The BBC's wingeathon on low-cost airlines is a tour de force of wrong thinking.

I knew there was going to be trouble when I read:

It seems that passengers on budget airlines are starting to stand up for their rights.

Of course, what this line is trying to imply is that we, as passengers, have some sort of rights over and above the contract into which we have freely entered. And, of course, as these rights are not going to materialize in a free market therefore we need government to impose them. To hell with freedom of choice. No matter that it will put up the prices and deny many the opportunity to fly. Never mind that it will stifle competition and hence invention.

It also appears that there is no lack of passengers who seem to want something for nothing and kick up no end of a fuss when they don't get it.

The article goes on:

However, some of those involved in the sit-in [of EasyJet passengers in Nice on the aircraft having been asked to leave to make way for passengers on another flight] had paid hundreds of pounds to fly from Nice to Luton, a fare many holidaymakers will match this summer when booking with the budget carriers.

We then come to:

Pietrasik [Guardian Travel Editor] expects the low-cost carriers will eventually agree to a passenger charter to offer customers a better service, especially as this sector of the market is booming.

I can't help feeling that underlying all of this is a tremendous resentment of these low-cost, sorry no frills, flexible fares (NFFF anybody?) airlines and the buccaneering, entrepreneurial spirit that they embody.

Then we get:

BBC News Online reader Paolo complains that now Ryanair has a monopoly on direct flights to Turin, a weekend return ticket has tripled in price.

And finally:

And Lawrence, a British expat living in Frankfurt, says not only have the no-frills airlines ratcheted up their prices as routes get more popular, passengers are stung for extra charges for overweight bags or checking in late.

The story "Toll could end nine-to-five day" in the Evening Standard causes me to make a number of observations:

Firstly, isn't it good that employers are considering greater flexibility and at least thinking about ridding themselves of the 9 to 5 fixation?

Secondly, didn't I say something similar in my piece about greater rail fare flexibility? Er...actually no. I said it in the press release (see the LA web site)

Thirdly, it is a shame that the full potential of congestion charging will not be realised. There is no reduction after 10am. Does the rush hour really start a 7am? Is £5 really such a deterrent to driving?

Fourthly, if people are flexible about when they travel we could actually see more people working in Central London not fewer.

Fifthly, our ancestors were well aware of this. Before 1952, there were such things as Workman's Fares on the railways: earlier travel at a cheaper rate.

Sixthly, apparently the Japanese are well aware of this. The rush hour there lasts three hours though how you decide exactly when you are going to travel I don't know.

Seventhly, do I really believe this? As I said earlier, £5 is not much of a deterrent. Only 30% of firms are considering a change, which means that 70% aren't. And how many of those considering change actually will. I suspect that there are all sorts of advantages in having all members of staff working the same hours.

I have added an addendum to my piece on Libertarian Pollution Control in which I outline some of the advantages of the compensation-through-the-courts approach.

There's a new kid on the Blog. Peter Cuthbertson of Conservative Commentary. He's certainly very conservative but he's well worth a read.

News Stories

Easyjet passengers stage sit-in
Nats deal in further scrutiny
Police want roadside eye tests

A couple of weeks ago I wrote: "the [Channel] tunnel has cost the (British) taxpayer next to nothing. All those who have lost money have been volunteers."

This did not please one correspondent who wrote in to tick me off. Surely, billions had been spent on it? This forced me to go and do some research. Strictly speaking I was right. The Channel Tunnel was built without a penny of taxpayers money. Indeed, that was a condition written into the treaty that made the tunnel possible in the first place.

But that is not the full story. Although the tunnel didn't cost the taxpayer, everything else did. There is a high-speed rail link in France and soon to be one in England. The Eurostars (including the Regional Eurostars and Night Stock) cost a fortune. So, it's not quite the great victory for private enterprise that I would like to claim. I wonder to what extent the building of the Tunnel depended on the knowledge that these other goodies would become available.

My correspondent also objects to my use of the term "volunteers" to describe those who have lost money. After all, most of us have bank accounts and pension funds and it is not that easy to avoid one that has some exposure to Eurotunnel's debts.

When I used the term I meant volunteer in the sense "no force applied" as opposed to "was specifically given the option". It's a bit like soldiers who volunteer for the army but are then "forced" to make good on the contract when a war breaks out. Having said that, investors did have the option to bail out. It may have been inconvenient but nevertheless it did exist. Even so, it strikes me as far better to have this sort of arrangement than taxation where if you don't pay the state threatens to send the boys round.

As in "Governments are charged with a difficult responsibility of balancing economic development against environmental damage." Evening Standard 26 July 2002

My objection to the use of the word "environment" is not so much that it is inaccurate, but that it is used to mean so many different things that perhaps ought to be considered separately.

For instance, if I build a new airport runway then I impose a cost on all sorts of different people in all sorts of different ways. A scenic view might be lost. The runway means more flights which means more noise pollution. More flights might also mean greater damage to the ozone layer and the emission of more greenhouse gases [Warning: I am extremely sceptical about both these scares]. More flights means more passengers which means greater strain on road and rail facilities. If the runway has been built with compulsory purchase powers then that (probably) means that owners have lost out. These losses are known to economists as "negative externalities".

My other general objection to the use of the term is the implied absolutism: that any damage is a bad thing and must be stopped. London has expanded vastly over the last two centuries. As I understand it, not so long ago, Oxford Street marked its northern boundary. Since then vast tracts of fields and woodlands have disappeared to make way for housing and other development. Do we really miss them? Would we really miss a whole new tract of countryside disappearing? Sure, it would be a bad thing if all fields and woods disappeared but somewhere there is a balance to be struck.

