Time for change: move more freight by rail and waterways to reduce air pollution and road accidents

Money Supermarket reports that more than half of fatal accidents on British roads involve HGVs, though lorries make up only 10% of the traffic. HGVs are involved in one in five fatal crashes on A-roads and an HGV is five times as likely to be involved in a fatal accident on a minor road than other traffic.

Department for Transport figures are quoted, showing that 82% of articulated heavy goods vehicles exceeded the 50-mph speed limit on dual carriageways and 73% broke the 40-mph limit on single carriageways in 2013. Despite this, in 2015 government raised the speed limit for HGVs travelling on single and dual carriageways in England and Wales. An HGV over 7.5 tonnes can now travel along a single carriageway at 50 mph, up from 40mph. The speed limit for HGVs over 7.5 tonnes travelling on dual carriageways increased from 50mph to 60mph.

The arrival of even bigger HGVs (double articulated mega-trucks) and ‘platooning’ trials pending with a driver in the first cab, controlling the following vehicles has raised further safety concerns. Last year, the Government announced that trials of partially self-driving platoons of lorries were set to take place on roads in the UK by the end of 2018.

Edmund King, president of the AA pointed out that we have some of the busiest motorways in Europe with many more exits and entries – and that platooning may work on the miles of deserted freeways in Arizona or Nevada but this is not America.

 

A few recent accidents:

12.9.19

The northbound carriageway between junctions 38 (Huddersfield) and 39 (Wakefield) was closed after an HGV overturned following an earlier collision with a car. The HGV was fully laden with glass bottles that had to be unloaded and diesel that had spilled across all three carriageway lanes had to be cleared.

11.9.19

M6 was shut after lorry crash between J12 and J13, near Cannock. The HGV hit the central reservation and later caught fire. Three lanes reopened southbound just after 12:30. Northbound remained closed most of day.

3.9.19

The M6 northbound between J14 (Stafford) and J16 (Stoke-on-Trent) was closed following an HGV fire.

13.8.19

The A38 was closed in both directions, between the A513 near Fradley and B5016 near Burton on Trent due to a crash and an overturned HGV. Around 40 tonnes of grain were spilled in the carriageway.

9.8.19

Police officers investigate the collision involving an HGV, between J25 and J24 near Taunton.

6.8.19

An HGV driver died following a collision on the M6 when his lorry burst into flames after colliding with a safety barrier.

5.8.19

There were severe delays on the M6 southbound between Junction 16 and Junction 15 due to two lanes being closed following an HGV fire. There was approximately seven miles congestion back to J16.

 

There is an alternative:

 

 

A Route One article reviewed reports by continental researchers who believe that their findings offer some support to policies being developed at Pan-European level to promote new multimodal transport corridors. These involve rail, inland waterways, short-sea (coastal) shipping. The researchers concluded that shifting a greater proportion of freight from roads to rail, boat and/or ship for part of its journey would be a sustainable way of meeting continuing rises in freight demand and reducing numbers of road accidents.

The Freight by Water 2018 conference, part of the Inland Waterways Transport Solutions project, highlighted how switching freight from road and rail to water can compete on cost and cut emissions. Inland waterways across the world have proved to be effective and efficient channels for moving everything from beer to building materials.

The conference highlighted several success stories and discussed several opportunities for freight by water, including the Leeds Inland Port at Stourton, which could take at least 200,000 tonnes of freight traffic off the roads. Its conclusion:

The time is right to increase freight using inland waterways throughout the UK and across Europe as an alternative to road and rail freight.

 

 

 

 

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The Financial Times offers two perspectives on the shadow chancellor’s economic proposals

Earlier this month the FT warmed to the shadow chancellor. Following Jim Pickard’s first respectful report on any aspect of Labour policy, an article, by Jim O’Neill, chair of the Chatham House think-tank and former Treasury minister, had the headline, “The UK opposition steps into an economic void left by a government grappling with Brexit”.

