The Socialist 26 January 2001

Put the Fat Cats on Trial

Put the Fat Cats on Trial

Stop the privatisation disaster: PUT THE privatised rail bosses in the dock! That's the message from The Socialist and one that's coming loud and clear from the travelling public after last October's fatal Hatfield crash.

Hackney Council Crisis

Workers strike back at jobs threat HACKNEY COUNCIL workers are holding mass meetings as we go to press to discusss three more days of strike action against council attacks on 29, 30 and 31 January. Chris Newby

Luton: Turn pressure into strike action

SATURDAY'S MAGNIFICENT 10,000-strong demo of Luton car workers, their families and other supporters reflected the anger people feel against the multinational companies who threaten to close down whole towns after the first nervous twitch of their shareholders.

 

Reports: Show of strength from car workers

Huntingdon Life Sciences

Big Business rescues a friend: ANIMAL TESTING at Huntingdon Life Science (HLS) had gone on for many years before it began attracting attention. Protests about the site began after an undercover TV reporter catalogued incidents showing abuse of animals during experiments. Ken Smith

Scotland - an exchange of letters

LAST WEEK we reported in The Socialist of the International Socialist Movement in Scotland’s decision to abandon the Committee for a Workers’ International - the international socialist organisation to which the Socialist Party is affiliated...

Much blood for oil

10th anniversary of the Gulf War:  TEN YEARS ago a US-led coalition of military powers went to war with Iraq, marking a new period of instability on a world scale.  Niall Mulholland.

Privatised power blacks out California

FOR THE first time since World War Two the state of California imposed a black out of electricity supplies. The state governor, Gray Davis, announced a state of emergency which meant a million people in the San Francisco Bay area had their power cut. It was only restored after emergency supplies were obtained from Canada, bought by public funds.

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Stop the privatisation disaster

Put the Fat Cats on Trial

PUT THE privatised rail bosses in the dock! That's the message from The Socialist and one that's coming loud and clear from the travelling public after last October's fatal Hatfield crash.

Transport Police are compiling evidence on those responsible - senior executives at Railtrack and maintenance contractors, Balfour Beatty. But don't expect the Crown Prosecution Service to pursue corporate manslaughter charges - especially this side of an impending general election.

In November 1999 contractors Balfour Beatty reported to Railtrack the rail defect that led to last October's fateful Hatfield crash. But nothing was done to repair the faulty line.

A public inquiry into Hatfield would reveal the failures of the privatised rail system as the previous Paddington and Southall inquiries had done. But an inquiry been ruled out by this pro-privatisation, pro-big business government, anxious to avoid controversy before the election. Clearly, New Labour is only concerned about being re-elected rather than obtaining justice for the victims' families and proper safety for the travelling public. Yet even 100 MPs agree with nationalisation of Railtrack.

Privatisation has been a disaster for people's lives not only on the railways but as we report in this week's Socialist:

But New Labour blunders on, determined to pursue the previous Tory agenda of handing over the country's public assets to the private sector to profit from.

London Underground and the National Air Traffic Service both face being privatised. Industrial action linked to mass community protests can halt this profiteering juggernaut and ensure the renationalisation of the privatised industries.

Renationalisation under democratic working-class control and management is the necessary first step to properly investing in public services to meet people's needs rather than the mega-profits of a few fat cat company directors.

 

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Hackney Council Crisis

 

Workers strike back at jobs threat

 

HACKNEY COUNCIL workers are holding mass meetings as we go to press to discuss three more days of strike action against council attacks on 29, 30 and 31 January.

Chris Newby

Hackney workers need to follow up the marvellous one-day strike on 20 December because some workers face the sack, others face cuts in their weekly pay.

All remaining workers would see their redundancy entitlement reduced to the statutory minimum - some with 20 years service could find any future redundancy package slashed from £20,000 to £6,000.

The unions must not only fight all attempts to cut conditions but also forcibly oppose job losses. Those workers under threat of losing their jobs mustn’t be left to struggle in isolation. The unity shown on 20 December must be maintained.

In an attempt to develop unity and democracy the following motion, moved by Socialist Party member Jude Ritchie (UNISON convenor, Education) was passed with a clear majority at a 70-strong all-union shop stewards’ meeting.

