Massive Rail Investment

[CogitoErgoSometimes]

Article here Capital infrastructure projects have to be a good thing and £9bn to upgrade the railways seems long overdue. Finally, a modern electrified network.

The ticket prices are absurd! In Spain or France you get regular, comfortable, punctual, high-speed trains and the the tickets are half the price. Why can't we do that here?

And while we're on the subject I hate the different prices for tickets, according to when you travel and when you book. If you have to go to work, you have to go at peak times. If you could avoid it you would. There should be one price per mile, so one mile one pound, say, ten miles ten pounds. Imo.

Children and old people etc could still have rail cards.

"The ticket prices are absurd! In Spain or France you get regular, comfortable, punctual, high-speed trains and the the tickets are half the price. Why can't we do that here?"

The straightforward answer is that these countries subsidise their railways more than we do. It therefore boils down to whether the people who use the trains should pick up the cost of train travel or whether the rest of us should. As someone who lives in the boonies, where public transport is non-existent and my community are forced to be self sufficient and pay for their own vehicles and fuel, one has to ask what benefit do we see from rail subsidisation?

On a tangential note, there was an interesting documentary about the Greek railway network on the BBC a few weeks back. It said that the level of subsidies that the Greek state paid out to their railway network, divided by the relatively low number of users, meant that it was more cost effective (and I would argue probably more environmentally friendly) for the government to pay for a private taxi for every passenger!

MrJP - you're not ill all the time either, but does that mean you don't see any benefit in the Health Service? If you didn't have kids would you not want your taxes to go towards schools?

Imo we all benefit from the railways even if we don't use them. And of course we should subsidise, nay, nationalise them.

Public transport in rural areas is awful, I agree, and it's not fair that your community is so isolated. I expect you suffer more from high petrol prices too.

Solopower I don't accept that subsidising the railways is the same as contributing to the NHS. The NHS is funded through an insurance system in exactly the same way as our car / house insurance is funded. You pay in to insure yourself against a massive bill should you need treatment - that's what insurance is, a system to make sure you don't get lumped with a big bill.

A subsidy is a very different thing altogether. A subsidy is a method of artificially lowering the price of a good or service to either encourage use or protect jobs (or both). That public transport is so heavily subsidised and private car use so actively discouraged with eye-watering levels of tax levied on fuel, yet the car remains so popular, suggests that the market has spoken and the government would be best served expanding the road network rather than try and fight a losing battle.

The problem with the current privatised system that the railways use is that there is no competition to encourage lower prices or better standards. Let's face it, the rail operator running the line between Birmingham and London isn't really in any competition with the company running the Newcastle to York service. The government has botched the process and instead of delivering competition, they have merely granted a series of monopolies which screw over the passenger. Placing the whole lot back into public ownership wouldn't address this fundamental problem.

"Public transport in rural areas is awful, I agree, and it's not fair that your community is so isolated. I expect you suffer more from high petrol prices too."

We knew what services we'd be getting when we moved to the countryside. We knew we'd have to be more self-sufficient. It came as no surprise to find that public transport is useless here. The problem I have is that we are being forced to contribute taxes (under threat of violence from the state) to something which we have no access to. How would you feel if you paid into the NHS all your life but, when you needed it, it was denied to you? This is exactly the same principal that we find ourselves in.

As well as public transport, we get no benefit from other universal services supposedly provided by government such as NHS dentistry, street lighting, gritting the roads or school transport despite making our contributions the same as everyone else.

The high fuel prices affect us because we have no choice but to drive everywhere. I estimate that living where we do add another 2000 miles per year on our annual mileage. This isn't an insignificant cost - especially as we have a 4x4 to cope with the fact that our lanes don't get gritted in winter (we're lucky to see 28MPG - bloody Land Rovers!). My family?s biggest expenditure over the year, in order, is 1) Tax, 2) Mortgage 3) Diesel 4) Food.

Your situation does sound unfair. However, part of the answer is to nationalise the railways because then even unprofitable rural lines would run - as they did before. You should have access to trains and buses, like everyone else.

Apparently, the govt already subsidises the private rail companies. Why aren't you angry about your taxes being paid to some private company instead of being used by the govt to support you in your rural lifestyle?

Firstly, those railway lines that were closed under the Beeching review were the (very) unprofitable ones. The infrastructure was ripped out donkey's years ago so it will require a massive amount of government spending to restore the lines to a working state. Those same unprofitable branch lines aren't likely to be any more profitable now, so they will require further subsidisation indefinitely too.

