative legacy of Cameron and Osborne and claiming that the state has a role, May is continuing their squeeze on public services.

Note here, that what can be interpreted about how the Tories will manage the economy has no help from the manifesto, which has no costings whatsoever. Just vague promises and vague numbers with no explanation of where money will be found, or taken.

The reality is that easing the social care strain by having the middle class pay more and by restraining the pensions of the least well off does nothing to increase the stake of ordinary people in their country. May is preaching a new Union, but it's still the same old unredeemed and hard to believe Tory slogan: "We're all in this together".

This is not an inclusive manifesto. It is not progressive. It is social harmony Unionism, putting the vague notion of a 'country' before the needs of the actual people. Theresa May demands unity, but doesn't offer ordinary people a real stake in the country.

Progressives and reformers will also be particularly unhappy to see Theresa May doubling-down on retaining power, with specific commitments to repeal the Fixed-term Parliaments Act, preserve First Past the Post and to require voter ID - all measures empowering the government of the day to stay there.

The path ahead, under the Conservatives, will continue to see the burdens fall on the poorest. Nothing in this document changes that. It is imperative that there be a progressive alliance to resist and oppose, because we need a strong opposition.

Greece's creditors are playing with fire - Grexit would be bad for Greece, but could ultimately be worse for the Eurozone

With their creditors circling and the IMF in particular apparently tired of negotiating (Inman et al, 2015), it does appear as if Greece is being bullied towards a Eurozone exit due to its unwillingness to sacrifice the country's dignity by slashing pensions (BBC, 2015).

Yet as bad as fears are that a 'Grexit' would be bad for Greece, and so might act as an incentive for it to agree to the terms of conservative austerity laid out by its creditors, their exit could be a lot worse for the Eurozone and those with a vested interest in its success (Garton Ash, 2015).

With debts due, and passed due, Greece has been scrambling to scrape together the funds needed to make repayments (Kirby, 2015). Without the repayments, Greece will not qualify for the bailout funds it needs to afford continued debt payments and to run the country.

Alexis Tsipras, the Prime Minister of Greece from the Radical Left Syriza party, has remained determined to resist the pressure from creditors for conservative economic reforms in exchange for the bailout (BBC, 2015). Tsipras has been attempting to negotiate the terms of the bailouts and the repayments, in opposition to the deep public sector cuts expected by creditors. Europe's rivals are already circling. China has a major interest in Greece, via its stake in the port at Piraeus (Smith, 2015), and, in what has been seen as a negotiation tactic, Greece has even held talks with the Russian government (Christides, 2015).

But on top of the demands of creditors, there have been warnings to Greece of the dangers and consequences of defaulting on its debt and leaving the Eurozone (Khan 2015). There are fears that a newly introduced currency would plummet in value quickly against the value of the Euro, and that this could result an effective pay cut for ordinary citizens of as much as 50% (The Hamilton Spectator, 2012).

Between being bludgeoned with creditor demands and being warned of the danger of default and withdrawal from the Eurozone, the present situation has the feeling of a deliberate strategy designed to diminish the negotiating power of Greece, and back the country into a corner. By bullying Greece into a corner, it would certainly be a lot easier to force the country to reform in a particular way - notably conservative and austerian (Jones, 2015).

That situation is being compounded by the pressure that Alexis Tsipras faces from his own supporters at home over electoral promises to reinstate the public sector's role and to protect pensions (Morris, 2015).

However, the determination to force Greece into playing by the conservative rules or face a damaging exit looks like a dangerous game for those with an interest in the Eurozone to be playing. It has been noted that, rather than talk of solidarity with the Greek people in their time of need, the attitude of negotiators has been of cold "matter-of-fact talks that take place when a big indebted business gets into trouble" (Peston, 2015).

If that attitude were allowed to force Greece out, then something very stark will have been stated about the Eurozone: that it is only for the 'economic convenience' of certain members, and that it is not necessarily for everyone - something that would surely undermine the future of the Euro.

With the Euro's future undermined, the Eurozone project itself could be undermined (Garton Ash, 2015). If one debt ridden nation might default and withdraw to pay off its debts with a new devalued currency, are creditors to other economically weak European countries with substantial debts going to refrain from increasing their demands - thus increasing pressures across Europe.

For what its worth, the attitude of Yanis Varoufakis, the finance minister of Greece, has been that Greece should not leave, instead seeking to reform the old system (J. Luis Martin, 2015). Varoufakis has talked at length about the need to work within the old system to arrest the dangerous social impact of the conservative austerity agenda and the crises that result, from which progressives do not benefit (Varoufakis, 2015). That means supporting a 'modest agenda for stabilising a system that I criticise', in order to 'minimise the unnecessary human toll from this crisis'.

Though Tsipras and Varoufakis have been unwilling to give ground on issues like pensions, tied to the welfare of a currently struggling people and key party election promises, they have shown a willingness to negotiate. Considering that while leaving the Eurozone is clearly not ideal for Greece, and reforms to the system would be preferable, an exit would at least mean more freedom over its own economic affairs - though it would purchase that freedom at a very high cost for to its citizens - their unwillingness to leave, has at least been a show of a constructive attitude.

For the Eurozone, however, there would be less of a sunny side. A Greek exit would undermine the Eurozone itself, severely weakening what has become one of the most recognisable cornerstones of European project by cast doubts upon other debt-beleaguered Eurozone nations. For now, the conservative austerians remain in charge and it is they who will continue to dictate the narrative of negotiations in Greece according to their own ideological terms.

Yet saving the Eurozone will need Greece's creditors to show some reciprocal goodwill. Through cooperation and reciprocity, there remains an alternative and progressive way out of the present crisis, where the common good can be placed at the heart of economic action.