Labour’s rail plan – what we need, rather than what we want?

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British Rail, company, East Coast main line, fare, firm, franchise, invest, Labour, Mike Sivier, mikesivier, operator, price, private, public, quality, rail, re nationalisation, reliability, reliable, service, taxpayer, union, Vox Political

De-railed: After years of reliance on taxpayers’ money, it seems the ride may soon by over for some of the UK’s rail privateers [Image: PA].

The Labour Party seems to have a real problem with offering the public what the public has demanded.

Faced with demand for the railways to be renationalised, they seem set to announce a plan in which private firms compete with a public service for franchises.

The promise of privatisation had been that the new franchise-holders would keep prices down, and any investment should be made by the companies concerned.

In fact, fares and taxpayer investment have rocketed since the railways were privatised by the last full Conservative government in the early 1990s.

It seems that Labour’s plan, which may be announced next week (the party is being very cagey about it), will mean franchises are awarded based on “a pragmatic choice between the state and private sector based on price, reliability and quality of service” (according to a report in The Guardian).

This, we are told, “will provide a solution that allays commuter frustration, provides a fair deal for the taxpayer and does not amount to a return to British Rail”.

Such a decision will not only anger rail unions, Labour MPs who have been calling for renationalisation, and 70 per cent of the British public, but also the rail industry’s private operators, who say current bids for franchises must not be upset by allowing the state to join the process belatedly.

It has also been claimed that an extra risk would be imported onto the public sector balance sheet if a state-owned company won a franchise.

But this is narrow-minded thinking; the state currently spends much more on the railways than it did before they were privatised – we already have a large risk on the public balance sheet.

If these private firms had done their jobs properly, then the taxpayer would not be shouldering so many of their costs and – perhaps – the Labour Party would not be considering even the partial renationalisation that is on the table at the moment.

None of the UK’s current rail operators have kept their promises and after 20 years, it is far too late for them to bleat about the situation they have created.

It should also be noted that the public sector has been running the East Coast Main Line extremely successfully since the franchise run by National Express failed, making expansion of this management model highly attractive to Labour strategists who need to find ways of trimming the burden on the public purse.

As a group of prospective Labour MPs in marginal constituencies wrote in a letter to The Observer, it would mean “hundreds of millions currently lost in private profit would be available to fully fund a bold offer on rail fares”.

If so, it seems that this halfway-house plan may provide exactly what we need, even if it isn’t what anybody wants.

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Osborne’s cuckooland claims could leave a terrifying legacy

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austerity, Balls, borrowing, contraction, cuts, debt, deficit, economy, Ed, education, fuel, George, Gideon, infrastructure, investment, Mike Sivier, mikesivier, Miliband, Osborne, payment, pensioner, rail, recovery, road, science, UK, Vox Political, winter

‘Jeffrey’ Osborne sings for his supper at some CBI dinner.

Try not to choke on your coffee: George Osborne reckons the British economy is “out of intensive care”.

Now, he says, the task is to “secure the recovery”.

He’s starting on Wednesday with cuts totalling £11.5 billion which, once fiscal multipliers are taken into account, means a contraction of around £20 billion in the national economy.

Securing the recovery. Good luck with that, Gideon.

The good news is that he is expected to announce investment in infrastructure projects, including roads, railways, education and science. He has realised – probably too late – that cutting all those infrastructure projects at the start of this Parliament was economic suicide and is trying to do something about it before everyone realises he’s an idiot. He is, of course, much too late for that but the investment – if it goes to well-advised places – might just do some good.

Don’t bank on it, though.

Osborne’s claims about the economy are based on statements that government borrowing has come down and employment is up – but we know that the first isn’t true and the second is not helping. In other words, he’s built his castle in the sand.

Government borrowing rose by £300 million in 2012-13, from £118.5 billion to £118.8 billion, according to the Office for National Statistics. That’s not a huge amount, you may think, but remember this government reckons it has cut borrowing by a third since taking power. That would put borrowing at around £100 billion right now, which is clearly inaccurate.

The debt is now £1.9 trillion, up from 1.1 trillion a year ago – 75.2 per cent of GDP, up from 71.1 per cent.

