/MAY DAY/LABOUR-BRITAIN: Blair Puts Brakes on Privatisation

By IPS Correspondents Reprint | | Print |

Samanta Sen

LONDON, Apr 29 2002 (IPS) - The national budget released this month has eased growing confrontation between trade unions and Prime Minister Tony Blair’s New Labour government.

Chancellor of the Exchequer Gordon Brown announced a 1 per cent increase in national insurance contributions to raise money for Britain’s floundering National Health Service (NHS). In the face of growing privatisation of public services, New Labour appeared refreshingly old-fashioned to unions in the move to tax-fed health care to be provided by the state.

The Trades Union Congress (TUC), an umbrella body for about 70 unions covering nearly seven million employees in Britain, called the tax “a defining moment in the future of the British health care system and in the history of the present government.” The tax on employers, employees, and the self-employed will raise 13.5 billion dollars in 2004-2005. It is intended to shorten queues that can extend to hours in an emergency and years to see a specialist.

“The move will mean an enormous boost for millions of people who lack the means to pay for private care,” a spokeswoman for the National Health Service says. The poor quality of health care in the NHS has brought a boom to the private health care industry.

Bill Morris, general secretary of the Transport and General Workers Union says the move on NHS is welcome but not enough. “The programme of public services renewal has seen the government subcontract its risks and responsibilities with the result that there is an emerging deficit of trust between the government and the governed.”

Morris warned the government that “the party is haemorrhaging members at a frightening rate” and that public confidence in its achievements must be restored.

The unions have been battling increased privatisation vigorously. The moves have been boosted by costly failures such as the privately owned Railtrack, a company that manages the rail track system.

The number of train accidents has increased since privatisation. Trains are usually slow and often late. An independent survey found the British railway system to be the worst in Europe. Blair himself said at the annual Labour party conference last year that Railtrack “has frankly been a disaster.”

In the face of such failures, several of the leading trade unions have launched a joint campaign this year called “keep public services public”.

Mick Connolly of the TUC, which brought the major unions together, declared at the unions conference held March 23: “The obsession of the government with the private sector, despite the evidence of its repeated failure to improve public services is irrational. The Government should put aside posturing, sound bites and spin and work with trade unions to deliver the improvement in quality of public services we all deserve.”

The unrest within the unions has grown particularly since the re-election of the Blair government last year. “In the first term (after elections in 1997) the unions were pleased enough that there is not a Conservative government any more,” Sarah Veale from the TUC told IPS. “They were just happy to have a government not against them.”

The unions were happy also because “in the first term Labour introduced many measures like the national minimum wage and statutory trade union recognition,” Veale says.

In the second term of the Blair government “the unions have felt that the government is far more intent on serving business interests than in upholding workers’ rights,” says Veale.

The tax for the NHS has been welcomed by unions but “we have many other issues with the government,” says Emily Thomas from the GMB, originally the General Municipal Boiler union which later brought together workers from many other unions. “We remain concerned about privatisation in schools, in local government and in other areas.”

Britain’s unions make a special claim on the Labour government. “We helped found the Labour Party,” Thomas says. “Even if we disagree we will have these discussions, they are important for a dynamic country,” she told IPS.

Disagreements are coming to the surface now in many of these other areas and also over the fundamental wisdom of privatisation. The GMB is currently preparing what it calls a Doomsday Book on private contracts around Britain county by county. This book will list every contract now being done by private sector workers, which was done earlier in the public sector. The emerging records show that efficiency has declined and losses mounted under privatisation, the GMB claims.

“The public sector wage bill was 144 billion dollars in 2000,” the GMB says in a report. “By contrast the government spent 182 billion dollars in the private sector on purchasing goods and services, capital expenditure and paying interest on its debt.”

Assuming an average profit margin of 5 per cent, this means that private sector profits from public sector expenditure are some nine billion dollars, the GMB says. An opinion poll it commissioned showed that only one in nine people believe that privatisation will improve services.

The unions are also looking for better protection in the workplace. “If someone has been employed less than a year they cannot claim unfair dismissal,” says Veale. “Nor can unions claim statutory recognition if a company employs less than 20 workers.”

Veale says many MPs in this parliament are “more left-leaning than in the previous parliament, and they are trying to push New Labour more towards the policies of old Labour.” Blair is under increasing check from his own MPs, and from the unions that created the party he heads in government.