George Obsorne - CEO of Britain PLC

“The executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie.” So wrote Karl Marx and Friedrich Engels in 1848. And today George Osborne confirmed how true this observation remains.

The chancellor, or should that be the chief operating officer (CEO) of Britain PLC, announced that firms involving in fracking – the highly-dangerous, controversial, ecologically-damaging extraction of shale gas – will only have to pay a 30% top rate on production.

That compares to 62% on new North Sea oil operations, rising to 81% for established offshore fields. Leaving aside for a moment that Osborne’s father-in-law is head of a lobbying organisation for big oil and gas companies, the position is clear.

The government, any government, will use its authority to command the state to do what’s best for business – often to the detriment of a particular community or society at large.

Desperate to create new energy supplies as North Sea oil runs down, the government is hoping that a shale gas bonanza is the answer to their prayers. Hence the tax breaks announced today.

Every day there’s another example of this ever-closer alliance with business that is the hallmark of this particular period of globalised capitalism. Last night, the UK’s state-owned blood supply was sold to a US-based private equity firm.

The Department of Health sold an 80% stake in Plasma Resources UK to a Bain Capital. This company was founded by Republican presidential candidate Mitt Romney, which paid £230m for a controlling interest.

This is consistent with the approach of all governments over the last 30 years. In 2004, New Labour prime minister Tony Blair said: “Our aim is to open up the system, to end the one-size-fits-all model of public service, which too often meant one supplier fits all, with little diversity, irrespective of how good new suppliers – from elsewhere in the public sector, and from the voluntary and private sectors – might be.”

In 2011, David Cameron remarked: “From now on, diversity is the default in our public services. What does that mean? It means that instead of having to justify why it makes sense to introduce competition, as we are now doing with schools and in the NHS, the state will have to justify why it makes sense to run a monopoly.”  

As a result, public services wholly provided for by the state are an increasing rarity. Today roughly £1 in every £3 that government spends on public services goes to contractors of one sort or another. That’s about £100 billion a year. That’s a bigger proportion than in any other country, the US included.

With the state lacking expertise in contract negotiating, let alone auditing what’s going on, the scene is set for creaming off the top, also known as scamming or gaming. Last week it was revealed that government contracts for tagging offenders held by G4S and Serco had been suspended.

The firms had been charging for tagging people who were either dead, in prison, or never tagged in the first place. Even this government had to act when the truth came out. This week, an extensive report by the Institute for Government into the outsourcing bonanza, gave chapter and verse on “gaming” by all sorts of agencies. The report noted:

“Such ‘gaming’ behaviours included excessive ‘parking’ of service users with complex needs and ‘creaming’ of users who are easier to support, and therefore more profitable to serve… Such gaming was most apparent in the Work Programme where the combination of low fees and specific design choices in the ‘payment by results’ system of reward acted to discourage investment in helping those who were less likely to get back into work swiftly.”

Choosing easier-to-pass qualifications is an education form of “gaming”, often used to maintain or attract fund. One head teacher told the researchers: “Schools that turn themselves around often do it… [by] exploiting tactics to improve exam results in the short term which are not about the experience that every child gets in every lesson.”

For Osborne and his corporate chums, however, it really is one big game which ends with directors and shareholders laughing all the way to the bank.

Paul Feldman

Communications editor

Interrogated to death in an Israeli jail

For the Israeli authorities, stone-throwing by Palestinians is a sufficient reason for murder by interrogation. That’s the only conclusion you can draw from the autopsy report into the death of Arafat Jaradat who has died in an Israeli detention centre.

News of his death sparked huge protest rallies yesterday in the occupied territories of Khan Youmi and Rafah, across the West Bank and Gaza, with the backing of the Palestinian Authority.

Jaradat was from the village of Sair near Hebron in the occupied West Bank. He was arrested on 18 February and held at the al-Jalame detention and interrogation centre. He died in a special section controlled by the notorious Israeli intelligence service, Shin Bet.

After being briefed by a Palestinian pathologist, the Palestinian minister of Prisoner Affairs Issa Qaraka said the autopsy showed severe bruising in multiple areas of Jaradat’s body.

The British-Danish corporate giant G4S, who were paid million to run the London 2012 Olympic security fiasco, provides “equipment” for both the prisons in which Jaradat was held. The rising numbers include some 219 children.

The Israeli Prisons Service has claimed that Jaradat died of a heart attack. But during his interrogation (aka torture) he was examined by an IPS doctor who was said to have found “no health problems”. Shin Bet’s tormentors saw fit to continue the interrogation. One can only imagine the scenes.

Jaradat’s lawyer, Kamil Sabbagh, who defended him in court last week, said that his client had told him he was being questioned for several hours each day and complained of sharp pains but that no physician had seen him. His family say that after Jaradat was arrested, he was allowed to return home briefly to say goodbye, which they saw as an indication he would be killed.

His death in the hands of the Israeli authorities has sparked a mass hunger strike by most of the 4,812 Palestinian prisoners currently illegally held in Israel jails. This number includes children under the age of 16 and 15 members of the Palestinian Legislative Council.

Fears are growing for other activists and human rights defenders, such as Hassan Karajah. His lawyer is calling for an international inquiry into Jaradat’s death. Hassan is being interrogated by the same Shin Bet investigators who oversaw the death of Jaradat.

It is not only Palestinian human rights organisations who are opposing the shocking treatment of Palestinian prisoners. Physicians for Human Rights-Israel have submitted dozens of requests to visit hunger strikers which have been ignored.

They cite the cases of Ayman Sharawna, Samer Issawi, (on hunger strike since last summer) and Jafar Ezzedi and Tariq Qaa’dan, who have been on hunger strike since November.

In a strong statement, PHR-Israel said the hunger strikers have been denied family visits despite their life threatening condition. The group said that the actions of the Israeli authorities “repeatedly violate hunger strikers’ human rights and contravene Israeli laws and regulations, international conventions, and guidelines on medical ethics”.

PHR-Israel denounced the fact that the hunger strikers continue to be shacked to their hospital beds, in violation of medical ethics. It seems that the prison authorities have even ignored guidelines from the Israeli ministry of health.

Palestinian MP Mustafa Barghouti told the Palestinian news agency Ma’an that escalating protests were "a natural development of popular non-violent resistance into a popular non-violent intifada and there is nothing left for Palestinians but to use their popular resistance to get their freedom”. 

The mass hunger strikes by Palestinian prisoners coincides with a financial crisis in the West Bank. A teachers’ strike is starting tomorrow and health care workers are already on a walk-out.

Negotiations with Israel are off the agenda as the settlements multiply throughout the West Bank. Frustration with the political leadership is growing for a variety of reasons. A third Intifada, a new Palestinian uprising, appears inevitable.

Corinna Lotz

A World to Win secretary

Welfare to profits as contractors cash in

That the results of the government’s welfare-to-work scheme have turned out to be worse than if it hadn’t existed at all is certain to be a disappointment for the ConDems, but for the rest of us it shouldn’t be a surprise.  

As most people are only too well aware, the economy is contracting, jobs are disappearing, real incomes declining. But the targets for the scheme were set in the run up to last year’s launch in the absurdly optimistic expectation that the economy would improve.

The target set for the 18 contractors  of getting 5.5% of the 2.4 million long-term unemployed and people on sickness benefits a job for at least six months was hardly going to make a dent in the jobless figures, but not one of them has achieved anything like it.

Only 3.5% - that’s one in every 28 - of the people referred to the Work Programme have found long-term jobs. In spite of this the work and pensions secretary Iain Duncan Smith defended the scheme, claiming that over 50% of those who have been referred to the scheme have been taken off benefits. 

Either somebody is not doing their sums, or there’s now an awful lot of people out there without jobs or benefits – just like in America.

And although the scheme is supposed to work on a payment-by-results basis, making the contractors’ profits dependent on forcing people off benefits, hundreds of millions of pounds have already passed into their hands.

They include A4e – the subject of systemic fraud accusations from its own internal auditor earlier this year, G4S - the company that failed to supply the promised Olympic security force – and Ingeus, part of a global corporation founded by the wife of Kevin Rudd, former Australian prime minister.  

There’s a group of voluntary sector groups also signed up to the scheme which includes Mencap, the Citizens Advice Bureau, the Prince's Trust and Action for Blind People. Well meaning? Maybe, but they’ve become willing accomplices to this £5 billion torment of the sick and unemployed. Even Charles Dickens would be appalled.

