Treasury Blocking electrification plans

[Nicholas Lewis]

A variety of other enhancements need to be organised before this can be done though by the sounds of it.

like what? Church Fenton has been remodelled as part of that scheme and little you can do at the Leeds end.

 

[YorkshireBear]

Current depressed passenger numbers are still only.taking us back to 2011 levels - and there were plenty strong enough cases for electrification then.

Current UK passenger levels would be more than enough to green light electrification in much of the developed world.

To make it even more stupid, the UK can borrow 50 year bonds at next to nothing. The very time to invest for the long term.

Fully agree with those about that Sunak and the Treasury's short term thinking is very damaging in the long term.

This is what is bewildering me at the moment. These cuts seem to take us back to well before 2011, so what were we doing in 2011 that meant we were able to approve electrification.

 

[Peterthegreat]

I just do not understand their logic.

There isn't any!

 

[A0]

Disappointing if true. Albeit not unexpected from a government department whose geniuses previously came up with getting everybody to pile into the Wetherspoons for a cheap dinner in the middle of a global pandemic.

Except the civil servants and NR people who will be behind this option are probably the same people who were working for the last Labour government.

== Doublepost prevention - post automatically merged: 11 Dec 2021 ==

Couldn’t agree more.

So who's money do you propose to pay for tgis with?

Because not only are passenger numbers down, so are tax receipts, which are needed to pay for this.

Are you saying if you'd had a 20% paycut you'd still keep your spending at the same level?

 

[A0]

Indeed. This depressing table was released this week in the wake of Mr Shapps “We’re doing all we can to love and spend money on the railways, including taking the credit for every electrification scheme so far including Scotland” tweet. The UK is trundling below 40%. That puts us around the same level as Romania. So much for decarbonisation and Net Zero.

A meaningless statistic unless you weight it by size of network. Luxembourg's rail network is smaller than London's for example.

 

[Starmill]

Are you saying if you'd had a 20% paycut you'd still keep your spending at the same level?

Most economic actors would see their borrowing power fall if their revenues dropped by 20%. Government in this country generally isn't seeing that.

 

[6Gman]

So who's money do you propose to pay for tgis with?

Because not only are passenger numbers down, so are tax receipts, which are needed to pay for this.

Are you saying if you'd had a 20% paycut you'd still keep your spending at the same level?

Government bonds.
Given the low rates currently on government bonds it is quite likely that reduced operating costs/increased income could pay for it.
I think your final question doesn't appreciate the difference between government capital investment and personal spending.

 

[A0]

Government bonds.
Given the low rates currently on government bonds it is quite likely that reduced operating costs/increased income could pay for it.
I think your final question doesn't appreciate the difference between government capital investment and personal spending.

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.

 

[dk1]

So who's money do you propose to pay for tgis with?

Because not only are passenger numbers down, so are tax receipts, which are needed to pay for this.

Are you saying if you'd had a 20% paycut you'd still keep your spending at the same level?

They can always find the money if they want to. A pay cut is a rather random suggestion old fruit.

 

[A0]

They can always find the money if they want to. A pay cut is a rather random suggestion old fruit.

No, there's a finite amoubt of money. Tax revenues are down, costs for things like the NHS are up thanks to the pandemic.

So, once again, how do you propose tgis should be paid for? Who should foot the bill? You putting your hand into your pocket?

 

[Nicholas Lewis]

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.

Yes for you and me but not for governments especially modern industrialised societies who can effectively create money out of thin air if they want to. Historically the main reason they don't is because of the risk it will drive up inflation but due to humankinds technological advances its far less likely to due the sheer amount of productive capacity across the globe that can soak up demand particularly consumer products . That said this doesn't mean the government doesn't have to mindful to create hotspots and there is anecdotal evidence already than HS2 has heated up the construction materials market so loading it too much with even higher NR spending would drive up costs unless capacity is created. One prime example is UKs basic steel making capacity is 40% of what it was 20 years ago so if you push up demand that has to be imported.
Ultimately though if the governments wants to take a political decision the money can be created but then everyone will want a piece of the action.

 

[Glenn1969]

Except the civil servants and NR people who will be behind this option are probably the same people who were working for the last Labour government.

== Doublepost prevention - post automatically merged: 11 Dec 2021 ==



So who's money do you propose to pay for tgis with?

Because not only are passenger numbers down, so are tax receipts, which are needed to pay for this.

Are you saying if you'd had a 20% paycut you'd still keep your spending at the same level?

Come back to these numbers in 2 years. If they are still down go ahead and cut. IMHO they won't be

 

[dk1]

No, there's a finite amoubt of money. Tax revenues are down, costs for things like the NHS are up thanks to the pandemic.

