Guard against politicians’ U-turns

For many years, the railway industry has been able to rely on the fact that it received all-party support for its investment programme, which makes it relatively secure. However, there is always the risk that the tide might turn and suddenly railways will no longer be the flavour of the month.

There was a worrying sign in an astonishing statement from Transport Minister Andrew Jones. While responding to a question on funding for rural bus services at the UK Bus Summit in February, he said: “We shouldn’t be having an industry which relies endlessly upon public subsidy… an industry which requires public subsidy is not an industry which has a healthy, robust, sustainable future.”

Jones may have been speaking about the bus industry, but clearly that view could equally apply to the railways. It is an astonishingly narrow-minded view of transport services, although most politicians do seem to have grasped the basics of economic theory, which (grandmother suck eggs moment) show that not all the benefits of the rail or bus industry can be captured through the fare box. Think what London would be like without its heavily subsidised rail, bus and underground systems.

Economists call these benefits ‘externalities’ (Gordon Brown went for ‘exogenous factors’), but readers of this column and audiences at my talks will be familiar with them. Apparently Andrew Jones is not. In his narrow-minded view, only the ability to make a profit makes anything worthwhile.

One could mention other uneconomic services such as the police, libraries, schools, hospitals, the army… but I won’t bother.