The Guardian has reported this morning that:
As they note:
TransPennine Express is to be run by the state after ministers announced that the failing rail company would not have its contract renewed.
Transport secretary Mark Harper said that the northern rail network will be run by the state-owned operator of last resort after disruption, cancellations and a huge decline in the service.
The First Group-owned TPE's contract expires on 28 May. Passengers and politicians across the north had called for change.
So, in a nutshell, the Tory transport minister has been forced to admit that privatisation has not worked in this case and that nationalisation has a better prospect of doing so.
Admitting that this is true for the whole rail network would be the best next step forward.
And it would be good if Labour might agree, but no doubt they will find a reason not to do so given that nationalisation is now anathema to them.
Why is it so hard for our politicians to understand that public service requires public control?
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They will still deny and deflect – the BBC article said the minister was blaming ASLEF for not allowing Transpennine to run a full service! So nothing to do with the company’s failure to recruit enough staff to run a service, or to have enough staff to be able to run a proper staff training programme for its shiny new trains…
The policy with private providers of public service is basically the same policy we see in the Central Bank Reserve Account for the private banking sector – where the BoE/State becomes the provider of liquidity as a last resort.
Privatisation of public services is just the same principle – the state will be the provider of last resort where there is a failure of some kind.
And the thing is, we are expected to accept that. That the private sector can fail, but the State sector is not allowed to (which is why apparently we had privatisation in the first place).
The message to private providers is ‘Come along and run public services and make loads of money. Don’t worry about being greedy or fucking it up because we’ve got your back!!’.
For the rest of us mere mortals, the state does not have your back – you get austerity, universal credit and an exploitative market out of control.
Honestly – that is it.
GNER was taken back into State control and then offered to the private sector again wasn’t it? It’s a farce.
I couldn’t agree more. If the state has to and can pick up the pieces when the private sector (deliberately) fails, then let’s just cut out the middleman and keep things in the public sector. You’re absolutely right, it gives the lie to the idea that private is better.
I don’t think they have tried to re-privatise LNER again, yet, have they? Avanti next, hopefully.
OK – but why private at all?
See above.
Gravy train – not a real train – that’s why.
Personally I think what lies behind this to and fro about the merits and demerits of privatisation and nationalisation are two things. Firstly, whether the delivery of goods services is taking place in a quasi-monoply situation. Secondly, just exactly how much control, or skin in the game, staff have in regard to control over capital.
Healthcare is very much a quasi-monopoly situation people generally want to stay alive for as long as possible and with high functionality so any new procedure or drug will be in high demand mainly in addition to existing ones.
Is transportation a quasi-monopoly situation? It’s recognised that retired people, most of whom are on reduced incomes, need financial help to move around and there’s still the argument that rail networks should be used more to move goods and materials around for a variety of common good reasons. Both of these would appear to require subsidies by the central and local state. Is transportation therefore a quasi-monopoly situation for the reason the state needs reliable control over transport operations? This would seem reasonable. Privatisation of the railways certainly hasn’t provided ideal control both on performance and price.
“there’s still the argument that rail networks should be used more to move goods and materials around for a variety of common good reasons. Both of these would appear to require subsidies by the central and local state”……..erm no.
1980s – British Rail – Red Star parcel service – operated at a profit (and delivered parcels from one Red Star rail station to any other in the Uk within 24hrs. Cheap and fast and relatively low carbon. Intercity (the BR service for intercity operations (hence the name !) was also profitable and used by mainland Europe operators as an ideal model on how to operate the railnetwork for intercity connections. Again – fast(ish) and cheap.
Subsidies are needed now because…………private operators are inefficient and basically subsidy farmers.
I was thinking more about the longer lorries argument now surfacing. If railway networks for long to medium haulage were that attractive unsubsidised we wouldn’t be having the longer lorries debate issue would we? So no I don’t buy your argument!
I have been giving some thought to the subject of privatisation, at minimum cost.
