State ownership of rail is only the start

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.

 

7 thoughts on “State ownership of rail is only the start

  1. Apparently the Cost of travelling to Glasgow during the Commonwealth games has been hiked well above the usual costs, this is typical of what we expect from privatised Utilities, poor service and extortionate costs to keep the shareholders happy.

  2. Food. YOu forgot food. We need to nationalise at least a part of the food industry so that we can get a supply of food which is there to properly sustain us instead of slowly poisoning us (sugar, trans-fats, aspartame etc) in the pursuit of profit.

  3. I tend to agree and particularly after the notorious events at Potters Bar, that there a number of areas that probably need to be under direct democratic control, the NHS being at top of list.

    However this isn’t an either or question, there is also a case for private involvement and for real enterprise.

    The dangers of monopolies, (or cartels,) are well known and well understood and these day’s, aided and abetted by corrupt government and a seemingly far from independent and often compromised civil service with a purely commercial agenda, the real objective of modern capitalism has been achieved by too many outsourced or privatized suppliers.

    Which is not be the best or most cost effective and efficient supplier of goods and service, but to be the only supplier of goods and services.

    But yes, there is strong case for taking the railways back into public management and other even more key and strategically critical areas as well.

    The arguments, (such as they were,) for the kind of wholesale and ideologically driven privatizations of public services that have blighted this country since Thatcher now stand as almost entirely discredited fictions and have not been even remotely born out by real life experience.

  4. Renationalising the railways could be a disaster. The train operators, with the exception of DRS,do not own any rolling stock which is leased from companies like Porterbrook. Since privatisation passenger numbers have risen from 800 million to 1.6 billion and trains are half the age they used to be.The age of privatisation has been a golden age for railway spending.In September Network Rail’s debt comes back onto the public books.Yes we in the North are paying high fares and getting nothing in terms of better trains. Leave East Coast, in public ownership at present, to compare with the private franchises before making a decision.

  5. We have a central bank which can create whatever money we need to buy things. It’s fiat currency, backed by the wealth it’s used to create, so as long as the new money is used to create proportionate wealth then there’d be no inflation. Further down the road, when depreciation of asssets affects the value of the wealth created (stuff gets old, in other words) money could be taxed from the system and so destroyed, maintaining the value of the currency. We don’t need to be borrowing from third parties nor worrying about the costs, we never did. Banking’s a scam, and we’re quite deliberately miseducated about money so we don’t realise.

  6. Renationalizing the railways could be a disaster certainly, but privatizing them certainly was not just Potter Bar, but the number of private operators who have pulled out or gone bust, (Rail-track,) as you say leaving the taxpayer with a massive bill for their liabilities anyway.

    So That’s as broad as it’s long in lot of ways also, (the recent Virgin debacle aside,) the civil service seem not only to enjoy running the railways but actually seem be quite good at it.

    After some of the Southern Lines were put into receivership, (or something like receivership; effectively they were renationalized on a temporary basis,)the civil service administered them very cost effectively and efficiently, (certainly according to the Financial times anyway.)

    The real question might well be, given the amount of public money that’s being thrown at them, can we afford not to renationalize them?

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