Monday, November 16, 2009

Backtrack or Derail

This article, by CPO co-founder Neil Clark appears in the New Statesman.

A pledge to renationalise the railways would be a clear vote-winner. So why do passengers’ demands fall on deaf ears?

Public ownership is a puzzle. Voters are in favour of it, but our three main parties offer little to its supporters in terms of viable policy options. Instead, they remain wedded to a pro-privatisation agenda, trying to outdo each other in making lists of what public assets to sell off next.

In the past two years, the government has nationalised Northern Rock, and has taken large stakes in leading banks. Privatisation has never been so unpopular. But the gap between public opinion and the position taken by our politicians is at its greatest in the case of the railways.

Rushed through by John Major's government, privatisation has left us with fragmented and user-unfriendly railways, requiring around four times the public subsidy received by British Rail. Despite the vast amounts of taxpayers' money that have been handed over to private train operators (for example, Virgin Trains received £294.6m this year for running the West Coast Main Line franchise), our railways are easily the most expensive in Europe, with fares 3.4 times the global average.

Research by the investment bank UBS showed that while a 125-mile, second-class train journey in Britain costs £54.39, it costs just £18.94 in Italy, a country with a similar average income. Since privatisation in 1996, fares for long-distance trips have soared by up to three times inflation. This year alone, fares rose by an average of 6 per cent, with services such as CrossCountry hiking prices by 11 per cent.

Add to the equation that rush-hour trains are often overcrowded, owing to the inadequate number of carriages (another result of privatisation that set up rolling stock companies), and it is not surprising that 70 per cent of the public back the renationalisation of the railways. But their calls are falling on deaf ears. The Tories want "longer, better franchises" for the train operators. They also want Network Rail, the not-for-profit, quasi-public body set up by Labour in the aftermath of the collapse of Railtrack, to lose its monopoly on engineering work.

The Liberal Democrats pledged renationalisation in their 2005 election manifesto but the policy has now been dropped, to the consternation of party activists and some MPs. "Where is it written that we have to abandon good ideas simply because Labour and the Tories have abandoned them, too?" Lembit Öpik asked at this year's party conference, where several pleas for taking the railways back into public ownership were rejected by the party.

Labour's stance is perhaps the most baffling of all. Here is a party that is down in the polls, and in desperate need of vote-winning policies. Labour opposed the sell-off of British Rail when in opposition, with Tony Blair promising a "publicly owned, publicly accountable railway". Yet in government it has happily accepted the privatised system.

Loco motives

What would Labour lose by reverting to its earlier stance and committing to full-scale renationalisation? The answer is nothing. The government's inaction can be traced to the man at the top. "The trouble is that Gordon actually believes all this neoliberal dogma about the benefits of privatisation," a former Labour MP told me earlier this year.

Brown's speech at this year's Labour party conference, in which he attacked "right-wing fundamentalism that says you just leave everything to the market", seemed to signal a move away from New Labourism to a more social-democratic agenda. But the Prime Minister showed his true, pro-privatisation colours when, shortly afterwards, he announced a fire-sale of publicly owned assets - including the Tote bookmakers, the Channel Tunnel rail link and the Royal Mint.

We should not forget the crucial role that Brown played in aiding and abetting the Tory sell-off in the 1990s. In Broken Rails: How Privatisation Wrecked Britain's Railways, Christian Wolmar describes how, in the spring of 1996, the shadow chancellor vetoed his party's plan to scupper the forthcoming privatisation of Railtrack by announcing that, on coming to power, they would replace its shares with preference shares. Labour's initiative was "a genuine opportunity to undermine the [privatisation] process fatally". But thanks to Brown's intervention, the knock-out blow was never delivered.

Opponents of renationalisation say that bringing back British Rail would cost the government too much money. But they ignore the fact that we are in a recession and many franchises are in serious trouble. This year, we have already seen the government renationalise the east coast rail service after NXEC, a subsidiary of the troubled transport company National Express, tried to get its contract renegotiated.

Eight of the 19 franchises expire in or before 2013, which means that at most only 11would have to be bought out by the government - that's assuming no others default, as in the case of NXEC. Renationalising in this way, and setting 2013 as the date for the establishment of a fully publicly owned network, would not only reduce the costs of the process, but expose the hypocrisy of the free-market critics of public ownership, who would be left arguing for continued taxpayer subsidies for a privately owned railway.

