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Tuesday 14 December 2010

Politicians and other useful idiots.

Politicians, Civil Servants and others of that ilk justify the high salaries they enjoy by relating them to what is on offer in the private sector.
Apart from those that fall into the category of what Lenin liked to call Useful Idiots, most of them would be virtually unemployable outside the Public Sector.. For the purposes of this particular argument, a useful idiot would be someone responsible for or close to the decision making processes in a major Ministry like the MOD. Into this category fall several erstwhile Prime Ministers, Health Secretaries and assorted Sir Humphreys and retired generals who are able to parlay their contacts and presumed insider knowledge into a consultancy role or a seat on the board of a defence contractor or energy supplier.
For the remainder, the residue who have enjoyed neither power nor any especial influence, the best they can hope for in the real world is occasional, low-level consultancy work.
Not to beat about the bush,politicians are useless at business.
Even back in the Thatcher era, when the cabinet was supposedly stuffed with first class business brains, officladom always got taken to the cleaners by the private sector. Take the trains. Once upon a time we had a national rail network and one train operator, British Rail. Since they provided a national service, they were paid from the national purse. However, this monopoly, we were told, could not provide the transport service required by a 20th Century nation. It was sclerotic, inefficient and did not deliver value for money.
Privatising the whole shooting match, we were assured, would enable us to get rid of subsidies, save stacks of money, lead to major improvements in service and give the country a rail network that would be the envy of the world. A few decades later, instead of a single national monopoly,what we actually have is a number of regional private monopolies operating their own services on discrete routes. Maintaining the tracks all of these companies rely on is the responsibility of a semi-nationalised company that does all the grunt work and which, despite privatisation, sucks in virtually the same levels of subsidy as when we, the nation, owned the whole shooting match.
There is a similar story when it comes to our major utilities. Where once we had national and local providers of gas, electricity, water and sewage whose assets were owned by their customers - that would be you and me - we
now have a multiplicity of providers, many foreign owned, who operate effective monopolies in their geographic regions and use the profits generated by their UK operations to shield consumers in their home markets in France and Germany from rising energy prices.
In more recent times, the Blair adminsitration managed to enrich any number of foreign companies, civil servants and assorted advisors every time it sold another important national asset. This was ever so slightly at odds with the avowed inetntion which was, in each case, to realise asset values for the greater good and enrichment of the nation at large. Of these deals, the most lucrative for the purchasers, if not for us, has to have been the sale of DERA; the erstwhile Defence Research Agency. Dubbed the James Bond agency by the popular Press, thanks to its work on exotic weaponry, DERA in fact was the repository of some of the best and most valuable research in the world. I read somewhere that it held more patents on advanced materials and technology than any other body.
To cut a long story short, DERA`was sold to a US company and we were assured that the price was a true reflection of the company's
market value. A couple of the senior Civil Servants who had been involved in the negotiationswere suddenly transmogrified into high-flying directors and pocketed huge salaries and bonuses when, 18 months after the sale, Quinetic as the new entity had become, was laucnhed on the UK stock market, achieving a launch valuation many millions higher than the original purchase price. This was one of several deals overseen by Gordon Brown, the man whose first venture into capitalism was to sell our gold reserves at jumble sale prices - and he was reckoned to be one of the more astute negotiators in the cabinet of the time.
Another of the deals whose consequences we are suffering even as I write was the sale of the, previously nationalised, British Airporsts Authority (BAA) to Ferrovia, a building and construction company from that repository of aviation history and knowledge, Spain.
To be fair, what attracted Ferrovia to the company was the giant shoping mall that we know as Heathrow Airport. The fact that it had two runways tacked onto the side and is the main conduit for trade into and out of UK and much of Europe was a minor consideration in the purchase. What really counted was the captive, albeit transitory, stream of shoppers that made its way into the collective maw of its shops and restaurants.

Which is why all of their focus was on maximising the returns from the retail side of the operation at the expense of the airport activities. Consequently, when snow fell on Heathrow, it was under-eqipped and under-staffed and failed to cope with the resulting chaos that ensued. Chaos that was transmitted via satellite to the tvs of every country in the world. What these images told the rest of the world was that our nation is inefficient, ill-equipped and, not to put too fine a point on it, incompetents. One message they did not convey is that the UK is open and eager for business..

Unfortunately, as we discover time after time, our polit
icians struggle to muster even half a brain between them when it comes to business Thus, Heathrow and other important airports were allowed to pass into foreign owership with no apparent strings attached in terms of expected levels of efficiency or performance and no sanctions agreed should performance fail to reach those standards
The parent company of BAA will bank around £1 billion in profits from its UK operation. Good fro them and their investors, not so good for the rest of us. Our global status has been undermined Many of the passengers forced to endure mediaeval conditions at Heathrow will think twice before flying. to the UK again. Some, understandably, will never return, preferring the certaities procided by competitive airports such as Schipol. Apparently, the official regulator has no powers to force BAA to make reparations for what has happened or to force it to equip itself properly against future adverse weather conditions. The best we can hope for is that passengers will group together to force the airport into paying compensation.
What should happen, as a matter of urgency, is that the Minister for Transport, Phillip Hammond, reads BAA the riot act, gives them a list of demands that they must comply with if they are to be given licence to continue running Heathrow, with the threat of re-nationalisation as the ultimate sanction.
What will proably happen is quite the opposite. The furore will melt away with the snow. The politicians and Civil Servants will breathe a sigh of relief and then get ready to be stitched up again when we come sell the Search and Rescue Services to a French-American consortium.