The Iron Man
March 19, 2012 5:36 AM   Subscribe

UK Prime Minister David Cameron unveils plan to lease motorways in England. David Cameron will clear the way for a multibillion-pound semi-privatisation of trunk roads and motorways as he announces plans to allow sovereign wealth funds from countries such as China to lease roads in England. Guardian liveblog.
posted by panaceanot (127 comments total) 6 users marked this as a favorite

 
Apologies if this is too parochial / politics-filter / news-filter ... wasn't sure whether it warranted submitting
posted by panaceanot at 5:38 AM on March 19, 2012


I'll admit that when I saw this headline on The Guardian, I assumed that I was confused about dates and it was actually April Fools Day.
posted by craichead at 5:40 AM on March 19, 2012 [11 favorites]


Seeing as how PPI has gone so badly, how can leasing out the roads possibly be considered a good idea financially?

From a driver's perspective, however, I'm all for this. The A1M from Alconbury to Peterborough was externally financed and then leased back to the government, and it's probably the best bit of road I know of in this area. Wide, fast and massively undercapacity.
posted by sodium lights the horizon at 5:43 AM on March 19, 2012


I hoping for an intervention from Rebecca on this issue.
posted by Abiezer at 5:44 AM on March 19, 2012 [1 favorite]


Why should a foreign government (because that's who stands behind sovereign wealth funds) run essential public services in the UK more efficiently than the UK's own government?
posted by Skeptic at 5:48 AM on March 19, 2012 [16 favorites]


BBC Coverage.

sodium: it would be undercapacity 'cos all the traffic's been pushed onto other roads, right?

I gave up driving (not for ever, but there's not a lot of point owning a car when any part of your day involves London), but damn, there's a lot of stupid here. Can we just have some money invested in a public rail system instead, please?
posted by Leon at 5:49 AM on March 19, 2012 [2 favorites]


I never understand the economics of these plans. How is more money going to be extracted from the road1 than is already? Either less maintenance (or less fair maintenance, i.e. ditching a union somewhere) or charging a toll. Which does Cameron support?

It seems like this plan in particular could be solved by a left + BNP coalition: "Furriners ownin' Engarland??"

1Not that any money should be being extracted from the road. Public services are not intended to make a profit. They can even *should* be operated at an apparent loss, the remainder being made up for in taxes. That's what taxes are for, after all.
posted by DU at 5:49 AM on March 19, 2012 [6 favorites]


Does this trick ever work? Sell off public property and then rent it back and somehow that's going to be cheaper even though the buyer is going to have to add a layer of profit taking to a process that used to be non-profit. They tried to pull that with my city's parking last year and fortunately the council managed to block it or we'd have spend the next fifty(!) years renting our parking spaces back from J.P. Morgan.
posted by octothorpe at 5:55 AM on March 19, 2012 [28 favorites]


With every passing day the David Cameron government starts to look more and more like something out of an Alan Moore or Warren Ellis story. I'm sort of expecting that any morning now the headline on the front page of the The Guardian will read:
BRITISH POLICE SOLD TO MYSTERIOUS MEGACORPORATION
Money to be saved by replacing human officers with flying robots
posted by Kattullus at 5:55 AM on March 19, 2012 [14 favorites]


If I can believe that Hairy Bikers episode last week, Norway has a system of road tolls in which new roads are tollways until their construction has been paid back, which sounds like a fair enough system. Any reason this can't be implemented in the UK?

(Apart from the obvious fact the ConDems aren't up for it, that is.)
posted by MartinWisse at 5:57 AM on March 19, 2012 [2 favorites]


It's going down like a lead balloon in the right-wing press from what I've seen so far, too. Really does seem like they think they've got one term to enact as many (and not in their manifesto) swivel-eyed policies as they can dream up.
posted by Abiezer at 5:59 AM on March 19, 2012 [4 favorites]


Ob. Daily Mash: Cameron unveils passing of enormous buck.
posted by TheophileEscargot at 5:59 AM on March 19, 2012 [2 favorites]


Posted this at the end of the previous UK politics thread, but will add it again here, as it speaks to how Osborne is clearly not motivated by any sort of fiscal probity.
posted by Abiezer at 6:00 AM on March 19, 2012 [2 favorites]


I'm sure this will be just as successful as the rail privatisation, as cost-effective as the Private Finance Initiatives, and as well-implemented as other recent government ideas.
posted by The River Ivel at 6:01 AM on March 19, 2012 [9 favorites]


According to the talking heads on the radio (4) this morning £45bn tax revenue is generated annually by road taxes, petrol taxes &c. Spend is £9bn.

The proposal involves the new sections of road to be monitored in some way so that the government can then pay the private companies per car that uses the road. Which sounds mad. I suppose it's another opportunity for more cameras to be pointed at us.

So many other options! Couldn't they promote more telecommuting? I don't know anyone that *likes* commuting. Any more than 30 mins and you're into the irritating zone. That is unless you are cycling on a nice cycle path and you can have a shower at work at the end of the ride. Or sitting in a comfortable, punctual, reasonably priced train. *Dreams on*
posted by asok at 6:13 AM on March 19, 2012 [3 favorites]


@Leon : no, it's undercapacity because someone actually built a road with the future in mind. There's no tolls on it, so no-one is avoiding it. To all intents and purposes, it's just another road - it just so happens it was funded under DFBO rules instead of government faffing.
posted by sodium lights the horizon at 6:15 AM on March 19, 2012


I'm sure this 'proposal' announcement is in no way timed to distract the country from the Lords' final scrutiny of the NHS bill.
posted by jack_mo at 6:16 AM on March 19, 2012 [9 favorites]


I did, of course, mean DBFO - Design Build Finance Operate
posted by sodium lights the horizon at 6:19 AM on March 19, 2012


Seeing as how PPI has gone so badly, how can leasing out the roads possibly be considered a good idea financially?

It really doesn't matter if it works-out financially, as long as the idea is ideologically pure.
posted by Thorzdad at 6:22 AM on March 19, 2012 [7 favorites]


So many other options! Couldn't they promote more telecommuting? I don't know anyone that *likes* commuting. Any more than 30 mins and you're into the irritating zone.

But you are labour. You must be disciplined. Your role is to work, to make things grow so that your masters can sell what you have produced.

