A 24-hour Tube doesn't make 750 job losses any better

It's hard not to see the prospect of all-night Tube parties as a distraction from the larger issue of budget cuts to the capital's transport network.

Rarely has a transport announcement caused such joy, but Londoners - long jealous of their New York City cousins across the pond - are finally getting a 24-hour Tube service. It's only on Fridays and Saturdays, and it's only on five lines (well, four-and-a-half, technically), but this is big news.

The night bus, those post-midnight caravels that weave their way through the streets of pre-dawn London, will no longer be one of the defining experiences of the city's nightlife.

The choice of lines to stay open is a curious one, apparently justified because of signalling and train upgrades that will make all-night operation possible by 2015. Still, it's clearly a move that is aimed at the West End - those lines all go through there, and it's the Northern line's Bank branch (which goes along the edge of Shoreditch, another nightlife centre) that misses out. More lines may begin all-night operation over the years, subject to a range of factors, Transport for London has said.

It's not all good news, though. TfL will be closing every single ticket office across the Tube network, with the loss of 750 jobs. That's a huge cut, and directly contradicts Boris Johnson's 2008 manifesto pledge to stop any ticket office closures.

The justification, according to TfL, is that there will still be at least one member of staff in every station that is open at all times. However, they're going to be given "the latest mobile technology" (read: iPads with WiFi) so they can keep an eye on things no matter where they are in the station. For some stations, this could be fine; for others, especially those in busy tourist areas - where everyone will be expected to buy their tickets from machines - it could be much worse. There will be six "information centres" kept open in the six busiest tube stations (Waterloo, Victoria, King's Cross-St Pancras, Oxford Circus, London Bridge, Liverpool Street) but that's your lot.

Night buses can be frightening places, especially for women. The thought of taking that experience underground, alone, in a large station with only one person on duty to offer help if needed, is a cause for concern. The RMT has made it clear that it considers these staffing changes a threat to passenger safety; ironically, considering Boris Johnson's determination to switch the Tube to driverless trains as a way to prevent strikes, the extra night trains will probably mean new drivers will be hired, increasing the RMT's leverage.

There are also changes to how tickets work. TfL is already phasing out cash payments for bus tickets and has introduced compatibility with contactless debit and credit cards, and a similar push is being made with the Underground. For most people this makes sense, as the changes will make it so that there's a daily and weekly cap on how much your card is charged to create de facto travelcards. While there are no plans to get rid of Oyster, it's clearly not going to be around forever. This creates problems of accessibility for that significant minority who will find it harder to pay for their journeys, either because they haven't got a bank account with which to get a contactless card, or who find using ticket machines difficult.

It's very hard not to see the announcement of a 24-hour Tube as a way of drowning out the large job losses and controversial changes to how transport in London will work. There's a big hole in TfL's budget thanks to a £225m drop in funding from central government, and two main tools to combat that are above-inflation fare rises (check) and staff cuts (check) - these plans, as announced, will save £270m for TfL in operation costs over five years.

Quite a lot of that funding gap would have been covered by not doing things like building a crap cable car or commissioning a pointless custom-built bus, but it's too late now. Oh well.

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Now listen to Ian discussing this with Helen Lewis on the NS Podcast:

 

The new 24-hour Night Tube, as it'll work from 2015. (Image: TfL)

Ian Steadman is a staff science and technology writer at the New Statesman. He is on Twitter as @iansteadman.

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The industrial strategy acknowledges a fundamental truth about growth

It's time for the government to recognise that private businesses need help to thrive. 

When Theresa May created a new Department of Business, Energy and Industrial Strategy after taking office last summer, plenty of eyebrows were raised. Industrial strategy, it was widely remarked, was something attempted by the Labour governments of the 1960s and 70s – and it had dismally failed. British Leyland, Concorde and Delorean were the dead proof that governments were useless at "picking winners" and shouldn’t attempt to. What was the new Prime Minister thinking? 

A few commentators did observe that the concept of industrial strategy had in fact been revived at the end of the Labour government and in the early years of the Coalition. Gordon Brown and Peter Mandelson had successfully revived the motor industry in 2009-10 and initiated a new offshore wind manufacturing sector; Vince Cable and David Willetts had identified key manufacturing growth sectors and established new support systems for innovation. But they also pointed out that this had been largely abandoned by the next Business Minister, Sajid Javid, and was never embraced by David Cameron or George Osborne. 

So what did May mean? We are about to find out, when the government publishes its green paper on industrial strategy today. 

