Politics Thread!

[pogo]

However, privatisation hasn't been a success for the taxpayer.

But success for the taxpayer isn't the only or even main criteria for govt. involvement in the railways. If it were I doubt projects like the Channel Tunnel, Crossrail, HS2 would get off the ground. Long term, success for the taxpayer depends on much more than just the size of the subsidy. Having a railway brings significant economic benefits, probably greater than the cost to taxpayer. It's not often costed this way; such calculations are hard to do and the results very redistributive, with better off car-owning taxpayers subsidising a service used mostly by poorer non-car owners (though the economic benefits flow to us all, as lower congestion and greater economic efficiency).

Apart from the financial considerations railways have considerable green and welfare benefits; for a large number of people it's the only way to travel long distance. For these privatisation has been entirely positive, with passenger numbers doubling. The financial benefits are less clear cut but that doesn't mean it's not a success, it just means it's a political decision how large a subsidy to have.

[Harlequin]

However, privatisation hasn't been a success for the taxpayer.

But success for the taxpayer isn't the only or even main criteria for govt. involvement in the railways. If it were I doubt projects like the Channel Tunnel, Crossrail, HS2 would get off the ground. Long term, success for the taxpayer depends on much more than just the size of the subsidy. Having a railway brings significant economic benefits, probably greater than the cost to taxpayer. It's not often costed this way; such calculations are hard to do and the results very redistributive, with better off car-owning taxpayers subsidising a service used mostly by poorer non-car owners (though the economic benefits flow to us all, as lower congestion and greater economic efficiency).

Apart from the financial considerations railways have considerable green and welfare benefits; for a large number of people it's the only way to travel long distance. For these privatisation has been entirely positive, with passenger numbers doubling. The financial benefits are less clear cut but that doesn't mean it's not a success, it just means it's a political decision how large a subsidy to have.

You appear to just be restating, at greater length, the point tufty made in the sentence immediately before the one you extracted and quoted.

[VNVObit]

pogo, is as usual, conflating 2 decisions into 1.

the first decision is whether doing something is good for the country (business case for railways, rural broadband, etc.) which takes into account policy aims, wider economic benefits (i.e. cost benefit analysis of the proposal)

Having determined that the proposal is something we should be doing then we move on to the second decision which is how will it be financed - public, private or a combination of the 2. The decision to go private , or some kind of public/private combination, is driven by cost to the taxpayer. Lowest cost should be the main determining factor in that decision (just as in any other business) as the wider benefits have already established in the business case

pogo can't seem to disentangle the first from the second , or at least shows no sign of being able to.

[pogo]

probably explains why the UK hasn't performed that well against other countries

"For this reason we consider it more appropriate to compare the UK’s broadband network with those in other major European economies than with those in all EU28 countries."

Which makes sense. It's vastly cheaper per household to provide universal broadband to a densely populated country like Holland, Denmark. OFCOM is the independent regulator, not someone out to make a political point.

[gravy]

Probably also worth mentioning the Hatfield crash.

It's pretty well acknowledged that was down to Railtrack's incompetence and lack of tight control on track maintenance.

So there's some deaths down to the wildly successful railway privatisation.

[pogo]

pogo, is as usual, conflating 2 decisions into 1.

the first decision is whether doing something is good for the country (business case for railways, rural broadband, etc.) which takes into account policy aims, wider economic benefits (i.e. cost benefit analysis of the proposal)

Having determined that the proposal is something we should be doing then we move on to the second decision which is how will it be financed - public, private or a combination of the 2. The decision to go private , or some kind of public/private combination, is driven by cost to the taxpayer. Lowest cost should be the main determining factor in that decision (just as in any other business) as the wider benefits have already established in the business case

pogo can't seem to disentangle the first from the second , or at least shows no sign of being able to.

No my points are firstly the benefits of privatisation are clear, simply by looking at the passenger numbers, hence my challenging Labour's renationalisation plans in the first place. On the cost issue raised subsequently the subsidy is higher now because it's more successful: as a % of fares it's been fairly flat.

Is public or private cheaper ? Labour's plan isn't going to save money. Sure the government would be able to undercut any private bid, but that's as the cost of borrowing and any risk are borne by taxpayer. Not a minor cost if you're talking about a multi-billion pound business. Besides it's been agreed with the unions, and I'm sure their influence will be used to oppose any cost savings such as job cuts or pay restraint. The government should be in charge but Ed Miliband is the party leader most dependent on trade unions for a generation. He'll find it hard to resist union demands.

Long term the problem will be absent the discipline that private firms provide the bad practices and inefficiencies British Rail was known for will set in. Imagine for example if a franchise goes to the government, then is up for renewal five years later. Can you imagine the fuss the unions will make over all the job losses, the disruption, the uncertainty? If Labour are still in charge they'll probably change the rules to make sure that doesn't happen, so the temporary and partial renationalisation quckly becomes permanent and, as more and more franchises are renewed, total.