Nice to see that the Tories are such ideology-driven fanatics that they would rather have the roads of England owned by Chinese financiers than by an English government that actually did its job.
posted by lucien_reeve at 6:22 AM on March 19, 2012 [5 favorites]


CosaNostra Pizza #3569 is on Vista Road just down from Kings Park Mall. Vista Road used to belong to the State of California and now is called Fairlanes, Inc. Rte. CSV-5. Its main competition used to be a U.S. highway and is now called Cruiseways, Inc. Rte. Cal-12. Farther up the Valley, the two competing highways actually cross. Once there had been bitter disputes, the intersection closed by sporadic sniper fire. Finally, a big developer bought the entire intersection and turned it into a drive-through mall. Now the roads just feed into a parking system -- not a lot, not a ramp, but a system -- and lose their identity. Getting through the intersection involves tracing paths through the parking system, many braided filaments of direction like the Ho Chi Minh trail. CSV-5 has better throughput, but Cal-12 has better pavement. That is typical -- Fairlanes roads emphasize getting you there, for Type A drivers, and Cruiseways emphasize the enjoyment of the ride, for Type B drivers.
posted by curious nu at 6:24 AM on March 19, 2012 [33 favorites]


Abeizer - this is basically the same sort of thing as the Alphaville article on pensions.

You get an immediate chunk of cash from the initial sale and in exchange you create an annual inflation protected legally segregated payment to the "buyers", any incremental investment by the buyers increases the size of the payment. Of course if its regulated like water the incremental investment will be agreed ahead of time between the owner and a theoretically apolitical regulator. You also probably find a way to incentivize more efficient provision of services and repair, although I'm not sure what the scope is compared to water, but compared to the capital costs from the lease won't be very large.

So the plus side is you get politics out of road maintenance decisions (really, the water regulator has been pretty good) and maybe possibly you get better service. The negative side is you've replaced the normal way to fund expenditures beyond internal revenue generated from road taxes and fees - issuing government debt, which right now has negative real interest rates and can be funded from general obligations, with what is essentially secured inflation protected debt that pays RPI+ something.

I mean unless you get the deal done at some crazy price (which is actually really plausible these days) then its hard to see how this ends up being an economically rational decision, so the only conclusion is that its a way for the government to raise debt without actually raising debt.
posted by JPD at 6:26 AM on March 19, 2012 [4 favorites]


There's so much pre-Budget outrageousness in the papers that I'm inclined to think that the government is just leaking all these insane proposals so that the country breathes a sigh of relative relief when merely deranged measures get announced in the Budget itself.

Gideon's Budget summary: "This Budget isn't as completely stupid and insane as it might have been, and I commend it to the House."
posted by daveje at 6:29 AM on March 19, 2012 [3 favorites]


Yes, it's to distract media attention from the NHS bill. It seems to be working. Not that they won't do it - they're likely to get the usual kickbacks from the usual sources - but the announcement today is to take the media wind out of David Owen's sails.

The doctors and nurses protesting the other day were intimidated by the riot squad and police with submachine guns who "just happened to be in the area". One blogger at least wondered whether the lack of reporting of the protest stemmed from a D-notice, though I think it's more that the BBC has decided that if it does what the government wants it will be left alone, a bit like the guy in action movies who betrays the heroes to the bad guys to save his own skin (or occasionally his loved ones) who is instantly killed off in a bloody and unpleasant way. There's no way the BBC is going to make it to the next election if they're talking about selling off the roads, ffs.
posted by Grangousier at 6:31 AM on March 19, 2012 [11 favorites]


So the Tories spent the last ten years in opposition blasting Labour for building transport infrastructure under PPI agreements. Now, they've come up with their own acronym for building privatised transport infrastructure. Who knew the objection was just to the particular name all along?
posted by Dysk at 6:31 AM on March 19, 2012 [1 favorite]


The proposal involves the new sections of road to be monitored in some way so that the government can then pay the private companies per car that uses the road.

Several motorways were built in Spain according to this "shadow toll" scheme. It has mostly ended up in tears, as traffic has been distinctly below what was foreseen in the business plans, and the managing companies have had to be bailed up by, of course, the government.

It's the usual "heads, we win, tails, you lose" scheme.
posted by Skeptic at 6:31 AM on March 19, 2012 [2 favorites]


Several Scottish bridges were built under the PPI scheme, which is the same damn thing, under Labour. It was pretty consistently an unmitigated disaster for everyone involved.
posted by Dysk at 6:33 AM on March 19, 2012


What depressing news. Thatcher started off the raping and pillaging of public services and it seems to be going strong. Water privatization is a fucking mess (Ofwat publish a measly amount of information about who is doing what so god knows how the pricing is 'justified'), and the rail privatization was a complete disaster (150 pounds for a 2 hour return rail journey during rush hour?), as one company owns the rails, another the electric lines. When will these fucking clowns realize that the maximizing financial profit DOES NOT maximize the societal good?

I hope there is a revolution and Cameron and his cronies get imprisoned with all the editors of the Sun for corrupting society.
posted by a womble is an active kind of sloth at 6:34 AM on March 19, 2012 [5 favorites]


Even the Telegraph, ostensibly a right-wing paper, hates Cameron. The majority of the people in the UK did not vote Tory - thats why they had to put together a coalition.

Can we move on to the next government now?
posted by vacapinta at 6:37 AM on March 19, 2012 [2 favorites]


Between the NHS (destruction of) Bill. the gratuitous cruelty of the disability benefits changes, the (proposed) ending of the 50p tax rate on rich* people, and the (relatively unnoticed) Govian dismantling of universal state education I've decided that Clegg and Cameron both joined either an apocalyptic cult or an insane left wing splinter group whilst at university and are now in the final stages of their plan to bring about the rapture/revolution.

The alternative, that they actually believe this and are enacting a one term crash policy to change the country and usher in our feudal future is just too depressing.


*if you earn over £150k ($238k) you are obscenely rich
posted by Gilgongo at 6:38 AM on March 19, 2012 [2 favorites]


Imprisoned? Prison's too good for them. I want their heads on sticks. I want to see their burning corpses hanging from the lamp posts of Parliament Square, and no wimping out and killing them before setting fire to them. I want to see Gideon smeared from head to foot with honey and nailed to a wasp's nest.
posted by Grangousier at 6:39 AM on March 19, 2012 [4 favorites]


When will these fucking clowns realize that the maximizing financial profit DOES NOT maximize the societal good?

