Tag Archives: privatization

The Top 7 Weakest Defences For Privatized Rail

The 3.6% hike in rail fares, announced last August, came into effect last Tuesday, and I have already seen the usual, rather weak, excuses offered in defence of rail privatization on the below the line comments threads on The Guardian and on Twitter. Have you noticed how their defences always seem to repeat the same canards? So, let’s have a look at them in no particular order:

  1. Passenger numbers have increased since privatization. This is probably the silliest of all the stock responses made in defence of privatized rail. It’s silly because it ignores the growth in population. One thing does not lead to the other. Indeed, populations in countries that have nationalized railways have also increased but you don’t see the same overcrowding, nor does one have to pay a king’s ransom to travel by rail in those countries. Sometimes this excuse is also used to smuggle in anti-immigration discourses.
  2. Why should I subsidize people who travel by rail? This one is usually offered by ‘me first’ types, who have internalized Thatcherite dogma and are incapable of seeing anything other than the self. Conversely, why should those people who never use pavements or the motorways subsidize the maintenance of those things? Another silly reply easily dismissed.
  3. Why should I care about commuters in London? This reply ignores the commuter rail networks in major conurbations like Glasgow, Greater Manchester and the West Midlands. It also dismisses, out of hand, the users of rural rail services, which not only remain expensive, but are patchy at best.
  4. Why should the taxpayer foot the bill? This question sidesteps the obvious: commuters and other rail users are taxpayers. If you are in any passenger group and are working, you effectively pay twice: once through vastly inflated fares and again through your taxes. The private train operators are subsidized, which means they make money from passengers but also benefit from the state’s corporate welfare scheme. The Virgin East Coast Mainline is in such dire financial straights that the Secretary of State for Transport, Chris Grayling, has offered to bail them out to the tune of £2bn.
  5. Rail fares need to increase to fund improvements. This is the rail operators’ main line of defence but when it’s unpacked and the privatized model is held up against the nationalized railways on continental Europe, it doesn’t stand up to scrutiny. Privatized train operators make profits for shareholders, who demand greater dividends. Therefore, the profits that are made, don’t go back into the business but are used to further enrich rentiers, many of whom don’t live in the United Kingdom. Indeed, some of the Train Operating Companies are actually owned by foreign nationalized railways themselves. Deutsche Bahn, the German state-owned rail company, runs the Northern Rail franchise, for example.
  6. Ah, but the rail network is nationalized; the rail tracks are owned by the state. So what? Passengers pay their fares to TOC’s and not the inanimate track, on which the trains run. The railway network is, for all intents and purposes, privately operated. Passengers can’t travel on the rail tracks without trains, because to do so would be to trespass on the permanent way. It’s also dangerous.
  7. We don’t want to go back to British Rail. Well, actually, yes we do. The problem with this line of defence is that it deliberately ignores the fact that BR was chronically underfunded and was as poorly managed as the rest of the British economy. This includes the private sector, in which British management has long been a problem – especially with regards to low productivity. I’m old enough to remember BR and it wasn’t as bad as many naysayers say it was.

So, if the privatized railway model is so good, then why hasn’t it been adopted in other countries? The answer to that question is obvious: because it’s flawed; the fragmented structure of rail tracks, TOC’s, train leasing companies, and various regulators make it a real dog’s dinner. Why would any country want to adopt such a tangled mess?

The response to last week’s fare increase was fairly predictable: protests were held at 40 railways stations and the usual gasps of disbelief could be heard up and down the country, but how does waving placards and handing out leaflets to passengers actually affect anything? What we really need is a mass fare strike coordinated with the rail unions. Fare strikes have been used in other countries, notably in Australia. But we’ve had fare strikes in Britain too. In 2007 and 2008, passengers on  First Great Western refused to pay fares.  The South Yorkshire Freedom Riders are a fairly recent example of how people power can force change.

Instead of complaining on social media and telling jokes, how about taking some real action for a change?

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The EU, Sovereignty, Asset-Stripping and the Hypocrisy of the Right

Now the government wants to sell off its stake in Eurostar. What’s next? Our air?

David Cameron’s just been to China with a gaggle of his party’s biggest donors. According to the Daily Fail, Lord Flashman took 131 of his cronies with him on his Chinese junket, one of whom was his father-in-law. The purpose of the visit, it seems, was to kiss Chinese arse and maybe sell off a few of Britain’s assets in the process, but the visit hasn’t gone according to plan.

According to various sources, the Chinese media told Cameron that the UK was “just an old European country” that is only fit for studying and travel. Given the cuts to higher education, I’d say that only one of those things is true. The Britain that some folk would like to see borders on a theme park complete with fairytale princesses and princes.

That’s pretty much what this country has become – a theme park – as well as a site of primitive accumulation for foreign asset-strippers. What’s the betting that part of the reason for Cameron’s visit was to offer the Chinese a few national assets?

According to Open Democracy, the selling off of the nation’s assets has severely damaged the economy. So what’s the government’s solution? Continue to sell them off.

Between 2000 and 2010, our total trade deficit was £286bn, but during the same decade the value of our net sales of portfolio assets was much larger than this – at £615bn. None of this money was spent on direct investment in plant, machinery and industrial buildings, which would have strengthened our economy. Portfolio assets are no more than titles to ownership – mostly shares – so selling these to foreign owners involved no physical investment in the UK, just loss of ownership and control on a grand scale.