A golden age

Renationalisation could, and should, usher in a new golden age for Britain's railways. For that to happen, we need to acknowledge that railways are a public service and not judge them on how much revenue they generate. That means returning to the spirit of Barbara Castle's 1968 Transport Act, which relieved the railways of what Wolmar describes as "the impossible target" of breaking even or making a profit.

It means reintroducing distance-based pricing and scrapping today's market-based pricing, which has led to extortionate fares - such as Virgin's £247 "anytime" return from London to Manchester, or the first fare costing over £1,000 (from Cornwall to Scotland). It means reducing ticket prices to the European average, with 50 per cent reductions of fares at weekends, enabling Britons to travel across the country cheaply. And it also, of course, means more trains.

Nationalisation would have a positive social and environmental impact, and it would also have a wider political significance. It would be a clear sign that the era of neoliberal extremism ushered in by the Thatcher government in 1979 is finally at an end. The sell-off of the railways was the most extreme of all the Conservative privatisations. No other country in western Europe was foolish enough to follow Britain's example - even in "free market" Switzerland, the railways are publicly owned.

If we are serious about constructing a society where the needs of people come before capital, renationalisation of the railways would be a perfect place to start.

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A tale of two commuters

A comparison of the experiences of two commuters exposes the differences in service in Britain and abroad.

Matthew Clark travels to work in London each day from his home in Arundel (a journey of 58 miles each way) on trains run by private operator Southern. He pays £3,280 for his season ticket; an "anytime" return for the journey costs £42. “The price is outrageous. I get a seat because I get on at the start of the journey, but people who get on at Crawley have to stand." What about punctuality? "If I was hypercritical, I'd say that often trains are a few minutes late, but it's not that bad. Once, though, I left Arundel at 6.06am and only got into London at 1.30pm - two trains broke down. It was a disaster."

In Belgium, Andy Assez commutes from Leuven to Brussels (17 miles each way), on the state-owned National Railway Company of Belgium. "I have a season ticket, which my employer pays for. A non-discounted season ticket for the journey costs €991." (£889. A return is €9.60.) “I almost always get a seat, even at peak hours. There are a lot of people who are going in the direction of Brussels, but there are also a lot of trains (around six per hour). Most of the time, I can't really complain about the services on the train." And punctuality? "The train is usually not more than five minutes late, but exceptionally it can be more than 15 minutes delayed."

Wednesday, November 11, 2009

Britain's privatised trains too expensive for rail firm

The BBC reports:

Network Rail is transporting 200 staff by coach from Reading to Coventry for a conference because of the high cost of train tickets, it has emerged.
The rail operator has opted to shun train travel for road transport as it is more than £24,000 cheaper.
If open return tickets were bought for all the staff it could cost up to £27,000 - £135 each. But coach travel, at £12 a head, will cost just £2,400.
The firm said it made no apologies for getting the "best value" for taxpayers.
Network Rail said it looks at cheaper options for journeys as part of cost-cutting, as its workers do not get free travel or discounts.
A spokesman added: "Whilst we have no role in setting train fares, we use rail for the overwhelming number of business journeys.
"Occasionally, if there is a cheaper alternative, we will use that."

Tuesday, November 3, 2009

Britain's first £1000 train fare

From The Daily Mail:

Britain's first £1,000 rail fare has caused a fresh row over the rising costs of train travel.
A first-class 'walk-on' return ticket from Newquay, Cornwall, to Kyle of Lochalsh, Scotland, now costs a staggering £1,002 - making it the first time passengers have been asked to pay such a high price for a UK journey since rail services began in 1825.
The record-breaking fare emerged in a survey by rail expert Barry Doe. It shows that since privatisation in the mid-Nineties fares for long-distance trips have soared by up to three times inflation.
A first-class 'walk-on' return from London to Manchester was £134 in 1995, the last year British Rail set all fares, but has trebled to £387.
Even inter-city fares 'capped' by legislation put in place at privatisation have risen far more than inflation.
In 1995 the cheapest 'walk-on' return to Plymouth was £39, but is now £72. This is a rise of 85 per cent compared with inflation of 45 per cent over the same period.
Rail enthusiast Michael Palin, whose first TV travelogue was a train trip to Kyle of Lochalsh, said: 'The fare is staggering. Fares do seem to be rising and complicated. If you're good on the internet you can spend a couple of hours and get good deals.
'If you're not so good you can end up paying £1,000. This is what happens in a free-market economy where railways have been privatised. I don't think this is a journey I'll be doing.'

