Labour Economic Competence - OR NOT

While Liz Truss and Rishi Sunak continue to knock lumps out of each other as part of the increasingly surreal campaign for the Tory leadership, denying reality along the way - both have asserted that delays at the port of Dover, and at the Channel Tunnel terminal, were not down to Brexit, even though they most certainly were - the Labour opposition is setting its stall out.

This setting out occurred in Liverpool, where party leader Keir Starmer declared “With my Labour Government, we will have: More innovation … More new technology … More research and development … More start ups … So Britain will be the best country in the world to start a new business”. But no mention of the Brexit elephant in the room. So no single market access.

Where is the hottest start-up city in Europe right now? It isn’t in the UK. Arguably, that city is Lisbon, which may be out on the western fringe of the Iberian peninsula, but it’s in the EU. And it isn’t about to leave. Labour could learn a lot from what has happened there. But no, we can’t talk about anything EU related, so painted into a corner has Labour become.

Another corner into which The Red Team has allowed itself to be painted is the N-Word, as in Nationalisation. Public ownership of rail, water and energy? Er, not as such. Shadow chancellor Rachel Reeves said this would bust her “fiscal rules”. Chris Dillow was unimpressed. “I've no strong view on whether utilities should be nationalised or not. But to say that private ownership is ‘pragmatic’ & necessary to stick to fiscal rules is just pure gibberish”.

Rubber Macfisheries underwear with duff geriatric club? Maybe not that kind of gibberish. Dan Davies had a clue for budding economists and accountants: “I feel like if you're trying to show that you can be trusted on the economy, ‘I don't understand double entry bookkeeping’ isn't the best start”. A utility is nationalised and so appears on the public balance sheet as an asset.

Labour has allowed itself to be defined by talking points selected and nurtured by the right-leaning part of our free and fearless press - and all too willingly regurgitated by broadcasters. Also, the current rules for Public Sector Net Debt count the cost of a nationalised asset, but not the asset itself. But, even considering that, as Jon Stewart might have said, two things here.

One, Ms Reeves would have no problem sticking to a fiscal rule that she had carefully designed herself, in concert with her economic advisors. If the current rules for PSND don’t make sense when put alongside the basics of double-entry book-keeping, then maybe they should. End of problem.

Rachel Reeves

And Two, in the case of rail, it mostly is already nationalised: Network Rail is on the Government balance sheet. As for those running trains over the tracks that NR owns and maintains, well, the private sector has shown that freight works best in their hands, moves an increasing amount of tonnage over time, and makes money while doing it. So that can be left well alone.

But passenger operations do not: almost all are now either directly controlled by arms of Government (as with London Overground and TfL Rail), run by Government via an operator of last resort after the previous operator handed back the keys (InterCity East Coast, now branded as LNER), or are on management contracts, which is most of the rest. And that means one thing.

Those management contracts could be taken in house when the awards expire - a move which has previously been Labour policy - and there you have public operation of both track and train. No rewriting of the PSND rules would be required. But Labour is now the rabbit-in-the-media-headlights party and is frit of acting in what would be the public interest.

That this is the party which nationalised the railways - along with a significant amount of the road transport industry - in the immediate post-war years, when the UK was more or less bust ,shows how far the Overton Window has been moved to the right since Mrs T was first returned to power in 1979. Of course, Ms Reeves may be planning to nationalise anyway, should Labour get back into power, but that risks a further charge of rank dishonesty.

And we’ve had plenty of that from maybe soon to be former alleged Prime Minister Alexander Boris de Pfeffel Johnson, and his coterie of ineptitude, already. How is Labour going to head off the spectre of yet more rises in energy bills next winter? How is it going to get a handle on higher and higher train fares? How will it get people out of their cars? Crickets.

What is Labour for? I keep asking this question. But I never get an answer.

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