You labor under the assumption that "societal good" forms any part of the calculations.
posted by Thorzdad at 6:40 AM on March 19, 2012 [2 favorites]


Can we move on to the next government now?

Might have to wait a while. This is 1981, revisited. The Tories are just getting started.
posted by daveje at 6:41 AM on March 19, 2012


We are all in the gutter, but some of us are looking at the stars.

Now they've privatising the gutter, presumably the stars are next?
posted by fearfulsymmetry at 6:42 AM on March 19, 2012 [2 favorites]


We are all in the gutter, but some lucky bastards are downstream of the drain.
posted by Grangousier at 6:43 AM on March 19, 2012 [2 favorites]


Skeptic: Why should a foreign government .... run essential public services in the UK more efficiently than the UK's own government?

Is this a trick question? The UK can't govern itself out of a wet paper bag. Surely anyone else can do a better job.
posted by three blind mice at 6:44 AM on March 19, 2012


.
posted by ruelle at 6:45 AM on March 19, 2012


I'm really not going to be left with a country to go back to, am I?
posted by Artw at 6:45 AM on March 19, 2012 [1 favorite]


As jackmo said upthread, it looks like a pretty transparent ruse to focus attention away from the final review of the NHS bill in the Lords. It'll come to absolutely fuck all soon enough.

Honestly, I have as much faith in Alex Salmond as I do in your average snake oil salesman, but I can see me and lots of people like me voting for independence as this insane experiment in Chicago school madness gathers pace in England. I don't ever want to live in a country that's like that.
posted by ClanvidHorse at 6:45 AM on March 19, 2012 [4 favorites]


Does this trick ever work?

No.

Though it does usually make some short term money, which usually goes into the pockets of mates of whoever does the privatizing.
posted by Artw at 6:48 AM on March 19, 2012 [1 favorite]


Norway has a system of road tolls in which new roads are tollways until their construction has been paid back.

No. It is nothing at all like this.

Norway has a system of fees and taxation to claw back the oil money it spends so as to keep inflation under control.
posted by three blind mice at 6:48 AM on March 19, 2012 [1 favorite]


I'm really not going to be left with a country to go back to, am I?

I'd stay where you are... I'd be sodding off right now if I could
posted by fearfulsymmetry at 6:48 AM on March 19, 2012


OpenDemocracy had a bit today on how many peers have a financial interest in the privatisation of the NHS:
More than one in four Conservative peers - 62 out of the total of 216 - and many other members of the House of Lords have a direct financial interest in the radical re-shaping of the NHS that is perilously close to being enacted. These peers have been able to vote on the crucial divisions that will determine the immediate and long-term future of the NHS and the coalition’s Health and Social Care bill.

The peers – who have personal interests in insurance companies, private health-care and private equity groups – have placed themselves into a position in which they are in danger of voting on behalf of the personal and private interests that stand to gain from the bill rather than in the public interest.
posted by Abiezer at 6:49 AM on March 19, 2012 [8 favorites]


The UK can't govern itself out of a wet paper bag. Surely anyone else can do a better job.

Well, in that case, I don't know why the British went through the whole bother of WWII. After all, Adolf Hitler knew a thing or two about building motorways.
posted by Skeptic at 6:50 AM on March 19, 2012 [2 favorites]


Charlie Brooker (the comedic hero that we all need) as a good piece in the Guardian about the NHS debacle.

"The future of the NHS? Cough up, fleshbags
Introducing competition to the health service will, so the theory goes, improve it. And it doubtless would, if businesses behaved like selfless nuns"
posted by a womble is an active kind of sloth at 6:55 AM on March 19, 2012 [3 favorites]


Honestly, I have as much faith in Alex Salmond as I do in your average snake oil salesman, but I can see me and lots of people like me voting for independence as this insane experiment in Chicago school madness gathers pace in England. I don't ever want to live in a country that's like that.

I hear what you're saying, ClanvidHorse. The disappointing thing about the independence debate is it seems to be only Salmond's voice we're hearing - here's a once-in-a-lifetime opportunity to decouple Scotland from "this sort of thing" and debate what the political and social values in Scotland could be, and we only hear one voice. The reality is post-independence, there will be a broad political spectrum, although I'd doubt there would be many supporting selling the roads or killing the NHS.
posted by khites at 6:59 AM on March 19, 2012 [1 favorite]


There is one word for any privatization of public infrastructure that the buyers fully support, namely graft. I'm afraid the U.K.'s future holds poorly maintained roads which the state must ultimately maintain themselves while renting them back from foreign governments.

I'm pleased the U.K. has set it's sights upon reaching a tipping point that requires serious social unrest however. In fact, I suggest you skip this whole double leasing stupidity, simply let the road management companies impose whatever tolls they wish, that'll get the middle class involved more quickly. And I recommend that this time around you guys adopt France's old approach once the unrest gets serious.

In theory, there are auction styles that maximize the income from such privatization, but every time they've been tried with spectrum, all the buyers went bankrupt through overpaying. There isn't really any sensible middle ground on this stuff, you usually get massive corruption and graft, but if you avoid that, then you get panic buying that bankrupts whole industries.
posted by jeffburdges at 7:01 AM on March 19, 2012 [1 favorite]


every time they've been tried with spectrum, all the buyers went bankrupt through overpaying

If you design the regime correctly having the overpaying buyers file for bankruptcy shouldn't be a problem.
posted by JPD at 7:07 AM on March 19, 2012


If you design the regime correctly having the overpaying buyers file for bankruptcy shouldn't be a problem.

But who provides the services, then? This is the big problem when this model is adopted for things like roads. Theoretically, the government could just let the operator fail. But then, what happens to the road? You close it until you find some other sucker investor to take over?

The more complicated these schemes are, the more obvious it becomes that their whole scope is to disguise the ultimate cost and risk, whether it is to the taxpayer or to investors. The only people who ultimately win are the financial wizards dreaming up these scams.
posted by Skeptic at 7:13 AM on March 19, 2012 [2 favorites]


The bondholders. Companies operate all the time in bankruptcy. The bondholders have an interest in minimizing their losses, if they walk away their loss is 100%.
posted by JPD at 7:21 AM on March 19, 2012


One of the major bus operators in the part-privatised London public transport system, London United Busways is owned by the state-owned Paris public transport company RATP. The UK's largest electricity company EDF Energy, also happens to be owned by the state-owned Electricité de France group.

