The Tory rail privatisation disaster

When the Tories were introducing their ideologically driven and hopelessly botched plan to privatise the UK rail network the Tory Transport Secretary John MacGregor claimed that passengers would benefit from reduced fares.

Anyone who understood the basics of monopolies (captive markets) knew that MacGregor's promises were fantastical nonsense. Once a monopoly service is handed to a private profit-seeking entity, prices are certain to rise because there's no price competition in a captive market.

Two decades after rail privatisation the average train fare has increased by 117% (24% adjusted for inflation). On some journeys fares have increased by well over 200%.

Aside from the direct hit to passengers' wallets, there's also the fact that the private rail operators are being showered with £billions in direct and indirect taxpayer subsidies.

Annual direct subsidies to the private rail franchises far exceed the total cost of running the entire UK rail network back when it was run as a not-for-profit public service!

Aside from the direct subsidies there is also the issue of the indirect subsidy that occurs because the publicly owned rail infrastructure company (Network Rail) allows the private rail franchises to use the tracks at significantly below the actual cost of maintaining them.

Hiring out the tracks at way below market value in order to secure the profitability of the private train operators has meant that Network Rail has built up a vast debt mountain of £41 billion.

This is about as clear an example as possible of the Tory ideology of privatising the profits and nationalising the debts as it's possible to see.

Aside from costing far more in direct and indirect subsidies, the privatised rail franchises do far less than British Rail with all of that extra money.

Before privatisation British Rail designed and developed new trains, including many that are still in service today generating huge profits for their private operators. Privatisation of the UK rail network put a swift end to Britain being a world-leader in train building.

Immediately after privatisation the private franchises were so intent on reaping as much profit as possible out of the old taxpayer-funded rolling stock that there wasn't a single new train order for 1,064 days, causing the absolute annihilation of the UK train building industry.

These days the UK buys most of its new trains from Germany, Japan, China and even Italy, which is an absolutely shameful state of affairs for the country that invented the railway and was a world leader in trainbuilding well into the 1980s.

The abject failure of rail privatisation is perhaps the most glaring example of all amongst a litany of other woeful Tory privatisation scams, yet the Tories will never undo their mistake because they're ideologically opposed to British infrastructure being owned by the British public and operated on their behalf.

In fact the Tories have such a strong ideological opposition to British infrastructure and services being owned by the British people that they would demonstrably prefer our rail infrastructure to be owned and operated by foreign states like Germany, France, Netherlands, Hong Kong and Singapore. 

Just a few decades ago a government would be considered shockingly treasonous for promoting a policy of prohibiting the British from owning our own rail network so that it can be used as a cash cow by foreign states. 

But these days, thanks to the Tory rail privatisation scam, it's not just a crackpot policy that would have been shouted down as anti-British lunacy in the past, it's the actual reality!

Tory rail privatisation has been an absolute failure for everyone apart from the profiteering rail franchises and train leasing companies. Passengers have suffered massive ticket price inflation and ever more over-crowded and unsafe conditions; the taxpayer continues to pay far more in subsidies than the total cost of running British Rail in the past; Network Rail is sitting on a £41 billion debt mountain; the UK train building industry has been annihilated; and railway staff have suffered over two decades of declining wages and worsening working conditions.

The two political parties that deserve credit for promoting the extremely popular policy of rail renationalisation are Jeremy Corbyn's Labour Party and the Green Party (who supported rail renationalisation back when the New Labour mob were still pushing disgusting neoliberalism-lite gruel on the public under Miliband and Balls).

Let's hope that someone with some sense actually moves to sort out this festering Tory blight on our nation soon.

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OR

A few simple questions about Labour's energy policies

In this article I'm going to provide 12 simple questions that you can send to anyone who claims that they oppose the Labour Party energy policy because it's "too left-wing", "Marxist nonsense", "taking us back to the 1970s" or any other reason.

I've divided the questions into four different categories relating to the four stand-out energy policies from the Labour manifesto.

1. Labour want to renationalise the transmission and distribution grid because these things are natural monopolies.

1.1. Do you know what a natural monopoly is?

1.2. Given that natural monopolies are not subject to competition, and therefore susceptible to market abuse, what is your justification for natural monopolies remaining under private ownership?

