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A conspiracy to wreck the tube

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Issue 1759

Court case begins as fat cats plan…

A conspiracy to wreck the tube

NEW LABOUR’S drive to privatise the London tube is showing all the crazed obsession of the Tories when they introduced the poll tax. Transport secretary Stephen Byers, with Blair’s full backing, last week sacked Bob Kiley as chairman of London Transport, the public company that runs London Underground.

Kiley’s crime was to agree with transport experts and 90 percent of people in London that New Labour’s “Public-Private Partnership” (PPP) tube scheme is a disaster. The government now says it will force through its plan, making it the centrepiece of its wider campaign to privatise the public sector. Its only allies are fat cat businessmen who stand to make a fortune. These people were at the heart of dumping Kiley last week.

The man New Labour has appointed to replace Kiley is Sir Malcolm Bates. He got his knighthood under New Labour. In 1997, just months after New Labour was first elected, the government put Bates in charge of speeding up PFI privatisation projects. He was a former deputy managing director of GEC, the multinational arms company now renamed Marconi that is shedding thousands of jobs. Bates and other London Transport directors worked with Byers to oust Kiley and silence the opposition to privatisation.

The other key directors of London Transport include:

  • Edmund Wallis. He is the former chairman and chief executive of Powergen-the second largest electricity generator in Britain. He was at the forefront of electricity privatisation.
  • David Newlands. He is executive chairman of the Tomkins engineering conglomerate. He recently got a big bonus despite working part time, and the company suffering a steep fall in profits and share price. He used to be finance director at GEC. His other directorships include Standard Life Assurance, Britax International and the Weir Group engineering multinational.
  • Derek Higgs. He was chairman of Prudential Portfolio Managers, a giant financial institution which seeks a quick buck by speculating on the stock market. Higgs is deputy chairman of British Land, which specialises in property development and works with the engineering companies that want to take over the tube.
  • Derek Smith. He is the boss of London Underground and has repeatedly taken the tube unions to court to try to stop industrial action. He sent a letter about PPP out to all tube staff earlier this month. It read, “The London Transport board remains charged with the specific responsibility for implementing PPP, and must continue, with London Underground, to work towards a satisfactory completion of the PPP deal.”

These four men, together with the New Labour government, now want to bring the disaster that privatisation brought to the railways to the tube.

Fortune seekers

THE government has already wasted 100 million on consultants to push through PPP. The whole idea was cooked up by Steve Robson, a top Treasury official who drew up the plans for rail privatisation under the Tories. He told City fat cats that such privatisation schemes are “the goose that laid the golden egg”. The consortia looking to take over the tube’s infrastructure have taken that to heart.

They are looking to make a profit of 15.7 percent. Some of the companies in the frame to run parts of the tube have already made a fortune out of mainline rail privatisation.

They include Balfour Beatty and Jarvis. They were responsible for the upkeep of track on the GNER line at Hatfield. A piece of track shattered there last October, derailing a train and killing four people. Construction firm WS Atkins is part of another consortium that is now a preferred bidder to run part of the tube.

New Labour has already handed the education service in Southwark, south London, to WS Atkins. The government knows that schemes like its plans for the tube are more expensive than public funding, because private companies have to borrow at higher rates of interest than the government.

But it is determined to suppress the truth. Tube bosses last week got an injunction preventing two reports from being made public. One, by accountants Deloitte & Touche, attacked the privatisation plan as expensive. The other, by engineering firm Parsons Brinckerhof, focused on the impact on safety.

Resistance can win

THAT THE government chose to sack Kiley shows just how out on a limb it is. For he is no left winger. He is a former CIA agent, and as boss of the New York Metro brought in bullying managers to weaken the unions. He stays on as London mayor Ken Livingstone’s transport supremo.

Livingstone and Kiley launched a court action this week to try to halt PPP. They say they will work within the scheme if the case fails. However, Livingstone has privately said he is prepared to launch a campaign against PPP. The pro-business London Evening Standard has slammed PPP. London Labour MPs are panicking that the scheme will cost them votes, as are councillors in London, who are up for election next May. This can encourage the mood for resistance.

Such a fight cannot be left to politicians, newspaper editors and businessmen. Those forces attacked the most effective action against tube privatisation-the strikes by tube workers earlier this year.

Those strikes beat London Underground and secured significant concessions, though union leaders called them off with the threat of privatisation still hanging over the tube.

The isolation of the government boosts the scope for a serious campaign against tube privatisation. Trade unions should be at the heart of launching that fight now. A victory over the tube would be a mighty blow against the privateers’ threats to hospitals, schools and services across Britain.

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