And

What did we sell? Foreign interests bought from us an incredible range of what had previously been owned in Britain. Most of our power generating companies, our airports and ports, our water companies, many of our rail franchises and our chemical, engineering and electronic companies, our merchant banks, an iconic chocolate company – Cadbury, our heavily subsidised wind farms, a vast amount of expensive housing  and many, many other assets all disappeared into foreign ownership.

This is how Gidiot and the rest of the hole-in-the-head gang can claim the economy is “on the mend”, except in anyone else’s books, it isn’t. Here’s some more:

No other country in the world allowed this sort of thing to happen. Why did it occur in Britain? There were three main overlapping reasons. The first was an institutional change. Until 1999, when it was abolished, the Monopolies and Mergers Commission was required to consider whether take-overs satisfied a general public interest test. The organisation which replaced it after 1999, the Competition Commission, had no such remit. It was only concerned with whether acquisitions would weaken competition. This left the UK with no process for reviewing whether the wider interests of the British economy were likely to be compromised by the purchase by foreign interests of UK companies and other assets.

While it may be tempting to see this as something Nu Labour did, we should remember that the privatizations of the 1980s all happened under Thatcher. Blair and his mob continued in the same vein.

More recently the government asked the Chinese to build a new nuclear power station and they may even fund HS2.

The Guardian reports:

China wants involvement in Britain’s first high-speed rail line and an increased role in civil nuclear power, the country’s premier said in Beijing after talks with David Cameron on the first day of the prime minister’s visit.

Li Keqiang said China would also like to invest in power projects.

Speaking in the Great Hall of the People on Monday, Li said: “The two sides have agreed to push for breakthroughs and progress in the co-operation between our enterprises on nuclear power and high speed rail. The Chinese side is willing to not only participate in but also purchase equities and stocks in UK power projects.”

One might imagine that the potential trade-off is to strip workers of their rights. This is why there is such a  push on the part of the Right to leave the European Union and scrap the European Convention on Human Rights (which is unrelated to the EU). Remove workers rights and further limit the power of the trade unions and what do you have? A country like China.

This morning Danny ‘Beaker’ Alexander told listeners on Radio 47’s Today programme that the government was looking to sell off Eurostar.

The Guardian has more:

• Billions of pounds of public money will be used to back the new Wylfa nuclear power station, due to be built by Japanese investors Hitachi on the Welsh island of Anglesey. The Treasury has signed an agreement that it will guarantee loans to the project in future – enabling Hitachi to get cheap finance – in a deal similar to the one offered to France’s EDF to build a nuclear plant at Hinkley Point, Somerset.

• Large insurance companies have put aside £25bn for spending on national infrastructure over the next five years, following changes in European rules pushed for by the UK that incentivise investment in a wider range of assets.

• Plans to bring in the UK’s first toll road for a decade have been scrapped. Improvements to the A14 between Cambridge and Huntingdon will be financed by the government and not by the motorists using the road, after a public outcry and David Cameron’s acknowledgment of “strong feelings” about it in East Anglia.

• Terms have been agreed on a £1bn guarantee for the London Underground’s Northern line extension to Battersea.

• An extra £50m will be allocated to redevelop the railway station at Gatwick  Airport.

Describing the £25bn investment by insurers as a “massive vote of confidence”, Alexander will say Britain’s infrastructure is being rebuilt after years of neglect.

Who’s he trying to fool?

What gets me is the way the Right will complain that Britain has ‘signed away its sovereignty to Brussels’ but says nothing about how this country’s assets have been comprehensively stripped and sold off to foreign investors. Five of Britain’s energy providers are owned by foreigners, one of which is EDF, France’s state-owned electricity provider.

The Right have demanded an in/out referendum on Britain’s membership of the EU because they claim that British people have ‘a right to decide’ the nation’s future relationship with Europe. Yet, they don’t dare propose a referendum on whether or not we want our national assets sold off to foreign countries.

Now how’s that for hypocrisy?

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Filed under Government & politics, Public spending

Thatcher’s dead

Yes, she’s finally dead. She tore apart the country and sold off the family silver. Under her rule, the North-South divide grew larger and people were urged to think only of themselves. Large swathes of the country had their hearts torn from them.

I promised myself that I’d play this on a loop when Thatcher snuffed it and here it is.

Here’s another tune that sums up the moment.

Elvis Costello wrote and recorded this at the height of Thatcher’s rule.

It’s 1322, I may go for a beer. I don’t usually drink during the day but this is a very special day.

Let’s remind ourselves of what happened in 11 years of her misrule.

  1. The sale of council homes. Councils were forbidden to use their capital receipts to build new homes. We now have the biggest housing crisis since WWII
  2. The Miners Strike. Subsequent pit closures devastated the communities that grew up around the collieries. The Metropolitan Police served as Thatcher’s private army
  3. Section 28
  4. The Poll Tax
  5. The abolition of the metropolitan counties
  6. The Falklands War
  7. The deregulation of the financial sector, which has contributed to the banking issues we see today.
  8. The widening of the North-South divide
  9. School league tables
  10. The wholesale privatization of nationally-owned  industries and public services
  11. The marketization of education
  12. The Toxteth, St Paul’s, Handsworth and Brixton riots
  13. The lack of real jobs to replace those lost through privatization
  14. Anti-union legislation (revenge for 1974)
  15. Canary Wharf and the rest of the “Enterprise Zones” where people could be paid less and weren’t allowed to collectively bargain for improvements to pay and conditions
  16. British Rail effectively starved of funding to prepare it for privatization
  17. Massive cuts to arts funding. Arts and culture reduced to commodities.
  18. Unqualified support for Pinochet and his repressive regime.

So there you have it. The wicked witch is dead. Now let’s get rid of this shower in power.

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