Defend public wealth: resist privatisation

“We have to get beyond sectoral interests and look at the common good, to defend the very idea of social ownership as an alternative to the anarchy and chaos of corporate monopoly capitalism.”—Extract from the TULF’s pamphlet Robbing the People’s Wealth.

This January the Trade Union Left Forum met in the TEEU offices and agreed to launch a campaign in defence of public wealth and opposition to privatisation. Members and activists from a range of unions, public and private-sector, shared their experiences of the scale of privatisation that is under way and the loss to the public of valuable assets and services.

Privatisation—or outsourcing, sub-contracting, opening up for competition—is not new. Indeed over the years the state has sold off, for a quick buck, billions’ worth of public wealth in the form of various companies, including ICC, ACC, Irish Life, Eircom, Aer Lingus, Irish Sugar, Irish Steel, and Great Southern Hotels, as well as refuse collection, natural resources, and many more. In more recent years it has also outsourced the provision of various public services, particularly in the health service and most recently in An Bord Gáis. Many of these have ended in disaster for the public.

Where profitable companies are sold, the continuing return they provided to the state in the form of a dividend is ended. For example, Irish Sugar went on to become Greencore; if retained in public ownership it would be a valuable state asset today for investing in health, education, and other vital services.

Others, as for example ACC and ICC, on privatisation lost their strategic investment mandate and went on to fuel speculative short-term investments, so contributing to the property bubble.

Eircom went through various owners, has been stripped of many valuable assets, loaded with hundreds of millions in private equity debt, fallen well behind in its provision of vital infrastructure, and in its most recent form has become a state asset of Singapore, through Singapore’s state company ST Telemedia.

In refuse collection we now have the sadly comical scenario of three or four massive trucks from different companies roaming through estates, picking up bins from every third or fourth house, with hidden registration charges often spent on pointless advertising, touting for each household’s business; and this is presented to us as private-sector efficiency! Nothing could be more inefficient from an economic and environmental point of view than this farce; and the public pay for it.

A positive example of how an efficient state enterprise can be run and be of immense value to the public is the ESB. Established in 1927, at its peak the ESB employed 13,500 workers in secure, well-paid, decent work, with educational opportunities not available to many workers in the private sector. The ESB never received a subsidy from the state but has been self-financing from its inception. Over the last decade it has returned in the region of €2 billion worth of dividends to the public purse.

As a result of EU law on energy deregulation—i.e. privatisation of the market—imposed on the ESB, it was forced to raise its charges, at the public’s expense, so that less efficient private-sector companies, such as Airtricity and Viridian, could enter the market and profit at our expense. In essence, the state is imposing a profit tax on the public for private enterprise.

As a result of this the ESB has had to hand over about 800,000 customers and has been forced into thousands of job losses. It now employs in the region of 6,500 workers. Any “job creation” by Airtricity and other companies is not real job creation at all but job displacement, from better-paid, more secure employment to lower-paid work.

The ESB, including its workers, should be defended and supported as a valuable state enterprise and public asset.

The Trade Union Left Forum is launching a politicised union campaign within the trade union movement and also more generally among the public, because campaigning works.

This Government wanted to sell off Coillte, the successful state forestry company. In recent years Coillte increased its value from €730 million to €1,400 million and turned an operating loss into a profit of more than €40 million. At present it employs more than a thousand workers. It is committed to sustainability and biodiversity, vital for Ireland’s environmental balance, and particularly for jobs in the agricultural sector. It is crucial to the broader forestry sector, which creates €2.2 billion in economic activity each year and employs more than 12,000 workers.

The sale of Coillte was prevented by heightened public awareness and interest in our forests and the value of the company to the public, led by both the trade union Impact and committed social and environmental activists.

In Germany, union and public campaigning has forced the Hamburg Metropolitan Region to renationalise its electricity grid, after private-sector involvement failed. Indeed in Germany since 2007 more than two hundred power and water grids have been renationalised by local authorities—evidence of the failure of privatisation and the value of public ownership.

As the TULF pamphlet suggests, the trade union movement has to move beyond sectoral interests and lead a public campaign in defence of public wealth and public ownership and to fight privatisation wherever it is proposed. This needs to begin with an ideological defence of public ownership and a heightened sense of pride and value in successful public operations.

Only the trade union movement has the capacity to make this campaign national and combine the complementary interests of the workers directly involved and the public who both own and rely on these assets and services.

What’s more, it is ICTU policy to lead such a campaign; yet little has been done. The TULF is committed to making this a union issue and encouraging inter-union support and activism.