Prosecuting corporate complicity in Argentina’s dictatorship

Open Democracy News Analysis - 19. December 2014 - 10:00

Argentina put its dictators on trial after the 1976-1983 reign of state terror. Now courts are investigating the role of prominent corporations in the kidnapping, torture and disappearance of their workers. Español

The debate over how to tackle corporate involvement in human rights violations is intensifying worldwide. One facet of this relates to everyday company operations and their impact on people’s quality of life and the environment. Another, darker, aspect concerns business complicity in crimes against humanity—an issue that surfaced during the Nuremberg trials after World War II and persists today.

In June of this year, the United Nations Human Rights Council established a working group to develop an international legally binding instrument on business and human rights. Separately, in many countries, including Kenya, Liberia, Sierra Leone, South Africa, Brazil and Colombia, people have been analyzing the role played by transnational corporations in human rights violations committed in the context of armed conflicts and authoritarian regimes. Argentina’s experience in seeking justice for crimes committed during its 1976-1983 dictatorship serves as an important reference for these discussions.

In many countries, people have been analyzing the role played by transnational corporations in human rights violations committed in the context of armed conflicts and authoritarian regimes. Although the country’s dictators and military officials were the first to face trial, civilian collaborators—including prominent business executives—played a key role in identifying activists and facilitating their abduction, detention and even murder. These were not isolated incidents. Instead, they formed part of a systematic plan by Argentina’s juntas and some corporations to reduce the power of organized labor, and shift the economy away from industry and towards the financial sector.

In 1986 and 1987, Argentina’s Congress passed amnesty laws that blocked the prosecution of many crimes against humanity committed during military rule. The laws were eventually repealed and declared unconstitutional—in 2003 and 2005, respectively—and hundreds of dictatorship-era cases were brought or reopened. The Center for Legal and Social Studies (CELS) has broadened its efforts to seek accountability on the issue of corporate complicity in crimes against humanity, aiding prosecution efforts through a three-pronged strategy of litigation, research and advocacy.

In terms of litigation, CELS seeks to establish the criminal responsibility of business leaders and managers in crimes committed during the dictatorship. We aim to pinpoint the exact location and circumstances of workers’ kidnappings and show the relevance of their political or trade-union ties, exposing why companies may have wanted to eliminate them.

In 2009, Argentina’s Congress amended the law to allow non-governmental organizations (NGOs) to act as private prosecutors in cases of crimes against humanity or grave human rights violations. This possibility existed prior to the legislative change, but only on a case-by-case basis. State prosecutors continue to take the lead, but private prosecutors, or “institutional plaintiffs,” can act independently, bringing their own evidence forward and making direct appeals to the judge. They often collaborate with the state prosecutors as well.  

CELS is using this innovative mechanism to act as a private prosecutor in the case of Molinos Río de la Plata, an Argentine food company that is being investigated over the disappearance of 26 people between July 1976 and October 1978. The vast majority of those people were union activists at one of the company’s plants. CELS is playing the same role in the case of the luxury carmaker Mercedes-Benz, in which executives are being investigated over the part they played in the enforced disappearance of numerous workers. Recently, the state prosecutors in this case asked the judge to probe the actions of two of the company’s former managers.    

In both the Molinos and Mercedes-Benz cases, senior company executives are accused of providing information to the military about whom to target, signaling specific workers for abduction or handing over their home addresses, for example.

As of September 2014, 15 business people had been charged with participating in crimes against humanity, implicating Ford Motor Company, the sugar producer Ledesma, the mining firm Minera Aguilar, and La Veloz del Norte, a bus company. Former Ford executives are accused of allowing company premises to be used for kidnappings and torture. In the Ledesma case, in which CELS filed an amicus curiae brief, company officers allegedly provided the military with vehicles to abduct their employees.

In these cases the managers are not themselves directly accused of kidnapping, torture or murder. The cases rest rather on proving that they had a clear interest in ridding themselves of combative workers, and that they collaborated with the military and security forces to facilitate the illegal abduction and clandestine detention of those workers.

It is still early in the process and none of these cases has gone to trial yet. Argentina’s legal system facilitates the prosecution of these crimes because human rights organizations are able to participate formally as interested parties. Further, many judges utilize the criteria set forth in international human rights treaties, for example, by removing any statute of limitations in cases of crimes against humanity.

Ezequiel Kopel/Demotix (All rights reserved)

Argentinians observe a "Day of Remembrance for Truth and Justice," for victims of political violence by marching in Buenos Aires.

On the research front, CELS’ team works to piece together information that is nearly 40 years old, analyzing documents from corporations, trade unions and the Labor Ministry, among others. There is an enriching back-and-forth between research and litigation in which shared information serves the legal strategy as well as the process of reconstructing historical events and their context. CELS is doing research in conjunction with the Latin American School of Social Sciences (FLACSO) on corporate complicity during Argentina’s dictatorship, exploring how some companies benefited from the economic policies carried out under state terrorism.

In terms of non-judicial remedies, CELS has worked for the creation of a bicameral congressional committee to investigate corporate complicity with the crimes committed during the dictatorship. If established, it would issue a report analyzing the consequences of the juntas’ economic policies, and work to identify corporations and company executives who participated in crimes against humanity to facilitate the implementation of these policies.

Prosecuting the leaders of still-powerful corporations is not the same as trying retired military officials, who are largely seen as the dictatorship’s “bad guys.” Nonetheless, the importance of these trials goes beyond determining the guilt or innocence of individuals. The hope is that they will contribute to a broad societal debate about the role that corporations and civilians played during the dictatorship. In that sense, they represent just one more essential step forward in the process of memory, truth and justice.

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Performing popular justice: from the disappeared to the outraged

Open Democracy News Analysis - 19. December 2014 - 9:08

What differentiates the escrache from merely a dangerous form of un-regulated retribution? Crucial to this question is the concept of containment


An old man cowers in his home. Outside people are chanting, erecting banners, appropriating road signs and wearing masks. They are flooding his inbox, spreading his image, repeating his name, revealing his identity.

In their eyes he is a criminal.

The protesters are changing the visual fabric of the neighbourhood, transforming the space into a public courtroom, where the evidence and sentence of the crime is forever on display.

Posters carry the individuals’ name, address and telephone number as well as recent photographs so a campaign can be waged in the street, by mail, on the phone and online. Through direct action, (exclusion as preferable to expulsion) the neighbours of the barrio become the executors of the permanent sentence.

This is all part of escrache.

It represents a form of justice in the public sphere, the utilisation of public shame as a means to circumvent judicial failings through the praxis of performance.[1] Through manufacturing a form of social condemnation against the perpetrators of state and economic ‘genocide’, the performance of popular justice proposes the idea of counterpower as an immanent strategy of organization.

A slogan that can be heard over and over is ‘If there is no justice, there’s escrache.....

What first emerged in the late 1990s in Argentina as a tactic to address the problem of impunity (granting legal immunity to members of the junta) became the most effective strategy to tackle the impunity given to corporate and political actors responsible for – and perpetuating – the financial crisis.

In Spain its energies shifted from the Desaparecidos of the military regime to the Indignados and those affected by the country’s housing crisis. Tax amnesty’s for corporations, the ‘amnesty for convicted bankers and the appointment of former politicians to the board of directors reinforced the impunity and immunity enjoyed by elites with access to power’.[2]

This revolving door policy also reinforced a perception of incestuous complicity between state and corporate bodies. In Spain, as Eduardo Romanos has noted, the complete lack of contact between the street and those in institutional power – driven out of a necessity during the country’s transition from dictatorship to democracy to keep ‘political institutions particularly sealed off from the demands of protest movements’ – has seen the escrache prove particularly effective – while as a tactic it has had little impact elsewhere in Europe.[3]


In March 2013 Plataforma de Afectados por la Hipoteca (PAH) (Platform for People Affected by Mortgages), lobbying for ‘regulation and retrospective payments for distressed mortgage holders’, began targeting deputies of Spain’s PP (Partido Popular) government who had objected to the proposed ILP.

In response, the PP Secretary General described the adoption of escraches in a wider campaign aimed at blocking evictions and occupying apartments as ‘pure Nazism... totalitarian and sectarian’, with the presumption of innocence – the bedrock of any democratic and accountable judiciary – supplanted and ignored by this ‘social stigma imposed upon individuals’.[4]

While public support for PAH escraches hit 89% last year, some argued that as a form of protest they ‘too easily and too often degenerate’. In the words of Michaela Mihai virtuous civic denunciations risk becoming a form of ‘civic homicide’.[5] By turning a target’s house (or neighbourhood) into a ‘prison’, what differentiated the escrache from merely a dangerous form of un-regulated retribution?

Crucial to this question is the concept of containment. Central to the success (and effectiveness) of the escrache is the establishment of a clear boundary – which the performance serves to highlight but which the action refuses to cross. ‘The performance makes the case for revenge and concretizes the struggle in a localised place but the escrache does not cross the boundary to inflict physical harm – it stops literally at the doorstep.’[6] By showing that they could but will not take revenge, the action becomes a statement about the identity of its agents.[7] The escrache attempts to split the association between popular justice as a form of revenge through invention and creation.

Without holding any real or actual power, escraches convoke a festival whose duration is not marked by the logic of ‘harassment’ nor by that of the TV newscast.[8]

With the PAH taking to online forums and flooding the email accounts of party deputies and CEO’s, the integration of ‘virtual escraches’ within the wider protest programme began to be seen in the context of ‘Ruin Life Tactics’ instigated by hacker collectives such as LulzSec or Anonymous.

Yet importantly, while online networks remain anti-hierarchical, housing and austerity collectives such as 15-M, PAH and its precursor V de Vivienda, though still organised around a grassroots horizontalism, maintained specific objectives which were ultimately realised by the tactics they employed. Drawn from a predominantly older age demographic, PAH sought, and were able, to actively close the historical gap between protesters and power-holders - ‘engaging with legal representatives of the government [within institutions at local level] as opposed to negating due process completely’.[9]

In June 2014 the President of Sareb, Spain’s ‘bad bank’, was targeted in Madrid, his house picketed with slogans such as ‘If Sareb is ours, then so are its properties!’ and a manifesto was read out containing banker’s salaries and calls to redistribute bonuses to help fund homeless shelters. However, as well as these traditional forms of escrache, PAH also sought to constructively engage with MP’s, inviting them to local assemblies to hear first-hand accounts of how the mortgage crisis was affecting the nation’s homeless.

Partly in response to the campaign of escraches against elected officials, a new Public Security Bill, first drafted in December 2013, sought to limit the right to peaceful assembly or spontaneous protest – banning any gathering within 300m of MPs homes. According to Human Rights Watch, the bill, amended in November 2014 and shortly to pass into law, imposes fines for those who show a ‘lack of respect’ for police officers, organize unregistered demonstrations and ‘allows authorities to bypass the courts to punish protesters without the guarantee of a trial’.

Despite this, escraches continue but necessarily adapt to avoid strict provisions in the law. They represent ‘an unformulated definition of justice’ that ‘evolves with the moment of the event and somehow becomes a metonymy for the process in toto’.[10] The process of making justice aesthetically, therefore, changes for each performance.

Far from being spontaneous instances of mob rule, the time preceding an escrache involves a period of intense discussion and debate within the local community as to the very meaning of the act. This form of pedagogical exchange is an attempt to heal the historical trauma of the past. It makes the past present in order to change it retroactively.[11]

One popular slogan often sung at escraches and housing occupations declares, “It’s not a crisis... it’s a scam”! Escraches literally expose the popular narrative propagated by the state or corporations; that impunity for perpetrators of genocide was ‘necessary’ for peace just as financial amnesty for corporations is ‘necessary’ for economic recovery.

Image:­‐questions-­‐with-­‐colectivo-­‐situaciones/The act of exclusion becomes the visual manifestation of popular justice as escraches evolve into forums of community building and healing.[12] Incorporating music, theatre, and puppetry, justice-fun-fairs take place outside courthouses and are transmitted to local PAH assemblies. Where the target is particularly well-known, participants adopt the persona of the ‘criminal’. By wearing look-a-like masks the crowd is able to vent their frustration at a visual manifestation of the target as a form of catharsis. The goal of the temporary action of the escraches is to become an on-going and active community performance.

