Daily View 2×2: 1 July 2009

2 Big Stories

British economy in worst state in over half a century

Perhaps it’s the sweltering weather, perhaps recession fatigue has set in, but there is little reaction to yesterday’s startling news that the British economy contracted by 2.4% in the first quarter of 2009 – the worst decline in more than 50 years. It isn’t the main story for even one of the newspapers, though it led all last night’s TV news programmes. Lib Dem deputy leader Vince Cable underscored the seriousness of the data:

The biggest three month fall in GDP in more than half a century is a clear sign that we are in a severe recession. Such a dramatic collapse in growth can only make the public finances worse.

“Rather than making promises on public spending that nobody believes, the Government must start taking tough choices on whether it is going to cut spending or raise taxes to bring the economy out of the red. In the run up to the election, every party owes it to the public to explain how they are going to balance the books.

“Rather than squeezing public services, we must identify areas of public spending, such as public sector pensions or the renewal of Trident, which the country can simply no longer afford in their current form.”

National Express east coast rail route nationalised

As the BBC reports:

The government is to take the East Coast rail service, run by National Express, into public ownership. The troubled rail franchise, which is expected to have lost £20m in the first half of the year, is suffering from slumping passenger numbers. Ministers have refused the company’s requests for its contract with the government to be renegotiated.

The Department for Transport said that all East Coast services would continue and that tickets would be honoured. Existing operational staff will transfer to the new state company which will be set up to operate the route. The government added it intended to put the franchise out for tender from late next year.

Lib Dem shadow transport secretary Norman Baker has urged the Government to take a robust line:

National Express should not be allowed to just hand back its failing East Coast operation while it continues to make a profit on its other routes. Handing back one franchise must mean handing back them all.

“Instead of rushing in to another poorly planned private franchise agreement, the East Coast should be run as a public interest franchise until the end of the current term with tough passenger orientated targets to ensure that, for once, the passenger is put first. This would drive up performance across the network.

“The whole rail franchise system must be overhauled. We need longer deals, requiring train companies to invest in the network and meet strict passenger satisfaction targets.”

2 must-read blog-posts

Billboards – Big waste of money or effective campaigning technique? (Nich Starling)

Certainly it might make people have an awareness that a candidate is standing of that party has not got a high enough profile in the constituency or is unable to deliver the number of leaflets that the main parties can put out. But in a by-election it can serve to show the lack of effective ground troops that party has. … Does anyone else have experiences of billboards they can offer by way of comments?

If you want a royal family, don’t moan when they spend loads of cash (‘Costigan Quist’)

Perhaps I’m being a little slow, but isn’t that what the monarchy is all about? We get a posh family for the Americans to coo over, Prince Phillip to act as an ambassador abroad, Charles to sort out our architectural failings, a whole bunch of nice palaces and stately homes. Of course it’s going to cost money.

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  • “The whole rail franchise system must be overhauled. We need longer deals, requiring train companies to invest in the network and meet strict passenger satisfaction targets.”

    NO, NO, NO, NO and No again. This is the Conservative Party policy for the railways and it is totally useless. The only remote satisfaction that has come from this franchise system so far is the ability to sack the rubbish ones. Under their proposals, we will be stuck with idiotic and useless companies for decades to come, with no chance of sorting things out properly.

    For crying out loud, why don’t we address the fundamental problem here, take a lead as we have done in so many areas, face the glaring truth, and admit: PRIVATISATION HAS FAILED? We need some form of mutual ownership like the building societies or John Lewis. Or failing that, another form of not-for-profit public ownership.

    Sorry, Norman, but as a party member, transport policy is one area where the Lib Dems are up a total blind alley. We need some new thinking and you are not providing it.

  • European Union law:
    1) There must be a separate accounting mechanism for track ownership and train operation.
    2) Open Access operation to be run at marginal cost (give or take a few quid).

    Basic fundamental:
    1) Operation of track alone does not equate to profitability, (see Railtrack and Network Rail – they announce profit but it is wooden dollar profit)
    2) There are very high fixed costs in this industry
    3) There is an enormous budget deficit.
    4) something has to give……

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