“Why is this man transport secretary?” On the naked partisanship of Chris Grayling

Lawyers hold a Chris Grayling puppet during his tenure as justice secretary. Image: Getty.

Oh good, there’s more.

Yesterday, the Evening Standard revealed that transport secretary Chris Grayling had decided to block the expansion of Transport for London’s rail empire, describing it as mere “deckchair shifting”. In our report on the topic we speculated about three possible reasons for this: practical concerns, ideological ones, or nakedly political ones.

In today’s Evening Standard, there’s another top scoop on the subject, by Pippa Crerar. It begins as follows:

The Transport Secretary was today accused of putting party politics ahead of commuters after a leaked letter revealed he opposed handing over control of suburban rail to keep it “out of the clutches” of Labour.

(...)

...in a letter written before the new Mayor took over, he admitted he was against rail devolution to keep services away from any future Labour mayor, rather than because of the impact on commuters.

So. That settles that one.

The letter dates from 2013, when Conservative Boris Johnson was still mayor. Here’s the key passage:

“While I am generally a great supporter of what you are doing in London, I would not be in favour of changing the current arrangements – not because I have any fears over the immediate future, but because would like to keep suburban rail services out of the clutches of any future Labour Mayor.

Obviously similar concerns apply over a future Labour government as well, but the continuation of the system we have at the moment does at least mean that MPs and local authorities from outside the London area would have a remit over train services in our areas, which I would not like us to lose.”

Three thoughts on this:

1)  This is partisanship of the most shameless and disgusting sort. Chris Grayling is meant to be transport secretary for the entire country, not just for people who vote for him. That he would take a major policy decision based not on what is best for Britain’s commuters, but on how to best undermine his opponents, speaks volumes about Grayling’s statesmanship – and explains the level of esteem in which his achievements in previous ministerial roles, at justice and work & pensions, are held.

2) It also doesn’t really stack up on its own terms. As things stand, there are already a fair few commuters towns outside the London boundary, which are dependent on Transport for London for their travel arrangements: Amersham, Watford, Epping, Brentwood. They seem to get along fine: indeed, they seem to have better train services than most commuter towns that sit outside the TfL empire.

No mayor of London, of either party, has ever had a policy of running fewer services outside the city boundary, so as to boost those inside it. Partly that’s because it’d be stupid, but largely it’s because railways simply don’t work like that:  service levels are dependent on boring physical factors like track arrangements, signalling, the location of sidings and so forth. Political boundaries have nothing to do with it.

Does Grayling not understand this? If he doesn’t, why on earth is he transport secretary? And if he does, what on earth is he wibbling about?

3) While we’re on the topic of things Chris Grayling doesn’t seem to understand: why does he think that MPs and local authorities have any remit over franchising arrangements at the moment?

Okay, MPs can annoy the transport secretary, who can in turn annoy the train companies. But that’s a pretty indirect and weak form of accountability, as demonstrated by [insert example of terrible train service of your choice]. Local authorities, meanwhile, have no ability to control train services at all that I can see.

So why does Grayling believe that giving TfL a role in service commissioning would weaken accountability?

Once again: why is this man transport secretary?

I’m not the only one wondering that this afternoon. From the Standard:

Tory former minister Bob Neill called on Mr Grayling to stand down saying he had “lost confidence” in him as Transport Secretary.

The Bromley and Chislehurst MP told the Standard: “My discussions with him indicate to me that he’s acted for party reasons and not acted in the interests of London commuters.

“It’s pretty clear that he has a dogmatic opposition to rail devolution and I don’t think that’s a legitimate basis on which to take a decision. It demonstrates that he’s acted extremely badly. I don’t have confidence any more in him as Secretary of State.”

Bromley is of course a London constituency.

It takes a special talent to change a policy for nakedly partisan reasons, and still manage to alienate MPs from your party.

Jonn Elledge is the editor of CityMetric. He is on Twitter, far too much, as @jonnelledge.

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The ATM is 50. Here’s how a hole in the wall changed the world

The olden days. Image Lloyds Banking Group Archives & Museum.

Next time you withdraw money from a hole in the wall, consider singing a rendition of happy birthday. For today, the Automated Teller Machine (or ATM) celebrates its half century.

Fifty years ago, the first cash machine was put to work at the Enfield branch of Barclays Bank in London. Two days later, a Swedish device known as the Bankomat was in operation in Uppsala. And a couple of weeks after that, another one built by Chubb and Smith Industries was inaugurated in London by Westminster Bank (today part of RBS Group).

