“Privatisation, more than any other feature of public life, has created a cost-of-living crisis that stagnating wages simply cannot meet.”
By Jon Trickett MP
The privatisation of water, rail, post and energy has been a tale of colossal cost to ordinary people. Never forget that these services were all originally built on the back of taxpayer funds.
The service quality has declined while prices have soared. Rail fares, for example, are up 42% under the Tories, and the cost of a first class stamp has climbed by 85%. And it is not just price rises. The closure of post offices, cut in daily postal collections, and pumping of raw sewage into our waterways paint a sorry picture.
Prices are up, quality is down. People are carrying the burden, for millions in fuel poverty the situation is even starker. As families choose between heating and eating. Anxiety over how we pay our bills is endemic. Privatisation, more than any other feature of public life, has created a cost-of-living crisis that stagnating wages simply cannot meet. Working terms and conditions are also impacted by privatisation. When a service is sold off, TUPE rules are meant to apply. But, as we have seen, privatisation has led to the decline in working standards, security and pay.
One of the best examples of Tory privatisation that clearly did not benefit families is that of our postal services. The privatisation of Royal Mail benefitted sovereign wealth funds and friends of the Tory Party who, if you remember, bought shares on the morning of its flotation at share prices, 330p, that have since climbed 50% to 509p.
No one can claim things have got better since privatisation. The cost of a stamp has now risen by 85%, from 41p to 76p, and the number of daily collections of post are down – in some cases twice daily collections changed to just daily. The latest news from Royal Mail is that their intention is to cut Saturday deliveries, switching their focus to ‘parcel growth’.
The main casualty here is small communities and villages like mine where elderly people and those with reduced mobility have had to endure more than 10,000 Post Offices close under neoliberalism. To my mind, it’s clear the Tory plan was to deliver a poorer postal service in order to create a demand which has been filled by a proliferation of private firms. A by-product of this has been a boom in the number of parcels that go missing, now over 5 million a year.
By every barometer ordinary people have lost out on the quality and cost of their postal services because of the decision to let the market in.
23 energy companies have gone bust since August 2021. This is clear evidence that the free market is ill suited to domestic energy supply.
The privatisation of home energy services has also hurt families. Today, more than seven million people live in fuel poverty across the United Kingdom with recent price rises pushing that figure closer to eight million. Fuel poverty has mortal consequences.
14% of the winter excess mortality has a causal link to fuel poverty. In real terms this means typically 3,000 people are losing their lives on a yearly basis for reasons linked to being unable to afford their home energy bills.
You don’t have to be poor to suffer anxiety relating to the cost of energy bills. Millions of families report that they delay putting on their heat by a month into the colder months due to affordability. It is welcome that the Welsh Labour government has announced an additional £100 of help for families on Universal Credit to get them through the winter. England has failed to offer any help to households saddled with a 12% rise in energy bills in October having already absorbed a 6% rise in April. With more rises around the corner, help is needed.
Greece, France, Italy, and Spain have all stepped in to provide help, most notably with the levying of a windfall tax in Spain on the profits of big energy corporations. In the UK, our main energy provider reported a billion pound of profits at the start of summer. CEOs of the big six energy firms enjoy wage packages that average £800,000 a year. People are entitled to ask, where, in any of this, is the benefit to ordinary people factored in?
Profiteering from the supply of water to families is surely one of the most unethical practices one could contemplate. And yet here in the UK, nothing was too sacred for the Tories. The privatisation of water companies thirty years ago has undeniably hurt our households.
Today, more than 70% of our water companies are now owned by foreign firms. Moreover, over the last 5 years, their shareholders have pocketed on average £80 million a year, while their CEOS have enjoyed pay packages of nearly £1 million apiece. Whilst all of this profiteering is taking place, your water bills have climbed by a fifth under this government.
Only recently, the Tories who have accepted donations from water corporations, tried to block a law that would have tackled the amount of raw sewage water firms pump into our waterways, a figure that was 450,000 tonnes last year alone. Think about that. They tried to prevent us asking these big water corporations to stop pumping raw sewage into our waterways.
This, surely, is all the evidence one needs to confirm that these corporations do not work in our interest.
As with postal services and water, the railway rip off is plain for all to see. Rail fares have climbed 42% since 2010. The existence of more than 1,000 different tickets and tariffs make our ticket system the most complicated in Europe.
Wages in real terms have stagnated, so above inflation rail fare rises have eaten directly into people’s pay packets. The con with railways of course is that it is the taxpayer who still foots the bill for rail improvements. The government has handed more than £70 billion in rail subsidies to the private sector over the last thirty years.
During this time, rail corporations have carried on making extraordinary profits. For example, rail firms record more than £350 million on average in profits a year, whilst their CEOs enjoy pay packets in and around one million pounds and in some cases as high as £10 million. Ordinary people are suffering from a lack of investment in local transport that is holding back growth. My area is one of the worst affected. Outside London we suffer severe under-investment in rail. Yorkshire receives just £321 per person in investment while the figure is nearly three times that at £907 per Londoner.
The recent cancellation of HS2 into Yorkshire saw the government leave only 10% of the promised investment for our area in place. To unleash regional growth and properly level up we need to restore the 3,000 bus routes cut, invest in light rail and tramways to connect our communities in a green and affordable way that can properly level up. Of course, we know the Tories do not level up – they punch down.
The picture is clear. Opposition to privatisation is underpinned by sound financial rationale. We need to get prices down and quality up. Unethical wage packets of CEOs, bumper share dividends for shareholders all the while prices climb ever higher for ordinary people leave us with no choice but to join the fight to get these services back under public control.
The money that could be saved from keeping the billions of profits in house and reinvesting them in lower prices and better services makes a compelling reason to right this injustice. In every sector we see evidence of donations to the Tory Party from these corporations. It is time for the gravy train to be brought to an end.
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The collapse of the energy companies has resulted in the big energy firms ‘picking up’ the customers. British Gas has had 459,300 customers handed over to it. Shell Energy has 279,000. EDF: 220,000. EoN: 21,000.