We all know what the problem is: Austerity – the self-perpetuating (and self-defeating) policy that will eventually bankrupt us all (but not the country. Because we have our own currency, the UK is unlikely ever to go bankrupt. You see, when the Tories told you that, they were lying).

The worst of it is that the other main political parties have signed up to the delusion that all these cuts might actually do some good.

Ed Miliband has ruled out more borrowing. That in itself is not a bad idea. But Ed Balls has admitted that he would follow Tory spending plans, at least for the first year of a Labour government, and there’s a consensus that pensioners will probably be the next defenceless social group to be hit with cuts – this time to benefits such as winter fuel payments.

They are talking among themselves. It seems unlikely that any of them has bothered to look out of the window to find out the real effect of their idiot schemes.

And so the agony continues. Based on an economic fallacy, perpetuated on the masses, while the very rich continue raking it in.

The longer this goes on, the greater the danger to us all.

The Coalition is hoodwinking us towards totalitarianism. Will the ‘People’s Assembly’ halt this?

Tags

advisor, armchair, austerity, business, co-operative, Coalition, conditioned helplessness, Conservative, corporate, cut, Democrat, disabiled, disability, electricity, environment, gas, health, Labour, Left Unity, leftie, Liberal, living wage, Michael Meacher, Mike Sivier, mikesivier, mutual, nationalisation, newspaper, Owen Jones, Parliament, people's assembly, private sector, progressive, rail, safety, self-employment, sick, social security, socialism, talking shop, technologies, technology, Tories, Tory, totalitarian, UKIP, Vox Political, water, welfare, Westminster, workplace

Wise words: The ‘People’s Assembly’ hopes to stir people out of their apathy and encourage them to oppose the unelected and unmandated right-wing, ideologically-driven and austerity-led destruction of British society. Are you interested, or is it too much like hard work?

“The people are not ready to embrace Socialism and may never be ready.”

“What, a cobbled together bunch of leftie socialists?”

“It will take more than a few breakfast TV celebrity socialists turning up in community centres to shake people awake, and armchair socialism – like conservatism, capitalism, fascism, communism and any other political ism that involves a minority seeking to impose its will on the masses down at their local community hall – is the last thing that anyone needs.”

“It would just be a talking shop of unelected and ‘celebrity’ allegedly left-wingers, who like to hear the sound of their own voices. It does not have any democratic structure, and would just be a sort of an admiring glee club, that would allow its supporters to have the illusion that something is being done.”

“Even if you got five million people to march through London protesting over the austerity program, the Palace of Westminster wouldn’t hear it.”

These are just a few of the negative responses to a recent article by Owen Jones, on the forthcoming meeting of the ‘People’s Assembly’, organised by the new socialist organisation Left Unity. None of them are saying anything we haven’t heard before. It seems the constant refrain, to which the British people sing along, is “Don’t bother trying to change it; there’s nothing you can do”.

This is, of course, lazy nonsense. You hear it from people who genuinely can’t be bothered and, more perniciously, from supporters of the status quo (in this case, the Coalition or UKIP) who know that a discouraging word at the right moment can nip a potential rival organisation in the bud. It’s called conditioned helplessness, and I’ve discussed it before.

Remember, the ‘People’s Assembly’ has not had its first meeting yet. Already people are trying to tell us it is a failure, a “talking shop” for “armchair socialism” that would not be heard in the corridors of power.

I wish I could attend, but geographical issues and other responsibilities mean this is impossible (I live in Wales and have responsibilities as a carer).

One thing we should all remember is that this is a socialist movement, not the creation of a political party. We already have a democratic socialist political party, although our Labour members of Parliament seem to have forgotten that (here’s a clue, folks: Read the top line on the back of your membership cards). They appear to be taking the soft option and following the Coalition narrative. But that’s no reason to let them get on with it.

It seems to me that the ‘People’s Assembly’, like the Left Unity organisation that is staging the event, will work best putting pressure on systems that are already in place. Labour presents the best chance we have for ousting the Tories and their little yellow helpers, without putting something equally right-wing in their place. People of good faith just need to encourage the Party to do the right thing.

