Anorak | John McDonnell will bankrupt the Tube and there’s no such thing as a free market

John McDonnell will bankrupt the Tube and there’s no such thing as a free market

by | 15th, February 2018

No sooner has John McDonnell outlined his ambition to renationalise energy, rail and water than news reaches us of a shortfall. The Guardian notes:

Transport for London (TfL) has insisted it is not facing a financial crisis despite planning for a near £1bn deficit next year after a surprise fall in passenger numbers.

Mr McDonnell told BBC Radio 4’s Today earlier:

“It would be cost free. You borrow to buy an asset and when that asset is producing profits like the water industry does, that will cover your borrowing cost.”

The assets make the profits. The profits pay the bills. What about if people alter their behaviour?

He went on:

“We aren’t going to take back control of these industries in order to put them into the hands of a remote bureaucracy, but to put them into the hands of all of you – so that they can never again be taken away.”

But bureaucrats will still run the entity, albeit ones appointed by the State, right? Who are they accountable to? How does anyone get redress for poor service? Is McDonnell seeking to serve taxpayers best or just tying to give meaning, direction and authority to the State?

“Public ownership is not just a political decision, it’s an economic necessity. We’ll move away from the failed privatisation model of the past, developing new democratic forms of ownership, joining other countries, regions and cities across the world in taking control of our essential services.”

So you take over the London Underground, and budget accordingly. And then there’s a £1bn deficit. Which means..? As Ronald Reagan put it in 1986: “The nine most terrifying words in the English language are, I’m from the government and I’m here to help.”



But business has never been independent of the State. What of PPI, regulation and subsidies, which rather dampen the idea that immense profits are being made? (In 2006-7, the Government spent £6.8 billion of public money in the the privatised rail industry – around half what it cost to run the entire thing.) What of Government calls for curbs on executive pay and vows to “fix the broken housing market”? So much for the free market.

Tony Blair told us “Stability can be a sexy thing”. Theresa May wants to be “strong and stable”. They seek to maintain the status quo. Doesn’t that add up to the established businesses and their links to Government rolling on and on and not entrepreneurship, the best of which is often triggered by volatility and daring?

McDonnell’s monocular and forgetful call for re-nationalisation has not come out of the blue. It’s just an addendum to current and recent Government policy and a crisis of purpose.

Posted: 15th, February 2018 | In: Broadsheets, Key Posts, Money, News, Politicians Comment | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink