Issue 254 of SOCIALIST REVIEW Published July 2001 Copyright Socialist Review





Going, going, gone?

Flowers placed at the site of the Paddington rail crash
Flowers placed at the site of the Paddington rail crash

Railtrack, the privatised rail company, is on the verge of going bankrupt and may have to be bailed out again by the Labour government. On the eve of the general election its shares plummeted by 17 percent, below the flotation price of May 1996, when the railway system was privatised by the Tory government. Railtrack was also booted out of the FTSE 100 leading businesses. Its share price is now less than a quarter of what it was at its 1998 peak.

Why this collapse? The reason was that a Dutch investment bank, ABN Amro, published a report which calculated that the real value of Railtrack was no more than 58 pence per share. At that price Railtrack would be unable to raise money to make new investments.

ABN Amro's evaluation has been challenged as being far too low. According to Deutsche Bank, Railtrack is worth 17 times as much. Although the experts can argue, the real problem is that no one is too sure just what Railtrack's liabilities or assets amount to. It could, in the words of Guardian correspondent Keith Harper, be either a basket case or an investment opportunity.

Railtrack's investment plans for the next ten years have been scaled back by 30 percent--from 56 billion to 34 billion. This disguises some odd assumptions. For example, expenditure on the cross-London Thameslink 2000 track is no longer put at the 1 billion estimated cost, but at 150 million--which is the fine Railtrack will incur for not doing the work!

In fact, penalties loom large in Railtrack's calculations. There is the 560 million penalty Railtrack incurred following the Hatfield disaster. And if it pulls out of modernising the West Coast route, the penalty will be 250 million. One of the more absurd aspects of the penalty system is that Railtrack and the railway companies employ 300 people to argue among themselves as to who is responsible for late trains and who is to pay.

Railtrack lost 534 million last year, its first ever loss (two years ago it was making profits of 1.3 billion)--although its shareholders received a dividend of 138 million. This means Railtrack is going cap in hand to the government to ask for more handouts.

On top of the immediate cash injection of 2 billion (to pay for post-Hatfield repairs) it may have to ask for a further 1.6 billion if it cannot make cost-cutting efficiencies, 700 million for failing to meet its performance targets and 1.7 billion for West Coast modernisation if it cannot raise the money any other way. So it may be demanding something like 6 billion in the next 12 months from the taxpayer. Anger among rail workers is running high and strike action against privatisation is a distinct possibility in the months ahead.

All this puts enormous pressure on Labour's commitment to privatisation. It is now cheaper for the government to take control of Railtrack than to cough up more subsidies. For just 750 million (a sum less than half the value of Railtrack at the time of privatisation) the government could take a controlling share. For 3 billion (half the 6 billion it wants from the taxpayer) Railtrack could be taken out of the hands of the fat cats entirely.

The once proud claim that the market would make running the railways more efficient and less costly has been exposed as complete nonsense. Even Virgin points out that it costs three times as much, once the system was broken up into 100 parts, to refurbish a mile of track--15 million as opposed to 5 million--as it did under British Rail. One of Railtrack's top five investors, Legal and General, wants to see the government take a stake of up to 25 percent--a kind of semi-nationalisation by the back door.

New Labour may tinker with the structure of the railway system (perhaps by eliminating the separation between ownership of track and the operating companies). But that cannot overcome the problem of having a vital public service run on market lines. Yet the continuing crisis of Railtrack will intensify pressure on a government which is intent on pursuing an agenda of further privatisations of public services.
Gareth Jenkins


  • Railtrack was accused of 'lamentable failure' and 'dangerous complacency' by Lord Cullen, with the release of his report examining the causes of the Paddington rail crash in which 31 people died.

    The head on crash was caused when one train went through a red signal. The signal was partly obscured by a bridge and overhead lines, and had been passed 'at danger' eight times before. Yet Railtrack did nothing.

    The anger of the survivors and the victims' relatives was summed up by Tony Knox at the press conference, who held up a wanted poster with the name of the former Railtrack chief executive. 'As far as I'm concerned Gerald Corbett is wanted for serial killings on British railways,' he said

    The day the report was released Railtrack's shares went up 4 percent, so confident is the company of further government subsidies.


  • Pressure from students has forced American University to drop Sodexho Marriot as a food services contractor. Action was taken because of the company's links with private prisons in the US. This is the same company that administers the voucher scheme for refugees in Britain.

  • Union recognition is sharply on the increase following legislation that was introduced last year. The latest TUC survey on recognition shows that 94 percent of all deals are for full recognition, which covers collective bargaining over pay and grievances.
    One of the most successful unions has been the NUJ, which has seen its membership rise by over 10 percent in the last year. Branson
  • Struggling to increase your overdraft facility? Don't worry, you're in good company. Virgin boss Richard Branson has been forced to mortgage his airline company to secure an overdraft of 50 million from Lloyds Bank. Times are tough for Branson--US magazine Forbes has just lowered his estimated worth from $3.3 billion to $1.9 billion.

