Revealed: How the world gets rich – from privatising British public services
Exclusive: Scandal of UK citizens’ millions that go to foreign state-owned public services
By JIM ARMITAGE
20 November 2014
Foreign governments are making hundreds of millions of pounds a year running British public services, according to an Independent investigation highlighting how privatisation is benefiting overseas – rather than UK – taxpayers.
Swathes of Britain’s energy, transport and utility networks are run by companies owned by other European governments – meaning foreign exchequers reap the dividends while UK customers struggle with increasing fares and bills.
In the past two years alone, overseas taxpayers have taken dividends totalling nearly £1bn from companies which make their profits from UK households and passengers.
The figures unearthed by The Independent in corporate filings will fuel calls for the Government to rethink its privatisation agenda – and boost those who argue that the railways should be opened up to publicly owned UK operators, or even renationalised.
An analysis of companies’ financial filings for the last financial year shows that currently 20 national train lines are run or owned by foreign state-owned or controlled companies.
Only last month, the ScotRail franchise was offloaded to the Netherlands’ state-owned Abellio.
Christian Wolmar, a rail industry analyst, said: “It is a completely daft situation where state-run companies in foreign countries can bid for our rail services but UK ones can’t. It is specifically banned by law for the likes of Transport for London, or Directly Operated Railways to bid for UK rail contracts.”
Mick Cash, the RMT general secretary, said: “The true scale of the way the railways here in Britain are being used as a cash-cow to hold down fares and improve services across the rest of Europe will shock passengers.”
While privatisation was meant to bring the business acumen of the corporate sector into public utilities, increasingly it has allowed foreign governments and their state-owned operators to make vast profits out of the UK. Meanwhile, British firms have almost no presence in overseas utilities markets and, since the takeover of Arriva by Germany’s state-owned Deutsche Bahn, only a small share of global public transport.
As a result, vast amounts of British citizens’ bills and fares leave the country in the form of dividends to taxpayers in continental Europe, funding their schools and hospitals.
Foreign taxpayer-owned transport companies received £102m in dividends from UK train fares during the past two years, The Independent has calculated. That figure is dwarfed by the £900m sent back to foreign governments from British household energy bills. These came from dividends taken out of the UK by EDF, majority-owned by the French state, and the industrial energy supplier GDF Suez, part-owned by France.
Other foreign energy players are also taking huge dividends from UK electricity bills but are remitting them to private investors. For instance, Scottish Power’s Spanish owners Iberdrola took a £600m payment. With consumers paying an average of £410 more a year for energy compared with a decade ago, The Independent’s findings shine new light on the motivations of foreign energy suppliers.
In the rail and bus industry, German and French taxpayers are the biggest players, with German state-owned Deutsche Bahn and French state-owned Keolis running large chunks of the networks. But Hong Kong also owns UK rail and bus operators, while taxpayer funds in Singapore, China and Qatar are big investors in the Heathrow Express rail route.
Critics of recent governments say they have been ideologically opposed to state ownership in a way the European firms who run British infrastructure are not. They cite how the East Coast Main Line rail route was handed back to the taxpayer in 2009 by National Express because the company could not make enough money from the contract. Since then, it has been run as a “Directly Operated Railway” and performed well and with a healthy surplus to the taxpayer. However, the Government has decided to sell it to the private sector again, with French government-controlled Keolis and Eurostar among the bidders.
Labour has pledged to overturn rules which ban state-owned British entities from competing with private firms for rail franchises. But the party is coming under pressure from unions to commit to full renationalisation.
The anti-privatisation group We Own It described The Independent’s findings as a “scandal”, adding: “If energy was run publicly, we could use these profits to reduce the bills we all pay and boost green investment.”
A Department of Energy and Climate Change spokesperson said: “We want an energy market that works for consumers.”
EDF said: “Dividends paid by EDF Energy to our parent company should be set against the £17.5bn that has been invested in the UK, and the £1.2bn it invested last year alone in its existing nuclear and coal stations, new generation capacity, gas storage and in its customer supply business.”
Arriva pointed out that it had retained its operational independence although it was now owned by Deutsche Bahn and said it had invested €750m (£599m) in the business in the past two years. However, accounts showed its British arm, Arriva UK Transport Limited, paid a £15m dividend to its parent company.
The Independent also examined water companies but, while they are mostly owned by private equity firms with controversial tax avoidance strategies, only one, Yorkshire Water, is state-owned, being 26 per cent owned by the Singapore government’s sovereign wealth fund. Last year Yorkshire Water’s holding company Saltaire did not pay a dividend.
Going Dutch: Scotland picks Abellio
Last month the Scottish Government stripped Aberdeen-based FirstGroup of the contract to operate the £2.5bn ScotRail franchise – and handed it to Abellio, an offshoot of the state-owned Dutch national railways.
The decision was criticised by unions, who warned it would mean Scottish taxpayers effectively subsidising rail passengers in Holland.
“Scotland could have taken control of its own railways,” said Mick Cash, the general secretary of the RMT union at the time. “Instead profits will be sucked out of the system to underpin investment and fares in Holland.”