So, once again, how do you propose tgis should be paid for? Who should foot the bill? You putting your hand into your pocket?

As I said, there’s always a way to find the money. I’d happily chip in yes.

 

[philosopher]

No, there's a finite amoubt of money. Tax revenues are down, costs for things like the NHS are up thanks to the pandemic.

So, once again, how do you propose tgis should be paid for? Who should foot the bill? You putting your hand into your pocket?

In the long run, electrification, at least of well used routes such as the Chiltern Mainline I would have thought would save the government money as electric trains I think are more efficient and easier to maintain.

 

[mr_jrt]

For those suggesting there's only a finite amount of money, may I introduce to you the concept of quantitive easing, and the fact that the Bank of England have magic-ed up £895bn out of thin air.

 

[stuu]

For those suggesting there's only a finite amount of money, may I introduce to you the concept of quantitive easing, and the fact that the Bank of England have magic-ed up £895bn out of thin air.

Indeed.

The second greatest trick the Tories have ever achieved is to convince people that a state that issues it's own currency has any resemblance to Mr Micawber's view of annual income. It isn't. Fiat money is literally conjured out of the air with a press of the enter key

As Mr Jrt correctly states, the debt borrowing by the government has been bought, almost entirely, by the Bank of England. An arm of the government. Does the debt exist, in any meaningful sense?

 

[WatcherZero]

Im not surprised the effort is slowing, the dirty secret is the push to make all vehicles electric requires the electricity to come from somewhere, and we arent building enough power generation to support it all particularly with all the cancelled nuclear projects.

 

[BayPaul]

Much as I want to see our network decarbonised, the original plan was somewhat ridiculous, and looked to me like official crayoning and 'just get the wires up'. Clearly the mainlines and suburban networks need to be wired up, but, as far as I remember, this plan included wiring such lines as the Settle and Carlisle. That would imply to me that NR has not really been very forward looking with alternatives. A lightly trafficed line like this is never likely to be economically sensible to electrify, and sounds like a much better prospect for hydrogen, or batteries as technology develops, or even biofuels if we want a very conservative option. These are decent technologies, not bionic duckweed.
Hopefully NR will come back with a significantly cheaper plan that has a bit more thought gone into it, and the treasury will then be able to support them.

 

[daodao]

A lightly trafficked line like this is never likely to be economically sensible to electrify

In the longer term, the most economic approach for longer lightly used lines like the S&C, for which electrification cannot be justified, is to close them.

 

[BayPaul]

In the longer term, the most economic approach for longer lightly used lines like the S&C, for which electrification cannot be justified, is to close them.

Certainly the most economic approach, though there is more to most lines like this than the pure economics. hydrogen and battery seem like a decent balance, IMO

 

[fishwomp]

Certainly the most economic approach, though there is more to most lines like this than the pure economics. hydrogen and battery seem like a decent balance, IMO

Not for some considerable time. Hydrogen electric currently is something like for every KWh you get out, you spend 2 KWh to make it. We have an energy crisis, this doesn't help it.

Battery is good though - not least for re-gen the electric (although S&C is a bad example as it doesn't have enough stops for that to be worthwhile). It's come a long way in 20 years. We might be saying same about hydrogen in the fullness of time, but it's still a distance off. But then again, so is 2050.

 

[YorkshireBear]

The S&C had it suggested so that it can be used by freight. That generally seems to be where electrification of lightly used lines is suggested.

 

[BayPaul]

The S&C had it suggested so that it can be used by freight. That generally seems to be where electrification of lightly used lines is suggested.

Yes, and I think this was where the official crayoning happened - basically any line that carries even small quantities of freight was listed as needing electrification. In my mind, this made the plan totally unrealistic. A self-powered freight solution is clearly needed for lines like this, something like a battery tender that could be added to a electric loco does not seem impossible.

 

[YorkshireBear]

Yes, and I think this was where the official crayoning happened - basically any line that carries even small quantities of freight was listed as needing electrification. In my mind, this made the plan totally unrealistic. A self-powered freight solution is clearly needed for lines like this, something like a battery tender that could be added to a electric loco does not seem impossible.

Interesting idea. It would be heavy but probably not much more so than any diesel loco.

Agreed it made the plan quite unrealistic, but much of the plan still needs doing and removing the odd line like the s&c probably isn't going to change the treasury's mind

 

[BayPaul]

Not for some considerable time. Hydrogen electric currently is something like for every KWh you get out, you spend 2 KWh to make it. We have an energy crisis, this doesn't help it.

