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Old 21st September 2020, 05:56 AM   #1
Darat
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General UK politics

Starting this thread as there are quite few policies and stuff happening that aren’t just Covid politics or Brexit.

One I want to raise is the rail system.

The UK government has now extended “support” for the rail operators to 18 months in total: Rail franchises axed as help for train firms extended https://www.bbc.co.uk/news/business-54232015

Surely it would be cheaper and simpler to re-nationalise the rail system? The infrastructure has been nationalised for some time now, several of the franchises have moved back into public control.

What on earth can be the benefit of trying to keep the rail system even nominally “privatised “ in light of the changes of passenger numbers for the foreseeable future?
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Old 21st September 2020, 06:53 AM   #2
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Were the franchises intended to be run for profit? I.e., the private operator was supposed to charge the riders somewhat above cost and pocket the difference? (I'd imagine the other side of this ideal coin would be the franchise operator reducing costs while maintaining quality of service.)
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Old 21st September 2020, 06:55 AM   #3
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Originally Posted by Darat View Post
Starting this thread as there are quite few policies and stuff happening that aren’t just Covid politics or Brexit.

One I want to raise is the rail system.

The UK government has now extended “support” for the rail operators to 18 months in total: Rail franchises axed as help for train firms extended https://www.bbc.co.uk/news/business-54232015

Surely it would be cheaper and simpler to re-nationalise the rail system? The infrastructure has been nationalised for some time now, several of the franchises have moved back into public control.

What on earth can be the benefit of trying to keep the rail system even nominally “privatised “ in light of the changes of passenger numbers for the foreseeable future?
I don't know whether there is a good economic argument for it, but to re-nationalise a whole industry would be to spit on the grave of Maggie Thatcher - as opposed to subsidising private industry by taking the assuming the economic risk by nationalising parts - which is apparently fine.

IMO rail privatisation never made sense and IMO the model used wasn't chosen to make the privatisation or ongoing running of the railways more efficient, cost effective or profitable - merely to make it most difficult to re-nationalise.

Christian Wolmar who is a passionate railway advocate has opined that if British Rail had had a fraction of the subsidy that the private railways had enjoyed alongside the growth in passenger numbers then the service would be far superior and less expensive.
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Old 21st September 2020, 07:05 AM   #4
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Railways have been privatised in Victoria, Australia for decades. The standard of the service, safety, reliability and cleanliness are clearly better. It’s entirely possible for government to set the standards for transport and other services and let the (more efficient, in my opinion) private sector deliver these services.
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Old 21st September 2020, 07:14 AM   #5
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Originally Posted by theprestige View Post
Were the franchises intended to be run for profit? I.e., the private operator was supposed to charge the riders somewhat above cost and pocket the difference? (I'd imagine the other side of this ideal coin would be the franchise operator reducing costs while maintaining quality of service.)
Yes and no.

No simple way to sum it up. But one of the major flaws is that the government ended up giving more in financial subsidies to the private companies than it used to do to fund the previous nationalised rail system.
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Old 21st September 2020, 07:19 AM   #6
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Originally Posted by lionking View Post
Railways have been privatised in Victoria, Australia for decades. The standard of the service, safety, reliability and cleanliness are clearly better. It’s entirely possible for government to set the standards for transport and other services and let the (more efficient, in my opinion) private sector deliver these services.
The private sector unless it is a not for profit is always going to be more inefficient than a equivalent non-profit system as it has to add in those extra percentage points that represent the profit.

Now of course a nationalised system can be inefficient, badly run and so on but it doesn't start with the inherent inefficiency of having to make a profit.
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Old 21st September 2020, 07:22 AM   #7
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Originally Posted by theprestige View Post
Were the franchises intended to be run for profit? I.e., the private operator was supposed to charge the riders somewhat above cost and pocket the difference? (I'd imagine the other side of this ideal coin would be the franchise operator reducing costs while maintaining quality of service.)

The service is subsidised by the government, so what is likely to happen is that the operator runs the service as cheaply as possible and pockets the subsidy.

Last I heard the railways were being subsidised at a higher rate than they were when they were nationalised.

