rganl.sln information ;~ontractors newthreats · the firm has a record of employing ghost cleaners....

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AN ANTI·PRIVATISATION NEWSLETTER FOR THE LABOUR MOVEMENT No 5 NovIDee 1983

CLEANING FIRMWhat kind of work does Homes Countiesdo for public authorities?It cleans a large number of governmentoffices around the country eg VATheadquarters in Southend, DHSS andInland Revenue offices and has a £1 mcontract to clean Garwick Airport. Ithas a few NHS contracts and is trying toget more along with school cleaning.

What kind of wages and benefits doesthe firm pay?It is important to examine this in thelight of what they charge their compan-ies for their cleaners' hard work. Thereare between 200-300 cleaners em-ployed full and part-time on the Gat-wick Airport contract. The companycharge the British Airports Authority£950,000 for their work for whichthey, the cleaners, get only a fraction ofwhat they earn for the company.A majority of the 10,000 workers

are part-time women cleaners. Thecompany tries to make sure workersdo less than 16 hours a week to avoidpaying employers' National Insurance.It argues that four people doing twohours a day is cheaper than one persondoing an eight hour day. Wages ratesare as low as £1.20 an hour and areoften set according to the contract.There is no sick pay with working. so few hours. You get a week's holi-day after five years' service. There isno company pension scheme for clean-ers, only the very senior staff.The firm has a record of employing

ghost cleaners. Doyle has admitted thatthere are about 400-500 false names onthe books each year. The company gotcaught on a Ministry of Defence contractat Bath where there was a shortage ofpart-time cleaners so the existing clean-

CONT. ON PAGE 2~I------------------

In responseto a letter published by David Pagein Local Govt Chroniclecriticising exploitation of contract cleaning staff in the public servicesPublic Service Action went to interview him. He was until recentlyAssistant Company Secretary for the Home Counties Cleaning (GroupServices) Ltd, one of Britain's largest cleaning companies.

PRIVATE PITS Peter Maddison

This is a private pit at Roddymoor, near Crook, County Durham. There are now fif-teen licenced privately operated mines in the county, and many more in SouthWales. The above pit is located in the middle of what was once a large coke and pro-cessing plant incorporating a colliery. Others are located at previously closed NCBpits. Another crucial area of privatisation is open cast mining. Most sites are con-trolled by multinational companies like Taylor Woodrow and Wimpey's and mostare non-unionised. At one large site at Tanners Hall near Stanley they are actuallydigging up equipment left in the closed Brancepeth Colliery.There have been numerous complaints about the private pits - villagers complain-ing about noise and workers (non-un ionised) concerned about lack of ventilation.Most of the coal is sold locally as domestic coal.There is some concern that the current restrictions limiting licenced mines to under30 employees may be lifted to a hundred employees. The Central Electricity Gene-rating Board is attempting to break the NCB's monopoly on the sale of coal. Thiswould increase imports of coal from South Africa and other countries as well as aidprivate mine companies in Britain. The biggest threat may come from attempts toprivatise the massive new Selby coalfield.

2 Public Service Action No 5

FROM PAGE 1ers worked an extra two hours underfalse names. This was exposed by theDaily Telegraph in 1981. There is alsoa constant flow of industrial tribunalcases for unfair dismissal and severalworkers have won. It was companyI policy to file defences to writs and

/tribunal applications simply to delay

I the process of judgement. Industrialinjuries caused by heavy cleaningequipment are also frequent.

I What did your job involve?I I assisted with all the legal and/ insurance work for Home CountiesCleaning and its subsidiaries whichinclude Contract Clean companies andHome Counties Hospital Care Ltd atthe company headquarters near Ayles-bury. I did similar work for OceanaHoldings and its subsidiaries, eg Hygenol,Spearhead Chemicals and JanitorialSupply House Ltd, which supplygovt. depts and Home Counties' comp-panies with cleaning supplies. Oceana

I also has a laundry which trades under'/ three different names - Royal Bucks

/Laundry, Personnel Care Ltd and

/Chiltern Laundries. Both groups ofcompanies have a combined annual

/ turnover of about £20m and are run/ by Patrick Doyle (see PSA No.3) whoI owns 97% and 80% of the shares ofI Home Counties and Oceana respectively.I How was the company run?Doyle is a ruthless entrepreneur andbully. The Chief Accountant and theCompany Secretary left after beingassaulted. There were never any boardmeetings while I was there. MichaelPoulter, an ex-mercenary with a pro-vocative manner, is Doyles' right handman and is now Managing Director ofHome Counties although this is just acosmetic front - Doyle makes all thekey decisions although he resigned asa director on April 1983.He built the company up over the

last fifteen years but the past five yearshas been a gold mine for cleaning com-panies. Doyle bought his yacht (he hadtwo worth a £1 m but had to sell one)and the mansion all purchased on thecompany's account, since 1979. Thecompany expanded by taking oversmall local companies and changing theirnames. There are now around twentybranches of Home Counties and itssubsidiaries around the country. Eachhas a branch manager and a couple ofsales reps. When they get a contractthe branch will hire a supervisor whoholds the keys to buildings and willlook after about five contracts. Theythen advertise for cleaners.Does Homes Counties give workers anytraining?They make a big play on being special-ist cleaners but they are not. Companybrochures claim that The Firs (thecompany headquarters previously usedby Churchill during the last war) is inconstant use for staff training but Inever saw any training all the time I wasthere.

We understand that Home Countiesis in severe financial difficulties?Yes it is. In September 1982 HomeCounties owed £800,000 VAT and£200,000 National Insurance and PAYEarrears. The Customs and Excise wereabout to start bankruptancy proceed-ings in May 1982 and then again lastXmas. During this period it actuallywon the cleaning contract at the largeVAT headquarters in Southend (seePSA No 3). Cheques for the repaymentof VAT issued by Home Counties havebounced. The Inland Revenue have alsobeen investigating Doyle and the com-pany. The Daily Mirror have reportedthey owe £1m in unpaid tax.The banks have been investigating

the company. Doyle has transferredabout over £2m into his Spanish propertyscheme. Some cleaners have to sue to gettheir redundancy money.

What links does Home Counties havewith other companies?Doyle is good friends with David Evans,boss of Exclusive Cleaning. They bothstarted in cleaning at about the sametime. They talk and meet regularlyHome Counties bought a company fromBrengreen Holdings, Exclusive's parentcompany, a few years ago.Do you think the cleaning companiesoperate a cartel?I saw no evidence of it but they allknow and help each other out in variousways. They're obviously in competitionbut I'm sure that if one companycouldn't do or wasn't interested in acontract they would put in a hightender to help the other company getthe contract.Are there links with politicians?Yes, Doyle has held fundraising partiesfor the Tories at his mansion. Doylealso uses the yacht at Marbelle in Spainfor entertaining. There are other kindsof links. A group of Area Health Auth-ority representatives arrived for a partyat The Firs earlier this year. Doyle hasalso had a good contact in the CivilService.Have Home Counties lost any contractsrecently?It recently lost a cleaning contract atHeathrow and one at Milton Keynesbus station. The company was one offour firms awarded school cleaningcontracts in Cambridgeshire but whenthe council heard about the company'srecord and debts they were thrown out.Do you think Home Counties is typical?Some of Doyle's activities may not betypical but the way that the firmoperates and its exploitation of theworkforce is certainly typical. Nodoubt the Contract Cleaning andMaintenance Association will attemptto paint Home Counties as untypical.

The industry presents itself asbeing in the specialist cleaning busi-ness but in my view it is more aboutspecialising in the exploitation ofcheap unorganised labour than it isabout specialist cleaning.

ContractorsFAILURES.49 out of 50 schools in Birminghamnow cleaned by International ServiceSystem (ISS) have complained about'the standard of cleaning. The council's

I' education department however claimsthat 'only' 15 of the 20 protests havebeen received from Head teachers.

I • Academy Cleaning Services Ltdwere recently dismissed from theirschool cleaning contract with theLondon Borough of Merton. TheNational Union of Teachers had com-piled reports which showed that noprimary or middle school was cleanat the start of term. As the term pro-gressed things went from bad to worse.Teachers threatened strike action ifstandards didn't improve, complaintsmounted, classrooms were boycotted insome schools, and eventually the firmwas given an ultimatum - improve orget out. Two weeks later they weresacked. The, work is now done byProvincial Cleaning Services (part of theHawley Group).Pritchard Services Group was recentlyfired from its five year garden mainten-ance contract with Wandsworth Council.Pritch3rd started the £348,000 contractearlier this year but had accumulated£138,116 in fines by early October.Despite the direct labour bid being nexthighest the council is to bring in anothercontractor.• Cambridgeshire County Council ishaving major problems with its schoolcleaning contracts. Queen Ediths In-fant School was closed for a day inOctober due to uncleaned classrooms- Initial Services Cleaners have thecontract. Toilets were dirty, wastebins not emptied, and there was stillblood on the floor from an accidentdays earlier.T!1ere have been numerous com-

plaints from schools in Peterborough,now cleaned by Sunlight's subsidiaryPall Mall. Caretakers have been cata-loguing the rapid decline in. the stan-dard of cleaning.• Merton Council has had to sack apainting firm on a £%m contract.Tenants have complained that thefirm left some houses in a worse statethan before they started.