1.3. Do you know that the Qatari and Chinese governments have invested in the UK National Grid?

1.4. Could you explain why is it right for Qatar and China to own the UK National Grid and use this natural monopoly for their own benefit, but so terribly wrong for the UK state to own and operate it for the benefit of Britain?

2. Labour wants to set up at least one publicly operated not-for-profit energy company for each region.

2.1. Could you explain why you believe not-for-profit energy companies are a bad idea in principle?

2.2. Do you believe that competition in the market place is a good thing?

2.3. If you think competition in the market place is a good thing, why are you opposed to not-for-profit local energy companies being given the opportunity to compete with the massive corporate energy companies?

3. Labour wants to create an energy agency to support local people and businesses to establish Local Energy Cooperatives.

3.1. Do you believe it is the role of the UK state to assist British people and British small businesses in entrepreneurial schemes, or should they just stick to assisting major corporations (like cutting the rate of tax for fracking companies in half, and over-riding local democracy) and foreign states (like bribing them into building our energy infrastructure by promising to pay them double the market rate for electricity for 35 years)?

3.2. Given that electricity transmission losses between the power station and the home are typically between 8% - 15%, wouldn't a focus on generating energy within local communities lead to a more efficient system?

3.3. Do you believe that an energy network made up of lots of small suppliers producing energy from a wide range of different sources would be more, or less susceptible to major disruptions (through terrorism, war, or natural disaster) than an energy network made up of a few gigantic producers?

4. Labour want to introduce a temporary cap on energy prices until their reforms go through.

4.1. Do you find it hypocritical that the Conservatives and the Daily Mail attacked this energy price cap policy policy as dangerous Marxist price-fixing when Ed Miliband announced it in 2013, but now that they've stolen the idea for their own manifesto, they're singing its praises and bragging about how much money it will save?

4.2. Given that the Tories are also planning to introduce energy price caps to intervene in the broken energy market, don't you think it's probably better to propose actual reforms like the Labour Party ones outlined above, rather than just offering a temporary short-term sticking plaster "solution" to the completely broken system like the Tories?

Bonus question

If you've heard anyone claiming that Labour's energy policies would "take us back to the 1970s", ask them to answer this:

Could you describe the problems we had in the 1970s with the regional not-for-profit energy companies and the proliferation of small local energy cooperatives?

Of course they'll struggle with that one, because two of the three main strands of Labour's so-called 1970s energy policy involve the introduction of things that simply didn't exist back then (regional not-for-profit energy companies and local energy cooperatives).

What answers did you get?

There are only twelve questions (and a bonus question) in all.

None of them are very difficult, especially for someone who claims to oppose Labour's Energy policies. I mean if you claim to oppose a plan to break up the natural monopolies, you've got to actually know what a natural monopoly is right?

The Tory reactions to these questions will be telling. My prediction is that the majority will just ignore them because they don't like the obvious answers. Another significant chunk of them will retort with whataboutery, misrepresentations, empty political slogans, fallacious reasoning and outright smears rather than attempt to answer the twelve questions in good faith.

A very tiny minority of Tories will actually attempt to answer the questions in good faith. I'm genuinely intrigued as to what they'll come up with because, as you can see, there are some very tricky ones to answer for people who support Tory energy policy and oppose Labour's.

 Another Angry Voice  is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.

OR

The Tory "war on justice"

Legal Aid was created in 1948 as part of the post-war welfare state. The objective was to introduce a measure of equality before the law. The vast majority of the UK population, then and now, believe in the principle that if a person cannot afford to pay for a lawyer to represent them in a court of law, then one should be provided on their behalf, in order to reduce the chances of miscarriages of justice occuring.

The Tory party clearly disagree with the whole idea of using the welfare state to ensure equal access to justice. They only have one propaganda tool to argue that equal access to justice should be abolished, the tiresome appeal to austerity. Legal Aid costs around £2 billion a year. This may seem a lot, however in comparison to other expenditures it is a drop in the ocean. Take Housing Benefit (or the Wealthy Landlord Subsidy - as it should properly be known), that comes in at £22.5 billion a year. The Tory welfare reform minister David Anthony Freud has given assurances to the National Landlord Association that this subsidy will not be reduced. Compared with the potential Housing Benefit savings that could be made through the imposition of rent controls, any money saved through attacking the Legal Aid budget pales into insignificance. Even if Legal Aid were abolished altogether, that would only account for a miniscule 2.2% of the 2012 budget deficit (£90 billion). Trying to eradicate the budget deficit by focusing on the Legal Aid budget instead of the Housing Benefit budget is like trying to save space on a hard drive by erasing text files instead of deleting some of the films you have no intention of ever watching again. Anyone should be able to see that this austerity narrative is just a cover story for the real Tory agenda.

