How will Corbyn fund nationalising the Railways, higher taxes?

[Isitmebut]

To my knowledge the old British Rail was not annually making money.

We currently have record investment going into the railways, but Mr Corbyn appears to believe that under State ownership, the UK with £1.6 trillion of National debt and an unfunded pension liability of around £1 trillion on top, can put onto the State/taxpayer the risks/costs of acquiring rail lines, funding all investment and running them - when the State has a piss poor record of this.

I can understand why Corbyn and the public sector trade unions might want to do this, as its jobs for the boys and (unlike factories that closed in the 1970's) every time you 'sit around a table' you always get what you want whether the company is making a honking great loss or not - but how is it in the interests of the taxpayer with such an open liability, when the UK has such a huge national debt and still spending more than we earn?

Corbyn says it is a popular policy, but when will we hear how ££££ financially viable it is???

GiddyOnZackHunt …. Re your Mmm. And who operates our contracts? SNCF (or whatever it's called) the French operator. Nowt to stop them milking our commuters to pay their debts....

Clearly you would not make that statement unless you could qualify it, are there not general increases in line with each other?

Are there no government/watchdog controls – as I thought over the past few years there price rise are ceilings?

What is to stop a Corbyn government using the railways or any other State service to pay off what he calls ‘austerity reductions by NEW politics’, which can only ever be by government spending cuts and/or more taxes?

Want2bSuperman .... I have no idea of the enormity of the then Swedish railway problems compared with the British Rail state ownership days, or if he had the government of the day with him or against him, but he soulds a remarkable man.

Re your His facility was in Sweden where unions remain strong but are driving out manual labour to Poland.

We had a similar situation in the high inflation/interest rate 1970's with coal.

Where the trade union claimed and got from Wilson I believe, over a 30% pay rise amongst others for a dangerous job admittedly few of us would want to do, BUT (cause an effect) it made our coal with strike/supply uncertainty, more expensive within a global market place - and I believe our power stations had to start importing cheaper coal from POLAND - or pass the increased prices of erratic production, on to us.

Interesting thoughts all round. For a start I see no one is talking about TFL (apart from Isitme bemoaning strikes), a nationalised transport body that covers around 90% of operating costs through fares. Of course, fares are high, and in order for a nationalised British Rail to provide a similar service, fares would also have to high, perhaps almost as high as they are now.

The benefits of a nationalised service though is greater co ordination, and greater public pressure (I would hope) for more lines, faster trains etc. You would pay the same but get a better service.

BR suffered from low govt. investment, and union politics. A well funded BR through fares + a more sensible union relationship would be a good thing IMO.

I don't think it should be a govt.'s main priority though. And it would be very expensive - although also very do-able.

The benefits of a nationalised service though is greater co ordination, and greater public pressure (I would hope) for more lines, faster trains etc. You would pay the same but get a better service.

Alyosha .... can you please give me ONE Labour major services government department, that despite for several years the largest 'real terms' increase in annual spending in Europe, invested that money commercially/wisely (hopefully in something tangable) - and was NOT passed to the coalition in a condition 'not fit for purpose'?

Re 'low government investment' I reiterate my previous point, governments will always have higher spending priorities than worrying about how cramped THOSE WITH JOBS are, travelling to work during the rush hours.

i.e. Corbyn's current view there should be NO limit on benefits, STILL has not worked out that the basic requirement of getting benefits, welfare, and tax credits under Labour was having a pulse, was always going to be unsustainable - so would replicate the same policies, but on further leftie steroids.

You seem to have all the answers op, I can't see the point of this thread. I had exactly the same thought as kerberos upthread.

Mintyy I have learned to ignore isitme's monologue.

Minty y .... You seem to have all the answers op, I can't see the point of this thread.

The point is that having lived through Labour's policies in the 1970's in by twenties, saw the polices damage the last Labour government did in the the 2000's that Corbyn and co were MPs within - I HAVE some answers to this rollocks that Corbynism are NEW politics/ideas - as I not only have the tee shirt, I wore it on the train when the State ran railways and other taxpayer funded industries that no longer exist.

You do realise that we can learn from history we do not have to repeat it.
All governments do damage and this is what they are remembered and judged upon. Just as you cite the issues of the 70's and Blair, the harsh legacy of Thatcherism is lasting in many communities within the UK and will not be forgotten or forgiven for generations. I suspect the same will be said for the current government.
I don't think many people think Corbyn has all the answers but they do understand that he is different from the sameness of the parties in recent years. A shake up / change is desperately needed even if it's just to make all politicians not get complacent.
The reason the last election was so disasterous for all parties included those who were elected was that people found it harder than ever to know what any of them stood for and even harder to engage with them. Introverted politics that fails to engage the electorate is not good for anybody except lazy politicians.