Of course, there has been a line run at a profit: https://www.chroniclelive.co.uk/news...es-8656990.amp

Quote:
The East Coast Main Line franchise made a profit of £13 million last year - with the cash returned to the Treasury.

And the financial success of the line is in stark contrast to other rail franchises, which required millions in subsidies to keep going.

The government took action to remedy this, with predictable results: https://www.bbc.co.uk/news/amp/business-44140410
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Old 21st September 2020, 07:25 AM   #8
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Originally Posted by Darat View Post
The private sector unless it is a not for profit is always going to be more inefficient than a equivalent non-profit system as it has to add in those extra percentage points that represent the profit.

Now of course a nationalised system can be inefficient, badly run and so on but it doesn't start with the inherent inefficiency of having to make a profit.
With quite a lot of experience in the public service, I would argue that public sector inefficiency trumps what you refer to as profit inefficiency. Didn’t you guys invent the term “jobsworth” to illustrate this public service inefficiency?
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Old 21st September 2020, 07:34 AM   #9
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Originally Posted by lionking View Post
With quite a lot of experience in the public service, I would argue that public sector inefficiency trumps what you refer to as profit inefficiency. Didn’t you guys invent the term “jobsworth” to illustrate this public service inefficiency?

When a franchise collapsed and had to be run by the public sector, it made a profit. See above for the results of returning it to the private sector.
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Old 21st September 2020, 07:42 AM   #10
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Originally Posted by Mojo View Post
When a franchise collapsed and had to be run by the public sector, it made a profit. See above for the results of returning it to the private sector.
I don’t think one example proves anything.

In my experience services run by the private sector are more efficient, at least in Australia. I don’t see even the Labor party here calling for re-nationalising of utilities.
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Old 21st September 2020, 08:00 AM   #11
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Originally Posted by lionking View Post
With quite a lot of experience in the public service, I would argue that public sector inefficiency trumps what you refer to as profit inefficiency. Didn’t you guys invent the term “jobsworth” to illustrate this public service inefficiency?
No "jobsworth" is private/public indifferent!
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Old 21st September 2020, 08:17 AM   #12
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Originally Posted by lionking View Post
I don’t think one example proves anything.

In my experience services run by the private sector are more efficient, at least in Australia. I don’t see even the Labor party here calling for re-nationalising of utilities.
I had direct experience of seeing why the public sector is less efficient when it comes to running a power company because I was working at National Power just after vesting.

The CEGB was obliged to have a significant amount of excess capacity in case of outages and the operating regimen was designed to ensure minimum stress on the generating equipment.

Now we have very little excess capacity and the government is having to pay the private sector hand-over-fist in order to secure it - it is a major concern in the UK at the moment. The plant was run into the ground - which didn't really matter because coal-fired power stations are obsolete but unplanned generation outages are higher than under the CEGB.

Because electricity prices are so dependent on the cost of fuel perhaps it's unfair to compare electricity prices (they are significantly higher in real terms now), but many of the other privatised industries including water and railways have far higher prices in real terms.

It may have been the privatisation models used in the UK which led to this position, it could be poor regulation (I also spend a couple of years in the water industry and saw how the water companies were able to manage their investment so as to influence the regulator) but we seem to have poorer service at higher cost (to the consumer and the treasury) than our European neighbours.
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Old 22nd September 2020, 05:19 AM   #13
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Originally Posted by Darat View Post
Yes and no.

No simple way to sum it up. But one of the major flaws is that the government ended up giving more in financial subsidies to the private companies than it used to do to fund the previous nationalised rail system.
Wouldn't the Tories consider that a resounding success?
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Old 22nd September 2020, 05:25 AM   #14
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Originally Posted by lionking View Post
I don’t think one example proves anything.

In my experience services run by the private sector are more efficient, at least in Australia. I don’t see even the Labor party here calling for re-nationalising of utilities.
When the WA government privatized the bus network, they did save money but not for the reason that you might think.

MTT bus drivers, being public servants, had a guaranteed wage which could not be reduced. After privatization, these same drivers had to get jobs with the private companies at up to 1/3 less than they were being paid previously. So the government savings came straight out of the bus drivers' pockets. (Whether the government managed to keep those saving or paid out to the private companies in other ways, I don't know).
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Old 22nd September 2020, 06:20 AM   #15
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Originally Posted by psionl0 View Post
When the WA government privatized the bus network, they did save money but not for the reason that you might think.

