Dexter Whitfield exposes the perils of privatisation underlined by the Covid-19 pandemic
Equitable Recovery Strategies, my recent report for the European Services Strategy Unit, addresses five political and economic objectives to achieve sustainable climate change and post-Covid-19 living and working conditions.
Firstly, new economic strategies combining Green and Integrated Public Healthcare System Deals. Decarbonisation of energy must run parallel with the decommodification of public services and the de-commercialisation of nature and biodiversity. They must be aligned with democratisation and participation and political, economic, social and environmental equality and justice1.
Secondly, to provide evidence of how the renewable energy sector is increasingly owned and operated by private equity funds, fossil fuel energy and oil companies and smaller renewable energy companies. Further rapid expansion of the sector and achievement of 100% decarbonisation could create a private sector monolith, largely reflecting the fossil fuel industry’s corporate ownership. Thus public ownership of renewable energy generation and distribution is critical.
Thirdly, to stress the importance of achieving a fundamental change in the security, terms and conditions, training and quality of employment and in local participation in supply chains.
Fourthly, to emphasise how equality, social and environmental justice, and the elimination of discrimination, must be at the core of all policies. This must transcend all sections of the economy and be a core element of radical public management.
Finally, to identify some key organising and action strategies that trade unions, community and civil society organisations must develop to achieve effective and sustainable Green and Integrated Public Healthcare System deals.
Political economy framework
The political economy of privatisation framework developed in Whitfield (2020) is built on the dual concepts of accumulation by dispossession2 and the primary and secondary circuits of capital3 within which the financialisation, marketisation and individualisation processes create the opportunities, framework and political legitimacy for privatisation. Equally important to understand is the presence and viability of national and global companies and various types of investment funds that participate in privatisation. They demand public subsidies, guarantees, grants, tax concessions and favourable regulatory frameworks as a condition of their participation in the marketisation and privatisation process.
Neoliberal ideology has had a major influence in extending privatisation beyond the sale of state-owned corporations and outsourcing of support services to encompass core services, PPPs and ‘choice’ mechanisms for patients and pupils. It created the conditions for the deepening of financialisation, marketisation and individualisation. Instead of the 40-year era of neoliberal ideology becoming less dominant, the post-Covid-19 pandemic recession could have the reverse impact by further embedding it in economies, with devastating consequences.
Hence the importance of developing new political economy strategies combined with the Green and Integrated Public Healthcare System Deals. But we must insist there must be no austerity measures, no tax increases for employees on or below the average industrial wage, no privatisation and no reinvention of public private partnerships.
Globally, renewable energy projects are primarily owned and operated by private companies and private equity funds. Public finance is mainly used to attract private investment in renewable energy projects in both industrialised and developing economies. It is little more than corporate welfare. Direct public investment varied between 12% and 16% of the total between 2013 and 2015, averaging US$40bn, falling to 8% (US$21bn) in 2016. The focus is specifically on investment in renewable energy and not climate finance, which includes expenditure on transport, energy efficiency and adaption.
Renewable energy is green, but is rarely publicly owned and operated. A global secondary market operates with merger and acquisition deals that include renewable energy manufacturers, project developers, project owners and renewable energy funds which seek to increase market share. The renewable energy sector could ultimately mirror the private ownership and control of the fossil fuel sector but it will not be under democratic control and its equality, employment and social policies are likely to be ‘business as usual’.
Public finance is mainly used to attract private investment in renewable energy projects… It is little more than corporate welfare.
Government and public authorities should develop a Conversion Strategy. It should consist of a national organisation or agency to develop alternative use proposals. It would identify international, national and regional demand for green products and services; provide technical support or grants to trade union and community organisations; develop national training and reskilling programmes for workers; and economic development programmes for areas affected by fossil fuel closures.
A 16-part Code of Practice for Quality Employment is for a ‘just transition’ and must apply to all jobs in the economy. In addition to terms and conditions, pensions, security of employment, health and safety, flexible working, training and equal pay and conditions, the Code must include redeployment, relocation assistance, changes in working practices and the application of new technology, and participation in the planning and delivery of functions and services. A commitment to in-house provision and delivery and full implementation of trade union rights and representation are also essential.
