And aren\’t you surprised?
He says that privatisation \”hasn\’t failed in every regard\”, citing increased passenger numbers – yet, as the government accepts, this increase mirrored the state of the economy – as did the folding of franchises like East Coast and the ditching of Great Western when the wild projections of ever-increasing profits fell off the same cliff as the banking system.
Far from the efficient and competitive model the Tories promised when they privatised our railways in the 1990s, they have become a cash cow for businesses interested only in guaranteed, risk-free profits.
Right, so evidence that one franchise went bust, another was abandoned because there were no profits, is proof that there are guaranteed risk-free profits?
Blimey.
There seems to be a failure in your basic reading comprehension here – the key word in that last paragraph is ‘interested’.
The franchises folded and were abandoned because the companies were not prepared to absorb losses (or lower profits than they had projected), meaning that, as ever, taxpayers are left carrying the risk that the private sector is unwilling to hold, despite their willingness to cash the profits when things go well.
D – Tim, must try harder.
@ bert
There seems to be a failure in your basic reading comprehension here – the word in that last paragraph ‘guaranteed’ is what Tim discusses.
I find it difficult to dislike him, despite that he does his best for me. He’s a union leader, its not his job to have a balanced view – quite literally not his job.
It is not the job of management to ensure extra pay for the workforce during highly profitable times, and it is not Bob’s job to think much about shareholders.
Having said that he does talk rubbish, and might better represent his members interests if he had a more informed view of the world.
bert,
the very points are
1) there are no risk free guaranteed profits (except for when the government intervenes and guarantees them to you and even then they are not 100% guaranteed)
2) no one wants to continue to “absorb” losses over time ’cause then you end up not having any money left which makes it sort of difficult to pay your employees, the government, your suppliers, your creditors or your shareholders
So can’t we stop pretending as if it wasn’t so? The government could of course start by stopping to guarantee private profit?
oh and of course point n. 3: if a service cannot be provided profitably by the private sector that is either because
– the government is levying too high taxes on it
– there is insufficient demand – which means that you/we should think very hard if that service is needed or not – sometimes the answer might still be yes (public goods and stuff) but the default position should be no
it amkes the idea a carbon tax interesting….has anyone considered the knock-on effects? Question directed to the greeens and Connolley (who has started to post here)….think it through before you ask for it. It will bite your arses hard.