Labour
Labour’s plan for rail nationalisation make sense – but do not go far enough
I posted this video on YouTube this morning. It is a particularly current topic. Railways are an issue in which I have particular interest. I first read a textbook on the economics of the nationalised rail industry in 1975. I still have it somewhere. And I have never changed my opinion about the importance of state control of our railways. In that case Labour’s plans appeal to me, but I have reservations. Watch on….
The transcript is:
Labour's plans for renationalising our railways make sense as far as they go, but they don't go far enough.
Let's talk about the basics of this. The basic fact is that railways should never have been privatised. As long ago as a century ago, in 1923, Winston Churchill and others realised that the idea that private companies could run railways was really rather bizarre because that imposed enormous cost and did not create competition, simply because there's rarely going to be more than one set of tracks between two places in the country. Sometimes, but rarely.
And so it made sense to bring companies under common control. Now in 1923, they backed off nationalisation and instead went for something called ‘the grouping’. There were four large companies in the UK. That didn't really work. Frankly, it didn't produce the benefits they wanted. So, in 1948 we got British Railways.
That worked until the era of the 1970s when a lack of finances, or what the Labour Party and the Tories of that period thought were a lack of finances, undermined the delivery of a combined new rail network, because of underinvestment in the main. And then we limped towards privatisation, which was meant to bring in vast amounts of new private capital to transform our railways.
Let me give you some numbers. In the last year, 2022-23 - that's the last one we've got data for - we know that the government subsidised the UK railway system by nearly £20 billion in a year. Now that was much higher than before Covid, but that's the total cost. The total amount of private capital that was brought in by the railway operating companies was just 4 percent of that total.
So let's not pretend we have an effective privatisation model of railways right now. We haven't. We've got a nationalised system of railways already, and we need that system because it will deliver efficiencies.
I bet you, if you travel regularly on railways like I do, you have suffered the problem of arriving in a station to see the connection that you were hoping to make disappearing because it's run by another train operating company than the one that you came in on and they are not required to coordinate with each other.
If we have an integrated railway, which is what I hope Labour will try to deliver, then such things shouldn't happen. The customer, and not the profits of the operating company, should come first. So, if Labour do that, we should get benefit.
And they will be able to fund benefit, because nationalised railways are cheaper to run.
Why? Because there's vastly less accounting to do. Nobody has to agree who's responsible for a train running late. It doesn't matter whether it's the operator, RailTrack, or somebody else. It's late, and the compensation is due. Hundreds of people have to work that out at present.
There's also no problem with ticketing. If I move from where I am in East Anglia to, say, Lancashire, I'll go through several railway operating companies to get the journey completed. They have to agree how they split the ticket. Now you can say there's a formula to do that, but setting the formula still takes time.
And the point is, all those costs will be saved. Everything should work better as a nationalised railway.
But one thing - and this is where Labour's plans don't go far enough - Labour needs to have its own train leasing company, because right now all the trains run on all the British railways are leased by three companies to the railway operating companies, and those leasing companies make a fortune.
They make around 25 percent of what they charge to the railway companies a year - probably a billion in profit. That's excessive, unnecessary, inappropriate, call it what you will. Labour has to invest in its own trains for the future.
The average train in the UK is 16 years old. We now need new investment. We need to maintain the ability to make trains in the UK. We need to do so persistently. Labour has to also fund it with government because that will be cheaper than the option of using private finance. We know that. Labour has to genuinely believe in nationalisation.
Its claim that it's not interested in dogma when it comes to this issue is ridiculous. It should be interested in economics and the economics of this demand a nationalised railway service.
Labour, stop prevaricating. Deliver what this country needs. And that is a nationalised railway service.
Nationalised rail – but don’t mention the banks
It is not often I link to the Morning Star – which is now a journalist’s co-operative rather than a USSR tool! They are spot on about the alleged rail nationalisation from Labour – it completely leaves out the rail leasing companies – operated by banks, usually using ‘tax efficient’ offshore operations… They state: It’s... Read more
Without providing safe routes for potential refugees Keir Starmer has no way of stopping the boats
I watched Keir Starmer talking on a news bulletin last night and heard him say, in words that echo those of Rishi Sunak, that we “have to stop the boats“.
He was, of course, referring to the inflatable craft being used by those seeking asylum in the UK to cross the English Channel when no other route is available to them before they can make an application to live in this country.
Starmer’s reasoning for this claim was that these boats are evidence that we have lost control of our borders. There was no hint of humanitarian concern. There was no suggestion in what was clipped as to how he would deal with the issue. There was no expression of interest in the broader issues that this crisis raises, whether for this country, for others, or for the future flows of migration that are inevitably going to increase as climate change becomes more severe. Instead, only the expression was that of a bureaucrat offended by action that upsets the routine that they desire, which is how it seems that he views this activity.
I am not naive. I am, of course, well aware that some of those who might cross the English Channel do so because they are being trafficked. However, in that case, they deserve protection from those abusing them.
I am equally aware that some of those who might be taking this perilous route do so simply because they are economically desperate, and not because they are at genuine risk in the countries from which they come. There is, in that case, obvious need for some mechanisms to sort those who are really refugees, from those who are seeking what is illegal entry.
However, what we do know is that a substantial majority of those who make this crossing do succeed with their asylum claim, despite the existence of a system which stacks the odds against them. In other words it would be wise to presume that those who have reached the English Channel have done so as a consequence of a state of genuine desperation. The willingness to go through the trauma of this process will, in a great many cases, be the clearest indication of that.
