eaglesnick

[eaglesnick]

Private Sector Good, Public Sector Bad? (3)

This is the third part of a look at former public services and utilities in Britain that have been privatised or part-privatised in the name of neoliberal economics and the mistaken belief that private enterprise is ALWAYS more efficient than publicly run bodies.

The National Health Service

The Tory Party and successive Tory governments, including the Sunak administration, vehemently deny they are slowly privatising the NHS.

“Sunak pledges to cut waits with greater healthcare choice but denies NHS privatisation plan."  (Health and Protection: 04/01/23)

Such denials are deliberately misleading. According to the World Health Organisation:

“Privatisation is where non-government bodies become increasingly involved in the financing or provision of health care services”.

The Tory Health Care Act of 2012 removed the "duty of government” to provide NHS services directly, opening up NHS care provision to the private sector. This trend has been further accelerated by the 2022 Heath and Care Act. The Guardian had this to say about the change in the law:

“The new bill will continue the dismantling of the NHS, this time by adopting more features from the US health system. For anyone who cares about the NHS, this should set off alarm bells.” (Guardian: 07/12/21)

What we need to remember when reviewing the provision of public services by private companies is that the first duty of a private company is to make profits for it’s shareholders. The profit driven motive of private enterprise may lead to more cost savings but often at the expense of quality of service

“There is only a small number of studies addressing the effect of privatisation on the quality of care offered by health-care providers, and yet within this small group of longitudinal studies, we find a fairly consistent picture. At the very least, health-care privatisation has almost never had a positive effect on the quality of care." (Lancet: "The effect of health-care privatisation on the quality of care”, March 2024

In 2019, (November 29th) the Guardian reported that private firms had received £15bn over a five-year period for NHS provision. By  2019/20 Health Care Commissioners were spending £10bn a year on services delivered by the private sector. (The Kings Fund: Is the NHS being privatised, 01/03/21)

Despite this massive increase in NHS private provision, we all know the health service is on its knees. Before 2010 multi-year funding of the largely publicly run NHS saw the NHS improve its service provision. 14 years of Tory government, two health care acts later, and we see a total reversal in those trends. By 2014 signs of stress were becoming apparent. David Cameron and George Osborne deliberately starved the NHS of money, NHS budgets rising on average only 1.4% between 2009-19 compared to the 3.7% yearly rises since the NHS was first established.

The NHS is slowly bleeding to death: emergency departments are overcrowded, extended waiting times in A&E are leading to over 200 unnecessary deaths per week, there are not enough hospital beds, staff are demoralised, and doctors strikes continue because the government refuses to pay public sector workers a fair wage. Waiting lists continue to grow, it is impossible to find a NHS dentist and sick people have to wait weeks for a simple GP appointment.

This systematic rundown of the NHS by successive Tory governments is not all bad news as privatisation has benefited the lucky few.

Staff agencies are doing very nicely thank you, the BBC reporting that:

“Companies providing freelance staff to the NHS to cover for big shortages of doctors and nurses have seen their income rise by tens of millions of pounds since 2019.” (24/03/23)

Total spending on agency staff in England was £3bn in 2021, one hospital reportedly paying £5200 to a free-lance doctor for a single shift. It would be nice to say that doctors are not complicit in the gradual privatisation of the NHS but that would be untrue.

“Hundred’s of England's NHS consultants have shares in private clinics.”  (Guardian: 21/01/22)

Over a billion pounds has been generated by these set ups since 2015

But it is not only doctors who profit personally from privatisation. During the pandemic, top Tories were very quick to pass on lucrative contracts to their friends in business. These largely unscrutinised public contracts have drawn accusations of “cronyism” and "chumocracy". Others have been more blunt, the Financial Times  (06/08/21) asking the question: “When does cronyism become corruption?"

The shortage of PPE during the pandemic led to contracts being awarded to companies without competition. Literally billions of pounds were given to private companies to supply gowns, gloves, and face masks.

“But the way these deals have been given to firms has led to concerns over a lack of detail about why particular suppliers were chosen. The government has also been accused of favouring firms with political connections to the Conservative Party with a "high-priority lane".  (BBC News: 20/04/21)

This accusation turned out to be true.

"UK government’s ‘VIP lane' for PPE suppliers was unlawful. High Court rules.”  (Financial Times 12/01/22)

Although Michael Gove claimed that “every single procurement decision" went through an eight-stage-process” the courts found that nearly fifty PPE deals were fast tracked by Conservative ministers, who awarded contracts worth £5bn to companies with political or Whitehall connections.  Four Tory MP’s and three Tory peers were named as “referrers” Michael Gove, Penny Mordant and Esther McVey are said to have personally recommended firms.

Some MP’s have done a lot more than fast-tracking private health care provision. Many of them have actually invested in private health care companies while others are happy to accept financial donations from them.

Wes Streeting, Shadow Health Secretary and the poster boy for Keir Starmer’s Labour Party, is said to have accepted “£22,5000 in private donations from private health firms last year.” (VOX Political: 30/04/23) Other Labour notaries are also said to have financial connections to private health care companies. Keir Starmer has received £157,500, Yvette Cooper has received £295,205, and Dan Jarvis has received £137,500. (Labour Heartlands: Selling Out the NHS: The Shocking Links Between Labour MP’s and Private Healthcare Donations: 17/06/23)

On the Conservative side, The Mirror (21/01/23) reports that Penny Mordant accepted £10,000 from care home firm Renaissance Care, while ex-health minister Steve Brine made £200 an hour giving “strategic advice” to drug firm Signa, before resigning in 2021. Publicly available information tells that that at least 28 Tory MP’s and Peers have had ties to private health and medical groups. Even the former Health Secretary Sajid Javid had share options in a Californian tech company dealing in health sector software.

So, while the NHS slowly disintegrates for want of proper investment and strategic planning, individual MP's and private health care providers reap the rewards of privatisation. Should this in any way be doubt then listen to what  former Conservative Prime Minister John Major had to say as long ago as June 2016:

“The NHS is about as safe from them (Tory Brexiteers) as a pet hamster would be with a hungry python.”

