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Amid outrage from retailers and farmers over a poorly designed Budget to raise taxes by £40bn, Labour’s most misplaced act of socialism has gone almost unnoticed.
The railway nationalization bill is on a serene and high-speed journey towards statutes.
Many train users have strong opinions about poor service levels, long delays and exorbitant long distance and commuter fares.
Labor’s manifesto promised to end the hybrid arrangement under which licence-holders, mainly from the private sector, use tracks centrally controlled by Network Rail.
Public ownership: Railway nationalization bill moves quietly towards statutes
Transport Secretary Louise Haigh and Chancellor Rachel Reeves fail to recognize that simply transferring ownership of franchises, when they expire, to the government is not going to miraculously reform poorly functioning services.
Northern Rail – which is already in public hands – is known for its poor performance and has breached its contract several times since April and has become a symbol of a broken Britain.
It received a larger subsidy of £648.4 million in the year ending March 2024 (up from £597.6 million) and uses technology that is decades out of date.
The Government’s decision to give in to the demands of the militant railway unions, without built-in productivity targets, is throwing a lot of money away.
Under public ownership, railways will have to compete not only with other operators, but with the entire public sector for investment funds.
If the public has the choice between better services from a Manchester center or investing in NHS scanners, it’s not hard to guess which is the bigger priority.
Analysis by Railway Partners shows that just a 1 per cent slippage in rail network efficiency would add £1 billion to the cost to the public purse.
Travelers hoping for a better deal from public ownership may not have realized that a 4.5 per cent rise in fares is expected within the Budget next March. This is more than double the Bank of England’s inflation target.
Adding railways to the national balance sheet also means absorbing at least £16bn of debt. It is no surprise that the Chancellor had to invent new fiscal rules to find additional room for investment.
postal madness
The Communication Workers Union (CWU) cannot be blamed for trying to get the best deal from the Royal Mail now that Czech billionaire Daniel Kretinsky’s £3.6bn bid looks set to be cleared under the Investment and Investment Act. National security.
CWU boss Dave Ward is seeking a deal that guarantees a higher-than-inflation pay rise and commits, among other things, to rest every other Saturday.
Before rushing into the arms of Kretinsky and his secret supporters, the CWU would do well to analyze the outcome of other public-private agreements.
At Asda, high interest payments on debt caused its market share to fall.
Local nurseries owned by private equity are making huge profits from local authorities, creating intense financial pressure.
Kretinsky’s offering is largely financed by loans.
Even if Ofcom allows a big price increase for first class shipping, there will be a desperate economic struggle. Labor and wage agreements could be unceremoniously scrapped.
bad business
It is disturbing to learn from high-profile retailers that Whitehall lobbied not to sign a letter from the British Retail Consortium which flagged the potential £7bn cost of Labor’s National Insurance and other charges and future job losses.
Not exactly the business-friendly government that Rachel Reeves promised.
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