Lib Dem Voice polled our members-only forum recently to discover what Lib Dem members think of various political issues, the Coalition, and the performance of key party figures. Some 550 party members have responded, and we’re publishing the full results.
Just 1-in-20 Lib Dems opt for full privatisation
LDV asked: In general, would you like to see more or less government involvement in running the country’s railways?
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41% – I would like to see the railways fully nationalised
34% – I would like to see more government regulation than there is currently, but stopping short of full nationalisation
16% – I would like to keep the railways remain privatised but with the same level of government regulation that there is currently
5% – I would like to see private companies in complete control of running the country’s railways without any government involvement
4% – Don’t know
While no single option has a majority, a clear plurality of members (41%) favours full nationalisation of our railways according to our survey. Only slightly fewer would like to see greater state regulation of the industry, but falling short of full nationalisation. A much smaller group (16%) prefer the status quo, while just 1-in-20 Lib Dem members supports full privatisation.
We are paying out enormous subsidies (we are told) so let us pay them to ourselves, not private companies.
Need to see a variation in models such as in London where Transport for London runs the Overground very successfully with a private contractor but takes the fares risk so cheaper and better!
The privatised rail system is unworkable, competition on a rail network is impossible and the only people that benefit from the current system are shareholders.
I would like the East Coast franchise and others to have a fair chance at testing arms length state ownetship, a proper analysis of merits/demerits ofownership/management models in other EU countries and a trial of a worker-co-op franchise.Also stop the mini-monopoly franchise model so that where alternative routes between destinations exist there is more scope for competition.
We only have to look at the state railways of europe for some better models.
The current situation has it about right, but what is ideal would be franchised which promote investment and good performance by private companies while there is central body (preferably protected from the government or at least the Treasury) charged with co-ordinating improvements and expansion of the network. ‘Nationalisation for the sake of nationalisation is a nonsense.’
I think we need to completely re-think the tendering process in order to ensure that there is genuine competition.
If we were starting at the beginning I would like to see national railways. But successive governments have spent vast sums on splitting the railways into franchises and subsidizing Railtrack. Impossible to keep interfering; settle for what we have got but do it more effectively. And get the maths right.
Privatisation has been a disaster, and the state operation of certain activities is not incompatible with liberal thinking (even Adam Smith recognised that there were certain activities the State should run).
We’ve proved that railways are a natural monopoly; let’s get them back where they belong. Rail freight especially is an important sustainability driver.
I’d like there to be a franchising system, but there would be a very high minimum standard for franchisees, and if no bidder reached the standard, then the government operator would run that service. That way, really good operators could come in, but the poor/average ones would not be able to cream off profits.
Government should get out of the railway business altogether. No subsidies; no regulation. Planning laws must be reformed to allow railway companies to expand supply.
Much better franchising procedures are needed which take into account the quality of the service offered as well as the income to the exchecker. The railway system is a vital service which shouldn’t necessarily always have to make a profit – society benefits overall from a well run railway. I’m in favour of HS2 for this reason.
The companies running the railways are making huge profits. I have little faith in the government’s ability to regulate railways, or IT, or the press or the etc. East Coast should be used as the example.
* Stephen was Editor (and Co-Editor) of Liberal Democrat Voice from 2007 to 2015, and writes at The Collected Stephen Tall.
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22 Comments
I’m personally shocked at how many people in the party think that there is anything worth salvaging at all from the current botched, expensive mess that is privatisation/franchising.
Quite worrying, really.
The problem with nationalisation is that we spend money while not creating anything, it would make shareholders richer without building one extra metre of track.
The model used in london – mixed ownership with overall control vested in a public body shows that the present model can be made to work. Lets extend the London model to all big cities for a start.
I am personally shocked at how many people in the party think that there is anything worth salvaging from the failure of central planning, which failed in every field of life where it was practised – notably in transport, where infrastructure is planned in response to political expediency rather than real demand.
@Tom Papworth
“I am personally shocked at how many people in the party think that there is anything worth salvaging from the failure of central planning, which failed in every field of life where it was practised”
Yes, after all, look at what a basket case the Swiss railways are. The Swiss go green with envy when they are able to travel on the UK’s immaculately planned and efficiently run rail network.
I find your comment unbelievable. I thought the Lib Dems were immune to this kind of “hate the state”, evidence-free ideology. The private sector is notoriously bad at planning infrastructure projects with long term payback periods and where common standards are required. In fact, the UK’s rail network is absolutely a prime example, with private competition leading to duplication of lines where they were not needed, lack of co-ordination and gross inefficiency prior to nationalisation.
@paul barker
“The problem with nationalisation is that we spend money while not creating anything, it would make shareholders richer without building one extra metre of track.”
The track is already in public ownership. What is being discussed is an end to flawed separation of train operations and track ownership. All we have to do is to let the franchises come back into public management. The question should be, how do we do this in the most efficient way possible and the experience of others like the Swiss could become a template for the UK.
