Last month New Labour’s latest privatisation, Qinetiq, was floated on the Stock Exchange. Qinetiq consists of most of the Ministry of Defence’s Defence Research Agency, all except the most “sensitive” areas — these were split off in 2001 to prepare for privatisation.
Despite this precaution, “Qinetiq” still deals with some dangerous stuff, like anti-missile programmes and guided weapons. What is more, the privateers do not have the resources to safeguard their secrets; and they themselves warn that they may not be able to “deter misappropriation of its confidential information.”
In other words, blueprints for the production of the latest military hardware is being vulnerable to theft by terrorists, simply in order to allow a profit to be made from it!
The government must have got a fantastic deal even to contemplate this? Well... no actually. The Treasury received £42 million from US comany Carlyle for a third of Qinetiq and complete control of the privatisation. This represents half the amount of taxpayers’ money paid to lawyers and banks like UBS to arrange the privatisation. The newly-privatised company has netted Carlyle £227 million — more than five times what they paid for it — and the new chair and chief executive of Qinetiq have taken a grand total of £47 million for themselves, more than was paid to the Treasury.
This and many other rip-off privatisations show quite clearly that the dollar-signs in the eyes of New Labour’s privatisers are not even real ones. It would be inaccurate to accuse them of wholesale corruption.Unlike Mr Tessa Jowell, they do not (usually) require large wads of actual money to be in love with it. Their admiration can be entirely Platonic and ideological.
As former Labour defence procurement minister Lord Gilbert comments, “The sale was very much akin to Boris Yeltsin handing out the assets of the old Soviet Union to his chums at knockdown prices.” Who are these “chums”? Well, the board of Carlyle counts both Geourge Bush Senior and John Major among its members. James Sassoon, who in his capacity as “head of privatisation” at UBS, advised the government to privatise Qinetiq and then moved to the treasury to carry out the dirty deed, was also chief adviser to Major in his disastrous privatisation of Railtrack!