Public Service Action No 5 3

THE FIGHT GOES ON

The BT unions have succeeded in making the privatisation ofTelecoms one of the major issues of the moment - for the media andMPs at least - and gradually for the public. The effectiveness of theircampaign has forced BT to take out full page adverts in the nationalpress attempting to quieten public unease about the effects ofprivatisation and has clearly had an effect on the terms of the newdraft licence for BT.The POEU strategy of selective and

controlled industrial action in key areasis proving successful in disruptingservices to business and governmenttargets without harming the ordinaryuser. The BT Board has tended to claimthat it has been ineffective but onemember admitted recently to 'severedisruption' and members of the BritishBankers' Association were asked in aconfidential circular to refrain frompublic statements about the disruption,Mercury rescue by courtsMercury's legal action against the POEUis a measure of the effectiveness of theindustrial action. In the High Court,Mercury claimed to have lost between£11, million and £1% million worth oforders because of the POEU blacking,with another £4 million worth or ordersin jeopardy. They told the court thatthey feared being forced out of business.Though they lost in the High Court,Mercury won in the Appeal Court withthe undefeatable combination ofTebbit's Law and Master of the Rolls,Sir John Donaldson, notorious from hisdays in the Heath Government's ill-fated Industrial Relations Court.Anti-privatisation action continuesThe POEU recall conference from 7th-11th November voted, after a passionatedebate, to obey the Appeal Courtinjunction and stop blacking Mercury,but unanimously agreed on 'a flexibleprogramme of industrial action' againstprivatisation.The POEU action strategy over the

last two months has been selective hits

at key targets, ranging from ,8 work torule at three major internationalexchanges in London, stri kes at datatransmission centres, telex centres inLondon and at Aberdeen (serving NorthSea oil companies), electronic exchangesserving big business in Birmingham,Manchester, Liverpool, Glasgow andSwansea. In early October BT manage-ment launched an attack on unionaction with lockouts of 1,600 membersat the international exchanges, bussingin of engineers from other areas tostrike-hit exchanges, making workerssign 'work as instructed' forms, andthreatening dismissal to a few of thethousands who refused to cross picketIines. The effect of this was a massiveescalation in the industrial action - thenumbers involved went from 150 to2500 in a few days, with an increase inselective target actions.

the re-imposed strike levy has broughtsupportive action from other unions.The UCW has staged a number of oneday strikes in support of the POEU inkey London exchanges, there has beenselective action by the CPSA in Inter-national Services, the SPCS is support-ing the POEU, and the NUR is currentlytaking legal advice as to the legality ofits continued blacking of work onMercurt cables in support of the POEUaction. The TUC General Secretary haswritten to all affiliated unions asking fordonations and interest free loans for thePOEU. Already loans have come fromthe UCW, GMBATU, and the CPSA.BT's policy, apart from publicly

playing down the effectiveness of thePOEU action, harassing union officersand forcing management to scab, is tocripple the union financially - what the

_. POEU call the 'Black Hole' strategy. So~ 1 the support of other unions is crucial.c.

TU support growsAs PSA goes to press some 2500 POEUmembers are still on strike or undersuspension and the dismissal of 57 mem-bers is still hanging in the air. BTclaimed that it was holding up the dis-missal to encourage the POEU to calloff its action, but in truth it knows thatto carry out the sackings would bringmassive retaliation, not just from theunion. Currently negotiations for apartial return to work are going onbetween unions and management sub-ject, we understand, to the dropping ofdismissal threats against the 57, but theindustrial action strategy goes on. Theimpressive record of solidarity in thePOEU and the support for action from

TELECOMS SALEThe Telecommunications Bill is now onits way through parliament and detailsof the draft licence for a privatised BThave emerged. It gives the impressionof offering some protection to con-sumers in obliging BT to provide a 'full'service to rural areas, a free emergency999 service and to continue to providecall boxes. For 5 years increases inconnection and local call charges are tobe kept below the rate of inflation (theBTUC has a very different viewl. BTmust provide interconnection withother networks, overseen by OFTE L.BT sale delay - post office first?'The BT Board and its bankers Warburgsare now pressing for the actual sale ofBT to be delayed until 1985. TheGovernment is publicly sticking to itstarget date of October 1984 but is.believed to be having private secondthoughts over the timing because ofdoubts as to whether the City can copewith the huge £4 billion sale. The newIndustry minister Tebbit is said to belooking at the Post Office and the Giro-bank for a quick privatisation deal.£100 million for the CityThe Government is expected to payouta total of £100 million in connectionwith the BT sale offer, mostly in advisoryand underwriting fees to City Insti-tutions.


WestminsterFORGING LINAs reported in PSA 4, NALGO and NUPE in Westminster have formeda joint ad-hoc committee to resist the council's cuts and privatisationplans. PSA talked with Colin Robertson, NUPE shop steward andtemporary Chair of the Committee. I

!I

IiIII1~l

Ell~,.9-1~l

organise ourselves really effectively we 0.1were forced to respond to the council's Iattacks of cuts and privatisation. !PSA: Was there one issue that got people Itogether?CR: Well one thing that really helpedus was when the leader of the council,Lady Porter wrote a personal letter toall council employees saying in a verycondescending way that if we didn't allworker harder the services would beprivatised. That made people very angryindeed. Over this we met the councilface to face at a joint works committee.It was the first time this had happened,in Westminster and was an importantstep.

PSA: How did the committee comeabout?CR: We had to get away from justlooking at our own bootlaces and liasewith other unions, labour councillors,voluntary agencies and communitygroups in the borough to try and worktogether. You can't organise a fight ifyou are isolated.

PSA: Was there an easy alliance between.NALGO and NUPE?CR: Not at first. There was some mis-trust on both sides. Some NUPE memb-ers saw NALGO members as being partlyresponsible for our losing jobs. Afterall, they were preparing contracts andtenders, helping to privatise the servicesthat we provide. They were also cuttingtheir own throats ultimately but theyI didn't see it that way at first.

, PSA: What other problems were there?" CR: Different union structures at alllevels. Also 'them and us' attitudes, you

, know, NALGO members have 'careers', and NUPE members have 'jobs'.

"

PSA: How did you try to overcome theseproblems?

'I CR: We decided on a list of priorities;to provide an open forum for joint dis-

I, cussion.; improve communication; reviewWestminster's plans and proposals; pro-mote joint action; establish a jointshop stewards committee; link up withother trade unions and anti privati sat-'ion campaigns. We have weekly meetingsand have produced a newsheet inform-ing the membership of council plans, theneed to respond in a co-ordinated wayand so on. Then things started to happenso fast that before we had managed to

PSA: Does the council consult with theunions?CR: They don't believe in it. They maketheir decisions in principle first and onlythen information might come our way.We can't argue because we don't havethe facts. If the facts are then releasedto us it's usually too late because theirdecision has already been made! If theydo meet with us then the unions are onlyallowed to comment on staffing impli-cations not, for example, on possibleeffects on services.

PSA: Isn't this one way area in whichNALGO members could be helpful?After all they prepare the reports forcouncillors don't they?CR: That's true. For example, onenight I went to a council meeting andhappened to see from the agendathat tenders had been iniated for myjob! It's very difficult to organise atthat stage. NALGO have now made

it branch policy not to co-operate withtenders but information exchanging bet-ween us could still be better. IPSA: What issues have you taken up I,

so far?CR: We were involved in a joint NALGO/ INUPE health and safety stewards meet- ,ing on asbestos in council buildings. We ,also intend to take up the issue of ,asbestos on council estates. Tenants ,have already started to organise and ,we should be co-operating with them. ,We lost the fight to stop the privatisat- ,ion of the cleaning of council buildings. ,The council also tried to privatise the ,garden maintenance of Hall PlaceEstate. They did a study and got estim- ,ates from two private firms but Direct ILabour was cheaper. Then they did asecond study of one third of the garden- ,ing jobs in North Westminster but again ,we proved cheaper. On the Warwick ,Estate there's a pilot scheme of work ,shifts which we assume has been arrang- ,ed so that a private competitor could ,easily tender for the work. But thereare threats of cuts and privatisation right Iacross the board. 1

PSA: Is education important? ICR: Definitely. As well as the asbestos Imeeting that I mentioned, we organised Ia one-day educational in work time that ,was attended by fifty stewards which was Ia great success. We're also concerned ,that we get our message across to the 1

public, the users of the services. II

PSA: What about industrial action? iCR: We supported demonstrations Iagainst library closures, helped organise ,public meetings and produced leaf- Ilets. For the half day of action in IOctober we not only marched on the Icouncil meeting but helped organise a ,public meeting for the people who Icouldn't get into the p{lblic gallery. We ,had speakers from the trades council ,and the POEU. We are also supportingthe residential social workers in their Ifight. ,

I,IiIIII,

PSA: What lessons have you learnedfrom your action so far?CR: We should have establised a jointshop stewards committee and got itofficially recognised right from thestart. As an unofficial body we havefound it difficult to organise; we couldhave had more clout! Also money hasbeen a problem, particularly for public-ity material. This could have probablybeen avoided had we been official. Wehave definitely brought NALGO andNUPE much closer but it is much moredifficult to organise together' and ironout teething problems when you are inthe middle of a battle. We should havedone it much sooner.