I am personally quite shocked that the survey proposes a simplistic axiomatic choice between nationalisation and privatisation, after events have shown both models of ownership to be incapable of satisfying the demands of running the railways.
These either/or choices create unhelpful divisions where instead we need to be looking for fresh ideas to unify around.
Reading through the selected comments I find it amazing that people seem to genuinely believe that having the railways re-nationalised will some how reduce government interference, when the evidence from the days of British Railways indicates the opposite is likely to be the case.
“The track is already in public ownership.” is a red herring – it is natural for government to regulate and control strategic infrastructure assets such as roads, radio frequencies, utility grids etc. the question is more to do with getting the contracts right and correctly aligned to the motivations of the interested parties than actual ownership. In this respect we should take note of the changes that have been going on behind the scenes, namely the changing style of public-private engagement, something the Olympic’s demonstrated and hence now forms part of the Olympic legacy. The question is do we build on this legacy and our growing experience of public-private engagement or do we turn our backs on it and go back to some mythical golden age of state control?
@ Roland
“The question is do we build on this legacy and our growing experience of public-private engagement”
While I will grant you there have been great strides in one-off infrastructure project procurement, what we are talking about here does not relate to this.
We are talking about the on-going operation of a public service by private companies. The Olympic legacy here (G4S) is quite different.
The whole argument that somehow the public and private sectors are in some learning curve that will miraculously come right after enough time has been allowed is frankly beyond belief. The railways were privatised 15 years ago. How much more time do you advocates of reform want, exactly?
@Oranjepan
“after events have shown both models of ownership to be incapable of satisfying the demands of running the railways.”
Which events are these? BR pre-privatisation was starved of funds compared with the feast of subsidies given to private companies, both directly and indirectly (through improved infrastructure paid for out of the public purse).
Events in other countries have shown precisely the opposite: that publicly owned and operated rail can be an efficient way of running a public service which will not on its own generate any profits. Even Margaret Thatcher understood that rail could not run under private ownership, yet now, over twenty years later, we have members of the Lib Dems proposing the continuation of just that.
@RC: “The private sector is notoriously bad at planning infrastructure projects with long term payback periods and where common standards are required.”
Who exactly do you think built our railway network? I hate to burst your statist bubble, but most of the UK’s railway infrastructure was built by private entrepreneurs. They made a tidy profit, too, while ushering in the now-romanticised “Age of Steam.” By comparison, the record of the nationalised railways was one of managed decline.
It is also worth noting that, since the 1990s, passenger numbers have increased by 50%. Not bad for a failed privatisation.
There are major problems with the present system, it must be said. No really effective transport improvements can be achieved without significant planning reform – private companies cannot currently respond to changes in demand by building (or closing) new (or unpopular) lines. They are also required to provide services to uneconomic stations/lines, thus pushing up costs for the vast majority who travel on the useful bits of the railway.
It is also worth considering the American example, where the private railway companies are hugely effective (they carry 50% of US freight, for example) while AmTrack (though officially “not an agency or establishment of the United States Government” was set up by President Nixon in 1971 and is highly subsidised and regulated) is known world-wide as a disaster.
The railways aren’t privatised. They’re owned by Network Rail. The failure has been in the separation of the burden of infrastructure, which would otherwise create potential for genuine competition, vs franchising the operation of the rolling stock on the arms-length government monopoly track.
That being said, if you’re going to privatise it, do it properly. If you’re going to subsidise it, be transparent about it (that might mean back-door renationalisation). It’s pretty clear that actually these companies aren’t making much money out of the franchising model, as evidenced by the collapse of GNER and similar. The British Rail problem is fundamentally infrastructural; not managerial.
@Tom Papworth
“Who exactly do you think built our railway network? I hate to burst your statist bubble, but most of the UK’s railway infrastructure was built by private entrepreneurs. They made a tidy profit, too, while ushering in the now-romanticised “Age of Steam.” By comparison, the record of the nationalised railways was one of managed decline.”
Oh dear, Tom. Did you fail to notice that in the intervening period someone invented something called the internal combustion engine? The railways were already in decline before nationalisation. In fact that was the whole reason they were nationalised. Their construction, as I pointed out, was carried out in an unplanned and inefficient way which left us with grave infrastructural problems like duplication of lines and lack of head height e.g. for double height commuter trains.
“It is also worth noting that, since the 1990s, passenger numbers have increased by 50%. Not bad for a failed privatisation.”
1) Passenger numbers were already increasing BEFORE privatisation, so this is a continuation of an existing trend determined by other things like growth of disposable income and demand for travel generally, commuting and traffic congestion;
2) They have also increased in countries where privatisation hasn’t happened;
3) There has been massive publicly funded investment in railway infrastructure since privatisation e.g. the West Coast Mainline, which has been a major contributor to that growth.
4) How do you know that passenger numbers would not have increased without private ownership anyway, as has happened with the London Underground over the same period?
