Philip Hammond has made the most extraordinary range of comments in response to a report on the future of our railways according to the Guardian.
As they note:
Philip Hammond said above-inflation fare rises could disappear within four years if reforms set out on Thursday in an independent report are implemented. But he ruled out fare cuts as he warned that the £5.2bn-a-year state subsidy for the "relatively small" and "better off" proportion of the population that use trains is unsustainable.
Yes, of course: I see. £5.2 bn of subisidy will go but fares won't rise. That's obvious, isn't it?
Next:
"In the long term the taxpayer will not be prepared to just continually increase the level of subsidy that they give to the relatively small number of people who ever use trains — something like only 12% of the population. And of course those who use trains tend to be better off anyway," he said
Quite so: let's shut down all our cities then. There's no other way they can function: tarins are critical to their survival. I wonder how he's going to handle the chaos of removing their arteries, or the economic disruption of the extra pay that's going to be required to cover fares?
And doesn't he realise that passenger rail services in this country have almost certainly never paid? Until the post war period freight made all the money for railways. Losses began when freight went to roads. Until it did it cross subsidised passengers. Like Lansley demanding of the NHS something that has never been done before now Hammond is demanding that railways make a profit running passenger trains - something that has never been done before.
The next selection of the inspired wisdom?:
[The report] will avoid echoing the Beeching report of 1963 that resulted in the closure of more than 8,000 miles of track and will not recommend cuts in heavily subsidised rural lines. But the report is expected to lay bare the cost of supporting such services. Hammond said responsibility for those lines could be devolved to local authorities.
Ah, the standard Tory ploy these days - don't blame us for cuts. We gave responsibility to local authorities and they closed the service. The fact we cut their budgets by billions and denied them the right to raise taxes has nothing to do with it of course. The Tories are doing this on health (where the Health and Social Care Bill specifically creates a Local and not a National Health Service with the state having no role left in health care - all responsibility being devolved to local authorities who will have no cash at all to undertake the task given to them) and now he's doing it with railways. Saying a local authority is responsible for subsidising a local route but giving it no additional funds is simply saying someone else must take responsibility for closure. That's sure indication of the pygmies we have in this cabinet.
Finally - to show ignorance of rail operation:
Hammond also paved the way for taking carriages out of service out of rush hour, a suggestion blocked by his Labour predecessors. "What's the point in running empty trains around the country? In some parts of the network carriages could be taken off in off-peak. Shorter trains are a possibility."
Of course it costs energy to move trains around. But it takes additional staff, extra trains movements, extra line capacity and considerable extra cost as a result to split trains, move them to carriage sidings for a few hours and then bring them back again. This suggestion shows the most basic lack of understanding of railways. But then he's a transpor secretary in the mould of Thatcher - I suspect he thinks only failures use trains. She did (she did not go near them - like buses). And that's what's at the core of this.
Railways work as a system, collectively, with cross subsidiation and sometimes subsidy. It's the best net outcome for soc
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Subsidies and private profit do not mix.
I’m utterly baffled by the comment about taking carriages out of service. Not whether it is a good idea or not, but at the idea that some dopey government minister should have influence on something that should be purely a local, operational, decision.
The privatisation by the Major government showed that the Tories did not understand railway systems. Presumably Hammond is following in their footsteps…
If Hammond really wants to save money, he should look at renationalising the railways. The subsidy was consistently lower when the railways were nationalised and the efficiency of train operation was higher. I quote from McNulty’s Rail value for money scoping study report:
* in real terms
Figure 1.2 in the report makes the same point.
According to the National Rail Trends survey passenger numbers have risen by 60% since privatisation. One might have expected economies of scale to make the railways more rather than less efficient.
And it’s not just the taxpayer who’s paying more: fares cost 22.7 per cent more in real terms than they did in 1995.
Although privatisation isn’t the only factor, I think the main reason for these shocking figures is the irrational, quasi-competitive structure that has been imposed on the railways.
I keep thinking that the Government is about to make the same mistake with the NHS in England. I think campaingers could cite what has happened to the cost of the railways as an example of what happens when an artificial, fragmented, competitive structure is imposed on an organisation that needs to work cooperatively to work efficiently.
Should never have been privatised, should be re-nationalised as soon as possible.
Ask the French or Germans how to do it – the Germans are probably more appropriate as an example – similar sized country, similar population density, similar division between “prosperous” half and “less prosperous” half.
Will never happen, obviously. Any of substance is, of course, chauffeured to work.
I understand that before privatisation, the subsidy was about £1 billion per annum and this now stands at £5.2 billion. Two extra tiers of charges have been added – the shareholders’ dividends and Roscos’ charges for rolling stock provision and the Roscos are owned by the usual banks who cream a profit. Perhaps the conservatives, with their limited commercial abilities, are shooting themselves in the foot here.
In fact, the railways have risen to the challenge well and passenger numbers have increased dramatically, despite the fact that our fare structures are probably the highest in Europe.
Most young people cannot afford a car, and particularly the insurance, so if we are to have jobs mobility, the train has a vital part to play.
The problem with the trains in the UK is that they were privatised in the first place. The rail networks with which they are being compared are still in state ownership.
This morning on the Today programme, Bob Crowe pointed out this highly relevant detail in a phone interview.
That bit of his interview did not make it to the excerpt used in the Radio 4 news reporting it.
It seems very strange to class nearly 1 in 8 of the UK’s population as a ‘relatively small number of people’. By that standard, London is only inhabited by a little more than a ‘small number of people’.
Simon Jenkins was for some time a Board member of BR. In his book “Thatcher & Sons” he documents some ofthe craziness.
“All reports on options for privatization had concluded that the one thing that should no happen was a break in managemnt responsibility between infrastructure and those running the trains. Such ‘vertical separation’ would snap the lines of comand and lead to buck passing and confused investment priorities …
“The passage of the railways bill in 1993 was chaotic. John MacGregor, transport secretary … tried to claim that he was no privatizing teh railway at all. He was merely bringing to it ‘as much private sector involvement, attitude, objectives and management as possible’.
“Virgin contracted to receive a guaranteed subsidy of £400 million over two years on the West Coat Mainline alone. It had been profitable under BR.”
It all sounds alarmingly like current plans for the NHS.
Indeed. The Big Lie – “we’re not privatising the NHS, no sirree”.
In other news, several more billion is being wasted on Trident.
Is this “austerity” really necessary, even under the parameters of Conservative economics? Raise taxes, cancel Trident, rationalise the railways…there are plenty of savings to be made by a government genuinely interested in “efficent management” of the economy.
No these cuts aren’t needed.
See Cuts: The Callous Con Trick to the right for a start