Saturday, January 19, 2008

The N Word

Watch the right-wing tabloids frothing at the mouth over the recent rises in gas and electricity prices. Today's Express was even diverted from Diana and the fact that it's raining to make British Gas's 15% increase its front page lead.
Then recall how, when Thatcher was in her pomp, these same papers were cheerleaders for the privatisation of public utilities. Remember how that Elysium of a share-owning democracy would lead to competition = greater efficiency = lower prices?

Yes, wholesale energy prices have increased (although very recently we were told they were about to fall dramatically). But the elementary point that is usually ignored is that private companies exist to make profits. Their shareholders demand a return on their investment. Part of the consumer's price rise is the shareholder's dividend.

It should be a fundamental principle of a civilised society that those things that are essential for life itself - fuel, water, sewerage - should be divorced from the profit motive.
What about food and shelter, you may ask. Social ownership of a vast and diverse food industry is impractical. But the state recognises the special status of food by exempting it from VAT. (There is, of course, VAT on fuel bills. Tories again.) The necessity of social housing was also part of the post-war consensus, including affordable, rented, council housing, until Thatcher ordered the selling off of council houses.

Privatisation has been a double-whammy for the tax-paying consumer, not only paying higher prices but subsidising these private companies and protecting their profit margins through their taxes.
The Labour Government introduced tax-funded winter fuel allowances for the elderly to mitigate the effects of high energy prices and try to reduce the large numbers of elderly people dying from hypothermia.
Tax credits subsidise low wages paid by vastly wealthy private companies.
More taxpayers' money is being poured into the privatised, fragmented railway system today than under the single, state-owned British Rail.
As reported this week, the taxpayer is handing £100 million a year to private schools. Don't make them justify their charitable status. If the Government hasn't the guts to abolish them (which it hasn't), just take their charitable status away. Everyone knows that charitable status is a piss-take.
But that's small beer compared to the £54 Billion of taxpayers' money that is currently propping up Northern Rock, a company that got into trouble through greed and mismanagement.

And if Gordon Brown is so terrified of the 'N' word, use the term I used above: take the fuel and water companies (many of them foreign-owned) back into 'social ownership'.
Rather than the bogus 'share-owning democracy' where only a minority of shares are owned by ordinary people, governments would be accountable to all of us for their management of these utilities through our elected representatives.


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