 

Following a couple of caveats, O’Neill writes: “In at least six policy areas, which Mr Corbyn and his shadow chancellor John McDonnell are treating as priorities, businesses and the government need to catch up (detail here)”.

• The first area on which Labour sees clearly is Britain’s productivity crisis.
• Second is the orthodox belief that lower corporation tax will magically boost investment spending.
• Third, risking large amounts of money on fixed investment no longer appears attractive.
• Fourth, businesses need to rediscover profit with purpose.
• Finally, there is the housing crisis.

But today there was a decided change of direction – had the editorial board been leant on?

THE EDITORIAL BOARD: Labour’s economic plans have serious flaws: shadow chancellor John McDonnell is ignoring the realities of modern business. The following – mainly speculative – points fail to convince:

1. Mr McDonnell’s most eye-catching announcement was a compulsory share ownership scheme. Employee ownership and other profit-sharing schemes are by no means outlandish. Many businesses already choose to run them in order to recruit and motivate their workforce. There are also sound political reasons to give employees a greater share of ownership and a bigger voice on boards after a decade in which wages have remained stagnant in real terms. But companies should not be coerced into taking such action.
2. Mr McDonnell claims these proposals are designed to tackle Britain’s productivity crisis – the evidence for this is sketchy and outdated.
3. It could increase the cost of capital and deter investment.
4. As the scheme would bear only on employers with more than 250 workers, it could also disincentivise growing businesses.
5. There is a real danger that Labour’s prescriptions may end up only harming the patient.
6. Businesses (and many voters) are concerned that the proposals on the table may only be the tip of Labour’s interventionist ambitions.
7. With Brexit representing a step into the unknown, however, the UK needs to preserve business and economic stability, not further radical experimentation

Then a reversion to something approaching approval

“Nationalisation, dilution of shareholdings, workers on boards, sweeping trade union powers — John McDonnell’s economic prospectus for Britain is the Labour party’s most radical in several decades. The shadow chancellor further developed the party’s socialist credentials in his address to its conference in Liverpool on Monday. He senses that the appetite for change is great enough to take Labour into office on a hard-left ticket at the next election”. And: “Labour’s policies do speak to the mood of many voters. Many Britons believe inequality is growing, public services are collapsing and the excesses of capitalism need taming”.

Though not as wholehearted as the conclusion of former Treasury minister O’Neill: “Dealing with the UK’s deep-seated economic problems requires sustained thinking and attention, not just occasional lip service. The Labour Party has stepped into the vacuum left by the government and appears to be offering the radical change that people seek”.

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End note: email from Moseley hit harder than the editorial board: 

• Looking forward to a rise in the number of companies with 249 employees, if any stay in the UK, should the nightmare come about at the next election ( Ed: as share ownership proposals apply only to companies with over 250 employees).
• The shadow Treasury team admits that private, unlisted companies could not be compelled to hand out dividends to workers. In theory that could incentivise public companies to delist from the stock market.
• The next problem is that foreign-listed companies will not be obliged to hand equity to their UK workforces. Again, that could provide an incentive for London-listed companies to switch their listings to an alternative financial centre such as New York or Frankfurt.
• Nor is it clear how the British government could force an overseas company with a London listing to comply with the scheme if most of its workers are abroad.
• One group of workers who could feel aggrieved by the proposals are those in the privatised utilities such as rail and water. Labour is determined to nationalise the utilities, and admits that — as state workers — staff would no longer be eligible for the share scheme. At present a third of employees in United Utilities participate in their employee share scheme, as do two thirds of South West Water employees and 70 per cent of Severn Trent’s UK employees.
• Another complication is that some companies could find alternative routes to rewarding shareholders, for example by carrying out share buybacks instead of dividends.

 

 

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Budget Day: Professor Sikka highlights the British state, a major guarantor of corporate profits

Prem Sikka, professor of accounting and director of the Centre for Global Accountability at the University of Essex, points out that during his budget speech the Chancellor won’t talk about the amount spent on corporate welfare and how that is contributing to austerity, income and wealth inequalities, and deteriorating public finances. Read the full article here.