On October 24th NALGO and NUPEorganised a half day strike and a 1,000-strong protest march and lobby ofWestminster Council's meeting whereproposals for cuts of £8 million andprivatisation were being discussed. Torycouncillors were also confronted, by amock funeral for the fifty architects'jobs which will be lost; fifty coffinswere piled onto the steps of the CouncilHouse.Forty per cent of the Council's

architects service is already in the handsof the private sector. The Tories hadearlier promised to extend this only if itproved to be cost effective and morebeneficial to ratepayers. Not only didthey reject the architects' own figureswhich proved that an in-house servicewas cheaper and more efficient, butthey had hushed up a confidentialreport by the City Treasurer dated 6thJuly 1983 which clearly showed thatprivate practice was at least 25% moreexpensive.Privatisation of the Council's valuers

department was also discussed; anarbitrary list of private firms of estateagents had been asked to tender for thework. Again, in-house figures showedthat the service could not be beaten.Nonetheless, despite heated oppo-

sition from Labour councillors and apacked public gallery and following ashort retort from one Tory councillorthat 'corruption in the private sectorwas here to stay', the Council votedoverwhelmingly to privatise the archi-tects and valuers departments.Further industrial action to resist

these measures is being planned.

IIIII

IIIIIIIII

IIIIIIIiIIIII Unprecedented alliances between tradeI unionists and the public have saved theI Queens Park and Maida Vale librariesI from closure and the buildings from

Ibeing sold off.Westminster were forced to abandon

I their plans following a fierce campaignI by NALGO and NUPE (who producedlover 20,000 leaflets). library usersI including .Iocal school children andI teachers and Labou r councillors. ActionI included demonstrations, public meet-I ings, marches and petitions.I Chair of the council's EnvironmentI Committee, Cllr Hartley, described as

I 'very damaging and scurrilous'.The library service as a whole how-1 ever is still under severe threat with theI Portland library still facing closure.I

CoventryPUBLICSECTORALLIANCEFORMEDThe Coventry Public Sector Alliancewas launched at a conference in Octoberwith delegates from 15 public sectorunions representing local government,the NHS, civil service, education andmost of the nationalised industries.Established to campaign against privat-isation, the Alliance is one of the first ofits kind in the country.--

MoreNewsWATER RATSThe complete privatisation of thedesign, operation and maintenanceof water distribution and treatmentplant; sewerage and sewage treatmentplant; and the provision of theenvironmental services - that is theproposal in a recent issue of Waterand Waste Treatment. Private watercompanies already supply about aquarter of the water consumed butthe proposal is to have private firmstendering for all the work - valuedat about £800m annually.Commenting on last year's water

strike the article states "How canwe justify tolerating this position ofcoercive monopoly, when there areover three million people out ofwork, who would be willing andable to take over the work of thewater authorities staff, at a consider-ably lower rate of pay. In true stylethey even want the monitoring ofeffluent to be done by consultants.KEEPING IT IN THE FAMILYA report from the privatisation fanat-ics, the right wing Adam Smithlristitute, on local government policyargues that contractors should beemployed to monitor contractors. Atthe end of a 5-year transition period,they want the full range of localgovernment services to be subject toobligatory tendering by contractors.In another report they argue for thebreak-up and sale of London Trans-port's bus and underground system.They also want massive privatisationof British Rail.CLEANERS WAGES CUTCleaners employed by contractorscleaning government offices havehad their wages cut by up to 20%.Contractors such as Exclusive, OfficeCleaning Services, ICC CleaningServices and Northern MaintenanceCleaners have used the abolitionof the Fair Wages Resolution on 21September to impose big cuts inwages and conditions. Exclusivehave cut its London hourly wagerates from £2.12 to £1.80. ICC hascut its Liverpool rates down to £1.50.Northern Maintenance has stoppedall holiday pay.Exclusive asked 60 cleaners on

its Inland Revenue office cleaningcontract in Cardiff to accept 12redundancies and a 50";" cut inholidays.CONTRACTORS SACKED

Naturally, the members of theCoventry Alliance are keen to find outwhat the TUC General Council intendsto do in implementing the decision ofthe last congress to form a NationalPublic Sector Alliance. But they insistthat they won't let anything slow downour local campaign.Already a letter has gone out seeking

invitations to speak at a wide range ofcommunity, trade union and consumerorganisations - and the Alliance is under-taking to supply tailor-made publicity.I In line with its policy of supporting

Igroups actively opposing privatisation,the Alliance is planning a joint publicmeeting with the British Telecom UnionI Council. Finally, whilst badges, leaflets,

I posters are being prepared, the Allianceis also trying to forge links with groupsI in other parts of the country who areI campaigning against privatisation. This

Iinitial surge of activity will culminate ina major conference in March 1984

I and the publication of a booklet onI privatisation in Coventry.

IIIiIIIIII

How the campaign is organisedThe Conference took the decision to·elect a Council of Public Sector Unions,with seats allocated to each industry orservice - and a number of general seatsbesides. This Council acts as an Executiveand is responsible for conducting thecampaign. Council members are accoun-table to the industries they representand it is intended to develop a tullyaccountable structu re with regu lar meet-ings of the full Alliance by March, 1984.For further information contact theSecretary, Will Barton, 24 MaycockRoad, Foleshill, Coventry CV6.

Labour controlled Coventry councilhas decided to run its own skipemptying service. J. C. Waste ofWarwick will lose its contract inJanuary when the council will pur-chase two special trucks and 45 skips.


fHOUSING'SALESIn PSA 4 we reported on the Council'splans in Tower Hamlets to sell off theI Teviot Street estate complete withI tenants as part of a development scheme

I for the Devons Goods Yard in Poplar.I The Council is going ahead with a con-

I sultation programme, ignoring the

'

existing tenants' organisation and insteadcalling 10 separate meetings each for

I 100 tenants.I The mailing for the consultation hasbeen put out to contract - for fear of

I sabotage from within, it seems. NALGO

Imembers in the Housing departmentrefused to hand over the keys for flatsto be valued for the sell-off and arecurrently ballotting members on theblacking of all work connected with the

, privatisation plan.I Meanwhile the tenants have been

I active in opposition to the plans. Whenthe Housing Development Committee

I visited the site they were greeted bysome 100 angry tenants who followed, the Members' tour round the estate andI into the reception laid on at theI community centre. Links have beenI made with the tenants' organisation at

1

Cantril Farm, the privatised estate atKnowsley on Merseyside (PSA 4). which

I Teviot Street tenants are due to visitsoon.I Now clearly hooked on privatisation,I the council's housing development

I committee plans to sell off WaterlowI Estate to a private developer toI rehabilitate the flats for sale. On theI the grounds that the council can't doI the necessary re-hab within the current

I DOE cost limits the committee is

I ignoring opposition from the council'shousing management committee andI from the residents of the estate. The

I residents were not consulted before theI decision to sell, but have since produced

Ia clearly argued alternative plan for theestate proposing conversion to the kinds

I of housing units most needed in the

Iborough - for large families, singlepeople and the elderly, and proving that

I the work can be done within DOE costI limits.I .116 maisonettes on the Ely estate in

ICardiff are to be sold by the councilfor improvement and resale. Both

I Barratt's and Wimpey's have express-

led an interest. With 39 maisonettescurrently empty, a 'consultation ex-ercise' carried out by the council

I found that, not surprisingly, 88% ofI tenants wanted to move.

leThe council at Rochester upon Med-way is in the process of decanting some

'1 220 flats in three tower blocks and 50maisonettes to sell them off to a devel-

I oper. Wimpeys are in negotiation with

I the cou~cil. They are planned for owner-occupation.

II .Approval for the first private shelter-ed accommodation for the elderly inthe north east has just been given byLabour control!ed Newcastle City Coun-

One growth area for private contra,ctorsis the new Youth Training Scheme(YTS). A large number of trainees areending up in the clutches of privatetraining organisations and colleges. InBirmingham, for example, two in everyfive YTS trainees end up with privatetraining agencies.The profits come from two sources.

Each 'managing agent' taking traineesgets £100 per trainee which is bankedeven if the trainee doesn't take the placeoffered. There is no claw-back on un-filled places. Secondly, by cutting thecosts of training (more per class, cuttingteaching salaries) money can be madefrom the training fees.Many thousands 'of young people will

be'\at the mercies of these organisations.The Link Organisation, for example, has18,000 places for trainees, Sight andSound has 4,000 places, Pitmans have5,000 places whilst Control DataInstitute have 1,000 places.Each of these major groups have

been involved in controversy. Link'smanaging director is the former directorof Distribution Industry Training Board(shut down by the government) whilsther husband was formerly. the MSC'sMerseyside regional manpower director.Development director John Cordrey is amember of the Merseyside Area Man-power Board - the body controllingYTS schemes in each area.Sight and Sound are headed by ex-

liberal MP John Pardoe who in 1981-2was paid a nifty £462 per week. It willreceive £8 million taxpayers' money forrunning these schemes, yet the SundayTimes (1.5.83) was less than com-plimentary about its teaching methods:'During classes, it has been reported that

, students tend to have somewhat glazed,zombie-like expressions'.Pitmans is a well known name but

th is did not prevent the Fife Area

Manpower Board in Scotland throwingout a local Pitmans scheme. To theastonishment of the AMB, the ManpowerServices Commission in London thenproceeded to overrule its own Boardmembers, so desperate were they to getplaces filled. Managing Director HughPitman's main recent training experiencewas as an army officer.One of the smaller training agencies

is the Control Data Institute, a namethat may ring bells amongst those whohave followed the activities of a simi-larly named American corporation ineducational and welfare fields in theEast End of London and Coventry.In Birmingham, some 57% of Mode