Guess where buses and electricity are cheaper?
posted by Skeptic at 7:21 AM on March 19, 2012 [6 favorites]


You let the company build the road at great expense and go bankrupt because charging tolls doesn't work as well as anticipated, then seize the road and have the government operate it toll-less.

Well, I can dream...
posted by Dysk at 7:23 AM on March 19, 2012 [2 favorites]


Guess where buses and electricity are cheaper?

Sure because the French taxpayer spent the 70's and 80's paying for a huge fleet of nuclear power. EdF's tariffs aren't high enough where they could build new plants if they needed to.

There are no free rides. The argument against privatization is that a state owned utility has a lower cost of capital than a privately owned utility and I think that's a pretty good one. That and the lower rates that bleed out from the lower capital cost outweigh the claimed advantages in operating costs under private ownership.

I mean I think we agree, I just think that is a particularly cherry-picked example.
posted by JPD at 7:29 AM on March 19, 2012 [2 favorites]


The argument against privatization is that a state owned utility has a lower cost of capital than a privately owned utility and I think that's a pretty good one.

That's what they said about the state-owned assets in the former East Germany. The argument sort of looks absurd when one considers that the lower cost of capital in East Germany produced Trabants, while at the same time the other half of the country - with its privately held firms - produced Audis, BMWs, and Mercedes.
posted by three blind mice at 7:39 AM on March 19, 2012


Artw: I'm really not going to be left with a country to go back to, am I?

During the Icelandic economic bubble the country was controlled by a bunch of libertarian ideologues and corporate lackeys. I used to think that I wouldn't be left with a country to go back to either. Then the crash happened and now the prime minister is a lesbian who married her partner while in office. The wheel of fortune ever turns and those who were on top end up at the bottom.
posted by Kattullus at 7:39 AM on March 19, 2012 [9 favorites]


I'll wager money that once Cameron's government is out of office most of them will be found to be residing outside the shores of the UK.
posted by gadha at 7:42 AM on March 19, 2012 [2 favorites]


The wheel of fortune ever turns and those who were on top end up at the bottom.
Unfortunately they often break things in ways that are hard to reverse - one example I read of was the contracting out of housing maintenance services (somewhere in East Anglia, can look it up if necessary); the ridiculously low bidder for the contract went bust in short order, but there was no money for the council to re-hire sacked staff or replace lost assets like vans and tools.
posted by Abiezer at 7:46 AM on March 19, 2012 [1 favorite]


three blind mice, Audis are produced by the Volkswagen AG group. Who is the largest shareholder of the Volkswagen AG group, with a "golden share" with veto rights?

Right, the state of Lower Saxony, where Volkswagen is headquartered.

Trabants were shit not just because the VEB Zwickau which produced them was state-owned. Trabants were shit because no competition was allowed. East Germans could only buy a Trabant, and then only after waiting seven years. And, by Jove, they were quite glad to get it when it came.
posted by Skeptic at 7:47 AM on March 19, 2012 [5 favorites]


The celebrity stock picker guru Peter Lynch in One Up on Wall Street wrote one of his all-time favorite plays is anything the British government is privatizing. This is close but not an exact quote: "anytime the Queen is selling I am buying".
posted by bukvich at 7:54 AM on March 19, 2012 [1 favorite]


Yeah that's because they sold BP during the 80's recession and the utility assets into a bubble. Now that we've got this infrastructure bubble-iness going on its pretty much been the opposite of that.

That's what they said about the state-owned assets in the former East Germany. The argument sort of looks absurd when one considers that the lower cost of capital in East Germany produced Trabants, while at the same time the other half of the country - with its privately held firms - produced Audis, BMWs, and Mercedes.

Yes for non-commodity products quality and innovation matter more than CoC. But things like electricity, roads and water? Capital costs are way way way more important. I mean hell there are only two companies in the world you can buy a CCGT from these days anyway - and the pricing is pretty transparent.
posted by JPD at 8:01 AM on March 19, 2012 [2 favorites]


This is the kind of thing you do when you are desperate.

For example, you own a house and are in terrible debt. So you sell the house and rent, in order to pay off the debt. But frankly you only do this when you're desperate -- not when the cost of your borrowing is at a historic low.
posted by unSane at 8:04 AM on March 19, 2012 [1 favorite]


Well if we sell all our roads at least we'll be able to afford that nice yacht for the Queen on her jubilee
posted by dng at 8:08 AM on March 19, 2012


Has there been any research in how these sorts of schemes tend to go? I have only ever heard of privitization of public transportation and utilities ending in tears, but perhaps that's because those are the ones that make the newspapers. Any reputable and/or academic research into the subject floating around somewhere?
posted by jsturgill at 8:17 AM on March 19, 2012


Pretty large sample set of successful privatizations of Utilities. Of course you can argue about what is success. There is pretty much an entire genre of academic economists who focus on the issue so you can find plenty of papers both pro and con. Again though it depends on what you define as success.

Usually its the regulatory regime that matters the most.

Most of the nightmares occur when the customer prices implied by the privatization are unaffordable, or the amount of investment required means rapid price inflation with the customer receiving not much in the way of perceived benefit.
posted by JPD at 8:27 AM on March 19, 2012


My God liberal dems surely this? I mean what the fuck? These politicians have no interst in anything other than graft from their corporate masters. The brazenness of this public theft is astonishing.
posted by humanfont at 8:38 AM on March 19, 2012 [1 favorite]


This is the problem with virtually unicameral legislatures. The House of Lords should be stopping this shit but since they're a house of cronies not a house of review they're utterly fucking pointless. We saw the same pillaging of the Australian middle class during the last Howard government having control of both houses and we put a stop to that shit the second we had the chance.

Directly elect the Lords across the entire UK with STV and make it on equal footing with the Commons except for supply. You'd see a centre-left party (Greens) blocking the stupid shit coming from the Commons as quick as lightning.
posted by Talez at 8:56 AM on March 19, 2012 [1 favorite]


Red herring, yes.

But still.

To allow a private entity to build a toll road from scratch makes sense. Tolls pay for the construction of the road, so the city gets a new road for free. It's a new road, with smooth black asphalt, that is an optional alternative to preexisting routes. You can put in a clause that once the corporation makes a certain amount of profit, the road is handed over to the public domain.