"Any significant proposals put to management by the negotiating committee should be ratified by a stewards’ conference or a mass meeting of the members".

As Jude Ritchie says: "People are willing to strike. They’re not prepared to see 500 of their colleagues lose their jobs. The council also threaten to serve a 90-day notice on 1 February to change terms and conditions. This would mean workers who keep their jobs return to work on dramatically reduced terms and conditions at the end of the 90 day notice.

"The one day strike in December was massively successful with over 90% of workers participating. Yet councillors still ignore the unions’ and workforces’ opinions. It’s only by taking further strike action that we can force them to listen to reason. I urge everyone to come out from 29-31 January."

Hackney UNISON, recognising the importance of a strong campaign in the community have produced leaflets appealing to both workers and the community. Council workers, Socialist Party members and community activists have leafleted most of Hackney’s 27,000 council residents to build support for the strike.

A successful three-day strike in Hackney will be a big boost in the campaign to defend jobs and services in Hackney. It will also be a huge inspiration to all those other public sector workers around Britain fighting for decent public services.

 

 

Socialist Party public meeting: 

Monday 29 January, 7.30pm

M.O.T.H. Club, Valette Street (near Hackney Town Hall)

Speakers: Brian Debus, Chair Hackney UNISON, Carlene Edwards- Unison shop steward Libraries, Bill Mullins- Socialist Party Industrial Organiser

Chair- Jude Ritchie

 

 

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Turn pressure into strike action

SATURDAY'S MAGNIFICENT 10,000-strong demo of Luton car workers, their families and other supporters reflected the anger people feel against the multinational companies who threaten to close down whole towns after the first nervous twitch of their shareholders.

The delegations of General Motors (GM) workers from Ellesmere Port and plants in Germany, Belgium, France and Spain showed there is a basis for organising European-wide strike action to stop GM's plans in their tracks. The messages of support read out from the platform gave a small inkling of the widespread opposition within the GM plants in Europe, the USA and Canada against the company's "retrenchment" plans.

But what strategy was proposed by the union leaders at the rally after the demonstration? They have promised a European-wide day of action on 25 January and even though there was an expectation that something would happen in Luton and perhaps Ellesmere Port, little else concrete was proposed from the platform. It was left to a local radio DJ who was chairing the rally to say everyone should go sick on the day!

Tony Woodley, the chief transport union negotiator for the car industry, talked about the traumatic year for the industry with the closure plans for Dagenham, the threats still hanging over Longbridge and now Vauxhall. He complained how the Luton closure demonstrated the role of a multinational like GM and revealed the nature of globalisation. It was he said, quick cheap and easy to sack workers in Britain compared to elsewhere.

He pointed out that GM have made £1.2 billion profit from Britain in the last 12 years and alleged that they have abused taxpayers' money and the wages of the workers to get that. "GM have acted illegally and immorally".

The union leaders strategy seems to solely consist of holding out for mass pressure to change GM's collective mind. But what is required is a call to arms, including strike action, if the pressure is to have any effect. Workers at Luton and Ellesmere Port need to build on the success of the demonstration to pressurise the union leaders to prepare such effective action.

GM are proposing these plant closures to impress their investors as they prepare for a new recession. Already there has been a big fall in the world and US car market.

Trade unions both in Britain and across Europe organising in GM plants have a responsibility to explain what a forthcoming recession will mean for workers' jobs and conditions. They should be campaigning for the nationalisation of all GM plants under threat of closure, whether in Britain or any European country.

They should demand to open the accounts of these multinational companies. The records of where the profits and government subsidies have gone over the years should be opened up to public scrutiny.

The car bosses are preparing for the future, it is time the European unions did so too by effectively mobilising the anger that exists among car workers.

A socialist programme of nationalisation of the industry under workers' control and management, along with and democratically controlled planning on an all-European basis could meet the transport needs of society at large. This would be widely supported by workers everywhere.

 

 

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Show of strength from car workers

 

THE DEMONSTRATION became more upbeat as it went along and felt the support from the Saturday shoppers, many of whom joined the demo. By the time everybody was funnelled into the centre of the town there was a strong feeling of collective solidarity.