So what has gone wrong? The Employment Related Services Association (ERSA), the lobbying group for the array of predatory companies feeding off the unemployed and sick, claims that things are now getting into gear and are set to improve.

The latest World Economic Outlook from the Organisation for Economic Co-operation and Development promises something very different. Already in July they predicted that unemployment in advanced economies would remain high until at least the end of 2013, with young people and the low-skilled bearing the brunt of what they euphemistically termed “the weakest economic recovery in the past four decades”.

But four months later, things have got a whole lot worse. The OECD has slashed its forecast for next year’s growth in the world’s advanced economies from 2.2% to 1.4% and warned that the risk of a serious global recession cannot be ruled out.

The OECD expects the seriously troubled eurozone economy to contract further in 2013.  Growth in the US is forecast at 2% next year down from a May estimate of 2.6 per cent – but only if Obama can pull off a deal with the Republicans and prevent the country falling over the “fiscal cliff”. Japan’s economy is expected to expand 0.8%, little more than half the growth expected in May.

Greece is expected to be the worst performer among the membership, with the OECD expecting its economy to shrink 4.5% next year. The Spanish, Italian, Slovenian and Portuguese economies are also predicted to contract over the course of 2013.

And the UK? The OECD predicts an expansion of 0.9%. But as far as the budget deficit is concerned - the subject of all the austerity, and the welfare-to work programme in particular – the UK will be performing worse than every other member except Japan.

So, in effect, the contractors – private sector and charities alike – have really been contracted to manage the contraction. They get state funding and the unemployed get state harassment and benefit cuts. More like welfare to profits than welfare to work.

Gerry Gold

Economics editor

G4S - securing their world, not ours

Despite its inability to fulfil its London 2012 contract, the rise and rise of G4S is the story of the privatisation of the state and an increasing emphasis on “threats” and “security concerns” aimed at keeping people in thrall to authority.

G4S is no ordinary corporation. It operates in more than 125 countries and has 675,000 employees. Group turnover last year was £7.5 billion, mostly derived from state contracts around the world, with 30% of revenues coming from “developing markets”. Pre-tax profits were up 2.1% to £531m.

The self-styled “world's leading international security solutions group” has cashed in on the drive by the state to divest itself of more and more functions like prisons, crowd control and significant parts of the police service. As the company’s website declares: “In more ways than you might realise, G4S is securing your world.”

Of course, it’s not “our world” so much as their world – the rich, the bankers, the state, and the corporations that G4S helps to secure. And nowhere is “security” more on the state’s lips than in Israel, which continues to occupy Palestinian lands in defiance of countless UN resolutions.

As a sub-contractor of the Israeli occupation, G4S, according to the Palestinian grass roots movement Stop the Wall, is involved in human rights abuses and violations of international law. Through its subsidiary G4S Israel (Hashmira) it provides:

• equipment for Israeli-run checkpoints and terminals in the West Bank and Gaza, including luggage scanning machines and full body scanners

• security systems to the Israeli armoured corps base of Nachshonim

• (and operates) the entire security system of the Ktziot Prison, the central control room of the Megido Prison and security services to Damon prison where Palestinian political prisoners are held.

 • peripheral defence systems on the walls surrounding the Ofer prison, located in the West Bank, near the settlement of Givat Ze'ev.

 • security services to businesses in illegal settlements, including security equipment and personnel to shops and supermarkets in West Bank settlements. 

Palestinian prisoners are, of course, mostly tried in military courts while others are held in detention under laws dating from the British mandate. Many prisoners have taken to hunger strikes to force their plight into the public arena. G4S also transfers Palestinians to and from interrogation centres.  

Campaigners add: “Yet Israel continues to build new settlements and expands older settlements, stealing Palestinian land and resources. While G4S profits from ‘securing’ these illegal settlements, the IOF [Israeli Occupation Forces] restricts Palestinian movement and violently repress any dissent in the name of ‘security’.”

In Britain, over 700 complaints have been filed against G4S over the treatment of immigrant detainees, of which 130 were upheld. There have been 48 assault complaints. There has been particular criticism of the treatment of detainees held at Brook House immigration removal centre near Heathrow .

In 2010 it lost a Home Office forcible deportation contract after the death of an Angolan deportee, Jimmy Mubenga, while being restrained on a flight back to Angola. A report by the Commons home affairs committee condemned G4S over its treatment and said the number of complaints likely did not reflect the true number of cases of abuse.

