Author: johnredwood

All too often the largely nationalised railway lets us down. On frequent strike days there may be no trains. On other days there may be delays and cancellations. There are bad weather days when service is impeded or cancelled.

The railway has lost its big five day a week commuting business. It used to overcharge this captive audience whilst discounting much of the leisure and pleasure business it used to try fill the off peak trains. It is having difficulty adjusting to a two three days a week in the office model, and to the more flexible hours of many. It is reluctant to make more changes to handle events and leisure travel more enthusiastically.

Before lockdown the average fare was £6.27 and the average subsidy £3.73 per ticket. Since lockdown the average fare has fallen to £6.12 and the average subsidy gone up to £7.51. So subsidy has doubled whilst the value of the fare has gone down.Why do taxpayers have to pay for people often with more income and leisure time than them to get cheap tickets?

I was on the committee that reported on how to privatise  the railway. I disagreed with the majority report which proposed the system they adopted. They recommended splitting track ownership from trains and wanted a monopoly track company for the whole country.So Railtrack was born. It was nationalised by Labour. As I expected the  monopoly track company did not perform well, though it was a bit safer than BR. It was nationalised following a bad crash brought on by track failures. As a monopoly it was more interested in revenue from existing assets than in evolving and growing the network.

Today we need railway management who can analyse current trends in commuting, leisure passenger travel and above all freight. We need a new pattern of use geared to maximising use, increasing revenues and cutting subsidies.

I will discuss the model I urged based on track and train together in line or regional companies facing competitive challenge in a later piece.

With Labour wanting to complete the nationalisation of the railways and the Conservatives hesitating to privatise, it is time to revisit the general case against public ownership.

The UK’s nationalised industries have been bad for customers. Lacking competition they put up prices too much, deliver poor service and fail to innovate  in a customer friendly way. They are bad employers, often shedding labour by redundancies as they lose customers. They milk taxpayers, sending all their  losses to the Treasury to pay. They make ill considered, expensive and badly managed investments in new capital like HS 2.

The Post Office has behaved disgracefully towards its employees. It bungled  a computerisation programme. It has plunged into losses.

HS 2 has been subject to huge cost overruns and then faced a series of cuts to its scope to try to contain costs to three or four times original budget.

The nationalised part of the railway, all the track, signals and stations, has inflicted misery on passengers with endless signal failures, unplanned track maintenance, leaves  on the line and the wrong kind of snow. Many of the delays and cancellations stem from nationalised mismanagement.

Nat West/RBS in public ownership has lagged other banks and performed badly.

The Bank of England has  proved to be the UK’s worst asset manager racking up £170 bn of losses on so called safe bonds it paid too much for.

The nationalised roads offer too little capacity and are bedevilled by temporary closures, congestion, slow running and potholes.

Hertz’s decision to sell off 30% of its recently acquired EV rental fleet shows that it is hard work renting out an EV. Early  buyers of Teslas to electrify their offering they will now pause  their buying and help push second hand EV prices down. More owners of EV s will lose more money on their purchase.

Many renters worry about range. EV owners are finding repair and insurance costs are high, whilst losses on resale are big. Car manufacturers are throttling back output and wanting more subsidy to go into the battery business.

The UK government should pause its EV subsidies and let the market sort out an EV enough people want to buy or rent.

John Redwood (Wokingham) (Con):

It has been said that maybe 80% of goods moving from GB to NI will be able to use the internal market lane. Why will 20% not be able to do so, and why would the UK Government, who I was told were in charge, not want to ensure that practically all goods use the internal market lane?

Mr Baker (The Minister of State, Northern Ireland Office):

With great respect to my right hon. Friend, with whom I have gone a very long way in this cause, he might like to revisit the text. The point is that the 80% of goods going on that route are staying in Northern Ireland; they are UK goods. The other 20% are goods that are going on to the European Union. That is the point: 80% is UK internal market trade, and 20% is trade going on to the European Union.

John Redwood:
Further to that point, which is a very good one, would the EU not decide to use its powers if Stormont tried to use the brake too often and change the amount of EU law that applied?

Hilary Benn:

The Stormont brake was the result of a negotiation between the Government and the European Union. It was a really big step forward—it is why we are having this discussion now, and I support it. Anything is possible in the future with regard to what one or another party that is engaged in continuing discussions and negotiations may seek to do, but we have a deal with the European Union and it expects us to honour the Windsor framework—a point I have made in the House many times before—and we would expect the EU to do entirely the same. Nobody can guard with absolute certainty against what may happen in the future; we have to deal with the world as it is today.