I saw this phrase in an article by Christian Wolmar in the Evening Standard:

Governments are charged with a difficult responsibility of balancing economic development against environmental damage. Labour seems to have forgotten completely about the second half of this equation.

I spotted this in the article on penalties for dangerous driving:

Drivers caught using mobile phones behind the wheel could be given points on their licence, under a clamp down on careless driving.

But the government has stopped short of making mobile phone use while driving a specific criminal offence.

I was slightly alarmed to read the following in an article on the village that will have to make way for the third runway at Heathrow:

"We all know how hard it will be if our homes are compulsory purchased. We will not get full value for them and as a result will not be able to buy anything similar unless we move miles away."

According to Antoine Clarke (of Samizdata fame) under compulsory purchase in France you get the value of your property plus 25%. It seems a pretty arbitrary number but it is whole load better than 0%. In the past Antoine has explained that this is one of the reasons why people in France don't kick up such a fuss about new developments. I think I'd up the premium to 50%. That would make it absolutely clear that the development was a good thing.

It's fascinating to note that whenever air traffic control is mentioned, as it today, the adjective "part-privatised" is always used. Why never "part-nationalised"?

Whatever, NATS, the air traffic control service, is losing money and the National Audit Office thinks its all the fault of "part-privatisation". Which is odd, because everyone knows, that it is losing money because of the general downturn in the industry since 11 September.

Which brings us on to the difference between real privatisation and pseudo-privatisation. Under a pseudo-privatisation, like this one, no one is allowed to go bust and so the taxpayer is obliged to keep on paying. Under real privatisation, NATS would go bust under unpayable debts and a new company would buy its assets at a more realistic price.

Many readers will remember that the Health and Safety Executive (HSE) published an interim report into the Potters Bar accident. It said that 20% of the points in the Potters Bar area had loose nuts. It also made all sorts of recommendations which led me to think that they didn't know what happened but I would be looking forward to their final conclusions.

In doing so, I assumed that the HSE knew what they were doing when they made the claim about the points. It appears they didn't. According to RAIL No.440 (no link, hard copy only) the only way you tell if a nut is loose or not is with a torque wrench. But the HSE's tests weren't carried out with a torque wrench - they were carried out with an adjustable spanner. There is no way they could have known if the nuts were tight enough.

If this is true there are two conclusions: either the HSE knowingly issued a false report or they are incompetent. Either way it is absolutely scandalous.

It gets worse. The HSE also claimed that it had found a duff set of points somewhere on the network and issued an "enforcement" order. But when journalists checked the story out they found that the set of points in question (at Wembley) had been locked out of use well before the HSE stuck its oar in.

The HSE has previous form on this. After the Hatfield crash, they issued a report where they managed to misidentify the vehicles involved. This was quite an achievement given that the numbers were all clearly marked on the outside of each vehicle. Readers may also remember that at the same time Railtrack bombarded the network with temporary speed restrictions (TSRs). What readers may not know is that although Railtrack could place a TSR it could not remove it. That was the job of the HSE (see Broken Rails by Christian Wolmar p12). The HSE dragged its heels in lifting TSRs so prolonging the post-Hatfield crisis.

If the HSE is found to be lying then the people responsible should be sacked. If it is found to be incompetent then it should be abolished, preferably without replacement.

The government looks like putting its weight behind plans to levy roll tolls via satellite. So what do I think?

I have to say, I am in two minds. I start from the libertarian standpoint, that government should get out of the roads business entirely. It shouldn't own roads, run them, regulate them or tax them. But what if it is in the roads business? What then?

Should I be advocating policies that will do the least amount of harm or should I hold my hands up in despair saying "it's all going to end in tears anyway so the sooner the better. No clues."?

The problem with taking the ideologically pure position is that although what the state does will be bad it may not lead to collapse. And even if it does lead to collapse that does not mean a free-market approach will be taken.

The problem with suggesting less damaging approaches is that the state will somehow contrive to screw it up and free-marketeers will get the blame - just look what happened with rail privatisation. A similar thing is likely to happen with congestion charging in London, though at least with Ken Livingstone in charge it is unlikely that the free market will get the blame.

There is another danger here. Although, a free market would lead to charging on many roads there are many others on which it wouldn't. One thinks particularly of residential streets and link roads to out of town shopping centres. This scheme is likely to charge for everything regardless which will cause enormous resentment - especially, if it isn't linked to a reduction in other forms of road taxation.

Another problem with this specific scheme is its reliance on new technology. The state has not exactly covered itself in glory in this field in recent years. Just look at EuroFighter. Only yesterday, the BBC trotted out a whole list of government IT failures. It could have mentioned many more. If the government is to encourage some form of road pricing, which, by and large, I support, it should keep the technology simple. That way there is less to go wrong and the principle can be applied at an earlier stage.

From the Radio 4 programme "On the Ropes":

"If you think safety's expensive try an accident."

"One accident can actually destroy the airline."

"Thank you for setting up EasyJet. You saved my sex life."

As in "The gamble is that with no shareholders, Network Rail should see more government subsidy end up being spent on upgrading the rail network and less on paying a return to investors", The Guardian 1/7/02

This is a line often used to justify nationalisation to which the response ought to be: "If nationalisation is so good why was the Soviet Union so bad?"

