What would we consider a successful railway system?

Under many measures, the railways have performed remarkably since privatisation. It is not surprising that the British public would nevertheless like to renationalise them, given how ignorant we know they are, but it’s at least slightly surprising that large sections of the intelligentsia seem to agree.

Last year I wrote a very short piece on the issue, pointing out the basic facts: the UK has had two eras of private railways, both extremely successful, and a long period of extremely unsuccessful state control. Franchising probably isn’t the ideal way of running the rail system privately, but it seems like even a relatively bad private system outperforms the state.


Short history: approximately free market in rail until 1913, built mainly with private capital. Government control/direction during the war. Government decides the railways aren’t making enough profit in 1923 and reorganises them into bigger regional monopolies. These aren’t very successful (in a very difficult macro environment) so it nationalises them—along with everything else—in the late 1940s.

By the 1960s the government runs railways into the ground to the point it essentially needs to destroy or mothball half the network. Government re-privatises the railways in 1995—at this point passenger journeys have reached half the level they were at in 1913. Within 15 years they’ve made back the ground lost in the previous eighty.

But maybe it’s not privatisation that led to this growth. Let’s consider some alternative hypotheses:


Was it a big rise in the cost of driving?


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Was it the big rise in GDP over the period?


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Was it just something that was happening around the developed world?


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Was it purely down to extra cash injections from the state?


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Has it come at the expense of safety?


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Has it come at the expense of customer satisfaction?


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Has it come at the expense of freight?


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Is it all driven by London?


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Democracy’s not all it’s cracked up to be you know

As Churchill pointed out democracy does have something going for it, that it’s better than all other methods anyone’s ever tried. But that doesn’t mean that it’s perfect, not by a long shot. And interestingly we’ve that nice Owen Jones making the point for us:

The Aids crisis was building; more than half the population believed homosexuality was “always wrong”, peaking at 64% in 1987 when just 11% opted for “not wrong at all”; and later that decade the homophobic legislation, section 28, was introduced.

Meaning that under the pure rules of democracy that Section 28 legislation was entirely justified. Indeed, it should have been introduced as it was obviously the majority view of the people. All of which is a problem with democracy: for there are quite obviously times when that will of the majority conflicts with the civil liberties of various minorities. Meaning that we have to decide which we are going to regard as more important, those civil liberties or that will of the majority.

Those times that we have to decide coming in a variety of flavours. We could most certainly gain a majority for the idea that we should string the paedos up without much of a trial. There’s actually a substantial campaign to insist that legal protections for accused rapists should be weakened, even to the point (not in the UK thankfully, not yet, but in the Antipodes) that the presumption of innocence should be dropped. Here at home we have a campaign to insist that prostitution among consenting adults must be made illegal: quite clearly a violation of that right to ownership of ones’ own body and the income therefrom. And there’s been campaigns against the rights of property ownership for most of the past century. A subset of which today is the idea that the shareholders in a company may not decide how much they wish to pay the managers in their own employ (in the name of “equaliteeee” of course).

And the campaign against the arbitration part of the Transatlantic Trade and Investment Partnership is exactly a complaint that that treaty would insist that governments must obey the law of the land over and above whatever democracy demands as changes.

Jones has provided us there with a useful example of when those civil liberties are more important than whatever it is that the mob thinks. We should remind him of this point when he next, or his ilk, suggests taking away our economic liberties. Just because the Demos can be whipped into howling for it does not make a policy one we should enact.

Two cheers for Mark Carney

Applauding regulators, and especially the financial variety, is rare but maybe the tide is finally changing.  It was a delight to see Ofgem attacked this month by its previous chiefs for reducing competition and thereby contributing to higher prices, i.e. the opposite of what utility regulators are supposed to do.

Likewise it was a delight to read in The Times (“Regulators join bandwagon heading away from Bank”, 18th August) that the Prudential Regulation Authority (PRA) has lost 160 staff.  That is only 10% of the total and the cynical may believe that they were always lost.  Even so, it is a step in the right direction and the Governor’s “One Bank” plan deserves some of the credit.

The Bank’s present 3,600 staff compares with 2,900 in February 1997, i.e. before Gordon Brown removed banking regulatory and supervisory responsibility.  This compares like with like. In 1974, Bank of England staff numbered 5,500 excluding print workers.  The long term staffing levels are declining but, with the transfer of regulation to Brussels, Mark Carney should still be looking to halve the current number to about 1,800.  For comparison, the Bank of Canada has, according to its latest (2012) Annual Report, 1,239 staff.