Unfortunately, and to its eternal shame, the same can now be said of Keir Starmer’s Labour Party.

#uk politics #MHS #privatisation #private health #keir starmer #wea streeting #penny mordant #Michael gove #unlawful #donations #cronyism #corruption #morality. deaths #sickmess. underprovision

[eaglesnick]

Private Sector Good, Public Sector Bad? (2)

This is the second part of a look at former public services and utilities in Britain that have been privatised in the name of neoliberal economics and the mistaken belief that private enterprise is ALWAYS more efficient than publicly  run bodies.

Prisons

The first privately run prison in the UK was opened in 1992 under a Conservative government and private sector involvement in Britain’s penal system has grown steadily ever since. The UK is now second only to the USA in the number of privately run prisons.

Premier Custodial Group was formed in 1992 and in 2005 was the largest private company running UK prisons. It was a joint venture between the American private prison operator Wackenhut Corrections Corporation and the British firm Serco PLC. From a turnover of £7.52 million in 1994 it had increased its revenues to £127.4m, with pre-tax profits of nearly £10m, paying out a £2m dividend to shareholders. In 2002 Wackenhut was taken over by Group 4 Falck.

In 2003 Serco gained control of Premier, estimating that Premier's

 “income over the life of its existing contracts for five prisons, one secure training centre, two immigration facilities and court escort custody and electronic monitoring services was £2bn” (Cited in Prison Reform Trust: Private Punishment :Who Profits; January 2005)

Group 4 Securicor (G4S) was a company created in 2004 when Group 4 acquired Securicor. Since these takeovers these companies have gone from strength to strength, with Serco, G4S, and GEO Group branching into immigration and other services.

In 2018, the Guardian reported that the Home Office paid these companies:

 “hundreds of millions of pounds to run the UK’s immigration removal centres, but no one knows for certain just how profitable the industry is…Commercial confidentiality agreements mean the Home Office and outsourcing companies are not obliged to publish detailed financial information about immigration detention centres in the UK.” (Guardian: 10/10/22)

In 2022, one of these companies, Sodexo was awarded a £264 million UK prison contract over a ten year period. On receiving the contract, Paul Anstey, CEO, Government, Sodexo UK & Ireland stated:

“Our vision is to provide a secure and safe environment which reduces re-offending through education, builds new skills and offers respect, equality and inclusion.” (Facilities Management Magazine: 16/08/22)

If only that were true! As long ago as 2013 Sodexo Justice Services  was facing charges of prisoner torture and degradation.

'Cruel, inhumane and degrading': Female prisoner kept segregated in 'squalid' cell for five years.”  (Independent: 21/08/2013)

In 2016 a video of naked Prisoners pretending to be dogs led to an investigation into violence and humiliation of prisoners by Sodexo. In September 2017, a female prisoner died under Sodexo care. An inquest into her death concluded:

“serious failures at Sodexo run HMP Peterborough contributed to death of Annabella Landsberg”  (Inquest: 04/04/2019)

Another prison run by Sodexo was accused of residing over a “spice” epidemic, which led to the death of a male prisoner. (Manchester Evening News) In 2018 Sodexo was again accused of neglect and systematic failures resulting in the death of yet another inmate. In 2019, a different prison run by Sodexo was accused of “systemic breaches of inmate human rights”.

In February of this year 20 prison staff resigned from the Sodexo run HMP Lowdham Grange, which was deemed so unsafe the government was forced to take it over.

The appalling levels of service cited above are not restricted to Sodexo alone. In her book “Profiting from their misery: Britain’s private prisons”, Hatty Nestor reveals that:

“outsourcing companies like G4S encourage prisoners to work 40-hour weeks, all they are paid (is)  as little as £2 an hour. Such practices amount to slave labour. Companies are profiting from prison labour, paying fewer well-trained, low staff wages. In private prisons, staff are paid 23% less than public prisons, and they also outsource security, healthcare and cheap food. Private prisons aim for a profit margin of 8-10%, which is met by cutting costs and the increased exploitation of staff and inmates.”

Given that privately run prisons pay their staff less, are more overcrowded, and employ fewer prison officers you would think they would at least be more cost effective yet this isn’t the case. The governments own figures for 2022/23 reveal that it cost £32,762 per prisoner, per year in publicly run prisons, while the cost for privately run prisons was £33,628 per prisoner. (Ministry of Justice: “Costs per place and cost per prisoner by individual prison.", 21/0324)

 What is more, the government gives 23% of its allocated budget to private companies despite the fact their prisons only house 15% of the total prison population. It seems that whichever way you measure private prison success (apart form profits for its shareholders) private prisons do far worse than those still in the public sector.

[eaglesnick]

Private Sector Good, Public Sector Bad?

The reigning ideological economic theory within the Conservative Party is, and has been ever since Margaret Thatcher came to power, that “markets know best”

This was made abundantly clear when Kwasi Kwateng, the Chancellor of Liz Truss’s short-lived government, dismissed anything resembling a “planned economy”. Rather, growth and economic success depended on:

“…the power of our treasured free-market economy to leverage private capital and unleash Britain’s unique entrepreneurial spirit to grow new industries." (The Conversation: 13/04/22)

The key words here are “to leverage private capital”. What this means in ordinary speech is to encourage private investors to participate financially in “projects that benefit the economy, society or the environment”.  This has resulted in private investors running (and in many cases, owning) most of our public utilities and services. But rather than “benefit the economy, society and environment" these private investors have devastated it.

Over the next few blogs I intend to look at various British/English public utilities and services and to see how they have fared under the private sector.  First up are the railways.

Britain’s railways are organised within a mishmash of private and public ownership, and has been described as “broken" and no longer fit for purpose.

“The UK's train network is not only one of the worst in Europe, it is also one of the most expensive.” (euronews: 20/05/21

This is no surprise given its complex and chaotic structure.   The railway tracks and rail network are owned and operated by Network Rail, which is a “non-departmental public body of the Department for Transport, (DFT) with no shareholders"

 Non-departmental public bodies are a strange entity. They are national or regional bodies that work independently of government, are not staffed by civil servants, and yet are still accountable to government ministers. It is the Secretary of State for Transport who sets the strategic direction of the railways, allocating funding, and it is the secretary of state  who has to approve major investments in the railway system.