Friday, October 30, 2009

Tories to sell-off entire Royal Mail if they win power

The Daily Mail reports:

A Conservative government would press ahead with plans to privatise Royal Mail and the party believes there would be more bidders if the striking Communication Workers Union is defeated.

The Tories are keen to sell off the entire service, rather than just the 30 per cent stake that Business Secretary Lord Mandelson wants to off-load.

It has emerged that Ken Clarke, the shadow Tory business secretary, had met potential bidders for Royal Mail and is said to be ready to include plans for full privatisation in the first Queen's Speech after a Tory general election victory.

The Tories are also looking to introduce measures that would ban strike action that was not supported by a majority of all workers being called out on strike.

Monday, October 26, 2009

Forensic Science Service set for sale

The Mail on Sunday reports:

The Forensic Science Service, which analyses crime scene evidence in England and Wales, is gearing up to be privatised.
A leaked Government briefing document for those on the panel who interviewed Dr Simon Bennett, the new FSS chief executive, makes it clear that his role would include readying the organisation for a sale.
Mike Sparam, negotiating officer for the Prospect union, said: 'We obtained a document that told the panel that the new appointment would be to drive privatisation in a similar way to QinetiQ.'
Bennett, a former managing director at defence group QinetiQ which was privatised six years ago, started at the FSS just a few weeks ago.
Since then the organisation has announced the closure of three of its seven laboratories with the loss of 700 jobs and announced that the DNA database will be handled by the National Policing Improvement Agency. This means the FSS can be sold without the Government losing control of crucial files.
The FSS's remaining four laboratories will concentrate on specific crime investigation areas, including cold cases, similar to the work dramatised in BBC's Waking The Dead.
Sparam said: 'The company will no longer be able to provide the service it once had after having slashed its workforce by 40 per cent.

Sunday, October 25, 2009

Poor Casualties of the new Cold War

Fron The Sunday Express, 25th October 2009.

THE second biggest power supplier in Britain is due to announce bumper profits next month.
Scottish and Southern Energy, which has nine million customers, has already forecast that pretax profits for the six months to the end of September will be significantly higher than last year’s £303million.
Speculation is rife that the company could announce profits for the period of nearly £600million. But with average annual household energy bills standing at £1,239 after a 42 per cent rise last year, any rise will enrage consumers.
Power suppliers, many of them foreign owned, say they need to make money to invest in new infrastructure but price comparison website uswitch.com believes there is plenty of scope for another price cut.
Uswitch.com said household bills have fallen by only four per cent from last year’s high, despite energy on the wholesale market being relatively cheap all year. Experts at energy consultancy McKinnon & Clarke have branded the situation “scandalous” and say that the energy companies have a stranglehold on the market.

Thursday, October 22, 2009

Britain a democracy? You're having a laugh

This article, by CPO co-founder Neil Clark, on the pro-privatisation policies of Britain's three main parties, appears in the Morning Star.

Do you remember the days when political commentators in Britain used to sneer that US "democracy" merely meant the choice between two identical pro-big business parties?

That was when there were genuine differences between Labour, Conservatives and the Liberals on a variety of key issues. But those days are long gone.

The reality is that the Britain of 2009 is to all intents and purposes a one-party state. Labour, the Conservatives and the Lib Dems are merely wings of the "capital party" - the same capital party which has governed Britain since 1979.

In 1997 capital decided it needed to change the faces at the top of the ruling junta as they'd got a bit stale, so we got "new" Labour and grinning Tony instead of the old Tories and the grey-haired John Major.

Now capital has decided that in order to keep up the charade that we live in a democracy it's time for another cosmetic regime change and so the "new" Tories, with Dave "Tony Blair mark II" Cameron, will be wheeled back in. Change we can believe in. Not.

