By Simon Basketter
Downloading PDF. Please wait... Issue 2154

Trade unions’ bizarre flirtation with ‘transformation’ (or ‘privatisation’)

This article is over 12 years, 7 months old
The economic crisis has discredited the idea that the market is the solution to our problems.
Issue 2154
The cover of Hilary Wainwright
The cover of Hilary Wainwright’s book

The economic crisis has discredited the idea that the market is the solution to our problems.

Yet, bizarrely, when it comes to public services, privatisation is still being pushed by the Labour government.

And even more oddly, sections of the left and the union movement are going along with the central argument behind the attack our services.

The clearest example of the absolute refusal of the government to change direction is Royal Mail. Lord Mandelson and the government are determined to force through a privatisation that even the Tories balked at.

“Modernisation” as a mantra has done for Royal Mail over the years.

The most useful reminder of the consequences of this is the government-imposed 13-year pension holiday that landed Royal Mail with a £6.8 billion deficit.

This is the same deficit they now use as a rod to beat it with, and apparently proves the case for privatisation.

In reality there isn’t that much wrong with the post. Even after a 40 percent shrinkage there are still 12,000 post offices. Labour’s plan is part of the “there-is-no-alternative” twaddle that has been the default setting since Labour came to power.

Labour has waged an ideological war to hand over services to the rich and move them away from being owned and controlled, however marginally, by the public.

“Private good, public bad” became the common sense.

The idea is that the rigorous pursuit of profit will ensure dynamic and efficient services. This means a drive towards a low-wage, deregulated economy with run-down services.

From the NHS to the rail, we now know this to be rubbish. And the business model isn’t doing too well in the private sector either.


Importantly, the shift towards private provision didn’t mean holding back on spending public money.

Rather, the money went from public coffers straight into company profits.

The privatised rail network costs us more now than it did while it was publicly owned, not to mention the billions we have handed to the banks.

But what is really disturbing is the alternative being pushed within the unions at the minute.

Instead of fighting the attacks on our services, there is a widespread acceptance that “modernisation” is inevitable, coupled with a desire to find a more moderate version.

So Compass – a “think-tank” – has put forward a proposal for a not-for-profit Royal Mail.

The idea is similar to Network Rail and some of the failed water companies.

It says it wants a “dynamic and innovative public service” that enlists both the workforce, including managers and trade unions, and the public in the renewal effort.

The main thing worth knowing about Network Rail is that is costs a fortune, yet remains at the heart of the privatised rail system with all its faults.

All the blather about renewal ignores a simple thing – “modernisation” and efficiency are not about improving public services but cutting costs.

So in another Compass publication, Public sector reform … but not as we know it!, Hilary Wainwright actively encourages “modernisation” – and for the unions to get involved in the process.

It recounts an example of how it has been done.

The case Wainwright reports is the “transformation” (as the latest jargon has it) of Newcastle council’s IT services, with 650 staff and a budget of £25 million.

Much heralded is the role of the Unison union, and the Northern region of the union in particular, in articulating the determination of staff to keep their destiny in their own hands.


Apparently the new model has a “democratic infrastructure” which ensures that, once arrived at, tough decisions, including job cuts, stick.

The advantage of this is apparently that the self-funding deal has saved management £28.5 million. Unison and Wainwright claim that, if reproduced at other councils, this could save £3.5 billion nationally.

Wainwright uses the rhetoric of democracy and workers’ control – but behind the left cover lies the idea that managers and workers’ interests are the same.

So as councils look to cut back services and jobs, her solution is for unions to become involved in the process as “social partners”.

This “transforms” unions from fighting for their members to looking to manage the pain for the bosses as they sack workers.

Labour governments in the past had to choose between increasing workers’ democratic control over industry or protecting the interests of those who owned the country’s wealth.

They invariably came down in favour of the latter. But now even the facade of acting in the interests of workers has been dropped.

The government’s commitment to the market perpetuates a state of affairs that condemns us to poverty, low wages and insecurity.

The pressure to all come together with bosses needs to be resisted in the private sector – and seeing it as a solution for the public sector will be even more disastrous.

The desire for partnership with the bosses is raising the white flag in the battle to defend our public services.

We should not let our unions participate as partners in our bosses’ attacks. Instead we need them to help organise a fight back.

If the unions go down the road of accepting “modernisation” as inevitable and necessary for the public sector, they will be doing nothing but signing up for cuts in services and jobs instead of defending them.

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