Wide screen devices may view this page better by clicking here

Arguments for socialism :: Banks

spotCampaigns

spotOrganisations

triangleArguments for socialism

spotPeople

spotInternational

spotEvents

spotAround the UK


All keywords


All Arguments for socialism subcategories:

* Arguments for socialism

Capitalism

Globalisation Anticapitalism

Marxism


Banks


Highlight keywords  |Print this articlePrint this article
From: The Socialist issue 981, 7 February 2018: NHS - build the fightback

Search site for keywords: Outsourcing - Workers - Carillion - Shares - Banks

Capita in crisis: bring all outsourcers back in-house

Capita is one of the outsourcers which managed the DWP's notorious 'work capability assessments', photo by Pete Mason

Capita is one of the outsourcers which managed the DWP's notorious 'work capability assessments', photo by Pete Mason   (Click to enlarge)

Leo Marsden, Lambeth and South West London Socialist Party

Shares in outsourcing giant Capita have collapsed following the company's profit warning to shareholders. This follows shortly after its competitor Carillion sank into liquidation, and underlines further the fragile state of British capitalism.

Shares fell by more than 47%, resulting in enormous profits for hedge funds who had sold them 'short' - essentially betting on misery for Capita's workers and small business suppliers. Shares in Serco and other outsourcers also fell significantly, reflecting a wider malaise.

Despite the collapse, the company appears to have avoided bankruptcy, with emergency measures to halt dividend payments and issue 700 million in additional shares. Management is also drawing up plans to 'cut costs' - no doubt meaning attacking workers' jobs, pay and conditions.

This may provide bosses temporary respite - at the cost of the workers who make them their money. But it will not solve the problems of a company with over 1 billion of net debt suffering from decades of underinvestment.

Like Carillion, part of Capita's problems stems from austerity - cuts in public budgets mean outsourcing vultures are competing to do more with less. Although the main impact of this corner-cutting is on workers and service users, it shows the short-sightedness of austerity even from the bosses' blinkered point of view.

Meanwhile, the Tories have had to bring forward the end of Stagecoach and Virgin's contract to run the East Coast railway - again. After cutting it from 2023 to 2020 in November, it will now end in months. The government may end up running it directly.

And more problems are looming for the outsourcers. After years of pumping in cheap credit to try to restart the economy, central banks are now increasing borrowing costs. This will only cause more bankruptcies.

Panicked traders have already responded to interest rate hikes and fears of asset bubbles bursting by wiping $4 trillion off global stocks in a week.

Britain's ruling class is desperately trying to avoid these tremors becoming a generalised economic crisis. Banks and the state scrambled to put together 325 million of support for Carillion's small suppliers. It's a fraction of the firm's liabilities, but reflects the banks' own precarious position and fear of further insolvencies.

The government in turn is trying to reprivatise services rescued from Carillion - but offers no guarantees for workers and most small business creditors.

The Tories may have only temporary relief regarding Capita. If bankruptcies come to spread throughout the outsourcing and construction sectors, they would be facing another deep recession.

Carillion employed 20,000 workers in the UK and Capita employs 50,000. Hundreds of thousands of working and middle class people would be directly affected by Capita going under. We demand bailouts for workers - the bosses have had plenty already.

The Socialist Party says:

Donate to the Socialist Party

Finance appeal

The coronavirus crisis has laid bare the class character of society in numerous ways. It is making clear to many that it is the working class that keeps society running, not the CEOs of major corporations.

The results of austerity have been graphically demonstrated as public services strain to cope with the crisis.

The government has now ripped up its 'austerity' mantra and turned to policies that not long ago were denounced as socialist. But after the corona crisis, it will try to make the working class pay for it, by trying to claw back what has been given.

Inevitably, during the crisis we have not been able to sell the Socialist and raise funds in the ways we normally would.

We therefore urgently appeal to all our viewers to click here to donate to our Fighting Fund.

Please donate here.

All payments are made through a secure server.

My donation

 

Your message: 

 






Arguments for socialism keywords:

Banking crisis (15)

Banks (291)

Clause 4 (1)

Clause four (6)

Consciousness (11)

Democracy (188)

Minimum wage (312)

Nationalisation (205)

New workers parrty (6)

Northern Rock (34)

Party funding (1)

Photographs (4)

Planning (86)

Podcasts (4)

Socialism 2007 (17)

Socialism 2008 (13)

Solidarity Scotland (1)

Solidarity (381)

The Socialist (1164)

Them & Us (25)

Trade union organisation (7)

Vaccine (13)

What we saw (38)

Workers (1848)

Workers press (1)

Working class (848)

Socialist Party Facebook page
Socialist Party on Twitter
Visit us on Youtube

Article dated 7 February 2018

Join the Socialist Party
Subscribe to Socialist Party publications
Donate to the Socialist Party

MEMBER RESOURCES

Pay in Fighting Fund

Pay in paper and book sales

Leaflets

Bulk book orders

New member submission

WHAT'S ON

triangle19 Apr Oxfordshire & Aylesbury Socialist Party: Poland under Stalinism

triangle20 Apr Bristol North Socialist Party: Vaccinations, innovation and capitalism

triangle20 Apr Caerphilly & RCT Socialist Party: Election Question Time with candidates from TUSC

More...


The Socialist, weekly newspaper of the Socialist Party

Covid-19

News

Elections

Workplace news

Lessons from history

Campaigns news

Readers' opinion

Subscribespacer|spacerebook / Kindlespacer|spacerPDF versionspacer|spacerText / Printspacer|spacer1129 onlinespacer|spacerBack issuesspacer|spacer Audio files


Thurrock council workers striking against pay cuts, photo by Dave Murray

Thurrock council workers striking against pay cuts, photo Dave Murray

What We Stand For
Socialist Party Facebook page
Socialist Party on Twitter
Visit us on Youtube

Platform setting: =

Desktop version