So, if Starmer is to provide an alternative, and this will no doubt become his responsibility, what should he do?
Firstly, there should be an assumption that those claiming refugee status probably have it. I am not suggesting that this means that they be given an automatic right of entry into the UK. Both politically and practically that is not plausible or viable. There must, in that case, be a filtering process to determine which applications succeed, and which fail, That necessary process must, however, be undertaken humanely, with a degree of sympathy for the likely refugees plight, and with the assistance provided so that those with a proper case can be identified, assisting in the process the identification of those acting inappropriately.
Secondly, as so many with expertise in this area have suggested, this process could take place in France. At the very least, initial vetting should be possible there, with mutual cooperation between the UK and France to make this possible. I am aware of all the inconvenience to France that those seeking entry to the UK creates, but given that they have no choice but face this issue, redirecting funds away from creating criminality towards assistance, speedy decision making, and facilitation of rapid transit if that is the right outcome, would be in everyone’s best interests. It might also cost considerably less than current attempts to address this problem.
Thirdly, and most obviously, this then provide the opportunity to stop the boats. Those able to cross the Channel could then do so using safe routes , like ferries, with tickets provided, and buses to ensure their appropriate onward transport.
Fourthly, if despite this, there were then to still be small boat traffic the likelihood that it would involve those with a limited chance of a right entry is high. In that case a changed approach towards policing of that activity could take place on both sides of the Channel, whilst still requiring a continued open-mind on the need to protect those who might be trafficked.
I am not sure why it is so hard for Keir Starmer to explain such a potential policy. At the heart of any solution to this problem there has to be a method that differentiating those who are likely to have a legitimate claim of entry to the UK under international law from those who have not got that right. Until that happens, the prospect of successfully persuading France, or any other country, to treat what is happening as an illegal activity is low, which is why I understand their reluctance to overly deter this traffic. They know that legitimate refugees are those most commonly to be found amongst those on the beaches of Northern France. Do they have to stop them in that case? Until that changes - which it is only in our power to do - why should they?
Only when those in small boats are those most likely to not have a good claim for entry into the UK can successful action against this traffic begin. I would have thought Keir Starmer would understand that. I would have hoped that he would want to. I would equally hope that he will want to make sure that we act humanely and with sympathy to those in a desperate situation. But perhaps I am naive, after all, in believing that this is what he might think.
Labour has abandoned its environmental commitments. Is it any surprise that UK big business is following its lead?
As the Guardian notes this morning:
Unilever is to scale back its environmental and social aims, provoking critics to say its board should “hang their heads in shame”.
They added:
On Friday, the London-based firm’s current chief executive appeared to signal a strategic U-turn for the company, which is valued at £94bn on the London Stock Exchange. In an interview with Bloomberg, Hein Schumacher confirmed plans to water down the company’s ethical pledges on a range of issues including plastic usage and pay.
There really can be no surprise here. Labour is expected to win the first term of what many will think likely to be at least a two term government this year. They have abandoned their green commitments and budgets. Why wouldn’t business do the same?
Rachel Reeves should take note. Her decisions and smooching around the City have consequences. It is by no means clear that they are good.
I’d rather be French…
This vox pop is an indictment of 14 painful years of Conservative government: So that youth can get some of its future back let us hope that Labour will feel confident enough to properly embrace what looks like the incipient reinstigation of free movement for the young – led by the European Commission! That would... Read more
Scotonomics on the Taxing Wealth Report
I was on Scotonomics last night, discussing the Taxing Wealth Report, and right at the end its relevance for Scotland.
For reasons I can’t explain the YouTube link will not embed here, but you can watch the video by clicking here.
The state has become a killing machine…
…Which is how this twelve minutes of fighting talk from Lord Prem Sikka concludes: This is all excellent stuff in my view – and although he mentions Modern Monetary Theory (MMT) in passing, he doesn’t use it in his arguments preferring just to point out all the unused tax possibilities that there are. Now I’m... Read more
There is no indication that the Labour Party has any predisposition to be radical
Andrew Rawnsley suggested in The Observer yesterday that Labour could be a radical government despite the fact that it has no money to spend.
His suggestion was that in the last Labour government policies on the minimum wage and civil partnerships were radical but nearly costless, at least to the government. He also highlighted previous administrations and their measures to reform abortion and equalities laws. None of this can be disputed. But, his assumptions really do not stack.
The parliaments of 1967 and 1974 were radical because that was Labour’s inclination at the time. We knew that these that these things were desired. That’s why most happened early in parliaments. We have heard nothing like that this time.
And important as these things undoubtedly are, they took place in most case against backgrounds where essential services were being supplied. In other words, these things could be done precisely because there was an atmosphere where this was possible because very basic things, like preventing people dying because of a lack of healthcare, were not an issue.
Rawnsley ignored that. It was a big oversight.
So too was his assumption that there is no money available a big one to make. In fact, it’s just not true. I have shown that in the Taxing Wealth Report. The lack of money is not necessary. It is by choice. And however it is looked at, it is not a radical choice.
So, Rawnsley is wrong for two reasons, although the roots of both are similar. The reality is that being radical requires a predisposition to be so, whether on social policy or spending, with the latter being intimately related to the former by the ability of tax to redistribute income and wealth. There is no indication that the current Labour Party has any predisposition to be radical, at all. In that case, to presume it might be is an act of faith stretching credibility beyond tolerable limits.
Why doesn’t Labour want to be in government forever?
I just posted this short video on YouTube, TikTok and elsewhere:
And, yes, the video does include a mistake. I say first past the post increases constituency size when, of course, it is PR that dues that.