The companies that operate the trains are privately owned and are either awarded franchises from the DFT, or they are “open access” operators that provide passenger services on a particular route or network, but with no exclusive rights enjoyed by franchise holders.

To complicate matters further, the actual trains, passenger carriages and railway wagons, known collectively as “rolling stock”, are owned by the rolling stock leasing companies” (ROSCOs) who lease out their stock to the privately owned rail operating companies.

Freight train operators are totally separate from passenger trains, have no contracts with government but do need permission from Network Rail to run their services.

For year 2022/23 the railways received £11.9bn of government funding and Network Rail has secured £27.5 bn of government funding over the next five years. In short, we the taxpayer invest heavily in our rail network which the private passenger, rolling stock and freight companies use to make a profit.

A 2019 report by the TUC found that:

“Rail firms have paid over £1bn to shareholders in the last 6 years.” (TUC: 02/01/2019)

In 2022 Avanti West Coast received a taxpayer subsidy of £343m, despite having the worst punctuality record amongst train operators and paying out £12m to its shareholders. Avanti West Coast is owned by First Group, who also own Great Western Railway and South Western Railway. Great Western paid out the largest dividend in 2021/22, £33m, while South Western paid out  £13m. 

More recently:

“UK rail operator Govia awards $79m in dividends amid UK rail dissatisfaction.” (Railway Technology: 08/01/24)

Govia is largely foreign owned, the three largest shareholder companies being Australian, Spanish and French. In 2022 it was fined £23m “over financial irregularities" having failed to return £25m in taxpayer funding. Why on earth any government would want to go on subsidising such a company is beyond understanding, especially as the Transport Minister at the time said the company had:

“…committed an appalling breach of trust...behaviour was simply unacceptable and this penalty sends a clear message that the government, and taxpayers, will not stand for it." (BBC News: 17/03/22)

Clearly the minister (Grant Shapps) didn’t mean what he said as Govia is still operating trains two years later and still courting controversy

Turning to the train-leasing companies, we find:

“Profits of UK’s private train-leasing firms treble in a year. More than £400m paid in dividends in 2022-23 while rest of railway faced cuts and salary freezes.” (Guardian: 18/02/24)

These companies saw their profit margins rise to 41%, a profit that we as taxpayers and passengers pay for. It is estimated that "taxpayers are now effectively paying the £3.1bn spent last year on leasing trains.” To actually run a passenger rail service yet not own a single locomotive or passenger carriage is bazaar to say the very least.

Finding overall profit figures for freight train operators is a little more difficult but Colas Rail UK’s revenue in 2022 was £15,529m, up 17% on the previous year, an operating profit of £460m.

 Overall, taxpayer subsidies to the rail industry run at £6bn per year. However, these massive subsidies have not led to lower fares, an end to over-crowed trains, or an efficient service. According to TaxPayers Alliance 02/01/23) "rail subsidies cost taxpayers £1300 each by March 2023.” Meanwhile the private companies that operate the highly fragmented and disjointed system continue to reap profits and pay out dividends.

Maybe this would not be so bad if the British taxpayer subsidised dividend payouts went to British owned companies, but this is far from the case:

“According to the Rail, Maritime and Transport Union, 70% of Britain’s railways are now under foreign ownership to some degree.” (CityA.M.: 11/01/17)

The figure of 70% foreign ownership is disputed, not least because some companies have gone bust since 2017, with five lines now being effectively run by the government as “operators of last resort.”  As the 1993 Railways Act forbids the UK state from running the railways these lines are likely to be franchised out to private firms in the future.

“…many foreign state-owned enterprises of the Netherlands, Germany, France, Italy and Hong Kong now run rail franchises in the UK." (The Standard: 11/05/23)

While other countries have no philosophical problem with running railways for the benefit of their citizens, and clearly have no qualms about investing state money in foreign ventures, the Conservative Party is ideologically opposed to state intervention in running UK public services and is vehemently opposed to setting up a UK sovereign wealth fund.

In summary, successive Tory governments have continued to pay taxpayers money into the coffers of private enterprise regardless of how efficient, honest or effective these firms are at providing an essential public service. Clearly, where the railways are concerned, they are not run to “benefit the economy, society and environment" but for the benefit and interests of private investors, in the mistaken Tory belief that private enterprise is always better than public stewardship despite evidence to the contrary.  

#uk politics #rishi sunak #Trains #franchise #leasing network rail #taxpayer money #profits private enterprise #inefficient #expensive #p

[eaglesnick]

Broken Britain: Labour’s Policy

Homelessness

According to Shelter 109,000 households are homeless in temporary accommodation - up 10% in a year -  including 142,490 children – up 14% in a year.

Labour does NOT include ending homelessness in Keir Starmer’s “Five Missions" that are at the centre of his party's promise to voters.

Child Poverty

4.3 million children were living in poverty in the UK during the period 2022/23 – 30% of ALL the nations children.

Labour does NOT include ending child poverty in Keir Starmer's “Five Missions"

Food Banks

Nearly 3 million emergency food parcels were distributed by food banks between April 2022 and April 2023, 760,00 people using food banks for the first time. The number of children in "material deprivation" wherein families cannot afford to feed themselves was 1.9 million.

Labour does NOT include ending    poverty in Keir Starmer's “Five Missions"

Water Pollution

According to the Environment Agency there were 3.6 million hours of spills of raw sewage into Britain’s waterways and beaches compared to 1.75 million hours in 2022. Not a single river in England is now rated as healthy.

Labour does NOT include environmental cleanup and protection in Keir Starmer's “Five Missions"

Social Care of the Elderly

Chronic under-funding, severe staff shortages and a growing elderly population has brought the social care sector to crisis point and on the verge of collapse. According to Age UK 2.6 million people over 50 years of age have unmet social care needs, while many thousands languish in hospital for lack of a social care plan for living in their own homes.