At the rally you could feel the sense of betrayal by the company. Every time anyone on the platform mentioned Vauxhall’s promise from two years ago to keep production going in Luton there was a roar from the crowd. Workers listened intently as the platform speakers spoke about GM's broken promises.

Messages of support from GM plants all over the world, including Brazil, Italy, Australia, USA and Austria were met with cheers from the crowd.

Steffen, part of the delegation from the Opel plant in Bochum told The Socialist: "We have come from Bochum today to organise solidarity to fight together against General Motors' plans for closures and sackings. In Germany we are holding rallies on the day of action on 25 January and we are going back after this demo to prepare for that. Workers in Germany are angry at the bosses trying to divide and rule between the British and German workers."

Assembly line workers from the plant, speaking from the platform, were impassioned in their demands that GM be made to change their minds. One of them said why should they be allowed to get away with it "we have done everything they asked of us, we increased production and improved quality but it seems this isn’t enough."

One woman said how three generations of her family had worked for Vauxhall and "now after 95 years of Vauxhall in Luton they want to close us down"

The union leaders who spoke made angry speeches about the events leading up to the demo. Bill Morris for example demanded a parliamentary enquiry into what happened to all the government subsidies that the taxpayers have given to GM in recent years.

Tony Woodley's main argument was to weakly challenge GM about over-capacity: "It's not uncommon as one model like the Vectra is run down, there is a gap before the next model comes along. There is no over-capacity in the long term but what happened in this case was the GM shares on the New York Stock Exchange fell from $90 to $50 and the GM board wanted to make a gesture to impress the investors." They promised a new model but instead have announced enforced redundancies. "There has been no consultation at all. This is the unacceptable face of globalisation"

Other union leaders like Ken Jackson of the AEEU made a plea to protect the manufacturing base of the UK economy.

But again and again the union leaders just begged GM to honour their agreements. TUC leader John Monks even called for a national campaign for proper corporate standards of behaviour!

The workers there know they're being betrayed by the multinationals, but many wanted to see more concrete plans from their union leaders for effective action.

 

  • No job losses, no asset-stripping

  • Open the books, where have all the profits and subsidies gone?

  • Organise a Europe-wide GM strike to defend jobs

  • Nationalise the car industry under democratic workers' control and management.

 

 

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Huntingdon Life Sciences

 

Big Business rescues a friend

 

ANIMAL TESTING at Huntingdon Life Science (HLS) had gone on for many years before it began attracting attention. Protests about the site began after an undercover TV reporter catalogued incidents showing abuse of animals during experiments.

Ken Smith

Other animal-testing institutions have probably perpetrated similar abuses against animals, despite supposedly strict government laws about testing on animals but HLS became a focal point of animal rights protests.

Undoubtedly, concern for animal welfare is mixed in with an anti-corporate consciousness. HLS isn't simply a research centre where results are beneficially turned over to cure human conditions. It's primarily a contract company, testing on animals to assist big corporations in agribusiness, chemicals etc.

This angered those seeking to get the company shut down. That's why the campaign attracted such active support. Additionally, HLS - like most if not all companies in this field - is very secretive about its contracts, about what it actually does and for whom.

HLS provides a vital service for big business. Look who's lining up to support it. From The Royal Bank of Scotland, to former Prime Minister John Major, the current government and a mysterious American backer, big business interests are clearly the keenest to keep HLS open.

Despite HLS breaking government testing regulations where two workers were successfully prosecuted - it's been allowed to continue its animal testing without needing to justify its methods or its business interests. That is particularly why New Labour has rushed to its defence.

Companies like HLS not only treat animals with barbaric contempt, they treat humans badly as well.

HLS is prepared to let all its staff continue working under very stressful conditions, because it won't outline what research it's doing and who it has lucrative contracts with. Many of these companies have often in the past jeopardised their own workers' health and safety, making them work with hazardous substances etc.

But multinational science companies aren't just indifferent to their own workers' wellbeing. In Third World countries the population is often used as human guinea pigs. Last week Pfizer, the multinational drug company, was accused of tampering with medical test documents after allegedly 'unsafe' tests on children in Nigeria in order to get a certificate allowing distribution and use of a drug.