John Redwood:

Someone wanting to send goods from GB to NI would naturally expect to use the new internal market lane—the green lane. Who decides whether they would not be allowed to do so? Would it be the EU, the UK Government or the Stormont Executive?

Chris Heaton-Harris (Secretary of State for Northern Ireland):

It is the UK Government in that area.

John Redwood (Wokingham) (Con):

If the Chancellor of the Exchequer wishes to lower the VAT rate or to take something out of VAT altogether, will that be a good law for Northern Ireland as well as for the rest of the UK, and can we now set taxes for the whole country?

Chris Heaton-Harris (Secretary of State for Northern Ireland):

On the example my right hon. Friend has given of VAT, that has just been done for a number of different things. I believe the latest one was solar panels, but I will check with those in the Box. There are various other products, and I will get an answer for my right hon. Friend. But, yes, is the answer for VAT, and also for tax.

The regulations address the concerns that have been expressed in parts of the Unionist community in Northern Ireland that its status has been diminished. Let me say from the outset of our discussions that what the Government wanted and the Democratic Unionist party wanted, and which we had, was our shared determination to strengthen our Union.

When I voted for Brexit I voted for change.     I saw how far the EU was lagging behind the USA, and behind Switzerland, Norway and Iceland, three small countries  not in the EU in income per head. The latest IMF figures show that the USA now has twice the level of GDP per head, at $80,000, than the EU average at $41,000. The UK at $49,000 is usefully above the EU average but well below the US.

I have watched with concern at EU performance as the US has founded, grown and developed the world’s large digital companies, pioneering on line shopping, social media, search, software applications and now artificial intelligence. The EU has looked on, sought to regulate these activities but had to  buy the goods and services for what is a US led digital revolution. All 10 of the largest companies in the world by market value are US and 7 of them are in the digital sector.

Remain was so wrong about what would happen after Brexit. The opposite happened to their forecast of fewer jobs, early recession, falling house prices. They now tell us our way to faster growth is to rejoin the EU, or align ourselves more fully with the vast array of rules and regulations   that the EU specialises in. Many of these rules prescribe how products must be designed and made. This often adds to costs and can stifle innovation.   A flourishing single market just needs a simple rule that if a product is of merchandisable quality in one country it should  be permitted to offer it for sale in another that is part of the same market. If there is to be supranational regulation then require good safety standards, require proper labelling but do not tell people how to design and make any given product.

The US has a common law system. We used to depend on our common law system, then had to see superior code law from the EU bolted on top of that more flexible system.     The battle over the Northern Ireland Protocol is partly a battle over the UK’s right to diverge. Ministers  now say we can. So then, get on with it. We have plenty of historical evidence that the EU model means slow growth, high costs and Europe slipping further and further  behind the world leaders in living standards. Why want to tie ourselves back into a system which can thwart enterprise, be hard on entrepreneurs, promotes high taxes and costs and fails to encourage innovation?

Briefings from Treasury and OBR say little room for tax cuts. This is all based on OBR forecasts which have been wildly wrong in recent years. They have mainly been too pessimistic about revenues, greatly exaggerating the deficit.

The government must help itself by curbing spending and correcting obvious forecasting errors. Here are some key items.

1 Debt jnterest has soared thanks to the addition of the non cash item of indexing debt to the genuine cash payments and costs of higher interest burdens. Having terrified us with a surge to over £100 bn of so called debt interest, we should see a big drop of at least £35 bn in interest costs going forwards as the inflation rate this year subsides. They only showed £17 bn of this in the budget numbers.

2. The government has promised to cut legal migration by 300,000. This will create substantial savings on additional subsidised  benefit top ups, revenue costs of extra  NHS and education service and the additional capital costs of extra provision. New arrivals need subsidised homes, school places for children and health capacity.  This should save  £75 bn over the next few years using the old EU number on costs adjusted upwards  for recent inflation.

3.There should be a write back for losses on Bulb which were probably overstated in the provisions

4.Cancel gilt sales by Bank of England.  With overall Bank losses currently running at £34 bn so far this year, ending market sales at low prices would save a substantial part of this

5. Get public sector productivity up by half the amount lost since 2019. Thus would save an estimated £15 bn

6 Re phase and require much larger private sector contributions to any carbon capture and storage projects. We cannot afford £20 bn public money or anything like it on this.

7. Railways  – Require faster reduction of deficit and grants

John Redwood (Wokingham) (Con)

As owners expect to have influence over editors and the editorial line, why do we not have a policy of ruling out all Government ownership of such organisations, which would make it much simpler?

Julia Lopez, (Minister for Media, Tourism and Creative Industries):

I thank my right hon. Friend for making that simple point. It is one that I am sure will be considered once this case has passed.