A' (employer led) schemes and 40"10ofthe total of 13,500 places are with suchentrepreneurs, many of whom are verynew, inexperienced and a serious threatto the public education sector. For itwill not be the trainees alone who areaffected by this trend. All workers -especially the teaching staff - at localauthority colleges are under threat.Larger classes, lower costs, cheaper

salaries and one year contracts forteachers are the order of the day. Jobsin the public sector will go as the privateagencies grab MSC money that wouldotherwise have gone to the colleges. Insome areas there have already beenserious criticisms of the quality of theteaching staff whilst the job descriptionsmake the mind boggle - Sight and Soundadvertised jobs at £7,000 a year plusbonus (what on earth for?).How ironic that at a time of massive

restrictions on education spending atevery level, the Government can findhuge amounts of money to hand overto the private training agencies some ofwhom, such as Link, will be handlingmore money (£34,000,000) than manycolleges or even local authority educationdepartments.

cil. Property developer Leamington IEstates will build 27 flats in Jesmond. I AND MORE SUBSIDIESAnother 30 will be built at Corbridge, The Tory government has decided toNorthumberland. give 16,500 tenants who bought def-• WITH FULL VACANT POSSESS- I ective council houses repair grants -ION: THE FREEHOLD OF 23 PUR- I but councils owning the remainingPOSE BUILT FLATS AT RYDER 153,500 houses will get NOTHING.COURT, WALTHAM FOREST: PRICE I A study by the Building Research£550,000. The estate agent told PSA I Establishment into six prefabricated'we got the last tenants out last week'. I building systems (used prior to 1960)The previous owners? The Metropolitan I - BOOT, Cornish Unit, Orlit, Unity,Police - who used it for married I Wates and Woolaway - showed thatquarters. I they are 'gradually deteriorating as a.Merton is to close its Direct Labour I resul~ of carbonation of the concr~teOrganisation with the loss of 286 I and In some c~ses the ?resence of h.lghmanual jobs and about 200 white collar I levels of chlond.e leading to corrosionjobs. This means that all council house I of the stell reinforcement and con-repairs, road and grass cutting, drain I sequence cra~ki~g of the concrete'.and sewer repair work will be handed Another 6 building systems are to beover to contractors. The council has also I investigated. The government has alsoprivatised its audit and brought in consul- I admitted that post 1960 houses andtation to the social services department. I flats may also have to be included.

I --- -

SupplementFACTS & FANTASIESBUYING SHARES IN

PRIVATISEDPUBLIC ASSETS

Public Service Action No 5

'YOU'VE NO IlYE:R HOW 6'ec.uRE. \T FEs.L.~ TO OWN ),OOROWN HOME. I OWN JO~ ""'0 f\ ~'-"\'-E. O~ 'Tl-\s, COMPf\N"I.'

In this special supplement of Public Service Action we counter theincreasing claims and propaganda made about workers share owner-ship and buy-outs in the privatisation of public services. The Torieshave claimed that selling some shares to workers and users is 'realpublic' ownership' and have extolled the virtues of 'investing in orowning your own job'. The planned sale of British Telecom and otherstate assets will be accompanied by massive publicity and gimmicks totry to persuade workers and telephone subscribers to buy shares.This supplement provides workers and users with detailed arguments

and information to counter the myths and fantasies about share owner-ship. Use it in the workplace, home, public services, club and pubs toget the real facts across to all workers and users.

Why don't we pool our money, togetherwith trade union funds, to buy the bulkof sharesin companies formed in the saleof public services, eg British Telecom,National Bus?

The government is expecting to raiseabout £4 billion from the sale of 51% ofBritish Telecom's shares. Assuming thatthe government issues £1 shares andeveryone of BT's 250,000 workers has£1,000 to invest, they would collectivelyown only 3.2% of the shares. Even if allthe major unions could readily sell all

•


their assets and invest in BT shares, thetotal share ownership of workers andunions still wouldn't reach doublefigures. To get a substantial stake wouldmean every worker investing thousandsof pounds - a lot of money for us butpeanuts as far as financiers and thecompany are concerned.Assuming the share offer is oversub-

scribed, ie the number of applicationsfor shares exceeds the number beingsold, then stockbrokers will allocate acertain percentage of shares to differentclasses of shareholders, eg 25% of sharesto small investors, 40% to large financialinstitutions. Allocation may also beaccording to the price you bid if theshares offer is run under the tendersystem. The system ensures that onlya proportion of workers would beallocated shares anyway.Once the government sells a further

chunk of shares (it has twice recentlysold BP shares and having sold 51% ofCable and Wireless in 1981 has justdecided to halve its shareholding again)it is likely that an even larger proportionof shares will end up in the hands of therich and the financiill institutions.

Some control?But won't owning some shares give ussome form of control? All those whoown shares in a company can vote tocontrol the policy and profits of thefirm.Owning a small percentage of shares willnot give you any form of control what-soever. You will get about as muchinformation and have about as muchinfluence as you'd have with a buildingsociety account. You would get a copyof the annual report and interim results(anyone can Qet these free anyway) andyou will be able to attend shareholders'meetings and have a vote on takeover ormerger bids concerning the company.But the stark reality is that controlis exercised by the large shareholders ~the financial institutions like banks,insurance companies, investment trustsand pension funds, and the government.These institutions may well have adirector on the board and can use theirpower to intervene and hold meetingswith the board and senior managementif they believe that company policy isgoing against their interests.Shareholders are dealt with on an

individual basis so if you could buy1,000 £1 shares in the BT sale this willgive you 0.000025% control - you don'treally think they are going to take anynotice of your views?Private shareholders are in big

decline. A new study by the StockExchange shows that private share-holders own only 28% of the shares onthe Stock Exchange, down from 54%twenty years ago. Conversely, thefinancial institutions have increasedtheir grip on share ownership.Even when private shareholders have

bought shares in the government's saleof assets, most do so for speculativegains. Both British Aerospace and Cableand Wireless had over 150,000 share-

THE £18,OOOm SELL-OFFSALES PLANNED OR UNDERDISCUSSION

Phillip Wolmuth

Present Public Est. ValueOwnership-% £m

BP 39 3000British Telecom 100 8000British Gas(N.SeaOilfields) 100 400British Gas(Wytch Farm) 100 230British GasCorporation 100 ?Britoil 48 600British Airways 100 1000British Airports Authority 100 400British Rail (Sealink) 100 100National Bus 100 200Royal Ordnance Factories 100 300British Shipbuilders (warship100 300yards)British Shipbuilders (repair 100 200yards)BL (profitable subsidiaries) 100 200Cableand Wireless 45 600British Aerospace 48 175AssociatedBritish Ports 48 35British Technology Group 100 250British Steel (joint ventures) 100 ?Rolls Royce 100?British Rail (parts) 100 ?Civil Aviation Authority 100 ?British Nuclear Fuels Ltd 100 400Central Electricity Generat- 100 ?ing Board (parts)

TOTAL £16,219millionThe combined value of public serviceswhereno estimates are given like gas,electricity andrail are likely to exceed£20 billion.

holders at the time of sale. Withinmonths most had sold and the numberplummeted to 27,000 in each case. Thenumber ofshareholders holding 1 millionor more shares grew substantially.Even if a large number of workers

and the unions did manage to buy someshares there would be great difficulty intrying to organise collective action onthe limited opportunities afforded byshare ownership. Remember the hardarguments trying to convince workersto take action over cuts, pay andconditions let alone trying to organisevoting on their shareholding!However it is useful for trade union

and labour movement organisations tobuy a handful of shares in companiesinvolved in privatisation and to make apoint of attending annual generalmeetings to gain publicity against thecompanies' policies and practices.

If the government sold on averagehalf of all these assets this wouldamount to £18,000 million.Source: Stockbrokers estimates and pressreports.

alone control. Thei"e are now over 500employee share ownership schemes inBritain 'owning' (controlled by trustees)£125m worth of shares - just 0.04% ofall the shares issued on the StockExchange.The directors of recently privatised

Amersham International have justgrabbed control of 1.25 million of thefive million Amersham shares set asidefor the employee share ownershipscheme. The shares, worth £2.83m, willbe used to provide 'further rewards' fortop executives. Directors' remunerationshave already increased 50% in the lastyear.These so-called 'free' shares are a

con.• they are held by trustees, usuallydirectors of the firm, and it is they whovote on your behalf at shareholders'meetings, not you or your union rep-resentatives.• free shares can't be sold for twoyears unless you leave the firm.• if shares are sold after two years youwill have to pay tax on any profits, plus.pay tax on the original value of the'free' shares if sold within 7 years fromthe time you obtained them.

Free share LtdThe government and the company maygive workers some 'free' shares. Can'twe use these and employee shareownership schemes to get some control?Workers may well be offered about 100'free' shares together with interest freeloans to purchase more shares. But thisrepresents a minuscule percentage of theshares. Employee share ownership/profitsharing schemes are now finding favourwith the Tories, SDP and Liberals asanother means of achieving 'real publicownership'. Employees of Cable andWireless own 0.001 per cent of thecompany, 0.005 per cent at Amershamand 0.2 per cent in Britoil. And that canhardly be construed as ownership, let

THE RICH ARE GETTINGRICHERLatest figures show that during 1981the richest 5% of the population increas-ed their share of the wealth from 43%to 45%.

