Saturday, 24 May 2014

The corporate stranglehold on the UK economy

At PCS Annual Delegate Conference in Brighton, John McDonnell MP, Andrew Fisher and Ann Pettifor spoke at a fringe meeting 'The economy we've got ... and the economy we need'. Their contributions were wide-ranging, but one thing was in common: big corporations are taking us for a ride ... and over-charging us for that ride!

John McDonnell spoke first and described a "corporate kleptocracy" in which four outsourcing companies: G4S, Serco, Atos and Capita have made huge profits from public contracts - massively expanding their share price, despite a slew of scandal and corruption. In the case of G4S fraudulently claiming for tagging people, and mismanaging Oakwood prison.

John also referred to the revolving door in Westminster through which corporate secondees are placed in government departments, and senior civil servants and ministers leave to pursue lucrative directorships at the companies to which they awarded contracts.

Andrew Fisher built on McDonnell's "corporate kleptocracy", saying that privatisation had led to huge profits for big business, seven figure salaries and bonuses for directors. He contrasted this with how privatisation had meant higher bills for water, electricity and gas, and higher rail fares - yet workers saw job cuts and attacks on pay and pensions.

This, said Andrew, accounted for the huge underinvestment in UK industry because our infrastructure on energy, housing and rail lags far behind the rest of Europe as our private owners just sweat the assets they got on the cheap, rather than invest for the long-term. Andrew ended by saying that we need "an economy as if people mattered, not as if only oligarchs matter".

Ann Pettifor derided "rentier capitalism" - using the example of Glazers who had bought Manchester United by loading it with debt - and repaid that debt through fans paying high prices for season tickets, TV contracts to watch them, and for the replica shirts. This was even more perverse said Ann when you see little children in Africa wearing the shirts knowing how much they've paid for them, so that the Glazers can pay their debts.

These are people who don't live here, "they live in the stratosphere", said Ann - a phrase that relates both to their stratospheric wealth and to the Florida residency. Many similar rentiers do live here, said Ann, but they "pay £50,000 a year to avoid their taxes and register as non-domiciles".

Following their contributions, there was a good discussion with delegates, who showed a real appetite for more political and economic discussion and for ideas about how to organise against corporate abuse. Many delegates also bought copies of Andrew and Ann's new books 'The Failed Experiment' and 'Just Money'.

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