To allow a private entity to put tolls on an existing road does not make any kind of sense. People are paying tolls on roads they've already paid for. What are the tolls put towards? Upkeep? Yeah, I'm sure they'll get right on that.
posted by Sys Rq at 8:58 AM on March 19, 2012


In summary : the UK government want drivers to pay again, in tolls, for road improvements that they already more than pay for for in compulsory road tax.

Non-UK folks - since 1919 or so the UK has had a hefty road tax that all drivers must pay every year. It's supposed to pay for the upkeep of the roads and the building of new ones, as a universal toll on the roads, but over the years the government has been pocketing more and more of the money instead. Now they've hit on this bizarre idea of pulling in investment money and charging tolls, all for something that drivers already pay for every year.
posted by w0mbat at 9:16 AM on March 19, 2012


Wow. The UK is pretty much the only country left in the infrastructure race to the bottom. (The US doesn't count, because the combination of states-rights and pork-barrelling has meant that infrastructure outside of the New Deal was never really a priority.)

It doesn't take a magic crystal ball to see that this is not going to work out at all. It will end up costing more, and the results will be worse roads than ever.

When you liberalize stuff like this, you liberalize stuff that feeds the engines of commerce and capitalism. And this *always* ends up concentrating capital and inflating costs until what you have has nothing really to do with capitalism.
posted by clvrmnky at 9:17 AM on March 19, 2012


To allow a private entity to build a toll road from scratch makes sense. Tolls pay for the construction of the road, so the city gets a new road for free. It's a new road, with smooth black asphalt, that is an optional alternative to preexisting routes. You can put in a clause that once the corporation makes a certain amount of profit, the road is handed over to the public domain.

It makes sense if you have plenty of land on which to build an additional set of infrastructure. England doesn't. The country's too densely populated to allow inefficient use of land such as doubling up motorways. Any market which requires lots of available land to function well won't work here. The housing market is a prime example.

Non-UK folks - since 1919 or so the UK has had a hefty road tax that all drivers must pay every year. It's supposed to pay for the upkeep of the roads and the building of new ones, as a universal toll on the roads, but over the years the government has been pocketing more and more of the money instead. Now they've hit on this bizarre idea of pulling in investment money and charging tolls, all for something that drivers already pay for every year.

"Road Tax" is Vehicle Excise Duty. Hypothecation was never complete, and ended in the 1930s. Most motorways were built from the 1950s onward, as part of the scam perpetrated by Ernest Marples. The VED should be abolished, but only if replaced by more pennies on the fuel tax. That way the ones who drive and use the roads most pay the most, and no need for tolls except to combat congestion (which I don't think is a good use outside of cities.) Much fairer, but few motorists would go for it even if it was revenue neutral.
posted by Jehan at 9:27 AM on March 19, 2012 [2 favorites]


To allow a private entity to put tolls on an existing road does not make any kind of sense. People are paying tolls on roads they've already paid for. What are the tolls put towards? Upkeep? Yeah, I'm sure they'll get right on that.

To be fair, at least part of the "tolls" will be "shadow tolls", that is, rather than asking the drivers to cough up directly, the operators will record how many vehicles use the road and bill a corresponding fee to the government.

The question is: is this really efficient, or rather an underhand way of hiding extra state lending from the books? Because, at least for existing roads, this is essentially a sale and leaseback scheme. Now, the jury is out on whether the state is more or less efficient than private entities in building and maintaining roads, but what is pretty much established is that it is a rubbish negotiator in sale and leaseback schemes.
posted by Skeptic at 9:37 AM on March 19, 2012 [2 favorites]


Skeptic: Audis are produced by the Volkswagen AG group. Who is the largest shareholder of the Volkswagen AG group, with a "golden share" with veto rights?

Right, the state of Lower Saxony, where Volkswagen is headquartered.


C'mon Skeptic. Privately held in part by a public entity is not the same thing as state owned - it's not even the same ballpark - but nice try comrade.

Trabants were shit not just because the VEB Zwickau which produced them was state-owned. Trabants were shit because no competition was allowed. East Germans could only buy a Trabant, and then only after waiting seven years. And, by Jove, they were quite glad to get it when it came.

And who was going to compete in East Germany against a state-owned firm except another state-owned firm? The Lada was every bit as bad as the Trabant so the theory of state-ownewd versus state-owned competition would seem to lack a decent example.

You make my point. This entire thread is about privatizing a road and giving a private firm monopoly control over it. I guess if another state-owned firm could build an exact same road in the exact same place then it's all good?

I have this great book I bought in an Amsterdam bookshop some years ago, written (ostensibly) by Josef Stalin, and published in Moscow called "Problems of Leninism" which is full of the same sort of nonsensical excuses for the failure of Marxism. Spoiler: not enough cowbell.
posted by three blind mice at 9:59 AM on March 19, 2012


eh SOE's in natural monopolies is a pretty far jog from Communism.
posted by JPD at 10:01 AM on March 19, 2012


BRITISH POLICE SOLD TO MYSTERIOUS MEGACORPORATION

Sorry, this fantasy is already close to becoming reality:

Revealed: government plans for police privatisation

West Midlands and Surrey police offer £1.5bn contract under which private firms may investigate crime and detain suspects

posted by KokuRyu at 10:04 AM on March 19, 2012 [3 favorites]


God, if only you could make "don't feed the troll" work on a national scale. Ignore this nonsense, the destruction of the NHS is happening tomorrow morning, and no amount of bullshit about the roads is worth even a single comment right now.
posted by fightorflight at 10:10 AM on March 19, 2012


Obligatory (and oh so prescient).
posted by lazaruslong at 10:15 AM on March 19, 2012 [2 favorites]


fightorflight - the NHS has been lost.
posted by Summer at 10:26 AM on March 19, 2012 [1 favorite]


This is like the craziest Bullingdon Club dinner, at first they pretend to be serious guests, but slowly they begin getting so drunk and trashing the place. Whose daddy is going to clean this shit up?

Schoolboy cunts.
posted by Jehan at 10:35 AM on March 19, 2012 [8 favorites]


I have this great book I bought in an Amsterdam bookshop some years ago, written (ostensibly) by Josef Stalin, and published in Moscow called "Problems of Leninism" which is full of the same sort of nonsensical excuses for the failure of Marxism.