The Socialist believes that these profit-hungry multinationals should be nationalised under democratic working class control and management. Scientific research should be controlled through government agencies. A proper national scientific survey could then be conducted to find out which tests require use of animal testing and the circumstances under which it could happen.

Animals and humans are abused by big business. It's justified as being in scientific interests when it's actually in the corporation's profit interests.

Many scientific staff have no option other than to work for these profit-sucking companies - their safety and jobs need to be protected. The best way to do that is to nationalise these companies under working class control and management to continue with ethical scientific research or to fund alternative production at these plants to guarantee workers' jobs and income.

New Labour has rushed to defend these companies, their bosses and large shareholders. It has done nothing to properly defend the interests of the majority of staff working in these industries or to answer the concerns of the protesters.

 

 

 

 

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Scotland - an exchange of letters

 

LAST WEEK we reported in The Socialist of the International Socialist Movement in Scotland’s decision to abandon the Committee for a Workers’ International - the international socialist organisation to which the Socialist Party is affiliated.

ISM public representative Tommy Sheridan MSP has since sent a letter to Socialist Party general secretary Peter Taaffe criticising a response to the press from CWI members.

We print abridged versions of the exchange of letters below.

 

 

Dear Peter,

It is with a mixture of sheer astonishment and deep disappointment that I feel compelled to write this letter to condemn your actions and those of the CWI leadership in releasing the attached press release to the enemies of the socialist movement internationally and the working class in general.

We have engaged in a very robust debate over tactics, strategy and programme within the CWI during the last two years. You have politically attacked and criticised the Scottish leadership and we have in turn defended ourselves and criticised the CWI leadership. This discussion and debate were sometime heated but always took place in a democratic and comradely manner and atmosphere. It was very much a family affair.

Unfortunately you and the CWI have now committed a cardinal sin within the socialist movement. You have put our disagreements into the hands of the anti-working class, anti-democratic and anti-socialist press and media.

They exist to distort and denigrate the ideas of socialism and often socialists individually. Yet, the so-called leaders of a socialist International have placed our discussions and disagreements in their grateful laps.

I note your pathetic complaints when one of these grateful capitalist lapdogs "distorts" what you had to say. For goodness’ sake, Peter, what did you expect? You are certainly not wet behind the ears. This press release was a serious mistake which will win you no friends in the socialist movement internationally and will probably convince the 75% of the CWI members in Scotland who voted to leave that they were right to do so.

We had the debate, Peter. You simply lost the argument... you and the CWI stand condemned for distinctly anti-socialist and anti-labour movement actions. You don’t run to our enemies when you fall out with socialists Peter. They are not our friends and never will be. We may not be in the same organisation any longer but we should still be allies in the struggle for socialism generally. You should be ashamed of your actions.

Yours in disappointment

Tommy Sheridan.

 

 

 

Dear Tommy,

I suppose we should be grateful that you have, at last, replied to letters and statements from myself and the CWI. As you will recall, I wrote a private letter on 4 July, 2000, concerning what I consider were mistaken views on the issue of Cuba in your column in an "anti-socialist" newspaper, the Daily Record. I am still waiting for a reply.

Similarly, we wrote on 30 August, asking for clarification of your ambiguous remarks in the Scottish edition of The Observer, which hinted that SSP MSPs would be prepared to back an SNP administration in the Scottish parliament. We still await a reply.

You are mistaken in believing that I and the CWI leadership released the press statement which you are objecting to. It was the Scottish comrades who support the CWI Majority who took that decision then I was contacted by the Daily Record reporter and made my remarks, some of which were misreported.

I want to make it clear, however, that in no way do I or the CWI leadership dissociate ourselves from the decision to issue the statement or its political contents. But like Shakespeare said you "doth protest too much."

It was you and the ISM Majority who, via the net, broadcast to the world the news that you had departed from the CWI. This was done before the ISM Minority comrades issued their press statement.

... According to you, we have "now committed a cardinal sin" for allowing our views to be expressed in the "anti-democratic and anti-socialist press and media".