For subsidisation read a tax hike.

"Why aren't you angry about your taxes being paid to some private company instead of being used by the govt to support you in your rural lifestyle?"

There has always been a proportion of tax money that has gone into the coffers of private companies. The NHS, for example, buys in bandages and drugs from companies like GSK. All departments buy stationary from outside suppliers rather than open up their own paper mill. I don't understand the argument which says that buying in objects is good, buying in services is bad.

As for expecting the government to support my rural lifestyle, I'm not asking for that. In the words of Nobel economics prize winner Milton Friedman,

"There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you?re doing, and you try to get the most for your money. Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I?m not so careful about the content of the present, but I?m very careful about the cost. Then, I can spend somebody else?s money on myself. And if I spend somebody else?s money on myself, then I?m sure going to have a good lunch! Finally, I can spend somebody else?s money on somebody else. And if I spend somebody else?s money on somebody else, I?m not concerned about how much it is, and I?m not concerned about what I get. And that?s government."

I'd just like us all to be a bit more self sufficient and for government to get the hell out of our lives so much.

MrJP I would be happy for some of my taxes to go towards linking up rural areas to the national rail network. I want my txes to go towards projects that improve the lives of everyone, not into the pockets of the bully boys at the top.

Helena Kennedy (Any Questions, Radio 4) addressed your point about buying in services: www.bbc.co.uk/programmes/b01kt7m6#synopsis

What happens when the govt gets the hell out of our lives? The banking crisis.

Mr JP - are you happy for your money to line the pockets of G4S?

"And if I spend somebody else?s money on myself, then I?m sure going to have a good lunch!"

See, lots of people deliberately choose the cheapest item on the menu.

I don't subscribe to the notion that all people will always act selfishly all of the time. Despite human nature being what it is, our history is littered with acts showing the opposite.

Yes, Dahlen! Yes!

It's time for a counter attack. Those of us who want to see the continuation of the human race, form your ranks.

Selfishness, as I have said elsewhere, logically leads to mutually assured destruction, and in MAD.

It's a wonderful irony, (isn't it? isn't it?) that the most extreme form of total selfishness has to be to look after other people, because without them, we can't survive.

Milton Friedman was an arse who judged everyone else by his own extremely low standards and, like most traditional economists, failed to realise that human behaviour is complex. He was also patronising thinking other people would fall for his simplistic analogy. Pile of crap.

Agree. Have you read 'A short history of progress' by Ronald Wright?

He shows how the 'survival of the fittest' mentality will ensure that we will all eventually disappear up our own orifices.

This is what it says about him on Wikipedia: en.wikipedia.org/wiki/A_Short_History_of_Progress

He calls for long-term, not short-term solutions.

Here's the links to his talks:

Solopower "What happens when the govt gets the hell out of our lives? The banking crisis."

Aside from the fact that the banking system was supposed to be regulated by Browns' FSA which didn't even see the problem let alone prevent it, the crisis only became our problem when the government stepped in to bail the failing banks out. If you think that the current banking problem was caused by a laissez-faire attitude, god help us!

edam "are you happy for your money to line the pockets of G4S?"

I agree they've hardly covered themselves in glory with regards to Olympic security, but they've done a good job in other sectors, including running prisons and providing security for Heathrow Airport. I don't think that their 'balls-up' rate is all that high (although it has been very visible) compared to some government departments. The failure to deliver one contract doesn't undermine the argument for privatising government services.

Dahlen ^""And if I spend somebody else?s money on myself, then I?m sure going to have a good lunch!"

See, lots of people deliberately choose the cheapest item on the menu."^

They certainly do, but doesn't this sentence put you in mind of the M.P.'s expenses scandal from a couple of years back? Substitute 'lunch' for duck house, second home or resurfaced tennis court and it sounds eerily familiar.

edam I didn't realise you were a respected authority on economics with a Nobel sat, gathering dust, on your mantelpiece!

MrJP, why is it that no govt has managed to stop people avoiding tax in your opinion? £13 trill would buy a lot of railway lines.

Yes, I think we need more regulation of the financial sector. We need to stop people taking our money and running away with it. Stealing it.

Solopower "MrJP, why is it that no govt has managed to stop people avoiding tax in your opinion? £13 trill would buy a lot of railway lines."

I read that story and the numbers involved suggest that £13Tn is a global estimate of tax avoidance - how much is 'owed' to our own revenue is impossible to even estimate given the details I've seen.