MTT bus drivers, being public servants, had a guaranteed wage which could not be reduced. After privatization, these same drivers had to get jobs with the private companies at up to 1/3 less than they were being paid previously. So the government savings came straight out of the bus drivers' pockets. (Whether the government managed to keep those saving or paid out to the private companies in other ways, I don't know).
I’m not that worried about the market setting pay rates, or featherbedding of public service pays being attacked. I said earlier that I was a public servant for many years. I only realised I was overpaid when I left and hit the normal job market.
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Old 22nd September 2020, 06:23 AM   #16
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Originally Posted by psionl0 View Post
When the WA government privatized the bus network, they did save money but not for the reason that you might think.

MTT bus drivers, being public servants, had a guaranteed wage which could not be reduced. After privatization, these same drivers had to get jobs with the private companies at up to 1/3 less than they were being paid previously. So the government savings came straight out of the bus drivers' pockets. (Whether the government managed to keep those saving or paid out to the private companies in other ways, I don't know).

That can’t happen here. Well, not until next year.

https://en.wikipedia.org/wiki/Transf...Directive_2001
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Old 22nd September 2020, 08:15 AM   #17
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Originally Posted by Darat View Post
Yes and no.

No simple way to sum it up. But one of the major flaws is that the government ended up giving more in financial subsidies to the private companies than it used to do to fund the previous nationalised rail system.
Originally Posted by Mojo View Post
The service is subsidised by the government, so what is likely to happen is that the operator runs the service as cheaply as possible and pockets the subsidy.

Last I heard the railways were being subsidised at a higher rate than they were when they were nationalised.

Of course, there has been a line run at a profit: https://www.chroniclelive.co.uk/news...es-8656990.amp




The government took action to remedy this, with predictable results: https://www.bbc.co.uk/news/amp/business-44140410
It kinda sounds like the government was hiring private contractors to operate the lines, rather than funding a government department and government employees for that purpose.

Rather than selling the entire operation, lock, stock, and barrel, to a private firm that wanted to make a go of it.

I wonder how much of the rising costs were simply the usual costs of things rising over time. "Cheaper than it would be if you were running it today." Is one thing. But was "cheaper than it was when you ran it ten years ago" ever actually on offer?

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Old 22nd September 2020, 08:38 AM   #18
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Originally Posted by theprestige View Post
I wonder how much of the rising costs were simply the usual costs of things rising over time. "Cheaper than it would be if you were running it today." Is one thing. But was "cheaper than it was when you ran it ten years ago" ever actually on offer?
When operations are taken back into public hands, costs drop significantly.
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Old 22nd September 2020, 08:48 AM   #19
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Originally Posted by theprestige View Post
It kinda sounds like the government was hiring private contractors to operate the lines, rather than funding a government department and government employees for that purpose.

Precisely. And the private sector needed more money for it because some of it had to be handed to their shareholders.

The purpose wasn’t to run the railways more efficiently, it was to hand over public money to the private sector.
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Old 22nd September 2020, 10:05 AM   #20
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Originally Posted by theprestige View Post
It kinda sounds like the government was hiring private contractors to operate the lines, rather than funding a government department and government employees for that purpose.

Rather than selling the entire operation, lock, stock, and barrel, to a private firm that wanted to make a go of it.

I wonder how much of the rising costs were simply the usual costs of things rising over time. "Cheaper than it would be if you were running it today." Is one thing. But was "cheaper than it was when you ran it ten years ago" ever actually on offer?
They could and did raise prices above inflation every year.
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Old 22nd September 2020, 10:46 AM   #21
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Originally Posted by Darat View Post
They could and did raise prices above inflation every year.
Inflation is going to run at different rates in different sectors, I think. I'm wondering about costs, though. Not prices.
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Old 23rd September 2020, 06:19 AM   #22
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Anyway, the whole UK rail privatization thing sounds very badly botched, coming and going.
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Old 23rd September 2020, 07:20 AM   #23
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I'm trying to think of things that would be more unlikely than a Tory government renationalising the railways..... declaring war on the USA? Boris Johnson doing an 8 hour shift? Rees-Mogg not coming across as a ******
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Old 23rd September 2020, 07:23 AM   #24
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Originally Posted by theprestige View Post
Anyway, the whole UK rail privatization thing sounds very badly botched, coming and going.