And that is: Ditch all the idiotic follow-my-Tory-leader austerity-driven policies announced in recent weeks. Austerity has failed as a way of balancing the books; it was never intended to do so in the first place. Ditch the divisive Tory-soundalike rhetoric that shows Labour also wants to blame the poor for problems that they never created. Clear private sector ‘advisors’ out of Labour Party meetings and thinktanks – corporate influence will only benefit corporations and their shareholders; they have the Conservatives for that.

Adopt the line taken by Michael Meacher MP: “We will end austerity”.

Devise new policies for health, workplace safety and social security that will aim to prevent not only workplace-related sickness and disability, but also congenital conditions that blight lives. That will bring down the bills for health and social security far more than misplaced attempts to punish those whose ill-health is already an unjust punishment, as they have not committed any crime.

Reconsider policies relating to business. Labour has long since admitted that nationalisation of all industry does not work, and it doesn’t. But there are some services that should be run – as a business, perhaps, but under the authority of the state – in the national interest. These are the public utilities – water, electricity, gas. Possibly rail transport as well, because the current privatised situation is costing the taxpayer far more than when the service was nationalised.

Encourage self-employment where practical. People can only be assured of the ability to sustain themselves if they own the means of production. The best way to do that is to work for themselves. For businesses involving more than a single trader, encourage mutualism or co-operatives. This is the best way to ensure that all workers get the most benefit from the products of their labours. With employees encouraged to put more effort into their trade by the promise of getting more out of it, progress towards meeting and exceeding the Living Wage seems more likely.

And support new technologies, especially those that are environmentally-friendly. This is where many of the new jobs will be generated and the UK has delayed its support of these advances for far too long.

I don’t think these are impossible ambitions.

They can be achieved if the progressive members of British society get their act together and stand up for them. And let’s all admit it, they would be much healthier than the cuts that have spawned a continuing storm of protest ever since the Coalition first inflicted them upon us, just because most of us are poorer than they are.

I can see a willingness to take part in this activity, all around. I recently commented on attempts to silence progressive thinking in the letters page of my local newspaper – that has only happened because people (not just me) were willing to put pen to paper and say they think the Coalition has got it wrong.

People are realising that they can’t expect their political representatives to do the right thing without being told what it is. What’s holding them back is the concern that this is a minority view. That is why they may welcome an umbrella organisation like Left Unity and the ‘People’s Assembly’, to show them they’re not alone.

I would like to say that in Central Hall, Westminster, on Saturday but I can’t be there.

Would anybody like to say it for me – or something better?

Or shall we all just sit back in our armchairs and mutter, while the country goes to hell in a handbasket?

Whoever said Labour has no policies: Prepare to be embarrassed!

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austerity, back, bankers' bonus tax, bedroom tax, benefit, benefits, build, coal, Coalition, Conservative, council, councillor, David Cameron, end, energy, fake, fare, George Osborne, Health and Social Care Act, high pay commission, Income Tax, jobs guarantee, Labour, living wage, Lord, mansion tax, Michael Meacher, mining, nasty, national investment bank, Norman, Ofgem, Party, policies, policy, price, psychometric, public, rail, regulate, regulation, rent, service, spending, stab, Tebbit, test, The Green Benches, tuition fee, VAT, workfar

The end of austerity should be Labour’s flagship policy, according to Michael Meacher MP. Don’t get too excited – Labour has to get into office first, and we’ve no idea how bad the Conservative-led Coalition will wreck the systems of government before May 2015.

This is turning into a very bad weekend to be a Conservative.

The Nasty Party has lost control of 10 councils, with hundreds of councillors unseated. Its claims about people on benefits are falling flat when faced with the facts. It has fallen foul of UK and EU law with its fake psychometric test, which turned out to have been stolen from the USA. Its claim that Labour has no policies has proved to be utterly unfounded.

… What was that last one again?

Yes, you must have heard at least one Tory on telly, rabidly barking that Labour can’t criticise the Coalition if it doesn’t have any policies of its own. Those people were not telling the truth – even though they probably thought they were (poor deluded fools).

