Wednesday, October 23, 2013

Trains to nuclear power: British privatisation, asset-stripping and selling the family silver

The plan to build a nuclear power station courtesy of EDF, and the selling-off of the Royal Mail, are the latest in a long line of steps to erode the sovereignty of Britain's national infrastructure and assets.

A recent article in The Guardian reminds us that the deal to build a new nuclear power station next to an existing one in Somerset is thanks mostly to money from Chinese state-owned companies going to EDF, a company mostly owned by the French state (the name is an acronym for "Electricite De France"). In other words, the British government is happy to have part of the nation's future nuclear energy effectively ran as a joint venture of the French and Chinese government. Not only that, but as part of the deal, the the British government has agreed in advance to a price that is many times higher than that at the moment.
Not only are they handing British energy to joint French-Chinese custodians, they are also kicking their own people in the teeth in the process.

This is nothing new the the UK. The "privatisation" of the energy industry simply created a cartel, or oligarchy, of private sector behemoths. Due to the massive barriers to entry, this makes it necessary that only huge corporations can apply to such tenders. Worse, the oligarchy created from this "privatisation" was guaranteed government subsidies coming from taxpayers' money, completely missing the point that these companies were supposed to be in a "free market", and free of government. Thus it is the worst of both worlds, as is often the case with UK "privatisation". This model bears many characteristics similar to the corrupt arrangements found in Fascist economics.
It gets worse. Apart from one of the so-called "Big Six" (energy cartel) being part-owned by the French state (EDF), there is also "E.ON", which is a Germany-based company, with interests also in Russia, Sweden and the USA. The sad reality of who owns the "Big Six" is explained here. Of the six, only two are actually British (even if they do include the majority of the market share). Apart from the two already mentioned, "npower" is technically British, but owned by German parent company, RWE. "Scottish power", is owned by its Spanish parent company, Iberdrola. Only "Centrica" and SSE ("Scottish and Southern Electric") are British companies in the full sense.
With the recent price rises, many times above inflation, the irony is that the government sees no reason to interfere in the blatant price-fixing of this energy cartel masquerading as a "free market", while taxpayers fork out for government subsidies to the selfsame "free market". This is pattern repeated time and time again in "privatisation".

There is also the example of water supply. Again, the logic of the private sector was applied to an industry where the state-ran regional authorities were transformed into private companies. The difference between the energy sector and the water industry is that, for obvious practical reasons, you cannot make water a free market good because a customer cannot "choose" which water supply to use. The same point is true of the rail network (see below), which is still ran by companies that have, for the most part, carved up the network into spheres of quasi-monopolistic control. In the case of water supply in the UK, it has been turned into a cash-cow for foreign investors, with the British customer being often treated little better than a serf.

Apart from the energy sector, there is the "privatised" rail network. This operates on much the same operating model as that of the energy sector. As with energy, the train operating companies also include "Arriva" (one of the biggest private transport companies in the UK), which is owned by "Deutsche Bahn", the German national rail carrier. Likewise, "Greater Anglia", that is the main train carrier in the East Of England region, is owned by "Abelio", the Dutch national rail carrier; they also have a joint stake in "Merseyrail" and "Northern Rail", with one of the biggest service-provider behemoths, Serco. In other words, part of Britain's rail stock is now effectively owned by the German and Dutch government.
"Privatisation" of the railways in the UK has therefore really meant selling-off part of the rail stock to foreign governments. The laughable irony here is that Britain's nationalised rail network was parceled up piece-by-piece, with parts of it going to foreign nationalised rail companies. You really couldn't make this up!

This is not "privatisation": it's called asset-stripping, or selling national assets to foreign countries. And again, the rail companies are free to charge whatever price increases they like, far above inflation (without government interference), while still receiving taxpayer-paid government subsidies as well. EDF has been offered the same deal for the new nuclear plant.
A great arrangement if you can get it!

No wonder the British government is trying to convince China and other countries to "invest" in the UK. The British government is often taking British taxpayers' money to give it foreign companies (or foreign government-owned companies) as "subsidies", while also allowing them to suck their British customers for as much as they can (because it's a "free market").

Whose interests do the British government work for? In the examples above, it certainly isn't in the British national interest, let alone the taxpayer.

Fool the British people once, shame on you! Fool them twice...well...

People get the government they deserve.

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