Category: Economics

  1. Dublin Bus deregulation and why I’m against it

    So there was a discussion on twitter about the disaster that was UK regional bus deregulation. And yes, it was a disaster. A friend of mine from the North of England used to have (and probably still does; I’ve just not heard it in a while) a lengthy and well-rehearsed rant about the catastrophic effects of bus deregulation on Northern cities. By the time he had fully warmed to his theme you got the distinct impression that bus deregulation in the North of England was like AIDS, the Holocaust and Climate Change all rolled into one.

    In stark contrast to this buspocalypse, the twitter discussion held aloft the London model (a model apparently outlawed outside London — something I wasn’t aware of, but I can’t say surprises me) which retains a central authority (Transport for London) effectively managing and setting parameters for all bus routes; ensuring smooth integration with other routes and other modes of transport; but then offers those routes for private tender.

    And it works. From the point of view of the customer (who is always right, after all) London’s bus system is pretty excellent. Keeping a city the size of London moving is a bastid difficult task, and London buses contribute massively to achieving it. That’s undeniable even for an unreconstituted socialist like me.

    I believe public transport, like a lot of other things, should be publicly owned and operated. That’s my starting position, ideologically-speaking. The reason I’ve never been part of any socialist organisation however, is because I prize flexibility above ideological purity (I get more of my philosophy from Gregory Bateson than I do from Marx). See, if there’s a social problem to be solved (let’s say we’re setting up a new transport system in a new city) and there are multiple potential solutions, I will naturally gravitate to one involving collective ownership and operation. State ownership is not a dirty concept to me. In fact it’s generally preferable to corporate ownership in my book.

    However, in situations where you have an existing public transport system that incorporates private companies and is clearly working, then you have to be some kind of maniac to recommend poking it with a stick for ideological reasons. If the London bus system starts failing the city, then I will be on the side recommending more public involvement while others will insist that privatisation didn’t go far enough. But so long as it’s working then clearly the right balance is being struck. So we should all leave it the hell alone.

    I’m not saying that even “above average” systems can’t be improved upon, nor that we shouldn’t try; but there’s also a truth in the old “if it ain’t broke, don’t fix it” maxim. Which brings me, finally, onto Dublin…

    Dublin Bus ain’t broke

    Dublin Bus is a state-owned company and it runs all of Dublin’s bus routes, with a few minor exceptions — airport hoppers and a handful of suburban / semi-rural services right on the outskirts of the metropolitan area. Some Dubliners like to complain about Dublin Bus, but having experienced a lot of cities and their buses, Dublin Bus is firmly in the “above average” category. No it’s not perfect. But it covers a wide area, frequently and generally reliably*. So already we’re ahead of the game.

    But not only does it get the basics right, it has a bunch of bells and whistles. The various real-time information apps and text message services — as well as at-stop displays — are, again, above average. In fact they’re pretty damn good. The Leap card (Dublin’s equivalent of London’s ‘Oyster’ — working across bus, Luas and rail) had a shaky start but is now running seamlessly and damn near everyone uses it. You can top it up in almost every newsagents or supermarket in the city, as well as at train stations, Luas stops, online or using the mobile app on any phone with NFC. It literally can’t be made any more convenient until they develop top-up by telepathy.

    The buses all have decent free on-board wifi.

    So it seems to me — and I’ve yet to hear a convincing counter-argument — that introducing deregulation (albeit of the London-style) makes no sense whatsoever in Dublin. Government policy has seen 24 suburban routes put up for tender and I just don’t understand why.

    In this instance, a “convincing” argument would involve demonstrating precisely what about Dublin Bus is requiring a major shift in operating practices. Then providing details of how much better the system will be from a passenger standpoint after partial privatisation; along with solid evidence that the risks of damaging an essential public service are either near-zero or else demonstrably worth whatever improvements will be experienced by passengers. How much money will the change save both passengers and the state? Will the staff of the new companies be as well-trained and well-treated as those of Dublin Bus? If not, why not? Where will the state be spending the money saved by this process?

    Because if this change does not significantly improve the system, or keep it at least as high quality for significantly less money… then it looks suspiciously like we’re poking our public transport infrastructure with a stick for ideological reasons.

    But it’s the cost!!!

    Those familiar with the Dublin Bus situation may be fuming by now… not by what I’ve said, but what I’ve failed to say. Dublin Bus loses money. And it’s got a powerful union which has been willing to take industrial action (it’s only a few months since the last Dublin Bus strike caused chaos in the city). Plus the fares aren’t exactly cheap. In fact they’re among the highest in Europe. Even with the Leap card discount, Dublin Bus fares are significantly above average.

    Naturally the rationale being given for the part-privatisation is to reduce or eliminate losses as well as reduce costs to the end user (though that’s never been explicitly promised, it’s always hinted at… “improved competition will bring benefits to the passenger” being a regularly trotted-out government soundbite). Fine Gael might relish a bit of union-busting but they’re unlikely to be so dumb as to admit it in public, so it’s all about the cost savings — to the state and to the passenger…

    … the private sector will swoop in, reduce costs, reduce fares, improve (already excellent) services and make a profit for their shareholders. All at once.