The assumptions underlying this fallacy are two-fold. First, that the private and state sectors spend money on the same things. Second, that the state spends it just as efficiently as the private sector.

For instance, on the point about where money gets spent, before privatisation Japan National Railways (JNR) spent a lot of money on new high-speed lines. After privatisation the JRs spent a lot of money on new trains and very little on new lines (see Railways in Japan - Public and Private Sectors p53).

Similarly, on the efficiency issue, the JRs made dramatic improvements post privatisation. Having said that they are still some 20% less efficient than the existing private railways (see Privatisation and Beyond - the JR Case p6).

There are very good reasons for these two phenomena. Private concerns spend money in a different way becauase they are chasing profits while state institutions are chasing votes. Private businesses are more efficient because if they are not they will make less money. State businesses do not have to be efficient because if they run out of money they can always go cap in hand to the Government.

As in the phrase "Privatisation [of British Rail] did not bring more efficient, more profitable railways", The Guardian 1/7/02. There is, of course, a grain of truth in this: British railways were privatised and were done so in the Railways Act 1993. What this misses is that a whole load of other things were done at the same time: the industry was fragmented - principally between wheel and rail, passenger services were franchised on a short-term basis, Railtrack (effectively) had its income set by the government, fare control was introduced and maintenance was forcibly contracted out.

What you can reasonably say is that one, or a combination of these factors created the problems we see today. What you cannot do is isolate one of them and put the blame on that without a whole bunch of evidence.

The point also needs to be made that privatisation emphatically does not mean fragmentation even if the two have tended to go hand in hand.

Having said that libertarians and our softer political allies have rather been hoist by our own petard. Because, by and large, privatisation has represented liberation from government we have tended to forget that it doesn't have to and have hence tended to support any privatisation. The great irony of rail privatisation is that the government ended up with more control of the railways, not less ie not what we (or should that be I?) wanted.

We are stuck for a word. Privatisation has been dicredited. Deregulation could equally well apply to a state industry. Getting-the-state-out-of-the-X-business is a bit clumsy. Any takers for "de-statification"?

Here a few articles that I have found while surfing the net:

Regional Eurostar Services - the Department of Transport's write up on what happened. Many years ago, people thought what a great idea it would be to run trains from places like Leeds and Birmingham through the Channel Tunnel to the Continent. They bought the trains (including sleeper stock) and then realised that this was stupid - flying was quicker and cheaper.

The Channel Tunnel Rail Link - another Department of Transport write up.

The Channel Tunnel Project - an assessment of how the project's finances went pear-shaped.

The Lost Promise of the American Railroad - a "standard" ie wrong, account of the decline of America's passenger railways.

Pioneer behind the road code - about the man who invented the Highway Code, the rules and guidelines of motoring in Britain. A small amount pointing out the nonsense of speed limits.

From Canal Lock to Gridlock - another "standard" history of Britain's railways. I hope to get around to a takedown one of these days

In the Evening Standard today there is an article about a new anti-airport pressure group, AirportWatch. They begin well, calling for an end to subsidies and tax breaks for the aviation industry. [Actually, I didn't know that there were any subsidies or tax breaks for the aviation industry, so I would be grateful if someone would enlighten me.]

But after a good start things rapidly go downhill with calls on the government to "promote alternatives to air travel such as high-speed rail lines." ie spend lots of taxpayers money, and "set environmental limits at airports and set up an independent body to oversee pollution control regimes on airport operations" ie create a new layer of bloated, inflexible bureaucracy. Ugh.

There seems to be a strain in libertarianism which believes that all environmental problems will eventually be solved by progress. I am not so sanguine. Although I have severe doubts about claims of the damage caused by carbon dioxide and CFCs I am happy to believe that in certain circumstances negative externalities exist. From personal experience I can say that Concorde flying directly overhead is just one such example.

So, how should negative externalities be dealt with? The best paper I can find on this is Max More's Libertarian Pollution Control. He points out that taxation is not the answer because the government doesn't know what the "right" amount is. We now know that not only does the government not tax by the right amount but the money never gets near the people actually affected. He also points out that private ownership is vital. His solution? Have it dealt with by the courts.

The compensation-through-the-courts approach would have many advantages. Firstly, it takes government out of the picture. Secondly, it would be reasonably predictable. Case law would give precedents to follow. You're operating more flights which are creating more noise? Fine. We know that 10,000 flights a year depress property values by £5,000. You're now operating 20,000 flights a year so that'll be an extra £5,000 compensation.

Of course, there are complications here. 20,000 flights might not actually be twice as bad as 10,000. They might be flying at different times, especially at night. The planes might be quieter. But all these sorts of things can be factored in a dealt with by the court. There will, of course, be unfairnesses, just fewer of them. There may be new information, but this, again, can be dealt with in a new court case.

Thirdly, it's quick. No public controversies, no public enquiries, no political agonising. That means development can take place a lot faster - and it's not just a big boys' game.

Fourthly, it provides a means for dealing with some of the global environmental controversies. You are a producer of CFCs are you? OK, well, this claimant here (and thousands like him) are claiming that that's going to destroy the Ozone layer, increasing the likelihood of contracting skin cancer, increasing their insurance premiums. So, here's the fine. Ah, but you've come up with new information that suggests that the hole in the Ozone layer isn't getting any bigger. OK, then, we'll reduce the fine. And so on and so forth. It's quick, it's flexible, it encapsulates most of the available information and it is reasonably just.