Labour does NOT include social care reform   in Keir Starmer's “Five Missions"

The Labour Party’s number one priority isn’t to help the poor, the homeless, the elderly or to protect the environment. It is to secure:

…“the "highest sustained growth" in the G7 group of rich nations, made up of the UK, US, Canada, France, Germany, Italy, and Japan, by the end of Labour's first term.” 

Strangely enough within Sunak’s “five promises” he emphasizes growing the economy above all else. Its all very well “growing the economy", but WHO are we growing the economy for, and who will benefit from any future growth?

After 14 years of Tory government the poor have become steadily worse off while the rich have prospered. The continued redistribution of the nation's wealth from poor to rich is a national scandal, leading to the UK “having some of the highest levels of inequality in Europe.”  Unfortunately, even if Labour should win the next election, this inequality is likely to continue.

#uk politics #keir starmer #rishi sunak #five promises #five missions #inequality #poverty #homelessness #child poverty #pollution #corporate greed #wealth #poor #social care

[eaglesnick]

“Leadership is a privilege to better the lives of others. It is not an opportunity to satisfy personal greed.” ~ Mwai Kibaki

Cash for honours? Who knows, but when you have donated £5 million to the Tory Party and are then knighted by Rishi Sunak for  “ business, charity and political service” a few eye brows are bound to be raised.

I am not sure what political service the Egyptian billionaire Mohamed Mansour has performed for Britain other than being a senior treasurer for the Conservative Party and donating £5 million pounds to their coffers in 2023. What we do know is that his time in Egyptian politics was rife with controversy.

In 2005 he was appointed Transport Manager under the Mubarak dictatorship. Mubarak was swept from power in 2011 after the Egyptian people had finally had enough of his dictatorial, undemocratic rule.   During this time:

“Mansour was known to be part of the team of Mubarak’s son, Gamal. The general public quickly came to think of this collection of businessmen as being in government to serve their own corporate empires..." (Middle East Eye: 16/12/22)

In October 2009, after two passenger trains collided causing the death of 50 people, Mansour was sacked from his post as Mubarak’s Transport Minister. Returning to his business empire, he was again embroiled in political scandal when he was accused of:

“…partnering up with his cousin, Ahmed al-Maghrabi, who had served as housing minister under Mubarak, to buy thousands of square kilometres of land to construct a residential compound for a fraction of its market price.” ((Middle East Eye: 16/12/22)

Another political controversy involved  sanction busting. In 2022 it came to light that Mansour’s Caterpillar dealership, Unatrac, was supplying machinery to Russia's oil and gas industry despite the international sanctions impose on Russia following Putin's invasion of Ukraine.

As for receiving a knighthood for his charity work, it seems he maybe less concerned with charity than in avoiding business taxes. Not only was Mansour’s company Unatrac trading with Russia despite international sanctions, it was also subject to HMRC investigations into tax avoidance.

“The firm co-owned by billionaire Tory treasurer Mohamed Mansour paid £3.2million in additional tax following an HMRC probe into the potential use of tax havens, it has emerged." (Sunday Mirror: 05/02/23)

Correct me if I am wrong, but surely if ALL taxes that are due were paid in full, then there would be less need for charity?

Billionaire Mansour, it would seem, is more interested in business, especially his own, than in politics or public service. The fact that the Tory Party are now prepared to accept money from donors who advocate the shooting of black MP's and from donors associated with dictators and tax avoidance says it all.

#uk politics #rishi sunak #mohamed mansour #tax avoidance #dictators #mubarak #scandal #hmrc #cash for honours #putin #sanction busting

[eaglesnick]

“Earth provides enough to satisfy every man's needs, but not every man's greed.” ― Mahatma Gandhi

Yesterday I highlighted the national scandal that encompasses the debt ridden, privately owned, companies that own and run  Britain's water utilities.

2023 saw 10,000 hours per day of untreated raw sewage being pumped into our waterways and onto our beaches because not enough money has been invested in modernizing the largely Victorian system. Instead, these companies, many of them foreign owned, chose to pay out billions to their shareholders rather than protect the environment they are responsible for.

Today the news broke that Thames Water, Britain’s largest water utility, may go bankrupt because it of its burden of debt. In many ways the history and behaviour of Thames Water epitomises the problem with UK  water companies as a whole.

Just over thirty years ago Thames water was a debt-free public utility. Mrs Thatcher, firm in her belief that private enterprise was infinitely more efficient than publicly run companies, sold shares in our water utilities to the public at large. Shares in the newly created private companies initially sold at bargain basement prices.

Selling water utility shares at well below their market value was a deliberate policy. It was part of Thatcher's strategy to create a "shareholding democracy". Unfortunately, it went disastrously wrong as “few small shareholders could resist the temptation to cash out their large profits.” (Guardian: 16/08/22)

Having undersold shares in water companies to the tune of £6bn in today’s money, the small investors resold their holdings to “private equity, institutional investors and large infrastructure firms from abroad." (ibid)

The certainty of good returns and a weak regulatory system practically guaranteed that privately owned water companies were a cash cow, and this has proved to be the case.

“…regulators have allowed returns that have been high or higher than average risky private companies, yet investors have been exposed to no more risk than government bonds. As the Financial Times puts it, 30 years on, “water privatisation looks like little more than an organised rip-off.” (Ibid)

Taking Thames Water as an example of this "organised rip-off" we find that in 2006 the German utility firm RWE, that owned Thames at the time, sold it to the Australian infrastructure asset management firm Macquarie for £4.8bn

Macquarie had a business model of borrowing against its assets (our water network)) to increase dividend payments to its shareholders. By 2017 when Macquarie sold its final shareholding, it had racked up a debt of £10bn.

In short, the blind adherence to free-market economic philosophy, (when was a water monopoly ever a free market?), the selling of essential infrastructure utilities to foreign entities,  the creation of a weak regulator and the turning of a blind eye by successive governments to the year-on-year increasing debt  within water companies, was bound to end in disaster.

