BRITISH COLUMBIA

socred plan an echo of Thatcherism

British neoconservative program
breeds inequality, budget crisis

Continued from page 1

nobody would be doing it (privatization).”

The comment was quoted in a detailed
report on the conference proceedings pre-
pared by Mark Stobbe, executive assistant
to Saskatchewan MLA Ray Atkinson, who
attended the meeting. A copy of the report
was obtained by the Tribune.

Held July 22-24 in Vancouver, the Fraser
Institute conference clearly provided a stra-
tegic discussion on privatization, bringing
several representatives of financial consult-
ing houses and corporations together with
municipal, provincial and federal govern-
ment representatives.

A number of B.C. Crown corporations
took part, including B.C. Rail, B.C. Systems
Corporation, B.C. Assessment Authority,
B.C. Enterprise Corporation and the Insu-
rance Corporation of B.C. A policy analyst
for the Ministry of Social Services and
Housing was also a participant.

Stephen Rogers was a featured speaker at
the three-day meeting and was reportedly
“warmly received” by participants for his
government’s perceived commitment to
privatization. According to Stobbe’s report,
both Rogers and Graham Walker, the
chairman of Saskatchewan’s Crown Man-
agement Board, stressed the need for “‘polit-
ical leadership” in leading the drive towards
privatization.

Rogers told the-meeting that, following
his review of Crown companies and
government services to determine what can
be privatized, he has compiled a booklet
which is 42 inches thick. He also promised
conference participants that the govern-
ment would take action on the list by
Christmas.

In his report, Stobbe noted that the
“favoured method” of selling off Crown
corporations is the British method by which
shares in the newly-privatized company are
advertised widely and sold through banks
and the post office to attract individual buy-
ers as well as corporate and institutional
investors.

“Tn building political support for privati-
zation,” he said, “the pricing of the stock
issue is of crucial importance. It was
recommended that privatizing governments
consciously undervalue share prices when
they are issued. This ensures that stock pri-
ces immediately rise and that all of the
investors immediately make a profit ... By
giving large numbers of people a small share

in the profits of privatization, it is hoped
that they will overlook the large profits
being made by the big investors and any of
the negative social effects that accompany
the privatization.”

That political strategy is the work of Dr.
Madsen Pirie, president of the far-right
think tank, Adam Smith Institute, who was
the keynote speaker at the conference. Con-
sidered the ideological godfather of the Brit-
ish privatization program, his tactics are
thought to be those most likely to be dupli-
cated by governments in this province and
Saskatchewan.

Dr. Pirie recommended that govern-
ments:

@ “Make friends of their enemies” by
offering undervalued shares to the public,
with even more attractive share options to
employees of the company to be privatized;

_© Head off potential opposition by iden-
tifying public objections and incorporating
into the privatization plan some answers to
the criticisms;

© “Privatize the process of privatization”
by contracting out the sale of Crown com-
panies to private investment firms or banks.
According to Stobbe’s report, “this allows
the government to distance itself from any
problems that arise in the course of privati-
zation and helps it to avoid legislative and
political debate on the issue.”

What little Premier Vander Zalm has
revealed of the government’s privatization
Proposals so far certainly indicate that the
government will closely follow the British
example in launching its own privatization
program.

Vander Zalm told a Press conference in
Cowichan Bay Aug. 13 that privatization
would probably proceed through share
sales to the public, with particular emphasis
on special offers to employees.

He also hinted that he was alert to the
need to head off public criticism, assuring
Teporters, “there will be no fire sales... and
we'll do our best to make sure service stand-
ards stay high and that privatization doesn’t
hurt employees or the consumers con-
cerned.”

Just how little those assurance are worth,
either in this country or Britain, was indi-
cated by Dr. Pirie. According to Stobbe’s
report, he was questioned about a deteriora-
tion of service by British Telecom following
the privatization but “simply dismissed (it)
as being irrelevant to judging the success of
the corporation.”

In launching its privatization program

TRIBUNE PHOTO — ERNIE KNOTT

PREMIER BILL VANDER ZALM ... “potentially re-structuring the workings of

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now, the Socreds are hoping to give the
program the appearance of popular sup-
port through share purchase plans as
Thatcher has done. And they are clearly
banking on being able to disarm critics with
the claim — made repeatedly in the busi-
ness press — that Thatcher’s policies have
created an “economic boom” in Britain.

But as recent economic studies — incl-
uding a report from the British govern-
ment’s own Central Statistics Board —
claims of a British boom are grossly
misleading. In fact, privatization, along
with Thatcher’s other neoconservative poli-
cies, has led to a continuing economic
decline and a redistribution of income
towards the wealthy not seen since the
1930s. -

According to economist Mario Iaco-
bacci, writing in the Financial Post June 22,
Britain has lost 1.9 million manufacturing
jobs since Thatcher came to office in 1979.
Manufacturing output is still four per cent
below the 1979 level while unemployment
has grown steadily to its current level of 11.2
per cent — the third highest among the 21
countries covered by the Organization for
Economic Co-operation and Development.

In addition, there has been a capital out-
flow from the country — including money
from such recently-privatized companies as
British Gas — as British companies finance
mergers and takeovers in the U.S. and else-
where.

What is undergoing a boom is the rate of
corporate profits. But the much-vaunted
privatization drive that was to put more
wealth in the hands of ordinary people has
in fact had the opposite effect.

According to the report issued by the
Central Statistics Board last month, the
long-term trend towards greater equality of
wealth since World War II, has been rev-
ersed since Thatcher came to power. Under
her government, the share of wealth taken
by the top 20 per cent of income earners has
risen to 49 per cent while the per cent of
wealth owned by those at the bottom 20 per
cent of the income scale has declined to 6.7
per cent.

The report stated: “Both income and
wealth figures are now pointing to a sub-
stantial change in the post war, and interna-
tional, trend towards greater equality.”

Not yet evident but expected within two
years is the effect of the Tories “selling off
the furniture to pay the bills,” as one econ-
omist has described the privatization pro-
gram. The British Tories hope to get some
$21 billion into the budget from the sale of
Crown companies — but the infusion of
cash is a one-shot deal. Once the money is
spent — and the growing British budget
deficit virtually assures that it will be spent
quickly — the country will face a fiscal cri-
sis with no profits from Crown companies
to provide any income.

That crisis would undoubtedly prompt
the Thatcher government to slash public
spending on such services as the National
Health Program, education and unem-
ployment insurance still further.

As a result of 12 years of Social Credit
government policies, British Columbia is
already well down the road travelled by the
British government. Blocking the privatiza-
tion drive will be crucial to ensuring that we
go no further in that direction.

PACIFIC TRIBUNE, SEPTEMBER 2, 1987 e 3