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Towards a parting of the ways

Published : Sep 29, 2001 00:00 IST

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The Tony Blair government's aggressive pursuit of privatisation may result in the end of a century-old relationship between the Labour Party and the trade unions.

THE apparent hold Margaret Thatcher's catchphrase, "There is no alternative" (to her economic policies), still retains on mainstream political consensus in the United Kingdom is nowhere more evident than in the Tony Blair government's steadfast pursuit of further privatisation. Now, certainly later than some pundits had predicted, the Blair government's privatising zeal is bringing the Labour Party into a potentially sundering dispute with the very founders of the Labour, the trades unions.

Premier Blair's address to this year's Trades Union Congress (TUC) Conference in Brighton was cancelled in the light of the horrendous terrorist attacks in the United States, and the TUC itself truncated its proceedings. However, the dispute on the future of Britain's public services will soon re-emerge. The cause for alarm in the union movement is the extension of privatisation into the realm of labour-intensive areas of services, such as education and health.

In previous instances of privatisation of public utilities, water, gas and electricity particularly, there was a reasonably sustainable argument that new technologies made redundancies inevitable. In addition, criticism of the performance of those nationalised utilities opened the door to sympathy for trying privatisation as a potential way of improving those services.

Where that particular argument has come spectacularly unstuck has been the railways, privatised under the previous Tory government of John Major. A series of disastrous rail crashes, added to the continuing inadequacies of the railways in terms of delays and general discomfort, have sorely dented the argument that "private equals efficient". Indeed, recent polls indicate that the majority of British citizens favour the re-nationalisation of the railways as the only way to provide better safety and comfort.

The transport debate has been heightened by the added spice of personality clashes when it comes to the privatisation of the London Underground. No one who has travelled on the world's oldest underground railway system can doubt the need for a fundamental overhaul of the creaking structure. However, the question is who finances it?

For the Labour government, despite the turmoil caused by the rail privatisation, the answer is the private sector. This decision is driven also by the self-imposed strictures of controlling public expenditure by the Chancellor of Exchequer, Gordon Brown. The subtext of this policy is the need to prepare Britain for entry into Europe's single currency, a precondition for which is cutting budget deficits and strictly controlling the public purse.

Leading the charge against the government's plan is the charismatic Mayor of London, Ken Livingstone, who, having been deprived of the official Labour nomination as mayoral candidate through the most outrageous manipulation of votes in the selection procedure, stood as an independent and won a landslide victory in 1999. Contrary to the hopes of many disillusioned leftists, Mayor Livingstone has subsequently refused to hoist any banner for a new party and has been reiterating his desire to return to the official Labour fold. The battle therefore for London's Underground takes on the shape of a battle for the Labour Party itself.

Livingstone's own actual plans for the Underground show that Livingstone himself has moved ideologically - he prefers to raise the money through the issue of a bond, similar to that which funded the revival of the New York underground system. Indeed, Livingstone invited the architect of that plan, Bob Kiley, to head his own team. A report from a respected accountants firm, Deloitte and Touche, made public only because of court action, casts doubts on the calculations used by the government side to favour its version of privatisation.

However, this rolling debate in London is likely to form but a minor prelude to further privatisation, in education and health. The largest single union in the U.K. is now the public sector employees' union UNISON, with over a million members. UNISON, along and with the other large general unions, the TGWU (transport and general workers) and the GMB (general and municipal) (the former traditionally on the Left and the latter on the Labour Right), are forming a huge block of resistance to further privatisation.

The key issue is again finance, with the government favouring the so-called PFI (private finance initiative). This in effect allows the private sector to build, for example, a hospital and then lease it to the health authority. This obviates the initial need for state finance but in the long run saddles the health authorities with increasing costs in paying for its facilities. Again the main spur is the commitment by the Blair government to be seen as cutting public expenditure. But equally important is Blair's personal conviction that the private sector is more efficient than the public sector.

The GMB has published the results of an opinion poll it commissioned, which show that one in four Labour voters will not support further privatisation. This is quite a desperate attempt both to warn off the Blair government and to head off the rising tide of grassroots demand in the unions to stop financial support to the Labour Party, which the unions themselves founded in 1900.

UNISON claims that "there is ample evidence to show that private sector involvement (in public services) inevitably leads to a worsening of pay and conditions of staff". The abiding scepticism in sections of the trade unions that the labour movement dog would inevitably and always be wagged by the Labour Party parliamentary tail has re-emerged in the mainstream as union leaders are confronted with disquiet among union members.

There are scarcely disguised signs from Blairites that they would welcome a split between the unions and Labour and are egged on by much of the liberal and right-wing press. When Blair proves unmoved by union protests against privatisation, the end of a unique relationship in Left politics may finally be sealed.

(This story was published in the print edition of Frontline magazine dated Sep 29, 2001.)

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