Somebody must lose when investors gain

He is an unlikely champion of the public sector. Stephen Byers, the
former transport secretary who spun himself right out of office,
has begun to back deferentially into the limelight again.

Last week, in the first of four speeches to the think tank the
Social Market Foundation he warned Downing Street that Labour has
to set limits on involving the private sector in the modernisation
of public services. Eureka!

It was Byers, of course, who described as “wreckers” those in the
trade unions who raised legitimate questions about the tone, focus
and impact of public service reform when the private sector is the
ringmaster. Now Byers is saying that, first, there must be no
charges for essential services such as health and education.
Second, the private sector has to be limited and public interest
must come before the interests of shareholders.

Byers’s reasoning for this change of heart is that party activists
are disturbed (as if they haven’t been for the past six years) and
the opposition is making reform projects such as foundation
hospitals difficult to achieve.

A third reason is that placing the profit motive at the core of
care has the same devastating effect on the public service ethic as
flesh-eating bacteria on a human body. It destroys.

A few years ago, Vivien Stern, former director of the National
Association for the Care and Rehabilitation of Offenders, described
a conference in Texas, directed at investment managers. It was
entitled Privatising Correctional FacilitiesÉMaximise
Investment Returns in this Exploding Industry. “What is so chilling
abut the conference brochure,” she wrote, “isÉthe excitement
about making money, totally divorced from any ethical reference
point that might cast doubt on the subject of this moneymaking –
locking up large numbers of the American poorÉthe majority for
non-violent crimes.” If present trends continue, 4.5 million
African-Americans will be behind bars by 2020. Good business?

Concern at shareholders’ influence on the shape of health,
education and the welfare net has been voiced many times but, so
far, not by a Blairite former cabinet minister.

It would be a pity if Byers, in concentrating on the dangers of a
potential grassroots rebellion, failed to deliver the most vital
message of all: profits sufficient to satisfy the investor, sooner
or later, meant a profound loss to those who have little in their
pockets.