In South Yorkshire, where G4S won a £30 million contract to take over asylum seekers housing, a sub-contractor has started evicting people and moving them into unsuitable accommodation miles away.

G4S is laughing all the way to the bank, however. Confidential Home Office documents seen by the Daily Telegraph show that fees paid to G4S for managing civilian security staff for the London Games have soared from £7.3 million to £60 million. The same company failed to recruit sufficient staff, leaving the government to call in the army.

It’s not just cost savings that have driven the capitalist state to “outsource” security to firms like G4S. The aim is also to shed responsibility for services like health, housing, pensions and education as far as possible, creating new markets for all sorts of companies. So where does that leave the present state’s legitimacy, its “right” to rule over us. The Olympic security farrago confirms that it is virtually non-existent.

Paul Feldman

Communications editor

Corporate complicity in crimes against Palestinians

Corporations play a decisive role in enabling Israel to commit war crimes and crimes against humanity like destroying Palestinian homes.

Seven key corporations – some of whom actually boast of their role – take centre stage in an indictment handed down by an international tribunal, which met in London recently. The Russell Tribunal on Palestine (RTP), whose panel includes eminent British lawyers Michael Mansfield and Lord Gifford, heard what it called “compelling evidence” of complicity:

G4S, a multinational British/Danish corporation, supplies scanning equipment and full body scanners to several military checkpoints in the West Bank and Gaza. G4S also provides equipment for prisons for Palestinian political prisoners.

Elbit Systems, a leading Israeli multinational, supplied the Unmanned Aerial Vehicles (otherwise known as Drones) that were extensively and illegally used in the Gaza conflict. The British army has recently awarded Elbit a $1 billion contract.

Caterpillar, based in the US, supply specifically modified military D9 bulldozers to Israel, which are used in: (i) the demolition of Palestinian homes; (ii) the construction of settlements and the Wall; and (iii) in urban warfare in the Gaza conflict.

Cement Roadstone Holdings, an Irish multinational corporation, owns 25% of the Israeli corporation Mashav Initiative and Development Ltd, which in turn owns Israel’s sole cement producer, supplying 75-90% of all cement in Israel and occupied Palestine.

Dexia, a Franco-Belgian corporation, finances Israeli settlements in the West Bank via its subsidiary Dexia Israel Public Finance Ltd.

Veolia Transport, a French corporation, is involved in the construction of the East Jerusalem light railway. Veolia also operates bus services to illegal Israeli settlements as well as landfills where settlements dump their garbage on Palestinian lands.

Carmel Agrexco, an Israeli corporation, is an exporter of agricultural produce, including oranges, olives, and avocadoes from the illegal settlements in the West Bank. It also exports Palestinian products which are mislabelled as “made in Israel”.

An RTF statement at the end of the two-day hearing said: “It is clear from the evidence of witnesses that this conduct is not only morally reprehensible, but also exposes those corporations to legal liability for very serious violations of international human rights and humanitarian law. What distinguishes the present situation from others in which international action has been called for, is that in this case both Israel and the corporations that are complicit in Israel’s unlawful actions are in clear violation of international human rights and humanitarian law.”

Although companies were invited to defend their actions, only Veolia Environment, PFZW pension fund and security company G4S responded to the tribunal in writing. The jurors included former French ambassador Stephane Hessel; Irish Nobel Laureate Mairead Corrigan Maguire; South African professor John Dugard; South African politician Ronald Kasrils; Spanish judge Jose Antonio Martin Pallin and former US congresswoman Cynthia McKinney.

Dugard, who recently served as the UN Special Rapporteur on Human Rights in the occupied Palestinian territories, said: “We are dealing with a criminal enterprise on the part of Israel. Under criminal and international law and in many cases under national legal systems, there is an obligation on the part of states to redress such illegality, but if states do not take action, there is also responsibility on the part of corporations and civil society to redress these wrongs.”

Israel’s response? The Israeli government is currently considering making protest along the lines of campaigning for boycotts and disinvestments a criminal offence. It has also just carried out a new swathe of demolition of Palestinian homes. I am waiting with bated breath for the leaked cable from the US embassy attacking such policies.

Paul Feldman
Communications editor