Culture becomes ‘a strategy of containment for irritating change’- material for ‘fetish-making observer voyeurs’.[13]

The escrache reveals information in a ritualized public action. Collaboration between human rights groups, artistic collectives and anti-austerity/housing groups seek to create forms of justice through lived experience ‘in which individuals and groups can explore forms of subjectivity potentially autonomous to the seeking of state power’.[14] This represents a performance art practice which serves politics through commitments to the ‘local, particular and relational’.[15]

For Katja Seidel, escraches documented and performed by PAH represent, ‘a pragmatic case of the local ‘vernacularisation’ and diffusion of justice practices in a global Culture of Justice. The escrache is not an end in itself but a strategy to demand justice.’[16]

The process of creating alternative judicial structures and community accountability is ultimately, therefore, as important as the outcome. As one escrache participant put it:

We are creating a community in the desert; in the desert of the big city where looking someone in the eye is difficult. Security used to be in the bank and insecurity was in the streets. Now insecurity is in the bank. The robber who used to be outside the bank is now in it. And security is in the street, with our neighbours.[17]


[1] Cross, Michael in Conversation with Brian Whitener, Genocide in the Neighbourhood II

[2] Romanos, Eduardo. Evictions, Petitions & Escraches: Contentious Housing in Austerity Spain. 2013

[3] Romanos, 2013

[4] Romanos 2013

[5] Mihai, Michaela, Denouncing Historical “Misfortunes”: From Passive Injustice to Reflective Spectatorship

[6] Benegas, , Diego, ‘If There’s Justice…’ Trauma and Identity in Post-Dictatorship Argentina. Performance Research: a Journal of Performing Art, Vol. 16, issue 1, 2011 p.24

[7] Benegas, 2011 p.24

[8] Colectivo Situaciones. Situational Knowledges (the Escrache), 19th & 20th: Notes for a New Social Protagonism, Common Notions, New York, 2003 p.204

[9] Romanos 2013

[10] Whitener, Brian. Genocide in the Neighbourhood, Chainlinks, London, 2010  2010 p.86

[11] Begegas, 2011 p.28

[12] Benegas, 2011 p.22

[13] Sommer, Doris Cultural Agency in the Americas, Duke University Press, NC, 2005 p.13

[14] Donovan, Thom (trans Whitener, Brian) 5 Questions for Colectivo Situaciones

[15] Donovan, 2011

[16] Seidel, Katja. Political Power Reconstructed, 2013

[17] Pablo, E. cited Day Gramsci is Dead, Anarchist Currents in the Newest Social Movements, Pluto Press, London,  2005 p. 34

Country or region:  Argentina Spain Topics:  Civil society Conflict Culture Democracy and government Ideas International politics
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Resisting the state from the inside and out: the Colombian Peace Community Model

Open Democracy News Analysis - 19. December 2014 - 8:43

The use of international norms coupled with the solidarity of international support has been a successful formula that has meant relative peace for the community for nearly 10 years.

The Comunidad de Paz de San José de Apartadó. Image credit: Agustín Fernández Gabard. Some rights reserved.

“The best way to resist the state is to be organised.” (Interview, Peace Community Member, November 16, 2013.)

The Comunidad de Paz de San José de Apartadó (the ‘Peace Community’) is a grouping of rural settlements in Colombia that won’t take sides in the armed conflict that has raged in the country for over half a century. With no end to the violence in sight, the Peace Community decided to run their affairs independent of a repressive state and brutal paramilitaries, and violent guerrillas. This refusal to co-operate with any of the competing systems of violence led the community to adopt and adapt familiar concepts of international law which has gained them the recognition of the Inter-American Court of Human Rights via protection orders[1]. The use of international norms coupled with the solidarity of international support has been a successful formula that has meant relative peace for the community for nearly 10 years.

The birth of a peace community

 “They cut him up like a pig”, the elderly man announced as I stood beside him in San Josésito under a glaring Colombian sun. He pointed to a picture of Santiago Tuberquia Muñoz, who was about 18 months old when he was killed on Monday, February 21, 2005. I tried to hide any reaction, but I could feel the blood drain from my face. I wanted to ask ‘why?’ But what possible satisfactory explanation could there be? The question itself may even be disrespectful as it would assume that such an act was explicable. And there are actually two questions: why did they do it? I’d have to ask the killers that. And why does he think they did it? I couldn’t ask, my research impulses gave way to a deeper instinct which suggested I should just shut up and listen:

What I’m going to tell you right now, it’s a long story. In 1997, we began suffering violence … we saw massacres, we saw a lot of torture, we saw kids being chopped up, we saw the rape of our women, we saw indiscriminate bombings, and this all was carried out against small scale farmers. After seeing all these consequences of violence, we came to San José. The town was all alone … there are only two old people living there. So the farmers occupied the houses, we were 370 families, and that’s when the first massacre occurred … the 17th Brigade committed the first massacre with the paramilitaries, three people were killed. People were extremely fearful and lots of people left. They went to Medellin, or they went I don’t know where. And then there was another massacre [2005]. Five people were killed by the 17th Brigade and the paramilitaries, and even more people fled. That’s when we, the people who decided to stay, met, and we started organising. Of course we were afraid, but I dunno, it’s pride, we are going to resist. They are not going to take away our lands. So you can kill us but we’re going to stay here … we decided to sign an agreement that says we wouldn’t participate with any of the armed actors, neither directly, nor indirectly. To be able to be outside of the conflict, and that’s how the Peace Community was created.” (Interview, Peace Community Member, November 16, 2013)

The Peace Community subsequently took on the day-to-day running of their settlements, including internal law and external relations. When asked whether they were interested in receiving health, education, and other services that are normally provided by the state, I was told that “it doesn’t really matter, because [the state] have never fulfilled them anyway” (Interview, Peace Community Leader, November 16, 2013). But how could they convince those who wish to monopolise violence in the area to leave them alone?

Commandeering international legal norms

Recognising that the Colombian conflict is about land and to discourage interference from the state, the Peace Community created a self-styled neutral zone which Fr Alberto Franco (of Justicia y Paz) argues is “a small place that is identified, and has signs to label it, using the international humanitarian law principle of distinction of civilians in war”. Other communities have copied the model (e.g. in Curvaradó) or have adapted alternate versions to suit their own distinct circumstances. For example, the ‘zones of refuge’ of the Naga communities:

… a place inside the community that has signs and is identified as a place where they can all go in a time of conflict … and it will be respected and that helps avoid possible displacement. And it also helps them make visible their commitment to being civil society in the middle of a conflict. (Interview, Fr Alberto Franco, November 22, 2013)

Some indigenous communities have adopted similar versions that are sensitive to their own cosmovision, called ‘humanitarian reserves’ or ‘areas of autonomous coming together’. Other communities had developed ‘areas of biodiversity’ to protect land (Interview, Fr Alberto Franco, November 22, 2013).

So these are different constructions, different forms or ways that weren’t necessarily written out or developed within the ideas of Columbian and international law, but they use principles from both Columbian and international law. So even though they don’t have formal legal protection, there’s a kind of recognition that happens in practice, like, for example, the magistrates of the Inter-American Court of Human Rights have recognised the humanitarian zones as an expression of international humanitarian law. (Interview, Fr Alberto Franco, November 22, 2013)

The importance of international solidarity and accompaniment

To help maintain their bold experiment, the Peace Community enjoys ‘accompaniment’ from international organisations – for example, Peace Brigades International (PBI), Fellowship of Reconciliation (FOR) and Palomas de Paz – whose physical presence in the villages significantly increases the political cost of any attack. The community also has sister cities around the world, including Maddison, Wisconsin (USA), three cities in Spain, and one each in Portugal, Italy, Luxembourg and Belgium:

Both national and international level sister cities have had huge advantages for us. They’ve allowed us to really sustain ourselves as a community and they’ve given us support that we’re not alone and we think without these sister cities, it would have been much easier for the government, together with the paramilitaries, to wipe us out, to destroy us. (Interview, Peace Community Member, November 16, 2013)

The government of the Netherlands donated the money to buy the land that San Joséito, the hub settlement, stands on (Interview, Peace Community Member, November 12, 2013); the private nature of the property providing further legal protection from State intervention.

The pressure that can be brought to bear from abroad is significant. So next time you hear that the Peace Community or others in Colombia are under threat, search online for a telephone number for your nearest Colombian Embassy and make the call – you may well be surprised at how effective your intervention can be.

Role of the Colombian state

Soon after young Santiago’s death, Defence Minister Uribe (later to become President of Colombia) was quick to blame the FARC, a callous political ploy as information began to seep out to the press that it was in fact a joint army (17th Brigade) and paramilitary (Héroes de Tolová) operation called Operation Phoenix. The Colombian military – who killed Santiago, before chopping up him and his 5-year-old sister, Natalia, with a machete and burying them along with their parents and a neighbour – referred to the family as a “puro guerrillero muerto” or ‘dead guerrillas’[2]. In 2010, Captain Guillermo Armando Gordillo (who was tried alongside four soldiers and 20 paramilitaries) received 20 years for his part in the slaughter but that was as high as responsibility went,[3] despite the fact that General Mario Montoya Uribe was implicated in the planning of the operation[4]. And widespread impunity ensures that the Peace Community is still under threat from the military-paramilitary complex. On July 21, 2014, a government soldier reportedly stated that, “the time has arrived for that son-of-a-bitch Peace Community, we are coordinating with the paramilitaries for the extermination of that son-of-a-bitch Peace Community” (Amnesty International 2014[5]). But the Peace Community are not easily moved by such threats:

I think until the government changes its policy, until they start shifting the way they respond to the famers, the farmer lifestyle, the needs that we have as a people, until the government changes the way that it acts, we are going to continue resisting. (Interview, Peace Community Member, November 12, 2013)

[1] see The Order of the President of the Inter-American Court of Human Rights of 9th October 2000; and see also the Orders of the Inter-American Court of November 24, 2000; June 18, 2002; November 17, 2004; March 15, 2005 and February 2, 2006, which have repeatedly called upon the Colombian state to maintain the measures.

[2] AI Index: AMR 23/003/2005, 28 February 2005

[3], March 16, 2010


[5] Armed Forces Threaten Peace Community, Urgent Action Document – Colombia, UA: Amnesty International Index Number: AMR 23/027/2014, 24th July 2014.

Country or region:  Colombia Topics:  Civil society Conflict Culture Democracy and government Ideas International politics
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An anarchist guide to Christmas

Open Democracy News Analysis - 19. December 2014 - 7:00

On the night before Christmas, we’ll all be about. While the people are sleeping, we’ll realise our clout. We’ll expropriate goods from the stores, ‘cos that’s fair. And distribute them widely, to those who need care.

Can we reclaim Christmas for the masses? Credit: Grace Wilson/STRIKE! magazine.

It’s no surprise to discover that anarchist theorist Pyotr Kropotkin was interested in Christmas. In Russian culture, St. Nicholas (Николай Чудотворец) was revered as a defender of the oppressed, the weak and the disadvantaged. Kropotkin shared the sentiments.

But there was also a family link. As everyone knows, Kropotkin could trace his ancestry to the ancient Rurik dynasty that ruled Russia before the upstart Romanovs and which, from the first century CE, controlled the trade routes between Moscow and the Byzantine Empire. Nicholas’s branch of the family had been sent out to patrol the Black Sea. But Nicholas was a spiritual man and sought an escape from the piracy and brigandage for which his Russian Viking family was famed. So he settled under a new name in the southern lands of the Empire, now Greece, and decided to use the wealth that he had amassed from his life of crime to alleviate the sufferings of the poor.

Unpublished archival sources recently discovered in Moscow reveal that Kropotkin was fascinated by this family tie and the striking physical similarity between himself and the figure of Father Christmas, popularised by the publication of ‘A Visit from St. Nicholas’ (better known as ‘The Night Before Christmas’) in 1823.

Kropotkin was not quite so portly as Klaus, but with a cushion stuffed up his tunic, he felt he could pass. His friend Elisée Reclus advised him to drop the fur trim on the outfit. That was a good idea as it would also allow him to wear a bit more black with the red. He’d decided to follow Elisée’s advice on the reindeer, too, and to use a hand driven sleigh. Kropotkin wasn’t normally given to dressing up. But exploiting the resemblance to spread the anarchist message was excellent propaganda by the deed.

Anticipating ‘V’, Kropotkin thought that we could all pose as Santa Claus. On the edge of one page Kropotkin writes: "Infiltrate the stores, give away the toys!"

Faint remnants on the back of a postcard read:

On the night before Christmas, we’ll all be about
While the people are sleeping, we’ll realise our clout
We’ll expropriate goods from the stores, ‘cos that’s fair
And distribute them widely, to those who need care.

His project notes also reveal some valuable insights into his ideas about the anarchistic features of Christmas and his thinking about the ways in which Victorian Christmas rituals might be adapted.

"We all know", he wrote, "that the big stores – John Lewis, Harrods and Selfridges – are beginning to exploit the sales potential of Christmas, establishing magic caves, grottos and fantastic fairylands to lure our children and pressurise us to buy gifts that we do not want and cannot afford".

"If you are one of us", he continued, "you will realise that the magic of Christmas depends on Father Christmas’s system of production, not the stores’ attempts to seduce you to consume useless luxuries". Kropotkin described the sprawling workshops at the North Pole, where elves worked all year, happily because they knew that they were producing for other peoples’ pleasure. Noting that these workshops were strictly not-for profit, craft-based and run on communal lines, Kropotkin treated them as prototypes for the factories of the future (outlined in Fields, Factories and Workshops).

