Issue 248 of SOCIALIST REVIEW Published January 2001 Copyright © Socialist Review

The Walrus

Knights of the round table

New Labour's commitment to privatisation goes deeper than we think

True to form, the one truly sour note that marred the tenth anniversary of Thatcher's demise was provided by Tony Blair, with his patently fabricated claims to have finally ditched her.

Exactly how this apparent conversion squares up with plans to press on regardless with privatisation of the London Underground and air traffic control hardly seems to have registered with the Blairite apologists on the national press who retail this rubbish. After Hatfield and the subsequent pandemonium most ordinary punters regard the very idea of going ahead with these plans as bordering on the deranged.

So much so that you begin to wonder if there is another agenda going on here altogether. After all, it's so rare to find New Labour taking a principled stand on anything, so how come it can be so pig headed in its insistence that these projects must go ahead? The most likely answer is that, though it's no secret, New Labour's commitment to privatisation is much more deeply embedded than most of us had realised. Since the last election the government has steadily locked itself into a legislative programme involving Private Finance Initiatives so terrifying they would make even Thatcher blush. Added to this, an impressive machinery has been put in place to carry through the entire privatisation strategy--much of which appears to be even more under the control of big business, merchant bankers and Tory grandees than it was when Thatcher was in charge.

Despite frantic efforts by rail industry bosses to find a scapegoat for the results of their own greed and incompetence, there can be few better examples of just how far that runaway gravy train has hurtled off down the track. To begin with, the man currently in charge of the government's Strategic Rail Authority is Sir Alastair Morton. As George Monbiot points out in his excellent book Captive State, the terms of reference set out for Morton include 'influencing the use of the significant amounts of public funds which we provide to the industry', and ensuring that rail transport 'constitutes good value for money'. In the job he had before, as head of the Channel Tunnel consortium Eurotunnel, debts eventually rose to 8 billion.

Even more reassuring is that Sir Alastair sits on the government's Private Finance Panel and describes New Labour's Private Finance Initiative as 'the Heineken of privatisation--taking the private sector to the parts of the government machine not reached by previous privatisations'. It's view no doubt shared by Adrian Montague, former head of the PFI Taskforce, who also worked on both the Channel Tunnel and privatisation of British Rail. In December 1999 Montague was appointed as Deputy Chairman Designate of Partnerships UK (or PUK), successor to the PFI Taskforce.

In April 2000 transport minister Gus MacDonald brought Montague onto the board of the Strategic Rail Authority alongside Alastair Morton. Montague, who owns shares in Eurotunnel, has recently advised ministers on financing for the Channel Tunnel Rail Link and privatisation of London Underground. In the press release announcing his appointment, though, we were told that he had mainly been brought on to 'ensure the interests of passengers, including people with disabilities, are strongly represented'.

Over at Railtrack, meanwhile, we find that the new chairman, Sir Philip Beck, is a dyed in the wool, true blue Tory and brother in law of David Heathcoat-Amory, the Tory trade and industry spokesman. Before he went to Railtrack, Sir Philip was head of the John Mowlem construction group, which was heavily involved in the Channel Tunnel project and on the Docklands Light Railway.

Before Mowlem, Beck played a key role in the formation of Invensys, a major conglomerate with a number of rail subsidiaries, including Westinghouse Signals. Among the recent signalling contracts awarded by Railtrack, Westinghouse is involved on the Heathrow Express line, at Euston (along with Balfour Beatty ) and on the Channel Tunnel Rail Link. Mowlem has just won the job to build a new rail welding depot at Eastleigh, worth 12 million, following a 2.8 million contract for signalling and track work at Reading Station, also awarded by Railtrack.

The extent to which firms like Mowlem and Balfour Beatty are already involved in the rail industry was neatly summed up in a supplement on Railtrack in the December 1999 issue of Building Magazine, gleefully announcing 'the arrival of 33 billion of construction contracts'. Mowlem and Balfour Beatty are both members of the three major consortiums now bidding for contracts on the London Underground. Other names include Bechtel, WS Atkins, Amey, Alstom and Carillion (formerly Tarmac).

On 30 November the London Evening Standard reported that one of the men who will play a key role in awarding the private contracts to run the underground 'has strong links with two of the bidders'. A few weeks before taking up a job as non-executive director of London Transport, Sir Malcolm Bates had been a non-executive director of BICC (the holding company for Balfour Beatty). Before that he was deputy managing director at GEC, now known as Alstom. A versatile fellow, Sir Malcolm had also headed up two comprehensive reviews of PFI for the government. In 1998 Alstom delivered 100 new trains for the Northern Line, at 3 million a go, 'which subsequently proved to be unreliable and subject to more breakdowns than expected'.

The Walrus

Two more knights are worth a mention. Sir Patrick Brown was one of the top civil servants who helped steer through the privatisation of British Rail, and is now deputy chairman of the construction group Kvaerner (a leading member of the Government Construction Client Panel, alongside Balfour Beatty Major Projects, Laing and W S Atkins). The Treasury 'brains' behind electricity and coal privatisation, as well as the railways, Sir Stephen Robson, resigned just before Xmas, telling the Financial Times, 'I want to do something that will be a bit of fun and earn me a bit of money.'


New Labour's PFI is so terrifying they would even make Thatcher blush


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