I'm a Marxist (or even a Stalinist!) now?

The point is, whether an entity is state-owned, publicly-owned, mutually-owned or privately-owned does not, alone, determine how efficiently it works. At the end of the day, what matters are the incentives that the owners set to its individual managers and workers.

The Soviet system was quite adept at setting all sorts of perverse incentives. I have witnessed that first-hand in Romania, East Germany and Cuba, so I don't need any cute anecdotes about the Soviet-block automobile industry to get the point.

However, as we have witnessed during the last few years, shareholder-owned and privately-owned entities are also liable to set such perverse incentives that they end up destroying wealth on a massive scale, and needing help from the "inefficient" state. Because shareholder and private owners are also people, and people fuck up.

So, the mantra that privatisation necessarily leads to efficiency is just as ideological as that "Problems of Leninism" booklet. Just like collectivism for collectivism's sake is a recipe for economic disaster, privatisation for privatisation's sake is far from a panacea.
posted by Skeptic at 10:45 AM on March 19, 2012 [10 favorites]


Might have to wait a while. This is 1981, revisited. The Tories are just getting started.

What people don't remember is that Thatcher was way behind in the polls in 1981. She would have undoubtably lost, if the Tories hadn't seen their popularity boosted by the Falklands War. And it's not like they can do something like that again, is......oh. Shit.

Um. At least we got some good music out of the early 80s. Right?
posted by Infinite Jest at 10:51 AM on March 19, 2012 [2 favorites]


Privatization was of course a huge sucesss in Russia and did not leave many citizens wishing for the return of Stalin.
posted by Artw at 10:53 AM on March 19, 2012 [4 favorites]


At least we got some good music out of the early 80s. Right?

You mean, like this?
posted by Grangousier at 10:55 AM on March 19, 2012 [1 favorite]


And who was going to compete in East Germany against a state-owned firm except another state-owned firm? The Lada was every bit as bad as the Trabant so the theory of state-ownewd versus state-owned competition would seem to lack a decent example.

In all fairness, private competition with factors like a home market that is virtually safe, an artificially-high demand and nominal competition from politically-controlled entities produces bad results too.
posted by ersatz at 10:59 AM on March 19, 2012


Lots of candle-lit vigils all over the UK at 8PM this evening to mark the likely passing of the NHS bill. This is being reported in the Guardian and should hopefully be reasonably sized. I'm going to go to the London one, which is next to St Thomas' Hospital. I'm an androgynous-looking woman in a blue-and-white striped polo shirt, and a grey cardigan with one white button, and a grey tweed jacket. If any MeFites are there, do come and say hi to me - it looks like I'm going to be on my own.
posted by Acheman at 11:00 AM on March 19, 2012 [3 favorites]


One of the major bus operators in the part-privatised London public transport system, London United Busways is owned by the state-owned Paris public transport company RATP.

I keep meaning to count up how many of the London/South-East Rail Franchises are now held by companies either partly, or completely, owned by non-UK Public Sector Rail firms.

Pretty certain it's almost all of them now apart from East Coast, which National Express fucked up so bad that the DfT had to take it back (and that takes serious talent).

But then don't get me started on how awful the Rail Franchising system is. Another example of why stuff like this is a bad idea.
posted by garius at 11:08 AM on March 19, 2012


I suppose Saorsa airson Alba now translates as Abandon Ship of State!
posted by jeffburdges at 11:30 AM on March 19, 2012


Why are the Liberal Democrats going along with all of this, especially the dismemberment of the NHS? Of course, it's easy to say that they will do anything to hold onto power, but there has to be other reasons as well.

As a Canadian, I'm looking at what's happening in the UK and wondering if our own Conservative government might not be heading down the same path at some point in the future. We're one year into a 5-year mandate.
posted by KokuRyu at 11:37 AM on March 19, 2012


I'd expect they're choosing continued employment over ideology, KokuRyu, given they aren't expected to fare well in the next election.
posted by jeffburdges at 11:49 AM on March 19, 2012


It is Clegg's ideology; he's one of the Orange Book liberals. Laws wrote the chapter on health, which "called for a social insurance scheme with private providers to replace the NHS. It was therefore no surprise that the 2010 Liberal Democrat manifesto suggested market reform of the NHS, including abolition of SHAs, a direction of travel now emulated by the coalition government’s Health and Social Care Bill." (from here)
posted by Abiezer at 11:54 AM on March 19, 2012 [5 favorites]


Why should a foreign government (because that's who stands behind sovereign wealth funds) run essential public services in the UK more efficiently than the UK's own government?

Have you seen the UK's own government? They do stuff like this!
posted by running order squabble fest at 12:23 PM on March 19, 2012 [2 favorites]


I received a weaselly reply from my MP today regarding the NHS. Posting it here might be spam, but it was fun to reply to.
posted by Jehan at 12:35 PM on March 19, 2012


Fuck me, between this, the NHS bill and yesterday's British politics thread, I'm starting to worry that by the next election I'll have run out of things to be monumentally angry/depressed about.
posted by Len at 12:48 PM on March 19, 2012


since 1919 or so the UK has had a hefty road tax that all drivers must pay every year. It's supposed to pay for the upkeep of the roads and the building of new ones, as a universal toll on the roads, but over the years the government has been pocketing more and more of the money instead.

There is no such thing as "road tax" in the UK. Car owners pay Vehicle Excise Duty (VED) - a tax on emissions. Roads are paid for nationally (motorways and trunk A roads) from general taxation and locally (local rural roads and urban streets) from Council Tax revenue. Everyone pays for the roads.
posted by normy at 12:58 PM on March 19, 2012 [2 favorites]


Fuck me, between this, the NHS bill and yesterday's British politics thread, I'm starting to worry that by the next election I'll have run out of things to be monumentally angry/depressed about.

Since nobody in their right minds will vote LibDem again it'll be a straight up choice between Labour, who will presumably have dreamt up some new way to betray you, and the Conservatives who are at least honest about being self-interested awful fucks who want to sell of the country and line their own pockets. Tough choice.
posted by Artw at 1:03 PM on March 19, 2012 [4 favorites]


(And Murdoch might not even get to decide the result - that's going to be a shocking change. )
posted by Artw at 1:04 PM on March 19, 2012


Fuck me, between this, the NHS bill and yesterday's British politics thread, I'm starting to worry that by the next election I'll have run out of things to be monumentally angry/depressed about.