Over the past few weeks I have noticed some interesting sites out there:

Channel Tunnel Rail Link - official site - some interesting stats
Direct Link North - gobsmackingly funny. This organisation wants to build a TGV-style network across the country. This is, of course, a laudable aim until you look at the cost - £55bn - almost all of which will be coming from the taxpayer. The turnover of the entire UK rail industry is only some £3bn a year.
Streamliners - the site of the PBS programme on the Burlington Zephyr, which for those of you who don't know was a revolutionary, American diesel train built in the 1930s.
Association of British Drivers - people who (for the most part rightly) think that environmentalism is tosh, rightly think that new roads should be built, rightly think that speed limits should be raised but wrongly think that pricing is wrong. Oh, well you can't have it all. Generally speaking, an excellent and well-informed site.

A couple of months ago I suggested that the government was not being entirely fair in its dealings with Railtrack (see "Rail smash has buried bad news" and "More (potential) double standards"). Today, comes the news that Railtrack's successor, Network Rail, is likely to be showered with the very sums (if not greater) that Railtrack was denied.

The news that the government is considering removing rail fare controls has, in media parlance "raised fears" of a massive increase in prices.

For once, fear is the right word. Allowing railway companies the freedom to set their own fares does seem scary. The man waiting for the 0822 has to get to work. For him there is, to all intents and purposes, only way of getting to work - the train. There is no choice. Buying railway tickets is not like buying bars of chocolate.

So, there must be controls, right? Wrong. Fare controls are amongst the most damaging forms of regulation that governments can impose on a railway. Here, there were very few controls and very few complaints until the 1920s. London and its railways expanded in tandem bringing suburbia to the masses, all at an affordable price. In the 1920s the state imposed controls on freight charges. Railway profits went for a Burton. Then, during the Second World War, the government froze fares while inflation let rip. The railways emerged in a parlous state, in dire need of a major overhaul. During nationalisation fares were constantly being held down while the industry gradually declined. It is significant, that British Rail's happiest time was during the 1980s when it was allowed to increase fares more or less at will. Incidentally, the chief reason why Japanese trains are so overcrowded is, once again, state-imposed fare control.

But what of the man on the 0822? What's going to happen to him when he's left to the tender mercies of the market? Well, the bad news is that, intitially at least, his fares are going to go up. Quite a lot in fact.

The interesting thing is what happens next. If fares are high and are kept high and passengers see no improvement in service they will start to make different arrangements. Some will move to somehere near a cheaper railway. Others will change jobs to somewhere nearer where they live. Slowly but surely the railway will start to lose revenue.

At this point the market starts to come into its own. Sure, some railways will exhibit a couldn't-give-a-toss-attitude put up the fares, keep them high and do nothing in return but their profits will decline. But others will take an entirely different approach. They will use the price signal to improve quantity and quality. They will introduce lower fares for those travelling before the peak. They will introduce automatic fare reductions in cases of poor punctuality. They will increase capacity and they will spruce up stations (where they don't rebuild them). They will do this because higher fares will tell them that there is a market out there waiting to be satisfied and satisfied markets mean nice, fat pay cheques.

When fares are set free the man on the 0822 will see a step change in the quality of the service. It won't happen at once (railways are not like that) and it won't be without pain, but it will happen.

All from Railway Technical Web Pages:

Railway Finance
Wet, wet, wet - why trains are late in Autumn
UK Safety Cases - or why regulation is putting up the price of everything and not necessarily making anything any safer.

Up to and including 31 August 2002

I have just posted up a takedown of this ridiculous article over on UKT Extra. To summarize: lefties play fast and loose with the English language and tube trains are inherently safe.

Will Self, trendy London's trendiest writer is not without merit, even if very little. Any man who can (allegedly) take heroin on the Prime Minister's plane or propose that the police should sell drugs (I thought they already did) cannot be all bad. Just mainly.

It is in the above article that he justifies the "mainly". In it he tackles the situation on the Tube - something he knows little about - or to put it in civil service speak: he knows f*ck all about f*ck all. He says:

No one who's a regular and observant user of public transport in this city can fail to appreciate that private investment, plus decentralisation of line operating, is a recipe for potential safety disaster.

He then says:

It now emerges that Chinese whispers between Railtrack and the maintenance contractors Jarvis may well have been responsible for the Potters Bar disaster in which seven people died and many more were injured.

He goes on:

Yet, while no one doubts that these failures are a direct result of rail privatisation

He then excels himself:

Anyone over 40 who grew up in the city, will remember the horrors of the Moorgate train crash and the King's Cross fire.

Self then goes on to praise the proposed RMT strike. One can almost detect the strains of the Internationale floating in the background before he has one final side swipe:

It'll be an opportunity to contemplate the smoke-and-mirrors [Hang About - that's my phrase!] economics which lies behind all the Government's PPP plans, as they flog off British infrastructure to the corporate fat cats.

Not satisfied making a total fool of himself talking about railways, for an encore, Self starts talking about roads and the chaos at Vauxhall Cross. In doing so he slags off the urban planners who of course come under the state and that part run by his mate, Ken.

Most companies turn losses into profits by either increasing revenue or coming up with cheaper ways to do what they'd been doing previously. Not so Eurotunnel, the builder and operator of the Channel Tunnel. Eurotunnel gets it debtors to agree to a refinancing deal (also see graphic).

