More money, more debt and more austerity for Britain

The Coalition Government has announced more investment in both the railways and infrastructure. And more austerity to pay for it.

The Government has announced over £9 billion of investment in Britainís railways. On the face of it, this is good news, but people should see the bigger picture. Britainís railways are - ostensibly - private companies. So what we see here is the Government giving public money to private companies, another word for this giving is subsidy. Now the simple question is, why should the British Government or any government subsidise a private company, any private company? Not without an extremely good reason.

Britainís railways are funded approximately half by the taxpayer and half by the passenger. Logically, either passengers should pay the entire cost of their travel - which would cripple many commuters - or the Government should run the network on behalf of all of us, which would mean it could reduce fares considerably, and even abolish fares not only on the railways but on much of the transport network, certainly within major cities. Do the math.

As one Guardian correspondent pointed out earlier this week, it is ultimately the poor who will pay the price for this, because this subsidy is a transfer of wealth into the pockets of the rich.

Meanwhile, Chancellor Osborne is set to announce a further £50 billion of investment in the countryís infrastructure. Again, this sounds good, but it is not new, debt-free money that will be financing this programme, but new loan guarantees.

If the Chancellor has promised more borrowed money for the infrastructure, his boss has promised only more austerity, another decade of it. In an interview with the Daily Telegraph, David Cameron said he expects the (manufactured) Eurozone crisis to drag on until 2020. Realists will add at least another five years to that forecast; cynics, another ten.

[The above op-ed was first published July 20, 2012; the original wasnít archived.]

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