At the time it was described as “a poll tax on wheels”.
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Old 23rd September 2020, 11:54 AM   #25
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Budget has just been delayed

https://www.lgcplus.com/finance/brea...ed-23-09-2020/

edit - "Rishi Sunak has scrapped his plan for an autumn budget and will announce fresh measures to halt job losses and business failures on Thursday amid government fears that a second wave of Covid-19 threatens Britain with a double-dip recession.

The chancellor has decided that the long-term decisions that would have featured in the annual set piece event must be shelved in order for the Treasury to be able to focus on avoiding a short-term economic crisis.

With signs that the summer spurt in growth has proved short lived, Sunak will use his statement to MPs to announce an extension of business loan schemes and a package of employment support to replace the government’s furlough scheme, which is due to end next month.

Setting the stage for a set piece Commons update, the chancellor said he would announce the details of a “winter economy plan” that would “continue protecting jobs” as Britain enters a new phase of the pandemic."

https://www.msn.com/en-gb/news/uknew...?ocid=msedgdhp

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Old 26th September 2020, 02:18 AM   #26
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Liberal Democrats adopt Universal Basic Income as official party policy
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Old 26th September 2020, 04:34 AM   #27
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Originally Posted by Squeegee Beckenheim View Post
The Liberal Democrats have resorted to offering free money and they still won't get anyone to vote for them. It'll be sexual favours and ice-cream next.
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Old 26th September 2020, 06:18 AM   #28
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Originally Posted by theprestige View Post
Anyway, the whole UK rail privatization thing sounds very badly botched, coming and going.

It depends on what its purpose was. If it was about providing an efficient train service, then it failed. If it was about handing over public subsidies to the private sector, then maybe it wasn’t so badly botched. And remember, the people who set it up rarely travelled by train.
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Old 26th September 2020, 06:25 AM   #29
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Originally Posted by Archie Gemmill Goal View Post
The Liberal Democrats have resorted to offering free money and they still won't get anyone to vote for them. It'll be sexual favours and ice-cream next.
There's support for UBI in both Labour and the Convervatives, too, and in the latest YouGov poll on the subject this year 51% of respondents were in favour vs. 24% against.

So your over-dismissive oversimplification is stupid on more than just one level.
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Old 26th September 2020, 06:33 AM   #30
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Originally Posted by Darat View Post
The private sector unless it is a not for profit is always going to be more inefficient than a equivalent non-profit system as it has to add in those extra percentage points that represent the profit.

Now of course a nationalised system can be inefficient, badly run and so on...

See, for example, the NHS Internal Market, brought to you by the same people as the privatisation of BR.

I also remember someone arguing, when British Gas was being privatised, that it was necessary because government policy was to reduce gas prices, and this couldn’t be done while it was in public ownership because the Treasury wouldn’t allow it.
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Old 26th September 2020, 06:40 AM   #31
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Originally Posted by Squeegee Beckenheim View Post
There's support for UBI in both Labour and the Convervatives, too, and in the latest YouGov poll on the subject this year 51% of respondents were in favour vs. 24% against.

A major problem in UK politics is that a party can regularly come up with policies that the majority of the electorate agree with and still not have people vote for them because they are perceived as having no chance of winning.

A vote for what you actually want is “a wasted vote”, AKA first past the post.
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Old 26th September 2020, 06:49 AM   #32
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Originally Posted by theprestige View Post
Were the franchises intended to be run for profit? I.e., the private operator was supposed to charge the riders somewhat above cost and pocket the difference? (I'd imagine the other side of this ideal coin would be the franchise operator reducing costs while maintaining quality of service.)
Yes they were for profit. The Franchisee put in a bid to buy the franchise.
A lot of them put in too much and had to gauge the profit by ticket price rises and under investing on rolling stock etc.
They also got a big subsidy from the govt.