Some people, he felt, thought that Father Christmas’s dream to see that everyone received gifts on Christmas day, was quixotic. But it could be realised. Indeed, the extension of the workshops – which were quite expensive to run in the Arctic – would facilitate generalised production for need and the transformation of occasional gift-giving into regular sharing. "We need to tell the people", Kropotkin wrote, "that community workshops can be set up anywhere and that we can pool our resources to make sure that everybody has their needs met"!

One of the issues that most bothered Kropotkin about Christmas was the way in which the inspirational role that Nicholas’s had played in conjuring Christmas myths had confused the ethics of Christmas. Nicholas was wrongly represented as a charitable, benevolent man: saintly because he was beneficent. Absorbed in the figure of Father Christmas, Nicholas’s motivations for giving had become further skewed by the Victorian’s fixation with children.

Kropotkin didn’t really understand the links, but felt that it reflected an attempt to moralise childhood through a concept of purity that was symbolised in the birth of Jesus. Naturally he couldn’t imagine the creation of the Big Brother Santa Claus who knows when children are asleep and awake and comes to town apparently knowing which have dared to cry or pout.

But sooner or later, he warned, this idea of purity would be used to distinguish naughty from nice children and only those in the latter group would be rewarded with presents.

Whatever the case, it was important both to recover the principle of Nicholas’ compassion from this confusing mumbo-jumbo and the folkloric origins of Santa Claus. Nicholas gave because he was pained by his awareness of other peoples’ hardship. Though he wasn’t an assassin (as far as Kropotkin knew), he shared the same ethics as Sofia Petrovskaya. And while it was obviously important to worry about the well-being of children, the anarchist principle was to take account of everyone’s suffering.

Similarly, the practice of giving was mistakenly thought to require the implementation of a centrally-directed plan, overseen by an omniscient administrator. This was quite wrong: Father Christmas came from the imagination of the people (just consider the range of local names that Nicholas had accrued – Sinterklaas, Tomte, de Kerstman). And the spreading of good cheer – through festivity – was organised from the bottom up.

Buried in Christmas, Kropotkin argued, was the solidaristic principle of mutual aid.

Kropotkin appreciated the significance of the ritual and the real value that individuals and communities attached to carnivals, acts of remembrance and commemoration. He no more wanted to abolish Christmas than he wished to see it republicanised through some wrong-headed bureaucratic re-ordering of the calendar.

It was important, nonetheless, to detach the ethic that Christmas supported from the singularity of its celebration. Having a party was just that: extending the principle of mutual aid and compassion into everyday life was something else. In capitalist society, Christmas provided a space for special good behaviours. While it might be possible to be a Christian once a year, anarchism was for life.

Kropotkin realised his propaganda would have the best chance of success if he could show how the anarchist message was also embedded in mainstream culture. His notes reveal that he looked particularly to Dickens’ A Christmas Carol to find a vehicle for his ideas. The book was widely credited with cementing ideas of love, merriment and goodwill in Christmas. Kropotkin found the genius of the book in its structure. What else was the story of Scrooge’s encounter with the ghosts of Christmas past, present and future than a prefigurative account of change?

By seeing his present through his past, Scrooge was given the chance to alter his miserly ways and re-shape both his future and the future of the Cratchit family. Even if it was only remembered once a year, Kropotkin thought, Dickens’s book lent anarchists a perfect vehicle to teach this lesson: by altering what we do today, by modelling our behaviours on Nicholas, we can help construct a future which is Christmas!

This article was originally published by STRIKE! magazine.

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The presidential election and linguistic violence in Tunisia

Open Democracy News Analysis - 19. December 2014 - 1:21

The leading presidential candidates and some of their supporters are setting a bad example with hostile, exclusionist rhetoric, fuelling a tense political atmosphere.

First round election results. Demotix/Chedly Ben Ibrahim. All rights reserved.

One of the striking achievements of Tunisians in the post-revolution era was the adoption of a consensual democratic constitution, securing freedom of expression and free choice of the country’s rulers. The first round of the presidential election, held on 23 November 2014, was a historical opportunity to incarnate the sacrosanct principle of people’s sovereignty, an occasion for Tunisians to freely choose the most competent leader from among the 27 presidential candidates.

Heavy citizen participation in the election—62.9 percent of the total electorate—contributed to the success of Tunisia’s nascent democracy. The results revealed a sharp break with the past, with the grim days of dictatorship when one unrivalled candidate won the majority of votes.

The elections showed that Tunisians’ attitudes toward the choice of their leader have changed. Two candidates made it to the second round: Beji Kaid Essebsi (88 years old) came first with 39.46 percent of the votes, and Mohamed Moncef Marzouki (69 years old) second with 33.43 percent.

The margin between the two candidates did not exceed six percent. Such a result indicates clearly enough the integrity and the reliability of the electoral process, as well as Tunisians’ refusal to align themselves with one single person, and their faith in political pluralism as the only viable substitute for repugnant unilateralism.

However, the sense of relief felt in the hearts of Tunisians after assuming their political and electoral duties in an atmosphere of transparency and freedom did not last long. The public speeches of the two winners in the first round, along with the statements made by their respective partisans, proved to be neither reassuring nor encouraging. Both politicians and supporters went so far as to condemn the voters for choosing this or that candidate, making the voter a victim of voicing his or her political point of view.

For example, Beji Kaid Essebsi, who commented on the election results in an interview with the announcer Jean-Jacques Bordan of radio Monte Carlo, claims that those who opted for Marzouki are Salafists, Jihadists, and violent members of the League of Protection of the Revolution. Essebsi added, "unfortunately, there will be a sharp division, a sharp chasm in the texture of our society between Islamists on one level and Democrats and non-Islamists on another."

Describing the electoral behavior in such a manner can only split the electorate in a Manichean way into two groups. The first comprises the supporters of Marzouki (about one million and 92 thousand voters) who are invariably qualified as extremists and heretics. The second includes Essibsi’s supporters who are charged with being accomplices of the Ben Ali regime. Judging part of the electorate by putting them in one basket called "Salafism and extremism" is categorically exclusionist.

Essebsi forgot that there are no detailed statistical data issued by authoritative bodies in relation to the ideological affiliations of the supporters of the acting president. In fact, they come from different intellectual and cultural backgrounds. Many observers have depicted them as a mosaic of Tunisian society. Among them we find ideologues and non-ideologues, heretics and modernists, partisans and non-partisans of political parties, religious groups and secular elites, liberals and conservatives.

These voters cannot be grouped under the banner of one ideology. Moreover, the classification of voters into two categories, Islamists and democrats, is improper as it leads to the division of Tunisians on the basis of ideological allegiances. Division engenders polarisation and exclusion in a nascent democracy. Conversely, the tendency to claim that one candidate is committed heart and soul to the protection of democracy while the other is its eternal foe is undeniably illogical.

Tunisians have chosen a democratic political system, thereby electing the peaceful handover of power as a substitute for the coup d’état. This is why they walked to the polling centers to cast their votes for one candidate. Their hope is to erect the solid pillars of the civil state. Their simple dream is to safeguard political pluralism.

In a political environment pervaded by verbal violence, a university professor and a partisan of Nidaa Tounes downgraded the supporters of Marzouki as scum. The heightening of political tension has led to this escalation of linguistic violence and in turn to a state of social anger. Language has the potential and the energy to propel people into action and reaction.

Thousands of Tunisians walked to the streets in popular rallies to express their dissatisfaction with Essebsi and his biting comments, defending their freedom to vote for the man of their choice. They carried slogans picturing themselves not as terrorists but as civilians. Their chief argument is that they elected Marzouki in in the first round on the grounds that he presented a more promising electoral manifesto. He seems for them more convincing owing to their confidence in his democratic project and his achievements as a defender of human rights.

As regards Marzouki’s assets and the nature of those who elected him, Abdel Moneim Mabrouky, a Tunisian resident in Washington, comments on his Facebook page:

"I live in the heart of western modernity and cherish its values of liberty and independence. I love openness and hate fanaticism. I find much pleasure in drinking wine, and I voted for Marzouki because he is a defender of human and civil rights. He safeguards the right to difference and pluralism."

Likewise, Phaedra Motahari wrote on her Facebook page: "I chose Marzuki not because I love him, but because of his call for and commitment to the consecration of democracy, and the preservation of the gains of the revolution".

Huda Idris, a university professor, also said:

"I earned a PhD. degree and speak four languages. I studied in Tunisian universities. I love movies and travel...I'm not a Salafist, and I elected Marzouki because of my confidence in his modernist electoral project."

Against this backdrop, we can see how citizens, by electing the candidate they trust, exercise their freedom of choice, and consider the election not only a right but also a duty that cannot be confiscated and manipulated by any party.

From another angle, Mohamed Moncef Marzouki’s electoral campaign is overshadowed by a variety of abuses and linguist violence. His political discourse has provoked both his political rival and his partisans. On their Facebook pages, Marzouki’s supporters have reiterated a whole host of phrases and statements laden with epithets disparaging Beji Kaid Essebsi as an ugly “traitor,” “ a secret agent,” “a dinosaur,” “a dictator,” and “a mummy.”

Such appellations certainly fall short of providing substantive and objective evaluations of Essebsi’s electoral program and political performance. They are limited to superficial readings of his long political career, readings that revolve only around the demonisation of a presidential candidate rather than around a critical assessment of his skills and defects.

In an interview with France24 on 25 November 2014, Marzouki said: "The accomplices of the dissolved autocratic system of the Democratic Constitutional Rally supported Essebsi." No doubt, such a view requires relativisation. It is true that a significant number of those who voted for the candidate of Nida Tounes are partisans of the old regime. However, many of them are real opponents. Within their ranks, we find Liberals, Nationalists, Leftists, and Bourguibists who backed up aji Caidr Essebsi because of their dismay at the political and economic performance of the Troika coalition government in the transitional period. It follows naturally that one cannot classify all voters as partisans of the ex-regime.

Marzouki went further to proclaim, "the final victory of Beji will push the country towards the brink of political instability." Such an assertion can fall only in the category of psychological intimidation, the ultimate purpose of which is to frighten the electorate of a political rival.

It would be more beneficial for Marzouki to explain the risks that Tunisia may confront if Essebsi ultimately wins the election, including the risks linked to his age, to his complicity with old regime, and to the possibility of the country’s regression to tyranny. Instead, his public speeches were characterized by psychological intimidation that transformed Essebsi into a bogeyman and obliterated his achievements. Despite his flaws one cannot possibly forget his active contribution to the success of the watershed elections of 23 October 2011.

After the declaration of the results of the first round of the election, some of Marzouki’s supporters opted for the tactic of inciting Tunisian southerners against northerners, because the latter voted for Essebsi. But Tunisians have rejected calls to push the country toward civil strife. Currently, there exists a widespread refusal of the political rhetoric calling for revenge and the persecution of those who are nicknamed the old regime’s henchmen. Today, Tunisians know well that the mere recourse to Manichean discourse foreshadows fomenting strife, the division of the country due to regional conflicts, potential threats to social peace, and the failure of the nascent democratic experience.

The majority of Tunisians perceive the election as an assertion of existence and an act of self-expression, thereby turning the Cartesian cogito ergo sum into "I elect, therefore I am". They can no longer accept any control of their minds, any censorship of their thoughts, and any standardisation of their electoral behaviour. it will be better if politicians appropriate the kind of socio-political consciousness which citizens have gained by respecting their right to vote for the presidential candidate of their choice.

It is vital that politicians hone their awareness of what ought to be said, and when, where, and how to speak. It is crucial that they recognise that apologising to the citizens is part and parcel of decorum. It is essential that they know when language should be channelled and utilised to consolidate national union. They should take into account that political rhetoric has, inevitably, strong effects on the masses. But most of all it is quintessential that they acknowledge that that the chilly logic of exclusion and counter-exclusion can in no way boost democratic coexistence. It can only destroy national unity and facilitate the deviation of political life from the peaceful competition for power to intolerance and anarchy.

If the two presidential candidates really take into consideration the welfare of all Tunisians in their respective political agendas, they have to use language positively. They have to send clear messages reassuring Tunisians. The man who will rule Tunisia ought to appear in the image of a president who does not differentiate between people, but who brings them together under the blue sky of the same country, under the banner of freedom and the right to difference rather than under deceptive slogans of the God-leader who claims to possess the absolute truth.

Sideboxes Related stories:  The decline of political Islam in Tunisia Tunisia: elections, justice and dignity Tunisia’s forthcoming elections: transition at risk and arms sales won’t rescue Tunisia's elections: consolidating democracy Country or region:  Tunisia Topics:  Democracy and government
Categories: les flux rss

We promise you an operetta

Open Democracy News Analysis - 19. December 2014 - 1:19

The development of Egypt's military-brand nationalism over the past year can be traced in a series of formulaic, epic 'operettas'.

Still shot from the music video of the operetta 'Benwa'dak' (We Promise You).

