The corporate grip on public life is a threat to democracy
Seamus Milne Guardian
The revelation that health policy has been handed to the private sector exposes a crony capitalism that has to be overturned
Seumas Milne guardian.co.uk, Wednesday 17 November 2010 20.30 GMT The onward march of corporate power is a long established fact of British life. We've become familiar with the relentless privatisation of public assets and services, the creeping colonisation of Whitehall, and the revolving doors that see politicians, lobbyists, executives and civil servants swap places and exchange contracts with bewildering speed.
But the Guardian's revelation that fast food and drinks companies such as McDonald's, PepsiCo, Unilever and Diageo have now been asked by ministers to draw up public health policy shows the corporate takeover of politics has reached a new level. This isn't an issue of government consulting business. We're talking about the same vested interests that have fuelled the obesity and alcohol abuse crises as good as dictating terms at the heart of government.
Naturally their first demand is that there will be no regulation to tackle those crises: no tax or price control to reduce consumption, or even traffic-light labelling of high sugar or fat content. Having defanged the Food Standards Agency on the companies' behalf, the Conservative health secretary, Andrew Lansley, is happy to oblige in what amounts to a surrender of the public realm.
In the US, where the corporate grip on politics is widely seen to have gone furthest, it was considered a scandal that Dick Cheney's taskforce on energy policy and climate change was revealed to have been secretly cooked up with the "active involvement" of the oil giants. In coalition Britain, Lansley has gone one step further and effectively contracted out key areas of public health policymaking to those whose interests diametrically collide with the demands of public health.
It would be almost comical were it not so dangerously destructive. But so accustomed have we become to the advance of private profit-making into every sphere of society, it's easy to miss the acceleration of privatisation now being overseen by the Cameron administration. Across government, the crisis of the private sector is being used to launch a renewed assault on the public sector, covering everything from Royal Mail to vast expanses of public woodland.
Take the Tory ideologue Michael Gove's drive to turn every state school into a privately run academy, alongside a string of new Swedish-style "free schools". So far, debate has largely focused on the loss of local authority influence, patchy academic record and potential social segregation. But as both types of school spread, the baleful impact of private control on parental and community accountability will quickly become apparent.
The government insists its schools plans will promote diversity and choice. But that will "only be true for certain people in certain parts of the country", argues Professor Stephen Ball of the Institute of Education. It will be the sponsor or private management firm – not parents or teachers – that controls the governing body in both types of school. And the private companies and foundations, already making money out of academies by commissioning services from themselves, are preparing to make a whole lot more by running chains of schools across the country.
A taste of where this privatised free-for-all might end up can be found in the case of 3Es, the first private company to take over a group of state schools under New Labour. One of those schools, in Gove's Surrey constituency, had to be brought back under council control this year after a damning Ofsted inspection. And 3Es itself has been taken over by the American-owned corporation Aecom, which also has a string of multimillion-dollar contracts with the US and client military in Iraq.
International takeover has also been the fate of John Bauer, the largest private free school provider in Sweden, which was bought out by a Danish venture capital firm. Whether many parents in Britain actually want their children's schools controlled by private equity or military service companies, over which they have no control and which might go bust or be taken over and run from abroad, seems pretty doubtful.
But the chance to shrink the state offered by their cuts programme is clearly too good an opportunity for the Tories to miss. In health, the privatisation unleashed by Lansley's post-election plans for the NHS will be on a much larger scale. By handing over the bulk of spending to consortiums of GPs, to be run by private companies, he will take the private sector from service delivery to the heart of commissioning – increasingly mimicking the rapacious US insurance model.
The cost of this upheaval will be £2bn-£3bn. But then privatisation rarely delivers savings except at the expense of wages and conditions. In health, the weight of evidence shows that private markets lead to exorbitant administrative costs, lack of accountability, cherrypicking, increased inequity, conflicts of interests, and pressure for top-up payments.
Across the range of public services, privatisation isn't about delivering new goods and services, but about making profits out of existing services for private shareholders, whose interests are likely to clash with those of users and producers. It is already a huge market, out of which legions of bankers, lawyers, consultants and managers have grown fat. Hence the need to corral the political class, media, thinktanks and academic world in order to create a public consensus that private colonisation of the public sphere must continue unhindered.
So it's no surprise that Lansley's office in opposition was funded by John Nash, chairman of Care UK, almost all of whose £400m business comes from the NHS. Nor that so many New Labour ministers moved effortlessly from government to work for the same companies their own privatisation efforts had so lavishly featherbedded. Even now, after Ed Miliband has distanced the party from the Blairite corporate embrace, Labour remains hobbled in its opposition to the coalition's privatisation programme by its own record.
That will have to change if the grip of this crony capitalism on public life is going to be overcome. At heart it's a democratic imperative of far greater importance than the duck ponds and second-home flipping that triggered last year's political crisis. The public space will have to be clawed back, piece by piece.