In April 2013 the Legal Aid budget was slashed by £350 million, meaning that all manner of cases will no longer be eligible for Legal Aid. The House of Lords battled against these draconian cuts in Legal Aid but the Tory party managed to win their ideological victory against equal justice with the backing of the so-called Liberal Democrats.

A study by the Law Society found that 80% of British people are now effectively excluded from the justice system in all manner of cases, such as family law, unfair dismissal, personal injury, appealing against draconian government decisions and clinical negligence cases. If the no-win-no-fee merchants don't see the case as a likely win, the individual has the stark choice of either trying to represent themselves in court, or abandoning their pursuit of justice altogether.

As well as the countless miscarriages of justice that will stem from these reforms, there are also signs that the predicted false economies are already happening. The number of people attempting to represent themselves is on the rise, and their lack of procedural legal knowledge is resulting in a huge amount of wasted court time.

The Conservatives have demonstrated their ideological opposition to equal justice, and no amount of transparent austerity propaganda is going to convince thinking people that their legal reforms have anything to do with "targeting resources at the most important cases" as they claim. Instead it has everything to do with creating huge legal advantages for those wealthy enough to afford legal representation. A Tory justice system is one where corporations, wealthy individuals and the Department of Work and Pensions can hire expensive legal teams to easily defeat the amateur self-representation efforts of the ordinary person, no matter what the facts of the case. What the Tories are doing is conducting all-out war on the concept of equal justice.

The BBC peddle a typically pro-government line on the issue, endlessly repeating the Tory justification propaganda without the slightest effort to question the stated motivation for the cuts. They are also utterly clueless. In this article advising people on how to represent themselves in court after the £350 million in Legal Aid cuts in April 2013, they suggest seeking help from the Citizen's Advice Bureau, without the slightest mention of the fact that the Tories simultaneously slashed CAB funding by 86%, so as to ensure that the people they are trying to deny justice to, have nobody else to turn to.

If anyone is still labouring under the fantasy that the Tories are not intent on undermining justice, I suggest you do a little bit of research into secret courts and have a little think about the potential consequences of such totalitarian legislation. If the introduction of secretive courts (where neither the defendant nor their lawyer will be allowed into the courtroom, allowed to know the crimes with which they are being charged, nor be allowed to examine any of the evidence against them) isn't an attack on the basic concept of open justice, then it is hard to imagine what would be.

Anyhow, the Tories are far from finished in their battle to revoke access to justice from us ordinary people in order to turn the British legal system into little more than a plaything for the rich. The Justice Minister Chris Grayling has outlined the next round of Tory reforms to the justice system to a near universal chorus of condemnation from across the legal profession. The Crown Prosecution Service have warned that the next wave of Tory attacks will "undermine the fundamental principles of justice".

The next step in the Tory "war on justice" is to stop paying Legal Aid solicitors for the work that they actually do, and rolling out a system of flat fees. Defence lawyers have warned this will create a perverse financial interest for solicitors to recommend guilty pleas to their clients, regardless of the facts of the case. If your solicitor gets paid the same whether they spend hundreds of hours developing a rock solid case, or for spending a few hours convincing their client to plead guilty (no matter how innocent they are), this perverse financial incentive will inevitably lead to a rise in miscarriages of justice.

The stated objective of this reform is to eradicate hundreds of small local solicitors offices in order to distribute Legal Aid work on large contracts to companies like G4S and Stobart Barristers. In order to make these vast contracts viable, Grayling is insistent that defendants should lose the right to choose their own solicitor.

Some of the minority of Tory MP's that actually give a damn about libertarianism have objected that state-appointed lawyers would be illiberal and against their libertarian conception of Toryism. Grayling's retort to these concerns is that he expects "to make changes that allow a choice of solicitor in the future." His response to grave concerns from within his own party (and the majority of the legal profession) is to press ahead with his plan to revoke the right for people to chose their own legal representatives, just with some nebulous half-commitment to reverse the state-appointed lawyer element at some unspecified future date. If anyone believes that a Tory minister will go against the interests of the large corporations he has just signed monopolistic supply contracts with, I've got a bridge you might be interested in buying.