One step forward would be to remove Limited Liability status from any and all monopoly services. This would cover, rail, elec networks, gas network, water and sewage & telecoms. Such organisations and their owners and managers could then be made liable, without limit, for any & all failings both at an organisation level and a personal level. Given the reality of the UK’s one-party-state/two whinges system (sic) this is unlikely to happen. But if it did – it would certainly focus minds.
If I, as a young engineer, was personally liable for the safety of the men operating under my supervision, then it seems reasonable that organisations providing vital services to the UK are likewise required to take responsibility for any and all failings. For the avoidance of doubt on this, had I failed in my duty, I would have been jailed (& quite right to). There is no reason why this sort of responsibility could not also apply to organisations and their staff. Flood a river with sewage, you pay compo, do it multiple times, you (and the staff responsible) go to jail. If this happened, there would doubtless be a rush for the exits on the part of owners of UK infra. Owned by an off-shore or foreign company? that’s OK, assets seized if you don’t cooperate.
Adam Smith hated limited liability because of the moral hazard implicit within it
Limited liability companies can’t avoid Health and Safety legislation:-
https://www.hse.gov.uk/leadership/legislation.htm
But they do….
The point is not about health & safety – the point is to expose organisations that operate monopolies to full risk, – which at the moment they avoid, through Limited Liability. If they did not have limited liability and were open to any & all sorts of legal actions (for a wide range of reasons mostly to do with failures or one sort or another) then most owners of monopolies would decide that the returns were not worth it.
Why should a monopoly have limited liability? Fact of the matter is, most of the UK monopolies are money-extraction/profit maximisation machines – I have to deal, on a daily basis, with the rabble that own and run electricity networks – so when I say they are profit maximisation machines this is based on my direct experience with this set of mafiosi (also, I used to wrok for them – pre-nationalisation & still know some of my former colleagues).
I very largely agree
Every society operates by norms of behaviour which often have to be turned into laws. Simply to argue that private enterprises are allowed to operate as a law unto themselves doesn’t cut it. It simply means there is either insufficient law or it isn’t being enforced. That is a political problem. It’s no good pretending either that the solution for private enterprises is for them all to be partnerships not least because of funding, personal liability and decision making issues or for private enterprises all to become state enterprises, We all know states can become unaccountable rogue states which is exactly what fascism or communism teaches us.
“there is either insufficient law or it isn’t being enforced. That is a political problem.”
Glad we cleared that one up. Often the law is there; it just isn’t enforced. But that isn’t an accident. Changing the law is a difficult, contested business; much of which requires to be carried out in Parliament, in public. That will never do. Too much jeapordy. Too many risks. There are easier ways for Government to avoid the whole problem. The key is to make sure the legislation is basically solid, but more or less ineffective. This is relatively easy. Create a regulatory body that is notably weak, and liable to be favourable to the industry it regulates. That is standard; it will work for some time; but is still difficult. People complain; people notice. Regulators have to do something, and people can apporach them. They are in the public service.
Better still; claim there is no money in Government (the story we are broke never fails), and ensure the Regulator has inadequate resources to do the job. Perfect. This works every time; and as it requires close analysis and detailed knowledged even to understand what is not being carried out (and there are privacy laws for companies), this is extremely difficult to challenge; and is a very effective way of limiting the effect of laws and regulations, and the failure to implement them can go on unnoticed for decades. This is much better politically for free market Governments than de-legislation (look at poor old Kemi Badenoch, attacked by everybody because de-legislation is actually quite difficult). Much better is to keep the lefilation, but fail to resource the checks on application; then a loose, laissez-faire environment can go on for decades without anyone noticing; but the tabloids can still write outraged headlines demanding the end of Red Tape, which is killing enterprise and a monstrous imposition on business. Its a win-win. And its cheap! You can scream Red Tape, Red Tape, even when all the tape has fallen off and is completely lost; nobody will notice.