Battery is good though - not least for re-gen the electric (although S&C is a bad example as it doesn't have enough stops for that to be worthwhile). It's come a long way in 20 years. We might be saying same about hydrogen in the fullness of time, but it's still a distance off. But then again, so is 2050.

I agree that hydrogen is far from ideal and much prefer batteries, or biofuel where the line length is too much for batteries.

== Doublepost prevention - post automatically merged: 12 Dec 2021 ==

Interesting idea. It would be heavy but probably not much more so than any diesel loco.

Agreed it made the plan quite unrealistic, but much of the plan still needs doing and removing the odd line like the s&c probably isn't going to change the treasury's mind

My suspicion is that it could have been the implied attitude of 'we need the money, everything needs to be electrified, if you don't give us the money we'll accuse you of not caring about the planet' that p***ed off the treasury. A more nuanced plan might have fared better. And the S&C was just one standout example, there were an awful lot of lines with similar issues, or with other potential solutions. I wouldn't be surprised if it was possible to reduce the required new wires by around a third and still fully decarbonise (very rough guess, I'm sure I'll be proved wrong!)

 

[A0]

For those suggesting there's only a finite amount of money, may I introduce to you the concept of quantitive easing, and the fact that the Bank of England have magic-ed up £895bn out of thin air.

Except it wasn't "out of thin air" at all.

And QE is paid for by a number of its negative effects, most notably keeping interest rates low - which if you've got a private pension (i.e. any non final salary pension) ypu'll have felt the effect in terms of much reduced growth rates meaning you'll have less of a pension. It can also lead to devaluation of the currency - and as Harold Wilson learnt to his cost, the pound in your pocket *has* been devalued and *is* worth less.

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

 

[Gerald Fiennes]

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.

 

[Ken H]

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.

managing a project means giving a reliable estimate of completion and cost. Delivering a project late or with a cost overrun gived the project management no credibility. There again, senior management in a project not listening to bad news during the project, or staff too scared to report delays doesn't help.

 

[Annetts key]

Are you saying if you'd had a 20% paycut you'd still keep your spending at the same level?

For me, yes. For the government, also yes.

A meaningless statistic unless you weight it by size of network. Luxembourg's rail network is smaller than London's for example.

It’s percentages. Hence a ratio.

No, there's a finite amoubt of money. Tax revenues are down, costs for things like the NHS are up thanks to the pandemic.

If there is a finite amoubt of money, please explain how inflation works and how quantitative easing works. Also how digging coal, or minerals, or pumping oil or releasing gas out of the ground generates wealth?

The ‘economy’ had (prior to the latest restrictions) bounced back to not far off where it had been before COVID19 pandemic. So although tax revenues may well be down, they should be recovering. The NHS was underfunded before the COVID19 pandemic, because our governments have chosen not to increase spending enough to keep up with demand.


The problem with hydrogen is that electricity is needed to ‘make’ it. As converting electricity to hydrogen and then back to electricity is less efficient than distributing and directly using electricity, that means we need even more electrical generation. You also have to transport and distribute the hydrogen.

Yes, battery powered trains will be the answer on some lines. But I don’t think these look particularly attractive or practical for medium or long distance services. Especially if the trains are required to travel at speeds higher than say 60 mph. And yes, batteries need charging from an electrical supply. So are also not as efficient as distributing and directly using electricity.

The biggest problem with biofuels, is that you need farmland to grow the crops that they are made from. This is awkward when we as a species are currently felling rain forest so that the land can be used for food production. And as climate change causes the area of the deserts to increase, and more land becomes unviable to farm due to water levels rising, where are we going to grow the crops to make these fuels?

 

[Wolfie]

The IRP has not baked in any scheme - read P24. All the government has done is agreed to move the schemes to the next stage of development and evaluation.

The Treasury will still have their say before any scheme is finally approved.

Your last para is alway the case. I have said similar on here repeatedly and been told, despite being a long-term upper mid level civil servant myself, that l don't know what l'm talking about....

This news doesn't surprise me. The long delay to, and the filleting of, the IRP had the Treasury's sticky fingers all over it.

I thought that a large part of the Treasury was to relocate to the NE?

Re your last para funny old thing but those relocating tend to be mid to low level posts....

== Doublepost prevention - post automatically merged: 12 Dec 2021 ==

Utter nonsense. Do you seriously think that schemes that'll ultimately contribute to preventing the world being damaged to such an extent that the youth of today's grandchildren can't live on the planet is achieveing "nothing but harm"? What'll really cause nothing but harm in the long run is doing nothing about decarbonisation. Electrification isn't to "pacify environment activists", it's to contribute to the process of stopping the world from burning, literally.

Absolutely.