This comes from the Guardian this morning:
The feverish atmosphere [in the Conservative Party] is highlighted in today's Spectator whose political editor, James Forsyth, reports that No 10 is preparing an alternative spending review for this summer as a group of ministers led by May resist deeper cuts to their departmental budgets. Paul Kirby, the outgoing head of the No 10 policy unit, is examining moving large parts of the government into the private sector to raise revenue.
Let's just think about that for a moment, shall we?
You only raise revenue by moving something into the private sector if they're willing to either pay for the asset worth it represents or can take a long term profit margin out of it.
Most of the government is not saleable: we've flogged off most buildings now through PFI (even down to and including the Treasury itself - now owned by a tax haven company). And try as I might I can't see asset value in the remaining infrastructure of much of government - which is precisely why the government undertakes the activity in the first place.
That means that the only way to achieve this goal is to transfer services to the private sector and to then provide them with an ongoing income stream out of tax revenue from which they can extract a margin currently not suffered which they will pay an upfront sum to acquire. Now this is, of course, the age-old behaviour of bankrupt governments: it's akin to the sale of monopolies in the Tudor era, for example. Indeed; it is exactly the same thing. And three things follow. First there is monopoly abuse as the private sector operator seeks to maximise yield without concern, unconstrained by the democratic accountability imposed on government. Second, there's a loss of service: that's how the margin is extracted, of course. Third, there's a loss of control as government passes into the long term control of 'favourites'
This is profoundly corrupt. I describe the process in more detail in The Courageous State where I suggest what the government is doing is the action of a cowardly government - running away from responsibility whilst transferring assets to the control of its friends. It seems like I was absolutely right.
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I’m not surprised at all by this news. It’s the inevitable conclusion of a strategy and process that was undoubtedly conceived while the Tories were in opposition and in concert with many of those who stand to benefit.
As I and others who read this blog have commented before, it’s all part of the UK equivalent of the ‘shock doctrine’: in this case the use of the banking crisis and subsequent deficit as cover to dismantle the state – while arguing that it’s about paying off our debt and rebalancing our economy. That economic goal has always been a secondary concern – the primary objective was political and social – to finish the work that Thatcher began in the 1980s. This is a crucial distinction far too many economic commentators miss, thus providing further cover for the primary objective.
Now the Tories are aware they’ll only be in power for one term completing the demolition of the state, the fire sale of public assests and services, and the engineering of the corporate control of as many regulatory and governmental institutions as is possible will gain pace drastically. As will the tempo and harshness of the attack on the poor and less fortunate in our society. This is absolutely inevitable because one of the deep seated beliefs of modern day Tories is that Thatcher wasted her first term in office (as did Blair as they see it) and thus they are not about to make the same mistake. Expect the Lib Dems – as weak and lacking in strategic vision as they have shown themselves to be so far – to simply be swept aside.
Make absolutely no mistake as to what the desired result of this Tory ‘revolution’ is: a managed, corporately controlled, and deeply unequal ‘democracy’ of the type that would make Putin envious.
Ivan – Explaining the sale of assets as necessary to relieve the debt burden is entirely consistent with Duncan Smith’s and others’ use of hearsay to demonise large sections of our population. Tell a lie often enough and people come to believe it.
And Labour says and does nothing.
I repeat what I said on another issue a few days ago: the time has come for a total realignment of politics, away from Blue and Red to pro and anti-neoliberalism.