FacebookTwitterRedditEmail

Corporate Sickness in May’s Britain

Photo by Maurice | CC BY 2.0

Britain is ill, and even as the opportunists and populists scramble before the hardened negotiators of the European Union over imminent exit, revising optimistic forecasts and notions of sovereign greatness has begun.  Within Theresa May’s decaying state comes yet another economic disaster, and one that has prompted a revival of government assistance before the vicissitudes of the market. This, from a Tory government extolling the divine nature of free market enterprise.

Carillion, the UK’s second biggest construction company, is in a mammoth pickle, one to the tune of £1.5 billion.  It has gone into liquidation after the weekend failure to reach agreement with lenders and the government, a fact that literally threatens up to 20,000 jobs within the country, not to mention pension funds to the value of £600m.

Things get even more interesting when one sees where these jobs are, located across a range of industries from defence, health, transport (the HS2 high-speed rail line comes to mind) and education (notable here is the provision of dinners and cleaning for hundreds of schools).  In short, the company was something of a poster boy in the outsourcing agenda of government, golden boy of the competitive, tendering process.

The situation for the company has been so notably stricken as to prompt an emergency Cobra meeting by May’s Cabinet lasting for up to two hours.  Cabinet Office minister David Lidington suggested with usual understatement in the face of imminent catastrophe that matters had gone “pretty well” given that “people were turning up to work” and no “reports of serious interruption to service delivery” had been received.

Lidington’s language is that of a session at your MP’s surgery: dull, medicated, non-committal. Most of all, there is no sense of alarm.  The meeting, he continues, provided an “opportunity for ministers to test what sort of concerns are being expressed and decide how we should best address them”.

To date, the government has committed its first notable transgression against its self proclaimed free market ideology: covering the dues for small businesses and employees connected with Carillion’s public contracts.  The disastrous conduct of the golden boy must be somehow addressed.

Lidington’s point is to dress the assistance to those connected with the provision of public services in a different costume: avoid, for instance, any reference to a bailout, which reeks of the socialist hand and state-directed philosophy. “The action we have taken is designed to keep vital public services running rather than to provide a bailout on the failure of a commercial company.”

The consequences of such a patchy approach are already evident.  Given the web of contracts and commitments other companies have with Carillion, jobs are already being lost, the devastation starting to bite.  As a worker for the Midland Metropolitan Hospital Building told the BBC, “Everyone on the site told: ‘That’s it, go home.’  My company said, ‘You’ve been laid of.’”

Did anybody see this coming?  The situation last summer was already providing smoke signals of danger that all was not prudent on the financial side of Carillion.  The books were simply not tallying.  The company had issued profit warnings, largely triggered by overrunning costs regarding the Midland Metropolitan Hospital in Sandwell, the Royal Liverpool Hospital, and the Aberdeen bypass.

Notwithstanding these concerns, ideology prevailed: the company still received £2bn worth of contracts.  It was too big not to, being the fundamental face of outsourcing.  An export guarantee issued on July 6 even went so far as to put £130m of taxpayer funds at risk.

Frank Field MP, chair of the Work and Pensions select committee, was unflattering: “Carillion took on mega borrowings while its pension deficit ballooned. We called over a year ago [The Pensions Regulator] to have mandatory clearance powers for corporate activities like these that put pension schemes at risk, and powers to impose truly deterrent fines that would focus boardroom minds.”

Labour leader Jeremy Corbyn has been, predictably, the first to take the hammer to government policies on privatisation, most notably what he terms the “out-source first dogma”.  “In the wake of the collapse of the contractor Carillion, it is time to put an end to the rip-off privatisation policies that have done serious damage to our public services and fleeced billions of pounds.”

Showing that this was not merely a concern on the left of politics, the traditional gristle of progressive concern for market forces, Bernard Jenkin, Conservative chairman of the House of Commons Public Administration Committee, made a rather damning admission.  Carillion’s collapse “really shakes public confidence in the ability of the private sector to deliver public services and infrastructure.”

This is the Thatcherite sin of Britain, government prostrate before the private provision of services, the state indifferent to accountability.  In May’s declining Britain, even receiving a half-credible, resourced public service from any sector, is a doomed challenge.