Extracts

In a society where corporations fund political parties and provide jobs for potential and former ministers, the state has become a major guarantor of corporate profits. There are cuts in investment in healthcare, education and social infrastructure, and hard won social rights. A kind of reverse socialism has been created where the state transfers wealth to the well-off and punishes ordinary people. The following examples provide some evidence for the above thesis.

A small sample of Britain’s escalating and unsustainable corporate welfare programme:

EDF

The price of gas and electricity has been rocketing and Energy companies are accused of making vast profits. But EDF and its partners are set to receive £17.6 billion subsidy for building a nuclear power plant even though this investment is projected to provide a return of up to 21%. Despite this exceptionally high rate of return, the company will be able to charge a price of £92.50 per Megawatt hour (MWh), roughly double the current wholesale price of electricity.

Consultants, including accountancy firms KPMG, picked-up £8million in fees. High profits are not accompanied with social responsibility. Energy company SSE declared record profits of £1.5billion, but wants taxpayers to bear the burden of cleaning-up the social and environmental mess.

Rail

In 1996, the railways were privatised and now over 100 companies are running them, but subsidies have increased. The industry has received over £60bn in subsidies, and more is on the way with the Crossrail and HS2 projects. The industry has paid vast amounts in dividends to its shareholders whilst the customer has ended up with the most expensive rail fares in the western world.

PFI

Rather than borrowing directly to finance investment in schools, hospitals, roads, bridge and social infrastructure, under the Private Finance Initiative (PFI) companies borrow money to build the project and then lease the assets to the government at exorbitant prices. In 2012, some 717 PFI contracts with a capital value of £54.7billion were running. The government is committed to repaying £301billion, a guaranteed profit of £247billion over the next 25-30 years.

The resulting profits do not necessarily get taxed in the UK either. For example, HICL Infrastructure is a fund established by HSBC and registered in Guernsey. Its portfolio of PFI projects includes Portsmouth Hospital and the John Radcliffe Hospital in Oxford. For 2011, it is estimated to have made a profit of £38million from 33 PFI schemes, but paid only £100,000 in UK tax.

The government should be clawing back billions from the PFI programme, as it has become evident that the interest rates have been rigged. Even a small adjustment could save taxpayers billions of pounds.

The financial sector

The financial sector preaches free markets and deregulation, but is almost entirely reliant on the state.

The deposit-taking licence is provided by the state without any quid pro quo and the state also provided insurance for deposits of up to £85,000 to promote confidence in the industry.

The sector has boosted its profits through indulgence in money laundering, insider trading, cartels, tax dodges, and the sale of abusive financial products, with virtually no prosecutions for ant-social practices.

In its boom years, between 2002 and 2007, the financial sector paid £203billion in UK corporation tax, national insurance, VAT, payroll taxes, stamp duty and insurance taxes, about half of that paid by the manufacturing sector. In return, the state has poured in billions.

The latest data shows that some £976 billion of loans, guarantees and other forms of support have been provided to banks. The Bank of England has helped out with another £375 billion under its quantitative easing programme. Rather than building their tattered finances, the banks continue to pay exorbitant executive salaries.

BT

BT has annual turnover of £18billion and profits of £2.5billion, but received a government subsidy of £1.2billion to install broadband for rural areas. BT will keep the assets and the revenues generated by the subsidy.

Lotus

With 13million people living below the poverty, many on low wages and lengthening queues at food banks, most Britons can only dream about buying a sporty car. Lotus, the sports car manufacturer, has received £10billion subsidy: the price of a £90,000 model is now reduced by £5,000, thanks to a government subsidy.

By any measure the role of the UK state has been restructured to guarantee corporate profits. This welfare programme needs to be rolled-back. If the government insists on supporting fledgling companies, then the amounts should be returned once the company is profitable.

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