It's time to re-nationalise the railways!

By Greg McDonald

MPs are right to slam “perverse” private rail franchises for upping fares by 11% during a recession – but the real perversity was privatising the railways in the first place.

For the truth is that, with a £5bn taxpayer subsidy funding investors’ exotic holidays to distant lands of high-speed rail, Britain’s fare-hiking, service-cutting “private” railways have never really been private at all.

Rather, just like the bailed-out banks, all that’s ever really been private is the profit made in the good times.

Of course, we shouldn't be shocked to find a privatised company being run in the interests of profits in a boom. And we've learnt not to be shocked to discover it’s us who's picking up the tab when that company can’t be allowed to fail in a bust (after coughing up for some million-pound pension packages, naturally).

But we should be surprised at the government’s failure to grasp the solution: re-nationalise the network and build a high-speed railway where clean, fast, nationalised trains run on time on safe, reliable nationalised tracks and the annual increase in fares is zero per cent.

The nationalisation of National Express East Coast is a start – but with the financial meltdown revealing the free market ideology that gave us privatisation to be a disaster for which our grandchildren will have to foot the bill, and with unemployment still rising, there could be no better time than today to get to work building a greener, cheaper, nationalised future.

Surely the alternative track is perverse?

A right royal carve-up

by Alan Tyers

MPs, failed but lavishly pensioned Speakers, BBC executives, bailed-out bankers...and now the Queen as well? Has EVERYONE got their hand in your pocket?

As her subjects battle through the biggest recession in a generation, the cost of keeping the Queen in corgis and formidable hats has risen. The total annual cost of the monarchy is up £1.5m to £41.5m.

The Queen’s Civil List, which includes staff, cost £13.9m in 2008. £7.9m of that came from the Government (i.e. the taxpayer) and a further £6m came from a reserve fund that was built up during the 1990s with unspent (i.e. taxpayers’) money.

That pot now stands at "just" £21m, so even the most mathematically challenged royal (no doubt a strong field) should be able to work out that, at the current rate of spending, it’ll all be gone in three years or so.

And so the Royal Family will be wanting more money.

As the Government - this one, the next one, whatever - effects huge public spending cutbacks to fund the bailouts of their chums in the City, the beleaguered taxpayer will have to dig ever deeper to support an anachronistic bunch of losers, freeloaders and no-hopers.

The Queen, Gawd bless her, has done a magnificent job, but once she goes, it’s time for this obscenely-funded monarchy to reform, massively. They have assets and earning potential, so let them pay for their own keep: scrap the civil lists and let them sink or swim.

There is just no justification for having an already vastly wealthy man like Prince Charles and his Hooray Henry sons suckling on the public teat – let alone the also-ran 15th in-line nobodies.

If they want to stay on with people bowing and scraping before them, they can do it without enjoying the largesse of their supposed social inferiors.

Soak the rich? They barely got their feet wet

by Tom Kilkenny

In the run-up to Alistair Darling’s speech today, there was a lot of chatter about a “soak-the-rich” Budget. We were told the Chancellor was under Cabinet pressure to make those on higher incomes pick up the bill for the Government’s tooth-loosening fiscal deficit.

And, lo and behold, the biggest headline to emerge from the 50-minute speech was the introduction of 50% income tax for the lucky few among us who trouser more than £150,000 a year.

Combine that with the removal of personal allowances for people earning more than £100,000, and it looks like the cash is going to come rolling in, doesn’t it?

Maybe not so much. Stephanie Flanders, the BBC’s economics editor, has chewed the end of her pencil and worked out that ditching the allowances will only earn the Treasury £180m by 2011/12. Similarly, restrictions on tax relief for high earners’ pension contributions will contribute only £200m a year.

The move might have more serious consequences once the impending election starts to exert its pull. Will the breach of Labour’s manifesto promise not to increase income tax during this parliament come back to haunt Gordon Brown’s administration? Remember George Bush and the “read my lips, no more taxes” pledge that contributed to his defeat in 1992?

As much as an attempt to balance the books, this is a pre-election move to lure the Conservatives into the swampy mire of a fight on tax. David Cameron refused to take the bait this time round, but will he be able to resist once he’s got a few well-scripted retorts pencilled on his cuff?

Can he fix it?

by Tom Murphy

When Alistair Darling delivers his budget on 22 April, any voters who aren’t too preoccupied with the price of petrol and cigarettes will be looking for some effective plans to revive the economy.

