Improving the UK rail network, improves the Environment

Higher taxes on the most polluting forms of transport (such as car, air travel, and shipping) should be used to subsidise infrastructure and greener alternatives. It is important that a balance involving the economic cost of a tax increase, versus the damage to the environment is made a priority by policymakers.

That being said, it is clear to see some infrastructure improvements currently in progress on the UK rail network do not go far enough, with some even scrapped altogether (the HS2 Eastern Leg).

What needs to happen
The government needs to invest in UK rail infrastructure (new rolling stock, re-opening of branch lines closed by the Beeching axe of the 1960s) the modernisation/reduction of fares (this has begun and is a positive), and nationalisation of underperforming routes. Such policies if implemented effectively will have the effect of reducing car traffic, and in turn reducing emissions, particularly in more built-up areas. Good progress has and is being made. Some of this is current, some yet to be implemented.

The economic benefits of a joined-up rail infrastructure are extensive. The East West Rail estimates the area’s economic output could lose out by around £93 billion each year without major intervention to address the lack of suitable housing and poor east-west connectivity (East West Railway Company, 2021). What this points to is an increase in government spending is needed on these new infrastructure projects.

The current infrastructure additions
Some infrastructure additions do not go far enough. One of those arguably has to be the East-West Railway, which is currently in construction and is set to be completed in 2030. The line will not be electrified, which means diesel-powered trains will be operating on the line when it opens in 2030. This is illogical as the UK has committed to reducing its greenhouse-gas emissions to net-zero by 2050.

As the Bedford and Kempston MP Mohammad Yasin states “If he (the chancellor) is serious, this week of COP 26 is a good opportunity to commit to the new East-West Rail line being electrified from day one to avoid the need for diesel locomotives and the future costs of retrofitting”.

He has a point, the cost of electrifying admittedly older lines such as the great western mainline has been put at £2.8bn. This is not to mention that electric trains are more reliable and less damaging to track and other infrastructure.

Fitting gantries at a later date means line closures to fit components in tunnels and clearing vegetation to make way for gantries. The case for electrification whilst constructing the railway is sound. Making the investment now will prevent passenger delays and extensive costs later on.

The eastern leg of HS2 (phase 2b) has been scrapped, with HS2 trains now set to run on existing upgraded routes that are already at or near full capacity. To make matters worse they will be operating at nowhere near their designed speed on these lines.

Another setback to the project is the speed on the main HS2 line looks set to be reduced from 248mph to somewhere near 205mph, possibly even further. The frequency of the trains has also been stepped back (Badshah, 2023).

Short-termism and short-sightedness are plaguing large infrastructure projects like this. Governments often only see five years in the future. The reaction to increased home working as a result of the COVID-19 pandemic has led many to doubt whether rail capacity will ever increase to pre-pandemic levels.

This is a mistake, the UK population is projected to grow by 2.1 million over the ten years to mid-2030, with England’s population expected to increase more quickly then the other UK nations (Robards, 2022). The ability reliable rail travel has to take cars off the road is well documented (Timperley, 2019).

What is to be done?
Electrification should start as soon as possible across the whole of East-West rail. Other electrification projects should be considered on other lines across the UK network as a priority. Doing this now not only helps the UK meet climate targets but it will keep future costs down, and increases service reliability.



Is the free market the barrier to solving social problems or the remedy?

Despite what we hear in the news media the free market (less government intervention) does not practically exist. However, that does not deter commentators discussing the negatives and positives of the so-called free market that democratic countries seemingly operate in.

Whilst economically protectionist policies (more government intervention) can have detrimental effects in the markets (countries) they are implemented in, they also can serve to work to the advantage of a trading economy.

Matthew’s sliding market economy scale 🙂

In reality, economies of all major trading blocks and nations are best described as being on a sliding scale, with more open economies (less barriers) the UK be considered one, to more planned economies (increased barriers) North Korea at the extreme end.

It is important to keep in mind that despite what is perpetuated on the news and by commentators, the “free market” does not actually exist in reality, and is more theoretical. In practice, all markets in the world are mixed economics.

It is also important to remember that the economy is connected and not independent of other aspects of the world, like the environment, health and future well-being. Economics degrees at some universities are rigid and dictate that economies are separable. However, the work that groups such as rethinking economics is doing to change economic curriculums is outstanding.

