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Democrat August 2002 (Number 64)

Resistance grows to
EU-designer austerity

Report by Brian Denny

IN the drive to meet the convergence criteria for joining the euro the government is depressing wages in the public sector and privatising large parts of the economy under the guise of Public-Private-Partnership schemes.

However, public sector union UNISON launched strike action in protest and London Underground workers are taking action after LUL refused to all meaningful consultation over safety concerns connected with the transfer of Tube infrastructure to the private sector.

A BBC poll just prior to the Tube walkout last month confirmed that the vast majority of people support the rail union RMT. The core union argument is that PPP will undermine safety due to the fragmentation and breakdown of unified management and the impact of sub-contracting.

The experience of the breakup of the national rail network also raises safety implications of the fundamental conflict of interest of profit and public safety. The bottom line is that the break up of the London Underground and the introduction of Private Public Partnership (PPP) is being rushed through for political reasons.

Costs covered up

The pressure to reduce budget deficits has led to the government imposing Public-Private-Partnerships (PPP) to finance public works because the costs do not appear as an immediate sum in public expenditure figures.The lunacy of this process is compounded by the fact that for every £1 billion spent on PPP the taxpayer pays an extra £50 million per year in interest payments - sums that could have been spent on education, health or transport.

The fragmentation of the national rail network has already proved disastrous, yet the government remains determined to cut up London Underground's infrastructure in exactly the same way, in line with European Directive 91/440/EEC.

Democratic demand

However, polls of the travelling public, transport experts, unions, politicians, business and pressure groups, the elected London Mayor and Parliamentary Select Committees are all telling to this government: "Stop PPP on the tube."

Under the deal, private infrastructure companies (infracos) are taking on risk-free contracts. Two of the successful bidders, Metronet and Tube Lines will be getting £500 million in success fees before they have even done anything.

The contractors are being given £1 billion worth of contingency payments to cover costs during the first seven-and-a-half years of the contracts. The privateers will keep the lot even if the service delivered is below that currently provided by the public sector.

Londoners foot bill

It is the worst kind of irony that Londoners should end up footing the bill for PPP, not private companies bidding to make profits from London Underground.

This, of course, is reminiscent of the disastrous rail sell off which proved a bonanza for privateers and led to the widespread introduction of contractors and sub-contractors and the deadly crashes that followed at Southall, Paddington, Hatfield and Potters Bar.

The Potters Bar enquiry clearly showed that, as a result, there has been a worsening of track quality, a break down of control and a deterioration in safety.

The consequences of introducing such a discredited system on the underground, where anything up to 1,500 passengers is travelling on each train at any given time in confined conditions, do not bear thinking about.

The plain fact of the matter is that the private sector is more interested in looking after shareholders, as is their legal duty, than providing a safe and reliable service to the travelling public. UNISON has also pointed out that nearly every PPP hospital built so far, beds and jobs have been cut and costs have rocketed while private profits have soared to around 20 per cent.

Increasingly people are making the link between the drive to bounce us into the euro and the severe austerity measures millions of people are experiencing. This is happening across Europe and countries already trapped within the single currency, such as Portugal, face fines of 0.5 of GDP, which amounts to hundreds of millions of pounds, unless they knuckle under and slash spending even further.

Structural adjustment

Many are slowly waking up to the fact that EMU is structural adjustment for EU members and applicant states, a process which will allow corporate capital to take over entire economies and pauperise more and more people. The response to these attacks is becoming clear, we have to band together, resist and defend jobs and national democracy.