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Privatisation (Costs)

Part of Prayers – in the House of Commons at 1:30 pm on 5th April 1995.

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Photo of Mrs Helen Liddell Mrs Helen Liddell , Monklands East 1:30 pm, 5th April 1995

That is a very quick political point to make. Yes, there are more shareholders than trade unionists, and undoubtedly some trade unionists hold shares. That is partly because the Government have been intent upon attacking trade unionists and reducing the number of people in employment in this country, thereby making them less eligible for membership of a trade union.

There has been dramatic restructuring within the privatised industries, with a consequent reduction in employment. House of Commons Library figures reveal that about 127,000 jobs gross have been lost in the privatised sector. I accept that every company, whether private or public, has to go through periods of restructuring, but that restructuring is taking place at a time when the labour market is under considerable pressure. It is also a time of rising unemployment.

What are the hidden costs of privatisation? Many companies restructure—often code for downstaffing—because it looks good in their annual reports. That makes it easier for a company chairman to laud a company's performance before his shareholders and to increase the share price. A number of privatised companies have employed senior executives as consultants. They are given a golden handshake, but return as consultants or redesign themselves as sole traders, sometimes in the form of consultancy companies.

I do not shed any tears for them, but for employers at a lower level who find themselves out in the cold. If they redefine themselves as sole traders, they are re-employed on temporary contracts with their former employers as members of a casualised work force. They do not enjoy the minimum employment protection that exists even under a Conservative Government.

There is an even less glamorous aspect of privatisation. Only last week, the Equal Opportunities Commission published its analysis of the impact of private contracting as a result of compulsory competitive tendering in the public sector, and the conclusions are horrifying in 1995.

That research showed that women in particular, members of the ethnic minorities and disabled people have suffered dramatically from CCT. Eighteen months ago, there was public outrage when auxiliary and domestic staff and porters at Glasgow Royal infirmary were re-employed by private contractors at lower hourly rates and with fewer holidays. Only a public outcry from the highest to the lowest in the community stopped that happening.

Less publicised cases arise daily. As a consequence, wages paid in the public sector—particularly to women—have fallen by as much as 25 per cent. Many women working in public sector cleaning and catering have to take on multiple jobs—often below the minimum part-time hourly rate, so they are not eligible for state benefits, including maternity allowance. They often have short-term contracts that make no provision for holidays or holiday pay. If they cannot work during school holidays, they have to claim social security benefits—which is a cost to them and to the nation.

Tomorrow, local government elections will be held in Scotland. Seeing the Press Gallery almost empty, I reflect on the halcyon days when there were reporters in the Press Gallery. When I was a Press Gallery reporter, a distinguished BBC reporter who, sadly, died last week reminded reporters every time they left the Press Gallery that Scotland is different. If only someone had reminded the BBC and "Panorama" of that last week, there might have been a different outcome to events in the courts.

If I may refer to the local government elections, there is a hare-brained race to reorganisation of Scotland local government, leading to more privatisations, particularly of essential services such as the education advisory service and catering in Strathclyde. That will produce further casualisation of the work force and additional concealed costs for the public and taxpayers.

The Government continue their reckless pursuit of privatisation, having learnt nothing from the costs incurred by early privatisations. Last week, my party's transport team published "The Runaway Train: The cost of rail privatisation", showing that the cost of privatization—based on Government figures and figures published in Hansard, would be in excess of revenue.

I seek a reassurance that the Government are not turning a blind eye to the costs of privatisation. Obtaining accurate information from them is like drawing teeth. We want to know the real costs in terms of unemployment and the cost to customers. Before the Financial Secretary reminds me that, under privatisation, some customers will have lower bills, I remind him that others will pay more. Fortunately, Labour managed to stop water privatisation in Scotland, but many people are paying increased water charges in England and Wales.

Will the Financial Secretary acknowledge that not everyone gains under privatisation? May we know the true cost of privatisation to the Exchequer and to society? May I have a reassurance—although I doubt that the Financial Secretary can provide one—that my constituents, who have suffered from steel privatisation and other privatisations, can look forward to a better future? I believe that they can only do so under a Labour Government. I do not expect that the Financial Secretary agrees.