The manufacturing that remains in Scandinavian countries is declining largely due to unions making high wage demands. In Denmark you have factory workers making £20 an hour while in Germany the same labour force is paid £10 an hour plus the companies receive a subsidy. The Danish companies can't compete.

As it is my dad sold the business and the very first they did was move the last parts of production out of Sweden. My dad had already started moving it to Germany. Now they are moving from Germany to Czech as better labour pool of skilled workers.

I do think we should learn from our mistakes and look at how we can do things better based on what we know.

The problem is that people will always push for what they can get away with, whether from the employer or the employee side - the law needs to create a level playing ground between the two so that the interests of employees aren't trampled on by employers, and so that the interests of employers aren't destroyed by uncompetitive wages etc.

There can of course be a law for a Minimum Wage, but no government can ever commercially dictate to to a private company's owner/shareholders what their wage structure has to be - even if providing a competitive tax/regulatory/re tape environment for years ahead - which most ideologically won't, or can't due to the electoral cycle.

As for a start, how does a government know a companies individual competitiveness within the global markets, with either a big State regulatory/tax environment or the opposite?

So militant trade unions equally have a right to squeeze until the company goes tits up.

Away from highly unionised Labour the employees of course have a choice to look for another job, which over time (especially if training time/costs are involved) pay rates will rise - especially as the whole labour market tightens.

Anyone, what is the difference between the trade union/employer relations up in Nissan etc nowadays, to that British Leyland ones of old, as clearly there seems little comparison?

Isitme - the govt. can influence though. Let's take the issue of British private business' dreadful record on investment in infrastructure, training etc. at the same time dividends and profits are going up - and in some cases reaching record levels.

What's good for individual companies is bad for the economy (and leads to businesses moaning that employees aren't immediately ready for work - well no shit, why don't you train them?? The govt. is not your mum).

The govt. could tax profits more, giving companies a big incentive to spend more on investment/training.

Unions in Germany work differently - and there's no reason we couldn't encourage a similar model in the UK.

Germany has sensibly focused on high quality, premium vehicles that sell for a huge premium.

No Charisma, wont win a GE.

Charisma is in the eye of the beholder, Varya. ?

Alyosha .... Re your;

Let's take the issue of British private business' dreadful record on investment in infrastructure,

Clearly few businesses invest in recessions, never mind the worst for 80-years when finance was not freely available, but socialists never look beyond the word 'profit' - and few Labour MP's have ever run a business, so do not 'see' the effect several taxes/business costs they tend to annually put up annually - which on top of new government regulation, red tape, currency moves (if import raw material and/or export products) means they have problems planning their annual bills, never mind investment.

The govt. could tax profits more, giving companies a big incentive to spend more on investment/training.

So based on the above 'higher taxes' the socialist 'default' position is probably not the best idea, especially considering the far worse government record on wasting taxpayers money.

Specifically on training, Osborne recently announced a tax companies will pay, that they get back if training employees, to level the playing field for companies that train and other just poach - the details of which have to be ironed out for smaller businesses etc.

Unions in Germany work differently - and there's no reason we couldn't encourage a similar model in the UK.

Those German unions were behaving themselves in the 1970's so regional banks/private investment invested creating the white goods etc brand names and reputation they have today - while the UK had the opposite and should any company actually make a profit, the Corporate Tax under socialism was 50%.

As to creating a similar model after the horse bolted in the 1970's, you are joking, as everything I hear from Corbyn's dream team sounds more like they will repeal Thatchers curbs on militant job/economy destroying trade unions of the 1980's - as the Tories look to ensure future public sector strikes have closer to 50% members voting for it - as trade unions still have some of those 1970's style militants who intimidate etc.

P.S. Re company investment under socialism, wasn't the top rate of tax on receiving an unearned income (on investment etc) over 90% pre Thatcher????

Isitme -

Clearly few businesses invest in recessions, never mind the worst for 80-years when finance was not freely available, but socialists never look beyond the word 'profit' - and few Labour MP's have ever run a business, so do not 'see' the effect several taxes/business costs they tend to annually put up annually - which on top of new government regulation, red tape, currency moves (if import raw material and/or export products) means they have problems planning their annual bills, never mind investment.