Think Grenfell and building regulations. Then think through the wholesale failure of regulation in the UK over decades. The regulators in the UK typically end by being the creatures of the industry they serve; and there is the problem – they serve the industry, not the public. FSA in banking and finance. Failed. Terminated. National Rivers Authority. Failed. Terminated. Department of Agriculture & Fisheries. Failed. Terminated. And I could go on and on. Grenfell. The pain goes on there; the people who bought thousands of homes with defective cladding still see no end in sight.
This is all a political problem, but the industries supposedly being regulated are rarely ever the ones to pay for the failure. Notice that nothing happens for years, until the failures are so egregious they are unavoidable, or something cataclysmic happens that brings the whole edifice down. But little really changes. Then the whole sorry circle starts all over again.
You can call that a “political problem” if you like; but it never changes, and the “problem” has its teeth buried deep in the flesh of the culture. I could trace the same formula back for around three hundred years. Nice try, but your argument doesn’t fix anything and you really need to think this through a little harder, and a lot more critically.
“ Often the law is there; it just isn’t enforced. But that isn’t an accident. Changing the law is a difficult, contested business; much of which requires to be carried out in Parliament, in public. That will never do. Too much jeapordy. Too many risks. There are easier ways for Government to avoid the whole problem. The key is to make sure the legislation is basically solid, but more or less ineffective.”
That is pretty much what defines a tax haven. Deliberate non-compliance is the order of the day.
Just send them a bill for the dilapidation that has occurred under their watch, payable in equity.
Hands off Grand Central, First Hull and Lumo.
They provide good service, and run by good people, much better than what went before.
They float over the system – quite absurdly
https://weownit.org.uk/act-now/take-our-railway-public-ownership
Anyone want to be a keyboard warrior?
Sign and pass it on to all your friends.
We had a very good lunch time meeting today at weownit.
https://bright-green.org/2023/05/11/calls-for-whole-railway-to-be-brought-into-public-ownership-after-transpennine-nationalisation/
Avanti West Coast contract expires on 31st May. It could easily be organised for it to be back in public hands if enough people told the government that’s what they want.
Louise Haigh, Labour shadow transport minister, has said on many occasions, including yesterday, that Labour will bring back the railways into public ownership. What more do you want?
I watched QT last night
Time and again ‘no nationalisation’ was stated to be Labour policy
So I don’t believe that commitment
What follows is in response to Mr Schofields comments, which are a mix of optimism with respect to the ability of regulators to regulate complex monopolies coupled to attributions which I did not either say or imply. Finally, he “sort of” commits the same category error that Tony Judt attributed to Hayek/Road to Serfdom (that socialism inevitably leads to fascism (or perhaps communism)
“private enterprises are allowed to operate as a law unto themselves doesn’t cut it. It simply means there is either insufficient law or it isn’t being enforced”.
The “more and better regulation” is often used as an argument for maintaining the status quo. However, this argument collapses in the face of the following realties (by the way – I am not offering “points of view”). Taking the case of power networks, there is a massive asymmetry of information held by Ofgem and the network operators. Most of Ofgem is a mix of lawyers and accountants. They have a very limited understanding of how networks operate. This leaves the DNOs etc in a position to manipulate Ofgem, which they have done very successfully, for decades. Couple this to revenue generation/profit maximisation based on a given network operator’s asset base and we arrive at the situation today with RoAs of better than 6%+/- – for a monopoly!!. The effectiveness of Ofwat is there in front of our eyes. Rail? Remind me how “broadband” roll-out is doing? Etc etc.
The solution to these fundamental problems is re-nationalisation, either via buy-back (expensive) or a re-adjustment of the legal landscape. Doing this removes an expensive entity: regulators & forces politicos to take some responsibility. Markets work where there is competition, they do not where there are monopolies and regulation of private monopolies has, over the last 33 years been shown to not work, conclusively. The vile-tory experiment needs to end asap.
Finally, please don’t put words into my mouth: “It’s no good pretending either that the solution for private enterprises is for them all to be partnerships” – I never did. All my comments are focused on monopolies and their provision of key national services.