I am indebted to Michael Meacher MP, for posting information on the following in his own blog. He lists Labour promises, as revealed to date – and it’s quite a long list. Much – or indeed all – of it may have also appeared in an article on the Green Benches site, I believe. So let’s see…

Labour has already promised to:

• Repeal the Health and Social Care Act (otherwise known as the NHS privatisation Act)
• Build 125,000+ homes
• Regulate private rents
• Promote a Living Wage for public sector workers and shame the private sector into following that lead
• Offer a minimum 33-40 per cent cut in tuition fees
• Limit rail fare increases to one per cent
• Reimpose the 50p rate of income tax for the super-rich
• Impose a mansion tax on the rich
• Repeat the bankers’ bonus tax
• Reverse the bedroom tax
• Scrap Workfare and replace it with a ‘compulsory’ Jobs Guarantee (I’m not too keen on this one but it’s been promised)
• Offer a VAT cut or a ‘temporary’ VAT holiday
• Implement the High Pay Commission report in its entirety
• Scrap Ofgem and bring in proper energy price regulation
• Break up the banks and set up a National Investment Bank, and
• Support mining communities and clean coal technology.

In his article, Mr Meacher suggests that Labour needs to go further, with a really strong hook on which to hang all these policies. He suggests the following:

We will end austerity.

Yes, I thought that might stun you. Let’s have it again:

We will end austerity.

Now that you’ve had time to get used to the idea, I hope you’re applauding as much as I was when I read the article. Why not end austerity? The squeeze on public spending and services that David Cameron and his Boy Chancellor imposed in 2010 has not worked at all. There is now no basis for it – I wrote to Mr Osborne, requesting information on the other foundations of the policy after it was revealed that his main justification contained a huge error, and he has not replied, so clearly he has nothing to say. Its loss will be unlamented and can’t come soon enough.

There’s more in the article so I invite you to visit Mr Meacher’s site and read it yourself.

As for Mr Cameron… he’s a survivor but he’s starting to look tired and the number of his own party members who are stabbing him in the back is growing – Lord Tebbit has stuck his own knife in (again) during a BBC interview.

I wouldn’t bet any money that Cameron will still be PM by the end of the year.

Miliband’s plan: Return of the 10p tax rate

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bank, Bank of England, benefit, bonus, charge, David Cameron, disability, economy, Ed Miliband, energy, fare, income, Interest, Labour, mansion, Mervyn King, Mike Sivier, mikesivier, Nick Clegg, payday loan, people, politics, rail, tax, train, tuition fee, unemployment, Vox Political

Labour’s tax revelation: Ed Miliband announces his plan to reinstate the 10p lower tax band, as broadcast by the BBC.

What’s David Cameron going to whinge about now?

The comedy Prime Minister stuffed his foot deep into his own mouth during his questions on Wednesday, when he said he was not interested in Ed Miliband’s speech today because it would not contain any major policy messages.

Instead, Miliband not only took away one of Cameron’s favourite crutches – he has loved attacking Labour for removing the 10p tax rate (which he knew perfectly well was only intended to be temporary at the time) – but also spirited away one of Nick Clegg’s policy plans: Reintroduce the 10p rate and use a tax on mansions worth more than £2 million to pay for it.

That’s a brilliant strategy for the current situation. It answers Cameron’s criticism and it makes a clear message about Clegg – that Labour will do what he and his Liberal Democrats could not.

And it creates a clear priority divide between Labour and the Conservatives, who will introduce in a tax cut for people in the highest tax band in April.

Around 25 million people will benefit from this change, compared with 13,000 who will make money from the Tory tax plan.

His comment that the recovery will be created by the many – not just the few at the top – meshes very well with the opinion put forward on this blog yesterday about the Bank of England’s optimistic view of the future of the economy. The bank’s view, put forward by Sir Mervyn King, was that an improved manufacturing sector would lift us up – but this would only improve matters for people at the top of the economic ladder; Miliband’s plan brings rewards to those at the bottom.

And we know, don’t we, that people at the lower end of the pay scale keep the money circulating. That’s how the economy grows – keeping the money moving.

Mr Miliband also announced several other plans that would have important implications for working people and those who are on low incomes. These are to:

•Break the stranglehold of the big six energy suppliers.

•Stop the train company price rip-offs on the most popular routes.

•Introduce new rules to stop unfair bank charges.

•And cap interest on payday loans.