The Social Problem and the 2019 General Election
In the 2019 UK General Election this falsehood continued to be perpetuated. The Labour party pushed the narrative that the free market is detrimental to the UK by pushing for more government intervention, through renationalisation and much tighter regulation of the way business operates (Elliot, cited in The Guardian, 2019).

The Labour party focused on its big selling points in its manifesto; free broadband, free adult learning, free dental care, the biggest council house building in a decade, abolishing tuition fees and the establishment of maintenance grants (Elliot, cited in The Guardian, 2019). None of which are bad socially, although how effective a policy of free broadband is questionable (how would the market correct itself in the case of a market failure?). For example, if the sole free broadband provider begun to experience severe technical issues, then where does that leave its customers?

Freer markets as a solution to societal issues
So, why do those who advocate for free markets, or shall we say “freer” markets think of them as solution to all manner of society’s problems?

Solving the societal issues with less intervention
Let us go back to a definition of what a “free market” is, Britannica defines one as:
An unregulated system of economic exchange, in which taxes, quality controls, quotas, tariffs, and other forms of centralized economic interventions by government either do not exist or are minimal (Orlitzky, 2018).

Many economists hold that no one can be made better off without making other individuals worse off, (like the absence of externalities or informational asymmetries, among others) (Orlitzy, 2018).

According to this theory, the indivisible-hand mechanism of self-regulating behaviour, society benefits by having self-interested actors make free economic decisions that benefit them (Orlitzy, 2018).

Many arguments are put forward for using increasingly freer markers with less regulation for solving social issues. From homelessness to climate change, or the quality and safety of council homes.

Indeed, the desire for freer markets can go full circle and begin to adopt protectionist elements. Some advocates for less government intervention in markets, are in favour of the UK leaving the European Union. Such an exit no matter what the end deal is, does lead to a scenario where additional trading barriers are put up with the UK’s largest and closest trading partner.

The advantages of freer markets: Innovation
There are many advantages of freer markets, however, I have decided to focus on one area for clarity and to keep this article concise.

Freer markets are advantageous in that they can provide freedom to innovate more easily. This is probably the strongest argument for less government intervention in markets in the 21st century. A lot of social problems are the result of the lack of innovation.

Depicting the effect of a negative externality and market failure

Without innovation we would not have had steam engine technology or information technology, which has opened markets, created new business models and connected those disadvantaged and excluded from society.

The disadvantages of freer markets: Market Failure

The disadvantages of freer markets are numerous, from profit being the motive for success, market failure, and equality not always equating to equal opportunity. I have selected the one disadvantage that I believe to be most pressing. A free market requires consumption to survive, and it requires this a at unsustainable level, in a finite world.

As the COVID-19 pandemic is proving if people stop spending instead of spending on goods and services a freer market will struggle to stay alive.

Freer markets require spending and production, which consumes vast amounts of natural resources. Freer markets can contribute to increases in pollution, however, they can through emission trading schemes also be used to cut emissions, with intervention! (Such as the European Union’s ETS scheme).

You can see that issues are not black and white and a combination of intervention and freer markets’, work together to achieve targets rather than orthodoxy.

Shifting the sliding scale: Freer markets in the age of Brexit and COVID 19
The challenge the UK faces at present with Brexit and COVID 19 poses significant challenges.

The UK’s withdrawal from the European Union is bringing with it a huge number of unintended/unseen consequences.
The proponents of the UK leaving the European Union argued that a free trade deal negotiated with the European Union would more advantageous than membership itself.

However, the pursuit for freer trade has led to an increase of trade friction (through being a third country) with Department for International Trade officials to advising British business to form EU-based companies to circumvent border issues.

This is an example of an unintended consequence of leaving the European Union, it could be argued however, this was forecast. What this shows is the pursuit for freer markets can in fact have the opposite effect.

COVID 19 poses a significant economic and social threat globally. There is no doubt that economic competition in the pursuit of self-interest between various large pharmaceutical companies aided the rapid development of vaccines. However, those private sector achievements were only matched by public sector intervention.

In Conclusion
This article is not comprehensive but does bring key points to the fore.

Both interventionism and non-interventionism in markets have drawbacks. What this article shows is that the trade-offs have undesirable outcomes, which is too damaging for a country to go one way over the other.

For this reason, countries deploy a mixture of the two. The COVID 19 pandemic is one such example with many large economies intervening in markets to bail out businesses and support citizens.