The only organisations that seem to be willing to speak up in favour of Grayling's plan to introduce flat-fees for state appointed solicitors, are the very firms that look set to gobble up these lucrative contracts. Here's what Trevor Howarth of Stobart Barristers had to say (yes he does use a tortured wagon driver's analogy!):

"We at Stobart are well known for taking out the waste, here that is the duplication of solicitors going to court. There are currently 1,600 legal aid firms; in future there will be 400. At Stobart, we wouldn't use 10 trucks to deliver one product." (source)

I mean who would want freedom to choose their own solicitor from a small local practice with decades of cumulative experience in the legal field in which you require their services, when you could have a state-appointed lawyer from a haulage (Stobart) or private security (G4S) company, with a perverse financial incentive to either talk you into pleading guilty to an offense you didn't commit, or to do as little work as possible to build a coherent defence should you insist that they go against their own financial interests and actually do their job, and defend you?

Anyone that has been following the similar monopolisation process that has been carried out on the court translation services will understand what kind of debacle occurs when the government decides to eradicate the competitive market and replace it with a system of political patronage, where favoured corporations are simply handed a monopoly over the whole service. The deliberate monopolisation of the court translation service has resulted in absolute chaos with over 600 trials abandoned due to Capita's failure to provide translators in the last year alone. The Commons Justice Select Committee described the handling of the contract as "shambolic", yet Grayling is insistent that he will impose similar monopolistic contracts on the much larger Legal Aid budget, no matter what the damage to the fundamental principles of justice.

To crony capitalist stooges like Chris Grayling, as long as corporate behemoths get to fill their boots at the taxpayers' expense; the destruction of market competition, the transparent false economies, the erosion of access to justice and the countless grotesque miscarriages of justice will be more than worth it. In fact, since Legal Aid is restricted to the poor and ordinary, the erosion of access to justice and the dramatic rise in miscarriages of justice will be an added bonus for the Tory party and their cabal of wealthy backers. Not only will they be cashing in with lucrative monopolistic contracts handed out by the so-called justice department, they'll also get to laugh all the way through any cases that actually come to trial where they are up against any of us "uppity plebs". They'll have their expensive team of lawyers, and we'll either be doing an amateurish job of self-representation or we'll be represented by some guy we didn't even want from Eddie Stobart or Group 4 Security, with a perverse financial incentive to do as little work as possible in preparing our defence.

As usual, the Labour party and the majority of the mainstream media are as good as silent on the issue, so it's left up to legal professionals and independent bloggers like myself to explain that these reforms are so incredibly bad that they could only have been designed as part of a deliberate campaign against the concept of equal access to justice.



 Another Angry Voice  is a not-for-profit page which generates absolutely no revenue from advertising and accepts no money from corporate or political interests. The only sources of income for  Another Angry Voice  are small donations from people who see some value in my work. If you appreciate my efforts and you could afford to make a donation, it would be massively appreciated.

More articles from
ANOTHER ANGRY VOICE    
                  
Secret Courts and the very Illiberal Democrats
                     
Legal Aid cuts: A Tory commodification of justice
             
Why the Lib-Dems are just as compassionless as the Tories
                   
The Tory contempt for working people
              
More Tory attacks on employment rights
                 
New justice: A short story
            
The Tory ideological mission
           
What is ... a justification narrative?
                    
The contrasting fates of Alan Turing and Lord Sempill
                   
 Guest post: The destruction of Legal Aid
                    

A question about Pizza

Do I dislike Pizza?

An intriguing question to ask someone like me that mainly writes about politics, economics and theology. How did it come to be asked?

Well I was asked the pizza question by a guy called Caleb Cutler after I described Michael Gorbachev as a "corporate whore" for appearing in a Pizza Hut advert in the late 1990s. I made the comment in the context that it was a pity to see a great statesman of the 20th century reduced to the status of a celebrity pizza salesman. A sad spectacle in my opinion.



Caleb's written comment read:

"Ah so you don't like pizza? Got something against free enterprise?" 

So to answer his questions one at a time:

I actually really like Pizza, commercial pizza not so much, but it is usually edible so I wont complain. What I don't like is seeing one of the great statesman of the 20th century ending up hawking corporate pizza, given that I share Bill Hicks' absolute contempt for the advertising industry.