The turmoil of the past year has produced its own mawkish soundtrack, a genre of music rather grandiosely called “operettas” that has been the go-to format for lionizing the state. As initially exemplified by the Nasser era “El Watan El Akbar” (The Great Homeland), the operetta has travelled onwards past the corruption of that once lofty ideal towards the glorification of the individual-as-the-state, as seen with the 90’s era ode to Hosni Mubarak “Ekhtarnah” (We Chose Him).

These operettas follow a set formula, and nowadays usually feature Z-list singers/people nobody has ever heard of with a smattering of more famous faces. Usually quickly cobbled together to address a particular moment in time, it gives the impression that, aside from the time constraints, perhaps the producers were working with a limited budget, like a beef burger made out of 40 percent meat and 60 percent textured vegetable protein.

The most famous and high pedigree operetta of recent times was “Teslam El Ayyady” (Bless the Hands), a paean to the armed forces. Its video featured pop singers triumphantly warbling in a recording studio interspersed with stock footage of Egyptian army manoeuvres. (Then) Field Marshall (now President) Abdel Fattah El Sisi was the star of this show, and the song was released at the height of Sisi mania in July 2013, shortly after the removal of then President Mohamed Morsi by the army following mass popular demonstrations against him.

Teslam El Ayyady was the money shot of its era, a lurid joy explosion. Its insistent, catchy refrain assaulted Egyptians everywhere they went, spreading the good news that the country had been saved even as Egypt descended into an ever-worsening cycle of violence and bombings. Its function, like all nationalist songs, was to rally under the flag, unify and glorify, while ensuring that inconvenient nuances of truth and reality got drowned out in the fanfare, a sort of jolly historical revisionism. Because music is made to transport us, after all, and perhaps nothing does this more effectively than a woman in pink lipstick screeching about soldiers set against images of heavy artillery.

Teslam El Ayyady has given birth to a thousand mutant children, all much of a muchness and bound together by the common theme of short-changing on the truth, barrel thumping and enthusiasm about all things military. All these songs are characterised by a certain amount of fantasy and wishful thinking – in keeping with the times – as well as a presentation of the Egyptian people as a monolithic, homogenous bloc confronting a threat from a dangerous alien being that has insidiously wormed its way into the fabric of Egyptian society.

Veteran pop songstress Angham’s “Mesh Men Baladna” (Not from our Country) puts this most bluntly with its refrain, “Not from our country/he who sells security/not of our children/he who buys from the devil”. Egypt is a nation obsessed with, and terrified of, the other. As a friend puts it, “Egyptians have a unique view of individuality: it’s fine as long as we all do it together”.

In this Egypt that allows no difference, minorities – by which is meant anyone who doesn’t conform to accepted norms be they cultural, religious or otherwise – are constantly having to negotiate and justify their position within wider Egyptian society. This becomes fascinating when the minorities themselves adopt the language of the mainstream.

Have a look at this song, “Benwa'dak” (We Promise You), which appeared on a Facebook page called “A Million Brave Christians”.

The song is described on the page as “splendid…the first song from the Coptic Orthodox Church in Egypt dedicated to Egypt and the Egyptian army”. Adopting the operetta formula, it features the usual singing heads interspersed with horrid images of violence. The heads appear in front of a giant map of Egypt. Next to them are two cardboard cutouts of a church steeple next to a mosque dome with a cross plastered on one and the obligatory crescent on the other (Christian imagery meanwhile is largely entirely absent from mainstream Egyptian culture other than in state propaganda videos informing Egyptians that they are united and indivisible in the fantasy world discussed above, whether they like it or not).

In between the cardboard cutouts is a familiar trope in Egyptian propaganda: Egypt as a woman. This video adopts the traditional imagery of a young woman with flowing dark hair in a dress (during the Morsi era cartoonists put her in a hegab). In this case the woman’s dress is made out of the Egyptian flag, which the woman/Egypt is sadly repairing while her eye sheds a tear. She also pricks her fingers, drawing blood and in the process driving home the message in case you missed it: Egypt is in pain.

“Finally you have come back to us after an absence,” the lyrics say. “Once again we feel that you are a loving mother, when before you were a stepmother,” they continue. Nothing unusual so far, but then the next line says “That’s why Egypt, if they try to set fire to you, they won’t burn the churches, we will sacrifice ourselves for you”.

Here then is a Christian Egypt symbolised by the church. The lyrics go on to lament those that have lost their lives, “on the border or in a protest…or innocent people whose blood flowed in front of a church, martyred during a wedding or a religious celebration”.

But it is the plaintive next line of the song that reflects a latent misalignment with the status quo. “Be very kind to all your children, don’t treat them differently. Muslim or Christian, any religion, it doesn’t make any difference.” It is at this point that what started out as a celebration, and whose title promises us citizens making pledges to the state, momentarily turns into something very different: a thinly-veiled entreaty stuffed into the nationalist mix.

“Look after all the people, whether in a mosque or a monastery. Al-Azhar or the [Coptic Orthodox] cathedral, there’s not much of a difference”, the song continues. Perhaps the “loving mother” isn’t so loving after all, if an appeal like this has to be sent. While not exactly subversive, “We Promise You” is a manipulation of the Sisi-era operetta format that points a timid finger at the state even as it glorifies it.

This piece was originally published on the blog of music website Dandin on 8 December, 2014.

Sideboxes Related stories:  General El Sisi and the red sword From Strongman to Superman: Sisi the saviour of Egypt Copts in El Sisi's Egypt Egypt's liberal coup? Country or region:  Egypt Topics:  Culture
Categories: les flux rss

Blocked! How the Firewall of Britain is censoring the Internet

Open Democracy News Analysis - 19. December 2014 - 0:11

Internet filters in Britain are blocking charities and feminist websites...

Last week the website of Chaos Computer Club, a European association of hackers who run the immense annual Chaos Communications Congress event, was blocked by parental filters on Vodafone, Virgin and Three. Although some access to CCC has been returned, if you are in the UK you still won’t have access to many sites, such as Pregnancy Sickness Support, Everlasting Flowers or, depending on who your Internet Service Provider is.

Filters in the UK are default-on for mobile phones but are opt-in on ISPS- albeit they attempt to nudge parents into accepting. They may seem like a good idea, but in reality filters block much more than they are supposed to.

CCC suggested that they were victims to extremist blocking in the UK. However, it is likely that it was the use of the word ‘hacking’, a category several Broadband providers block for under-18s, that was the cause. CCC write about computer skills and education, much of it aimed at young people; it might be edgy, but it is highly debatable that it is adult-only.

Although the ISPs were told by David Cameron to set up filters to stop the smutty, what actually gets blocked can seem all too random, especially when some services don’t tell you why a site has been blocked. Had Vodafone provided a tool that told you why they block, we wouldn’t have to speculate on what happened to Chaos Computer Club.

Britain has many levels of web blocking and online censorship. Firstly, illegal child abuse images are blocked, based on lists produced by the Internet Watch Foundation. Then there are court orders which rule that specific websites (around 100) must be blocked, usually for copyright reasons. But the filters that affected CCC are those that block legal content. Introduced as ‘one-click to safety’ by David Cameron in 2013, the Government persuaded Internet Service Providers to implement filters, which block ‘adult content’ at the network level, and once opted-in there is one level of access per household.

Although that initial announcement was sold as preventing minors accessing pornography, they inevitably included a range of other categories: from alcohol and gambling to dating and blogging. Just a few weeks ago the Government put the pressure on to expand the filters again into ‘extremist material’. He said in his announcement, "In the UK we are pushing them [ISPs] to do more, including strengthening filters" proving once again that if a censoring mechanism is set up it will be used to enforce the Government’s world view.

Filtering is more complex than just switching off access to anything mildly questionable. This is where the randomness factor sets in. It’s left to the judgement of largely foreign companies, to whom the filtering task is outsourced, as to how to categorise sites. However, human communications cannot be easily divided into the ‘good’ and the ‘bad’. The result of ambiguity is ‘over-blocking’, where sites are filtered out through key word misunderstandings, and ‘under-blocking’, where actual porn is undetected.

The problem we face here is the lack of transparency over web filtering;  there is no oversight around blocking and no review process.

CCC is in a privileged position, despite being censored. With the support of advocates like BoingBoing and the media their site was switched back on by Vodafone on the 7th December, just days after reporting the problem. But smaller sites are less lucky, especially if they don’t know that they’re blocked. Each ISP applies their filtering differently. A business owner who has Virgin on her computer doesn’t know her website is being blocked on BT. If she’s not a customer of theirs she’ll have no easy redress to get the block removed. Even if she was a customer, they often unhelpfully suggest that she adds the site to her exclusion list – which is only effective on that computer.

What Open Rights Group is doing is seeking to expose the filtering, and campaign for free speech online. This year ORG volunteers built Based on free software, the website allows you to type in a URL and check whether or not it is blocked by any of the UK’s mobile networks and most of the UK’s home broadband networks.

One particular concern was that because many charities work to respond to issues surrounding dugs, sex education, smoking, mental health and abuse, their websites would contain keywords likely to be blocked. Using Blocked we found that at least 54 registered charities in Scotland have websites that are blocked by one or more of the main UK ISPs.

These include the Say Women project in Glasgow which offers: "safe, supported accommodation and related services for young women, aged 16-25 years, who are survivors of childhood sexual abuse, rape or sexual.”A Dundee equalities project called Different Visions Celebrate that works with Under 25's "who have any issues or concerns due to their sexuality or the sexuality of a family member" was also blocked. We’ve even seen a lot of sites relating to feminism blocked, and in July 2014 Three blocked a piece on maternity leave in Jezebel.

As long as filtering is pushed out by the Government we will continue to see more and more websites censored. There needs to be a legal framework, not a behind closed doors policy in which David Cameron or Theresa May can add a new type of site to be blocked in the UK every week. If you would like to get involved, please share our Blocked tool, and find out if your website is blocked in the UK.

Categories: les flux rss

Speaking truth about the BBC and power

Open Democracy News Analysis - 19. December 2014 - 0:11

The BBC has never championed 'speaking truth to power' and its capacity for critical journalism is weaker than ever.

In a talk at King’s College, London on 25 November 2014, a version of which was published on OurKingdom, the former BBC World Service reporter Roger Hardy reflected on the war which during his 25 years of journalism was 'by far the most difficult and the most painful': the US-led invasion and occupation of Iraq.

Over a decade has now passed, but the people of the Middle East are still living with, and dying from, the consequences of that illegal invasion. The key culprits here remain at large, but their crimes are not forgotten. For Roger Hardy—as for those British elites whose credibility was damaged by the invasion, as well as the subsequent failure to effectively colonise the country—the whole bloody episode is remembered as a monumental 'strategic blunder'. It was certainly that. But from another (parochially British) perspective, the invasion can also be seen as one of a series of scandals which exposed, and entrenched, the public's profound alienation from, and disenchantment with, the institutions of power in this country.

The news media—one such institution which would be shaken by further crises—blatantly failed to live up to its notional role as a source of accurate information and a watchdog of the powerful. This is the ultimate conclusion of Hardy's talk. Having described the difficulties faced by media organisations in covering war, and summarised the conflict between the BBC and the Blair Government that followed the invasion, Hardy concludes that 'the British and the American media were not robust enough in challenging the case for war'. The BBC, he says, 'did not do enough to speak truth to power'. Who could argue with this conclusion? After all, as Hardy notes, the New York Times has long since apologised for its failings in the run up to the invasion. What is remarkable is that this was the conclusion of Hardy's talk, rather than the starting point of a frank discussion about the roots of this failure and the possibilities for change. 

Typically for a journalist's account, Hardy's talk focuses on the media's conflict with and manipulation by the Government. This is an important aspect of any account, but it needs to be integrated into an analysis which acknowledges the extent to which powerful interests have more subtly shaped the culture of news and current affairs journalism and the institutional context within which it is practiced. The BBC, which is the focus of Hardy's talk, has in reality never embodied the sort of oppositional, interrogatory journalism which he alludes to. Accuracy has always been taken very seriously, as has the duty to inform its audience, but this has always been circumscribed by the BBC's general orientation towards elite ideas and interests.

The tenuous space the Corporation carved out for itself within the British establishment was originally based on the support of the more enlightened members of the governing elite who understood that it would serve their purposes better if the BBC were afforded formal, but still ambiguous, autonomy. This was an understanding reached during the General Strike of 1926 and it has shaped the BBC's orientation to this day. It still maintains a precarious existence dependent in the long term on the trust and affection of its audience, on whom it ultimately relies for its legitimacy, but more immediately upon the support of politicians who hold not only the 'purse strings' but also the constitutional power of life and death. It is not surprising then that 'speaking truth to power' has never been a BBC maxim. Whilst the Corporation has at times functioned as a space for critical journalism and oppositional voices, such spaces have always been marginal and such voices have always been marginalised.  Moreover, the BBC's capacity for critical journalism appears to have been weakened in recent years, not just as a result of Hutton and the institutional inertia it created, but more generally as a result of neoliberalisation, which has reshaped the BBC as well as the broader political culture.