  • The media and politicians' outcry over the Bulger case is one of the most shameful episodes in recent legal history. The facts are these: two ten year old children murdered two year old James Bulger, after taking him from his mother in a Liverpool shopping precinct. Robert Thompson and Jon Venables were found guilty in a full adult court. They have since lived in secure units. They are now both 18 and are eligible for parole.

    A hideous campaign has been mounted against the very prospect of their release. They are described as 'evil' and 'wicked' by the press. James Bulger's mother leads appeals for them to be kept locked up, and there are stories of visits to football matches and prospects of them living in luxury on taxpayers' money when they are released. What motivates these people is the desire for vengeance and retribution an understandable desire on the part of James's family, but one which is not understandable or justifiable on the part of newspaper owners and editors, and the politicians who stoke up these feelings.

    Any children who behaved as they did have to be terribly damaged. There are many signs that Thompson and Venables were. It took them some years to face up to the enormity of what they had done. By general agreement of those involved in looking after them, they have developed into people who could become useful members of society. This has taken an immense amount of work by the professionals who are now derided by the media.

    It is a reflection on our society that such children are only given serious help when they do something so terrible that they have to be locked up. The outcry should be that more children are not helped in this way before they commit crimes or do serious social damage. We should also ask where the calls for retribution will end. These boys are in danger of being killed or injured by vigilantes, and of being hounded from their new homes. Whatever they do can never atone for the loss of a child much more useful is to discover why children act like this in the first place. But that would never do in our brave New Labour world where the poor are blamed for the situation, rather than society.
    Lindsey German


    When Irish no's are smiling

    Vote NO to the Nice treaty

    The no vote in the Irish referendum on the Nice treaty has sent shockwaves through the political establishment. Ireland was the only country in Europe to get a vote on the treaty. But the treaty cannot come into force unless every country ratifies it.

    The no vote is all the more remarkable given that the entire political establishment supported the treaty and campaigned for a yes vote. This included the Fianna Fail led government, all the main opposition political parties, the official trade union leadership and the Catholic church.

    The no campaign was carried by a coalition of small anti-establishment forces. These included the Green Party, Sinn Fein, the SWP, smaller left groups and NGOs. The Christian right also ran a separate no campaign.

    The establishment is now desperately trying to figure out what went wrong and is pushing for a second referendum. It is trying to claim that the no vote came as a result of ignorance of the issues and was tinged with xenophobia. This is nonsense. The government deliberately tried to obscure the issues and rush the vote through. This did result in a low turnout and cynicism about the referendum. In so far as they dealt with the issues at all, the yes side deliberately misled people, claiming that Nice was about enlargement of the union. Despite its small forces, the no side demolished this argument and explained the real issues behind the treaty.

    Only a small part of the treaty dealt with enlargement. Even here it set no dates for the entry of applicant countries to the EU. The bulk of the treaty dealt with establishing the EU as a military and political superpower to rival the US. Nice established the legal basis and command structure for the new European army--the European Rapid Reaction Force. This force is to be closely linked to Nato. The treaty also called for cooperation between states in establishing a European arms industry. The slogan 'No to Nice--no to Nato' had a major resonance with large numbers of people.

    Nice also enshrined a commitment to the neoliberal agenda of privatisation at the heart of the EU. The socialists on the no side stressed this strongly in their campaign and hit a real chord with working class people.

    During the campaign the swing to the no side increased daily as the real issues emerged. The no vote was reinforced by a widespread distrust of the political establishment following a whole series of corruption scandals.

    Even the Christian right, which campaigned for a no vote, stressed the issues of militarism and democracy rather than their real agenda of opposition to abortion and divorce. The leftward thrust of the no vote was confirmed by the fact that the biggest no votes were recorded in the urban working class areas.

    Ireland's rejection of the Nice treaty has done a real service to the ordinary people of Europe. It has forced a real debate on what kind of Europe we want. Our rulers want a European superpower dominated by the interests of multinationals.

    We must fight for a social Europe that puts human needs before profit. The no vote in Ireland has been an important victory in that battle. The left in Ireland and across Europe now need to build on that victory.
    Richard Boyd Barrett


    Talk peace but prepare for war

    Refugees on the move again
    Refugees on the move again

    Macedonia is at war in everything but name. The ethnic Albanian guerillas of the National Liberation Army (NLA) have steadily grown in support since fighting broke out in February, extending the reach of their military operations beyond their base in the mountains around the Albanian-populated city of Tetovo. The NLA have now taken villages near the town of Kumanovo, cutting off its water supply and, most dramatically of all, attacked the outskirts of the Macedonian capital, Skopje, where many Albanians live. The bold range of these attacks would not be possible were it not for the mass support the NLA has attracted. As one Tetovo student put it, 'I have yet to meet a single Albanian in Macedonia who does not feel some sympathy for the rebels.'