And a policy on tuition fees is promised before the next election; Miliband says he can see how off-putting they are to people who would otherwise put themselves through university.

These are all sensible measures. We pay too much for our energy; we pay too much on rail travel; the banks rip us off; and payday loans are nothing but a scam anyway – one that too many people are forced to use because the current system ensures they don’t earn enough to pay their way.

In the Q&A session, Miliband said he would tax bankers’ bonuses to fund a work programme for unemployed young people – and he thinks businesses would back this. It’s a plan that might work, as the economic benefit from getting people back into work – the expansion that would result – could offset the losses the banks would suffer. So everyone could win.

The urgent issue that hasn’t been covered today is that of disability benefits. Vox Political would like to see Labour change its approach to follow that outlined in the House of Lords this week: That the disability benefit system must be rethought, starting with the needs of disabled people, not with a plan for a budget cut.

As matters stood at the start of the current government, only 0.4 per cent of disability benefit claimants were believed to be claiming fraudulently. That’s one in every 250 claimants – a very small amount. The current bid to clear as many people off the books as possible – no matter how ill they may be – is an abomination that cannot be allowed to pass.

It seems David Cameron, campaigning in Eastleigh, has been asked for his opinion on the main announcement. He said it “looks like it has been cobbled together overnight”.

That’s a weak response from the man of whom Mr Miliband said: “Have you ever seen a more incompetent, hopeless, out of touch, u-turning, pledge-breaking, make it up as you go along, back of the envelope, miserable shower than this Prime Minister and this government?”

Expect Labour’s poll ratings to enjoy a significant bounce.

Public sector – good/private sector – bad

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A4E, agency, Any Questions, bank, banks, BBC, benefits, British Rail, Conservative, consultancy, consultants, David Cameron, G4S, Geoff Atkinson, government, health, housing, John Bird, John Fortune, judiciary, Labour, local authority, London Underground, National Rail Trends, Olympic, Olympics, Owen Jones, PFI, police, Powys, Powys County Council, prisons, private, Private Finance Initiative, privatisation, public, Radio 4, rail, repairs, revolution, Rory Bremner, rosco, section, sector, security, services, stock, survey, tax, taxpayers, The Future of Transport White Paper, water, welfare to work, Westminster, You Are Here

