Treasury Blocking electrification plans

[Wapps]

I’m not sure I fully understand what is going on here, but as always in government (and in any major private organisation, IMO), isn’t it just a negotiation? As in, “X asks for 150%, knowing it will be lucky to get 90%; Y rejects that and offers 50%, but in reality being willing to go to 70%; and in the end they compromise on 80%”. That is a negotiation and the art of a compromise - you don’t get everything you want, but you are still (in this case) 80x better off than before (on the one hand) and (on the other hand) 70x saved compared to the original demand.

It seems that whenever these strategy documents (wish lists) are published by their proponents, joe public thinks that they are the base case - they are clearly not, they are a negotiating instrument and inevitably they will get watered down. Try to see these strategy docs in those terms and look at the positivity in the compromises that result (try to imagine the compromise was the starting point and then you will see what an achievement the compromise is!).

 

[yorksrob]

The treasury seems to be full of Beeching era throwbacks. It's time some of them were retired.

 

[Wolfie]

The treasury seems to be full of Beeching era throwbacks. It's time some of them were retired.

HMT isn't full of uber-train enthusiasts. Nor should it be

 

[yorksrob]

Two points, which argue each way on this:
a. Other European railways have found ways to borrow funds on their own account, without them scoring against central government's budget deficits. The UK has taken a much more formal line on this, a stance which goes back to MacMillan and mid-50s (I remember him, but not them!) when capital funds in the markets were very scarce (hint: post-war recovery!)
b. Please understand that, within government, it does seem that the cost overruns on Crossrail, GWEP and HS2 have set back the cause of rail investment very considerably. These have been hugely damaging, however good the rationalisation that TfL/NR/HS2 can provide about them. The Decarbonisation Strategy is just one of a number of things affected by this.

And all along we've been told that HS2 wouldn't affect investment in the bread and butter railway !

HMT isn't full of uber-train enthusiasts. Nor should it be

But it should be full of net zero carbon enthusiasts.

 

[Starmill]

But it should be full of net zero carbon enthusiasts.

Arguably the principal fault here lies with Sunak. He is a dangerous fiscal hawk with zero regard to climate change funding.

 

[Annetts key]

The treasury seems to be full of Beeching era throwbacks. It's time some of them were retired.

I think the reality is that government always wants to spend more money than it receives from taxes, because governments don’t normally want to raise taxes like income tax.

So there will always be a fight between different government departments, with the treasury trying to moderate. Often badly. As limiting a scheme purely by how much money is available often causes other problems, such as over optimistic cost forecasts (GWML electrification for example). Or poor value for money.

What we really need, is a consistent, and steady funding programme that is not liable to be cut in the next budget or when a government looses office. Then let the railways get on with investing in new infrastructure.

 

[Glenn1969]

Arguably the principal fault here lies with Sunak. He is a dangerous fiscal hawk with zero regard to climate change funding.

They are using short term figures as an excuse to make decisions that have long term effects

 

[Wapps]

Arguably the principal fault here lies with Sunak. He is a dangerous fiscal hawk with zero regard to climate change funding.

Genuinely, I don’t quite get this. Under Sunak, the Treasury has borrowed like no tomorrow and is putting up taxes (when many on the fiscal right are demanding tax cuts).

 

[Ken H]

They are using short term figures as an excuse to make decisions that have long term effects

why spend on something that will have no benefits before the next General Election? Thats how politicians think. Makes long term decisions on infrastructure difficult.

 

[irish_rail]

HMT isn't full of uber-train enthusiasts. Nor should it be

True, but, if it was we would probably have a decent fleet of comfortable intercity trains either with locos or power cars either end, not the 80x that wev been lumped with!

 

[RichJF]

What the Tory govt promises to appease & look good & what the Tory govt actually does are two massive different kettles of fish.

 

[LNW-GW Joint]

Remember the rail sector is still struggling with Crossrail completion and its damaging impact on TfL finances.
Every billion DfT spends on the Crossrail overrun (or TfL deficit) is a billion less for the wider railway.
Another TfL emergency funding agreement is due imminently.

 

[tbtc]

The treasury seems to be full of Beeching era throwbacks

The country has spent billions propping up the economy during Covid - tax revenues are down - the Government is in a tough financial position

It's apparently going to cost £78,000,000 to electrify just five miles of line from Lostock to Wigan (despite it being already electrified at both ends) - assuming it doesn't go over budget like the "main" line through Lostock was

Some people would say that it's reasonable for a Government to question why electrification costs are so high (especially when battery technology means that we could have trains using the electricity through Manchester meaning no pollution in the city centre)

Not @yorksrob though, he's found a conspiracy, where the Government is run by Beeching throwbacks - it couldn't just be because the railway industry has made even modest schemes unaffordable as far as politicians are concerned - no - the blame must lie with the Government...

it should be full of net zero carbon enthusiasts.