PensionpowderOur pension funds have vast resources -why can't they be used to buy shares?Surely the combined shareholding ofpension funds, workers and unionswould give us some control.Yes, the pension funds now have totalresources of about £60 billion withabout £6 billion new money coming ineach year. But they are not our pensionfunds - we do not control them. Werarely even influence their investmentpolicies. They are usually managed andadvised by the same financial institu-tions who have big stakes in the samecompanies and/or advise these firms asbankers or accountants. How we wrestsome control over pension funds mustbe one of the key issues of the 1980s.Anyway pension funds rarely invest

more than 5% of their assets in anyonefirm or property. They like to spreadtheir investments and rarely invest inthe company for which fund memberswork. The Post Office Pension Fund istherefore unlikely to invest in BTshares. So it would need several pensionfunds operating collectively to gain asubstantial stake in a large privatisedcompany .

[{,

Users to beconnedIf the government and privatised com-pany sell shares to the users of theservice, won't this give us some influenceand keep down prices?

The government and BT are likely tooffer telephone subscribers a chance tobuy BT shares. They are likely to makea great song and dance over this -'ownership to the people' and otherslogans will be part of a publicity drive,share applications issued with telephonebills, use of telephone sales techniquesand so on. But the number of sharesissued to subscribers will be relativelysmall. They will offer the shares not tospread ownership but to:* try to divert political opposition tothe privatisation of BT and otherservices.* make it more difficult for a Labourgovernment to bring BT back intopublic ownership.* tap a different 'savings market'because the City is afraid that the sheersize of the BT sale will swamp the stockmarket. (In 1982 the total institutionaldemand for shares was about £2.5 bill ion


PENSION FUNDS INPRIVATISA TlONYour weekly or monthly contributionto your authorities' or firms PensionFund is probably being used to buyshares in privatised services. A fewexamples are British Aerospace's share-holders which include the Post OfficePension Fund and those at LondonTransport, Humberside County Counciland London boroughs of Croydon,Tower Hamlets and Kensington andChelsea. Cable and Wireless shareholdersinclude the Greater London Council,Surrey, Essex, Nottinghamshire and KentCounty Councils, to name but a few.Many Pension Funds also have sub-

stantial shareholdings in companiescompeting for NHS, civil service andlocal government contracts. Shareholdersin Pritchard Services Group includeBritish Airways, West Yorkshire, Shrop-shire Pension Funds. British Rail, BritishSteel, West Midlands, Merseyside, SouthYorkshire and Durham County CouncilPension Funds own millions of sharesin Grant Metropolitan.So your money is used to support

companies slashing wages and bene-fits in the NHS and other services.Claims that there is a form of 'pensionfund socialism' in Britain, ie workersalready own a stake in industry, isanother myth. In theory workers dohave a stake but the reality is that pensionfunds are tightly controlled by manage-

.;; ment and financial institutions. TheE NUM has however started trying to geto some control over the miners pension~ funds' investment policies. This needs to:3 snowball across the breadth and width~ of the labour movement.

• f

WRONu HATt R\..f ......

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and total neW share issues reached£1.79 billion - compared to the £4 bil-lion BT sale spread over two years.) TheBT sale and other public assets alreadylined up for sale in the next few yearscould seriously reduce the amount ofmoney available for industry.* divert criticism from selling up to10% of BT shares to foreign investors inAmerica.A share offer to users will be presentedas a 'bonus'. But remember that as ataxpayer and user, you have alreadypaid for the ownership of the serviceand investment in it. BT, for example,directly funded all its own investment.So to buy shares now is to pay TWICE!The idea that if users buy shares this

will keep prices down is another fantasy.Depending on the result of the BT sale,share prices, etc BT will have to find upto £400-£500m annually just to pay theshareholders their dividends. This meansthat management will have to go all outfor efficiency and profits. Public servicewill not be a priority. More job losses,new and increased charges will be theorder of the day. So you pay for BT'sownership and investment, then youpay again for a tiny stake in the newcompany, then you pay again throughhigher charges to pay for the dividends.Some bargain.

Better thannothing?But if workers have at least some sharesin the company won't it give us astronger say in pay negotiations, invest-ment decisions, and make it harder forthe company to make closures andredundancies?Owning shares won't make a scrap ofdifference to the companies' decisionsand attitudes towards you as workers.But share ownership may well affectyour attitude to the company. A finan-cial stake, no matter how small, is likelyto lead to greater conflict within theworkforce over decisions to resistclosures and redundancies. It may be inthe shareholders' interests to close downpart of the service and sack hundreds ofworkers, but clearly it's not in theworkers' interests. Incorporation andconflict is precisely what the Tories,Liberals and SDP want.

WHO OWNS SHARES

IndividualsCharitiesBanksInsurance CompaniesPension FundsUnit TrustsInvestment Trusts & otherfinanCial companiesIndustrial & CommercialCompaniesPublic SectorOverseas Sector

% held in % held in1963 198154,0 28.22.1 2.21.3 0.310.0 20.56.4 26.71.3 3.611.3 6.8

5.1 5.1

1.5 3.07.0 3.6--- ---100.0 100.0

lI

WHAT D'ye-I<Met\N, we HflVE:TO t\""e,Pf RE.OVN DAN(,Y iN1\-\6 (N-re.~c.VT OFTHE VHARE-HOLOER{t ? we. A~e THe..

~ frHf\REt-\O peRf7m.,-4)

Employers will use workers' shareownership as a weapon to negotiate lowwage increases arguing that workerswith shares will be 'compensated' bypossibly receiving higher dividends ifprofits are increased because costs wereheld down. Very divisive - but it'sintended to be so.Several large firms like BP and ICI

have had employee share ownershipschemes for many years but this hasn'tstopped them making redundancies. Asimilar scheme in BT won't itself stopthe planned 45,000 redundancies.Pension funds, insurance companies

and other financial institutions arelikely to resist worker share ownershipschemes which go beyond minusculeproportions unless they are compen-sated and assured that their interests andpotential control are not threatened.

I

IiIIIIIII

"and ability to take action ... or both. IYou have to ask yourself why right I

wing organisations like Aims of Industry, Ithe Institute of Directors and firms like ITaylor Woodrow, which has fundedmany extreme right w.ing causes, held Iprivate meetings with Cabinet ministers Ibefore the general election in June to Itry to commit the Conservative Party to Iexpand employee share ownership. IThese organisations clearly want to Icommit more workers to the capitalist Isystem of ownership. The Tories duly Iresponded, claiming that these schemes Iare 'vital for efficiency as well asharmony in industry'. IWhy all this sudden generosity? I

Nicholas Ridley, now Transport Minister Ibut speaking earlier this year as Financial ISecretary to the Treasury, spelt out the Ireal reasons. He argued that a share of Ithe 'rewards' is good for efficiency, ie Iworkers will more readily agree to cuts Iand redundancies. He argued for asystem of low basic wages with workers IIpaid a twice-yearly supplement (rep-resenting about a quarter of earnings) Irelated to company performance paid Ifrom employee share ownership or Iprofit sharing schemes. He claimed that Ithis would give employees greater Iflexibility and was vital to withstanding Ieconomic crises and sudden increases in Imaterials, eg like the oil crisis. So the Ibait is share ownership but the catch iswage cuts, moderated demands andevery time and economy falters the Iworkers suffer more directly and more Iquickly than at present. IIncorporation is the name of the I

game. Defusing militant action, pre- Iventing strikes and giving workers I'responsibility' is the aim. 'Investing in Iyour job' will lead to less job security, Imore wage cuts, worse working condi-tions and lower benefits. Workers willbe drawn into viewing decisions simply

II

IWhy they want i

workers to ihave a stake I

II

IIIIII

I

Doesn't the idea of a company-owningdemocracy have many advantages?Surely through real public ownership,'owning our own jobs and by workingtogether we can solve Britain's problems.it will give workers a sense of belongingto and recognition with the affairs ofthe company_

That's what the Tories and others whoadvocate worker share ownership wantyou to believe. Capital is owned andcontrolled by the rich and ruling classes.Then all of a sudden they say 'You toocan have it'. Now that means what theyare offering is either worthless or accep-tance of it will lead to incorporationand weaken your negotiating position

NIGEL LAWSON, Charrcellor of the Exchequer, advocate of more asset sales and Ischeme~_to_s~~~ares to_~o~ke~ , ' ~~~~~~~~~~~~~~~~~l,

: on financial criteria like profits, divi-I dends, rate of return etc. Social needs,socially useful production and publicservice won't even be on the agenda.Remember that those workers and

their families who do invest in shareownership do so for financial gain. Inreality it is no different from puttingmoney into a bank or building society.They will want the best possible returnson their investment just like the pensionfunds and other financial institutions.Don't expect any solidarity because anyaction you take to fight against cuts,closures and redundancies or for betterwages and conditions will threaten theirdividends.

In whosefavour?Isn't the government organising the saleof state assets and services to favoursmall investors?

