24 August 2014

Poll tax on wheels

The Observer delves into the mysteries of rail privatisation:
The collapse of Railtrack in 2001 after the Hatfield disaster forced the creation of Network Rail, a not-for-dividend statutory corporation limited by guarantee, an elaborate organisational con to avoid the dread words "public company" and "nationalisation", even though it is 100% owned by the state. The de facto state backing has allowed it to run up borrowing of £30bn to finance rail investment, but at higher rates of interest than if it had been openly acknowledged that it was publicly owned. The cumulative extra servicing cost is more than £150m, but as the Office for National Statistics is now calling for the con to be ended and the debt reclassified as public debt, it's all for nothing. Brilliant.
Directly Operated Railways is the 100% publicly owned company that took over the east coast mainline when the incompetent private operator walked away from its obligations in 2009. Five years of public ownership and it is now the best run and most efficient operator, making a net surplus of £16m for the taxpayer. Its reward? To be sold back to a private operator next February that will redirect the surplus through a tax haven as dividends, game the Department for Transport for higher government support and walk away if the financial returns are not good enough. Thus the benefits of British-style private ownership in a public network. Meanwhile, the absurdities of privatisation continue. Two of the three companies that own the rolling stock leased to the train operating companies are owned in Jersey, the third is owned in Luxembourg. None shows any interest in supporting rolling stock manufacture in the country they so casually pillage. 


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