    Sure they will. Trouble is, that all hinges on that innocent phase… “reduce costs”. How exactly are they going to achieve that? I’m assuming they’ll be required to maintain the same safety and maintenance protocols as the existing routes. If not, I look forward to the criminal charges against everyone involved in this process. So there’s probably not a huge amount of wriggle-room for cost reductions in terms of the fleet itself. I’ve not seen anyone claim that the privatised routes will see a significant increase in passenger numbers, and I’m sceptical of claims that “administrative savings and efficiencies” will generate nearly enough additional revenue to cover fare reductions and corporate profit.

    So it’s looking suspiciously like “staffing costs” will play a part in all this. After all, the Dublin Bus union is so strong that bus drivers earn a bloody fortune. Bloody ridiculous wages for someone who just drives a bus all day! If we slash those wages, we can reduce fares. Right? That’s the implication anyway.

    Except it’s horseshit. Of the highest order. The average wage for a Dublin bus driver is €33,826 (source). This is more than 3 grand less than the average national wage (here) and they don’t get the option of living anywhere other than the most expensive place in the country.

    Nor are staff at Dublin Bus paid significantly more than their European counterparts (despite the constant implication that they are).
    Bar chart comparing European bus driver salaries
    This chart appears in an article that concludes… “the average income of Dublin’s bus drivers ranks a bit above Dublin and Ireland’s cost of living rankings, but not by much.”

    Far from living in the lap of luxury, it seems bus drivers have a union that is just about keeping their members’ heads above water. Which is a damn fine achievement in today’s world and one I salute them for. Driving a city bus may be looked down upon by some in the commentariat, but it’s a socially vital job, and it’s actually a pretty shitty one at times (anyone ever seen the abuse bus drivers occasionally have to deal with on a Friday night after the pubs chuck out? Think you want to handle that crap for less than the average industrial wage? Really?) I, for one, am more than happy to see bus drivers get paid at least the industrial average wage. Not less than it.

    And I can pretty much guarantee that the newly privatised routes won’t be looking to exert upwards pressure on staff wages.

    The solution is simple by the way. And it’s not privatisation. The system is providing a good public service. So just increase the state subsidy to Dublin Bus. That’s all. Put up my income tax by a half a cent if you have to. I earn more than a Dublin Bus driver. Sure, it probably took me longer to gain the necessary skills to do the job, so there’s that… but I’d be deluded if I thought my job was more important to the social fabric of my city, or that my conditions of employment weren’t much better.

    Hell, bump my tax by a full cent and reduce fares while also cutting losses. People like me who use the bus will make the money back… the rest of you? Come join us!

    * I don’t doubt there are routes in the Dublin Bus network that are less reliable than others or always end up overcrowded. But from a passenger experience standpoint, on all of the routes I have taken regularly, I can’t think of any metric that wouldn’t put Dublin Bus near the top when compared with other networks of similar size. Aside from price, but I’ll deal with that separately.

  2. The British Empire Strikes Back

    This right here. This is why Brexit will be a godalmighty disaster. That’s a Conservative Party MEP saying that. Not some random commenter below a Daily Mail article lamenting the end of the British Empire. Check out the banner image on the guy’s profile

    British Empire 2: The Hannansphere

    No, I assure you, that’s not a joke. That’s the flag beneath which a tory Member of the European Parliament chooses to speak to the public. It’s the kind of detail that makes you wonder whether Hannan might not be a character created by Peter Cook, somehow escaped from the pages of an uncommissioned script. But it’s tough to be whimsical for too long when it’s clear from his tweets that this Tory MEP genuinely thinks of Ireland as “belonging” under that flag. And he’s a little put out, quite frankly, that everyone else doesn’t think so too.

    It’s not just Hannan. A 2014 YouGov opinion poll has recently resurfaced — given fresh new relevance by the brexiteering lurch towards isolationism. In this poll, a significant majority of respondents believed Britain should be more proud than ashamed of its imperial past.

    And this is why we find ourselves in a peculiar farce. The British unilaterally* took a course of action that at the very least is causing a lot of concern here in Ireland; and at worst could potentially be catastrophic for our country. And yet a significant portion of the British Establishment and commentariat seem vaguely affronted by the notion that we’re not falling meekly into line behind them. The referendum campaign on the British mainland barely mentioned Ireland. And the subsequent General Election campaign featured Ireland mostly as a 1980s-era prop with which the tories could beat Corbyn.

    I love the UK. I lived there for many years. Went to university there. Worked there. Met many great friends there. Here in Ireland, if I was ever idiotic enough to enter politics, I would be immediately tarred with the term “West Brit” and it’d be a tough label for me to shake. By a great many yardsticks, I would be considered an anglophile for an Irishman**.