Yes, as part of the new Tory crusade toran equity and property owning demo-cracy they are trying to woo the 'smallinvestor', ie anyone with up to £5,000at their disposal. With the recent £524mBP share sale the government tried tomake it easier to apply for shares andallocated a certain percentage of sharesto 'small investors'. But it's still a lottery


as to whether you actually get anyshares and whether the share price risesor falls.It doesn't take a mathematician to

work out who are the people with aspare several thousand pounds to buyand sell shares. It certainly isn't NHSancillary workers or pensioners. It isalso costly to buy and sell shares. A£500 deal will cost an extra £22.50 fora 2"10 commission charge and 2.4%stamp duty and VAT. The governmentis considering reducing or abolishingstamp duty on small share deals. It mayalso introduce tax concessions forcompanies which bring in employeeshare ownership schemes. Just as homeowners get massive subsidies (far inexcess of those to council tenants) sonow share owners will be subsidised.More tax concessions to companies willbe paid for by individual taxpayers.They play and profit - you pay.

I

I

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No they are not. The vast majority of Ibuy-outs (the manager/workers buy the Icompany from the government or Iparent firm) are management buy-outs. INational Freight is a classic management Ibuy-out. Although the media constantly Iclaim it is a workers' buy-out only a Iminority of workers own shares. The Itotal of 10,000 'worker shareholders' Iinclude pensioners and their families Iwho don't work for the company. IThe government sold National Freight I

for £53.5m but had to pay £47.3m intothe pension fund to meet outstanding Iobligations. All but £6.2m came from a Ilarge loan from a consortium of four Ibanks who now control 17.5% of the Ishares. The banks hold 'B' shares which Igive more rights, eg to nominate a Idirector, veto the issue of new shares, Ithan the employee-held 'A' shares. IBarclays have a director on the board. IMost of the 'worker' shares are held bythe directors (an average 35,000 shares) Iand senior and middle management. 132 I--------1BANKERS BONANZA 1

Merchant banks and stockbrokers are Ihaving a real bonanza from privatisation. IThe sale of shares in BP (1979), Brit- Iish Aerospace, Cable and Wireless,Amersham and Britoil cost the jJovern- Iment £42.7m in fees to financiers. The IAssociated British Ports and recent BP Ishare sales cost several million pounds Imore. Fees for the sale of BT and other Ipublic services will run into tens ofmillions of pounds.

, Buy-outS: oldI wine in plasticI packageI

III

But aren't management/worker buy-outs different and hasn't the workerbuy-out of National Freight been verysuccessful?

I

11$1Q.


MONEY POURS OVERSEASFinancial institutions, industrial com-panies and private investors have trans-ferred £30 billion out of Britain sinceJune 1979. The outflow is increasing- over £6 billion went overseas intoforeign company shares, property andother deals in the first six months of1983.

people now own 26"10 of the employeeshares. Barclays Bank felt so secure thatfor a while they didn't have any securityon their investment. Try getting thatunder real workers' control. The TGWUhave consistently opposed workers'buying shares. Virtually all buy-outs areorganised and controlled by seniormanagement in collusion with bankersand financial institutions.National Freight did make a small

profit in 1982 and in the first ninemonths of 1983. Operating profits fell28% in 1982 compared to the previousyear when it was still under statecontrol. Most of the profits now comefrom property sales of over £16m todate. With 950 depots and sites aroundBritain (the sale was described as 'aproperty hijack from the public purse')property sales can continue to trans-form the accounts for some time tocome.Buy-outs are gaining ground in

America. Steelworkers were involvedin a £45m sale of a National SteelCorporation plant at Weirton, WestVirginia. They then suffered a 32% cutin wages!

Surely the income from sf/are sales willhelp to boost the economy?

This is another myth. The money thegovernment receives from selling publicassets and services is not going toimprove public services or the economy.The £4 billion from the BT sale will doabsolutely nothing for investment in abetter telephone .and communicationsystem. In fact it won't even cover BT's£3.5 billion debts and the £1.75 billiondeficit on the pension fund. It is alsounlikely that the sale of shares will leadto any increase in telecommunicationsinvestment. A European study byLogica, a computer services group,recently concluded that 'the record ofBritish management and the investmentcommunity in supporting large-scaleinvestment in industry is poor; squeezedbetween tight tariff constraints and thedemand for high profits, BT could findit just as difficult to increase investmentas before'.The government can only make

public assets 'saleable' by writing-offtheir debts, giving millions of pounds toprivate companies and shareholders.British Aerospace was sold for £43m

Drainoneconomy

COMPANY

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Bankofireland(§)(IOOp) .Bargel(2Op) . .JohnBealesAssocialedCompanies (2Op)Br'dfordPr"PertyTrUSI(2Sp) .

Brilish-BorneopelroleUmSY~r\";g:~'~~~o;7:':"~j- - .,.A.F.Bulgin(Sp)~ I

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t::~::.g;'~"!&(~inS(5Pj.HiIJSemueiGroup(2Sp)HUnlingGibson(2Sp) '.LandS6curilies(IOOp) .LawLand(2Op) ".

FH.LlOYd(25p) .MClnerneYPrOP8rtieS(§J(10P) .Munford&White (lOp) .New Throgmorton Trusl(I983) (2Sp)

but if the injection of public moneysince 1977 is taken into account there isa deficit from the sale of £135.4m.National Freight had £100m debtswritten off, Associated BritiSh Ports£81m. It is no coincidence that seniormanagement in British Airways andNational Bus, with debts of £1 billionand £160m respectively, favour manage-ment buy-outs as a method of sale inorder to try to blunt criticism of theplanned write-off of debts. BA is likelyto be sold for only £750-£1,OOOm andNational Bus for about £100m.Two firms of City stockbrokers have

recently criticised the government's saleof assets. They suspect that these sales,which will increase to £3 billion annuallyover the next two years, are being usedto avoid difficult decisions on taxes andpublic spending. They believe that theprivatisation programme could well leadto higher interest rates and acceleratinginflation - exactly counter to thegovernment's monetarist strategy. Theeconomy is being run a bit like NationalFreight's accounts - keep selling assetsbut when they run out ...

340

Pre-tax pPreVious

300

2iO

6"/ 790.0005·7 4.137.8002·6 154.0000·4 373.995

1.298.000791.000

194.000(l)1.350.000

21.900.000360.000217.000

3.804.870

"'/ 485.247175'5 16.360.0005·9 469.8873·2 343.000

2.232.000-1.743278.000

4.030.000

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32'5 32'1 33.00023'6 26'9 1.302.0001·0 1·4 208.0001·0

No short cutsSo what is the answer? If privatisationcan't be stopped, isn't it better forworkers and users to buy shares, evenwith all these drawbacks, than forshares to be bought by the rich and thefinancial institutions?

Worker share ownership isn't going tohave any substantial effect on thedistribution or control of wealth inBritain. Nor is it going to change classrelations or employer/employee relationsfor the better. But it does start to blurthese fundamental relations to thedisadvantage of working class people.The case against the sale of public

assets and services and worker/usershare ownership is overwhelming. Thelabour movement must vigorously in-tensify the campaign against sales.Education and propaganda must playakey role. There is no substitute for astrong and effective workplace tradeunion organisation, public sector alli-ances with workers and users collectivelyfighting for the control of publicservices and the economy. You can'tbuy your way out of it.

FURTHER INFORMATIONFor information on National' Freight seeChapter 5 National Freight Corporation inPrivatisation? edited by Sue Hastings andHugo Levie.

For more information on share sales andarguments against buy-outs see Making itPublic: evidence against privatisation byDexter Whitfield. For information on pensionfund share ownership see recent issues ofLabour Research.

For information on share ownersi)ipsee The Stock Exchange Survey of ShareOwnership.

•

Oontractors &ConsultantsPRIVATE POWERTaylor Woodrow, the construction and engineering multinational, istrying to buy three recently closed power stations from the CentralElectricity Generating Board (CEGB). One is the Plymouth Boilfired station which could be converted back to coal firing. The othertwo are the coal-fired stations at Rogerstone and Uskmouth nearNewport,South Wales. ' •

Taylor Woodrow plan to use the EnergyAct 1983 which now permits privatecompanies to generate and sell elec-tricity through the national grid.Taylor Woodrow runs open cast coalmines in South Wales, Northumberlandand in Kentucky and West Virginia,USA and has benefitted from numerouspower station construction contracts. Itis also currently building the Heyshamnuclear power station.If Taylor Woodroll\{ succeed, this will

be a major first step towards privatisa-tion of electricity supply. Other com-panies like Wimpey's which also operateopen cast coal sites and have powerstation construction and engineeringinterests are likely to try to get similarschemes going. These proposals willhave major implications for minersand electricity supply workers.Turnover in 1982 f"eached £605m withpre-tax profits up £3.7m to £28.5m.Nearly £200m of this turnover camefrom overseas contracts in the MiddleEast, Africa and America. In 1982 Tay-lor Woodrow gave the Tory Party £28,950 and a further £25,000 to British

I United Industrialists which is basicallyI a laundry for right wing causes. The

I Prudential Corporation and NorwichUnion Insurance Group are substan-

II tial shareholders with 6.59% and 5.02%of the shares respectively

I Taylor Woodrow PLC has over 150I su~sidiary and associated companiesI including Taylor Woodrow Construc-I tion Ltd, Taylor Woodrow Homes Ltd,I Myton Ltd, Greenham Concrete Ltd,I and Taylor Woodrow Energy Ltd. Thei ..!

