Making the trains run on time

3 07 2009

imagesFollowing the de facto nationalisation of the East Coast Rail line, no doubt David Miliband will be popping up to tell us this is another example of New Labour radicalism, alongside the nationalisation of the banks. What really happened is that another deal that the government did with the private sector has unravelled as soon as it looked as if National Express, the company concerned, would have to make some hard choices about how to run the railway during a downturn.

What does this episode tell us? Firstly it confirms the point made by James Heartfield in his essay on the state and the economy, that the state and private industry have become more and more interpenetrated. A key aspect of the deal between the government and National Express was that the government would pick up 80% of any losses. This is not free enterprise by any stretch of the imagination. It is effectively a state subsidy to a private industry, as are many of the big government related projects, particularly in the IT sector. This process is likely to go even further as the government struggles to provide key services during the recession.

The state certainly does have a key role in the management of big infrastructural projects such as the railways. But the current system where neither the state nor private enterprise take full control is the worst of all worlds. It is possible for the capitalist state to run big infrastructural projects successfully, as anybody who has travelled on French high speed trains or driven on their motorways knows. In Britain this ability appears to have been lost.

As it stands the system we currently have allows neither the market nor the state to operate effectively. The deal with National Express allowed them to walk away just as they should have been bringing their management skills to bear in keeping the railways going through a recession. Even with the 80% subsidy against loss, rather than tackle the difficulty choices, of how to cut costs, improve service and productivity, they simply gave up.

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