This is why we should oppose privatisation

"I told you so" is always unpopular, especially when justified. Despite Labour's early experiments, progressives have long opposed selling off assets or contracts for public services. We are accused of being doctrinaire in doing so. Now that the evidence is coming to hand of how it has worked, let us examine whether we were correct in our opposition for other reasons.

This month has just provided one example: Hinchingbrooke Hospital. As long ago as the previous Government, this hospital was failing to meet targets and economically. Eventually, the incoming Coalition decided to privatise it, contracting a hedge-funded firm called Circle to turn it round. This process has been under way with some impact for several years but now, under the continuing austerity and inexorable rise in demand, Circle is unable to meet is shareholders' profit expectations and decided to withdraw. Who will pick up the burden is not yet clear but ultimately this will be the tax-payer. Yet again, the State is called on to rescue the private sector from the effects of markets. Familiar? I should think so. You doubt me - want examples? How about the banks?  Who rescued them from their gambling debts? How about public ICT and military procurement? How about Southern Cross care homes? Or East Coast Mainline? Or Olympic Park security (G4S)? Or A4E. Or Serco... the list goes on.

Has not the myth of the excellence in management of the private sector yet been laid to rest? Let us just see how privatisation is flawed:

• it is about making profits for investors from taxes paid by the public;
• it employs lower-skilled workers to replace skilled - and do a worse job, whilst leaving the State less-well prepared to step back in;
• it picks the low-hanging fruit, leaving again the State to deal with the most complex and skill-demanding roles but without economies of scale;
• it is far from infallible, as its proponents would seem to suggest;
• it can [and does, frequently] walk away, leaving the State, which the Right so belittles, to pick up the pieces.

These are why privatisation of NHS is bad for us all. Labour must stop just banging on about privatisation without explaining why it is a bad thing, when the Right and its media buddies say otherwise. You were told.