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Democrat July 2000 (Number 45)

Arthur Smelt makes some points

Post operative trauma

Privatisation of water works

Discussions at the European Council meeting held in Portugal in June included EU military cooperation with NATO, EU rapid reaction force, Europol, freedom, security, justice, enlargement, employment, economic reforms, social cohesion and many other topics including what is described as the next stage of postal liberalization.

What all this means to the man and woman in the street is not always clear, but postal liberalization prompts examination of those services and others in the public sector in this country, where developments are often linked to EU diktat.

To those of us not exactly sold on the idea of relentless Private Finance Initiative (PFI), it seems the overall plan of government is to change everything and anything to private ownership as part of the ethos of European Union. The arguments espoused to justify such actions, as usual, are on the lines of greater efficiency and improved economy resulting in greater consumer satisfaction.

One might argue that how well or badly an enterprise or organisation runs, of whatever category, depends heavily on the calibre and values of the human beings involved.

Since the privatisation of mutuals, public utilities and other public service departments, economies are being brought about at the expense of Joe Public.

Privatisation of gas and electricity utilities was followed by closure of offices and showrooms which served people in small towns and villages. Customer protest was disregarded and subsequently allayed when people realised post offices had become agents for the purpose of settling domestic gas and electricity accounts. Post offices also diversified further and became agents for various banks, some of whom had also closed sub offices in the name of efficiency and economy. Inconvenience to the elderly and those living out of town seems of little consequence.

Post Offices

Post offices have for years delivered an excellent service to pensioners and those unfortunate enough to have to rely on state benefits for their survival, many of whom do not have bank accounts. Even so in the last 20 years something like 3000 branch post offices have closed with more possible closures to come.

For the first time in almost a quarter of a century the Post Office has declared a loss on the year of £264 million. It has been reported that this loss is the result of government interference in the computerised system which covers payment of benefits to the tune of £571 million from which service the Post Office makes considerable revenue. It has been announced that by 2003 benefits and pensions will be paid into bank accounts.

The overall effect of such moves are obvious and it seems that government has done a double shuffle and decided to make post offices into banks. Reports indicate that millions of pounds are being made available to save thousands of post offices by making them into, amongst other things, a Universal Bank, all no doubt part of the liberalization of postal services.


The major political parties in Britain all state that they have no intention of privatising the NHS. There are many disquieting indications however, which point the other way.

EU pressure to keep PSBR below certain limits has brought about the same kind of economies seen elsewhere. Maternity units all over the country are closing down. Centralisation of hospital services is taking place forcing those in need of treatment, or needing to visit hospitals, to travel, in some cases long distances.

Increasing evidence shows PFI used to build and equip hospitals for the NHS to rent, is proving far costlier on the public purse than earlier arguments had made out. Retaining the old system would have been cheaper but the book-keeping would have been different.

The so called `concordat' between the NHS and private health care is apparently to reduce NHS waiting lists. The NHS is paying the private sector to treat and operate on NHS patients. Already it has been reported that hospital trusts have referred 100,000 patients in this way. There is little doubt top whack will be charged for those services and will be a drain on money which should be used to update and improve NHS facilities, not consolidate the private sector.


Public transport privatisation is literally another disaster. Not long after railways were taken into public ownership in 1948, it emerged that private rail companies were receiving £millions in government subsidy. This money was used to pay out shareholders with the result that 350,000 wagons were deemed unfit to roll at the changeover. Money for this massive repair bill was raised on the free money market at high interest which meant the public rail system was never out of debt.

We have come full circle - railways are back in private hands with similar writing on the wall. Maintenance of track and rolling stock are again being questioned. Railtrack declare a profit of £300 million whilst receiving government subsidies of over £2 billion. What kind of nonsense is this?

Yorkshire Water

More recently we have the spectacle of Yorkshire Water wanting to hand everything back to the consumer. Privatised in Dec 1989 with great publicity and share offers, water prices were hiked up to give nice profits. Yorkshire Water or Kelda as the company is called has skimmed off the cream, diversified into other lucrative areas and now they are being asked to seriously invest in infrastructure whilst keeping prices in check, they want out. If they are successful in this, they will leave customers with massive bills for maintenance of sewage and water delivery systems.

No doubt there are those who will argue that this is the New World Order, this is how it works. It is also how the EU works in forcing its dictates including PFI down our throats.