But I'm talking about businesses with record profits & dividends - so clearly they have the money as they are giving it back to shareholders, rather than investing. Of course shareholders love a good ROI but one would hope not at the expense of future growth!

And actually if you are profitable, surely the recession is a great time to invest? My own company used it as an opportunity to snap up some underpriced assets and wangle cut price training as suppliers were desperate.

*So based on the above 'higher taxes' the socialist 'default' position is probably not the best idea, especially considering the far worse government record on wasting taxpayers money.

Specifically on training, Osborne recently announced a tax companies will pay, that they get back if training employees, to level the playing field for companies that train and other just poach - the details of which have to be ironed out for smaller businesses etc.*

Higher taxes in this instance would merely encourage some balance book cooking - higher staff salaries, more investment in training etc. We all know companies are not going to lie down and hand over their profits lightly. With record low corporation tax you get record low investment, with no incentive at all for companies to look beyond the short term. Nice of Osborne to recognise the issue - but nowhere near as effective as the great big stick of corporation tax.

As to creating a similar model after the horse bolted in the 1970's, you are joking, as everything I hear from Corbyn's dream team sounds more like they will repeal Thatchers curbs on militant job/economy destroying trade unions of the 1980's - as the Tories look to ensure future public sector strikes have closer to 50% members voting for it - as trade unions still have some of those 1970's style militants who intimidate etc.

No, that's not what I want. Corbyn wants it but I don't like him much. There needs to be more understanding between employers & employees, and worker representation on the boards would help with that.

re: 90%+ - I'm a new Labourite! Not a Corbynite. 3rd way and all that.

Alyosha ..... Socialism 1st, 2nd, 3rd way - or even viewed as some 5th column, it matters not - you all view 'business' through the FTSE 100 (company) prism.

Of the possible hundreds of thousand small, medium, and large companies, how many don't know what to do with their earnings and are paying back shareholders?

I admit I'm surprised (albeit a relative few) companies are paying money back to shareholders rather than putting it to work, but thinking about it, the main reasons might be as stock markets have risen since March 2009 other companies are fully valued/expensive,they have grown organically as much as they can, the economy could level out from here, probably weaken - and maybe being taxed on cash on the balance sheet earning diddly squat in interest.

Socialism always wants to control private sector companies, never their own spending, so view them as both a perpetual cash cow and as an object for social good - rather than understand what makes them tick over and set taxes as high/fair (to the company) - without them taking tax avoidance measures, shrinking, or moving abroad.

The first thing Brown did in 1997 was see the Final Salary pension fund surplus in UK companies etc, he cut the dividend tax relief on all pensions, and now Private Sector Final Salary Pension Schemes are rare - especially compared to the Private Sector employees he increased by around 1 million.

www.telegraph.co.uk/finance/personalfinance/pensions/10698432/Final-salary-pensions-10-times-more-common-in-public-sector.html

www.dailymail.co.uk/news/article-2613609/Revealed-Labours-stealth-raid-took-118BILLION-pensions-paving-way-end-final-salary-schemes-suddenly-unaffordable.html

Isitme -

I don't know why you're surprised - it's common knowledge: www.telegraph.co.uk/finance/personalfinance/investing/9624131/Recovering-UK-companies-pay-out-record-in-dividends.html (from 2012)

www.telegraph.co.uk/finance/markets/11381992/The-search-for-high-dividend-stocks-will-continue-in-2015.html (early this year)

www.industryforum.co.uk/resources/articles/training-competitiveness-too-little-uk-investment-for-recovery/

Our productivity gap with Europe is almost entirely due to our underinvestment in training. Is it a coincidence that our board members are disproportionately rewarded for high Shareholder payouts (or kickbacks, depending on your POV)?

As a socialist I want conservatives to appreciated human nature - companies are not pure angels, only concerned with investing in their future & their employees, they are run by human beings with venal human concerns, including trousering as much money as humanly possible in the shortest period of time available to them.

The centre ground I advocate allows companies to keep their profits, pays shareholders so they continue to invest, but provides large enough sticks & carrots to push training, investment and other capital spending to keep the economy going forward.

Alyosha .... please don't be surprised what I don't know, I can't be the font of ALL knowledge. lol

'Productivity' is both a narrow and misleading measurement IMO; if a factory fires half its staff, and production hardly falls, Productivity of that factory will rise markedly.

Does an economy like the UK that loses a shed load of private sector workers, but then hires a shed load more public sector workers to replace them, become LESS Productive - as that is what happened.
www.dailymail.co.uk/news/article-3236690/Number-employed-state-falls-lowest-level-Second-World-War-pay-rises-fastes-rate-decade.html

So looking at that graph, one has to assume that productivity would start to rise, or at least the Business Investment that you are so worried about, right?

