The Guardian August 9, 2000

Public spending for private profit

by Daphne Liddle

British Chancellor Gordon Brown finally released his long-awaited public 
spending review. Those who expected it to be the opening shot in Labour's 
campaign in the warm-up to the next general election were not 

The figures add up to an increase in annual public spending from L195 
billion (A$513b) last year to L212.1 billion next year, L229 billion in the 
year 2002-3, to L246 billion in 2003-4. By 2004, an extra L43 billion 
(A$113b) will be allocated to front line services with education and health 
getting the biggest boosts.

The Tories, naturally, howled about public spending gone mad and a "return 
to old Labour values". But the City of London hardly batted an eyelid and a 
spokesperson for The Financial Times pointed out that public 
spending has been cut so far in recent years that the base level Brown is 
starting from is way below what even the Tories were spending.

Britain's capitalists were also quietly confident that a good share of this 
public money would, thanks to the privatisation of so many public utilities 
and services, end up in their pockets.

For example, spending on transport is to rise from L4.9 billion this year 
to L9.1 billion in 2003-4. Subsidies to the privatised rail companies will 
double to more than L2 billion a year as the Government plans to spend 
L22.5 billion on road and rail improvements over the next three years.

That should make the shareholders of Railtrack happy. The company will be 
able to go ahead with already agreed improvements to the West Coast line 
from London to Glasgow, finally build the Channel Tunnel rail link and the 
planned cross-London rail link  and still have plenty of dividends for 
the shareholders.

If Railtrack and the rest of the privatised rail companies were, 
justifiably, thrown out for failure to live up to their franchise contracts 
and British Rail restored, all that extra money could be spent on services.

And the taxpayers would get back the income from ticket sales and so on.

New subsidies for rural buses should improve some services  and profits 
for the private shareholders.

The extra spending on roads to relieve congestion will please the road 
haulage lobby. It seems this spending will be a good deal bigger than that 
allocated to upgrading the railways.

The extra L13 billion allocated to health is more than overdue. But 
hospital trusts still face debt crises and are forced to make drastic cuts 
to staffing and services.

When the trusts were set up, they were saddled with debts for the very land 
the hospitals stood on. Now many trusts are shackled to enormously 
expensive Private Finance Initiative deals.

And, with the current shortage of nurses, many trusts are being forced to 
pay through the nose for nurses from private agencies.

The same is true in education. We are seeing schools and education 
authorities being harrassed by Government inspectors to bring in the 
private sector.

There is to be an extra L1.6 billion a year spent on social housing  not 
council [public] housing. This will go to housing associations and housing 
companies whose policies are dictated by the market and the banks.

* * *
New Worker, paper of New Communist Party of Britain

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