How New Labour privatised the Tube

Submitted by Matthew on 5 March, 2014 - 12:40

The last in our series of extracts from Janine Booth’s new book, Plundering London Underground: New Labour, private capital and public transports 1997-2010.

When New Labour came to power, they were keen to distance themselves from the demands of the labour movement and to appeal to big business for support. This lead them to privatise industries that even the Tories had never dared to touch. In this extract, Janine looks at how this disastrous approach was applied to London Underground.


The London Underground Public-Private Partnership is an indictment of New Labour, whose turn away from the working class in search of credibility with capital was not only unprincipled but a spectacular failure.

To assess why Labour did this, we need to look at its history. Trade unions – including RMT’s predecessor, the Amalgamated Society of Railway Servants (ASRS) — set up the Labour Party at the start of the twentieth century, with the aim of enabling workers to elect their own representatives to Parliament. By 1945, thirty railworkers were Labour MPs, opposite just two railway bosses on the Conservative benches. But the Labour Party, while born of the working-class movement, sought to improve capitalism rather than to overthrow it. A 1922 Communist Party pamphlet argued that “even before the [1914-18] war, the Labour Party had become quite distinctly a class organisation of the proletariat which was dominated by that section of the middle class whose profession it was to organise trade unions”. Lenin described it as a “bourgeois workers’ party”.

There was conflict between these two poles – bourgeois and working class – for example when Labour’s left argued in the 1930s for workers’ control of industries such as London Underground rather than Herbert Morrison’s “public corporation” model. By the 1980s, the fragile balance between the two class poles was wobbling. A rank-and-file attempt to pull Labour towards internal democracy and socialist policies was defeated by the leadership, which instead hauled Labour rightwards, fixated with the view that the Party must jettison left-wing stances in order to be electable. “New Labour”, rebranded by Tony Blair, preoccupied itself with proving that it would be moderate and responsible in government. Journalist Nick Cohen wrote: “Blair was left holding the ‘centre-ground’ – a prize plot of land whose mortgage was paid by emptying the Labour Party of meaning.'

“New Labour” was continuing 1980s Conservative Prime Minister Margaret Thatcher’s project of driving the working class out of politics. In place of left-wing policies came a lexicon of buzzwords, chief of which was “modernisation”. As Dexter Whitfield explained: “The driving force [behind New Labour policy] is primarily ‘the modernisation agenda’ and the belief that partnerships with private companies are, per se, the only way forward. The feast of large multi-million-pound contracts under Labour [made] the Tories’ Compulsory Competitive Tendering regime look like a roadside picnic.”

“New Labour” privatised services that the Conservatives had thus far left untouched: the Royal Mint, National Air Traffic Service, Belfast Port and more.

The Conservatives had not yet privatised London Underground, even when they sold the rest of the railways. Maybe privatising the Tube would have been too complex, too unsafe, more controversial; maybe there were more marginal constituencies and more opponents in London; maybe the private sector itself was not interested.

No such obstacles would deter “new Labour” from its particular brand of privatisation, the PPP. New Labour was repackaging Conservative policies rather than departing from them. Tony Blair’s 1995 description of British Rail privatisation — “a hotchpotch of private companies linked together by a gigantic paper-chase of contracts – overseen, of course, by a clutch of quangos” – became an accurate summary of his own government’s policy for London Underground.

Many within Labour’s own ranks opposed the Tube PPP. Branches and conferences passed resolutions, MPs and councillors spoke out. But the Party leadership did not listen. The unpicking of Labour Party democracy over the previous two decades had left Labour’s members unable to make their leaders do what the Party wanted. 

Whitfield remarks that Labour’s idea of “Best Value” contains lots of Cs — clients, commissioning, contracts and more — but adds that “there is one ‘c’ word which is missing — class.” New Labour had chosen to serve not the working class that created and elected the Labour Party, but the capitalist class that exploited the working class. Granada chief Gerry Robinson said that “business can do business with new Labour”; he added, “That in my view is one of the healthiest changes in British politics for a very long time.” For Robinson and other company chiefs, what was “healthy” was that they once again had two parties competing with each other to represent their interests. “New Labour” listened avidly to trade associations and lobby groups devoted to the pursuit of business interests, mostly funded by the same corporations that benefited from the results.

Of course Jarvis plc, Carillion plc and Amey plc funded the New Local Government Network’s lobby for private sector involvement in public services: they stood to make a fortune from it. But it was Labour leaders’ own choice to listen and bend to this lobbying while dismissing the views of their own party’s members and affiliated unions. London Underground Ltd Managing Director Mike Brown could see the paradox: “The Treasury in particular was absolutely obsessed with being seen to be the friend of big business, the friend of capitalism, which was ironic for the first Labour government for a long time.”

Tony Blair said in his election victory speech on 2 May 1997, “We have been elected as New Labour and we will govern as New Labour.” But I would suggest that Labour had been elected because it was not the Conservatives, so should not have governed like Conservatives.

Its lifelong tug-of-war between aspiring to represent workers and operating within capitalism had been pulled far over to the capitalists’ end of the rope. New Labour was, as Peter Mandelson said, “intensely relaxed about people getting filthy rich”.

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