Not knowing much about such things I am guessing that this is the outturn of that old adage "If you owe £100 you're in trouble. If you owe £100 million, the bank's in trouble." The fact that some banks have been prepared to sell their debt at 43% of its face value would seem to bear this out. This may seem pretty tough but before you shed a tear for the banks spare a thought for the shareholders. As I understand it, they've lost far more.

But there is a silver lining to this cloud: the tunnel has cost the (British) taxpayer next to nothing. All those who have lost money have been volunteers.

Yesterday, I visited the offices of my local council to view their plans for one of the main roads in the area. The basic idea is to increase the number of lanes from one to two (yes, there is space), one of which is to be a dedicated bus lane. The council had said that a member of the Highways Department would be available to discuss the plans but even so I was pretty amazed when one showed up. I was even more amazed to find him personable, intelligent and on the ball.

I started by confirming that the primary aim of the project was to increase the flow of buses. Yes, he replied, by having a dedicated bus lane they would be able to move around faster and so increase their frequency. All well and good.

Then I asked him why they simply didn't put a toll on the road. That completely flummoxed him. "Er, well, it would be a nightmare." "Why?" "Err...Em... It's not on the agenda....Maybe in the future." I put that down as a "don't know".

Part of the plan was to introduce raised sections of road and double yellow lines (meaning no parking) at junctions. Now, personally speaking, I find sections of road raised to the same level as the adjacent pavement (US=sidewalk) extremely irritating. People get confused and I can't imagine it's any safer.

Mulling it over later I got confused. Is this part of the prevention vs punishment debate? Is it actually a good thing that as pedestrians we are allowed to kill ourselves? Would a private road owner be any better?

And what about those yellow lines? Surely, it is already illegal to park at junctions? Turns out it is. The problem is that the police don't enforce the law and traffic wardens can't issue tickets unless there is a yellow line there.

But the conversation got really interesting when we started talking about money. Richmond-upon-Thames is one of the richest areas in the country. Its roads budget is £1.5m a year. But of that, £1.4m is in the form of ring-fenced grants. So that leaves only £100,000 to actually spend on maintaining roads. The rest can only be spent on schemes like this one, which incidentally will cost £500,000.

I also discovered that when it comes to road maintenance a stich in time really does save nine. If you make sure that the road surface is kept in good condition then your road will give you many years of good service. However, if you allow the surface to deteriorate then the sub-surface is exposed to the elements you get potholes and the bills get very big indeed.

So, it is not difficult to see why we are getting a whole bunch of bus lanes and raised road sections when the rest of the road network is disintegrating.

What should be done about airline seats? As this BBC article demonstrates it is clearly becoming an issue. Some passengers are too fat, some too tall and some die of deep vein thrombosis. I should point out right at the beginning that when I say "should be done" I do not intend that it should be the state doing the doing. But what are the options open to airlines?

Well, they could offer everyone a nice, large seat with plenty of legroom. But that would mean taking seats out and therefore putting up the prices. Seeing as most ordinary seats are (just about) acceptable to most ordinary people any airline that did this would find itself at an immediate competitive disadvantage. Mind you, removing seats was the subject of a whole American Airlines advertising campaign so it may not necessarily be the case.

They could take out the odd row of three and replace them with rows of two. They could also offer rows of seats with more legroom. Come to think of it BA is already doing this. I think they call it World Traveller Plus. The customer gets an extra 7" over the standard 26". But the cost is enormous. WTP costs well in excess of twice the standard fare. Why? Why, for that matter does Business Class cost so much more? Beats me, but I assume there is a good business reason for so doing. The point is that larger Economy Class seats would have a tendency to depress Business Class revenues.

[Massive aside here but in the 1870s the Midland Railway abolished Second Class. Actually, it abolished Third Class seating and First Class fares. So, for a Third Class fare you got a Second Class seat and for a Second Class fare you got a First Class seat. For some reason it appears the sums added up.]

Actually, this may not be such an irrelevant aside. People's desires change over time. Not so long ago they were delighted just to be able to fly but now, in a richer age, they want more. I suspect that this was just what was happening in the 1870s: the poor were getting richer and to keep hold of their custom railway companies were having to improve their travelling conditions so much so that in the end there was almost no difference between Third and Second Class. The big difference is that on aeroplanes the issue is one of space which was not the primary issue on the railways.

It may be that left to its own devices the market will solve the problem. But, of course, these days markets are not left to their own devices. Right now, at an airline near you the following conversation could be taking place:

"Why don't we increase seat sizes?"

"Because, the government is thinking of introducing some new regulations."

"How does that affect us?"

"Because, if we go ahead and change all our seats we could find they're too small and have to replace them again."

"Oh. And if they're too big?"

"Then with the new regulations, everyone will assume that the problem has been solved and we'll lose any competitive advantage we might have had."

"So, we're better off waiting for the government?"

"Precisely"

So, the change will be late, you won't have a choice and the state will take the credit.

Yesterday morning I happened to catch EasyJet's Stelios Haji-Iaonnou (don't ask me how to pronounce it) being interviewed by John Humphreys on the Radio 4 programme "On the Ropes".

"On the Ropes" is dedicated to interviews with people who have been in deep doo-doo which is hardly a category which I would have put Stelios in. Taking on British Airways at their own game and beating them sounds like success to me.

Humphreys couldn't quite decide what the tone of the interview was going to be. On the one hand, Stelios is a capitalist and therefore evil. On the other hand he has created a business which has transformed the way we travel and he does have considerable charm. So, he escaped with a light roasting.