Railways cost the govt a lot more to run in real terms than they ever did when it was British Rail.
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Old 26th September 2020, 06:49 AM   #33
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Originally Posted by Mojo View Post
A major problem in UK politics is that a party can regularly come up with policies that the majority of the electorate agree with and still not have people vote for them because they are perceived as having no chance of winning.

A vote for what you actually want is “a wasted vote”, AKA first past the post.
Sure. And, ironically enough, that's also something the correction of which the Lib Dems have as policy.

The point is that UBI is gradually becoming more mainstream. 170 MPs campaigned for it this year, although the current government refused to even contemplate it.
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Old 26th September 2020, 06:51 AM   #34
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Originally Posted by Squeegee Beckenheim View Post
There's support for UBI in both Labour and the Convervatives, too, and in the latest YouGov poll on the subject this year 51% of respondents were in favour vs. 24% against.

So your over-dismissive oversimplification is stupid on more than just one level.
I wasn't being over-dismissive or stupid about UBI, I was being over-dismissive and stupid about the Lib Dems. They could adopt 'free bus tickets to Mars' as a policy and wouldn't matter one jot.
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Old 26th September 2020, 07:00 AM   #35
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Originally Posted by theprestige View Post
It kinda sounds like the government was hiring private contractors to operate the lines, rather than funding a government department and government employees for that purpose.

Rather than selling the entire operation, lock, stock, and barrel, to a private firm that wanted to make a go of it.

I wonder how much of the rising costs were simply the usual costs of things rising over time. "Cheaper than it would be if you were running it today." Is one thing. But was "cheaper than it was when you ran it ten years ago" ever actually on offer?
British Rail was carved up in to parts

One company had a monopoly on all the infrastructure of track and signalling etc.
Rolling Stock was given to a set of leasing companies and the franchise to run services were sold to a third set of companies.

Each franchise had to 'bid' for slots on the rails. When I was living in London 4 different franchises ran in to London Bridge station a 'bottleneck' on the lines in to charring Cross, cannon Street and the through lines of Thameslink.
At rush hours there were more trains than platform slots and the representatives of the different franchises were in the control room of the signal box arguing about which train should have priority and which should be left at the signals.
Some mornings we would arrive at Charring Cross on time then the next day we could be 15 minutes late, stuck outside London Bridge waiting for a platform slot.

As for the leasing companies, they were created with the single purpose of syphoning money out of the system to shareholders.
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Old 26th September 2020, 07:09 AM   #36
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Originally Posted by lionking View Post
With quite a lot of experience in the public service, I would argue that public sector inefficiency trumps what you refer to as profit inefficiency. Didn’t you guys invent the term “jobsworth” to illustrate this public service inefficiency?

The 'jobsworth" attitude is a result of bureaucracy.

If you think there is no bureaucracy in the private sector then you've been in public service too long.
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Old 26th September 2020, 07:54 AM   #37
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Originally Posted by Archie Gemmill Goal View Post
The Liberal Democrats have resorted to offering free money and they still won't get anyone to vote for them. It'll be sexual favours and ice-cream next.
What flavour ice cream, asking for a friend?
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Old 26th September 2020, 07:57 AM   #38
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Originally Posted by Darat View Post
What flavour ice cream, asking for a friend?
Depends what kind of sexual favours you receive. It isn't an either/or proposition it's a package deal.
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Old 26th September 2020, 08:09 AM   #39
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Originally Posted by Darat View Post
What flavour ice cream, asking for a friend?
Originally Posted by Archie Gemmill Goal View Post
Depends what kind of sexual favours you receive. It isn't an either/or proposition it's a package deal.
Not sure I'd want to try that ice cream, just in case...

Quote:
On 21 January 2006, Oaten resigned from the Liberal Democrat front bench[7] when it was revealed by the News of the World that he had hired a 23-year-old male prostitute between the summer of 2004 and February 2005. The newspaper also alleged that Oaten had engaged in 'three-in-a-bed' sex sessions with two male prostitutes.[8] Further allegations surfaced in the media over the following days, including an accusation that he had asked one of the prostitutes to engage in an act of coprophilia.
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Old 26th September 2020, 08:14 AM   #40
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Originally Posted by angrysoba View Post
Not sure I'd want to try that ice cream, just in case...
I'll put you down for chocolate then
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