Anyone who doubts the thesis should consider the recent pronouncements our three main parties have been making about privatisation.

Two weeks ago Prime Minister Gordon Brown - the man who wants you to think he's a social democrat - announced a fire sale of publicly owned assets including the Tote, the Dartford Crossing, the Channel Tunnel Rail Link, the student loan book and the Royal Mint.

The Tory reaction was not to criticise Brown over the principle of selling off state assets but to claim that the measures would "do little to solve the problems" of alleged government overspending.

"Given the state the country is in, it is probably necessary but it is no substitute for a long-term plan to get the country to live within its means," a party spokesman said.
The Tories then announced further privatisation of their own, with uber neocon shadow defence secretary Liam Fox telling the BBC's Andrew Marr at the weekend that the Met Office - in public ownership since its establishment in 1854 - may be flogged off too.
And we know that serial privatiser Ken Clarke is simply itching to privatise the Post Office if his party gets into power.

The Lib Dems, like the Tories, have no problem with Brown's fire sale in principle. Their quibble is with the timing.
"Given the state of the public finances, asset sales, at least in principle, make sense," said deputy leader Vince Cable.
"However as we saw with the sale of the defence technology company QinetiQ, this government does not have a good track record in getting the taxpayer a good price from asset sales."
If the Lib Dems do have a share of power after the next election, then even our motorways and major trunk roads may be owned by the private sector, judging by the enthusiastic reaction Cable gave to a recent plan by investment bankers NM Rothschild calling for the government to sell off roads overseen by the Highways Agency.

The Financial Times quoted Cable as saying of the Rothschild plan: "This is an attractive, positive idea which could release considerable resources to the public finances and may have real environmental merits.
"The scale of it is vast - it makes rail privatisation look like small beer."

Let's recap. If Labour wins the next general election we'll get more privatisation, if the Conservatives win we'll get more privatisation and if the Lib Dems win - or hold a share of power - we'll get more privatisation.

All this when opinion polls show that it's public ownership and not privatisation that the public wants. Britain a democracy? You're having a laugh.

The sight of our three main parties trying to outdo each other on what public assets they'd flog off shows us quite clearly where the real power lies.
Capital won't be satisfied until every asset currently in public ownership is in private hands.

Privatisation may be terrible news for consumers, employees and for the taxpayer, who is nearly always short-changed.
But for investment banks like Goldman Sachs and NM Rothschild - described by the Financial Times as the "architect of several privatisations" - it's a big money-spinner.
And of course the companies and financial institutions which buy the sold-off state assets, often at knock-down prices, make a killing too.
And then there are the ministers who sell off public assets and then pop up on the boards of privatised companies shortly afterwards.

The question is what can we, the people, do about it?

The realisation that Britain is a one-party state where capital calls the shots may be demoralising at first, but the positive thing is that it can help to frame our response.

We need to focus on direct action outside Parliament and campaign on a local and national level.

Hungary shows us the way.

In the southern city of Pecs, rising anger from local people over rocketing water bills led the town's mayor to send security guards to the city's waterworks in the middle of the night to reclaim it from the French multinational privateer Suez Environment.

The company's spokesman has complained and has threatened legal action, but it won't get much sympathy from local residents, 94 per cent of whom support the mayor's stance. The mayor of Pecs acted because the local people had had enough. It's time we followed their example. Don't get angry, get even, the old adage goes.
But if we really are going to get even with the privateers and stop privatisation once and for all we need to get angrier.

Why should we put up with the highest train fares in Europe and being forced to stand in toilets when we have paid thousands of pounds for our season ticket?
Why should we accept having to pay rip-off bills for our water in a country famous for its wet weather?

We wouldn't sit back calmly and allow a burglar to enter our house and take away our furniture and television, so why should we let corporate thieves get their greedy hands on our public assets?

Working together to fight privatisation is essential. The battle our postal workers are fighting to save the 350-year-old Royal Mail as a public service is one which should involve all of us. The RMT's fight for a publicly owned railway is our fight too. Never forget that we are the many. The pro-privatisation spivs are the few.

Important battles lie ahead in the next few months. It's high time we made our numbers felt.