The odd thing about The Times report is its sepulchral gloom.  We should be rejoicing that personnel are leaving the PRA and that they are joining trading banks to direct their compliance.  Surely less interference from bureaucrats and more self discipline by banks is just what we want?

Why only two cheers for the Governor?  Things seem to be going in the right direction at last but they have a long way to go.

There’s no reforming the EU without understanding it

Once again the Daily Telegraph (“Brussels plots fresh City of London power grab”, 8th August) and like-minded media have become irrationally frenzied by EU moves that are wrong but nevertheless entirely rational.  London has been reminded that the three UK financial regulators will have to give up their regulatory powers to Brussels and become merely supervisors. As this Institute pointed out in our letter to The Times in June 2009, the UK governmentagreed that the previous March.  It was President Sarkozy’s price for attending the London G10 Summit in April.   The necessary legal framework was agreed by Parliament before that summer’s recess.

The government and the City were silent at the time and in the five years since.  It is no use yelping now.  Brussels is only implementing what we agreed.

The worry now is that the City and the government ignorance of Brussels and its processes make EU reform all the less likely.  One needs to understand and then work the system to succeed.  The UK negotiators’ failure is demonstrated by the 55 occasions on which we have sought to block some new Brussels initiative or other and been over-ruled each time.  The French and the Germans know how to garner support for what they want done; the British government clearly hasn’t a clue.

If the past five years, during which the EU financial regulation issue has been ignored by City and government, show anything, it is that the Foreign and Commonwealth Office and HM Treasury have been asleep at the wheel.  The FCO lacks backbone and is notoriously pro-EU. We need a new team.

Obviously some of the existing team do have some understanding of the EU.  Perhaps we need an exam, supervised by Michael Gove, to sift out the good ones and then complete the new team with our finest negotiators first to understand what has to be done and then to prepare the way.  It will make little difference to the UK’s position in the EU if our involvement, for the few years preparation will take, is little more than keeping bums on seats.

The Coalition has at least done some of the preparation in asking and thinking about what reforms Britain would like but that is no more than a Santa Claus wish list without a plan to achieve any reform.

A final thought along these lines is to put the new team under John Major’s charge.  He is the last British Prime Minister successfully to have negotiated any substantial matter with the EU.

The reason we’re all such fat lardbuckets

A number of reasons are put forward as to why the nation has, in its entirety, become a population of fat lardbuckets. Big Food pushes ever more unhealthy comestibles upon us, advertising to children is for some reasons still allowed, there’s no tax on sugar, or fat, we’ve even got those who insist that inequality causes obesity.

Of course, all these reasons come with their own solutions: we should ban advertising to children, or of “unhealthy” food, or reduce inequality or something. As Chris Snowden shows in his latest little report (The Fat Lie)all of those reasoned proffered are simply wrong:

If we look at the average body mass of English adults since 1993,
we see a steady increase from 72.4 kg to 77.4 kg (Figure 7). This
seven per cent increase contrasts sharply with the data from DEFRA
which shows a decline in domestic calorie consumption of nine per
cent in the same period (Figure 8). If we confine ourselves to the
period 2002-12, for which we have solid data for food consumed
inside and outside the home, we see the same ‘paradox’: an increase
in average body weight of two kilograms coinciding with a decline
in calorie consumption of 4.1 per cent and a decline in sugar
consumption of 7.4 per cent.

Britons are eating fewer calories than we all used to. What is causing the increase in weight is that we’re all also doing less physical labour than we used to. The imbalance between calories consumption and expenditure is growing but not the total amount of calorie consumption. We’ve thus got under-expenditure of calories, not over-consumption of them.

Note that if we are all consuming fewer calories this does then mean that if Big Food has been trying to get us to eat more they’ve failed and failed dismally.

It’s also worth noting one more thing, that inequality argument. This should really be turned on its head: it is greater equality that is to blame here. There’s always been a certain calorie richness, calorie density, to the British working class diet as compared to its middle class (or even upper) equivalent. This made perfect sense back in the days of heavy manual labour. We now have much greater equality in the workplace, there’s very few of us making a living from the exercise of our muscles rather than what’s between our ears. And that greater equality has had a larger effect on those still eating that culturally calorie dense diet than it has on those whose diet adapted to less physical labour earlier.

It is still possible to point out that it’s the poorer among us who are the lardbuckets. But this isn’t the result of ineq1uality at all, it’s the result of greater equality in the workplace, in all of us now expending fewer calories in pursuit of our daily bread.