But, Tommy you wrote 80 articles in your weekly column for the "anti-socialist press and media". Moreover, you have not hesitated on TV and in press statements to criticise other socialists such as Arthur Scargill and Dennis Canavan. You criticised the latter for his attempt to return to the Labour Party, despite earlier describing him as a "principled socialist"... are you not guilty of double standards?

On many occasions when we were members of the Labour Party, we were forced to publicly express our differences with the right-wing Labour leaders. And occasionally, in interviews with the capitalist press during the witch-hunt against Militant in the 1980s, we also expressed differences with others on the Left. Was it "anti-socialist" or unprincipled to do this, as you suggest in your letter?

I am afraid, Tommy, that neither the history of the working class, socialist and Marxist movement, nor our recent experiences support you on this issue. Marx wrote regularly for the New York Tribune in the 19th century. Engels contributed a number of articles to the English capitalist press.

Lenin wrote an article on Marx and Marxism for the Liberal populist publication Grannat’s Encyclopaedia Dictionary. Trotsky wrote an article on Lenin in 1926 for the reactionary Encyclopaedia Britannica.

... Moreover, the Left Opposition and Trotsky were compelled to answer the Stalinists hundreds and thousands of times in the various capitalist newspapers throughout the world.

...The capitalist press undoubtedly seeks to bend and distort what is said in disputes within the socialist and Marxist movement. But this sometimes has to take second place to the need to publicly explain – to as many working-class people we can reach – the basis of disagreements which, unfortunately, sometimes develop.

Up to now, we have always sought to find agreement with you through private discussions, debate and correspondence. Unfortunately, as stated earlier, you refused to reply or even explain the basis of your differences with us...

I was surprised that you now write that the debate was heated but was conducted in a "democratic and comradely manner". Yet you and your supporters have consistently accused the CWI of being "undemocratic", of "refusing to listen". In reality, we have listened but profoundly disagree with the political positions of yourself and your supporters.

You say our disagreements were "very much a family affair". But, Tommy, you have walked out of the "family". We wanted to keep you and your supporters within the ranks of the CWI, because we were confident that through debate, discussion and experience we would convince many of the comrades of the correctness of our position.

You, unfortunately, publicly split with the CWI and we therefore had no alternative but to explain from our point of view why this has taken place.

...You claim that you won and we lost the debate in Scotland. I am extremely proud to be associated with the 25% of CWI members who defended the position of our International against you and your supporters. However, as you are aware, there is not one other group or section of the CWI (with a presence in 34 national countries) which supported your position.

One of the most astonishing, if not arrogant, statements in your letter is that "you and the CWI stand condemned for distinctly anti-socialist and anti-labour movement actions". So public criticism of your position and those of the ISM leadership is synonymous with "anti-socialist and anti-labour movement actions"? Don’t you think this is wee bit intolerant and lacks a sense of proportion, Tommy?

Neither the CWI nor I are "ashamed" of our actions. We have always sought to tell the truth in relation to working-class struggle. We will collaborate with all who genuinely fight to defend working-class people and struggle for socialism.

But at the same time, we will never hesitate to make constructive and fraternal criticisms of those ideas, policies and actions we believe will weaken the struggle for socialism. Without political clarification the working class will never be able to change society.

Yours fraternally,

Peter Taaffe

 

 

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Much blood for oil

 

10th anniversary of the Gulf War

 

TEN YEARS ago a US-led coalition of military powers went to war with Iraq, marking a new period of instability on a world scale.

Niall Mulholland.

This "mother of all battles" followed the invasion of oil-rich Kuwait by Saddam Hussein’s forces on 2 August 1990. Saddam’s regime was and still is one of the most oppressive on the planet, but the fate of the people of Kuwait counted for little in the schemes of the big Western powers. After all, successive British, French and US governments had bankrolled a massive military spending programme by the Iraqi regime, which created the fifth largets army in the world. Furthermore, these powers merely wrung their hands when Saddam carried out murderous gas attacks on the Kurdish minority in northern Iraq.