But the Scottish Government defended the plans, saying Abellio was simply offering a better deal to both passengers and the taxpayer.
It highlighted the company’s plans for reduced fares for jobseekers, a commitment to a living wage for staff, as well as more trains and £5 fares between any two Scottish cities.
The deal emphasised the global nature of public service provision today – while FirstGroup lost out to a Dutch company, it too is international and runs America’s culturally iconic Greyhound buses.
Foreign firms running our services
State-owned foreign company: Abellio
Owned/controlled by: Holland
Dividend withdrawn in last two years: £20m
Runs: Greater Anglia, Northern, Scotrail (just granted), Merseyrail, Bus services across London and the UK
State-owned foreign company: Keolis UK
Owned/controlled by: France
Dividend withdrawn in last two years: £37.9m
Runs (part or fully): Docklands Light Railway, Gatwick Express, London Midland, Southern, South Eastern, Thameslink Gt Northern, TransPennine
State-owned foreign company: Arriva UK Trains
Owned by: Germany
Dividend withdrawn in last two years: £15m
Runs (part or fully): Chiltern, Cross Country, Grand Central, London Overground, Wales & Borders
State-owned foreign company: MTR
Owned by: Hong Kong
Dividend withdrawn in last two years: £7m (estimate)
Runs part of: London Overground
State-owned foreign company: SNCF
Owned/controlled by: France
Dividend withdrawn in last two years: £19.8m
Runs part of: Eurostar
State-owned foreign company: SNCB
Owned by: Belgium
Dividend withdrawn in last two years: £1.8m
Runs part of: Eurostar
EDF, France: £616.2m
GDF Suez, France: £25.6m
Source: Companies House filings and RMT
We must restore our vital utilities, gas, water, electricity, railways, buses, post and telecommunications, to 100% British public ownership; end the scandal of PFI and completely renationalize the NHS; and see off the looming threat of TTIP to what remains of our welfare state.
Patria is the one and only party with the courage to champion the interests of our people by putting them before the profits of alien profiteers.
All the rest are bought and sold for a few crumbs from the plutocrats’ table. This is the reason the ‘mainstream’ media and ‘antifascists’ try to starve Patria of the oxygen of publicity, while lavishing it on discredited scavengers, money-grubbing charlatans and any other busted flush they can find.
A case in point: does Nick Robinson of the BBC need stronger glasses? Is it really likely that he failed to see a badge clearly marked CANDIDATE on the chest of a person with whom he posed for a photograph at the count of the Rochester and Strood by-election?
Patria is much more interested in quality than quantity. If you claim to be a nationalist but are more interested in what the party can do for you than what you can do for the party, we won’t turn you away, but you’re not really the type we’re most eager to recruit.
We’re looking for serious and upright patriots not narcissistic careerists or self-promoting clowns. If you’re just out to feather your own nest at the expense of your colleagues then you have a wide range of groups from which to choose. One is controlled by someone who doesn’t even live in this country any more! Another leaves fruit as its calling card. A third has a leader who uses foul language on the radio.
Going to prison is not usually regarded as a badge of honour. It’s very often a sign of stupidity and it tends to harm any party with which the convict is associated.
We want men and women of courage and integrity who are willing to stand for election to their local council and/or to parliament. We also need those who are willing to support our candidates by leafleting, writing letters to the press, manning polling stations, attending counts, etc.
Patria has already announced it has two candidates in place for the general election, which is two more than any other nationalist party, yet where is the media attention?
The ‘mainstream’ media, including the ‘antifascist’ media, would much rather discuss trivia such as tweets and Facebook posts and mock the clownish antics of cocaine sniffing ex-bouncers and disgraced teachers, than engage with the common sense policies of Patria.
Why? Simple: by doing so they present an image to the voting public of nationalists as scum led by unspeakable trash. Who in their right mind is going to join or even vote for a party like that? It’s certainly likely to put off the great majority of ordinary decent patriots.
Whereas by contrast if the media were to focus on Patria: not only would we not fit the stereotype they have created for the public because they would have nothing with which to discredit us, but they would be forced, in the absence of any dirt, to discuss our policies, which are so popular and reasonable that is the very last thing they would wish.
And so you see the reason Patria is denied publicity by the hostile media is the very reason we shall succeed where all the other nationalist parties and groups have failed: the media recognize real opposition and they fear it. Hence the media blackout.
But, believe me, we in Patria find the media silence and the fear that causes it very encouraging. It tells us, if we needed any confirmation, that we are on the right track. All we need do is to persevere and the votes and thence the publicity will come in due course.
Doing nothing while waiting for the pro-immigration UKIP fraud to founder, as it will, is not a sensible option. In order to be in a position to take advantage of the coming situation we need to continue to fly the flag of nationalism now, in the face of all the scoffers, doubters, do-nothings and nay sayers.
Let’s fight on while we’re still here.
It’s not easy but it is simple.
Patria is the future. Join us now and be part of our success!