Emigration looks good right now. Take away your cares on the sunny beaches of Varna...
posted by Jehan at 1:08 PM on March 19, 2012


I'm working on a Welsh accent and hoping Leanne Wood lives up to her promise.
posted by Abiezer at 1:10 PM on March 19, 2012


I'm working on a Welsh accent and hoping Leanne Wood lives up to her promise.

But why would folk like you and ArtW even bother coming back? If you're skilled and mobile, you've at least another 26 to choose from if your current gig doesn't work out. You know?
posted by Jehan at 1:19 PM on March 19, 2012


My wife dragged me to America in the middle of the Bush years. Homesickness does funny things to people.
posted by Artw at 1:21 PM on March 19, 2012 [1 favorite]


I'm cursed with a large family I actually get on very well with. And I like the weather. Plus, if the Chinese own our roads, I could be in with a good shout at a parking warden gig.
posted by Abiezer at 1:40 PM on March 19, 2012 [4 favorites]


Yes, what we need right now is for all non-right-wing-idealogues to leave the country. DON'T GO.
posted by Summer at 1:58 PM on March 19, 2012


To be fair, I don't exactly rule out the yanks electing some religious nutjob intent on ushering a nw dark age and having to leave the country for fear of being burnt as a witch, so there's that.
posted by Artw at 2:00 PM on March 19, 2012 [3 favorites]


British politics are more mystifying than the U.S., and that's saying something. In Britain, the government does whatever it wants even when there's clear information that 70% percent of the public are violently against it. In the U.S. the government does whatever it wants and nobody really knows how the public feels about it because the media concocts its own corporate narrative devoted to shaping audience sentiment and selectively reports only opinions that conform to that narrative. It makes nakedly bad government seem honest compared to obfuscatedly bad.
posted by George_Spiggott at 2:02 PM on March 19, 2012 [1 favorite]


Artw: Since nobody in their right minds will vote LibDem again it'll be a straight up choice between Labour, who will presumably have dreamt up some new way to betray you, and the Conservatives who are at least honest about being self-interested awful fucks who want to sell of the country and line their own pockets. Tough choice

Oh, I couldn't ever vote for Labour again, not after Iraq (not to mention everything else they did). Still, living in Scotland, I'm at least partially shielded from most of the lunacy being perpetrated south of Hadrian's Wall. It's truly frightening, and I really feel for people living in England; they're more fucked than the rest of the home nations by a long shot.

It's interesting watching Alex Salmond – a pretty odious shit, but one of the canniest political operators ever to get anywhere near power – and the SNP just sit back and let this tide of shit flow, while quietly whispering "See? See what London would do to you if we weren't here to step in?" The Tories have been dead, politically speaking, in Scotland since before I was born. But something else might be happening: Salmond has turned the SNP into an actual living breathing centre left social democratic party which, regardless of the (many) problems I have with it, is about the only game left in town for what used to be Scotland's Labour masses. That doesn't mean I'll vote for them, mind, but a lot of people of a less rigidly socialist bent undoubtedly will.

It's two years until the referendum on Scottish independence. I have absolutely no doubt that how much Cameron and Clegg fuck over England in the interim, and the scale of any resulting social chaos/unrest, could have a decisive impact on the referendum result.
posted by Len at 2:07 PM on March 19, 2012 [6 favorites]


I totally wish that in one of the many "we'll buy your road and lease it back to you" cases, the purchaser would have a change of heart and break the lease and permit no one to use the road at all. Or maybe hold a monthly lottery and let one lucky stiff have the road to themselves. Or turf it and turn it into a park.

It would be a truly expensive whim, but I thought that was the one, slim benefit to the masses that accrued with intensive concentration of capital. Eccentric people with too much money and nothing to spend it on.

But, alas, I know this will never happen. I still dream it. It is galling to me how obviously one-sided the proposition is, but how readily politicians of a certain stripe stick themselves to the idea.
posted by Fezboy! at 2:15 PM on March 19, 2012


Yes, what we need right now is for all non-right-wing-idealogues to leave the country. DON'T GO.

I'ld still get to vote in general elections, just from my flat in Köln. But I'm 30 this year, and I've few prospects. I would rather wash pots in Germany than rot in England.
posted by Jehan at 2:20 PM on March 19, 2012


So.... I assume the destruction of the NHS is pretty much done and dusted as of tomorrow?
posted by Artw at 2:42 PM on March 19, 2012


The electorate lap it up.
posted by Summer at 3:22 PM on March 19, 2012 [1 favorite]


YouGove still showing a 5% lead for Labour, and UK Polling Report gives a few reasons why ICM might be wrong here.
posted by Jehan at 3:34 PM on March 19, 2012


I just don't even know what to think anymore. I'm curious how what I thought was a particularly American form of ideological lunacy has been spread to the U.K.

They sold us down the river here in the Atlanta suburbs by taking a lane bought-and-paid-for with taxpayer money then converted into a carpool only lane with even more taxpayer money and now partially privatizing it as a High-Occupancy & Toll lane that costs as much or more than a gallon of gas to use during rush hour. Unsurprisingly, the reaction has been almost completely negative among everyone who can't afford to use the lanes, and very positive among those who can. (The comments on this recent article paint a pretty accurate picture of how "regular people" feel about the HOT lane.)

Now with the news about the NHS I'm even more confused. I admit ignorance to the current politics in the U.K., but what possible sensible reason is there to jettison such a long-standing and successful program as the NHS?
posted by ob1quixote at 4:27 PM on March 19, 2012 [1 favorite]


Because they've wanted to do it for 60 years and now finally they can.
posted by Artw at 4:33 PM on March 19, 2012


It's fair to be outraged or aggrieved by this... but not surprised.

There is an abundance of new, tracked data available.

Logically, tracking leads to tiering.
posted by darth_tedious at 7:35 PM on March 19, 2012


There is a special place in hell for Andrew Lansley and there's a special place in hell for Clegg.

I don't get what Clegg's deal is. It's like he's completely fucking ignorant of the "social" part of "social liberalism".