The case for an Integrated Public Healthcare System Deal
The Covid-19 pandemic has highlighted the urgent need to integrate public health, primary care, medical care and social care to create an Integrated Public Healthcare System. This system must integrate not only the core services but also the key objectives of research, disease prevention and identifying causes. Inequalities and discrimination should be eliminated alongside strategic planning, innovation, monitoring and review of the economic output and impact. Quality of jobs, skills and training, the supply chain of medical equipment, drugs, medicines and protective wear and the design and construction of facilities must also be an integral part of the public healthcare system.
Protecting and restoring nature and biodiversity have a key role in preventing the emergence and spread of future diseases and safeguarding food security. Green Deals must revert the commercialisation of nature and biodiversity, which should be treated as public goods with public protection and strong regulatory frameworks.
Recovery strategies
Local, regional and national manufacturing production strategies must include large scale battery storage, a national high quality sustainable and low cost broadband, electrified public transport and electric car charging networks. The manufacture of electric cars, vans, trucks and buses and rail (light and mainline) and electrification of remaining rail lines would have major local and national economic benefits. A National Conversion Agency should have the power to acquire, convert and adapt factories and to demolish and reclaim land and property for new economic and social use such as the manufacture of electric vehicles, heat pumps, solar panels and components for renewable energy systems.
Retrofitting public and private housing is very important because heating and hot water for UK homes accounted for 25% of total energy use and 15.3% of greenhouse gas emissions in 2018. It is vital to draw on the lessons of earlier failed ‘green’ schemes and to recognise the complexity of retrofitting 27m public and private homes, as well as the estimated £911bn cost. Equally important, the infrastructure programme must include a new public housing programme to meet housing needs and rising homelessness, and be built to quality standards with access to public transport, schools, children’s centres and public open spaces. The programme will require significant resources for flood prevention, sea wall and river basin protection works.
Public ownership and provision is essential for rail and bus transport (free in towns and cities), health, education, water services, utilities and criminal justice to include a local Public Construction Organisation to undertake housing and public facility retrofitting and repair and improvement work. Public service principles and values should replace the narrow neoliberal ideological obsession with profit, competition, markets, outcomes and entrepreneurialism.
Public provision and delivery of a universal health care system must eliminate all forms of privatisation. A programme of digitalisation and automation must be focused on meeting social and economic needs and usefulness to maximise benefits and to avoid technology-driven applications, such as those based on ‘we will because we can’ and aimed to ‘disrupt’ existing provision simply to extract profit.
The decarbonisation target will hopefully be achieved, but unless the decommodification of public services and adoption of radical public management is undertaken at the same time, a new surge of privatisation would be preceded by further financialisation and marketisation, with profound consequences for services and jobs.
Resource needs
The economic consequences of the Covid-19 pandemic are still unfolding with an already steep fall in GDP, a soaring rate of unemployment, rising levels of public and private debt and increasing budget deficits. However, the ending of fossil fuel subsidies, limiting tax relief and pension tax reliefs to the basic rate, increasing corporation tax by 2% per annum, a wealth tax of 1% on assets over £500,000, a reduction in offshoring and other similar measures could increase public resources by £82bn per annum – a start to more fundamental changes. Interest rates are historically low, which makes further government borrowing a viable approach.
The OECD forecast that general government gross debt as a percentage of GDP will increase from 119.9% in 2017 to 136.2% in 2021 if Covid-19 remains a single virus outbreak. It would rise to 148.6% in 2021 if there is a second outbreak. The debt/deficit hawks and the money printing advocates of Modern Monetary Theory, and the high-cost Universal Basic Income model, must be challenged as simplistic, unsustainable solutions.
These key strategic issues also emphasise the need for organising and building alliances between civil society, community, trade union organisations and Labour. Alternative plans are essential when confronted by closures, new developments or policies that threaten living conditions, jobs and local economies.
- Whitfield, D, (2020) Public Alternative to the Privatisation of Life: Strategies for decommodification, public ownership & provision, democratic control, climate action, conserving nature and biodiversity and radical public management, Spokesman Books, Nottingham. [↩]
- Harvey, D. (2003) The New Imperialism, Oxford University Press, Oxford. [↩]
- Lefebvre, H. (2003) [1970] The urban process, University of Minnesota Press, Minneapolis, MN. [↩]