[VNVObit]

No my points are firstly the benefits of privatisation are clear, simply by looking at the passenger numbers

business case not financing unless you are saying the sole reason for the increase in passengers is the privatisation in which case you are being a fantasist

, hence my challenging Labour's renationalisation plans in the first place. On the cost issue raised subsequently the subsidy is higher now because it's more successful: as a % of fares it's been fairly flat.

And that is a failure for the taxpayer as the percentage should have fallen for it to be considered a success

Is public or private cheaper ? Labour's plan isn't going to save money. Sure the government would be able to undercut any private bid, but that's as the cost of borrowing and any risk are borne by taxpayer. Not a minor cost if you're talking about a multi-billion pound business. Besides it's been agreed with the unions, and I'm sure their influence will be used to oppose any cost savings such as job cuts or pay restraint. The government should be in charge but Ed Miliband is the party leader most dependent on trade unions for a generation. He'll find it hard to resist union demands.

Long term the problem will be absent the discipline that private firms provide the bad practices and inefficiencies British Rail was known for will set in. Imagine for example if a franchise goes to the government, then is up for renewal five years later. Can you imagine the fuss the unions will make over all the job losses, the disruption, the uncertainty? If Labour are still in charge they'll probably change the rules to make sure that doesn't happen, so the temporary and partial renationalisation quckly becomes permanent and, as more and more franchises are renewed, total.

Firstly the public sector still bears the risk of the debt unless you say we can live without rail? As all that'd happen is the government would have to step in if a TOC became insolvent.

Secondly the cost of sovereign debt is significantly lower than that of a TOC despite their monopoly like position.

Which then leaves us the cost of mismanagement needing to be significantly greater than the cost of private provision plus profit. Again I'd point to the fact that it can be run successfully in other countries (including the US) so not convinced that it can't be done in this country

As for the discipline of private firms, the banks were private but they needed to bailed out by the state (and even those that weren't directly needed government intervention to survive). So again not really a convincing argument

[pogo]

Firstly the public sector still bears the risk of the debt unless you say we can live without rail? As all that'd happen is the government would have to step in if a TOC became insolvent.

Tell that to National Express who had to swallow a £72m loss when their ECML franchise folded. By getting private firms to swallow the profit and losses the taxpayer doesn't have to bail out firms.

Secondly the cost of sovereign debt is significantly lower than that of a TOC despite their monopoly like position.

Like the banks? The banks were able to benefit from lower borrowing costs as, being too big to fail, they had an effective govt. guarantee. Then it all went pear-shaped and the government had to step in. So one problem is the lower cost and effectively unlimited borrowing capacity can make firms less cautious.

The other problem is there's a cost when the government provides financing. It gets added to the overall stack of debt, i.e. the deficit. The larger that is the more expensive it is for us to borrow more, and the more pressure there is to reign in the deficit elsewhere so cut spending elsewhere.

So better to let private firms bear all these costs and risks.

Which then leaves us the cost of mismanagement needing to be significantly greater than the cost of private provision plus profit. Again I'd point to the fact that it can be run successfully in other countries (including the US) so not convinced that it can't be done in this country

The US though doesn't have a national rail network. It has a highly concentrated regional one, connected with token long-distance services kept going for political reasons.

Map: These three cities account for almost a third of Amtrak riders

Britain's rail system is concentrated in the SE but that's as London is seven times the size of the next nearest city. Probably without or with much reduced subsidies our rail system would be more like the US, with lots of services for London commuters + a handful of slow long-distance services kept going so the system was still theoretically national.

[VNVObit]

Tell that to National Express who had to swallow a £72m loss when their ECML franchise folded. By getting private firms to swallow the profit and losses the taxpayer doesn't have to bail out firms.

That's not insolvency, your comment is an irrelevant distraction

Like the banks? The banks were able to benefit from lower borrowing costs as, being too big to fail, they had an effective govt. guarantee. Then it all went pear-shaped and the government had to step in. So one problem is the lower cost and effectively unlimited borrowing capacity can make firms less cautious.

what about private firm discipline. You can't have it both ways.

The other problem is there's a cost when the government provides financing. It gets added to the overall stack of debt, i.e. the deficit. The larger that is the more expensive it is for us to borrow more, and the more pressure there is to reign in the deficit elsewhere so cut spending elsewhere.

Inaccurate, the servicing of the debt does indeed hit the deficit (not the actual debt, that sits on the government balance sheet) but then again so does the subsidy so really that's again an irrelevant point.

So better to let private firms bear all these costs and risks.

They don't bear all the costs and risks (subsidy, etc.), another inaccurate statement

The US though doesn't have a national rail network. It has a highly concentrated regional one, connected with token long-distance services kept going for political reasons.

Map: These three cities account for almost a third of Amtrak riders

Britain's rail system is concentrated in the SE but that's as London is seven times the size of the next nearest city. Probably without or with much reduced subsidies our rail system would be more like the US, with lots of services for London commuters + a handful of slow long-distance services kept going so the system was still theoretically national.

your final paragraph is why the NY subway was municipalised. So a country which prides itself on private entrepreneurial spirit recognises that privatisation isn't always the way to go if you want a strategically effective system of transport but you are unable to.

you're arguing with yourself again

[(o)(o)]

BUPA cannot give lesser treatment than the NHS - because their customers would just walk and go to the NHS instead.