Kiss goodbye to a lot of branch lines then (where it'd be better for the environment if every passenger went in a taxi than a DMU chugging along at a couple of miles to the gallon)

Is that what you want?

Because that's what'll happen...

 

[Starmill]

Genuinely, I don’t quite get this. Under Sunak, the Treasury has borrowed like no tomorrow and is putting up taxes (when many on the fiscal right are demanding tax cuts).

But he hasn't borrowed anything close to the amount that the market was willing to bear, while leaving many of his departments starved of cash. Look at the state of the judicial system or the number of arts venues, charities or music festivals and other large gatherings which have suffered. Look at the pathetic failure of our renewable energy market or our failure to build new homes, regenerate town centres, tax large bullying multinationals, or, of course, invest in the infrastructure which provides our transport services.

We could go on and on about this all day but the level of borrowing relative to the size of the economy isn't high, and the pandemic support has been mediocre. Just because it's £billions, doesn't mean it's a lot of money.

 

[yorksrob]

The country has spent billions propping up the economy during Covid - tax revenues are down - the Government is in a tough financial position

It's apparently going to cost £78,000,000 to electrify just five miles of line from Lostock to Wigan (despite it being already electrified at both ends) - assuming it doesn't go over budget like the "main" line through Lostock was

Some people would say that it's reasonable for a Government to question why electrification costs are so high (especially when battery technology means that we could have trains using the electricity through Manchester meaning no pollution in the city centre)

Not @yorksrob though, he's found a conspiracy, where the Government is run by Beeching throwbacks - it couldn't just be because the railway industry has made even modest schemes unaffordable as far as politicians are concerned - no - the blame must lie with the Government...



Kiss goodbye to a lot of branch lines then (where it'd be better for the environment if every passenger went in a taxi than a DMU chugging along at a couple of miles to the gallon)

Is that what you want?

Because that's what'll happen...

Electrification schemes weren't unaffordable before that privatisation that you're always so keen to defend at every opportunity, were they !

 

[Starmill]

It's apparently going to cost £78,000,000 to electrify just five miles of line from Lostock to Wigan (despite it being already electrified at both ends) - assuming it doesn't go over budget like the "main" line through Lostock was

To be fair that project does include platform extensions, step free access and a few other things, not just electrification. But yes.

 

[01d-and]

Will this mean that the "activists" will now focus their "protests" on rail as well as road ??

 

[tbtc]

Electrification schemes weren't unaffordable before that privatisation that you're always so keen to defend at every opportunity, were they !

You do know that Network Rail (the people who do the electrification) has been public sector for many years, right?

And that the Government controlls the railways?

But the fact that the Government cannot get the public sector Network Rail to deliver electrification at a lower price is... erm... the fault of privatisation?

I want more electrification - but given how much it currently costs, I can't blame any Government for being reluctant to get the chequebook out - we should focus more on the reasons why it costs so much rather than blaming the Government for not spending billions on more schemes - if it costs fifteen million pounds to wire up one mile of (double track) railway then there are a lot of other things that we could be spending that money on - focus your ire on the reason that the public sector Network Rail cannot do it for less money if you want

To be fair that project does include platform extensions, step free access and a few other things, not just electrification. But yes.

Fair point - but I suppose that a lot of electrification projects tend to see scope creep like this (especially as EMUs can be longer than DMUs, so a platform that has accommodated Sprinters for decades needs money spending on it to accommodate four coach EMUs)

I'd love more electrification, but the cost of this relatively short scheme is enough to make me defend Sunak's parsimony (which is not a side of the fence that I'd normally be on!)

 

[LNW-GW Joint]

Electrification schemes weren't unaffordable before that privatisation that you're always so keen to defend at every opportunity, were they !

It's got very little to do with privatisation.
BR contracted out electrification (eg ECML) to people like Balfour Beatty, as Network Rail does today.
The difference is in standards (construction and electrical as well as railway), and in the stop/go pattern of contracts and where the financial risk lies.
Much of BR's electrification expertise also migrated to contractors to work overseas when UK work dried up.
The CP5 projects reversed some of that, but labour costs have increased considerably.

 

[6Gman]

Equally you still have to pay back the money - doesn't matter whether it's bonds, gilts or whatever. So unless the borrowing is going to result in higher economic activity to cover it, which is the basis on which most such borrowing is made, undertaking such borrowing is a cost and therefore a drain on the public finances.

With long-dated bonds or gilts the cost of paying back can (almost) be inflated away.

So, unless inflation ceases to be a thing (which seems unlikely), the eventual cost is low.

 

[Ken H]

It's got very little to do with privatisation.
BR contracted out electrification (eg ECML) to people like Balfour Beatty, as Network Rail does today.
The difference is in standards (construction and electrical as well as railway), and in the stop/go pattern of contracts and where the financial risk lies.
Much of BR's electrification expertise also migrated to contractors to work overseas when UK work dried up.
The CP5 projects reversed some of that, but labour costs have increased considerably.

It actually has.