Another saddening aspect to Gorbachev's reduction to the status of a celebrity pizza salesman is the fact that his democratic mixed economy vision for Russia was hijacked by a pisshead called Boris who implemented a devastating neoliberalisation process at the behest of a bunch of American economists instead. The Russian free-market experiment was an absolute disaster. The neoliberal shock therapy session administered to post-communist Russia was one of the most obvious failures of neoliberal free-market ideology in a very long list of failures. The free market ideology managed to make Russia less productive and created more extreme poverty than the communist regime they so hastily replaced.

From this fire sale of state infrastructure and unregulated chaos there emerged a tiny minority of "winners" of course. Whilst millions of ordinary Russians were reduced to abject poverty, oligarchs like Roman Abramovich siphoned £billions out of the Russian economy to invest in absurd vanity projects like Chelsea FC and ridiculously over sized yachts.

What a warped view of the 20th Century would it take to simply ignore the fact that Russian neoliberal shock therapy ended up crippling the Russian economy, causing what was one of two great superpower less than a decade before to default on it's debts in 1998.

This brings me to the question about free enterprise, which is a lot more tricky than the question about pizza. Whether I have anything against "free enterprise" depends a lot on how "free enterprise" is defined doesn't it?

Should small businesses be free to compete on an even playing field with their competitors? Of course they should.

Should corporations be free to exploit their workers, destroy the environment, commit fraud, or use financial doping to eliminate their competition in the pursuit of vast profits and obscene executive pay? I don't think so.

I believe that the state has a vital role to play in protecting "free enterprise". If it takes the intervention of the state to ensure that there are several players competing in every sector in order to ensure competition and stimulate greater efficiency this is significantly better than allowing single enterprises to financially dope their way into markets, annihilate their competition through price fixing then exploit their monopoly position to maximise profits, going on to form international price fixing cartels with similar enterprises in order to eradicate market plurality.  If "free enterprise" is defined as a right to annihilate competition in order to maximise profits, this is actually an anti-competitive and inefficient economic ideology.

I believe in freedom to compete but I do not believe in the freedom to form economically damaging monopoly interests; the freedom to abuse information asymmetry; the freedom to form cartels; the freedom to corruptly influence governments and regulators; the freedom to profit on human suffering; the freedom to trade on insider information; the freedom to ruin the environment for insignificant economic gains; the freedom to debase the entire economic system for profit; or the freedom to use financial doping to destroy market competition and eradicate market plurality (Market plurality is a very important concept, I'll address this in a later post).

I actually believe that an efficiently regulated market can achieve much greater market freedom by the active stimulation of competition through progressive funding of infant industries. Adam Smith, the "godfather" of free-market economists also believed in infant industry protection, however free-market fundamentalists tend to completely ignore this aspect of his work, using the same selective reading strategies to read their favourite economics books as the fundamentalist American Christian right use to cherry pick passages from the Bible to justify anti-Christian attitudes such as intolerance and greed-worship.

In my opinion strong reliable and adaptable state sector is necessary to ensure a fair and level playing field. The state should intervene to support and protect infant industries. The state must also maintain the capacity to step in at short notice and intervene to prevent market failure, should the need arise. These measures are necessary in order to create a highly efficient and competitive private sector; a private sector best prepared to take entrepreneurial risk because progressive legislation would protect them from the risks of market domination by profit driven monopoly interests.

So in conclusion: I really like pizza, I'd much rather have a homemade one than a Pizza Hut one though. I don't have anything against "free trade", unless of course we are talking about the free-market, anarcho-capitalist definition of "free trade"; that corporations should have the absolute freedom to do whatever the hell they want in pursuit of profits, no matter what the harms they inflict on others in order to make them.

I don't believe in the anarcho-capitalist definition of  "free trade" because I believe in a social-democratic form of regulated free trade. However anyone that properly understands the right-wing libertarian position should also oppose the anarcho-capitalist definition of "free trade" given the importance of non-aggression in libertarian theory. The only people that would buy into this "deregulate everything, let corporations do whatever the hell they like" definition of "free trade" are economic illiterates that buy into absurd simplifications (private always good, state always bad) because they are incapable of actually understanding any kind of complex, pragmatic or even vaguely realistic economic theory.

See also

3D economics

   
Argentine recovery economics
  

Mixed Economy vs Neoliberalism

  

The Great Neoliberal Lie