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IIIIIIIIIIIII1

Office Cleaning Services uroup (:leePSA 4) have appointed Tory backbench MP Geoffrey Finsburg as aconsultant. He was recently approach-ed by the Goodlife family whQ controlOCS he has known for some thirtyyears but with whom he has had 'noprevious business connections'. Hisrole will be to advise on matters thathe thinks are relevant to show that bycontracting out, the NHS can savemoney. He told PSA that the NHS cansave 'tens of millions of pounds byprivatis~tion' and dismissed as 'politicaltheory' trade unions' claims that privatecontractors do not provide cheaper ormore efficient services.In any event he said that 'trade unions

are not technically qualified to monitorcontracts in the sense that hospital

Public Service Action No 5 13--. -...-

TAYLORWOODROW

~

HAWLEY BUYSANOTHER CLEANERThe Hawley Group (see PSA no.4) hasjust purchased Cleanall (Leeds), anoffice cleaning company, for £700,000.The firm, which had an annual turn-over of £1.06m in 1982/83, willbecome part of Hawley's subsidiary,Provincial Cleaning Services.

, ,firm's activities also include propertydevelopment (including the St Cather-ines Dock in London's Docklands), gasand oil exploration, and civil engineer-ing. A lot of its work comes from thepublic sector - Property Services Agencyand other government departments,national ised industries, local authori-ties and the NHS.

TAKEOVER BATTLEPritchard Services Group succeededin its £15m takeover of the SpringGrove Laundry Group (see PSA No 4).However Pritchard's had to increasetheir offer before a majority of SpringGrove's shareholders accepted.Brengreen Holdings (Exclusive Clean-ing) failed in its bid to capture Sunlight.

THIS IS THE CALLING CARD OFCOUNCILLOR DON KERNS OFMILTON KEYNES. Exclusive have thecouncil's refuse and street cleaningcontract.

adminstrators are qualified'. Buthewenton to say that if contractors had notperformed as well as they might 'someresponsibility lay with hospital author-ities and management'.Asked whether OCS would engage

in loss-leading in order to win contractshe rejected this well-established practicethroughout the industry as 'mythology'Geoffrey Finsberg is a former parlia-

mentary consultant to NALGO.

PRITCHARD IN TAKEOVERSAs soon as Pritchard Services Groupcompleted the £15m takeover of SpringGrove, the laundry and linen rentalfirm, it then went and paid £10m forFood Concepts, an American industrialcaterer. It has over 200 cafeteria con-tracts in the north-eastern states.Pritchards hope to use the company tograb more hospital contracts. A fewdays later a Pritchard subsidiary,Pritchard Security Services snapped upthe London based security firm, ZeusSecurity. Zeus, which will continue totrade under its old name, has an annualturnover of £600,000.

RISING STARSA recent Financial Times Survey ofBritain's top 500 companies showsthat many of the firms involved inprivatisation are shooting up the list.Pritchard Services Group jumped to 173position from last years 232. Hawleywere up to 251 (376), Tarmac 49 (52),Barratt Developments 66 (90) andGrandmet moved up one place to 8th.Brengreen entered at 456.

HOSPITAL MERGERAmerican Medical International (AMI)which has 9 private hospitals in Britain(900 beds) has taken over the LifemarkCorporation, a Texan based hospitalchain in a £665m deal. AMI, withannual turnover before the merger of£935m, will now have 137 privatehospitals, second largest to the HospitalCorporation of America which nowhas about 380 private hospitals world-wide.

• Another privatisation fanatic inParliament Christopher Chope, MPfor Southampton Itchen, has just be-come a 'parliamentary consultant' toGrand Metropolitan. Chope was leaderof Wandsworth council when Grandmetwon the refuse contract. Chope's fee isnot disclosed.

Marcus Fox, Tory MP for Shipley, hasjoined the board of International CareServices Group which owns HospitalHygiene Services Ltd (see PSA No 4).The firm has recently won cleaning con-tracts at three NHS hospitals includingLeeds Infirmary. Other companies inthe group are bidding for school clean-ing contracts. Fox will be particularlyresponsible for 'political matters' .So when you next listen to 'Today in

Parliament' and Chope, Fox and Fins-berg start pontificating on the virtuesof privatisation when they are reallytrying to sell you are Grandmet, Inter-national Care Concern and Office Clean-ing Services.


All over the country the health service unions are taking action againstcuts, closures and privatisation: joint action committees are re-forming,community health councils and health authorities being lobbied, widecommunity support being sought and won, threatened hospitals beingoccupied - and, not before time, the Labour Party has started itstravelling roadshow in an old ambulance.If we were to report here all the action with 600 sheets for signing, 10,000 leaf-we've heard about it would fill the lets have been produced and a press con-whole paper - so what follows is just ference held at which local pensionersa sample - ' talked about health care in the days.1n the south west revived joint stew- before the NHS.ards committees are winning the support - Durham County Council which coversof local trades councils. A mass demon- 3 DHAs has no reputation for radicalstration in Somerset on 20th November thinking but at its November meetingwill be supported by a 2 hour strike by unanimously supported a resolutionworkers at a Yeovil helicopter factory. (the Tories abstaining not voting against)- Meetings for workers are being held in deploring attempts to privatise any partall hospitals and have so far been of the NHS and pledging resistance toenthusiastically supported. any money or manpower cuts, with an- NHS administrators are speaking out instruction to its delegates on HAs toin defence of staffing levels. vote against them.- Unions are pressing health authorities - In Newcastle all NHS unions arenot to privatise and in Cornwall the lobbying CHCs and HAs against cutsauthority is fighting the DHSS to retain and privatisation and some HAs haveits in-house laundry service. I already agreed not to implement cuts or- Action continues against threatened I privatisation. 'Closed' meetings of theclosures in Bristol, Wellington and i RHA have been twice occupied byStroud. i health service workers and the Chair.In the north, joint action committees I has met with DHSS ministers to tryhave been formed in the larger districts I and win a reduction in manpower cutsand support is being won from local I - though the reduction achieved wastrades councils and a new Strategy of I only a paper one. Public meetings inHealth against cuts and threatened I North and South Tyneside have attract-

'If the in-house organisation can do 'I closures of wards and smaller units. I ed attendances of 500.itcheape.rand bettersobeit'Norman ,. - In Darlington 250 workers from the i .In Scotland the STUC campaign forFowler In the Sunday Express on I Memorial Hospital staged a walkout to I the NHS is involving local authorities,23. ~0.83 just~fying ~rivatisation of I lobby a DHA meeting where they made I trade unions, health authorites, politicalancillary hospital services. a statement offering TU support to the I parties (including Tories), pensioners... so what about Calderdale (PSA I I authority if the authority supported the I and other groups. A major conference on2) Newcastle (PSA 4) and Cornwall unions - but saying they would fight 29 November will encourage the devel-(PSA 5) Mr Fowler - where the 1 I the authority if it agreed to cuts. There opment of local campaigns. The ScottishDHSS is refusing to allow health • I a vigorous local campaign is involving campaign starts with some advantages:authorities to make savings by keep- Labour and Liberal activists and pension- relatively higher NHS spending, a very

!.. ing laundry services"in house. I ers groups. A petition has been started small private sector - only 4 private I

BLOOD MONEY (continuedfrom PSA 4): UNIONS WINCHANGESA new private hospital in Glasgowcosting £10 million, Ross Hall, hadits opening delayed by effectiveaction by Scottish health unionswhich blocked its supplies of bloodcoming from the Blood TransfusionService - and leaked to the press awarning from the head of Scotland'sblood transfusion service that thedemand for blood from privatehospitals in Scotland might threatenheart surgery for NHS patients.On 7.11.83 the Government an-

nounced that the NHS would infuture charge private hospitals andclinics for the administrative costsinvolved in supplying blood includingdel ivery, storage and processing -believed to total sgme £20 per pint.BABIES DEPEND ONCHARITYTen per cent of vital equipmentbought for the Burton Districtand General Hospitals last yearcame from charity fund raising. Over£30,000 was raised by raffles andgifts - the NHS put up £339,000for equipment, The Special CareBaby Unit was the main focus. Recentdonations have included an intenswecare incubator, drip sets, an alarmsystem to alert nurses when bab-ies stop breathing, and a tumbledryer to alJow nappies to be changedin the unit. The Consultant Paediat-rician Dr Martin Addy stated 'Given ,1

financial stringencies even largeramounts will have to be donated. Butits not for the purchase of luxuryequipment. It's for equipment wewouldn't otherwise'have'.BRITAIN SPENDS LESS ONHEALTH ADMINISTRATIONThe Government claims its cuts areaimed at the administration costs inthe NHS - but research by the Kj~g'sFund charity shows that Britainalready spends less than comparablecountries on administration - 5·6%of its health budget compared withbetween 9 and 12"If. in France. Inthe US some 21% of private hea.lthcare costs are for administration.Though comparisons are difficult theresearc;h seems to show that countriesrelying on a system of free care likeBritain and Sweden spend less onadministration.A MINISTER WRitES:

NHS:ACTIONBUILD-UP Phillip Wolmuth

I


I hospitals ('and we intend to keep it thatway') and no privatisation of ancillary

I service to date. Some HAs are goingI through the process of tendering toI comply with the DHSS circular, butI are confident that in house services

