Potholes in the Amazon Business Plan

It may be a sign that being a district councillor is getting to me, but I have begun to take an unreasonable amount of interest in potholes. Or perhaps it is because I have now been living without a car for three months, and from the saddle of a bike one's intimacy with the road surface increases considerably. There were two things that really set me to thinking about this most mundane of issues. The first was when I hit a large and definitely new pothole close to my house, in the dark, and was nearly thrown into the path of traffic. The second was a conversation I had with a road-mender, who told me he paid his taxes to have the roads fixed and yet they were becoming worse by the year.

In a way typical of the present approach to public concerns, the government has established a 'report a pothole' website. This is reminiscent of the 'cones hotline' fiasco, and about as likely to result in any action. The 'politics of austerity' means that we must put up with roads full of holes along with a postal service that is no longer reliable and rapidly rising waiting-lists for operations.

So what is the economics of potholes? As usual we need to dig a little bit deeper than questioning who pays and who benefits. The fundamental question is who causes damages to the roads, and do they take responsibility for that damage? Many years ago I stood as a general election candidate in Preseli Pembrokeshire. One of the hot local debates was about the trans-European highway that would traverse the constituency on its way from Latvia to Dublin. This, it was argued, would bring jobs and growth. That was a lie of course. The jobless Welsh citizens watched huge lorries pass through their villages taking products made by low-paid Latvian workers to consumers in Ireland whose purchases were funded by a Celtic boom that has now busted.

The purposes of the guff about trans-European highways was to persuade politicians to spend money upgrading the roads. In contrast to my last post, here we see the European Union most under corporate pressure, with its Council Directive 96/53/EC of 25 July 1996 obliging us to upgrade our roads to permit 40-tonne axle lorries by January 1999. As ever larger lorries have pounded our carriageways costs have risen and the quality of the road surface has declined. This is the reality of the single market: the exploitation of vulnerable workers and the expansion of pointless road freight.

And here is where the pothole whinge meets the other first-world problem of the Christmas period: items bought online that did not arrive in time for Christmas. Because many of the trucks that were hammering the highways during the last month have been delivering items bought from Amazon. The same Amazon that does not pay any tax. So to answer the road-mender's question, if the companies who use the roads for free as part of the slimline business model avoid paying their share of the cost of maintaining them, your taxes can never be stretched far enough to ensure that you will have a comfortable ride.
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Higher Education Accountability

As the debates over student fees have ebbed and flowed I have missed once again the skills of the accountant. What nobody has explained adequately to me is how the government's plan will ensure that money flows in in these straightened times, and exactly how it will also flow out.

Will Hutton has assisted on the second point, by offering some figures in his report on 'fair pay' in the public sector. Two points leap immediately to the critical mind: since national bankruptcy has resulted from the behaviour of the private sector, perhaps we should start our pay policy there; and how can any person reasonably accept Hutton's conclusion that a differential of 20-to-1 within organisations can be fair. Time for a new dictionary, not to mention a new moral code.

For myself and my colleagues in the universities there is no surprise that the differentials are highest in our sector. We have long been scandalised by the salaries and the expenses-paid trips enjoyed by our bosses. Hutton found that the average salary for a vice-chancellor is £200,000 and the median salary is some 15 times that of the lowest paid academic salary. Of course that is far from the lowest salary in a university, which also has a huge number of cleaners, caterers and other support staff on poverty wages.

The fattests of gowned cats are found, unsurprisingly, in the self-selected elite who call themselves the Russell Group, where the differential is 19 to one. These very same professors and administrators who are calling for students to pay three times as much to enjoy their skills are part of the reason why a university education is no longer affordable. Universities pay their managers more than all other sectors, with vice-chancellors earning more than four-star generals.

In these 'times of austerity' these salaries will be hard to afford, but how will raising student fees help? Since the increase will only affect the 2012 freshers, no money will flow back to the Treasury until 2016. Here is where accountants could be so useful. The details are decidedly murky at present, and when they are published no doubt we will all be looking elsewhere, but it appears that this money will be marked as an asset rather than a liability, thus reducing the deficit by actually shifting it onto the individual debts of young people.

With the additional help of some financial wizardry, the government may also be able to bring money into the public coffers sooner than 2016 by making the debt of our young people available for sale. This method of using securitization of our children's futures to help pay for support to the banking sector is the story that was missed while we watched the enraged students attempting to smash their way into the Treasury.
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Living Within Our Means

Green Party conference is still in full swing at the Birmingham Conservatoire. I was lucky that the two motions I had an interest in - one on banking and the other on how to put forward a positive view of a sustainable economy in the context of public-spending cuts - were both scheduled for the Saturday. So by 6pm everything was done and dusted and I was able to practise what I preach and have Sunday off.

This post has the same title as one of the motions that I was proposing, and its passage was not entirely comfortable. The Green Party is struggling with an influx of socialists who are understandably disillusioned with the Labour Party. This is a small proportion of Labour Party membership but can become a significant minority of our party, and one which rapidly starts to weight us down towards one side of the left-right continuumn that we really should be transcending. Thus it was that I found myself in the uncomfortable position of being attacked by the left of the party as though I was defending public spending cuts.

Like most people who either work in our use the public services that working people fought so hard for in this country (and isn't that most people who live in this country?), I am delighted that the TUC will spend this week making a range of political and emotional arguments in their defence. I just know that this is not the role for the Green Party. We cannot join the old left in their Keynsian calls for restimulating the growth that is killing the planet. We have a more subtle and forward-looking message and it is our duty as a party to put that forward.

The vote was won and, aside from some personal attacks that are another feature of the Labour Party that we increasingly have to put up with these days, I felt generally well supported and - which was more cheering - well understood. The theme of this motion was taken up by Adrian Ramsay, in his Deputy Leader's speech to the conference where he drew attention to the different ways we interpret the phrase 'living within our means'. I am including the text of the motion here:

Living within Our Means

Synopsis. The unprecedented deficit is an indication that we are living beyond our means in a fiscal sense, which supports the Green Party’s long-held belief that we are living beyond our means in an ecological sense. Our recognition of the link between these two crises constrains the kind of response which the party can make to the current debate about publicspending cuts.

Motion

LWM1 The Green Party restates its commitment to developing an economic policy that is compatible with ecological sustainability and 'recognises the limits of . . . the
natural systems of the planet’(EC100).
LWM2 In this context it is important that we recognise the current fiscal deficit as a consequence of a policy based on monetary inflation without respect to ecological limits; for our policy to be consistent we cannot rely on growing our way out of debt, as many conventional economists propose.
LWM3 The unprecedented level of public deficit means that a significant restructuring of our economy is inevitable. The Green Party would use this opportunity to achieve the managed descent from overconsumption that our commitment to sustainability requires, while simultaneously addressing the rapid rise in inequality that has occurred in the past 30 years. We could consider this to be a domestic equivalent of our global policy for Contraction and Convergence.
LWM4 Conference instructs the policy co-ordinator, the economics policy working group, and the Party’s media team to work together to find ways to exploit the opportunity offered by the fiscal crunch to publicise the Green Party’s unique
commitment to steady-state economics.
LWM5 The policy co-ordinators are instructed to begin a process that will bring to spring conference proposals that will, in the context of the current public spending position, explore the synergies and conflicts between:
The Green New Deal proposals that were passed as a fast-tracked policy motion in Autumn 2008;
The proposals for implementing our economic vision included in the 2010 election manifesto;
The commitment to building an economy within ecological limits included in the first paragraphs of our economic policy. Tweet