Unfortunately, just as the public had to bail out the bankers and financiers when their greed brought down the economy, so we will be expected to pay for the greed of foreign investors in our waterways.

#uk politics #water utilities #public services #private enterprise #mrs thatcher #rip-off #debt #pollution #sewage

[eaglesnick]

“There is an increasing sense of what can be called legal pollution."   Thomas Ehrlich

Just a few weeks ago the Department for Environment, Food & Rural Affairs issued a government paper claiming:

“Government cracks down on bonuses for water company bosse. Water bosses are set to be banned from receiving bonuses if a company has committed serious criminal breaches, the Environment Secretary has announced today.” (GOV.UK: 11/02/24)

Figures out today (27/03/24) confirm that 2023 was the worse year for sewage spills on record.

“Figures from the Environment Agency show that there were 477,972 discharges from England’s 14,000 storm overflows in 2023, a 59 per cent increase from the year prior. In total, over 3.5 million hours of sewage spills occurred in 2023, more than double the 1.7 million hours recorded in 2022.”  ( CITYA.M: 27/03/24)

It will be interesting to see how many, if any, water company bosses are actually denied their bonuses this year. I suspect that this DOUBLING of sewage discharges into our waterways and onto our beaches will be explained away as unavoidable and therefore perfectly legal.

As such we, the public, will be made to pay for the much needed investment to improve our sewage disposal systems.

“Water companies will invest a record 14.4 billion – the highest ever in a single year – to help ensure the security of our water supply in the future and significantly reduce the amount of sewage in rivers and seas...the funds raised by increased water bills are guaranteed only to fund improvements in our water and sewage systems." (Water UK: 02/02/24)

To add insult to injury, it will be we the consumer who will be charged extra to fix the problems caused by years of under-investment by the water companies.

Last year alone £1.4bn was paid out to shareholders in the form of dividends.

And since 1991:

“England's privatised water firms paid £57bn in dividends…nearly half the sum they spent on maintaining and improving the countries pipes and treatment plants.” (Guardian: 01/07/20)

In other words, if the greedy water companies had paid a little less in  dividends and a little more on upgrading the system we would have been spared the 3.5 million hours of raw sewage spillage last year and the  massive rise in water bills that is come.

#uk politics #free market economics #water companies #sewage #sewage spillage #bonuses #corporate negligence #pollution

[eaglesnick]

"Once you realize that trickle-down economics does not work, you will see the excessive tax cuts for the rich as what they are--a simple upward redistribution of income, rather than a way to make all of us richer, as we were told."  Ha-Joon Chang

Limited (public) company directors often receive shares in the company they are employed in as part of their salary. These shareholdings can be substantial and the dividends they receive from these shares can be considerable, especially as income from dividends is taxed at a lower rate than PAYE income.

Under the PAYE scheme ordinary working people start paying tax at the following rates:

TAX BAND                           TAXABLE INCOME                      TAX RATE

Personal allowance                 Up to £12,570                              0%

Basic rate                                £12,570 – £50,270                      20%

Higher rate                              £50,270 - £125,140                     40%

Additional rate                         over  £125,140                              45%

If you are fortunate enough to have unearned income from company share dividends the rates are as follows.

Basic rate             8.75%

Higher rate            33.75%

Additional rate       39.35%

There is a trend in big business for mandatory director share ownership:

“Research by consultants William M Mercer has found that nearly a third of the top 100 businesses in the UK now require top executives to have a substantial shareholding in their company. Some directors must own as much as five times their salary in company shares.” (ereward: 27/02 2017)

Even at lower income levels, company directors can make substantial tax savings.

On a total salary of £50,270, a company director can, by taking much of their salary in share dividends throughout the year and by having their non-dividend salary below the National Insurance threshold, only pay a total tax bill of £3,255.

If you or I earned £50,279 we would pay a total of £11,310 in taxes.

At the other extreme we have Pascal Soriot, the CEO of AstraZenica, who is reported to be in line for a £18.9 million salary this year. However:

“… a scenario outlined in the firm’s annual report showed the total amount could be boosted to as much as £25million if the shares were to rise by 50 per cent.”  (This is Money: 20/02/24)

Soriot has a base salary of £1.43 million per annum, the bulk of his massive income being made up by other payments. . For most people Soriot’s basic salary is beyond their wildest dreams, and to be paid nearly £19 million is obscene. I don’t know how much (if any ) of Soriot’s income comes from share ownership and dividends,  as this information is near impossible to find out.

What we do know is that “insider individuals” – board members and other top managerial officials of AstraZenica  – own at least £41 million worth of AstraZenica shares. (Simply Wall St: 20/01/22.)

 As well as having assets worth £41m, these “insider individuals” will receive dividend payouts on their share holdings, and if paying tax in Britain will enjoy considerable tax benefits unavailable to the majority of hard working people in this country.

We all know there is one law for the rich and one for the rest of us, and nowhere is this more apparent than when it comes to paying taxes.

#uk politics #taxes #unfair taxes #rich #company directors #shareholdings #astazenica #pascal soriot #CEO's

[eaglesnick]

“A generous basic state pension is the least a civilized society should offer those who have worked hard and saved through their whole lives."  George Osborne

It was Tory Chancellor of the Exchequer Kenneth Clarke in 1993 who first announced plans to raise the pension age of women from 60 to 65 years of age.  The Tories 1995 Pension Act enshrined this in law but the changes were to be phased in between 2010 and 2020. So far so good – lots of warning, giving women plenty of time to financially prepared for the fact the OAP would not be available until they were 65.

Enter David Cameron, George Osborne, Nick Clegg and the Coalition Government of Austerity. In 2011 they decided to accelerate the changes and bring forward the state pension age for women to 65  by November 2018 and then to 66 by 2020.

Displaying typical Tory disregard for the detrimental financial effects this might have on ordinary working women, and displaying a total lack of common decency, some women claimed “they only received 12 months notice of the six-year delay to their pensions." (Guardian: 21/03/24), giving them no time to prepare for their unexpected loss of pension.

What is more The Parliamentary and Health Service Ombudsman found the Department of Work and Pensions “guilty of misadministration in its handling of the changes.”