These events fired the starting gun for today’s self-service banking culture – long before the widespread acceptance of debit and credit cards. The success of the cash machine enabled people to make impromptu purchases, spend more money on weekend and evening leisure, and demand banking services when and where they wanted them. The infrastructure, systems and knowledge they spawned also enabled bankers to offer their customers point of sale terminals, and telephone and internet banking.

There was substantial media attention when these “robot cashiers” were launched. Banks promised their customers that the cash machine would liberate them from the shackles of business hours and banking at a single branch. But customers had to learn how to use – and remember – a PIN, perform a self-service transaction and trust a machine with their money.

People take these things for granted today, but when cash machines first appeared many had never before been in contact with advanced electronics.

And the system was far from perfect. Despite widespread demand, only bank customers considered to have “better credit” were offered the service. The early machines were also clunky, heavy (and dangerous) to move, insecure, unreliable, and seldom conveniently located.

Indeed, unlike today’s machines, the first ATMs could do only one thing: dispense a fixed amount of cash when activated by a paper token or bespoke plastic card issued to customers at retail branches during business hours. Once used, tokens would be stored by the machine so that branch staff could retrieve them and debit the appropriate accounts. The plastic cards, meanwhile, would have to be sent back to the customer by post. Needless to say, it took banks and technology companies years to agree common standards and finally deliver on their promise of 24/7 access to cash.

The globalisation effect

Estimates by RBR London concur with my research, suggesting that by 1970, there were still fewer than 1,500 of the machines around the world, concentrated in Europe, North America and Japan. But there were 40,000 by 1980 and a million by 2000.

A number of factors made this ATM explosion possible. First, sharing locations created more transaction volume at individual ATMs. This gave incentives for small and medium-sized financial institutions to invest in this technology. At one point, for instance, there were some 200 shared ATM networks in the US and 80 shared networks in Japan.

They also became more popular once banks digitised their records, allowing the machines to perform a host of other tasks, such as bank transfers, balance requests and bill payments. Over the last five decades, a huge number of people have made the shift away from the cash economy and into the banking system. Consequently, ATMs became a key way of avoiding congestion at branches.

ATM design began to accommodate people with visual and mobility disabilities, too. And in recent decades, many countries have allowed non-bank companies, known as Independent ATM Deployers (IAD) to operate machines. The IAD were key to populating non-bank locations such as corner shops, petrol stations and casinos.

Indeed, while a large bank in the UK might own 4,000 devices and one in the US as many as 12,000, Cardtronics, the largest IAD, manages a fleet of 230,000 ATMs in 11 countries.


Bank to the future

The ATM has remained a relevant and convenient self-service channel for the last half century – and its history is one of invention and re-invention, evolution rather than revolution.

Self-service banking and ATMs continue to evolve. Instead of PIN authentication, some ATMS now use “tap and go” contactless payment technology using bank cards and mobile phones. Meanwhile, ATMs in Poland and Japan have used biometric recognition, which can identify a customer’s iris, fingerprint or voice, for some time, while banks in other countries are considering them.

So it’s a good time to consider what the history of cash dispensers can teach us. The ATM was not the result of a eureka moment of a single middle-aged man in a bath or garage, but from active collaboration between various groups of bankers and engineers to solve the significant challenges of a changing world. It took two decades for the ATM to mature and gain widespread, worldwide acceptance, but today there are 3.5m ATMs with another 500,000 expected by 2020.

Research I am currently undertaking suggests that ATMs may have reached saturation point in some Western countries. However, research by the ATM Industry Association suggests there is strong demand for them in China, India and the Middle East. In fact, while in the West people tend to use them for three self-service functions (cash withdrawal, balance enquiries, and purchasing mobile phone airtime), Chinese customers consumers regularly use them for as many as 100 different tasks.

Taken for granted?

Interestingly, people in most urban areas around the world tend to interact with the same five ATMs. But they shouldn’t be taken for granted. In many countries in Africa, Asia and South America, they offer services to millions of people otherwise excluded from the banking sector.

In most developed counties, meanwhile, the retail branch and the ATM are the only two channels over which financial institutions have 100 per cent control. This is important when you need to verify the authenticity of your customer. Banks do not control the make and model of their customers’ smart phones, tablets or personal computers, which are vulnerable to hacking and fraud. While ATMs are targeted by thieves, mass cybernetic attacks on them have yet to materialise.

The ConversationI am often asked whether the advent of a cashless, digital economy heralds the end of the ATM. My response is that while the world might do away with cash and call ATMs something else, the revolution of automated self-service banking that began 50 years ago is here to stay.

Bernardo Batiz-Lazo is professor of business history and bank management at Bangor University.

This article was originally published on The Conversation. Read the original article.