It is by offering a progressive economic alternative to austerity that Labour can best reach out to a broad coalition of voters.
Shelly Asquith is President of the University of the Arts Students union (pc)
The recent sell-off of Royal Mail was rightly described as selling off £10 notes for a fiver. This gets to the heart of whose interest privatisation serves.
On Royal Mail, the public lost out. The winners are the hedge funds who have made a windfall for doing precisely nothing. Investment bank JP Morgan even told the government
before privatisation that they could sell the postal business for £10bn, more than twice as much as the government received.
This kind of rip off is part of the public’s everyday experience of the privatised industries – be it soaring energy bills or being crammed onto expensive commuter trains. It explains why polls show that a majority
want them taken back
into public ownership.
Ed Miliband was right to speak out against soaring energy costs and in standing up to the ‘Big Six’. These companies seem to believe they can constantly undermine peoples’ living standards to make profits. Miliband’s pledge has proven popular.
Building on this and taking on other vested interests and failed privatisations would no doubt further strengthen Labour.
Perhaps the next great privatisation scandal will be the sell-off of the Student loan book. Treasury secretary Danny Alexander has already announced that this will be sold off
, as part of a plan to raise £15bn in the sale of public assets. Millions who took out student loans between 1998 and 2012 will be affected.
This will be yet another bonanza for the bankers at the expense of ordinary people. To ensure a privatised loan book is profitable for its new owner, a secret report
for the government, written by Rothschild Bank, has proposed retrospectively increasing the cap on interest on student loan repayments as one option. Scrapping it altogether is another option.
Graduates would face years more of repayments on their loans – in blatant violation of the agreements they entered on getting the loans.
Alternatively, the report says that the government could underwrite the risk using the public finances to guarantee returns to private investment. The Guardian says the secret report is totally explicit about whose interest this would serve: “The [financial] risk is best taken by government…second best is it being taken by graduates…and lastly by investors….”
Last month, students organised a day of action against it. Public opposition
is already mounting
to the sell-off. This is a clear case where Labour can win broad support by taking a radically different approach on the economy to the Tories. Ruling out this sell off would defend living standards of 3.6 million graduates in England alone.
Opposing the student loan privatisation will be one of the ideas discussed at the Labour Assembly Against Austerity on 9 November. This will reject cuts and look at alternatives to Tory austerity that Labour should advance in its next manifesto to stimulate growth and jobs, and to build on Ed Miliband’s policy agenda to reach out to a broad coalition of voters whose living standards have declined under the coalition.