Meanwhile Jeremy Hunt, in his latest budget has given millions away to the wealthy in pension tax breaks.

“Financial firms have said the changes to pension allowances could let high earners who can afford it build up pension pots worth as much as £9m while enjoying the full tax benefits.”  (Guardian: 16/03/24)

We deserve better.

#uk politics #pensions #george osborne #iront #nick clegg #david cameron #rich. wealth #jeremy hunt #austerity #maladministration #waspi women

[eaglesnick]

“In a country well governed, poverty is something to be ashamed of. In a country badly governed, wealth is something to be ashamed of.”   — Confucius, Chinese teacher and philosopher

According to Jeremy Hunt, Chancellor of the Exchequer, his recent budget announcements will “eliminate low pay altogether". Speaking in Parliament last November he stated:

“People who get up early, put in the hours and work hard for their families deserve to be paid fairly” (Hunt: 22/11/23)

I couldn’t agree more. It is therefore such a pity that Hunt was being less than honest with us. According to The Resolution Foundation analysis of ONS data (reported in the Guardian. March 2nd 2024) after almost 14 years of Tory rule, average wages are still “below their 2008 peak".

In other words, despite inflation now falling and private sector wage rises being above inflation, the average worker in this country is no better off than they were over a decade a go. The Resolution Foundation has calculated that the 15 years of low wage growth under successive Tory governments has cost the average worker £10,700, the worst period of pay growth since the Napoleonic wars.

But who cares about the plight of the average UK worker or their families? :  certainly not Conservative governments. Under the Tories the tax burden for the average worker has rocketed, mainly through stealth taxes, and is set to reach the highest lever since the second world war.

But it’s not all bad news.

During the same time frame, emergency food parcels for the poor have risen from less than 100,000 in 2010 to over 3,000,000 a year. And while the poor queue for their food parcels, the rich are busy counting the massive increase in their personal wealth.

“Soaring levels of wealth across the UK, coupled with high levels of wealth inequality, mean that the wealth gap between the top and middle tenth of households in the UK has grown to a record £1.2 million per adult. ( Resolution Foundation: The UK's wealth gaps have grown over £1.2 million, 20/07/22)

So, when the Tories talk about an improving economy and tax cuts for ordinary working families, just remember what the stark economic reality is for the millions of workers “who get up early, put in the hours and work hard for their families”: stagnant wages and a society with ever increasing inequalities between those that work to improve the country’s wealth and and those who benefit from that work.

#uk politics #jeremy hunt #rishi sunak #inequality #rich #poor #taxes

[eaglesnick]

Green Behind The Ears

MYENERGI produces a list of green energy suppliers, wherein "green energy" is defined as energy that is produced by “hydroelectricity, solar power and wind power”. According to MYENERGI you can ask for renewable energy from a number of suppliers including, British Gas, EON, EDF and nPower.

Since the end of 1991 renewable energy has risen from just 2% of all electricity generation to over 40%, with December 2023 being the “15th month in a row where zero-carbon generation produced more than fossil fuel generation." (nationalgrid: 17/01/24)

Wonderful news for the environment: and wonderful news for the consumer, or so politicians would have us believe.

“Cheap electricity, clean air and insulated homes: Sunak outlines green financial 'vision'. (LBC: 03/11/21)

But here is the BIG CON.

1. The electricity you use at home comes from the ONE mains electricity cable in your street. There are NOT multiple cables outside your house in the same way there are different internet provider cables. The electricity supply you use in your house is the same as the electricity supply your neighbour uses regardless whether your supplier is “Green” or not.

“It's not possible to direct 'renewable' electrons to some homes and 'non-renewable' electrons to others.” (Which: How Green is your energy tariff?” 27/09/19

2.  Despite gas powered power stations providing under half of the total electricity generated in the UK, in recent years it “set electricity costs 84% of the time.” (ULC News: 06/09/22)

Renewable green electricity generation is far cheaper than electricity generated by fossil fuels, yet it is the price of gas-generated electricity that determines what we are charged for ALL our domestic electricity.

Despite paying lip service to “free markets” and “competition” the UK energy market is rigged in favour of the generators.

The UK operates a “marginal cost pricing system” and under this rigged system:

“…the wholesale price of electricity is set by the most expensive method needed to meet demand… In each half-hour trading period, each electricity generator bids the price it will accept to generate electricity, according to how expensive the electricity is to produce.

The bids are accepted in ‘merit order’ until the demand for electricity is met; the cheapest first, and the most expensive last. However, the price of all units of electricity is set according to the bid price of the most expensive unit needed to meet projected demand. (House of Commons Library: Why is cheap   renewable electricity so expensive on the wholesale market? 14/09/23)

In other words even if 90% of electricity demand is met by cheap renewable methods, ALL units of electricity are charged at the higher cost of fossil fuel generated electricity.

The crippling cost of domestic energy has led to 3.5 million households being in fuel poverty, with many in arrears and unable to pay for the energy they have used.  The energy suppliers claim they are “owed” £3billion in unpaid bills and are adding a levying a £16 on ALL households to cover their losses. 

So, although green energy is much cheaper to produce than that generated by traditional fossil fuel do not expect to see cost coming down anytime soon.

[eaglesnick]

“The increase in the price of electricity will not affect the poorest. Their electricity has already been cut off.” ― Ljupka Cvetanova, Yet Another New Land

The energy suppliers of Britain, we are told, are “owed” £3 billion in unpaid bills. Ofgem, the energy watchdog - working “to protect energy consumers” – has therefore decided that those of us who are paying our energy bills should be  charged an extra £16 pear year on top or our regular bills in order to help suppliers recoup their losses.

£16 isn’t very much, but it is the principle rather than the cost which is deeply concerning. End Fuel Poverty Coalition coordinator Simon Francis had this to say:

“This outrageous tax on energy consumers is simply not fair...  Energy suppliers have posted billions in profits already this year while millions of people struggle in cold damp homes. The record levels of energy debt are due to Britain’s broken energy system, not the fault of the hard-pressed public.”  (Guardian: 15/12/23)

It is a very strange logic that demands customers pay off a companies debts when they supposedly make a loss but refuse to share dividends when in profit.

