The very slightest editing of an FT headline this morning makes it read as follows:
Rail chaos on England's West Coast line as Link to London suffers sustained delays, cancellations, slashed timetables, overcrowding and poor customer service
Let's be clear; this is not the result of strikes. This is the consequence of profound mismanagement by Avanti, who are the private sector operator of this line which has now been in chaos for so long that the despair of those who need to use it is utterly justified.
We are used to hearing about the total failure of water companies by now.
Avanti's management of the West Coast line, which has not enjoyed the benefit of being subject to occasional state ownership, which advantage the East Coast route has enjoyed, has been absolutely disastrous. A policy of underinvestment, most especially in staff training, seems to be at the heart of what is wrong. But, deeper that that there is a more significant malaise. They run this railway with the intention of making a profit, which the state essentially guarantees to them. Their incentive to actually serve the public is almost non-existent.
It is time that the whiole concept of privatisation was abandoned. There are services, including water, rail, gas, electricity, post, healthcare, education, buses and more that need to be under state control to ensure that they are delivered to meet need. The only problem that we have is a shortage of politicians that will admit this.
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Not only has privatization failed, but so has capitalism; in its current socialized capitalism form; where it is only capitalist when everything is hunky dory, but socialist when they’re in financial / workforce / union / better competition problems.
Capitalism in this bastard form is broken & will eventually fail.
I know what I want to replace it, but I’ll probably never live to see that. (Sigh)
Also worth adding that private businesses SELL – that’s the whole point – and in these times of climate-ecological breakdown this ‘business model’ can’t work for utilities like energy and water, since we have to reduce their use.
I sometimes imagine what a meeting of an energy company’s board of directors would be like if its members were truly acting responsibly…
“So the question before us is this: How do we persuade people to buy LESS of our products? What marketing strategy is going to LOSE us customers most quickly…”
Re persuading customers to buy less energy / water etc. Yeah, if only, I think it would be in the best long term interests of any utility company to aim for longevity. I would advocate that they insulate customers homes / businesses, for a rise in standing charge & offer solar pv / wind where suitable, again for a standing charge rise. This would provide them with a stable base for future energy purchase costs / forecasts & move then to a sustainable income model.
I had the ‘pleasure’ of using Avanti a week or so ago for a trip to Stockport for a friend’s memorial service. As I bought super off peak tickets in advance the price was ok.
However, although the train was only 3 minutes late at Milton Keynes (despite massive disruption caused by signalling faults nearer London which means had to drive to MK and pay £10 for parking) they managed to be 20 minutes late at Stockport, meaning I missed my connecting train to a local station and had to pay another tenner for a taxi to my destination. On the way there the taxi driver told me that the trains the day before had been all over the place with the result that he had lost business and made no money that day.
Says it all doesn’t it?
I’m playing devils advocate here…….but was it that much better when these industries were nationalised? I was relatively young in the 70’s but I recall strikes, power cuts and bloated inefficient public services.
Or am I wrong?
They were better than now
Strikes are mostly caused by the owners of businesses, in the UK mostly City shareholders, wanting to increase or maintain their profits by reducing pay or worsening terms and conditions of the workforce.
It does not have to be like this.
After the Russian invasion of Ukraine in 2022 and the resulting massive inflation BMW and its Unions started wage negotiations.
The UK media started to talk excitedly about strikes.
In the event BMW and the unions negotiated a settlement of a 26% increase spread out over 3 years.
The Tory media immediately buried the story.
Like any period in history the 1970s had its problems but compared with the last forty years of Thatcherism it was a paradise of freedom, wealth and progress.
Most of what people believe happened in the 1960s and 1970s are lies made up by the Mail, Murdoch and the Daily Telegraph.
Mr Devils Advocate!
I was trained as a professional engineer by one of the state-owned utilities – MANWEB. Addressing your points “power cuts and bloated inefficient public services” – the power cuts were due to the miners strike in 1973. As for “bloated and inefficient”:
1969: MANWEB board: what should our relationship be with our customers (they really did ask this question): Answer: “to help them use electricity more efficiently and effectively”
1972: MANWEB shrank from a 3 layer org to two (district offices and a HQ @ Chester). The new HQ when it was built did not need any heating whatsoever until the outside temp was minus 4C. When built it was the most energy efficient in Europe, ditto when it was demolished in 1995 (in an act of corporate vandalism by Scottish power).
In terms of keeping the lights on: MANWEB for urban & suburban areas served by underground networks has perhaps the most efficient and effective network……in the world. National stats, speak for themselves: order of magnitude better performance than other equivalent areas. (all done under state ownership).
So much for bloated, inefficient nationalised services.
Finishing: British Rail – Intercity. So good, so efficient that mainland Euro rail operators in the late 1980s modelled their intercity services on …….British Rail.
The market insanity – lasting 40 years – has to stop. If it does not – the Uk will fall apart.
I was commuting by British Rail from north London to central London in 1974/75, a journey of about 25 minutes. I don’t remember any major issues, I don’t remember being late. What I do remember was the classsic way preparation was made for privatisation – starving of funds so service was deteriorating.