The most celebrated period of public service broadcasting was in the 1960s when the BBC to some extent reflected the broader democratic and egalitarian spirit of the age and enjoyed a greater degree of financial autonomy, thanks in part to substantial income from colour TV licences. However, this golden age, celebrated for its creativity and irreverence, proved short lived, and the BBC took a conservative turn towards the end of that decade as a result of both reactionary political appointments and increased funding pressures. The former Conservative Minister Lord Hill, appointed BBC Chairman by Harold Wilson in 1967, strengthened the powers of the politically appointed Board of Governors and, following a review by the influential consultancy firm McKinsey and Co., imposed new managerial structures and financial controls. Hill's successor, Michael Swann, would later recall that as the 1960s gave way to the 1970s there was both a change of mood in society and a change in emphasis in the management of the BBC. Its output had become more right-wing, and this, Swann remarked, was 'as it should be'.[1]

After a decade of conservative retrenchment, the BBC in the 1980s came under ferocious attack from the Thatcher Government and its New Right allies, a period which has received far more scholarly attention than the previous decade. It survived thanks in part to the protection of less extremist figures in the Thatcher Government, and in part due to divisions amongst its enemies.[2] But survival still came at the price of ever greater accommodation with the emerging neoliberal order. The BBC's notoriously managerialist turn under the leadership of Director General John Birt in the 1990s baffled and infuriated journalists and commentators alike, but what has been rather poorly understood is that Birt's unpopular reforms represented an institutionalisation of neoliberalism at the BBC. As was the case in other parts of the public sector, workers found themselves entangled in a debilitating web of neoliberal-inspired, market-like, bureaucratic regulations and incentives. Birt's flagship managerial initiative was known as Producer Choice, a 'quasi-market' similar to that imposed on the NHS. The other side of the 'Birtist' reforms was the consolidation of editorial power. From 1988 onwards, many of the relatively autonomous spaces for critical journalism that had developed at the BBC—galvanised by sixties radicalism and strong trade unions—were first subject to vetting and then slowly brought under centralised control.

The institutional changes the BBC underwent in post-Thatcherite Britain mirrored those of the wider society: power became more centralised, professional decision making became more marketised and working conditions were made more precarious. Meanwhile, whilst most found their freedom curtailed by neoliberal bureaucracy, a largely Oxbridge educated elite retained its decision making powers and the salaries of those at the very top sky-rocketed. This is the enduring legacy of the survival strategy developed by the BBC leadership in response to the Thatcherite assault, and it long outlived the much maligned John Birt. Under his successor, Greg Dyke, the BBC became consciously more pro-business, in effect making a concerted effort to embed itself in the very networks of unaccountable power that were eroding British democracy.

If we are to understand why the BBC has failed to 'speak truth to power'—and not just in the run up to the invasion of Iraq—we need to be aware of this institutional history and be honest about the extent to which neoliberalism and the interests it represents have influenced the BBC's institutional structure and culture. Journalism after all does not take place in a social vacuum. It is shaped by professional norms, and a particular allocation of resources, factors which are in turn shaped not only by the class origins of editors and journalists, but also by wider political struggles and their broader outcomes. Without any consideration of such factors, and the central question of under what circumstances journalists are and are not able, and inclined, to 'speak truth to power', journalistic lamentations like Hardy's, however well meaning and cathartic, will get us nowhere slowly.



[1] Michael Swann, Education, the media and the quality of life: speech to the Headmasters' Association Annual Conference at St Catherine's College Cambridge, 26 March 1976.

[2] Goodwin, Peter. Television Under the Tories: Broadcasting Policy, 1979-1997 (London: BFI Publishing, 1998).  Tom O’Malley, Closedown: The BBC and Government broadcasting policy, 1979-92 (London: Pluto 1994).


This article was originally published at New Left Project

Categories: les flux rss

Response to "'Whose University?’ dislodges Cambridge University's mask of humanity"

Open Democracy News Analysis - 19. December 2014 - 0:11

The claims of the "Whose University" campaign are ill-informed and tendentious.

King's College Chapel. Wikimedia/Christian Richardt. Some rights reserved.

The Whose University? (here, WU?) article contains so many errors, of both fact and interpretation, that it should not go unanswered. I would like to correct the more important mistakes and then offer some general remarks. My observations will concern mostly the colleges of Cambridge University, and in particular King’s College, against which many of the criticisms are directed.

An immediate error is the statement that students living in King’s are required over the Christmas vacation to “empty their rooms of themselves and all of their possessions”. That is certainly not the case for post-graduate students (whose existence WU? appears to have overlooked); nor is it the case for those undergraduates who have opted for a long-duration rental, which entitles them to keep their possessions in their room until the end of the teaching-cum-examination year, even when they have to be out of residence themselves. The requirement does apply to undergraduates who choose the short-duration option. They are required to clear their room during most of both the Christmas and the Easter vacations, in order to make space for other uses. During the Christmas vacation, on which WU? concentrates, that space is needed, not for conference business, which is not accepted at that time of year, but for the (this year, 854 strong) sixth formers who come to the college for admissions interviews, many of whom require overnight accommodation.

It is also incorrect to state that any undergraduates who need to remain in college accommodation during the vacations are required to leave. The tutorial system operated by Cambridge colleges grants permission to individual undergraduates who show a valid reason  – whether to do with finances, family situation, disability, mental health (especially those who come to university from social care services) – to remain in residence during vacations. Concerning mental health, current students registered with the University Counselling Service or NHS services can expect permission to remain in residence if they request it. It is extraordinary that the WU? group, whose members are themselves presumably students within this system, describe it as ‘not providing for their needs ... leaving them vulnerable, open to abuse, and sometimes homeless ... nowhere ... is there space for students to be human beings with human needs’. These generalisations are unsupported and invalid.  

What has not been found acceptable by King’s is an unrestricted right for all undergraduates to remain in residence, such as that apparently envisaged by WU? Permission to remain during vacations is granted only on an individual basis, to students whose academic work (e.g., a third-year dissertation) or extenuating personal circumstances make it necessary. No generalised undergraduate right to remain in residence, e.g., to pursue one’s social life while relieved of the academic demands of term time, has commanded support. 

WU? appears to be unaware that colleges such as King’s exist for a multitude of purposes. Education, religion, learning and research are stated explicitly in the King’s Statutes; to them should be added the performance of music and the handling of tourism. No particular group, including undergraduates, is entitled to claim ownership. The college has a Governing Body, constitutionally charged with reconciling these varied objectives. The student representatives who sit on it are free to seek augmented residence rights, as demanded by WU?, should they view that as a priority.

WU? errs also on the direction of change. The contemporary trend has been the liberalisation, in King’s at least, of permission to undergraduates to remain in residence – not the increased restrictiveness postulated by WU? Not so long ago, before the requirement for a final-year dissertation became general, few undergraduates received permission to stay up; nowadays, many do, particularly over the Easter vacation. Indeed, the choice between short-duration rental contracts and the long-duration ones that bring rights to residence during more of the Christmas and Easter vacations, as currently enjoyed by King’s undergraduates, was introduced relatively recently, in response to requests by student representatives.

A smaller issue, which appears to have triggered the WU? piece, concerns the message circulated recently by myself as Lay Dean to King’s undergraduates, reminding them not to let non-members of the college store belongings in their rooms over the coming vacation. The message was sent out following the issuance of invitations by some King’s students to members of an internet-based social network, which potentially includes non-members of the college, to do just that. Both practices are forbidden by college rules, for reasons that can readily be imagined: notably, the increased risk that student rooms will contain materials that are banned, dangerous or damaging when items are stored in them by non-members who may themselves be strangers, partial or total, to the host student. In any case, no disciplinary action has been taken, nor was any threatened, simply for making those offers, as is alleged by WU?

A copy of the circular message is appended below for readers who care to delve further. WU?’s characterisation of the message as ‘a paroxysm of authoritarianism’ is an exaggeration. The message was a standard reminder of the existence of an established college rule, and of the sanctions that might follow from breaking it.

Turning to the wider issues, WU? is correct to argue that the commercialisation and marketisation of British higher education should cause serious concern. The error here is to treat those forces as if they were just as powerful – behind a deceptive liberal facade – in relation to undergraduate life in Cambridge as elsewhere. In fact, Cambridge, like Oxford, is a collegiate university, in which the importance of undergraduate education, in terms both of intensive teaching in small supervision groups and of feedback on individual academic work, remains unmatched elsewhere. This teaching system is comparatively well protected by the endowments and fund-raising capabilities of both the colleges and the university. The colleges devote considerable funds to student services and student welfare. Charges for accommodation and food have indeed risen in Cambridge, alongside the rising cost of living in the city, but still compare favourably, in publicly available statistics, to those in other universities. Were a college like King’s to abandon the outside events that help finance the high cost of its educational provision, charges to undergraduates would have to be much higher than at present.

More generally, Cambridge colleges are not, nor are they likely in the foreseeable future to become, a locus for the profiteering denounced by WU? That trait does indeed disfigure other parts of higher education, particularly its growing for-profit component. WU? appears unaware, however, of how favourable is the position of its student members, and how well protected it is, compared their peers in many British universities.

The case presented by Whose University? is both ill-informed and tendentious. The piece reminds me of Mark Twain’s injunction: never let the truth get in the way of a good story.

Dr Paul Ryan

Lay Dean, King’s College, Cambridge


Addendum: circular e-mail message to King’s undergraduates, 5.12.14
To King's undergraduates

It has been brought to my attention that several King's students have been offering publicly to provide storage space in their College rooms during the coming vacation to others, including students of other Cambridge colleges. 

I would like to remind you that, as stated by the Accommodation Officer in an earlier email today, whether or not you hold a long rental contract, you are not allowed to store anyone else's belongings in your room.

The reasons for the rule concern security (personal knowledge of and responsibility for possessions left over the vacation) and housekeeping (reducing the obstacles encountered while cleaning rooms).

I will take disciplinary action against any student who is found to have ignored the rule.

I will also ask Housekeeping to remove any items that clearly do not belong to the student to whom the room is assigned.

Dr Paul Ryan

Lay Dean

King’s College 

Sideboxes Related stories:  "Whose University?" dislodges Cambridge University's mask of humanity Country or region:  England City:  Cambridge
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A second response to Meredith Tax - straw men make poor argument

Open Democracy News Analysis - 19. December 2014 - 0:11

Tax's misleading interpretation of my arguments do little to counter the central realities - that liberals and imperialist feminists have been prominent supporters of authoritarianism and state violence.

In November we published Deepa Kumar's widely read essay, 'Imperialist Feminism and Liberalism'. In response, 5050 published an essay by Meredith Tax, 'The Antis - anti-imperialist or anti-feminist?' Deepa Kumar's response to Tax can be read here. This second response is from Saadia Toor.

Meredith Tax’s response is exactly what one would have expected it to be. It exemplifies the ‘straw man’ style of argumentation, and of necessity misrepresents our arguments, our critique and our politics. I say ‘of necessity’ because it is only through misrepresentation that Tax can get away with not actually having to address the actual substance of our critique and answer our charges against today’s imperialist feminists.

I’d like to begin by addressing some of Tax’s claims before moving on to articulating the substance of our critique of imperialist feminism.

Tax caricatures our argument when she claims that we ‘reduce the problems of women to side effects of "capitalism and imperialism"’. I have never made the absurd claim that women’s problems are either side-effects or even products of capitalism or imperialism alone. But I do hold, following in the footsteps of socialist/Marxist/materialist feminists, that to fail to pay attention to political economy when discussing gender/sexuality is to commit a huge error. Women’s ‘problems… involving the family, cultural traditions, religious institutions, and systematic institutionalized sexism’ do not simply ‘[predate] capitalism’ or imperialism, as Tax helpfully points out. They are transformed by them, even as capitalism and imperialism create new problems for women and feminist politics. It is especially important to invoke political economy when discussing women’s status and issues within the context of Pakistan specifically, and the ‘Muslim world’ generally, precisely because it tends to be absent from feminist analysis pertaining to this region. Tax’s charge of reductionism is ironic given that in fact it is liberal/imperialist feminists who tend to reduce the various issues faced by Muslim women (especially in Muslim majority countries) to ‘Islam’, and/or ‘Islamic fundamentalism’. 