TOC's need to be compensated for disruption to their services. God knows how much TPE/Northern are getting for Vic-Stalybridge, and Church Fenton - Colton Jct. I bet it aint cheap.

The very TOC's that will get the benefit from the electrification.

 

[Starmill]

Fair point - but I suppose that a lot of electrification projects tend to see scope creep like this (especially as EMUs can be longer than DMUs, so a platform that has accommodated Sprinters for decades needs money spending on it to accommodate four coach EMUs)

I'd love more electrification, but the cost of this relatively short scheme is enough to make me defend Sunak's parsimony (which is not a side of the fence that I'd normally be on!)

It's almost inevitable unfortunately that electrification gets packaged up with other enhancement work because, surprise surprise, it's better value for money.

It's just unfortunate that there's a critical mass of resignalling, step free access and platform extension work to do if we actually want a modern, reliable, accessible railway.

 

[mr_jrt]

This myth that QE is a magic bullet of free money is perpetuated by people like you who don't understand basic economics.

My, you really don't like being challenged, do you? I never said it was free money, I merely pointed out it was not finite. I would suggest that someone who thought it was was the one who didn't understand basic economics, perhaps wilfully due to their particular brand of political dogma.

 

[Ken H]

It's almost inevitable unfortunately that electrification gets packaged up with other enhancement work because, surprise surprise, it's better value for money.

It's just unfortunate that there's a critical mass of resignalling, step free access and platform extension work to do if we actually want a modern, reliable, accessible railway.

Then that scope creep should be costed and funded separately. Tweaking signalling to make it work with electrification is an electrification cost. Wholesale resignalling certainly isnt.

 

[furnessvale]

Doesn't surprise me. It's sad really but let's be honest, what the UK does won't really have any effect globally.

I would like to see hybrid battery diesel (with adblue systems and maybe running biofuels) ordered to replace the 150/3/6 fleets (with AC options where necessary) as there will be a lot of more rural lines where full electrification won't reach.

No need for expensive adblue systems. Road haulage is managing very nicely using cheat devices called emulators.

 

[Wolfie]

The country has spent billions propping up the economy during Covid - tax revenues are down - the Government is in a tough financial position

It's apparently going to cost £78,000,000 to electrify just five miles of line from Lostock to Wigan (despite it being already electrified at both ends) - assuming it doesn't go over budget like the "main" line through Lostock was

Some people would say that it's reasonable for a Government to question why electrification costs are so high (especially when battery technology means that we could have trains using the electricity through Manchester meaning no pollution in the city centre)

Not @yorksrob though, he's found a conspiracy, where the Government is run by Beeching throwbacks - it couldn't just be because the railway industry has made even modest schemes unaffordable as far as politicians are concerned - no - the blame must lie with the Government...



Kiss goodbye to a lot of branch lines then (where it'd be better for the environment if every passenger went in a taxi than a DMU chugging along at a couple of miles to the gallon)

Is that what you want?

Because that's what'll happen...

A quality post.

 

[squizzler]

Given the original story being on the Telegraph and not aware of it being corroborated by other sources, I wonder if the paper received briefing against the chancellor to damage his prospects of a leadership bid? Everyone it seems is trying to get their ducks in a line in case the prime minister is forced to resign.

After all, nothing quite says "levelling up" more than cancelling electrification which by definition will go to the regions because the Home Counties all got theirs generations ago.

 

[Mike Machin]

With the huge strides being made in BEV technology for road transport, I would imagine that most of the remaining non-electrified routes could be closed over the next 20 years or so, bringing enormous financial benefits for the treasury and much greener more sustainable transport.

 

[JonathanH]

Electrification schemes weren't unaffordable before that privatisation that you're always so keen to defend at every opportunity, were they !

They were very much managed down to a price though. The ECML wasn't electrified from Leeds to York, the wires between Newcastle and Edinburgh aren't very good in windy conditions. Other lines could have been electrified in BR days and weren't, almost certainly because the costs weren't affordable.

But it should be full of net zero carbon enthusiasts.

A true net zero carbon enthusiast would generally look to people living a much more basic subsistence than most people would be happy to accept.

 

[yorksrob]

They were very much managed down to a price though. The ECML wasn't electrified from Leeds to York, the wires between Newcastle and Edinburgh aren't very good in windy conditions. Other lines could have been electrified in BR days and weren't, almost certainly because the costs weren't affordable.


A true net zero carbon enthusiast would generally look to people living a much more basic subsistence than most people would be happy to accept.

The ECML is an interesting issue. It seems to have gotten worse in recent decades so whether it is a combination of poorer maintenance, natural life expiry and increased incidence of severe weather that is beginning to show.

Nevertheless, it got quite a lot of electrification done, much more than the twenty years after privatisation, by which time the expertise had dissipated. Someone concerned with carbon emissions woulfd prefer an approach of managed down electrification to total inertia.

I see your point about true net zero, but a huge fall in living standards isn't desirable either.