    The Macedonian prime minister, Ljubco Georgievski, has repeatedly condemned the NLA as simply an import of troublemakers from Kosovo, modelled on the Kosovo Liberation Army (KLA). However, the non-Slav Muslim Albanians rightly feel discriminated against in a country where they make up 25 to 30 percent of the population but where the constitution describes Macedonia as the state of the Macedonians 'and others', where the official language is Slav Macedonian only, the official alphabet Slav Cyrillic, and the official religion Slav Christian Orthodox. Albanians are also massively under-represented in state institutions, where they make up less than 3 percent of personnel. For many, especially the young, the NLA has brought these issues to a head in a way that the Albanian parliamentary parties, the Democratic Party of Albanians (DPA), a partner in the ruling government coalition since 1998, and the Party of Democratic Prosperity (PDP), which recently joined the coalition, have failed to do. Although the parties remain in the national coalition recently cobbled together by Georgievski, it is a coalition on paper only.

    Nevertheless, Georgievski is also right about the links with Kosovo. In one outburst he attacked Washington and Berlin: 'You cannot convince us that the chieftains of these gangs are unknown to your governments, nor can you persuade us that they cannot be stopped.' It is very clear that the form Albanian anger and discontent has taken--guerilla attacks designed to polarise and radicalise the two nations into mutually exclusive camps--is inspired by the successful example of the KLA and the decisive backing it received from the west during the bombing of Yugoslavia in 1999. The head of the NLA, Ali Ahmeti, for example, is a Macedonian Albanian but also a KLA veteran. Every attack by the NLA has worsened inter-ethnic relations. After the funeral of three Macedonian soldiers in Bitola, Macedonians went on a rampage, attacking local Albanians and looting their shops. The Macedonian Academy of Sciences, the country's intellectuals, recently produced a map which advocated partitioning the republic. Although the NLA has given expression to genuine grievances, its tactics are ultimately designed to convince Albanians and Macedonians that they cannot live together and are therefore only adding to mayhem in the Balkans.

    The Macedonian government has been no better. It has alternated frantically between launching counter-offensives against the NLA, which have led to 20,000 Albanian refugees fleeing to Kosovo, and offering vague promises of constitutional reform. Georgievski has repeatedly threatened to declare a state of war, though he has so far been persuaded to back off by the European Union and Nato. Only this month, after the NLA killed five Macedonian soldiers, he again threatened to declare war and then withdrew an offer he had made the previous week to amend the constitution to increase Albanian rights. He explained that he had made the offer 'cynically' because of the pressure he was under from the west and the 'blackmail' he faced from his Albanian coalition partners. Increasingly hawkish, Georgievski was recently described by one official as acting like a 'crazy general'. However, his mood reflects Macedonian popular opinion.

    The US, Nato and the European Union now find themselves in an impossible situation of their own making. The Kosovo intervention in 1999 has strengthened the cause of Albanian nationalism immeasurably and created a movement that threatens to escape the control of its sponsors. Little wonder, then, that the New Statesman leader commented in March, 'This is not the accidental by-product of Nato's intervention two years ago; it is the inevitable result, and it was predicted at the time.' Although the US is opposed to the Albanian insurgency in Macedonia, it cannot afford to alienate the Kosovan Albanians, its most loyal constituency in the Balkans. With 42,000 K-For troops serving in Kosovo, where the US has spent $36 million on Camp Bondsteel, the largest military base it has constructed abroad since Vietnam, conflict with the Albanians is unthinkable. Consequently, the US has been behind moves to bring about a settlement.

    Robert Frowick, a US diplomat and a special envoy to the Organisation for Security and Cooperation in Europe (OSCE), secretly arranged a meeting between the two Albanian political parties and the NLA at which a deal was struck whereby the NLA would withdraw in return for a veto over government policy towards Albanians. When it was made public, the deal was widely condemned by everyone, including Nato, on the basis that politicians do not talk to what Nato secretary general George Robertson described as 'murderous thugs'. But it is very clear that the US is anxious to see such an arrangement succeed, though they cannot say so publicly. The real question, however, is whether a deal of any kind is now possible given the bitter polarisation of Macedonian society.

    The nightmare scenario of the conflict spreading to involve Macedonia's neighbours, who have historical claims on its territory, also cannot be excluded. In March Bulgarian president Petar Stoyanov offered to provide troops to the government but then had to backtrack by proposing that his troops operate under UN auspices as a border protection force. Albania, Greece and even Turkey look on anxiously. Is there anyone out there who still believes the US and Nato can bring peace and stability to the Balkans?
    Dragan Plavsic

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