Humphreys asked him about the manslaughter charges. Before be founded EasyJet Stelios ran a shipping line. One of the ships blew up and five crewmen were killed. The Italian authorities prosecuted him for manslaughter. Humphreys probed and Stelios weaved: "It was the worst day of my life..."; "You have to understand the context...". It didn't sound convincing. Had it been me I think I would have said: "I thought in England a man was presumed innocent until proved guilty. Or is that old hat?" and left it at that.

The interview then moved onto the EasyJet story. Stelios said surprisingly little though I was glad to hear him say something like: "Safety isn't just good for customers it is good for the bottom line." This is something that businessmen need to hammer home. Actually, they need to buy the hammer and nails first. It is all very well saying that safety is important but the public at large know perfectly well that a business's primary purpose is to make money. Businessmen will always be vulnerable to the charge that they put "profits before safety" and hence vulnerable to intrusive legislation until they convincingly demonstrate that safety is good for profits.

But I digress. There was a short section on the EasyJet way: one class of seat, quick turnaround, no refunds, no meals, cheap airports. The charge that there was some financial chicanery involved was brought up. Stelios replied that the economics was not rocket science. I suppose the proof of the pudding is that EasyJet has raised the money to buy Go - but why didn't he say it?

The last section (and, yes, I know this is miles from UKT's brief) was all about EasyEverything the internet cafe business. I was surprised to hear that it hadn't been a success because whenever I pass one it looks well turned out and packed with people. Stelios remarked that he hadn't given it the attention it deserved and that the very name - EasyEverything - betrayed its lack of focus.

Following my piece on the foundation of Amtrak I received an e-mail from Stephen Karlson of the University of Northern Illinois:

Getting to the most shocking news first ... yes, deregulation of domestic air fares and freight transport began during the Carter administration. Ralph Nader's organization was rather vocal in branding the Interstate Commerce Commission a cartel manager -- as was University of Chicago graduate and transport historian Professor George Hilton. Senator Edward Kennedy was a major advocate of deregulating the airlines, and economics Professor Alfred Kahn as chairman of the Civil Aeronautics Board encouraged price cutting and all sorts of price policies. (President Carter rewarded him for his success in deregulation by naming him inflation tsar.)

"Trains" has been a long-time critic of passenger train policy. And yes, it was bizarre. For example, the Interstate Commerce Commission allowed The Milwaukee Road to discontinue the Pioneer Limited (think a Midwestern version of the Night Scot), a full-service train connecting Chicago with Minneapolis while requiring continued operation of local trains 55 and 58, one-coach all-stoppers on the same route with very little ridership, inconvenient departure times, and no parcels traffic to speak of.

Amtrak's arrival marked the discontinuance of over half of the passenger train service remaining in the States at 1970-1971. Since then, it has made marginal improvements in running times and frequency in the Northeast, but elsewhere, trains are slower and less frequent now than they were immediately after World War II ended.

The Interstate Commerce Commission is one of the first agencies set up to regulate transportation rates. The short form of price and service regulation is this: it has a legal foundation in English common law (look for Lord Chief Justice Hale's De Portius Maribus -- sorry if I've mangled the Latin) and the Supreme Court here held in 1877 that "property becomes clothed with a public interest when it is used in such a way as to affect the public at large" (that ruling applied to fees charged for the storage of grain at the port of Chicago). The idea of independent commissions regulating rates caught on both in individual States and with the federal Congress. In 1887 Congress passed "An Act to Regulate Commerce" creating the Interstate Commerce Commission with powers to regulate rates, entry, exit, and other changes in service. Hilton claimed in an article in "Trains" that the purpose of the Commission was to stabilize cartels thatthe railroad managements couldn't stabilize on their own. Some of the subsequent amendments such as banning rebates (ostensibly aimed at Standard Oil and other large shippers) and setting up rate bureaus (also ostensibly to protect railroads against large shippers holding-up the railroads), and the extension of Commission authority to motor trucks and inland barges during the Great Depression certainly look like cartel management. During the massacre of passenger trains in the late 1960s,the Commission frequently allowed railroads to discontinue full service trains but required the continued operation of accommodation trains, often citing the additional stops the latter made (never mind at odd times).Another Amtrak 'reform' was eliminating some of the stops made by the remaining full service trains!

Airline regulation operated in much the same way. You may recall the meeting of the International Air Transport Association to define a sandwich, when the Scandinavian carriers started putting lots of edible food on large loaves of bread because they couldn't cut prices. Most ofthe Civil Aeronautics Board orders established minimum fares, most of their route allocations involved ensuring that each carrier had its share of lucrative routes so as to support its share of dogs (required, no doubt, by the public interest.) There was also a hearing to determine that coach passengers had to pay US $1 (in those days a small fraction of the pound) to rent a headset to listen to the movie. (Hilton lays out the general principle for such behavior in an article called "The Basic Behavior of Regulatory Commissions" that appeared in the American Economic Review Proceedings long ago.)

And yes, Senator Kennedy was instrumental in deregulating both surface and air transportation. I believe he was the Senate sponsor of the Staggers Act freeing railroading. Representative Staggers was an unlikely sponsor in the House: he chaired the Transportation Subcommittee, and to appease him Amtrak operated an experimental Turbotrain (not at all like the Oxford Local) from Washington, DC into West Virginia.