In the last 5 years I was commuting regularly from Newcastle to Durham, a journey of about 10 minutes. There was a train scheduled to get me to the office 10 minutes early, however I had to change my hours as my boss was unhappy that I was late almost daily. Going home I had 10 minutes to leave the train and take a 2 minute walk to catch the bus home. I usually missed it because the train was delayed. I did, however, have a choice of trains to take, LNER, Transpennine, Northern, Cross Country. Of course only 1 of those was scheduled to get me where I needed to go at the time I needed to be there.
Yes, David, I’m afraid you are wrong.
Social surveys found people generally happy in the 1970s, but according to the newspapers, who were the lead propaganda arm for the move to our current neoliberal dystopia, things were terrible.
If you look at the references in the back of those histories of the ’70s that paint a bleak picture, the heavy dependence on the Telegraph, Mail, Express and the Sun explains a lot.
I know I was growing up – but all I can recall was optimism, overall
Well I guess that’s me telt 🙂
I’ll just take British Rail as an example, Davidn – as I see others have also done. I commuted from Plymouth and then Exeter to London one day a week for four months every year for 25 years starting in 1983. In the British rail days, I was late and had to warn my class of Ivy Leaguers only once and that was only by 12 minutes. In the privatised years – apart from narrowly avoiding being involved in the effects/after effects of two disastrous and fatal crashes, I was so frequently – and considerably – late that I took to traveling the night before. As to the fares…!!!
Thanks Nigel
Public services only appeared to be bloated. In fact, the government took out lots of profit from nationalised industries. My husband worked all his life for BT, starting his apprenticeship when it was still the GPO. There were many constraints on the business because the “profit” did not remain with the GPO/BT. I still think it was better then than now because it was a public service, and not a business in the business of making money, first and foremost.
One example of this: the cost for installing a telephone service to a property was the same no matter the cost of installation before privatisation, it certainly isn’t now.
Thank you and well said, Richard.
Your post makes me of a workshop I was involved in around 2010. A City lawyer and I represented banking and discussed orderly liquidation. There were representatives from utilities and even universities.
It soon became clear, if it had not been already, that critical infrastructure should not be owned by the private sector. Some investors wanted banks broken up and run like utilities (or how utilities). There was no appetite from not just political representatives, but civil servants, too. I agree with your conclusion and just add that officialdom needs to step up, too, and take their responsibilities seriously.
*Or how utilities should be run.
I would have banking infrastructure state owned with licenced banks operating on the platform
I have said so since 2008
Thank you, Richard.
I agree. There are many more like us in the City than people imagine.
@Geoff Cox
It’s already happened!
South West Water and actually trying to persuade their customers in Cornwall to use less…
https://www.progressivepulse.org/economics/the-letter-that-demonstrates-the-disaster-that-is-neoliberal-financialised-capitalism
Neoliberalism and predatory capitalism has failed because it puts profits before people.
They are supposed to put efficiency before profits, but the temptation of profit always seems to win.
I think part of the problem is that the business owners have little consequences if their business goes bust.
A CEO with a £million salary can pollute our waterways with impunity.
If my dog fouls the pavement, I can get fined.
Neoliberalism implicitly defines “efficiency” as being a direct function of “profit”; it is a dependent variable. If an operating change implemented to improve efficiency (most typically by reducing costs), produces a measurably beneficial increase in profit, then it is a proven efficiency improvement. If the change doesn’t enhance profit, then it cannot be more “efficient”; it is an independent variable, and something other than an “efficiency” improvement, and whatever it may be, it is of no interest to neoliberal business executives.
Conservative and Labour politicians use a looser definition for the public sector. There, all that is required is to reduce costs. Of course, being politicians (ill-informed amateurs ignorant of everything but PR, career and Party interest); they eagerly talk about “efficiency” as if they were skilled operators, competent to apply some gee-whiz formula they remember reading about once in a magazine in their dentist’s waiting room, derived from Operational Research, enhanced by AI and digital technology; that they decide on the hoof, or at a Party Policy brainstorm, is going to change everything (outsourced to a management consultancy, or some new off-the-shelf private company set up by people they know). But trust me, they will do it; forget the guff, and under the pressure of the constant TV lights in their rabbit-eyes; just take a swinging hack at the costs, and tell you they have saved Billions. Nobody will investigate the results, there will be no post-transformation audit (that would never do); and eventually they will give up when they find out the costs have gone up, not down; and then privatise everything.
Set politicians the task of running the country, and you can be sure; left to their own devices, they will produce at least one Post Office scale disaster a year; forever and ever. Because that is what they do.
It doesn’t help that directors of PLC’s are required by law to maximise shareholder profits.
They are not
U.K. company law does not at that. See s172 Companies Act 2006 which is much more diverse than you suggest.
Oh really. I stand corrected then. Thanks Richard
In his book “The Price is Wrong: Why capitalism won’t save the Planet” Brett Christophers puts forward the idea that the terms “markets” and “capitalism” rather than being synonyms for the same kind of system are in fact, concepts in fundamental opposition to each other.