Well apparently looking at the figured released today and the report below, companies are investing, probably only slowed by the threat of a company bashing Labour government last May;

www.cambridgenetwork.co.uk/news/uk-economy-to-avoid-threat-of-secular-stagnation/

Record investment levels by firms mean that the UK economy will avoid the threat of secular stagnation. This defies warnings from some leading economists that a lack of appetite to spend among companies in advanced economies will lead to persistently slow GDP growth, according to EY ITEM Club’s special report on business investment released today.

• Business investment currently at highest level as a share of GDP since 2000
• EY ITEM Club’s forecast predicts investment by UK companies will reach a record high in 2019
• Headwinds faced in the East of England include skill shortages and infrastructure restrictions

Following a sharp decline of almost 20% during the financial crisis, business investment in the UK has performed relatively strongly since the economy emerged from recession at the end of 2009. Since 2010, investment by UK firms has more than made up for the ground lost in the recession, reaching 11% of GDP in Q2 2015,* the highest level since the end of 2000.

Looking ahead the EY ITEM Club forecasts investment by firms to rise by an average of 6.4% a year from 2015 to 2019, when it is expected to reach a record high of 12.9% of GDP. Cuts in corporation tax, low borrowing costs, increasing availability of finance, healthy corporate balance sheets, more expensive workers and last but not least, cheaper energy are all expected to contribute to this rise.

Most medium to large businesses need to plan up to 5-years ahead, and currently these figures show a record high investment expectation by 2019, but clearly one year away from ANOTHER threat of an anti business Labour government - and the probability some of those positive factors within the paragraph above would have turned business negative - could dramatically change that business investment/jobs expectations.

P.S. And McDonnell's speech at the Conference yesterday, gave business leader lots to think about - and none of it investment/job positive.

Labour's plans for economy are 'pure fantasy'

Business leaders blast shadow Chancellor's speech at Labour Party Conference in Brighton
www.telegraph.co.uk/finance/economics/11897387/Labours-plans-for-economy-are-pure-fantasy.html

Isitme -

Why is that misleading? Productivity will have risen - half as many staff are producing the same amount of stuff, they are more productive! Clearly the Capex investments made by the factory bore fruit...

Secondly, I'm not sure I understand your point - the coalition cut loads of public sector jobs, but productivity in the UK fell, it didn't rise as your hypothesis would claim...

www.bbc.co.uk/news/business-32827317

And the key culprits are...

"For a start, we do not invest enough - our companies don't spend enough on the latest technology or on research and development.
For instance in Germany there are 1,034 R&D staff for every 100,000 people, in the UK there are 883.
Nor do we have the best railways, roads and airports in the world. We all know about the arguments over whether Heathrow should have a third runway or not, it has been going on for years, but Charles de Gaulle airport outside Paris has had four runways for years."

Family businesses also come under fire - which is fair, I think.

It's good to see business investment rising - but what is it being spent on? And what is the ratio of investment to profits?? As UK businesses are now more profitable than ever before, and paying out record dividends, has their investment risen in harmony? Capital investment in foreign countries/M&A or genuine automation/training, tooling up for growth?

And I know you are playing to the crowd, but I am a committed Blairite, 3rd way etc. etc. Profits & taxes, neither too high nor too low.

Also British investment might be at a record high for Britain, but it is very very low compared to the rest of the world. Will find some figures for you...

Alyosha .... If Europe has better Productivity than us, it is likely because THEY never built an economy on increasing the private sector payroll as we did, and their private sector businesses struggling from a less growth economy, with higher regs, are much leaner than ours i.e. they have TWICE our unemployment rate and far more temp contract workers.

In the UK the BBC mentions reasons like infrastructure investment and education, both were dire under Labour for 13-years and the Conservatives are trying to correct - and don't start me on the 'mediocre managers' reason when our NHS under Labour hired managers at a higher rate than front line staff.

I don't know where this private sector investment increases are being spent on, I have not looked, but I'd rather know where the £trillions Labour had went, as I see feck all to show for it - and Corbyn/McDonnell believes in a yet bigger State where Labour can spend money better than the businesses that make the money/hire.

Socialists should not worry about company stats, especially as they have such a bad record managing the private sector growth - just give them the conditions to take risks/grow/hire - socialist governments need to concentrate on spending tax receipts wisely, not creating a client state that falls apart at the first recession.