Want a reason for re-nationalising British railways? Try 23 billion...

There is this old yarn about an encounter between Churchill and Attlee in the House of Commons latrines, after the war.  As the recently elected Labour Prime Minister entered, Churchill moved to the far end of the room.  "My dear old Winston," groused Attlee, "I had hoped that although we are opponents again in the House, we might still be friendly outside it."

"Now, now, Clement," replied Churchill, "I have no quibble with you, my good man; it is only that in my experience, when you set eyes on something that is very big and functions well, you are wont to nationalise it."


Irrespective of its proportions, Churchill had good reason to fear for his gentleman's sausage.  Targets big, small, functional and dysfunctional, were nationalised between 1946 and 1951, including the Bank of England, the coal, steel, electricity and gas industries, and, of course, the railways.  On Churchill's return to Downing Street his privy parts had been spared, yet one-ffith of the UK economy was in public ownership.


The majority of this was reversed by an equally ideological privatisation spree in the 1980s and 1990s.  Only the Old Lady managed to escape the Iron Lady.


In most cases, privatisation has been a Good Thing.  It has resulted in improved performance, greater efficiency and more accountability.  Competition has driven down prices for consumers and enforced more disciplined and accountable management.  Profit making has attracted further capital investment.


Not for the railways.  Rail companies talk a lot about improved statistics but passengers have to live with perceptibly declining standards, massive fare increases, under investment and unacceptable overcrowding.  First Great Western might claim that they have been on time nearly nine times out of ten in the past year but I would offer my Twitter feed as a more reliable indicator of their (un-)punctuality (WARNING: adult language).


Regular readers know how I feel about our historically important railways.  Like John Redwood wrote on his online diary yesterday, "I like railways."

Okay.  He didn't say that.  He said, "I like trees."  Yet the sentiment is sort of the same, for he was discussing the merits of private sector trees versus public sector trees.

I am quite sure that John Redwood would say that he does like railways too, yet as with trees, he likes them to be private sector, not public sector.  Outwardly, all Conservative politicians would agree.  Inwardly, some are not so sure.  Inwardly, several would tell you that the railways were a privatisation too far.  Inwardly, some want them back.

The Times (£) reports that the £23 billion of Network Rail debt is to be brought back on to the Government's books "to secure greater leverage over the private company."  This is a bold and decisive act for a Government whose principle objective is to reduce the nation's enormous debts.

The potential for a re-nationalisation of Network Rail is being played down but not discounted.  The initial aim of making the railways more accountable and transparent is a good one, considering the taxpayer already subsidises the company to the tune of £4 billion per year.

Even if Network Rail was bought by the Government, the nonsense of separate ownership of tracks and trains would still exist (except for the recently nationalised East Coast franchise).  It would still be a step closer to the wholesale dependency of the industry on the state, unless major franchise reforms take place, such as lengthening contracts.

There are a litany of reasons why privatisation has not worked for the railways.  Fragmentation has created inefficiencies rather than efficiencies and costs have not come down.  These inefficiencies in a strategic industry such as the railways have prompted ever higher state subsidies, to the extent that the taxpayer now spends more on railways in real terms than when they owned them fully.  Competition (and driving up of standards) cannot exist in railways like it can in utilities such as gas.

These and other reasons might be widely known and ever more widely ignored but in taking on Network Rail's financial liabilities, the Government has given twenty-three billion reasons why a return to public ownership cannot be ignored for much longer.

It would be an economically and philosophically retrograde step - an admission of failure.  It would also be a very dear transaction for the taxpayer.  Although I am more of a supporter of nationalised railways than most, I acknowledge that this would be a Bad Thing.  Yet as the state takes on more and more responsibility for their proper functioning, soon it will seem like the only pragmatic thing to do.

Anglo-Dutch free trade alliance reminds us what the EU is for

Whilst his MPs are squabbling in the House of Commons about the European Union Bill, the Prime Minister is on the continent making friends.

The Guardian reports that David Cameron, "in his first major EU initiative since becoming Prime Minister", is attempting to create an internal free market area with the Dutch.  This would permit professional and service workers to work throughout the European continent.  The article is just a bit amnesic: Cameron's biggest initiative on the European stage to date has been to limit the increase of the EU budget from 6% to no more than 2.9%, in concert with the French and Germans.  The more cynical might observe that an even bigger achievement has been simply not to cause a row.

That is by the by, for the crux of the matter - an Anglo-Dutch free trade alliance - carries intriguing historical overtones.

England and the Netherlands spent a lot of the seventeenth century coming to nautical blows over the issue of who ruled the waves - and therefore international trade.  The Dutch could not find a way to defeat Cromwell (who could, but Death himself?) but generally they came out on top and in 1667 their raid of the English fleet at Medway ranks as one of this island nation's worst humiliations.

The great French Annalist Fernand Braudel wrote, "history may be divided into three movements: what moves rapidly, what moves slowly and what appears not to move at all.”

The Dutch navy may have been fleeter of foot by the broadside, but moving slowly alongside beneath the swifter current of events was the burgeoning dominance of international finance and trade by the City of London and the nascent British Empire.

The prompt for both of these phenomena - warfare and mercantile superiority - were the Navigation Acts.  These laws, first passed in 1651, were designed to protect English colonial trade with European rivals, particularly the Dutch.  Some historians say that they were a crucial part of the eventual British dominance of world trade and the City's financial preeminnce.  Also pivotal was the accession of William of Orange to the English crown in 1688, which swung the attention of Dutch financiers towards London.

It is oft proclaimed that Britain was at the vanguard of free trade and liberty.  There is some truth in this, if your history books begin with the Pax Britannica.  For much of Britain's rise to global prominence had been on the back of protectionism and naval power.  The Navigation Acts were only repealed in 1849, by which point Great Britain ruled the waves.  Liberalising trade routes did not level the playing field, so much as give British traders more markets to buy and sell in.

With the benefit of hindsight, the respective tales of Britain and Holland could have been quite different.  Both relied on a strong navy to project power and an early mastery of trade and finance.  On the latter count, the Dutch were certainly the superiors.  They even contested similar regions of influence, such as North America, the Caribbeean, the Cape of Good Hope and south-east Asia.  Eventually, Britain came out on top, but it could have been different.

Now Britain and Holland appearto be joining forces to remind their fellow Europeans what the EU is for: liberalised markets for free trade in goods, services and personnel.  Many Conservative MPs have a keen taste for history - not least Bill Cash, who I know to be writing a biography of free trade campaigner John Bright.

Although a free trade alliance between Britain and Holland may seem out of step with the historical record, it sends a message that the European project has lots its way in a search for political, as opposed to economic, union (the clue ought to have been in the title, really).

This, then, is a timely reminder to dissatisfied eurosceptic MPs - particularly those in the new intake - that their Prime Minister has the right idea about Europe.  An idea more nuanced and pragmatic than they might like, perhaps, but this really ought to be a European adventure on which leader and party can see eye to eye.

The Conservative Party can be the Natural Party of Coalition Government

Conservatives claim that theirs is the ‘natural party of government’.  On top of that, I argue that the party should also be considered the ‘natural party of coalition’, based on its diverse philosophical heritage, which has engendered an instinct that is pragmatic and non-ideological.

Let's look at Edmund Burke - was he a Conservative?  Lord Acton, the Liberal historian, thought him one of the three greatest liberals, alongside Gladstone and Macaulay.  In Das Kapital, Karl Marx branded him “an out-and-out vulgar bourgeois” and criticised his hypocrisy in supporting the American revolutionaries but attacking the French Revolution.  Sir Winston Churchill summed up Burke’s polysemy when he wrote, “On the one hand he is revealed as a foremost apostle of Liberty, on the other as the redoubtable champion of Authority.”

Strictly speaking, our contemporary panegyrics to Edmund Burke are anachronisms.  He was neither a Conservative (such a party did not exist), nor a Tory.  Burke was a Whig and, by extension of his fervent advocacy for Roman Catholic emancipation and free trade, indubitably no friend of the Tories, generally ardent Anglicans and protectionists.

Yet Burke should be considered a founding father of modern Conservatism precisely because of his apparent contradictions.  To those who believe that politics should be about belief systems strictly adhered to, such as Karl Marx, Burke was indeed a hypocrite.  However, Burke did have beliefs, as innate to him as any Conservative today, centred on freedom, responsibility and community.  That he felt able to apply these instincts to the American Revolution but not the French is a mark of his pragmatic appreciation of context.  The revolutionaries in France might well have set to their task with liberté, égalité et fraternité in mind but the cause descended into murder, mayhem and misery, amidst which disappeared those virtues evident in the Thirteen Colonies a decade before.

In the North American revolutionaries, Edmund Burke saw a rejection of tyranny; contrariwise, in the Jacobins of the 1790s, terrorizing ideologues.  It is via that anti-dogmatic streak in Burke that we can discover our most authentic link to his tenebrous thinking.

The policies of political parties ebb and flow yet certain instincts remain the same.  It is possible to remain true to Conservative instincts – such as freedom, individual responsibility and community – yet still be able to approach policymaking pragmatically, flexibly and openly, in the national interest.  It was Burke again, who said, “All government, indeed every human benefit and enjoyment, every virtue, and every prudent act, is founded on compromise and barter.”

Genuine conservatives are not ideologues.  Conservatives do not possess any scopic Weltanschauung, instructing them how to re-order the world as presented to them.  Lord Hailsham, wrote in The Conservative Case (1959): “Conservatism is not so much a philosophy as an attitude, a constant force, performing a timeless function in the development of a free society, and corresponding to a deep and permanent requirement of human nature itself.”

Political parties steeped in ideological dogma are congenitally ill suited to the purlieus of coalition politics.  The “compromise and barter” that Burke spoke of does not come naturally to them.

“Compromise” (or “consensus”) has been a word besmeared in right-wing politics since the 1970s.  Margaret Thatcher said, “To me, consensus seems to be the process of abandoning all beliefs, principles, values and policies.”  Perhaps such a stance was necessary for her time.  Perhaps it was even a pragmatic reaction to the discord of her time.  To contemporaries of the late 1970s, the ‘Butskellite’ consensus of the post-war period did appear to have run its course.  Nonetheless, some of the inimical, unintended consequences of the 1980s may have been averted – or at least mitigated – by a modicum of consensus building.

Come what may, Burke’s “compromise and barter” is palpably valuable here and now.  In order to provide this country with the strong government needed to impel and sustain economic recovery and deficit reduction, Conservatives and Liberal Democrats boldly came coalesced into a remarkable accommodation, in the national interest.  Neither party could get everything that it wanted.  The Coalition Agreement, excogitated with astonishing alacrity, is the result of “compromise and barter.”

The Conservative Party's standing as the ‘natural party of coalition’ is not only based on the recognition that politics is “founded on compromise and barter.”  It is also based on the party's diverse political heritage.  This summer gone, ConservativeHome, a right-wing political website, asked new Conservative MPs to answer a short questionnaire, including naming their political heroes.  Their responses roamed freely through eras and philosophies: from Edmund Burke to William Wilberforce to Benjamin Disraeli; from Winston Churchill to Rab Butler; from Iain Macleod to Margaret Thatcher.

One answer, above all, was worthy of more detailed scrutiny.  Steve Baker, MP for Wycombe, named Richard Cobden as his political hero, because he “gave up his business prospects to further the philosophy of freedom in the general interest.  He was principled, pragmatic and yet thoughtful.”  Those who know their 19^th century history will recall Cobden as the radical Member of Parliament for Stockport, to whom Sir Robert Peel, “without scruple...attribute[d] the success” of the repeal of the Corn Laws in 1846, beyond any other individual, including himself.  Richard Cobden was most certainly no Tory or Conservative.  He was a tireless advocate of free trade, a policy with which few Conservatives now would disagree.  Then, however, the issue of free trade split a nascent Conservative Party between old protectionist Tories, the country bumpkin party of yesteryear, and the liberal conservative Peelites.  The protectionist majority were the direct antecedent of today’s Conservative Party – an unbroken corporate lineage runs from Lord George Bentinck, through Benjamin Disraeli, all the way to David Cameron.  The rump of more liberal Peelite Tories, which included William Gladstone, eventually merged with Radical and Independent Irish MPs to form the Liberal Party.  To which group do we owe the greatest philosophical debt?  Entire theses have been devoted to that question, but I hope that you will appreciate my basic point.  We are not merely a product of the Conservative Party but also a product of Whig, Radical and Liberal thought.

Conservatives are not only sharing power and office with the Liberal Democrats; they also share origins.  The two parties have gone their various ways in the past 150 years but I believe that they still share those core instincts of freedom, responsibility and community.  The example of Richard Cobden and free trade demonstrates how particular policies can seem anathema to a political party in one era and fundamental in another – yet instincts remain the same.  Compromising and building consensus does not mean a dereliction of principles – it means applying those principles to the needs of your time.

A broad philosophical heritage and the un-ideological, pragmatic, conservative instincts of freedom, responsibility and community can cross partisan divides.  The time will come again when the Conservative Party can govern on its own.  Yet if that is not the case in May 2015, and once more, we are faced with necessary “compromise and barter”, then again the party must not be troubled – for the Conservative Party is the natural party of coalition.

Needless slaughter awaits if Conservatives can't get on message

Nearly two months ago, Michael Fallon became deputy chairman of the Conservative Party.  The appointment was greeted warmly by the likes of Benedict Brogan ("a smart appointment" of "an adept media performer") and Tim Montgomerie ("the thinking man's rottweiler") as a sign that the senior party in Government was sharpening up its communications strategy after what Paul Goodman described as a summer of "no effective counter-attack" to "the Labour and media assault on the Government."

Goodman, the former Conservative MP for Wycombe, said that the Government's cull of special advisers had "blunted its political edge".  The Coalition needed a simple message to counter the Labour opposition's crass but straightforward "Tory cuts" line.  This message must be communicated relentlessly through the media.  Crucially, the party needed "to find and unleash attack dogs."  Enter Michael Fallon, who Brogan nominated as "Minister for the Today Programme".