I recently mentioned proposals from the Institute of Directors, IoD, to shut down large parts of the UK rail network. In the most recent edition of RAIL magazine these proposals were heavily criticised by two pressure groups. In a rage I dashed off a letter:

The claim that subsidised railways represent "value for money" cannot be allowed to pass unchallenged. Even on the fairly limited basis that TR∈ and ACoRP work on I find it difficult to see how they reach this conclusion. When one takes into account the amount of tax that could be spent elsewhere, on other forms of human happiness, it becomes impossible.

Not to put too fine a point on it: subsidy has been a disaster for the rail industry. Of course, it sounds great because in theory it means that the industry can keep branch lines open and build high-speed lines to the Continent. But in practice it undermines good management, commercial practice and long-term planning.

Had British Rail not been in receipt of subsidy the solution would have been simple: privatise it lock, stock and barrel. It would then have been able to take its place alongside the many efficient and effective private railways in Japan and the US.

But BR was subsidised. Before, pseudo-privatisation things were bad enough with a largely directionless BR trying to do everything on the cheap ever fearful of the next round of spending cuts.

After pseudo-privatisation the government needed some way of getting the money into the industry without being fleeced by monopoly suppliers. The result was franchising and the accompanying disasters of the wheel/rail split, track access charges and short-termism. And it still got fleeced.

In Japan decades of private ownership have allowed railways to plan for the long-term and develop engineering-led safety, maintenance and train systems that put us to shame. I would go as far to say that had we adopted the Japanese approach and with the input of British flair by now it would be the Japanese coming here on study trips and not the other way round.

Having proved that everyone would be better off under real congestion charging ie privatisation, I now find that there would in fact be some real losers. Though anyone who finds that his house has declined in value from £275,000 to £225,000 can hardly claim to be swelling the ranks of the poor.

I have every sympathy with these people. I think if I were faced with a loss of £50,000, I might find reasons to block the highway. These people have bought property on the understanding that they (or a future buyer) would be able to drive to Central London for free. Now, they find that the rules have changed. Of course, what ought to happen is that they receive compensation - but that is not in the nature of modern government.

Having said that, I don't have much time for the chap who complains about it costing £5 to go to the doctor's. If you think £5 is too much to pay then there can't be that much wrong with you.

The news that Transport for London is filling in bus lay-bys (I didn't know that such things existed in London) raises some interesting questions about how buses and cars (and vans and lorries) might rub along if roads were ever privatised.

The problem is that buses stop, other vehicles don't. If buses stop on the highway they cause congestion to other road users. When I used to drive in Central London one of my greatest fears was finding myself trapped behind a stationery bus picking up a whole bunch of passengers and not being able to move out into neighbouring lane.

On the other hand, if buses have lay-bys it is they that can't get out. Indeed, under private roads and hence (I assume) faster moving traffic the problem could get far worse. You'd have to have a special set of traffic lights to stop the traffic and let the bus out.

This kind of problem has a parallel on the railways. There is currently one hell of a dispute on the West Coast Main line between Virgin (the Inter-City operator), commuter operators (like Silverlink) and freight operators (like Freightliner). Virgin want to operate trains at a maximum speed of 140mph. But to do that the train needs a clear path in front of it. Put a commuter train there (maximum speed 100mph) which also stops or a freight train (maximum speed 90mph, I think) and reliable, high-speed operation becomes impossible.

In Japan they built their Shinkansen lines to a different gauge from the rest of the network precisely because it made it impossible for other types of trains to use it.

All other things being equal I suspect that we would see one or other type of transport system dominating. Or we could see a stark division between bus road and non-bus roads. Who knows, we might even see specialised bicyle roads.

At the end of the day money will do the talking. If so, I think buses will win out. It is one of the great ironies that as car use increased in Central London, so the number of people entering Central London by road fell: blocked by cars buses became slower and less reliable. Buses, quite simply, can move more people and more people means more money.

This is actually a rather good article from the "wrong" side of the congestion charging debate (and, indeed, from some time ago). The central charge is that congestion charging is good for the rich and bad for the poor.

In making my reply I have to make one important caveat - I am not defending Ken's scheme but the principle of private Central London roads and the expectation that these would include some form of charging.

But is charging good for the rich and bad for the poor? Well, it is certainly good for the rich. Your average magnate is likely to be completely unfazed by charging and be delighted that he now get around London in his Rolls that much more easily.

But what of the less well off? After all, if charging is to work, it does have to remove some people from the road, at least at peak time. Or rather, it has to remove their cars. And these people are likely to be the less well off drivers.

[Actually, I am far from sure that less well-off drivers can really be described as part of the less well-off. The mere fact that you earn less than the average driver does not mean that you earn less than the average person. In fact the really less well-off travel by bus which I will come to. But I digress]

So, certainly in the first instance the less well-off driver will suffer.

But what of the bus passenger? This could be very interesting. Buses will almost certainly pay the charge. After all, they are taking a lot of money in via fares. An immediate advantage to bus companies is that with less congestion and more importantly, a predictable level of congestion, buses not only become faster but more punctual. So more people will want to hop on the bus. And because more people want to use them, that means that the fare need not necessarily increase.

If you notice there is a complement between those people who are forced off the road and the new desirability of buses. In the short-term there is likely to be a capacity restraint ie not enough buses, so fares will rise, at least in the peak. But in the long term more buses will be bought leading to a decline in fares. At least on ordinary buses. But there is also likely to be a market for higher class buses: ones that are more comfortable, more secure and ones which you can plug your laptop into.