I say 'owed' using inverted commas most deliberately. The reason for this is that we are back to the fine line between tax evasion and tax avoidance. We could sit here and chew the fat over this all day but the bottom line is that, in this country, if something isn't explicitly illegal then it must be implicitly legal - that is pretty much how law works in this country and occasionally we don't like the results. The alternative, by definition, is a government or revenue system which makes up the rules as it goes along without recourse to parliament or the rule of law - that is a dictatorship and I'm sure we'd all agree that that is something we don't want.

So, back to the tax system; it might not be moral, it might not seem fair and it might not be something we could justify doing ourselves but, unless parliament has explicitly ruled otherwise, it has to be fair game.

Where I think that parliament has work to do to is to simplify the system as much as possible. British tax law extends to over 11,000 pages of rules - some of our competitors manage quite successfully with a rulebook less than a tenth of that size. If you remove exemptions and exceptions and all the excessive rules that obfuscate and contradict each other, tax avoidance will be much harder. This is a clear cut case where the devil is, indeed, in the detail.

Yes! JP, at last something we can agree on. Simplify the tax system.

But they won't do it, will they? Because the big companies that don't pay their share will threaten to go elsewhere, and the govt is ideologically committed to getting private enterprise to create jobs, run hospitals, schools etc, rather than to doing it themsleves.

This is because they think we don't like paying taxes. But I do - and so does everyone I know! It makes me feel like an adult, that I am playing my part, that my work is going towards creating a better world for all of us.

Imo that is what the 'big society' is all about - us all paying our share.

Sorry OP - I think this is a bit of a thread hi-jack.

Solopower There's another thread on the Politics site which has also been hijacked (I don't do it deliberately you know!!!) but started off talking about Theresa May and at the moment is talking about how to simplify the tax system! A lot of economics is counter-intuitive but one thing which I believe would fix a lot of problems at once would be to abolish Corporation Tax in the UK completely. This would, in effect, turn Britain into a tax haven and would attract investors from around the world, boosting jobs. It would mean that any company could increase their profits simply by doing business within Britain. How I would pay for this would be, as I explained on the other thread (try to keep up at the back!), by merging all forms of personal income - i.e. wages, dividends, rent incomes, interest payments etc. - under one 'catch all' flat tax system with a nice and healthy personal allowance equal to minimum wage. Under this system, there is little possibility of tax avoidance.

As for your second point, I can't say I share your enthusiasm for paying tax. Personally, every pound that I am forced into handing over is a few minutes of my life spent doing an activity I hate in vain! I'd much rather I was allowed to keep it to spend on my daughter than it was confiscated to contribute towards, for example, the Olympics - an event which, given its cost of £9.3Bn and a duration of 16 days works out to almost £4,500 EVERY SINGLE SECOND!!!

If we make the UK a tax haven we then deprive other countries of the tax that the companies should be paying to them - and they would find a way to retaliate. It's not in our long-term interests to play that sort of game, imo. It juist perpetuates the problem, which is that the huge corporations take out more than they put in to national economies.

But I agree that the system needs streamlining.

Solopower that is utter nonsense. It is, quite simply, not the job of the Chancellor of the Exchequer to consider the benefit to other nations ahead of his own. He is the British Chancellor and his responsibility and his mandate is to Britain alone. Besides, what retaliation could our rivals possibly take? If there was any mechanism to retaliate why wouldn't we be using that right now against existing tax havens such as Luxembourg, Liechtenstein, Monaco or the Cayman Isles?

I would also like to reiterate my point about tax incidence from another thread. If a company pays Corporation tax or whatever, it is still a real human somewhere who loses out. Whether the tax is 'paid for' by holding down the wages of the workforce, lowering the dividend, raising prices for the customer, exporting the work to the far east or, more likely, a combination of all of these, it is always a flesh and blood human somewhere which ultimately picks up the tab. At least, with the system I suggested, it clarifies who picks up that tab.

MrJP we don't exist in isolation. The Chancellor would not be doing his job if he didn't weigh up the effect of what we do in the UK on other nations. Obviously.

I can't comment on Corporation tax, as I don't know much about it, but it seems fair enough to me. I did read that companies are penalised for employing people, but hope that I have got that wrong. If true, then obviously that's wrong and should be stopped.

But we really have hijacked this thread for long enough, don't you think? This discussion could continue on the other one, though we are going to end up repeating ourselves!