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Thursday, October 09, 2008

Too Much Success

This column of mine appeared in Friday's Morning Star.

Anyone else out there remember British Rail's Sealink ferries? They had one problem: they were far too popular and were far too successful. And for a state-owned company in an era of rampant neoliberalism that would never do.

Sir Peter Parker, former head of British Rail, used to complain that being in charge of the state-run railway during the Thatcher years, meant being on a hiding to nothing. If British Rail made a loss, it was called an inefficient nationalised company. If it was making a profit, then it was surely it was time for it to be flogged off.

I was reminded of Sir Peter’s observations while travelling on a cross-channel ferry over the summer. In the 1970s and 80s the most popular cross-channel ferry operator in Britain was Sealink, a subsidiary of British Rail. Being part of British Rail meant that ferry departure times could be co-ordinated with train arrival times- and ‘through tickets’ could be bought from any British station. The problem with Sealink, from the Thatcherite’s perspective, was that it was simply too successful. Sealink earned a profit before interest and tax of £12.8 million for the year ending 31st December 1983( the year prior to its privatisation) compared to £2.9 million for the preceding year. Its return on assets was almost 10% and on turnover 5%- both highly creditable figures. Ludicrously, given how well Sealink was doing, the government claimed that they were privatising Sealink in order for the company to “benefit from the stimulus of private sector status and access to private capital“.

For Sealink, the "stimulus of private sector status" proved to be none too stimulating. The company was bought by Sea Containers, a Bermuda based, American owned company- which was then subject to a hostile takeover by the rival Swedish-owned Stena Line- and the Sealink name passed out of existence.

The sell-off of Sealink, together with the privatisation of the profitable British Rail Hotels in 1982- and British Rail Engineering- all paved the way for the eventual selling-off of British Rail itself in 1996.

Yet you won’t hear supporters of that privatisation mention the fact that Britain's "efficient" privatised railway system receives over four times more in taxpayers‘ subsidy than the much-maligned British Rail did.

“Governments and civil servants can’t run businesses- that’s been proved a depressing times all over the world“ claims privatisation zealot Richard Branson in his new book “Business Stripped Bare”. I wonder if this is the same Richard Branson whose privately run (but of course, publicly subsidised),Virgin Trains are such a model of reliability and efficiency?

I am a fairly optimistic person by nature, but if you had told me earlier this year when I co-founded the Campaign for Public Ownership, that George Bush's neo-conservative administration in the U.S. would be following the CPO's pro-nationalisation agenda, I really wouldn't have believed it. As Simon English, writing in The Evening Standard puts it, "Large chunks of Wall Street, supposedly the home of capitalism, are now under government control".

Of course, the moves by Bush- and similar ones by the British government to nationalise Northern Rock are more about keeping afloat the banking system rather than a sudden conversion to the cause of public ownership, but they still provide us with a great opportunity to promote the case for further nationalisation. If the government can nationalise Northern Rock, why can’t they renationalise the railways- and our profiteering energy companies?

2008 is the year when public ownership returned to the agenda.

It’s our job to make sure it stays there.

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