Is nothing sacred to the ConDem Coalition? After the news that the NHS is facing being cracked open to allow private companies to feast on the gobs of cash inside, that the taxpayers are paying companies to get people back into work, to assess whether people are really too sick to work, that we nearly sold off all our forests and even the police forces are going to be outsourced to security firms, maybe the fact that the roads are the latest to be privatised in all but name shouldn’t be too much of a surprise.
Ahead of the budget Cameron has announced a new plan to attract private investment in UK infrastructure, it seems as if in response to Vince Cable’s assertion that the Coalition have as of yet failed to create a solid plan for growth. But critics of the scheme say that it is nothing more than a revision of the Public Private Partnerships, later re-branded as PFIs, and will eventually cost the taxpayer more than they ever gain because of a desperate attempt to raise money for investment “off the balance sheet”.
The new plans will have companies bidding for leases of the 3% of Britains key motorways and trunk roads for something like 30 to 50 years. The government is keen to stress that it is not privatisation because they retain the ultimate ownership of the infrastructure. Essentially the government hands over a bit of road to a private company, they stump up the money to carry out expansion, improvement and maintenance and in return the government diverts a proportion of the Vehicle Excise Duty their way until the end of the contract. The idea is that investors will get a near guaranteed return on their investment and the government gets a new road.
Further incentives towards building are in place, in that if new roads are built and extra capacity can be added, the companies are allowed to introduce tolls. But you can almost be certain that at some point in the plan’s three or four decade lifetime investors will begin wheedling the government for more ways to fleece road users. Just look how long the cap on private care in the NHS lasted.
The model for this pseudo-privatisation is supposed to be that model of efficiency, the water utilities. This is the industry that David Hall calculates would be 12% cheaper per household if it were still in public hands. The industry whose lack of investment and massive remuneration for it’s directors means that it has chronic leaks, a lack of storage and still prices have risen by 50% since its takeover.
Questions have also been raised as to who will actually be investing in these projects. The plan is to alleviate the “ridiculous” situation where foreign investors are ready and willing to put money into the UK but British equivalents are not. Yet George Osborne has been urging the Chinese government and Middle Eastern oil barons to invest. Strange to think that our road taxes will be propping up totalitarian regimes and shady businessmen for decades to come, right?
And for what? A one time lump sum of cash to plug our nation’s balance sheet in return for ceding control over what seems like one of the last vestiges of the country the government actually has control over. The argument for the scheme is insane. The government itself can get access to the money for investment for next to nothing, 50 year indexed gilts have a yield of 0.2% yet if the government are going to attract any investment from the private sector they’ll need to be paying out a return of something more like 5-10%, not to mention all the other goodies and sweeteners they’ll have to fork over.
This obsession with keeping down the deficit is what caused the PFI catastrophe. So long as the money isn’t obviously adding to the size of the deficit during the Coalition’s term in government, who cares how much or for how long we’ll be paying it off. It’s also worth mentioning the injustice of taking money out of the common tax pool to pay for projects that will ultimately benefit only a few people.
It seems like the rampant disease of state-sponsored hypercapitalism, that we have been exporting all too lucratively to the cash-strapped or war-torn countries of the developing world has finally come back to infect us. If you hadn’t realised it already, there is no facet of our country too cherished, too efficient, too useful or too beautiful to be sold off by a caucus of two unelected parties for some faceless accountant to make money off of.
At least I think I’ve answered my original question: Is nothing sacred to the ConDem Coalition? Yes, profits and votes.
Photo by Ian Britton on Freefoto.com