State ownership of rail is only the start

bbbr1As the 31 Labour parliamentary candidates are demanding in their letter to Miliband, the case for returning rail to the public sector after the botched privatisation of 1996 is overwhelming. Private ownership has produced for the UK the highest fares in Europe, extensive overcrowding on commuter lines because of giving priority to dividends for shareholders over investment and quality service for the public, and the need for public subsidies to be doubled to £4bn a year.

Renationalisation won’t cost taxpayers a penny because the existing franchises fall due, they can simply not be renewed but transferred to the public sector. The electorate wants this by 55% to 18%, and it would be a significant factor in reducing the cost-of-living crisis for the travelling public. But this is just the harbinger for a much bigger change. Continue reading

The return of the state

Vacancy at the Economy Inn by (aka Brent), licensed under Creative Commons Attribution 2.0 Generic, file at 34 years private markets have held sway, with the corollary that the State was inefficient and bureaucratic and should accept its role to get out of the way. Since that Thatcherite-engineered change of culture after 1979 the UK has undergone a major recession in each decade – in 1980-83, then again in 1990-93, and then in 2008-09 the biggest financial crash since 1931 and the longest recession since 1873.

Both the frequency and severity of financial collapse has accelerated. The growth of average real incomes per head fell by a third from 2.4 per cent a year during 1950-80 to just 1.7 per cent a year in 1980-2010. Britain’s manufacturing base was decimated by the abandonment of state oversight of the nation’s strategic economic assets in favour of sell-offs, mainly to foreigners, on grounds that the market knows best. As a result the balance of payments in traded goods plummeted from near parity in the early 1980s to a whopping, and utterly unsustainable, £100bn a year deficit in each of the last three years. Continue reading