Tax remarks that ‘I always thought feminists … recognized the existence of diverse patriarchal formations’. If Tax had been in the least bit familiar with my work, she would have known that I not only agree that there are ‘diverse patriarchal formations’, I have argued that their existence is precisely why studies of Muslim women in Muslim-majority countries must not begin with the premise that ‘Islam’ is the root of (all) the problems. A blinkered approach to women/gender in the context of Pakistan which only sees one explanatory variable—Islam—misses the complexity of what is actually going on, because ‘Islam’ is as often rejected as invoked in patriarchal maneuvers

The claim that we want to shut down a discussion of the Muslim right is similarly absurd. We consistently talk about the Muslim right, but do so in a way that is attentive to history and contemporary domestic and international politics. At a time when self-proclaimed “progressives” in the US and Pakistan are too often to be found either openly cheering on US and Pakistani military operations, or supporting them with pinched noses “in the last instance” as “necessary evils”, it is understandably inconvenient to have to face the historical role played by these honourable institutions in creating and nurturing the very forces they now claim to be fighting. This is especially glaring in the case of Pakistan, where the Pakistani military continues to shield its ‘good’ Taliban (not to mention the other violent extremists it has cultivated) while fighting those it designates as ‘bad’ ones – it’s worth noting that these designations fluctuate opportunistically. From the genocide in East Bengal in 1971 to the killing fields of Balochistan today, the considerable might of the Pakistani military (nurtured, historically, by the US) has been most successfully deployed against its own citizens whose only crime has been to demand their democratic rights. This is the military that the members of Pakistani ‘civil society’ gave their support to this past summer when it launched yet another military operation in North Waziristan to ‘flush out the baddies’. This operation came at the heels of relentless drone strikes that the people of North Waziristan had already been subjected to for years - drone strikes that have, to date, killed anywhere from 168-204 children alone. This latest military operation has displaced upward of a million people. This military violence is nothing less than a form of collective punishment which the people of Pakistan’s tribal regions have been subjected to since the establishment of the Pakistani state.

Tax quotes Afiya Zia as saying "Their [i.e. our] attempts to malign liberal and secular feminists and human rights activists as supporters of war, drones, and military intervention end up confirming right wing accusations of the same." This is an odd statement. It implies that the idea that liberal and secular feminists and human rights activists support war, drones and military intervention is somehow nothing more than a malicious rumour. And yet, in Pakistan (and elsewhere) this is precisely what they have done.  Repeatedly.  In Pakistan, critiquing drone strikes within liberal/secular feminist/human rights circles immediately results in one being branded a ‘Taliban apologist’. On a large (and publicly accessible) email discussion list this past summer, Ms Zia made it clear that she supported the statement put out by the Women’s Action Forum (Pakistan’s most well-known feminist organisation) endorsing the Pakistan military’s latest military operation in North Waziristan. This collusion of liberals with authoritarianism is not new, in Pakistan or elsewhere. In fact, in my book (which Tax generously mentions) I show that throughout Pakistan’s history, liberals consistently sided with, and thereby shored up, the forces of the Right (religious or secular) in opposition to the (secular) Left.

This brings us to the fact that there is a method in the madness of Tax’s response – the bluster, the mischaracterizations, the red-baiting are all designed to draw attention away from what anti-imperialist feminists find objectionable in imperialist feminist politics, and specifically those of Tax and co. I have made this case before, and will just share a couple of examples here for the benefit of the readers of openDemocracy:

1. In 2010, Tax attacked the Center for Constitutional Rights and the American Civil Liberties Union for bringing a suit against the American government on behalf of Anwar al-Awlaki, the first US citizen targeted for assassination by his own state for his political ideology. A group of Algerian feminists (and CCR board member Karima Bennoune) then sent a letter to CCR in which they explicitly argued that the focus within the human rights community in the West on Muslim men as victims of the war on Terror comes at the expense of the well-being of Muslim women because it effaces the role played by Muslim men as perpetrators of violence against Muslim women. Bear in mind that this was at a time when human rights advocacy in the West on behalf of the victims of the War on Terror was fairly muted. As I argued in my essay “Imperialist Feminism Redux”,

What is important to note is that this critique of Western liberals and international human rights organizations for their misplaced and dangerous focus on Muslim men comes at a time when Muslim men qua Muslim men continue to be the explicit target of the GWoT,and an anti-Muslim racism which understands all Muslim men as dangerous intensifies in North America and Western Europe’. This critique also assumes that it is impossible to have a progressive politics that is concerned with the rights of both Muslim men and Muslim women. In fact, it posits all Muslim men as (by definition) perpetrators of violence against women. Supporting their rights (even their right to life, their right to a fair trial, their right to free speech, etc), even in the context of war, can only strengthen their ability to oppress Muslim women.

2. On its website, the Center for Secular Space (an institution with which many of those who express imperialist feminist views—from Tax to Gita Sehgal, Karima Bennoune and Afiya Zia—are associated) lament that, in Europe “‘discussions of still-existing racism have been replaced by discussions of Islamophobia’” implying that, (i) the actual problem at hand is not an increase in Islamophobia itself but increasing ‘discussions of Islamophobia’, and (ii) that these discussions distract attention away from ‘racism’, as if Islamophobia was not the pre-eminent form which racism in Europe has taken today.  The mind, as they say, simply boggles.

These are only a few examples – one can provide more. For now I leave it up to the good readers of openDemocracy to judge for themselves whose politics shores up the existing structures of power today - Tax & co., or those of us who are working hard to fight the metastasizing, anti-people (and deeply misogynist) national security states across the world. I would love to see a refutation of these specific charges from Tax rather than the sound and fury that she conjures up to distract attention away from inconvenient truths.

Our own position vis a vis the GWoT and ‘Islamic extremism’ and our critique of imperialist feminism should not need to be repeated, having been made in several places and several forms over time. However, in the face of Tax’s mischaracterization, I’ll state it loud and clear once again:

Despite Tax’s attempt to engage in what Hamid Dabashi has called “politically expedited historical amnesia”, this latest imperialist war (the ‘GWoT’) had strong liberal support in its early stages, fueled in no small part by ‘concern’ for Afghan women. This liberal support seemed to dissipate after the attack on Iraq, but as the deflation of the anti-war movement after the election of Barack Obama clarified, liberal opinion continued to remain in favour of the ‘good war’ in Afghanistan. War and other actions of Empire require legitimation. It is not enough—especially as the war in question drags on endlessly and spreads to large parts of the globe—to secure the consent of the far-right, neoliberals, and hawks, especially when a Democrat is in power.  Legitimacy is thus needed and sought from across the political spectrum. For obvious reasons, Islamophobia has played a very important role in securing consent for the war, both domestically within the US (and Canada/UK/Europe) and abroad, again across the political spectrum. This is the context in which the sort of imperialist feminism exemplified by Tax & co.—an international conglomeration of feminists with left-liberal credentials—emerged and the reason why it demands intense scrutiny.


This article is part of the Gender and Race strand of the Liberalism in neoliberal times series that OurKingdom is running in partnership with Goldsmiths, supported by the Department of Sociology. You can read Gholam Khiabany's introduction to the whole series here.

Liberalism in neo-liberal times - an OurKingdom partnership with Goldsmiths, University of London

Categories: les flux rss

DevoMix Christmas special: LocalismWatch’s seasonal update on devolution

Open Democracy News Analysis - 19. December 2014 - 0:11

We now know what the Smith Commission’s proposing for Scotland, and William Hague’s options on English votes for English laws.  But how does devolution tie up with localism? A Santa-stic overview of news, comment and (dis)information.


Following the referendum ‘no’ vote, David Cameron commissioned Lord Smith of Kelvin to identify greater devolved powers for the Scottish Parliament.  On 27 November, with the agreement of Scotland’s 5 main political parties, the Smith Commission published its outline recommendations.

These set out the case for a Scottish Parliament that will be:

  • - Stronger within the UK
  • - More accountable and responsible
  • - More autonomous – notably, in tax-raising powers
  • - Better in its dealings with Westminster
  • - Giving greater devolution to communities within Scotland and
  • - Building greater public understanding of its role

Lord Smith has certainly delivered on schedule – though, as with all constitutional projects, the devil is ever in the detail. Representatives of Scotland’s most remote island communities welcomed the Commission’s proposals to transfer powers over Crown Estates assets, Air Passenger Duty and energy efficiency schemes. But three SNP councillors in Renfrewshire were less impressed.  They videoed themselves burning the Smith report and were promptly suspended by their new leader, Nicola Sturgeon.

At the same time, Labour’s own new chief, Jim Murphy, has outlined his ideas for city deals in Scotland – something that he believes would help close the economic gap with their English equivalents. This intervention might well be timely, as business leaders in Dundee have argued that the referendum has slowed business start-ups in their city.

But the boundaries of economic catchments are more ‘fuzzy’ and ‘porous’ than many commentators realise. The Smith Report’s suggested concessions for Scottish airports have not gone down well in North East England. Newcastle airport stands to lose vital revenue as a result

England: the National Picture:

On 16 December, William Hague, tasked by David Cameron to design the roadmap for ‘English votes for English laws’, published a Command Paper, containing three possible options. These range from barring Scottish MPs from voting on measures affecting the rest of the UK to giving English MPs veto powers over laws applying solely to England. In that instance, an English-only committee would scrutinise legislation which would then be voted on by the full House of Commons.

If Cameron’s response was geared to appease his backbenchers, Hague’s proposals have not quelled their mutinous murmurings.  John Redwood told the Daily Telegraph: “I can't understand why they are wasting time with these watered down versions. Britain has been gravely damaged by Labour's lopsided devolution. It's time to even things up.” He warned that the measures fell short of “what the majority of Tory backbenchers and the public want”, and called for Scottish MPs to be barred from voting on any English matters. Lord Prescott, who as Deputy Prime Minister unsuccessfully spearheaded Labour’s attempts at regional devolution a decade ago, described Hague’s efforts as “a stitch-up” and “centralisation”.

The Prime Minister intends to put Hague’s proposals to his backbenchers ahead of a Commons vote early next year. But lacking unanimity in his own camp, let alone a Commons majority, it is hard to see how he can push a sustainable set of England-wide devolution proposals through Parliament before the General Election.

The process of securing local devolution packages for England’s cities and regions has been tortuous, despite – or maybe, due to – the intervention of political heavyweights. Lord Heseltine is a good example.  Speaking to the Institute of Economic Development, he described the devolution process as ‘unstoppable’. But like many in the Westminster village, his idea of devolution centres on high level powers and and top-table players, not people at the grassroots. “Without spending any more public money you can galvanise large amounts of private money,” Heseltine told his audience. “It's amazing how much additional growth you can get.” He argued that combined authorities such as that recently created in Greater Manchester, could work well in areas outside the major cities.  Given “a magic wand”, he would create unitary county councils across the country.

The All Party Urban Development Group (APUDG) of MPs and peers have issued a report called Going for Growth. This says that if councils were given more varied powers, including infrastructure improvements and increasing housing availability, the next government could build on the success of the Coalition’s growth initiatives. The report considers how Local Enterprise Partnerships (LEPs) have stimulated development, and invites the incoming administration to retain a focus on growth.  Devolving further powers to cities and regions and working closely with them would enhance understanding of local challenges, the report says. It should, however, be noted that this outpouring of cross-party consensus has been produced with money and technical support from the British Property Federation and Nathaniel Lichfield & Partners.

Labour’s Shadow Chancellor, Ed Balls, has lent his weight to the devolution fray. He has attacked George Osborne’s insistence that new combined authorities must be headed by elected ‘metro mayors’ – a formula that (as we shall read later) has stalled devolution talks in several English conurbations.  Balls has advised local councils to bide their time, promising a much better devolution package if Labour wins next year’s election: “George Osborne is saying ‘my door is open as long as you agree to my blueprint’ – which is counter-productive, obstinate and foolish.”  Southampton Council’s Conservative opposition leader demurs: “At least George Osborne’s door is open. Ed Balls’ door is open and there is nothing there.”

Who’s driving the devolution bus?

Stagecoach magnate Brian Souter helped bankroll Alex Salmond’s ‘yes’ campaign in September’s referendum. But Martin Griffiths, the bus company’s CEO, has come out against the proposed devolution of strategic transport powers to English city regions.  To him, these amount to ‘a confiscation of assets’: they would, in effect make the buses state-controlled.

The government’s chief planner has no plans for plans – in city regions, at least

However city regions are governed in the future, Steve Quartermain, the head planner in the Civil Service, says that the government won’t be encouraging the preparation of city-region spatial plans.  This is despite the fact that the Greater London Authority has a statutory London Plan and the incoming Greater Manchester authority wants one too. Quartermain said: "You can have greater-than-local planning but you don’t necessarily have to produce a document to carry that forward.”

A devo-tour round England’s regions

The North West

Referring to the current bookies’ craze for a ‘celebrity mayor’ in his native city, Noel Gallagher has suggested becoming Duke of Manchester, should Russell Brand’s much-publicised ‘revolution’ ever take place. Sir Richard Leese, Manchester City Council’s long-time leader, sees no problem with ceremonially up-titling the ex-Oasis frontman, but points out that “running large authorities actually does require some skills.” Local politicians were initially unhappy with an elected mayor being non-negotiable in Manchester’s devolution deal, but Leese revealed that, in the end, “pragmatism won out”. When the metro-mayor takes office in 2017, s/he will also serve as Greater Manchester’s Police and Crime Commissioner. Asked by BBC’s Laura Kuenssberg whether the elected mayor role had his name on it, Leese said: “If I said I hadn’t thought about it, you’d say I was a liar and you’d be right.”  

