A history of privatisation from the Guardian: New Labour had made electoral capital out of the Tories' unpopularity over privatisation, but only pledged to stop the sell-off of air traffic control. Even this minor promise was betrayed. For, if Thatcherism had not won the argument on public services, it had so comprehensively demolished the militant left and trade unions that there was nothing to prevent Labour from adapting to neoliberalism. The major privatisation policy introduced in this period was thus an awkward compromise between a managerial leadership and Labour's electoral base, known as the Private Finance Initiative (PFI) – a fudge originally pioneered by Norman Lamont. Introduced into the London Underground, the NHS and schools, these policies raised money in the short-term without the need for higher taxes. But there was also a streak of pro-market evangelising involved. Both Peter Mandelson and his successor at the department of trade and industry believed it was the role of government to foster entrepreneurial culture. The second and third New Labour administrations pressed aggressively for further state down-sizing and privatisation. Blair had based his 2001 re-election campaign on the extremely unpopular PFI. The calculation was that even if the measure wasn't popular, his victory would prove that there was no realistic alternative. Though there were few major sell-offs, the government's policies on the Royal Mail and the NHS had, as their logical conclusion, the privatisation of these services. Even the fiscal crisis in the NHS, resulting from the high costs of PFI initiatives, did not dampen the ardour. It was not until the credit crunch and the ensuing crisis that the pendulum began to swing, if only temporarily, in the opposite direction when Brown was forced to belatedly nationalise a string of failing banks. But even then, it was clear that the intention was to restore these companies to private ownership as quickly as possible.
The Tories took office without a mandate, but with no lack of confidence. Their agenda, which had emerged since 2008, was to represent the crisis of global capitalism as a crisis of public sector spending. Having already privatised the Tote and announced the sell-off of Northern Rock, with other nationalised banks to follow, they have indicated that Royal Mail will be sold off, along with probation services, roads, large sectors of education and the NHS. Even sections of the police, traditionally an ally of the right, will be privatised. Outsourcing will be extended into every possible area.
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But, as in the 1980s, the aim is not primarily to reduce public-sector borrowing. The Tories know that ongoing economic crisis is not just a fiscal or financial problem. The private sector is utterly stagnant. Globally, there are trillions of pounds being retained by corporations who see no viable avenue for profitable investment. US companies are holding on to $1.7 trillion, eurozone firms sit on 2 trillion euros, and British firms have £750bn doing nothing. Accumulation-by-dispossession is one way to get that money into circulation as capital. And while the Conservatives are not as ideologically confident as in the 1980s, the scale of their proposed privatisations suggests they expect to over-ride any opposition.
In historical context, privatisation seems to answer a number of dilemmas for the Tories. By spreading market incentives, it erodes the public sector basis for Labourist politics. By opening the public sector to profit, it gets a lot of capital into circulation. And by reducing the power of public sector workers, it suppresses wage pressures, thus in theory making investment more appealing. Above all, perhaps, in shifting the democratic to market-based principles of allocation, it favours those who are strongest in their control of the market, and who also happen to represent the social basis of Conservatism.