    Point being… given the mess of a situation we find ourselves in, and accepting that we can’t change the past… if the argument for Ireland to leave the EU and join some kind of federation with the UK was likely to find any sort of traction here in Ireland, then I’d be exactly the sort of person who would give it some consideration.

    But I’m not. When Irish people are polled on EU membership, you get numbers that would appear baffling to a lot of British people. Even after the frankly unjust and unjustifiable way in which the Irish citizenry were treated during the banking crisis… even then we never polled less than 80% in favour. Right now… it’s creeping closer to 90. At some level we didn’t fully appreciate until quite recently, we Irish are European. And if we leave the EU, it’ll be because the entire thing collapses, or we get dragged out kicking-and-screaming for some other reason. It won’t be because we feel an attachment to the Union Jack, or because it makes logistical sense for us to climb into the boat with the British, even as they blow holes in the hull with an antique blunderbus inherited from their Great Grandad.

    Brexit is a psychotic pitbull the UK brought into the neighbourhood. It’s up to them to make sure it doesn’t hurt anyone else. It’s not up to us to accommodate their delusions that the thing is a harmless poodle.

    The British have seriously screwed up with Brexit. Whatever they have done to themselves (and it may be very damaging indeed), they have likely inflicted a great deal of harm here in Ireland too, risking both political and economic upheaval in a region that might still have a bit of Semtex knocking about in it. And yet the Tories are exasperated when, far from backing them up, the Irish are infuriated. After literally centuries of utterly shameful behaviour in Ireland (Empire-nostalgia notwithstanding), I don’t think it’s unreasonable for us to expect Britain to start acting like half-decent neighbours for once.

    Fat fucking chance.

    * Let’s be clear… I am in no way questioning the legal — or even the moral — right of the British people to choose their own path (within reason — you’re not allowed randomly nuke countries even if you vote for it 52-48). However, if something is to be described as truly “democratic” then I’d argue everyone significantly affected by it should be given an equal vote. The Irish were not allowed to vote on Brexit. Again, let me stress, I’m not saying we should have been. I’m just saying you need a different word than “democratic”.

    ** Though it’s a good deal more complicated than that. There are aspects of British culture (the monarchy, the militarism, a huge chunk of the national character surrounding class, self-image and nostalgia for empire) where I would be far more extreme in my dislike than even the most fervent Republican. So yeah, as ever, do be careful with those broad strokes.

  3. Austerity

    I didn’t see Toby Young on the Channel 4 news, so I have no idea what the context of his “austerity is a myth” statement might have been. It’s possible Mr. Young was attempting to defend tory policy by insisting things “aren’t as bad as they say”. Perhaps he claimed the consistent increase in national debt, every year since the tories came to power in 2010, indicates that public services have not been cut… that the welfare state and NHS have not been dangerously undermined by a government ideologically hell-bent on slashing the services upon which the poor and vulnerable rely.

    In which case, the word “stupid” is an apt choice.

    However, I myself made exactly this point recently… that the tories cannot possibly “end austerity” because they never actually implemented it. And I stand by it. I certainly don’t think it’s a ‘stupid’ point.

    The reason there may be some confusion is a result of the two different definitions of “austerity” in play. And I think both of those definitions are useful in their own contexts. Moreover, I think it’s actually quite important that people in the UK highlight the fact that the tories never implemented “austerity” (at least, not in the sense they claimed they would do). It’s arguably the most damning indictment of them.

    For most of us, the word “austerity” is more or less synonymous with “hardship” or “tightening of belts” or “cut-backs”. And let’s be under no illusion, the ordinary people of the UK have been dealt that form of austerity in buckets since 2010. UK public spending has been cut. The welfare state, NHS, fire service and a thousand other items have been recklessly and viciously attacked by a tory government gripped by greed and ideology and the ordinary people of Britain are suffering as a consequence.

    But it hasn’t been “austerity” under the other definition.

    The Other Definition

    Austerity is supposed to be an economic policy whereby — simultaneously — public spending is cut and taxes either frozen or raised so that a nation runs a current account surplus which is then used to pay down the national debt. It’s all about debt reduction. Nothing else.

    However, a simple glance at the publicly available economic figures demonstrate that UK debt has risen every year the tories have been in power this century.

    UK Debt to GDP ratio - no indication of austerity
    By AbsolutelypuremilkOwn work, CC BY-SA 4.0, Link

    Why? Because far from cutting services and raising taxes to pay off debt; the tories have cut services and lowered taxes for corporations and the wealthy. And they were talking about slashing those taxes again (the post-Brexit tax-haven fantasy of the tory inner circle), long before this talk of “dropping austerity” began.

    “Austerity” is not an economic policy I agree with (though I’m sure specific hypothetical “edge cases” could be described whereby it makes sense). But I can at least acknowledge there’s a coherent argument in its favour when it’s actually used to reduce debt. Which is why using that term to describe the dreadful tory policies of the past 7 years gives them far more respectability than they merit.

    It hasn’t been austerity. It’s been wealth redistribution.

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