Jennifer Williams, social affairs editor at the Manchester Evening News, said that for councils, the offer of new powers is hard to resist, although austerity means that expectations won't be matched by resources. “George Osborne may be handing over big ticket devolution, but he continues to take money out of the day-to-day spending of the town halls,” she added. “There will be scepticism. Manchester is looking at £60m in cuts in 2015 and a further £30m the year after.” Lollipop patrols, mental health care, free swimming and youth services are likely to be first in the firing line

In an innovative slant to localism that no legislator, surely, ever intended, the Manchester Evening News is empowering its readers to exercise digital judgements of Solomon, through an interactive tool that lets them slim down the council’s budget, line by line. So although Manchester is the trendsetter for English devolution, it begs the question of what will actually be available to devolve, once the full programme of cuts implied in the Autumn Statement has taken effect.

Merseyside’s leaders have now consented to talks about talks on devolution – but only after pressure from those twin champions of centralisation, Lords Heseltine and Adonis. Here too, the question of an elected mayor has been the sticking point: only Liverpool and Sefton councils were originally in favour, the rest only acceding when the day-tripping lords revealed that additional powers and funding would not otherwise be forthcoming. Wirral Council leader Phil Davis said that Merseyside would seek “the kind of rapid progress towards devolution that we have seen in Manchester”. So far, so good: but there’s also the minor consideration of who will be Merseyside’s elected mayor. As readers know, Liverpool’s Joe Anderson has his eyes on that role.

Elsewhere in the North West, Lancashire’s 14 district councils, plus the unitaries of Blackburn and Blackpool, are working to secure a combined authority. While encouraging in principle, the reasons for coming together are less so. All the councils face severe cuts, but with far lower local tax bases than their powerful neighbours. Then there’s the challenge of resolving Lancashire’s complex geography of local rivalries – something that Westminster’s ‘localist’ drive consistently ignores.

The North East

George Osborne preached the metro-mayor gospel on his recent visit Newcastle, saying that if local councils were to merit greater control over functions and funding, their representatives must be more accountable: “Great cities like New York and London have one figure the public can pinpoint,” he said.  “If you want to have the full suite of powers that are normally associated with an elected mayor in almost any city in the world, then that is the model of government.” 

But although Osborne denied imposing an identikit model, local councillors contradicted him. South Tyneside leader Iain Malcolm responded: “It is disingenuous of George Osborne to say unless we have a mayor we cannot be held to account, rather than saying ‘these are the responsibilities the region will get’, and allow us to have the tools to get on and do the job. I just think he is trying to divert the devolution agenda to be about some sort of civic pride issue in the North East.”

Newcastle Council chief Nick Forbes added: “Where I do agree with Mr Osborne is that cities offer the greatest growth potential for UK plc and places like Newcastle are where the next generation of jobs will be created.  We are simply asking for the tools to get on with the job that needs to be done rather than be set political hoops to jump through.” Durham County Council’s leader Simon Henig commented, however, that an elected mayor for the entire North East would be a “show stopper”, and that decisions on future governance should not focus on Newcastle alone

Councils in the Tees Valley have taken the first steps in forming a combined authority: this could be operational by winter 2015. It is intended that the proposed new body, which already has strong business backing, will meet jointly with the area’s Local Enterprise Partnership (LEP). Public consultations began on 10 December and will continue until 31 January 2015.


Lord Heseltine has engaged in ‘intense devolution negotiations’ about two ‘conurbations’ - West Yorkshire and the City of York, and of South Yorkshire. Both currently have ‘loose’ area partnerships, but there is considerable high-profile opposition to having elected mayors. 

Opinion in Bradford is particularly divided on the issue.  The council is strongly against, with its leader, David Green commenting: “Discussions are still going on, but the councils in West Yorkshire are adamant that a mayor can’t be imposed. The combined authority is (already) working well.” Two of the city’s MPs, however, support the package. George Galloway, representing Bradford West, said that West Yorkshire could reap the same benefits brought about through the “strong leadership” of London’s mayors, “both of them bigger-than-life figures, who have clearly made a difference” to the capital

South Yorkshire’s leaders have not completely ruled out elected mayors, although - unlike their counterparts elsewhere - they have been assured that any deal currently on the table won’t bind them to adopt that arrangement. Any suggestion that they’re being forced to have elected mayors in return for devolution would be hugely damaging to Deputy PM Nick Clegg, a Sheffield MP, who has publicly promised local people that there’s no compulsion. More embarrassing, however, Sheffield council leader Julie Dore told a local democracy campaigner that there wasn’t sufficient time for public consultations on proceeding with a devolution deal on the Chancellor’ terms prior to his 3 December Autumn Statement.

As it turned out, no devolution agreements were secured anywhere in Yorkshire in advance of the Autumn Statement, which contained no references to England’s largest county. But ‘sources close to Nick Clegg’ were adamant that ‘a generational hand over of powers and finance’ was just weeks away. This was borne out when a Sheffield city deal was finalised on 16 December.

Hull City Council has been arranging business briefings to promote a devolution deal for Humberside, despite opposition and a ‘refusal to talk’ by the neighbouring three councils. Darryl Stephenson, Hull’s Chief Executive, said that if Humberside’s four authorities “cannot get their act together now, in ten years’ time they will not be forgiven.” Tim Rix, who chairs Hull's City Leadership Board, said: “Devolution seems to be the only game.  I really struggle to see how the other local authorities fail to see the benefits of this.”

But neighbouring East Riding leader Stephen Parnaby commented: “There is no pressure on this council or on our neighbours to form a combined authority. More importantly, we have not missed out, nor are we in danger of missing out, on any grants, funding opportunities or otherwise.”  Parnaby cited the halving of Humber Bridge tolls, new Enterprise Zones and a strong record in securing government funding. He also noted that the Humberside LEP had called for devolution talks to be deferred until after the general election: “By then, hopefully, there will be more clarity and more certainty as to what, if anything, we need to do.” Hull City Council have remained bullish, issuing a ‘stark warning’ to its neighbours that they were putting jobs and investment at risk by not seizing the moment and becoming part of the Chancellor’s ‘Northern Powerhouse’.

The West Midlands

Treasury officials have been negotiating a possible West Midlands devolution deal, along similar lines to Greater Manchester. George Osborne has insisted that devolved powers there depend on local acceptance of an elected mayor. Speaking to the Birmingham Post, he said: “I am willing to work across party lines to get what is right for Birmingham and the West Midlands.  What happened in Greater Manchester followed the creation of the combined authority and the effective working of that combined authority. That has not happened to the same extent in Birmingham and the West Midlands.  But there is now real progress on that front, which we are engaging with.”

Our readers will recall that Coventry City Council has resolved to join Birmingham and the Black Country in the combined authority. Its leader, Ann Lucas, has launched a charm offensive, inviting councils in Warwickshire to join too. But the Coventry Telegraph reports that around half of Lucas’ own Labour colleagues in Coventry are against joining Birmingham and want a Warwickshire-based alliance. Coventry’s Tory group agree. And the city’s UKIP representatives are unhappy with what they see as ‘secret talks’ over Coventry’s future, saying the local electorate should have a vote on the matter.

Lucas refutes any notion that the new body would be a ‘super council’. “If Coventry does become a member of a Combined Authority – whether it’s with Birmingham or Warwickshire – this does not mean that Coventry or Coventry City Council will disappear,” she said. “While I am Leader I promise you that Coventry will not become part of Birmingham – greater or otherwise. I can also promise you that Coventry will not have a mayor running business for us from Birmingham. I promise you that decisions about Coventry services will continue to be made in Coventry by Coventry councillors.”

In the West Midlands, old traditions die hard.  Warwick District Council’s leader has an open mind about the talks, saying: “this isn’t about handing powers over to Birmingham.” But Stratford-upon-Avon Council, which proudly struts its own corner of the world’s stage, says that it will be keeping its options open – and that these might not necessarily include Birmingham, or indeed, the rest of Warwickshire.

Elsewhere, councils such as Walsall and Staffordshire have been courting local businesses to gauge support for a combined authority. Indeed, it has recently been announced that a new regional LEP will be created to ‘sit alongside’ a West Midlands Combined Authority, with the region’s existing ‘area’ LEPs remaining in situ. How this arrangement would operate in practice remains unclear.

And yet, despite all these machinations, the West Midlands devolution process could be derailed due to concerns about its lead partner. Following a damning review of Birmingham City Council by the Civil Service’s ex-head, Sir Bob Kerslake, England’s biggest local authority could be taken over by central government if its performance doesn’t improve within 12 months. Communities Secretary Eric Pickles is contemplating appointing commissioners to take over its departments. He may, indeed, decide to break Birmingham into two or three smaller councils.

The review was prompted by Birmingham’s financial woes, the failings of the city’s children's services and what the government saw as the council's poor response to radical Islamic ‘Trojan Horse’ influences in some local schools.  Sir Bob said that these inadequacies had caused poverty, unemployment and low skills in the city, adding: “The overwhelming consensus of those . . . spoken to is that the council cannot carry on any longer as it is.”  A panel selected by Pickles will monitor Birmingham’s progress over the next year, before reaching a final decision.

The East Midlands

Derbyshire’s city, county and 8 district councils are set to form a joint organisation.  This is the first ‘non-metropolitan’ area in England to reach such an agreement.  Of the 10 councils, 7 are Labour and 3 are Conservative-controlled. County council leader Anne Western said that both parties had put their differences aside: “It's not been a straight path. Everyone around the table has needed to know what they're committing themselves to – but it's been done with a lot of good will.”

But a joint authority in neighbouring Nottinghamshire remains some way off.  On 28 November, local council leaders agreed to work towards the government-imposed deadline of February 2015.  Graham Chapman, deputy leader of Nottingham City Council, said: “There was a surprising amount of consensus, but we've still got some way to go and a lot of terms and conditions.” 

The South West

George Ferguson, Bristol’s elected mayor, is still working to get neighbouring councils’ agreement to a joint authority. In his annual state-of-the-city address, he mentioned the additional funding that Manchester had secured through its devolution package.  Referring to “the historical reluctance” for neighbouring councils to pool resources, Ferguson said: “The only reason for not accepting this change is political sensitivity. The Government has created a window. This is not a Bristol takeover and the new departments would not necessarily be run from Bristol. Other combined authorities have shared out the responsibilities.” Ferguson also criticised the region's current ‘West of England’ title: “For location and clarity, I prefer the title of Bristol City Region.  Manchester, Liverpool and Leeds are creating Northern powerhouses. Bristol needs to be the south west equivalent.” 

North Somerset’s leader, George Ashton, responded that neighbouring councils were already pooling resources, without losing their individuality. He added: “Constantly quoting . . . Manchester misses the point. We are not Manchester, and what works for them should not be mandatory for everywhere else. We talk of localism and devolution and then try to impose another layer of government further away from our communities, without even asking our residents. We are always keen to talk to Government about opportunities to secure the devolution of funding and powers, where it can bring clear benefits to local people but no one has demonstrated any real benefit and we have been told that there would be no new money. Some people confuse the need for government to give local authorities the power to get on with their existing responsibilities, with the need to create another authority. Apparently we would also have a Metro Mayor.  George says he supports devolved powers but then seeks to centralise it.”A similar state of affairs prevails in Gloucestershire, where councils prefer joint working to unification. 

The South East

Essex is home to several popular dramas, the most iconic of which depicts what the Guardian once described as “real people in modified situations, saying unscripted lines but in a structured way.”  The latest concerns Southend-on-Sea and Thurrock Borough Councils, who wish to re-focus the Thames Gateway South Essex Partnership (TGSEP). Essex County Council recently said it would be leaving the partnership to concentrate on its county-wide role. Other South Essex authorities are being invited to re-subscribe to the TGSEP, which will be formally re-launched on 1 April 2015.  Southend leader Ron Woodey regretted the county’s withdrawal, as this would “weaken the profile of Southend-on-Sea and South Essex . . . and lead to delays both getting funding for and delivering future projects.” 

The prospect of a new Solent combined authority, linking Portsmouth, Southampton and surrounding areas, has raised concerns in Winchester. Although Winchester's future allegiances remain undecided, fears exist that the current district council area would be split in two, if towns and villages in the south chose to join the combined authority


Although the capital already has an elected mayor and an Assembly, this has not stopped some London boroughs from joining the devolution circus. LB Croydon is pushing for new powers to collect locally-generated taxes on all developments. The council claims that if these focussed on a town-centre “growth zone”, these would funnel £5.25bn into the local economy by 2031, creating 8,300 new homes and 23,600 new jobs.  Croydon North’s Labour MP Steve Reid said: “This is not just a bid for Croydon, it stretches all the way . . . to the south coast.” He added that he and Croydon Central’s Conservative MP, Gavin Barwell, were completely united on this. “Scotland has got devo-max, we have just seen Manchester get devo-manc and now it is time to see devo-croy.”

