The transport secretary’s door is open, he says. Also open, for negotiating purposes, is the door of Southern Railway’s managing director. At Aslef and the RMT, the doors are always open for the enabling of getting back around a table. That’s the problem with so many doors: no one knows who is responsible for closing them. Nevertheless, despite what we are incessantly told, the opening and closing of doors is exactly not what the Southern strikes are all about.
This dispute could not be any more political, from the senior Department for Transport civil servant caught telling folk earlier in the year that he wanted to break the unions to Southern executives secretly briefing the exact details of the disputes that the company expected to trigger. The unions are fighting to retain their bargaining power. The transport secretary cannot get involved because that would be an admission that this is political. Even though it is.
Chris Grayling likes to say he is different from previous transport secretaries. He actually wanted the job. He might want to start doing the job now.
During the Southern crisis, he has thrown up some flak by starting the conversation about fragmenting and privatising Network Rail. His thinking is traditional Conservative ideology. Yet now is the time, and Southern the case in point, to think hard about who should actually have ownership of the railways.
The past 20 years of subsidised private rail has taught us that the hybrid privatised model does not work. Equally, it must be wrong-headed to think of fully renationalising the railways, as that would keep the civil servants in charge. So, at a time when the prime minister is talking about customer and employee board directors, we should be thinking about a model in which farepayers are shareholders, not merely stakeholders, in their local train company; in which employees, as with Royal Mail, own a chunk of the business.
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The biggest failure on the railways has been the failure to align interests and make parties accountable to each other. We should be shooting not so much for a people’s railways as a railway for its people. Naive, festive tosh, of course, but if you can’t want wish for a brighter, more equitable future for the rail network at Christmas, when can you?
Funny peculiar
About a fifth of the 47,000 employees of Interserve, one of the biggest private sector cleaning companies, are migrant European Union workers. Another 20 per cent are non-EU migrants. That’s a grand total of nearly 20,000 not carrying a British passport. At Mitie, a rival in the vacuuming and wiping game, about 90 per cent of its 35,000 part-time workers are migrants, nearly half of Mitie’s total 65,000 workforce.
These odd outsourcing companies present an interesting post-Brexit conundrum. But there is nothing so strange about these businesses as their accounting. Now Baroness McGregor-Smith has been persuaded it is in Mitie’s best interests that she goes, her successor as chief executive will want to sort out its incomprehensible accounting.
When Mitie wins contracts, it books the cost of transitioning the work as an asset on its balance sheet. In the initial, less profitable years of a contract, it books earnings at the average expected rate over the life of the contract rather than profits actually counted in cash. All told, Mitie may have as much as £500 million of accounting “funnies”, as they are known in the trade, in its accounts.
Investors hate this sort of opacity. Not being able to reconcile reported profits with incoming cash has blighted the credibility of Serco and maddened observers at Rolls-Royce. It’s a bit square to festively wish for a clean-up of UK corporate financial reporting, but, as we say, it is Christmas.
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Cool your jets
One of the greatest whines of the airline industry is that when air passenger duty was ramped up by Gordon Brown, he talked of hypothecating it as an environmental levy to offset aircraft pollution. That was a lie. It was just another tax on consumers.
Now the government is consulting on how it might incentivise the UK production of green jet fuels, kerosene made from wood pulp and the like. Smart British companies as big as BP and as interesting as the small-cap Velocys have the technology ready.
APD is not as pernicious a levy as the carriers claim, but if it is a tax whose take can be specifically and directly channelled to fund the development of clean jet fuel, then not only will the airlines have to think twice about complaining about it, it also could help ministers to solve the impasse around added pollution fears at an expanded Heathrow.
New year sales
When the cohort of British companies falling to foreign takeovers inevitably accelerates in 2017, a certain type of politician, including most of the government, will tell you that this is a terrific advertisement for post-Brexit Britain, evidence that we remain a thriving economy.
Don’t believe a word of it. Economically healthy we may remain, but those takeovers will be driven by one thing: valuation. Notwithstanding the fall in the share prices of stocks overexposed to the UK economy, such companies are also 15 per cent cheaper to an international buyer as a result of the devaluation of the pound.
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On that basis alone, there isn’t a company in the land that isn’t on the radar of City bankers hoping to report a merrier Christmas bonus season in 2017.
robert.lea@thetimes.co.uk