Iwill be retained. There are major threatsof cuts and closures in Glasgow andI Lothian - but the unions' victory over

I blood supplies to private hospitals hasI boosted morale for the fight ahead.I .In the south-east coordinating com-I mittees of NHS unions have been II formed and workshops are being organ- II ised. A long campaign to retain direct II labour for cleaning at the New Sussex II Hospital in Brighton has now been won. II .In the east Midlands a coordinating II committ~e of NHS unions and profess-ional organisations has been formed I

II in Nottingham to fight privatisation .threats to 1400 jobs where manage- I

I ment is now working out tenderingprocedures. A broad-based health strat- I

I egy group has been set up to defend lI the NHS. II .1n London there is action in many II boroughs against threatened hospital II closures, including occupations, several I'I broad based local health campaigns

Iare establ ished. Several DHAs have taken IIfirm stands against cuts - and nowI await the response to this stand from I

I above. Government claims of over- II provision in the capital will mean II drastic cuts in provision in London - II no children's casualty in Hackney, no II casualty provision at all in Haringey, II elderly people travelling for hours to Ilout-patient services in Lewisham, clos- Iure of the South London Hospital for

II Women, closure of the remaining after- Icare provision for Queen Charlotte's I

I maternity hospital, closure of major II mental hospitals with no compensatingI 'community care' provision. IIIIIIIIIIIIIIIIIIIIIIIIIIIIII

Victoria Health Emergency, a campaignagainst health cuts and privatisation inthe Victoria DHA has been launched byshop stewards. An educational attend-ed by thirty stewards in September Iwas followed by a meeting at which Ia committee was formed with the aim Iof drawing in wider community and Itrade union support.Westminster Hospital cardiac unit

and the bone marrow unit at the child-rens hospital are in immediate danger;one major hospital unit may close in1985. 188 jobs are to be lost in thedistrict by next April.The cleaning at the Westminster

Hospital Page Street annexe is contract-ed out to Exclusive, following the sack- Iing of Pritchards for inefficiency. Staff Iand public have lodged complaints Iabout the standard of Exclusive's work Ibut no action has been taken by manage- Iment to restore in-house cleaning.Unions fear further privatisation of Ilaundry and cleaning services. IThe campaign has organised a lobby

of Victoria DHA at 5.30pm on Decem- Iber 8th at the Queen Mary's Nursing IHome Page Street SW1. IThe November meeting of the Padding- Iton and North Kensington DHA was Ilobbied by over 100 health workers Iand public protesting the planned pri- Ivatisation of catering, laundry and Idomestic services. The lobby forced the Imeeting to be deferred until December I14th to enable the unions to attend the Imeeting to put their case. NUPE and IGMBTU are using the extra time tomobilise more support to force the IIDHA to resist privatisation.

IIIIIII!

IIIIIIIII

MAJORITY AGAINST NHSCUTS - NEW POLLThe Sunday Times on 13th Novemberpublished results on a new MORI pollshowing• 3/4 of the public think the cutswill mean a worse service with noimprovement in efficiency• 4/5 think cuts will means longerqueues for NHS treatment• 2/3 think patients will suffer asa result of the cuts

PRIVATE HEALTH FIRMSIN CRISIS'One of the biggest disasters I'veseen' says Michael Lee, adviser infinance to the DHSS. Private medicalinsurance companies are experiencingan upsurge in business at the moment,but may be forced to sharply increasetheir insurance premiums. They havebeen pressing government to bailthem out with tax concessions onhealth insurance, but have failed sofar. The crisis is caused by the doubl-ing of doctors' fees for private treat-mentin the last four years, byunexpected claims from subscribersfacing longer waiting lists in the NHS,and because expanding health insur-ance means that its not just thewealthy involved, but the less well-off who tend to be less healthy andso make more claims. Further,large US firms are increasingly mov-ing into the UK market, like Mutualof Ohio, the world's largest, offeringcheap deals to low risk clients -leaving other companies with alarge proportion of high risk clients.

CROTHALLSCrothall's, part of the Pritchard ServicesGroup, employs a 100 cleaners on acontract at Barking Hospital in eastLondon. Because the contract is up forrenewal Crothalls have sent redundancynotices to all the workers. Crothallsmanaging director stated that 'It isnormal procedure to hand out redun-dancy notices every time a contractcomes up for tender. It is precautionarymeasure as we have to give 90 dayswarning'. Crothalls keep their opt-ions wide open - the letter to thecleaners also says that if they winthe contract again there may be changesin the number of workers needed, workpatterns and conditions of employment.

Beware of Cheap ImitatiomRight wing business interests are sothreatened by the real facts about pri-vatisation published in Public ServiceAction that they have started up arabidly pro-privatisation newsletter. Thename and the design are a blatantattempt to copy the highly successfulPSA. Apart from the front page otherheadlines include 'Local AuthoritiesHappy With Contractors', 'AllianceLeaders support Privatisation', 'SavingsMount Up' etc. It is published from an Iaddress in Watford and claims an aca- Idemic Council of five right wing Thatch- Ierite academics. Contractors and right Iwing organisations like the Adam Smith IIllstitute have combined their funds tobe able to distribute their newsletterfree of charge. Just shows their faith in Imarket forces! It first appeared at the Irecent Tory Party Conference and it Iappears that large numbers were, Idelivered by direct labour to the Black- Ipool refuse tip.~~~~~~~~~.J

PUBLICSERVICE I

ACTION IInformation I

IIII1-;IEI~Ie.1=I~10-

I

MILTON KEYNES: MUCK, MONEYAND MASS SACKINGS. A 12-pagearticle in the latest Community Actionmagazine (50p inc post from CIA, 27Clerkenwell Close, London EC1) whichdetails vividly the struggle against theprivatisation of refuse and street clean-sing in Milton Keynes. It focuses on theattack on the unions leading up toprivatisation and the sacking of 70workers by Exclusive Cleaners sincethey started the contract in April 1983.This issue of Community Action alsohas articles on privatisation in socialservices and the successful campaignwaged to get three men's hostels takenover by councils in London following abitter dispute with their previousowners - Rowton Hotels.

REPAIRS: Whose Bill? 30p inc POStfrom SCAT Publications, 27 ClerkenwellClose, London EC1.A six-page booklet which examines theimplications of the new Housing andBuilding Control Bill. It shows thedrastic consequences for tenants andbuilding workers bf the new 'right torepair' scheme, more council housesales, and the privatisation of buildingcontrol. An action section argues theimportance of tenant-building workerlinks and public sector alliances.

THE DLO FIGHTBACK BOOKGMBATU October 1983

. Available from GMBA TU, Thorne

I House, Ruxley Ridge, Claygate, Esher,Surrey. £1 each. Bulk rates available.

I This pamphlet is an update of an earlierGMBATU publication on resistingprivate contractors, containing detailsof the latest Regulations under theLand Act as well as a clear explanationI of the Act itself. It:gives a brief descript-ion of how anum ber of D LOs havebeen effectively resisting privatisationand goes on to offer a detailed strategyfor the defence of D LOs.

Thatcher inquiring about the grass cutting costs and quality of work ofa well known firm of gardeners at the recent Tory Party conference inBlackpool.

BUSWORKER MONTHLY (15p pluspost from Alan Payl ing, 14 OsbaldestonRoad, London N16) is the paper of theBusworker Group, a rank and file groupof TGWU members on London Trans-port. Recent issues of Busworker havereported on various attempts to privatisebus and rail services and maintenancework in London as well as other issues

the price of most phone calls, instal-lation charges and lead to new chargeson operator connected calls; it showshow rural services will suffer and howthe Mercury network will cream off theprofitable business users; it shows how45,000 jobs are threatened togetherwith research and development; it showshow public telephone boxes and services

affecting jobs, working conditions and II for the disabled will be at risk.fares. The Busworker group want to ,develop links with other groups of bus ! Iworkers. I IDudley Council Ltd. i nforntat ·A new pamphlet highlighting the ! n d JOnpolicies of Dudley Council, who with ee eTory Central office encouragement have PUBLIC SERV dspent less of local services than any • campaign ICE ACTION need.other borough in the country by using unions, sh news reports from \Price Waterhouse to cut services and trades couno:rl stewards commit;adeMSC labour to plug the gaps. The other organ is /' tenants' group' ees,

I pamphlet costs 50p (plus postage). • informat~ 'ons; sandI Available from Trade Union Resource failures, lost 'on about Contra t ''I Centre, 7, Frederick Street, Birmingham • Copies of conhtra~ts etc; c Ors

. aut OntO ,I BRITISH TELECOM: HOW SELLING s,ng and compari 'es reports discus_I IT OFF WILL HARM BRITAIN. Free .ade u~ion sUbmiss~~ t~nders and anyI from BTUC, 14-15 Bridgewater Square, d' .deta,/s of Contrac ns, ,I London EC2. .t~on~ and benefits' tors wages, Con-

I This 20-page well produced hard hitting PUb/r~~es of a~y C;mpaign leaf/I report slams the Government's case for Pleasewy. matenal. ets andI privatising British Telecom. It explains n!:, or £!2~e SCAT Pub/' .j in detail how privatisation will force up ,cat, on::)

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rganl.sln information ;~ontractors newthreats · the firm has a record of employing ghost cleaners....

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