The Gulf War was primarily a war over oil. By invading Kuwait Saddam gained control of 20% of OPEC oil production, which allowed him to apply pressure on the lifeblood of Western capitalism. Saddam clearly believed, as "America’s man", that the powers would acquiesce to the invasion. But the US could not tolerate such a direct threat to its interests, and especially not in the unstable Middle East.

Following the collapse of the Stalinist regimes in the Soviet Union and Eastern Europe after 1989, the US and main powers were able to take unprecedented action against Saddam’s challenge. The UN Security Council, for the first time in its history, unanimously carried a resolution that implemented a total embargo of Iraq (except food).

On the other hand, the invasion of Kuwait evoked huge sympathy from the impoverished masses throughout the Arab world, despite the monstrous nature of Saddam’s regime. At last, it seemed, someone was standing up to the western powers and big business.

Test for the Left

THESE EVENTS posed a real test for the Left in Britain and internationally. The Labour Party leadership of Neil Kinnock wasted no time in fully backing the warmongering Tory government.

In contrast, Militant, the forerunner of The Socialist, along with the worldwide sections of the Committee for a Workers’ International, opposed this blood-for-oil war. We explained that the coalition war machine was assembled to uphold and reinforce the power of the US ruling class and that of the main powers. We correctly predicted that a coalition victory would not bring democracy to Kuwait, Iraq or anywhere else in the Middle East. Imperialism would use a victory to try to cow the Arab masses and indeed the peoples of Latin America, Asia and Africa.

Socialists also called for the Iraqi workers, peasants and national minorities to overthrow the Saddam regime, and for the establishment of a socialist confederation throughout the region, which would allow genuine democratic and national rights. These ideas found a positive response in the broad anti-war movement that developed worldwide.

The overwhelming forces on the side of the coalition combined with the regime’s lack of internal support resulted in a bloody rout of the Iraqi army. The rapid collapse of Saddam’s war effort was a clear reflection of the internal weakness of his regime. Over 100,000 Iraqis were killed or injured in the 100 hours of the land war. The US-led coalition suffered only 300 casualties.

The coalition powers stopped short of marching on Baghdad and deposing Saddam. They correctly feared this would result in a drawn out conflict. The shaky war coalition would have collapsed and the western anti-war movement would have mushroomed.

A few weeks after the ending of the war Saddam unleashed his tanks against the Kurds in the north and oppressed minority Shia Muslims in the south of the country. They had been encouraged to revolt when it suited the Western powers, but now with Saddam out of Kuwait the West feared the dismemberment of Iraq and the strengthening of Iran as a regional power.

This was a short-term victory for the West. Ten years on and Saddam Hussein still presides over a "rogue state". In fact, Saddam has seen off many world leaders, including, George Bush (senior), Margaret Thatcher and John Major and now Bill Clinton.

A deadly legacy

THE GULF War may have ended but a ‘secret war’ against the people of Iraq continues. One legacy of the 1991 conflict - the huge use of depleted uranium shells – has resulted in thousands of children and adults dying from cancer and leukaemia.

During the last decade the US and British air forces have repeatedly bombed Iraqi targets, killing army personnel and civilians, supposedly to force Saddam to comply with the UN’s ‘no-fly zone’ policy. Yet Turkish fighter planes have freely attacked Kurdish people living in these zones.

International sanctions still apply to Iraq, with devastating human consequences. According to Unicef, a UN agency, the blockades have contributed to the deaths of 500,000 children since the Gulf War, and 800,000 are chronically malnourished. Clinton’s key foreign aide, Madeline Albright, argues that, "We think the price is worth it"! This – the deliberate genocide of a people - is the real meaning of the ‘New World Order’.

Under the so-called ‘oil-for-food programme’, Iraq’s oil revenue is held in a UN managed account with 30% being taken for "reparations". Imports are subject to approval to by the UN Security Council, which means, for instance, that equipment vital to Iraq’s electricity and water supplies is held up. This results in frequently contaminated water and regular electricity cuts. Hospitals also have to cope with only rudimentary equipment because of sanctions. No wonder that 108 babies out of 1,000 will die before their first birthday.

Of course, none of this touches Saddam or the ruling clique around him. He has managed to consolidate his position while the desperate population are busy trying to avoid starvation. Teachers and civil servants earn, for example, around 50p a week.