 

More articles by:

Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge. He lectures at RMIT University, Melbourne. Email: bkampmark@gmail.com

bernie-the-sandernistas-cover-344x550
April 08, 2020
Melvin Goodman
The Impact of COVID-19 on the Body Politic
Eve Ottenberg
Amid Plague, Sanctions are Genocide
Vijay Prashad, Du Xiaojun – Weiyan Zhu
How China Learned About SARS-CoV-2 in the Weeks Before the Global Pandemic
Bill Quigley
Seven Disturbing Facts About COVID-19 in Louisiana
Joyce Nelson
BlackRock Takes Command
Geoff Dutton
Coronavirus as Metaphor: It’s Not Peanuts
Richard Moser
From Strike Wave to General Strike
Gary Leupp
Could COVID-19 Kill Capitalism?
Thomas Klikauer – Nadine Campbell
Corona, Capital and Class in Germany
Tom Crofton
Aspirational vs Pragmatic: Why My Radicalness is Getting More Radical
Steve Kelly
Montana Ballot Access Decision Suppresses Green Party Voters
Jacob Hornberger
Muhammad Ali’s Fight Against the Pentagon
Phil Mattera
The Rap Sheets of the Big Ventilator Producers
Manuel García, Jr.
Why Remdesivir and Hydroxychloroquine for COVID-19?
Rick Baum
When “Moderate” Democrats Lead the Ticket and Win, Down-Ballot Candidates Soon Suffer Losses
Jake Johnston
Tens of Millions Will Be Pushed into Poverty Amid COVID-Induced Recession
Kim C. Domenico
Healthy and Unhealthy Fear in the Age of Coronavirus
John W. Whitehead
Draconian Lockdown Powers and Civil Liberties
Binoy Kampmark
University Bailouts, Funding and Coronavirus
Luke Ruediger
BLM Timber Sale Increases Fire Risk, Reduces Climate Resilience and Harms Recreation
John Kendall Hawkins
Slavoj Žižek’s Virulent Polemic Against Covid-19, and Stuff!
Nyla Ali Khan
Finding Meaning and Purpose in Adversity
April 07, 2020
Joel McCleary – Mark Medish
Paradigm Shift by Pandemic
Matt Smith
Amazon Retaliation: Workers Striking Back
Kenneth Surin
What The President Said (About The Plague)
Patrick Cockburn
The Chaotic Government Response to COVID-19 Resembles the Failures of 1914
Marshall Auerback
The Coronavirus Pandemic Has Opened the Curtains on the World’s Next Economic Model
Vijay Prashad, Paola Estrada, Ana Maldonado, and Zoe PC
Trump Sends Gun Boats to Venezuela While the World Partners to Fight a Deadly Pandemic
Jeremy Lent
Coronavirus Spells the End of the Neoliberal Era. What’s Next?
Dean Baker
The Big Hit: COVID-19 and the Economy
Nino Pagliccia
A Simple Democratic Transition Framework for Venezuela: End All “Sanctions”
Colin Todhunter
Locked Down and Locking in the New Global Order
Robert Fisk
Biden Says He ‘Doesn’t Have Enough Information’ on Iran to Have a Vew. How Odd, He Negotiated the Nuclear Deal
Wim Laven
GOP’s Achievement is Now on Display
Binoy Kampmark
Boastful Pay Cuts: the Coronavirus Incentive
Dave Lindorff
It’s Spring and I’ve Turned 71 in a Pandemic-Induced Recession
Steve Brown
FLASH! Trump Just Endorsed Bernie’s Medicare-For-All Health Plan
Marc Haggerty
Class and COVID-19: Those Who Can and Those Who Can’t
Manuel García, Jr.
A Reply to Jeffrey St. Clair’s “Strange Things Happening Every Day”
George Wuerthner
How Fuel Breaks Fuel Fires
Marshall Sahlins
Election 2020
April 06, 2020
Richard D. Wolff
COVID-19 and the Failures of Capitalism
W. T. Whitney
Donald Trump, Capitalism, and Letting Them Die
Cesar Chelala
Cuba’s Promising Approach to Cancer
David A. Schultz
Camus and Kübler-Ross in a Time of COVID-19 and Trump
FacebookTwitterRedditEmail