Issue 273 of SOCIALIST REVIEW Published April 2003 Copyright © Socialist Review

Stop the war

Privatising privates

Labour now plans to privatise the military, as Solomon Hughes explains

While this war is fought for the corporations, the next one will be fought by the corporations. Labour's military privatisation programme means companies will supply and operate key warplanes, warships and army vehicles. The firms will even lure, train and employ soldiers under the Private Finance Initiative (PR). Privatising war is a Labour priority. Last November, on the first strike day of the firefighters' dispute, in the middle of preparations for war on Iraq, armed forces minister Adam Ingrain flew to Brussels to address the 'Defence Partnership's Second Annual PPP/PFI Global Defence Conference'. Delegates paid £3,504 to mingle with Ministry of Defence (MoD) officials at 'champagne brainstorming roundtables' and a 'Belgian beer tasting evening'. Ingram brought seven top MoD officials. Potential army privatisation bidders were told MoD officials would 'answer the key question: which services will be selected for PPP/PFI projects in UK military logistics'.

Sponsors Serco and BAE Systems, two firms bidding for the 'Future Strategic Tanker' scheme, paid for the beer and champagne. The tankers are for refuelling airplanes, which saw extensive action in the Afghanistan and Kosovo campaigns. They were central to RAF bombing of the 'no-fly' zones over Iraq and will be used in the current bombing campaign. These ageing tankers, often converted from civilian planes, carry out air to air refuelling. They are central to the US and UK's new imperial missions referred to in technocratic circles as 'projecting power'. By refuelling both British and American bombers in midair, they allow the allies to attack the Middle East from distant Diego Garcia when countries in the region refuse use of their airspace or airbases. Under the £9 billion 27-year deal, the planes will be supplied and operated by private companies. The scheme involves 'sponsored reserves'--soldiers who are hired and trained by the private companies, but who will fall under military command when shooting starts.

Socialist Review has obtained the PowerPoint slides from a presentation by Dr Timothy Stone of KPMG, who is the MoD's chief adviser on the Future Strategic Tanker deal. Stone explained that the warplanes will be run 'like Hertz and Avis'. The planes will be used for civilian charters, then rapidly converted to refuelling tankers when war calls. Dr Stone noted that there were possible problems. Firstly, the 'military need to go to war at short notice; civilians like long contracts'. Secondly, there were 'restrictions on usage' of the planes. Dr Stone told his audience this included 'not flying to Iraq on civilian operation'.

Peter Smart of Halliburton also addressed the Belgian conference, on 'Examining the Performance and Future Prognosis for PPP/PFI in UK Defence Projects'. Halliburton has a big role in British military privatisation. It won the 'heavy equipment transporter' PFI scheme. This project is also about 'Projecting Power'. The £300 million deal involves supplying tank transporters to bring heavy armour to the battlefield. The scheme also involves sponsored reserves--the privately employed drivers and their mates will be trained to bear arms, and become soldiers when the shooting starts. The transporters will not be ready for the current war. Within days of this conference a Halliburton tank transporter had a mishap shortly before it was displayed to journalists--the 'all terrain' vehicle tipped a £2 million Challenger tank onto its side while performing a 10 mph turn in a Salisbury car park before going through its paces for eager defence correspondents. If these bugs are ironed out, Halliburton's tank transporters might be ready by the end of this year.

Halliburton has other British military contracts. It already runs the Devonport nuclear dockyard. Its work refitting Trident is £400 million over budget and 29 months late. The scheme is being investigated for fraud among subcontractors. In October 2001 the Health and Safety Executive fined Halliburton's Devonport operation for exposing 24 workers to asbestos.

US vice-president Dick Cheney himself came to Britain to mix with ministers and civil servants backing military privatisation in April 2000. He chaired a conference organised by America's RAND Corporation at the ultra-establishment Ditchley Park Centre in Oxford. At that time Cheney was chief executive of Halliburton. Cheney's conference was attended by John Spellar, then an armed forces minister who remains in government (as a transport minister). Spellar came with the British top brass, including Peter Ryan, the director of the MoD 'Public-Private Partnership Unit'. Martin Kitterick, a partner at PricewaterhouseCoopers who advises the MoD on PFI deals, addressed the conference on the 'heavy equipment transporter' deal. Within nine months Cheney's firm won this contract. From the chair Cheney told Spellar and other conference attendees, 'My general impression is that our British colleagues are far ahead of us in the US in the extent to which they have adopted changes in culture, attitude and style of operation that are required for successful privatisation efforts.'

Conference participants agreed that 'concepts such as sponsored reserves in the UK and technical representatives in the US also blur the line between military and contractor'. However, they did not worry that battlefield privatisation was creating new mercenaries--instead conference participants were simply unable to decide where business should end and army begin. The conference report stated participants 'had difficulty drawing a clear dividing line between the activities that must be performed by military personnel and those that could be performed by civilian contractor personnel.'

Difficulties with dividing lines seem to bedevil military PFIs. Troubled PR specialist Amey sent a representative to last November's PFI conference. Their man, Sir John Stokoe, was until 1999 a major general in the army. Usefully, Amey also has former cabinet minister Baroness jay on its payroll as a consultant.

The problem of dividing lines surfaced on another PFI. Last year the MoD awarded the 'strategic sealift' contract to the AWSR consortium to supply six ferries to ship 'joint reaction force' troops to the battlefield. The consortium includes James Fisher Shipping, which is a shipping partner of choice for many of the world's oil majors.


Firms will hire, train and employ soldiers under a PFI scheme


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