Many of you may be aware that I live in a large county called Powys, that has a small population. This means that the amount of money the local authority receives from central government and local taxation is always stretched very thin, in order to provide the services required across – what is it? – 6,000 square miles.
Given that context, it should come as no surprise at all that some of the information I have been receiving about the way that money is being spent has raised concern.
It seems the county council has employed a consultancy to carry out a survey of housing stock – to pinpoint where repairs are required and carry them out. This consultancy has taken £1.5 million from the council’s budget and not one repair has yet been carried out.
In addition, it seems most of the council’s own employees at its benefits section have quit, to be replaced by staff from an agency. This organisation charges £20 per hour for each worker’s services, I’m told.
Is this value for money? I don’t think so.
I think it is a local symptom of a national malaise: the disastrous affair public authorities have been having with the private sector. It is an affair that has already led to the humiliation of the government in the G4S Olympic security debacle; an affair that has its roots in the Private Finance Initiative that was launched by the Conservatives in the 1990s and continued into the current century (to my shame) by my own political party, Labour.
I have recently become quite a fan of ‘lefty’ columnist Owen Jones. This may come as a surprise to some readers as not only has he enjoyed greater success than me at the same career (journalism), but he is 16 years my junior. Talented, young and successful – I should be green with envy rather than cheering him on, right?
In fact I’m simply glad that someone is around to say what I would have said, in his position.
You may have heard this gentleman speaking on the BBC’s Any Questions (Radio 4, last Friday and Saturday), on the very subject of private involvement in public services. If you did not, allow me to enlighten you.
“What’s happened with G4S has exposed the dogma of the last 30 years, that the private sector is good and efficient, and the public sector is wasteful. What happened when G4S failed? The state had to go in and fill the vacuum – and it’s not just there we’ve seen it. We’ve seen it with A4E, this welfare to work programe, this company that basically took taxpayers’ money to line the pockets of those who were running it; we saw it with PFI – started by the Tory government, continued under New Labour, that’s like paying for public services on a credit card, getting these private companies to do what the state should have done, apparently it costs up to £25 billion more, of our money. It’s the same with the London Underground; it’s the same with rail privatisation – we’re now paying up to four times more on subsidies for private rail companies than we did in the time of British Rail. And we’ve seen it recently with water. We just recently had a drought when rain was absolutely hammering the southeast. That’s because a water company sold off 25 reservoirs in the last 20 years.
“Public services should be run by the public sector, accountable to us, democratically-run, instead of taxpayers’ money lining the pockets of private companies who do not have our interests at heart; they just want to make profit out of our services.”
In support of that, let’s have a few facts and figures. Those I have at hand come from a book entitled ‘You Are Here’ by satirical luminaries Rory Bremner, John Bird and John Fortune, with Geoff Atkinson. It was published in 2005 so the information – accurate at the time – may be out of date by now and I would be happy to read any updates on what follows.
In 2005, this was the situation:
When the railways were privatised (by the Conservatives) it was decided that one company would own and run the tracks, one group of companies would operate the trains and another group of companies would own them. There are three rolling stock leasing companies – roscos – that lease their trains to the operating companies. These trains cost just over £2 million to build and are leased out for £500,000 per year. Their lifetime is anything up to 40 years – which is a huge profit margin.
But don’t worry – they don’t receive a penny of taxpayers’ money. No – the subsidy for the South Central franchise was set to increase by £342 million between 2005-2010. Of this, 80 per cent went to the roscos for new rolling stock – around £273,600,000. But it wasn’t taxpayers’ money by then. It was taxpayers’ money when it was part of the operating company’s subsidy, but when it was passed between that company and the rosco it was a simple business transaction.
That’s how they get away with it. You and I both know that the cash came out of our pockets, but because it went through a middle-man, these companies can call it their own.
You might be interested to know that the three leasing companies are (or were, in 2005) all owned by banks.
According to ‘You Are Here’, “The Future of Transport White Paper says: ‘The privatisation of the rail industry in the early 1990s assumed that private sector discipline and innovation would drive down the railway’s subsidy requirement and drive up the quality of service. In part this has been borne out.
“Rail users might well ask: In which part? The same document shows 80 per cent of trains arriving on time in 2004, compared to 90 per cent in 1998. The latest National Rail Trends shows total government support to the rail industry in 1995-96 of £431 million. For 2002-03 it was £2,588 million.”
Private Finance Initiatives were intended to bring private sector cash in to fund public services – which may seem like a good idea on the face of it. As ‘You Are Here’ states: The deal is simple. Money for the new service is raised privately in the money markets and thus kept off the country’s balance sheet… but like any free offer, it does come with small print.
“The long-term value of PFI contracts may go down as well as up. Your public services are at risk if you do not keep up the repayments. The return for consortiums running PFI projects” – on the other hand – “may go up and up and up. Standard terms include: cost-cutting, short-term employment contracts, high management costs, huge legal costs. Every element must be a profit centre. After expiry of contract (typically 35 years) the consortium is under no obligation to renew the terms of the lease and can renegotiate at more favourable rates or move out of the public service sector and turn the property into a hotel or office block.
“PFI often means that an organisation which previously worked to a single goal is now in competition with itself, as different parts of the same system strive to outbid each other, the primary goal being to enhance profitability rather than deliver a service.”
To enhance profitability rather than deliver a service.
In February last year (2011), David Cameron promised to deliver a ‘revolution’ in public services, in which he envisaged everything but the security services and the judiciary being privatised. You can read about it here. Private prisons; private police; private health services – we’ve seen these rear their ugly heads already, and I’m sure more is to come.
Considering the disastrous profit-driven performance of the private sector in public services, as detailed above, I cannot think of anything worse than letting private companies continue with what they’ve got, let alone adding anything new to their portfolio of travesties!
With this in mind, I have to ask why Powys County Council thinks employing a private firm to survey its housing stock, or workers for a private agency to administer its benefits, is an economical use of my taxpayer money.
It’s time the madness stopped, and if Westminster is too sick to do it, then perhaps local government should lead the way back to sanity.