Among economic and business commentators, it has been widely assumed that this will again largely be about government support to manufacturing industry, particularly in the field of research and development. This is after all where the orthodox theory of "market failure" acknowledges that government intervention may be warranted. 

But this expectation is wrong. Under Business secretary Greg Clark, the government is taking a much wider approach. In fact the green paper will start from two far-reaching observations about the British economy.

First, take the UK’s low rate of productivity. This is not primarily a problem of the major firms in our remaining manufacturing industries. It is instead rooted in the small and medium-sized businesses in the service sectors, which employ 84 per cent of the British workforce. These are characterised by systematic under-investment in new technologies. 

Second, this is compounded by the huge disparity in productivity across the UK’s nations and regions. While London has the highest output per head of any region in Western Europe, more than a quarter of the UK’s regions rank among the lowest. Only if productivity is raised everywhere can it be raised in the UK as a whole. And only if productivity is raised, can wages be increased. So this is crucial to any attempt to help those "left behind" or "just about managing". 

The green paper will therefore make it clear, as IPPR has argued, that industrial strategy is not just about galvanising R&D and brand new innovation – though this is certainly important. It is about stimulating the much more widespread adoption of new technologies in all businesses - the service sector too. And it is not just about high-tech companies in the UK’s golden triangle between London, Cambridge and Oxford. It must happen in every region and nation of the country

In other words, the government looks likely to accept a vital truth - that industrial strategy is not a single strand of policy, but an approach to economic policy in general. It involves a fundamental recognition that firms and markets left to their own devices do not necessarily generate the optimum results for society as a whole.

Firms under-invest; they do not always adopt the most efficient technologies; they cannot on their own achieve the benefits of clustering together in regional centres; their investors’ horizons may be too short termist; they need infrastructure, skills, planning and other public policies to be aligned; they need to be encouraged to locate outside the existing growth centres. 

In other words, industrial strategy acknowledges that wealth is co-produced by the private and public sectors working together, and successful economies need both.

The chief theoretician of this understanding in recent years has been the economist Mariana Mazzucato, who has argued that the best way of driving investment in innovation is for government to set "missions" to address major social challenges. Just as the US moonshot programme generated innovation in a wide range of sectors, so modern missions such as decarbonisation, meeting the health and social care needs of an ageing population and the housing shortage can galvanise a new wave today. The government can use both "demand-side" policies (such as energy policy and procurement) and "supply-side" policies (such as in infrastructure and skills) to promote private sector investment.

In Britain industrial strategy has always been thought to be a left of centre economic idea, because it requires an active role for government. The Telegraph and Mail will no doubt tell Mrs May this week that it is all very misguided. But this is not how the rest of the world sees it. The most successful economies – Germany, Japan, South Korea, the Scandinavians – all work on the basis of public-private partnership to maximise productivity and achieve better distributed growth. All of them have higher productivity, and lower regional disparities, than the UK.

Yet there remain real question marks hanging over the government’s approach. Will the Chancellor cough up? A strategy with no money will be stillborn at birth. In particular, will sufficient resources and powers be given to regional institutions to support long-term economic growth outside London? Shifting the geographic pattern of investment will ultimately be the key test of the strategy’s success. 

The Business secretary is known to favour "deals" with industry to deliver the strategy, in the manner of the "devolution deals" with local government he developed in his previous Cabinet role. But will these be properly transparent, as the agreement which kept Nissan in Britain in the autumn was not? Will they simply favour the best business lobbyists, or can they represent a real compact of mutual obligations between public and private sectors?

The government has already acknowledged that it needs to recruit overseas negotiators to do new trade deals. It could usefully employ some outside experts to help with industrial strategy too. A good test of its commitment to strengthening public sector capacity is whether the government continue with its crazy sell-off of the Green Investment Bank

Ultimately, the key question may be whether the strategy will outlast Clark, who is probably the only Heseltinian member of the Cabinet beyond Mrs May who really believes in it. Labour’s Shadow Minister Clive Lewis, who has been talking intelligently about industrial strategy and has recently launched his own consultation, is no doubt already sharpening his critique. 

For the Prime Minister, the rationale for industrial strategy is clear. As it goes through the trauma of Brexit, the British economy will need to be seriously strengthened. We are about to see whether she can deliver it. 

Michael Jacobs is the Director of the IPPR Commission on Economic Justice and co-editor of Rethinking Capitalism: Economics and Policy for Sustainable and Inclusive Growth (Wiley Blackwell 2016).