EDF, for example made a profit of £1.12 billion for the period 2022/23. Shell, not only a producer of gas and oil but also a domestic supplier of energy, made an overall company profit of £32.2billion in 2022. Is it too much to ask that any loss they may have made selling domestic energy be off-set against their massive global profits? Why are we subsidising the shareholders of such a hugely successful company? Meanwhile hard hit Centrica, owners of British Gas, only made £3.3 billion in profits for the year 2022. They obviously need our help!

Even the minnows of the energy supply industry made money. Octopus Energy Group made a profit of 1.6% ( £203 million) according to its own published  results, with revenues tripling from “ £4bn to £13 billion”.

Have we all fallen down the rabbit hole? When did it become acceptable for the paying public to make up the “losses” of private enterprise, especially when the overall arm of those enterprises are making billions in profit? The world just gets curiouser and curiouser.

#uk politics #energy prices #energy tax #multinationals #profit #public subsidy #ofgem

[eaglesnick]

Future Leader of The Conservative Party?

Kemi Badenoch, a far right Tory, is a firm favourite to take over from Rishi Sunak as leader of the Conservative Party. She is very concerned about honesty and openness, and rarely misses an opportunity to tell her audiences that “It is time to tell the truth”. For Ms Badenoch, politicians need to stand up and tell the truth because the public is “crying out for honesty”. (The Standard: 12/07/22)

Quite right Ms Badenoch. We do want the truth.

Yet, the Guardian carried this headline only two days ago regarding Badenoch’s relationship with the truth.

"...the truth is an insult to the ever-outraged Kemi Badenoch. The business secretary is a passionate defender of free speech apart from any criticism of her."  (19/02/24)

The former chairman of the Post Office, Henry Staunton, who was sacked by the business secretary Kemi Badenoch last month, has claimed he received instructions from a senior government official to slow down compensation payments for sub-postmasters to allow the government time to “limp into” the next election.

Ms Badenoch vigorously denied this was the case and, using Parliamentary privilege, attacked  Mr Staunton’s revelations as “full of lies”.

Today Mr Staunton has produced evidence that he was told to “hobble" up to the general election and to delay compensation payments as "now was not the time for dealing with long term issues.” (The I: 21/02/24)

The word “hobble" certainly implies that Mr Staunton was told to delay payments to sub postmasters and mistresses, but it is still a “she said - he said” argument, and who you believe will probably depend upon your political view point.

Less problematic in establishing whether Ms Badenoch is really the champion of truth that she claims to be, is evidence from the Canadian High Commission.

Badenoch, as Business Secretary, recently told the House of Commons that trade talks with Canada were “ongoing”. This is not true say the Canadians, causing Liam Byrne, Chair of the Commons Business and Trade Select Committee, to demand of Ms Badenoch why the Canadian account of the talks is:

“so utterly at variance with what she told the House of Commons.”

Maybe the right-wing Ms Badenoch is not as honest or as concerned with telling the truth as she claims?

#uk politics #kemi badenoch #right-wing #truth #lies #deceipt #selective memory #leadership bid #Tory

[eaglesnick]

[eaglesnick]

“Of all forms of inequality, injustice in health is the most shocking and inhumane.” (Martin Luther King, Jr)

So, King Charles has cancer. Being someone who also had cancer he has my sympathy: I wish him and his family a happy outcome to his worrying news. Those who do not have my support are the media who have been making up all sorts of excuses for the Palace issuing this news and the seeming sudden blackout regarding UK cancer recovery rates which are some of the worst in Europe, and which were hitting the headlines only a few weeks ago.

If you believe the media, the Palace issued the statement revealing King Charles has cancer to give hope to other cancer suffers.

“Several experts have praised the King for sharing the health condition with the public saying it will encourage others to seek help for their potential cancer symptoms.”  (Daily Express: 06/02/24)

“His Majesty has chosen to share his diagnosis to prevent speculation and in the hope it may assist public understanding for all those around the world who are affected by cancer.”  (Buckingham Palace statement: 05/02/24)

How knowing the King has cancer can “assist public understanding" of the disease is beyond my comprehension. Cancer Research UK tells us there are over 200 different types of cancer. All have their own levels of danger and all have their own specific treatment regimes.  Knowing the King has cancer tells us nothing other than the king has cancer.

The more likely explanation for  the Palace being  so unusually open about the King’s medical condition is it would have been nigh on impossible to hide the fact that something was seriously wrong with his health. He would have been seen visiting a hospital on a regular basis, his public engagements would have been cancelled and his physical appearance may well be affected by whatever treatment he has to undergo. In short, the Palace statement has more to do with “preventing speculation” (as it freely admits) than with promoting understanding of cancer, which had been the media’s spin.

King Charles is fortunate. He is rich and can afford private health care, and I doubt there are many people who would not also use their wealth and power to ensure the best medical treatment for cancer. Unfortunately, for the majority of us  in ‘Broken Britain’ that isn’t an option.

Only a few weeks ago the Guardian newspaper carried this headline:

“UK has some of worst cancer survival rates in developed world, report says. Rates for lung, liver, brain, oesophageal, pancreatic and stomach cancers worse than in most comparable nations." (11/01/24)

Britain ranked only  28th out of 33 countries with comparable wealth and income levels for cancer survival rates.  Not only does Britain diagnose cancers much later but treatment capacity is also below that of other countries. So, even if you are diagnosed early (which is unlikely) you will still have to join a long queue before treatment begins. Of course, if you are a King or are wealthy, this doesn’t apply and you can begin treatment almost immediately.

Britain’s media now has an opportunity to champion better cancer care for ordinary men and women and to insist that the “abysmal survival rates” that characterise our currant cancer care regime are reversed. However, the media reports I have heard regarding the Kings cancer have totally failed to mention that Britain has one of the worse cancer survival rates in Europe. If the media truly believe the Palace announcement concerning the King’s cancer is to “help others” or to “raise awareness” then they should start by revealing the shortfalls in the countries present cancer diagnosis and treatment regime and shortfall in NHS funding by successive Tory governments.