At least he’ll have a bit longer to do his sums. This will be the latest spring budget since Labour came to power in 1997, coming after parliament’s Easter break and the G20 meeting of the world’s leading economies.

He’ll probably appreciate the extra time. Since the date was announced, the Treasury has revealed that tax revenue in January fell by an eye-watering £6.7bn, or 11%, from the same month a year earlier.

It seems likely that voters will eventually blame PM and former Chancellor Gordon Brown for what’s happened to the UK economy. The crisis will be the main election issue for one in three voters, according to the Guardian, and the poll also claims that Brown is a liability to Labour.

But is it fair to blame the PM for an unprecedented breakdown in the global financial system? HBOS whistleblower Paul Moore certainly thinks so. He claims to have proof that Brown’s lax regulation of the financial system created a culture of reckless lending, excessive debt-fuelled consumer spending and inflated property prices.

In the Independent, Darling blamed attributed the difficult conditions to “bad decisions by international banks”, who took on too much risk without fully understanding the possible consequences. Their exposure to each other’s losses created the credit crunch, which soon became a global recession.

However, he has also located some of the blame a bit closer to home, telling the Daily Telegraph  that bankers, regulators and the government bore a “collective responsibility” for the culture that led to the credit crunch.

Darling also remains optimistic that he can turn things round. As well as increasing government spending to stimulate the economy (adding to public debt already in excess of £700bn), he plans to reform the banking sector, support key industries and use the UK’s presidency of the G20 group to co-ordinate a global response.

So what do you think? How much blame should Brown – as both Chancellor and PM – take for the crisis? And can Darling do enough to get the UK economy through its present disorder and leave it ready to face whatever’s waiting on the other side?

Block busted

by Alan Tyers

Ginormous video rental chain going the way of all flesh…

In 1994, Blockbuster was sold to Viacom for $8.4 billion: its investors must have thought that this gravy train would never hit the buffers.

15 years later, having muscled thousands of high street video stores out of existence, the video rental giant is considering filing for bankruptcy.

How could the chain have predicted that people would stop renting videos and DVDs? Well, not one but two better inventions came along: downloading and, fatally for video stores, postal rental. Why would you schlep to the shop – and be fined like a criminal if you didn’t return your rental in time – when you can sit on your botty and have the postman bring you things that you can keep for as long as you like? A good idea, undone by a great one.

It’s hard to feel much sympathy for Blockbuster, pandering as it always did to the lowest common denominator, shoving the biggest, dumbest movies down customers’ throats and barely stocking anything off the beaten track.

Once the entertainment industry really cottons on to downloading, postal DVD services will surely die too. The game marches ever on. I suggest a fun exercise to enliven these gloomy financial times: which corporate big beasts will be deader than Betamax in a decade’s time? I’ll get the ball rolling with one of the major cinema chains. Why would you pay a tenner to sit in a sticky seat when you can watch it at home on your 42' TV screen for a fraction of the cost?

Unemployment: mountain or dolehill?

By Greg McDonald

Today’s unemployment figures put the number out of work at 1.9 million, as employees at Ericsson, Sainsbury’s and Woolworths join the lines at Britain’s Job Centres.

But while our hearts must go out to the ever increasing number of applicants going for an ever decreasing number of jobs, and while we must demand the Government does everything it can to help families affected, nothing is more harmful in a recession than sapping confidence – and for that reason, if no other, we must also keep today’s numbers in perspective.

Early in 2008, as the initial dash to scenes of economic bad news became a stampede to proclaim the end of the pound/system/universe as we know it, economic sages breathlessly informed us that unemployment figures would smash through the two million mark before Christmas. They didn’t.

So while today’s numbers contain within them thousands of personal tragedies, let’s at least be thankful that the national Armageddon we were told to prepare for has not – at least, not yet – materialised.

The current figure is now only where it was in Tony Blair’s 1999 heyday – hardly recalled as a time of crushing societal deprivation. And while it will worsen, crying Armageddon at every new set of figures only serves to sap confidence and sink us deeper into the mire.

For those whose best chance of getting back into work is a confidence-driven recovery, we should take care not to overstate the problem.

A loan again

By Alan Tyers

Taxpayers are today rightly asking why we have to give banks another massive bailout…

It seems that the £37bn forked over in October was merely a sub to tide them over until the giro.

Prime Minister Gordon Brown now unveils a package of £50bn for the Bank of England to buy up bank loans, while the Government – that is to say, the taxpayer – will underwrite about £250bn of dodgy bank debts.

This will thus free up the banks to lend more money to households and business. Again, with the taxpayer as underwriter. This, it is taken on faith, will kick-start the economy.