I also don't get this retarded fucking trend of social liberals abandoning their base and their principals as soon as they see an ounce of real power. Meg Lees basically sent the Australia Democrats to the slaughterhouse with her betrayal on the GST leaving the batshit insane Greens left to speak for the centre-left. It's like a fucking competition to see who can be the best conservative lapdog so that they don't get slandered in the press as some ultra-lefty college student with no perspective on how things work in the real world.

I weep for the future of social liberalism. I fucking weep. And I'll weep again in 2015 when Clegg gets up on his platform at the end of election night, tears in his eyes about losing his seat, completely unapologetic about setting back social liberalism in the UK another thirty fucking years.
posted by Talez at 12:19 AM on March 20, 2012


I don't get what Clegg's deal is. It's like he's completely fucking ignorant of the "social" part of "social liberalism".

Clegg is just like Blair - a Tory in the wrong party.
posted by daveje at 1:21 AM on March 20, 2012 [3 favorites]


It amazes me that people look at the American healthcare "system" and say, "That's what we should have here."
posted by dirigibleman at 1:25 AM on March 20, 2012


It amazes me that people look at the American healthcare "system" and say, "That's what we should have here."

To be fair, both the British NHS reform and the American Obamacare are aiming (from completely opposite starting points) at the same model, namely a Dutch-style system of mandatory private health insurance with competing providers.

Having experienced the Dutch system first-hand, I'm not sure that's the model the NHS should be aiming at, though.
posted by Skeptic at 1:59 AM on March 20, 2012


I weep for the future of social liberalism. I fucking weep. And I'll weep again in 2015 when Clegg gets up on his platform at the end of election night, tears in his eyes about losing his seat, completely unapologetic about setting back social liberalism in the UK another thirty fucking years.

I think the rank and file Liberal Democrat MPs know just how toxic this is. Conservatives can boast about what they're going to do to the NHS, because their base likes it, but any Liberal Democrat who votes for this is marked in a serious way. I don't know how big the rebellion will be, nor what the upshot of it will be, but here's hoping. The budget speech will also put the party under strain, so maybe there's a good chance of seeing some open warfare. I'm a Liberal Democrat supporter, and anybody who doesn't speak up or act in the coming fallout won't ever get my support.
posted by Jehan at 2:41 AM on March 20, 2012


Good old Steve Bell... Stand and deliver!
posted by fearfulsymmetry at 3:20 AM on March 20, 2012


I think the rank and file Liberal Democrat MPs know just how toxic this is.

Oh they do. I have no doubt that a good number of MPs get in the party room and ask Clegg why he's such a tosser and why he keeps selling out their party. And I think Clegg knows that he's a marked man and his days in parliament are numbered.

But there's absolutely nothing the rank and file can do about it. Thirty years of grass roots support burned at the feet of the altar of neothatcherism. Forever in the minds of the electorate will Liberal Democrats mean "Conservative Lite".

I hope that sniff of Cameron's panties was worth it, Clegg.
posted by Talez at 8:07 AM on March 20, 2012


the only game left in town for what used to be Scotland's Labour masses. That doesn't mean I'll vote for them, mind, but a lot of people of a less rigidly socialist bent undoubtedly will.

It would be nice to think that if independence did decapitate Scottish Labour from the English body they would cease to be the Tory-lite party, and return to being the party of people who said things like:
That is why no amount of cajolery, and no attempts at ethical or social seduction, can eradicate from my heart a deep burning hatred for the Tory Party that inflicted those bitter experiences on me. So far as I am concerned they are lower than vermin. They condemned millions of first-class people to semi-starvation. Now the Tories are pouring out money in propaganda of all sorts and are hoping by this organised sustained mass suggestion to eradicate from our minds all memory of what we went through. But, I warn you young men and women, do not listen to what they are saying now. Do not listen to the seductions of Lord Woolton. He is a very good salesman. If you are selling shoddy stuff you have to be a good salesman. But I warn you they have not changed, or if they have they are slightly worse than they were.
posted by titus-g at 8:12 AM on March 20, 2012 [1 favorite]


Clegg hasn't started a bullshit war, so he doesn't have a lucrative US lecture tour ahead of him, he'll probably have to just settle for becoming a Tory once the LibDems sink without trace.
posted by Artw at 8:12 AM on March 20, 2012


It would be nice to think that if independence did decapitate Scottish Labour from the English body they would cease to be the Tory-lite party,

The third way has been nothing but a disaster for social democracy. It doesn't help that the electorate have the effective intelligence of a goldfish and can be convinced to vote Tory by being told that brown people who eat funny smelling food are taking over your local neighbourhood by duping the welfare system.
posted by Talez at 8:27 AM on March 20, 2012


Isn't there better regulation in the Dutch system, Skeptic? German has mandatory private insurers, maybe non-profits, but they're very tightly regulated.
posted by jeffburdges at 9:50 AM on March 20, 2012


Human Revenue Stream
posted by Artw at 9:49 AM on March 21, 2012 [4 favorites]


I've long felt that while the asset-stripping privatisations of the 80s and 90s were like the dissolution of the monasteries - a grab for money, essentially - what's going on now reminds me of enclosure. The rich have bare-facedly stolen the commons before.
posted by Grangousier at 11:08 AM on March 21, 2012 [2 favorites]


Artw: "Human Revenue Stream"

Thanks, Artw.

I always oppose privatization schemes, but if you asked me why I couldn't give a solid reason. I just have a gut reaction that it is taking advantage somehow. Mr. Meeks has clarified and articulated why I feel that way.

Building a public good with taxes and then privatizing the profits seems to have been the game all along. The "government is the problem" crowd never seem to catch on that the second half of that sentence is "—that prevents us from capturing the revenue generated by public goods for our own enrichment." Meanwhile the IMF and the World Bank force countries to sell off their utilities to the highest bidder, nearly always some company or group from the G8, and it never seems to benefit the people.

These people surely don't see themselves villains, but what they do is monstrous. What are they teaching people in economics departments anymore? Is this Austrian School nonsense so pervasive that people old enough to develop some wisdom actually think it's a good model?
posted by ob1quixote at 1:49 PM on March 21, 2012 [3 favorites]


Despite the fact that they wrap themselves in the Union Jack all the time, the Tories have the most remarkable tendency to sell out British interests to foreign entities whenever they can. Traitors.
posted by Grangousier at 3:27 AM on March 29, 2012


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