And the former MP for Darlington (I declare no interest) has made a steady - if inobtrusive - start.  Last Thursday, Fallon tore into shadow chancellor Alan Johnson's fallacious assertion that the Labour Government was "never living beyond our means."  As a member of the Treasury Select Committee between 1999 and 2010, Fallon knows keenly how deluded a statement this is.  He rightly declared it "as hollow as Gordon Brown's claim to have 'ended boom and bust'."

Then yesterday, Fallon picked up on the massive policy gulf between Mr Johnson and his leader, Ed Miliband on the 50p income tax rate and university funding.  Johnson, as the Labour minister who introduced tuition fees, is against a graduate tax, and on Sunday's Politics Show he admitted that his party had yet to agree on a "considered policy" on the top rate of tax.  Miliband wants to make it permanent but his shadow chancellor has said otherwise.

Michael Fallon said, "It's an extraordinary admission... Seven weeks after he was chosen, Ed Miliband still can't make up his mind - there's still no Plan A."

In two statements, Fallon is transmitting two simple political messages: 1) Remind the public of the hubristic hash that was Labour's economic mismanagement, and 2) Highlight the sclerotic, rudderless inertia and incertitude that is Labour in opposition - personified by the cleavage between Ed Miliband and Alan Johnson.

The Conservative Party needs a coherent, attacking message centred on these themes.  At the same time, reminding people that what the Government is doing is a good thing.  Tim Montgomerie writes today on Conservative Home, a right-wing political website, that David Cameron needs to make a quartet of political appointments to the Downing Street machine in order to address its weakness of message and capacity to drift.

Whilst I am a bit sceptical of Mr Montgomerie's motives in singling out specific names for specific jobs (maybe he is implicitly recommending a fifth position - himself, as No 10's HR manager), the point he makes is an important one.  The Prime Minister surrounds himself with people "he's comfortable with" and as a result "few people say uncomfortable things to him."  There is a genuine danger that too much of the Hilton-esque Big Society narrative - while it is sound and relevant (see Chris Butt on ConHome), it is terrible branding - is going straight over people's heads.  Conversely, the asinine but uncomplicated anti-cuts message from Labour is registering with the public (as recent opinion polls would suggest).

Someone does need to be ramming the message home that the cuts are not as bad as ideologically myopic elements of the media proclaim, and nor does the Labour Party have a credible alternative - or, for that matter, credibility.

If the Prime Minister has salaried space for an official photographer then I'm sure that he is able to find room for the sort of positions that Montgomerie has adumbrated.  Yet if you allow me to be uncharacteristically partisan for a brief moment, David Cameron remains head of a coalition government, transmitting a coalition message, from a coalition platform.  That was a mistake made in the summer in the form of Baroness Warsi and Chris Huhne's joint party-political press conference.

There needs to be a distinctive Conservative Party voice and the deputy chairman, Michael Fallon, should be it, and he should be heard louder and more frequently.  This is not a call to arms for a war of New Labour subterfuge and spin.  This is simply ensuring that the British public understand why this (Conservative led) Government is doing what it is doing.

Even in doing so, the party is bound to suffer to some extent in the provincial and local elections next May.  If the party fails to make this case, the suffering will become a slaughter.

Torn between head and heart on Control Orders?



Am I torn between head and heart? On one level, I don't think the general public gives two monkies if some shifty characters are put under near-perpetual house arrest (what is it, 40 over 5 years?) as long as the numbers are small and it strengthens our national security. If the head of MI5 says we need them, most people will say 'that's good enough for me' and move on to something that actually affects their day-to-day lives.

Yet that's the utilitarian view, and I don't believe that in this instance Bentham's principle of utility trumps the British principle of liberty and, particularly, habeas corpus. It is the legal foundation on which our constitution is built and is what set us apart from darker, more authoritarian Europe for centuries. Fine, the history of its implementation has not always been perfect, but it has been there as the starting point for liberty in this country.

So we have legal and ethical philosophy, history and tradition, pitted against cold utilitarianism and the harsh realities of governing compared to the bright idealism of opposition.

But hoestly, why wouldn't a security chief ask for more powers? Of course he would. Why wouldn't this make us safer? Of course it might, and probably does.

But that does not make it right. We are in this fight with radical, oppressive terrorist dogma in order to protect these hard-won and fiercely defended liberties. Should we really abandon them now? I do not believe, as some say, that abolition would be a sign of weakness in the eyes of terrorists. Instead, it is a sign of strength, it is a sign that we are unbowed, it is a sign that the way we live our lives, in freedom and toleration, shall not be compromised.

So no, I am not torn between head and heart. Both desire repeal of control orders. I can understand the rationale for their retention, but that rationale is not as strong as that for repeal.

Moreover, the Conservative Party and the Liberal Democrats have opposed control orders from their inception. The glue that binds the two parties together is civil liberties.

To turn their backs on that now would be to turn their backs on the philosophical basis on which this Coalition is built.