Is this not the worst of all possible words?

We have effectively nationalised our banks, allowing them to have a financial makeover at our expense.

And the master-plan for escaping a situation brought about by indiscriminate lending seems to be… lend more money!

This would be all very well if the people doing the lending hadn’t shown themselves to be such awful judges of a bet. Who is actually getting taken to task for this mess?

What evidence is there to suppose that the same idiots will not make the same mistakes again? Will we just keep handing the same banks and bankers money until they get lucky?

Cold front approaches from all sides

Today’s icy start is right on cue. As we begin our first working week of 2009 with a shudder, many Brits’ biggest hope for the new year is simply of hanging onto their jobs – and for once you can definitely trust Gordon Brown when he says he knows how you feel.

Unemployment forecasts aside, the PM begins 2009 with an in tray that almost justifies talk of a Government of national unity.

Falling house prices, failing businesses, hard-hit pensioners, intransigent banks, a weak pound, and record national debt suggest a Prime Minister 18 months from a general election should be heading for the dole queue.

Yet the more uncomfortable life becomes, the more comfortable we voters seem to get with the idea of Gordon Brown staying in his job. As long as the world economy is collapsing, terrorists are driving flaming jeeps into our airports or the country’s underwater, Brown is looking at a majority – or at least a hung parliament.

And here Brown’s future position could be tied up with that of another British politician whose reputation has been bolstered by the recession: Lib Dem treasury spokesman Vince Cable hinted over the weekend that he’d like the job of chancellor. And the promise of a hung parliament Lab-Lib pact might just be enough to convince Brown to reapply for his own job sooner rather than later.

For those who doubt Gordon has the audacity to make a Lib Dem his chancellor, here are two words to send an icy shiver down George Osborne’s spine: Peter Mandelson…

Chin up, cheese lady

By Alan Tyers

An interviewee on the Today programme has just said that she and her husband will have to stop eating cheese in the new year as they tighten their belts.

They used to eat cheese once a week, the devils, living like some sort of latter-day Roman Emperors.

But cheese will only come once a month from now on, she says, and hubby has even been made to get a slower, slightly cheaper broadband connection. Oh, where's the humanity?

These are my favourite credit crunch tales of woe as yet, inching out the idea that the nation should mourn for the demise of Whittard of Chelsea, who apparently sell or sold expensive coffee. Perhaps people just decided that they could get coffee better or cheaper elsewhere. Perhaps the shops were rubbish. Businesses come and businesses go, like all flesh.

Let’s not get too carried away. Same feelings about the fall-off in mortgage applications. When did it become a basic human right to borrow 10 times more money than you’ll ever have?

Even the Queen, who seems singularly ill-qualified to pronounce on the subject, will use her speech to discuss our feeling the collective financial pinch. I just hope the corgis are alright.

Sure, the economy is contracting. But this mass hysteria and constant representing of really quite everyday things – rubbish businesses struggling, people not being allowed to borrow bazillions of pounds of pretend money – as signifiers of doom is not helping.

We’re not dead in a ditch yet, and it is, after all, Christmas. Let’s enjoy it. Have a bit of cheese.

The wonder of Christmas

By Greg McDonald

Wham! are on the air and John Sergeant’s making a record.

It can only mean one thing: in keeping with tradition, this first week of December marks the suspension of good sense and good taste across Britain, and thank the little Lord Jesus.

Credit crunch? What credit crunch? As Brits part with their minds and money until January Ladbrokes have been forced to slash the odds against Birmingham seeing a white Christmas to 8-1, as the number of supposedly recession hit punters merrily throwing their cash away snowballed with news that it was drizzling a bit in the Highlands.

That’s the spirit. And after November’s scrooge-like VAT gift to David Cameron, it’s good to see Old St Gord and his chief elf Little Darling finally getting into the swing of things with yesterday’s repossession help plans delivering a more generous package.

But not everyone is moved. 165 years after Charles Dickens penned A Christmas Carol in protest at the fading of hospitality and charity for society’s poorest, 2008’s banking Scrooges still refuse to fully pass on the help ordinary people and businesses desperately need.

If today’s visit from the Ghost of Hard Times Past, in the form of the biggest interest rates cut since the days of rationing, fails to persuade these monetary chickens to share their fiscal turkey, it’s surely time their future Christmas bonuses were crossed of Old St Gord’s list.

For now though, gloom is off the menu. Hand me the sherry and turn up Noddy Holder: It’s Christmas!