The Socialist 11 June 2014 |
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Them & Us
PFI profit machine
Private Finance Initiative (PFI) schemes in the NHS, schools, councils, etc, are notorious for being a gigantic rip-off of the public purse. Introduced by the Tories and rapidly expanded under Labour, PFI schemes are simply a license to print money for big business.
In the latest twist to this public finance disaster, companies have been selling on their original 25+ years' contracts - a practice known as "flipping" - after only a few years, allowing them to make huge financial gains. Four such companies - Balfour Beatty, Carrillion, Interserve and Kier - alone have made profits in excess of £300 million from flipping.
Moreover, many of these contracts are being bought up by front companies based in offshore tax havens. So while profits are going offshore to avoid corporation tax many health trusts are being driven to the wall by crippling PFI service charges.
Chair of the Commons Public Accounts Committee, Labour MP Margaret Hodge, admitted Labour's multi-billion pound 'error'. "I'm afraid we got it wrong. I was a supporter at the time but I have completely gone off the whole concept. We got seduced by PFI", she said.
'Patriotism is the last refuge of the scoundrel'. The Samuel Johnson adage fits well the behaviour of care home provider businessman and Wales Ukip MEP Nathan Gill. This odious xenophobe while railing against immigration is, it seems, quite happy to exploit migrant workers to benefit his business.
Gill is cited as charging workers from Poland and the Philippines £50 a week out of £200-£300 weekly wages for "bunkhouse" accommodation. He lamely defends this rip-off saying: "I wish I had that proportion of spending money left after paying my mortgage". As an afterthought Gill said: "I can see how this could look bad"!
Big six rip-off
Toothless energy 'watchdog' Ofgem has pointed out that the 'big six' energy suppliers in the UK are expected to more than double their profits this year to £96 for every dual-fuel energy customer as a result of falling wholesale prices.
Industry fat cats are always vocal in regurgitating the argument of rising wholesale prices to justify ramping up customer prices, but they are silent when world energy prices tumble. The Tories, unsurprisingly, as champions of the 'free market,' have also kept their heads down as they kowtow to the big six.
Labour leader Ed Miliband has said an incoming Labour government would freeze energy prices for 20 months. Hey Ed, why not reduce prices? But that would require public ownership of the industry which pro-big business Labour won't consider.
As reported in the Socialist last week millions of children in Britain will be condemned to poverty by 2020 due to welfare cuts, flatlining wages and soaring living costs. Now the government's own Child Poverty and Social Mobility Commission admits that targets to reduce child poverty by 10% by 2020 are "doomed" to failure.
The Con-Dems' plan was always wishful thinking, based on an expanding economy providing well-paid jobs. The commission also pointed to the devastating effects of welfare cuts on families' living standards.