Campaign news

Stop Tory Privatisation

2nd February 2017

Stop Tory Privatisation

By Mick Brooks

The Tories are hoping to sneak through another privatisation – giving away our public assets to private profiteers.

This time it’s the Green Investment Bank. The GIB was set up in 2012 during the Tory/LibDem coalition government as a sop to Vince Cable and the LibDems. The idea was to raise funds in order to finance long term ecologically sound investments such as wind farms, biomass projects and street lighting systems. The government realised that private firms were not doing that. Capitalists are notoriously greedy with short term profit horizons, so a public body could fill that gap.

Right away there were tensions within the coalition. George Osborne is a failed Chancellor. He promised to eliminate the government budget deficit by 2015. The latest prediction is that there’ll still be a deficit after 2020. Osborne was obsessed with raising cash to pay down the deficit, even at the expense of selling off potentially valuable assets. He demanded that the GIB ‘stand on its own two feet’. GIB did ‘stand on its own two feet’, despite the long profit horizons that such green projects it invests in necessarily entail. The GIB has raised £2.7bn from the markets so far, with a respectable 10% return in prospect.

That makes it a juicy target. Public sector bodies can’t win in a capitalist economy dominated by Tory neoliberal thinking. If they don’t make money (even if that is not what they were set up to do) then that shows that the public sector can’t deliver. If they do deliver, then they should be handed over to the tender mercies of private capital.

In 2016 privatisation of the GIB was mooted by the Business Secretary Sajid Javid. Javid is a right wing ideologue, a disciple of Ayn Rand. According to his view ‘free market’ capitalism delivers the best of all possible worlds. So in that case why do we need a Business Secretary?  Javid was described as a Fredo Corleone figure, who saw his only tasks as pouring drinks and procuring hookers for important visitors.

While he was fantasising about free markets, the crisis in Port Talbot steel, which threatened thousands of jobs, caught him on the hop. It also raised important questions - such as why decisions by a firm based thousands of miles away can threaten the livelihoods of working class people here, and in that case how come markets are so wonderful? The Labour opposition correctly accused Javid of “incompetence and laziness.”

Javid has gone and Greg Clark is the new Business Secretary, but the policy of looting the state remains centre stage. The Scottish government is not happy.  They have been kept in the dark by the Tories at Westminster. GIB’s main offices are in Edinburgh. The SNP smells a rat. Their spokesperson says, “Reports have indicated that the completion of the transaction process will result in the complete break-up of the current Green Investment Bank portfolio and may result in an asset-stripping exercise with significant financial rewards for any new owner.

The preferred bidder the Tories have lined up is an Australian financial conglomerate called Macquarie. The firm is unaffectionately known as ‘the vampire kangaroo’. Complex financial shenanigans mean that despite all its assets (including Thames Water) it pays next to no corporation tax here. Macquarie is so confident of all the money they will make by buying the GIB at a knockdown price and breaking it up that they are already seeking bids for the shattered fragments it proposes to dispose of. Macquarie is not interested in green projects; it is interested in making the maximum money in the shortest possible time. Returns of 30% from the asset stripping have been mentioned.  Jobs in the GIB funded projects will inevitably go, and Britain will fall behind in the renewable energy sector. The only thing green about the proposed deal is the attitude of the Tories.

Clive Lewis, Labour shadow Business Secretary, declared, “Privatising the GIB makes no sense whatsoever. The bank is both a great success as a public institution and providing a healthy return to the taxpayer. It’s been multiplying our ability to build substantial low carbon infrastructure and fight climate change.”

Protest is building. The privatisation of GIB has stalled. Even the right wing paper ‘City A.M.’ opposes the sale. It’s not too late to stop the rip-off.