Such devo-tion to Croydon’s cause must have impressed George Osborne.  Whereas Yorkshire deals were absent from his Autumn Statement, the Chancellor said he would consider approving a new Croydon “growth zone”, “subject to value for money”.  Although this fell short of an explicit commitment, LB Croydon leader Councillor Tony Newman said: “A growth zone . . . will bring huge benefits . . . and transform Croydon into a modern, European city.  For Croydon to be named in the Autumn Statement shows the huge importance of Croydon and the significance that it holds to London and the wider region.”

South London’s devolution bandwagon rolls on.  On 8 December, Croydon announced that it was forming a joint committee of boroughs “which will put Croydon in prime position to benefit from any devolution of power from Whitehall.” This group, also including Kingston, Merton, Richmond and Sutton, would decide on regional growth, delegated funding from the Mayor of London and local investment. It would also lobby the government “to devolve powers . . . such as . . . getting people back into work, boosting skills and ensuring economic growth.”

So what’s English devolution really about, then?

As readers of Localism Watch will know, we work our cotton socks off to bring together a digital smorgasbord of mainstream and – quite frequently - obscure resources to help folk at the grassroots make sense of localism, Coalition-style. What we’ve digested so far - not just in this issue - draws us to a surreal yet inescapable conclusion: the national debate about localism is, bizarrely, being led by those whose motivations are centralist to the core. 

We’re not alone in that view.  Writing in New Start, Daniel Boyle tries looking forward to localism in 2015. But he says that, unlike Scotland, Wales, and most of our European neighbours, the talent in the English regions has “either been sucked out or quietly ignored.” He highlights fundamental flaws in the emerging city region structures. They’re based on rhetoric, legislation and administrative procedures, not reasoned, locally-led arguments. Boyle questions the proposed new authorities’ true capacity to exercise their devolved powers  Many of their brightest and best have long since departed to live and work in the capital. He makes a plea for re-establishing credible, locally-based financial institutions across England if Osborne’s ‘powerhouses’ are to develop into something more than a tongue-in-cheek catchphrase.

For all the Autumn Statement’s bluster, the Coalition’s package of austerity and privatisation has failed spectacularly to curb the deficit - if, indeed, that was ever its true objective.  Even the right-leaning Spectator admits that the Chancellor will have borrowed more in his 5 year tenure than Labour did over 13 years. Whoever picks up the poisoned chalice of power after next May’s election will have to make more savage public service cuts than those projected in 2010. The combined authorities and metro-mayors spawned from the government’s current ‘rough wooing’ of English councils will take the brunt of those cuts. As it stands, the packages now being offered contain no new money. To quote the jibe once levelled at Osborne’s hapless predecessor Norman Lamont, the new bodies will find themselves ‘in office, but not in power’, as they are compelled to run down, privatise and close vital public services.  And they, not Westminster, will bear legal responsibility for what ensures.

To LocalismWatch, it’s clear that what the government’s really devolving isn’t power, but blame.

Categories: les flux rss

Water in the UK - public versus private

Open Democracy News Analysis - 19. December 2014 - 0:11

Like the East Coast mainline, the differing setups within the UK offer a useful insight into claims by Britain's governing parties that privatised water is in any way superior to publicly owned. But it does offer some enormous profits.

Flickr/Patrick Brosset. Some rights reserved.

Of all the privatisations of the Thatcher government, perhaps the most controversial was the privatisation of water. Most countries in the developed world run their water on a municipal basis. In some countries, citizens don’t receive water bills but simply pay for it as part of their rates. In the UK, however, we now have a patchwork of different ways of delivering our water.

In Scotland and Northern Ireland, water is delivered by the public sector. Northern Ireland Water is a government owned corporation, accountable to the Northern Ireland Utility Regulator. Scotland has a truly public water supply. Scottish Water is a statutory organization, accountable to Scottish Parliament. In Wales a non-profit organization, set up after the failure of a private concern, supplies the water. In England ten wholly private companies provide water and waste management in ten regions. Once again, this puts England at the forefront of the privatisation drive within the UK.

Water is the very stuff of life, so it is understandable that its privatisation during the Thatcher years was controversial. So why do it? The big argument for privatisation used to be that it was cheaper. However as this turned out not to be the case—or somewhat disingenuous, depending on how you want to look at it—the new argument is that it’s more ‘effective’. We are told that, whilst private utilities may be more expensive, they are also more efficient. It turns out this might be a bit questionable.

In 2014, the Public Services Research Unit conducted a review looking at the difference in efficiency between the public and private sectors. They concluded: “The results are remarkably consistent across all sectors and all forms of privatisation: there is no empirical evidence that the private sector is intrinsically more efficient.” This finding is echoed by a whole host of studies into privatisation in both developing and developed nations, which show that the idea of greater efficiency in the private sector is a myth. This applies to water, but also equally to other utilities. A review of the experience in privatizing electricity in Norway, Canada (Alberta) and the USA (California), as well as the UK, concluded that markets did not deliver lower prices and higher efficiency because small groups of producers abuse market power. (Woo et al, 2003).

The UK’s water supply would seem particularly informative to study, due to the diversity of supply methods within one nation. At the same time this very complexity—and the information available—means the industry is very opaque and difficult to scrutinize. In a report for the New Policy Institute, the authors refer to the way the industry, particularly within England, is organised as 'very odd'.

Despite the complexities of the English water industry and its ownership model, certain trends are evident. Firstly, as recent media headlines suggest, household bills in England are increasing. Secondly, there is the clearly changing ownership profile of the privatised water companies, and the increasing presence of private equity in the mix. Thirdly, high profits and dividends for shareholders have also generated headlines. Fourthly, an increasing amount of debt is being carried by the English water companies. And finally, a run of problems and issues have faced the English water companies, including leaks and unsafe water, along with waste water incidents. Taken together these issues seem to challenge the claim by Thatcher’s government that a privatised water industry would be more efficient and less costly to run.

In England annual water bills had risen from £120 per year in 89, to £204 by 2006. If you take into account inflation, you’ve still got a rise of 39% over and above inflation.

And bills continue to rise, despite stagnating wages and a sluggish economy.

To counter the anger at climbing bills, privatisation supporters argue that the English water companies have invested more than state run entities would have. A study by Greenwich University shows that this isn’t true. Their research concluded that at least half the investment made by the water companies since privatisation was due to EU directives and regulations. That is, the companies made the investment because they had to. They didn’t do so happily either. In fact, the UK government tried to exempt the private water companies from having to make the improvements but the European Commission denied the bid.

During the early noughties Scottish Water and Northern Ireland water also had higher bills. But during this time Scottish Water invested £1.8 billion into the system, the biggest investment into the water infrastructure in Scotland ever made. Once this period of investment into a decaying water network was finished, Scottish Water began to reduce bills. Whilst Northern Ireland doesn’t currently charge domestic customers for water, it has had higher notional bills than some of the English regions. However it has, in the last few years, had the least increase to bills of all the water suppliers.

These days the difference in bills between the English water companies and Scottish Water are stark. Last year Scottish Water customers paid less than customers of all the private English and Welsh water companies. Prices across the ten English water companies vary greatly. Offwat’s estimated average bills for 2013/2014 are as follows:

South West                 £499

Wessex                        £478

Southern                      £449

Anglian                       £434

Dwr Cymru                 £434

United Utilities           £406

Yorkshire                    £368

Northumbrian              £359

Thames                        £354

Severn Trent                £335

In contrast the cost for Scottish Water customers was £334. In England, the least expensive is Severn Trent, and the most costly for households is South West water, whose average bill for 2013/2014 was an astronomical £499. So high are South West’s bills that the government pays for a £50 reduction for each household! This raises the question, if the private industry needs to rely on government help for its customers – shouldn’t the government simply take over and run the concern directly?

This isn’t the only instance of the industry asking the government to help. Thames Water has long argued that they need to build a new sewer in London to update the Victorian system – a so called ‘super sewer’. The only problem is that, as Thames Water is owned by a private equity consortia and has a high ratio of debt, it can’t finance this itself. The ownership group of Thames Water includes Macquarie Infrastructure Fund (Australia). The China Investment Corporation, and Abu Dhabi Investment Authority. The result of the situation is that the British state has to come to the rescue once again as Thames Water has asked the government to guarantee the risk. This is because Thames water has run up debt since privatisation and now owes around £8 billion. All this despite being able to pay out approximately £1.4bn in dividends between 2006 and 2012. This example brings us to two of the most pressing issues facing the English water companies, the increasing amount of private equity ownership, and increasing debt profiles.

The ownership profile matters for a variety of reasons. Stock exchange listed parent companies would be subject to UK tax. Private equity companies are not open to the same scrutiny, or the same tax regime if based outside the UK. Furthermore, they do not have to comply with any of the disciplines of the UK equity market.

The water companies that are private equity owned seem to be the ones with higher debt ratios. In fact, the privatised industry as a whole now has high debt levels. You can measure a company’s debt levels by looking at what is called the gearing ratio. This is a way of looking at how highly leveraged a company is. It is measured in percentages, and it is traditionally argued that a business that has a gearing ratio of higher than 50% is highly geared, or, highly leveraged, which could be unsustainable. The average level for the water companies has risen dramatically since privatisation and stood at 70% by 2010.

Whilst higher ratios aren’t always a cause for alarm—financing through debt can be cheap—the figures for some of the water companies are worryingly high. It also matters what the money is being used for. If the money is being borrowed purely for capital investment it is different than borrowing to keep paying high dividends, which some believe utilities in general are doing. It is argued by some analysts that organisations which have to borrow to pay dividends are basically self-cannibalising.

Thames water in particular has been accused of using borrowed money to fund too high dividends for over a decade.

This need for high dividends can cause companies to experience trouble with their credit ratings. Indeed, Sir Ian Byatt, formerly of Offwat, himself makes the link between high dividends, high debt, and trouble getting finance. He states: “In practice, many companies, especially the private equity infrastructure funds, have paid out excessive dividends to their owners. In the case of Thames Water, this has damaged its credit rating, leading to requests to Government for guarantees.”

Some analysts believe the most highly leveraged water companies could be in danger of going bust if asked to pay back a significant proportion of that debt. In this sense, English households are now, often unknowingly, part of the somewhat risky financialisation of water.

Another reason for the high debt structure of these companies may be more dubious than simply wanting to finance investment cheaply. There are increasing allegations that the water companies are using debt to lower their tax obligations. Tory MP, Charlie Elphicke, claims that the water companies have used debt interest to avoid tax adding up to over a billion pounds lost to the Exchequer in just three years. He terms the avoidance “staggering”. He singled out Yorkshire Water as a particularly bad example.

Simon Hughes MP gave figures showing just how much tax Yorkshire Water has managed to avoid by using debt to offset payments. He wrote to the Public Accounts Committee back in 2012 stating: “Yorkshire Water…has seen its tax liability decline from £70m in 2009 to a tax credit of £18.9m this year after it took out £1bn from a group of finance companies it owns in the Cayman Islands."

The ownership profile of Water Yorkshire includes Deutsche Asset & Wealth Management, GIC an investment fund backed by the Singaporean government, along with Citi Infrastructure Investors (US based). So yet again we have a complex group of international finance organisations, owning a UK utility that is highly leveraged and pays little UK tax.

In sharp contrast to the complex over indebted structure of much of the English water companies. Welsh water is a non-profit organisation, under which “assets and capital investment are financed by bonds and retained financial surpluses. Financing efficiency savings to date have largely been used to build up reserves to insulate Welsh Water and its customers from any unexpected costs and also to improve credit quality so that Welsh Water’s cost of finance can be kept as low as possible in the years ahead.”

Scottish Water is a publicly owned utility, directly answerable to the Scottish Parliament. It can borrow more cheaply than the English water companies, as government debt is considered safer than private debt. It has invested record amounts of money in recent years into the infrastructure, and once the investment is finished it quickly reduced bills to levels lower than all the English companies.

Whilst analysing UK water provision is an extremely complex task, it is clear that the privatised English water companies are operating in a highly financialised environment in many instances. They stand accused of running up high debts to maintain dividends, and in some cases, such as Thames Water, this has arguably helped damaged their credit rating. They appear to be run in the interests of shareholders and not customers. Not only are English customers paying the highest bills, they also are most at risk from utility companies whose business practices may mean that when it comes to future investment the state has to step in. Indeed, it is this highly leveraged structure, and the increasing amounts of foreign ownership that are most troublesome when examining the water providers.

Water should not be a vehicle for huge, international consortia to get rich. We have two alternative examples of healthier ways to run water companies within the UK. The non-profit organisation set up in Wales, or better yet, a return to full public ownership. The case of Scottish Water shows that this would be the best outcome for English customers.

This article is part of the Modernise: de-privatise series.

Categories: les flux rss