The Weekly paper of the New Communist Party of Britain
Week commencing 19th January 2018

Nationalise Carillion

by Daphne Liddle

LABOUR leader Jeremy Corbyn last week described the collapse of the giant company Carillion as “a watershed moment.” He said: “Across the public sector the ‘outsource first’ dogma has wreaked havoc. Often it is the same companies that have gone from service to service creaming off profits and failing to deliver the quality of service our people deserve.

“The evidence is clear and it is everywhere. Look at the £2 billion bailout for Richard Branson’s Virgin and Stagecoach for their failure to run the East Coast Line properly; or the scandal of the National Health Service being sued by private companies like Virgin after losing a contract...“Tory underfunding has created the crisis but privatisation, outsourced contracts and profiteering have made it worse.

“Our public services — health, rail, prisons and even our armed forces housing — are strained after years of austerity and the private sector siphoning off profits from the public sector

“It’s time we took back control. We not only need to guarantee the public sector takes over the work Carillion was contracted to do — but go much further and end contracts where costs spiral, profits soar and services are hollowed out.

“Labour will end the Private Finance Initiative [PFI] rip-off, put an end to the private profit is best dogma and run our public services for the benefit of the many, not the profits of the few.”

Theresa May’s government has refused to bail out the company but promised to guarantee the jobs of those working in the public sector whose jobs are at risk and to maintain the vital public services they deliver, from hospital building, to school meals, railway construction projects and railway cleaners, prisons and housing for the armed forces. But for those tens of thousands of workers in the private sector employed by scores companies subcontracted to Carillion, all May had to offer was a special hotline to the nearest Jobcentre.

Thousands of current and former staff have money in Carillion pension funds, which have deficit of almost £600 million.

According to the receivers, PriceWaterhouseCooper, creditors cannot expect more than a penny in the pound of what they are owed. This will sink not only Carillion’s employees, but also many of the small and medium companies subcontracted to it. The banks that have lent money to Carillion will also be hit. The repercussions could spread far and wide, and could trigger more collapses.

Trade union and Labour voices have been unanimous in their demands for an immediate end to any further privatisation of the public sector, and for privatised services to be brought back into the public sector.

This means a general election and a Labour government. The evidence is plain to all that Theresa May is incapable of governing and cannot even control her own party.

Mick Cash, the general secretary of the Rail, Maritime and Transport (RMT) union, said: “This is disastrous news for the workforce and disastrous news for transport and public services in Britain.

“RMT will be demanding urgent meetings with Network Rail and the train companies today with the objective of protecting our members’ jobs and pensions.”

Rehana Azam, national officer of the GMB union, said: “What’s happening with Carillion yet again shows the perils of allowing privatisation to run rampant in our schools, our hospitals and our prisons.”

The public-sector union Unison said: “The Government needs to move quickly to bring these contracts back in-house — to safeguard services and protect thousands of jobs in schools, local authorities and libraries.

“As things stand, Carillion holds key contracts across the health service. With the current winter pressures, staff shortages and underfunding, further uncertainty puts the NHS in an even more precarious position, piling more pressure onto an overstretched system.

“It’s disgraceful that Carillion was lining the pockets of its shareholders, even though the company’s future was increasingly uncertain. And now the taxpayer is going to be stuck picking up the bill for another failed privatisation experiment.”

Jon Trickett, Shadow Cabinet Office Minister, said: “The Government must act quickly to bring these public-sector contracts back in-house to protect public services and ensure employees, supply chain companies, taxpayers and pension fund members are protected.

“Given £2 billion worth of Government contracts were awarded in the time three profit warnings were given by Carillion, a serious investigation needs to be launched into the Government’s handling of this matter.”