They often provide no better than equal care - many consultants of course work both privately and for the NHS.

In my mums case, she had a trivial routine operation at BUPA, but due to surgeons error ended up with peritonitis, split open right down the middle and intestines pulled out onto the table. She nearly died. The decor was lovely though!

I also have experience of Priory hospitals AS A VISITOR. Likewise, I have visited NHS mental health wards including secure units. There is no comparison. The former is a £800+ a day, full of celebrities, and is like a holiday retreat. The latter is... uh...

They didn't like it and insisted on certifying every phone model as compatible with their crude analog circuitry. This was a particular problem for modems, as the first dialup modems appeared about this time.

We were using decouplers to log into servers across the country back in 1980s without a snitch :



The telephone hardware was pretty much the same in the UK, Australia, USA. Don't remember anyone complaining back then! Most people relied on telephone boxes. Things haven't always gone great since privatisation either.

[(o)(o)]

Probably also worth mentioning the Hatfield crash.

It's pretty well acknowledged that was down to Railtrack's incompetence and lack of tight control on track maintenance.

So there's some deaths down to the wildly successful railway privatisation.

Well I have some experience with this as I worked on Railtrack's asset management database for different line.

It was an absolute shambles. The asset database is crucial for safety.

The problem was it got mangled by being passed through the hands of various private contractors. That can happen when you put stuff like this out for tender.

[pogo]

Like the banks? The banks were able to benefit from lower borrowing costs as, being too big to fail, they had an effective govt. guarantee. Then it all went pear-shaped and the government had to step in. So one problem is the lower cost and effectively unlimited borrowing capacity can make firms less cautious.

what about private firm discipline. You can't have it both ways.

Banks that were indisciplined should have been allowed to fail. Smaller ones were, or were ushered into being taken over by less fragile banks. Northern Rock is the only one that actually collapsed and was broken up.

The problem is the big banks were (and still are) too big. Too big to fail as they'd bring down the banking system. Too big to be taken over by another bank – even if any were willing none was big enough. So the government had to step in. After Lehman, a large US bank that was allowed to fail and nearly brought down the financial system over there, no big bank was going to be allowed to fail.

The fix is to shrink the banks, or at least shrink the bit that's systemically important, to just the deposit taking/mortgage and other lending bit. This greatly reduces the size of any future bailout and also make them rarer, as it should be much harder for banks to screw up in consumer banking (though I'm sure some will manage it). The risky bits of banks can then be allowed to fail, like other firms, if they are badly run.

Inaccurate, the servicing of the debt does indeed hit the deficit (not the actual debt, that sits on the government balance sheet) but then again so does the subsidy so really that's again an irrelevant point.

The subsidy will still be paid whether the trains are operated by public or private firms. On top of that if the government runs a franchise then debt that would normally be private debt will become government debt.

If this goes ahead and is completed it effectively undoes privatisation: the money government raised from privatisation will have to spent recreating the railway operators as branches of government. Except, like the subsidy, the cost will be much higher because of inflation and as the railways do much more now. I fail to see how this is a good use of parliamentary time or resources.

[pogo]

We were using decouplers to log into servers across the country back in 1980s without a snitch :



The telephone was pretty much the same in the UK, Australia, USA. Don't remember anyone complaining back then! Most people relied on telephone boxes. Things haven't always gone great since privatisation either.

Never used one of those; they obviously didn't need certifying as they don't connect electrically, they just talk down the phone. They also must have been slow. WP says they maxed out at 1200 baud. The slowest modem I used (the first I bought) was 2400, the last and fastest 57600.

It makes my argument about there only being one design of phone too. That would only work with a phone conforming to the geometry of the old BT ones, with a separate handset. If phones were varied like today it would work far less well.

[(o)(o)]

We were using decouplers to log into servers across the country back in 1980s without a snitch :



The telephone was pretty much the same in the UK, Australia, USA. Don't remember anyone complaining back then! Most people relied on telephone boxes. Things haven't always gone great since privatisation either.

Never used one of those; they obviously didn't need certifying as they don't connect electrically, they just talk down the phone. They also must have been slow. WP says they maxed out at 1200 baud. The slowest modem I used (the first I bought) was 2400, the last and fastest 57600.

It makes my argument about there only being one design of phone too. That would only work with a phone conforming to the geometry of the old BT ones, with a separate handset. If phones were varied like today it would work far less well.

Wrong the coupler acoustically couples using flexible rubber which can accommodate various shapes.

[pogo]

Wrong the coupler acoustically couples using flexible rubber which can accommodate various shapes.

Like an iPhone? Most phones, even home phones, look like mobiles now. They in particular don't need large ends for the speaker and microphone. But it's hypothetical; with their low speeds, unwieldy use and cost they must have rapidly gone out of use when cheap, compact electronic modems came out.