Sadly, all this is of very little use to white-van man. The bus in no use to him as he needs the storage capacity of his van whether he works as a deliveryman or as some form of builder. He has a choice: either put up his charges or leave the city.

But even here I suspect there will be a complementary change. After all, who is he charging if not homeowners and shops? Increased charges for having kitchens redone will lead some to decide that it just isn't worth living in the central zone and move out. Which is good because that is exactly where their tradesmen will now be.

But what would happen to shops? Sure their costs have gone up but look at their customers. Buses can move far more people around than cars. So there are likely to be more customers. So more revenue. So shops may find that the effect is broadly-speaking neutral.

Having said all this, it is important to remember that there will be time lags while people get used to the new system, for that matter, while road owners work out how to charge. And while there are time lags there will be a certain amount of pain. But in the long run just about everyone (and not just the rich) will be better off.

Yesterday, I wrote a nice long piece on the HSE's Interim Report posted it up and deleted the original. But Blogger managed to lose it. Drat. Anyway, my main point was the the HSE do not seem to know what happened and that it is far too early to start speculating on the systemic cause far less the political/economic cause.

Brian's piece on whether moving around is all it's cracked up to be certainly raises some interesting points. Having said that personal experiences and anecdotal evidence suggests to me that travel will be with us for some time to come.

On more than one occasion now I have worked on IT projects abroad. Now, if any outfit was well-placed to explore the potential of tele-working then it would be a software house. They tend to have people who want to see what they can do with the technology and users who are able to learn how to use it. And yet what did I find? That personal contact was vital. Why, I don't know, but as soon as I or part of the team moved out of physical contact with the rest of the team, chaos ensued. Suddenly, checking the most minor fact or asking the simplest question took ages as e-mail or telephone communication ground to a halt under the weight of delays and minor misunderstandings.

I once asked someone who did tele-work (this would have been in the mid-1990s) how he found it. He seemed to think he was about 80% there but he still wanted to get into the office at least once a week.

For what it is worth I think meet space will be with us for a while yet.

Yesterday, the HSE published its interim report into the Potters Bar Crash. I haven't yet had the chance to read the reports but I hope to get something up today (Henman-Hewitt) willing.

This is just the sort of thing that happens on state-run anythings. And the guy thinks it's just a plain, old, ordinary mistake.

The headline says: "New rail crash investigator". The text says:

Mr Darling said the body would be an independent railway investigator whose sole focus would be to establish the causes of accidents and to "learn lessons".

After I'd posted that piece on Walter Block's views on roads I decided to have a further hunt around the Ludvig von Mises Institute to see what I could find. Rather a lot as it happened. A brief search unearthed two more papers by Block and a couple by Gregory Bresiger. Here's the list:

Financial Train Wrecks Ahead, Gregory Bresiger, The Free Market, Volume 20, Number 3, March 2002 - the scandal that is Amtrak

Sell The Subways, Gregory Bresiger, The Free Market, Volume 16, Number 9, August 1998 - on how big government and the unions wrecked New York's subway

Supercar, Superscam, Eric Peters, The Free Market, Volume 15, Number 8, August 1997 - Why attempts at producing fuel-efficient cars are costing tax payers a fortune

Free Market Transportation: Denationalizing the roads, Walter Block, Journal of Libertarian Studies, Vol 3, No.2 - Excellent article on how a free market in roads would actually work. Not sure I'm so optimistic about road safety though.

Public Goods and Externalities: the case of roads, Walter Block, Journal of Libertarian Studies, Vol 7, No.3, Spring 1983 - Another excellent article from Block. Especially good is his examination of the externalities of infrastructure projects - something that has exercised my mind from time to time. His solution? Let the developer buy up the surrounding land.

Management versus Ownership: The Road-Privatization Debate, Carnis, Laurent ; The Quarterly Journal Of Austrian Economics Vol. 4, No. 2 (Summer 2001)

The Characteristic Features of Monopoly Prices, Ludwig von Mises, The Quarterly Journal Of Austrian Economics Vol. 1, No. 2 (Summer 1998) - not sure if this will prove relevant or not but monopoly prices are a feature of railways.

In my surfing I also came across Public Purpose which is run by a chap called Wendell Cox who sits on the Amtrak Reform Council. He has plenty of sensible things to say especially on how the lower density of US cities makes trams and commuter railways redundant.

Many libertarians will be familiar with Walter Block's work and especially the trenchant "Defending the Undefendable". What they may be less familiar with is his work on road pricing called remarkably enough "Congestion and Road Pricing" published by the Journal of Libertarian Studies. This is an excellent theoretical paper especially since it nails the myth that congestion is not a problem.

For some time a couple of things have been bothering me. The first is I have a number of frequently updated pages (eg the Index, Cuttings File etc) that are getting difficult to keep up to date because they are buried in the archives. The second is that I want to publish some longer articles but they don't really fit into the one paragraph or less ethos of standard blogging.

So, I've decided to set up UK Transport Extra which will provide a home for these types of post.

So they're going to crack down on people who cycle on the pavement are they? Fat chance. The report itself admits that they've tried in the past and failed. What I found really galling was a quote from the London Cycling Campaign:

"We would never support anyone cycling recklessly on pavements, but in London it is almost impossible to avoid cycling on pavements at times because of obstructive and inconsiderate car drivers who clog up the roads and block the paths of cyclists."