As the 31 Labour parliamentary candidates are demanding in their letter to Miliband, the case for returning rail to the public sector after the botched privatisation of 1996 is overwhelming. Private ownership has produced for the UK the highest fares in Europe, extensive overcrowding on commuter lines because of giving priority to dividends for shareholders over investment and quality service for the public, and the need for public subsidies to be doubled to £4bn a year. Renationalisation won’t cost taxpayers a penny because the existing franchises fall due, they can simply not be renewed but transferred to the public sector. The electorate wants this by 55% to 18%, and it would be a significant factor in reducing the cost-of-living crisis for the travelling public. But this is just the harbinger for a much bigger change.
Private markets have served this country badly since Thatcher unleashed a policy of mass de-regulation across the economic spectrum in the 1980s. Compared with the 30 years previously they have produced a worse record in the following 30 years (1980-2010) on almost every economic index – in terms of growth, stability (there were no bank crises during 1950-80, but the mother of all bank crises in 2008-9), competitiveness, balanced economy, social and environmental standards, and income growth per capita. The British people don’t seem to have recognised it, but as a result of a privatised economy aggravated further by the government’s obsession with prolonged austerity we have been living through a period worse even than Japan’s notorious ‘lost decade’ in the 1990s. Japan increased its per capita GDP by over 10% in the decade to 2000, while the UK’s per capita GDP fell nearly 7% by 2013 compared with 2007. Who in their right mind wants to return to such a drastically failed economic model?The demarcation lines between State and markets urgently need to be redrawn. The UK has swung over the last 60 years from centralised State control to extreme let-it-rip market fundamentalism. The results have been manifestly dreadful – housing supply only a third of the level of housing demand, an energy semi-monopoly market exploiting soaring prices, a social care market leaving more than a million elderly people lacking families with no-one to look after them, a healthcare market system that is patently breaking down as service deteriorates despite devoted care by loyal staff, and a private banking system that has broken all records for greed, recklessness and arrogance.
Instead of worship of the market that has performed so badly we need the case to be made and argued for public intervention in each of these areas – not a return to 1970s centralisation, but a partnership in which the values and leadership of the public sector will play the central role.