The US is hell-bent on imposing its will in the Middle East, a region much more volatile than ten years ago. However, opposition to sanctions and bombings, from youth and working people across the world, is growing and seriously threatens the continuation of these policies.

A new mood of radicalism and anti-imperialism is developing throughout the Arab world. This will lead to revolutionary explosions against local dictators like Saddam, but also movements against the western capitalist powers. In no small way this will be due to the Gulf War and the barbaric crimes committed against the Iraqi people ever since.

 

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Privatised power blacks out California

 

FOR THE first time since World War Two the state of California imposed a black out of electricity supplies.

The state governor, Gray Davis, announced a state of emergency which meant a million people in the San Francisco Bay area had their power cut. It was only restored after emergency supplies were obtained from Canada, bought by public funds.

On Wednesday 17 January the state legislature approved a $400 million stop gap purchase of electricity supplies. Davis, using the state of emergency, ordered the spending of $1 billion to purchase out of state energy and supply it the private utilities. This has enraged many Californians who see the Democrat Governor as effectively feather-bedding those responsible for the crisis - the privatised supply utilities, Southern California Edison (SCE) and Pacific Gas and Electric (PG&E).

Davis has received more than $700,000 in political contributions from SCE and PG&E.

THE POWER crisis stems from the privatisation/deregulation of the industry in 1996 and is a graphic illustration of capitalism's failure to meet people's needs.

Demand for electricity has grown steadily in the last decade with the development of the hi-tech industries of the 'new economy'. The prevalence today of computers in shops, businesses and homes and the accompanying air-conditioning units, has led to a surge in demand for power.

But the private utilities have not invested in any new generating plant in the 1990s. Many of the power plants are over 30 years old and in need of repair; as much as 25% of the grid is out action at any one time.

The utilities cite the state's environmental laws as a disincentive to build more generating capacity. What they are really saying is that it's not profitable to build cleaner power stations. As a result on 18 January the state had only 55% of the power it needed.

But buying in power from suppliers in other states has been costly. Not least because the growth in the economy and the population has increased demand for electricity throughout the US. And cold, dry weather in the Pacific North West has caused a water shortage on hydro-electric dams.

As the demand for power has outstripped supply, wholesale electricity prices have soared tenfold (producing a handsome profit for the power generators). The utilities passed on the costs to consumers but public outrage forced the state's politicians last August to cap prices. However, in San Diego, which did away with price caps, prices tripled.

THE SCE and PG&E utilities debts have now grown to monster amounts, owing at least $11 billion. Because of these debts PG&E may have to cut off natural gas supplies to customers adding to the energy crisis.

On 16 January SCE defaulted on $600 million of debt repayments and on 17 January PG&E defaulted on $76 million causing ructions in financial markets. Ratings agencies have downgraded their debts to junk bond status.

An early casualty was Bank of America - the country's biggest bank - whose unsecured loans to the utilities caused the heavy selling of its shares, the trading of which had to be temporarily suspended on 5 January.

The utilities are demanding a lifting of the price caps. Already California's Public Utilities Commission has approved a price hike of 9% for domestic consumers and between 7%-15% for businesses - effectively making the public pay for the state's failed deregulation policies.

The power crisis is causing a major economic and political crisis. According to The Independent (8/1/01): "The fiasco threatens to kill growth in the United States' most dynamic state economy and possibly send shares on Wall Street crashing".

Unemployment is set to rise as electricity prices soar. PG&E and SCE have started to fire or lay-off workers. Mark Zandi, chief economist at Economy.com, predicts a downturn in the Californian economy if the power shortages last for three more weeks.

President George Bush's incoming federal administration has offered no solutions. But the crisis is spreading to other states whose constituents face rising electricity prices because utilities are having to divert energy supplies to California.

The energy crisis shows the madness of the capitalist market economy and how the profit system is unable to meet people's needs. Socialist Alternative, the Socialist Party's sister organisation in the US, is campaigning for the nationalisation of the power companies under democratic workers' control and management as the first step toward supplying cheap, continual and environmentally friendly energy.

 

You'll always find more in The Socialist

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