Sunday, 9 March 2008

Private Equity v Democracy

When most of us have such a low opinion of the vast majority of politicians, it's easy to lose sight of why democracy has always been a central plank of the labour movement agenda.

Before working people got the vote, parliament was simply a club for the rich and powerful to sort out their affairs - almost invariably at our expense.

Previous generations of working people fought to gain more power by both winning the vote. The rich and powerful sought to safeguard their interests by moving lots of decisions out of parliament, to prevent us getting our grubby hands on them.

The push for nationalisation in the early and mid 20th century was an attempt to counter this by bringing more of the economy under democratic control. However, in many cases the extent of democracy actually achieved in state-owned industries was extremely limited.

Since the 1980s the rich and powerful have been on the offensive, trying to roll back what limited democratic say we've had. Think about a few examples:

  • Privatisation
  • Stopping council house building in favour of property speculation
  • "Independence" of the Bank of England (from democratic control)
  • The World Trade Organisation (WTO) imposing rules which over-ride national laws, so that taking account of labour standards, health & safety or the environment in trade is banned
  • The rise of QUANGOs
  • Chopping up public services into "trusts", "foundations" etc
  • Government accepting "commercial confidentiality" to stop voters knowing how our money is being spent with private companies
If the people we elect go along with declining influence over our lives, is it any wonder that voters take a decreasing interest in who is elected?

Another factor is the international nature of business undermining the national nature of democracy. For example, companies play governments off against each other for tax-breaks and grants.

The TUPE legistation has given us some limited protection when our jobs are bought and sold between different companies. But the "share purchase" method of takeover completely bypasses this protection. You can be working for company X, all its shares are bought by company Y, which may have a radical impact on your future, and you currently have no say at all.

This is becoming a bigger issue at the moment because of the rise of Private Equity companies. Not only do they buy business through share purchase, avoiding TUPE, but they are not publicly listed companies, so are even more secretive than your normal PLC.

In it's campaign to give working people more say over private equity, UNITE is focussing on the example of Telent (formerly Marconi, GEC etc) in our sector, which was bought by the Pensions Corporation. There's more information about the general issue on both the Amicus and TGWU web sites. Why we don't have the same information on both is a mystery to me!

If you're interested in the wider issues about democracy, there's a brilliant book by the late Paul Foot "The Vote - How It Was Won and How It Was Undermined".

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