How Whitehall's Death Eaters did for the Midland Mainline

As politics go, the decision to “pause” the electrification of the Midland Mainline is miserably, yet predictably, shabby.

It’s pretty obvious the government knew the problems with Network Rail’s budget were going to come to a head before the election. The final announcement last week was also anticipated by a series of leaks which appeared in national newspapers.

Whitehall's grubby paws were all over them. They were softening us up.

All this when millions has already been spent on preparatory work for electrification, and when the government remains committed to pouring billions into London’s transport system and even more fantastical sums into the shimmering vision that is HS2.

But we shouldn’t be surprised. Post-war British history is littered with the wreckage of large-scale, government-funded projects which became victims of the cock-eyed ‘system’ by which we contrive to manage the UK’s creaking infrastructure - its inadequate airports, its slow, overcrowded railways, its stretched power stations and its crappy roads.

While we’re pretty good at producing reports which forecast demand and warn of problems, getting something done about them appears to produce an institutional psychosis which means we never quite manage to get it over the finish line without a financial hiccup. Or we just never manage to get it over the finish line at all.

Actually when I say ‘psychosis’, I mean ‘Treasury’, the government department which looms over anyone in Whitehall who dares suggest money might be spent.

We shouldn’t joke. While infrastructure has its wreckage, politics has its corpses, many of them rendered lifeless by what is the Whitehall equivalent of Harry Potter's Death Eaters.

Yet the decision to kick the Midland Mainline’s electrification into the long grass is surely a glaring example of a dysfunctional system of administration that has had its day.

What should be a rational assessment of the future needs of the economy has been turned into an advert for how not to stimulate regional growth, and how central government spends far too much time listening either to itself or to voices in London.

Those voices don't speak for us.

A couple of weeks ago I was in Nottingham’s twin city, Karlsruhe, riding on a tram which runs straight on to local rail lines and carries on its journey. It has been operating successfully for years and it’s the result of a political system which lets regions keep their money and make their own decisions.

Were it not for the depressing myopia of Whitehall’s economic prison warders, we could do the same in Nottingham.

A taxing issue for the economy?

I think it’s come to something when even Dave Hartnett, the head honcho of HMRC, doesn’t appear to get basic economics.
Let me say upfront I am NOT advocating non-payment of tax. It is WRONG. But...
If Bob the Builder decides not to tell the taxman when he takes £400 cash in hand for a job, he isn’t “diddling” the economy. What does Dave think Bob will do with the £400? Burn it? Bury it? No – he’ll probably go out and spend it. In the economy.
Now, you can argue that he is depriving the government of money which could be used to fund public spending (though by the time the government’s finished with it I doubt the public will see even half of it). That is where the proper justification lies.
The grey or black economy, however you want to characterise it, is a cheat. It is depriving the needy of help, it probably places a higher burden on people who do pay tax because Treasury calculations about levels of taxation make allowances for non payment.
But it’s wrong to suppose this money simply disappears out of the economy. It probably goes back in as consumer and business spending. So what doesn’t appear in one place probably surfaces in another.
HMRC and the Treasury also have to consider reasons for non-payment. Is it because people are just being dishonest, or is it because a self-employed person doesn’t think it’s fair that he flogs himself for all the hours God gives then has to hand over 40% or 50% or the money?
These are complex arguments. The simple principle of contributing to wider health and wealth through tax is, in my book, unarguable. And not paying any tax is just criminal. But what’s the underlying message for the tax system? Are people being more dishonest? Or are they just feeling the pinch?