Markets being places that allow easy entry, fair (regulated) competition and choices for customers that allow customers to choose what they believe to be a better product or service at a fair price.
Capitalism in contrast, is a place of natural or manufactured monopoly/cartels that allows little or no entry of competitors, where real competition is avoided by any legal/illegal means possible including government/regulator capture and where customers are forced to buy poor products or rotten services at whatever price the monopoly/cartel choses to offer.
He concludes that Capitalism is about is as likely to solve the real problems of humanity as a Columbian drug lord is to solve the problem of drug addiction.
He is right
Absolutely.
“If you’re unemployed, it’s not because there isn’t any work.
Just look around: A housing shortage, crime, pollution; we need better schools and parks. Whatever our needs, they all require work. And as long as we have unsatisfied needs, there’s work to be done.
So ask yourself, what kind of world has work but no jobs? It’s a world where work is not related to satisfying our needs, a world where work is only related to satisfying the profit needs of business.
This country was not built by the huge corporations or government bureaucracies. It was built by people who work. And, it is working people who should control the work to be done. Yet, as long as employment is tied to somebody else’s profits, the work won’t get done.”
Stolen from a post just below yours on Mastodon. I’m afraid I don’t know the author.
Thanks
Abby Innes “Late Soviet Britain” is an essential read on this subject.
“Under the Companies Act 2006 (CA 2006), directors have seven general duties to the company. One of these duties, commonly referred to as the ‘s172 duty’, is ‘to promote the success of the company’. Part 1 of that duty requires directors to do so ‘for the benefit of its members as a whole’, and in doing so, to have regard to the following six factors:
the likely consequences of any decisions in the long term;
the interests of the company’s employees;
the need to foster the company’s business relationships with suppliers, customers and others;
the impact of the company’s operations on the community and the environment;
the reputation for a high standard of business conduct; and
the need to act fairly as between members of the company.”
Thanks Andrew
I’ve always said that private companies work in retail but are not suitable to service industries where providing the service Is contrary to the goal of making profit.
I like the idea of the essential industries being part owned with a 1/3rd each between government, unions/workers and private investors.
The example of this I remember seeing (on working lunch I think!) was the recession of the early 90s which hit the car industry across Europe hard. Volkeswagon came up with a deal for 4 day weeks with agreement from unions and shareholders to ensure no one lost their job even though they had to reduce output. Once things picked up they were in a position to ramp up output quickly having held into their skilled staff, and out perform everyone else. No strikes or bail outs.
While it’s not an example of an essential industry, giving workers a stake in the company seems like a great way to build consensus and avoid the adversarial issues of unions vs directors from the 70s
Not-for-profit third sector organisations, involving the relevant stakeholders, could be an appropriate vehicle for managing the provision of such services. With government contract terms, legal status and associated provisions that safeguard their remit and specify their duties, keeping in public ownership any associated infrastucture, limiting executive rewards, etc.
I think you conflate ‘service industries’ with ‘public services’.
Public services (ie public ‘goods’ such as rail or local bus and tram transport; or health or education) or natural monopolies such as water and waste (liquid, storm water etc and domestic rubbish) are all inappropriate for private companies.
Other services, such as accommodation, hotels, food and drink in restaurants, cafes, pubs etc; or hairdressers, gardeners; musicians, artists etc… can all be run with private companies, with some forms of competition. (Although in some areas of the arts and culture, significant state subsidies may be deemed appropriate. A secondary issue, open to debate.) The idea of only being able to eat out at a unit of the ‘restauromonopol’ with a state-regulated menu is not what you meant, I’m sure!
Regarding rail privatisation: one of my colleagues at the consultancy that worked preparing BR for the change to come said that ALL of the staff said that the whole idea was madness but that the government told them that there was no alternative and that they had to push it through.
The results we now see before us.
Regarding the different services available – I caught a train from York to Leeds last year and was informed by the ticket inspector that we weren’t supposed to use it as it was only valid on a different company’s trains however she let it pass: I suspect because they see it all the time and fundamentally because it is more madness. When we bought the tickets there was no indication of any limitation. Luckily these limitations are not in force in our local railway line (North Kent).
As a daily and latterly a weekly user of Virgin/Avanti West Coast over the last 16 years, I want to say the staff have been consistently excellent. They haven’t always had the answers to management failures, but they’ve always tried bloody hard. This disparity between human beings and corporate behemoths is neatly summed up by a personal experience. I paid for an annual car park pass (multi-story owned by Virgin at the time before being sold to NCP) and commented lightheartedly to the lady in the ticket office I wanted to do it before Branson jacked up prices to compensate for profit controls imposed by fare regulation. She replied kindly saying she didn’t think he/they would do that. A month later car park prices increased 30%. As a low-level banker I have a vested interest in pointing out that employees of companies run by these scumbag UCE’s* are human too. (*Ultimate Controlling Entities – I just made that up since UBO doesn’t sufficiently identify the power behind the privatised utilities, etc).