For some time now I have been struggling to find an analogy for what has been happening to Britain. I finally think I have found it. What the Glazer brothers did to Manchester United is what those of wealth and power have done to the entire country.
For those who don’t know much about the squalid tale of the Glazers it goes something like this. A proud football club that was one of the best in the world got bought by people who were described as foreign investors. Yet there was very little real investment. Large amounts of money were borrowed to buy the club and then as soon as it was bought the new owners simply voted to put that debt onto the club’s balance sheet. Having loaded the club with debt they then proceeded to pay themselves large sums in dividends.
The business fell into a long gradual decline. Facilities like the ground were neglected for over a decade. A stadium which was once state of the art began to crumble into an embarrassing state of decay. After taking from the operation all they could the Glazers are now selling it on to new trophy owners and walking away with billions. The club has been sucked dry and can no longer rely on its status as one of the world’s greatest. Loyal supporters watched powerlessly for over a decade as their passion for the club was treated as a commodity to be exploited.
The contagion spreads
The tale of what has happened to our entire country is similarly squalid. It goes something like this. The UK once had major manufacturing industries that could compete around the world. Then oil and gas reserves were discovered in the North Sea. Suddenly more money could be made from extracting natural resources than from running productive business. Hedge funds moved in and started buying up large parts of the country.
Basic services such as water were taken from the public and sold for far less than they were worth. They ended up in the hands of owners who proceeded to load huge amounts of debt onto their balance sheets so that they could take out dividend payments that massively exceeded realistic earnings. Much of that money was then squirrelled away abroad.
Instead of getting new investment and a modernisation of a vital public service it was systematically stripped of value. Now we are left with a service that we all have to pay for which is so run down that it can’t even obey the rules about not releasing sewage into our rivers. Over £50bn (yes, you read that right, billion) has been loaded onto the balance sheets and mostly used to pay dividends.
The private operators have now admitted that they’ve made mistakes but told us that the only way to fix them is to put prices up for customers – again. Care homes, prisons, railways and parts of the health service got much the same treatment whilst once proud services like the NHS have been allowed to crumble into neglect.
From productive economy to rentier economy
Banking and money laundering became more profitable than actually producing anything and the very wealthy people who made their money in the City of London used some of it to buy influence with MPs and to run political campaigns to prevent the public from controlling their behaviour. One of those campaigns was called Brexit. People who shifted their money into offshore tax havens lectured us about making Britain great again. They weakened the country for decades whilst failing to pay their fair share of tax.
Despite all the money that was generated by pumping out North Sea oil and gas the UK has the highest level of debt to GDP since the early 1960s and the government owes more money than the whole country earns in an entire year. The ordinary people who keep the country going are finding it harder and harder to make ends meet. Real wages haven’t gone up for over a decade. Mortgages are horrifically expensive and finding decent rental property is incredibly hard. Meanwhile food prices keep shooting up yet our farmers receive a pittance for the things they work so hard to grow.
Contrast that with the position of those who have helped to suck the country dry. Finance companies persuaded government to weaken legislation and we got the 2008 financial crash. None of the speculators who made fortunes out of the boom and bust had to pay the money back. They are already back to their old ways of persuading government to weaken legislation so they can profit from risks that they don’t take responsibility for.
Almost every area of government is similarly exposed to pressure from wealthy lobbyists whilst the views of the ordinary person count for little. Building companies lobbied for light touch regulations and made billions as a result. The country got the Grenfell fire and a huge bill for repairing other buildings. Health service suppliers lobbied for easy and profitable services to be contracted out. The NHS got left with the costly and difficult work.
Loyal supporters of public services such as teachers and nurses have been left feeling like mugs. Instead of being proud of doing worthwhile work many just feel they are constantly letting down patients and pupils. They are working with levels of stress that go way beyond what anyone should be expected to cope with. Instead of being rewarded for their loyalty they find themselves being exploited.
Transformation from crisis?
It has taken decades to hollow out and damage public services. It will take decades to put it right. You can’t fix overnight a housing crisis that has its origins back in the days when they first decided to sell off council houses without building any replacements. Nor is it possible to repair crumbling buildings and crumbling morale in the NHS in a few months. Worst of all this work on restoring the fundamentals will have to be done at a time when we are fighting a losing battle with climate change, wildlife extinction and plastic pollution.
Fortunately, it is often from moments of great crisis that great transformation is achieved. That can only happen if there is a fundamental change of approach. What is needed is firm control over extractive capitalism which takes without giving. Accompanied by a lot more help for those who genuinely support the country. It is time to kick out Glazer-style cynicism from our country. Before we go even further down the league table.