#uk politics #King Charles #NHS #cancer recovery rates #wealth #health #broken Britain

[eaglesnick]

“Purpose driven technology will continue to flourish, whereas profit driven technology will either perish or destroy the world.” ― Abhijit Naskar, Mucize Insan: When The World is Family

Last July, the Guardian newspaper had this headline:

“Price of offshore wind power falls to cheapest ever level in UK. Contract price is nearly 6% lower than previous auction in 2019, which could ease pressure on energy bills." (08/07/22)

In Britain, nearly 50% of offshore wind farms are “state-owned foreign entities”. Or, to put it another way, foreign governments see a profit to be made from investing in UK energy generation. Our government, clinging to its outdated believe that ALL public sector enterprise is bad, auctions off our capacity to be energy self-sufficient to foreign powers regardless of the cost to the consumer or taxpayer.

The UK government operates “contracts for difference" for these "foreign entities” whereby we the taxpayer guarantee a fixed price for the energy they produce. Although the electricity generated is sold on the electricity market, if the price falls below the agreed contract price then the government subsidises the difference. If the market price is higher, the generating companies pay money back to the government.

Put bluntly, our government is gambling with taxpayer’s money, and at a time of energy shortages, which we have experienced since the beginning of the Ukraine war, then both as taxpayers and as consumers we in Britain are paying a far higher cost for our electricity than many other countries.

In the US “electricity prices surged 14.3% in 2022, double overall inflation”.  In Britain, according to government figures, electricity is “40% higher than two years ago” (ons.gov.uk: Cost of living insights: Energy). In France, where the government owns the electricity generating companies, prices rose by a mere 4%.

The Guardian headline of last July forecasting lower electricity prices just didn’t happen, not least because non-of the “foreign entities" operating the off-shore windfarms bid for the new contracts.  Why would they? They were being offered a reduced guaranteed price at a time of high-energy prices.

“None of the UK’s biggest offshore wind developers took part in the auction after many complained to government ministers and officials that the maximum price had been set too low.” (Guardian:08/09/23)

Given that the UK is now dependent upon foreign sovereign wealth fund investment in our offshore windfarms to secure continuation of supply they had no choice but to raise the minimum guaranteed price.

“The price paid to generate electricity by offshore wind farms has been raised by more than 50% as the government tries to entice energy firms to invest.”  (BBC News: 16/11/23)

Our Tory government has made some outlandish claims regarding security of energy supply and reducing prices to the consumer, but as we have seen security of supply is dependent upon the guaranteed minimal price offered to the foreign companies running our offshore windfarms.  These companies boycotted the last round of contract auctions because they knew they could demand a higher price, and that is exactly what happened. Rather than a reduction in price, British consumers can now expect even higher electricity bills.

By continuing to sell off our natural resources to the highest bidder, Tory governments neither secure energy supply nor do they reduce prices. In short all they have secured is the worst of both worlds and it we the consumer who pay the cost.

#rishi sunak #uk politics #wind power #windfarms #energy security #energy prices #inflation #profits

[eaglesnick]

“Rethinking capitalism means rethinking the role of the public sector, the role of the private sector, the role of finance, and the relationship between them all.”

Mariana Mazzucato

A few days ago multi-millionaire Sunak announced with much pride and sense of achievement, a £29.5 billion investment package from the private sector.

“Sunak announces £29.5 billion private sector investments.” (gg2.net:27/11/23)

Wonderful you might think. But is it?

This “investment” is all foreign money. Our water infrastructure had massive foreign investment to the point that it is now 70% owned by foreign shareholders, shareholders determined to maximise returns on their investment regardless of the pollution and environmental damage they are causing to British waterways and beaches.

The same is true of Britain's off-shore wind generating capabilities.

“Nearly half of UK's offshore wind capacity owned by state-owned foreign entities, analysis shows." (sky news: 26/09/22)

Relying on foreign investment neither guarantees security of supply or cheaper prices. Foreign investors will maximise profit at the expense of the British consumer. They will do this not because they have anything against we British in particular but because they don’t have to live with the consequences of higher prices: we do!

In France where the energy sector is state owned, consumers pay much less for their electricity.

“EDF energy prices rise by 4% in France compared to 54% in UK. State-owned firm was forced to take a £7billion pound hit to protect French households.” (WalesOnline: 07/04/22)

This just didn’t happen in the UK because the right-wing Tory party is against public ownership on ideological grounds. It doesn’t matter that it is the British consumer who pays the cost for this ideological Tory obsession. When did the Tories show anything but contempt for ordinary working people and their families?

This new tranche of foreign investment will see energy transition, “in such areas as offshore wind, solar, battery storage renewable fuels and pumped hydro”, and “affordable” housing being sold off to non-British owned firms. Investors from Australia, Spain and America will very soon have a greater chunk of Britain’s essential infrastructure than they do already.

Margaret Thatcher was accused of “selling off the family silver” when she adopted neo-liberal economic policies whereby the public services that ran Britain’s essential infrastructure were sold off to the private sector.

“By the time of her tearful departure from office in 1990, more than 40 UK state-owned businesses employing 600,000 workers had been privatised.” (Financial Times: 07/12/11)

Thirty-three years on and our government is still chanting the mantra “private sector good, public sector bad”. It doesn’t matter to these Tory ideologues that profits from foreign investment goes overseas. While many other governments are investing in their own economies while also building up sovereign wealth funds by also investing overseas, our government is stuck firmly in the past.

It is bad enough that the financial profits made in Britain by foreign investors are paid in dividends (and taxed) elsewhere, but these foreign investors will also own the intellectual property of the companies that they own. There is no “security” for Britain if a company can simply up sticks and start production elsewhere, taking the know-how, and often the skilled personnel with them. And like the foreign owned “British" water companies, they have no interest in Britain other than extracting as much money from us as they can.

#uk politics #rishi sunak #privte investment #selling the family silver #privatisation #profit motive #investment #sovereign wealth