I see it as no coincidence that when traveling in Europe, the most comfortable, efficient and affordable rail journeys are those through nations which still see the railways as best run by the state: nations like France and Germany. I dread rail journeys here in the UK: overpriced, overcrowded and often running late. And their networks are often properly funded, unlike British Rail towards the end of its life.
The way some LibDems now see the private, for-profit-of-a-select-few sector as the answer to everything, even when it has failed, is just as ideologically blind as Labour when they thought the state was the answer to everything in the early 80s. The private sector is great for many things, yes, but IMHO natural monopolies such as public transport is not. Just because many of us want re-nationalisation of essentials like public transport and energy does not make us Leninists or Labourites for that matter.
Public transport is not necessarily a natural monopoly. You can’t be surprised when it appears that way if the state still controls all the tracks, all the roads, extensively and complexly taxes the fuel and energy sources for that transport and specifically opts to franchise along regionally monopolistic lines. They do it with buses every bit as much as with trains.
@RC (20th Nov ’12 – 2:28pm)
“While I will grant you there have been great strides in one-off infrastructure project procurement, what we are talking about here does not relate to this.
We are talking about the on-going operation of a public service by private companies. The Olympic legacy here (G4S) is quite different.”
You are obviously taking a very narrow view of the Olympic legacy and its wider applicability. Yes the procurement and programme management of the infrastructure project component has received some exposure and rightly so, given that when London’s winning bid was announced, many were highly skeptical about GB’s ability to deliver major infrastructure projects on time and without substantial overspend. What this shows us is that future performance doesn’t have to follow the past and that enlightened and well lead change (in procurement and management practices) can rapidly change established practices and behaviours on both sides of the public-private partnership with great (positive) effect. Part of the Olympic legacy is to look at how we achieved the Olympic’s and (intelligently) apply them elsewhere.
But we should not forget the joint delivery of the event itself. Yes G4S failed to deliver and had to be replaced by services personnel [Aside: as events transpired, I think G4S actually did GB a favour!], but this doesn’t mean that the entire Olympic project should of been run by the public sector.
Hence we can and should expect better from other public-private partnerships, specifically the on-going operation of the railways.
“The whole argument that somehow the public and private sectors are in some learning curve that will miraculously come right after enough time has been allowed is frankly beyond belief. The railways were privatised 15 years ago. How much more time do you advocates of reform want, exactly?”
I take it from this that the re-nationalisation of the railways won’t require a (re)learning curve? Or is this something the re-nationalisation magic pixie dust will resolve?
Yes 15 years seems a long time, however we should remember the franchise agreements also run for a long time: 15 years in the case of the West Coast Mainline; changing agreements mid-term can and often is expensive. So it is natural to expect both the procurement process and the details of the new franchises to reflect learning etc. … based on the West Coast Mainline franchise bid process so far, I suspect that the DoT either hasn’t learnt anything or has failed to apply it’s learning’s – which doesn’t bode well for a re-nationalisation…
@RC
( 20th Nov ’12 – 2:34pm) “BR pre-privatisation was starved of funds compared with the feast of subsidies given to private companies”
(20th Nov ’12 – 3:51pm)
” Did you fail to notice that in the intervening period someone invented something called the internal combustion engine? The railways were already in decline before nationalisation.”
I think you do need to do a little more reading on the decline of the UK railway companies. Basically, due to the effects of two world wars, during which the government effectively nationalised the railways and operated them with minimal investment and then being unwilling /unable to make appropriate reparations to the companies basically gave itself the choice of nationalisation or discard the infrastructure. But having nationalised the railways, government continued to make little substantive and sustained infrastructure investment. In some ways privatisation was a benefit to the railways as it forced the government to make funds and subsidies available, so as to make them attractive to potential operators.
“Their construction, as I pointed out, was carried out in an unplanned and inefficient way which left us with grave infrastructural problems like duplication of lines and lack of head height e.g. for double height commuter trains.”
This point shows how little you really know about the railways. Their construction was planned, maybe not in the way we would do it today, but they did all standardise on gauge etc. and given that when most were built the top speed of trains was significantly lower than what we routinely achieve today on the same track formations. I certainly don’t fault Brunel, Stephenson and their contemporaries for failing to allow for double height commuter trains et al in some distant future…
@Tom Papworth: “… required to provide services to uneconomic stations/lines, thus pushing up costs for the vast majority who travel on the useful bits of the railway. ” The reason the Beeching-era rail closures were eventually halted in the 1970s is that they were not producing any of the savings that it was claimed that they would. There are many ways that apparently “uneconomic” services and lines are useful in an integrated rail system, for example as feeders for the main lines. When branch lines were closed, the people who used them mostly did not (as predicted) rail-head, or use the (short-lived) replacement bus services, they instead drove the whole way to where they would before have travelled by train. So the main lines lost business due to the mass closure of minor lines,
And some main lines, or important parts of main lines were closed during and after the Beeching Axe. The Matlock-Buxton link was closed in 1968 even though it was running at a profit, and had a few years early been used for diversions during an upgrade of the West Coast main line. The result of the mass closures is a rail network with little slack, meaning too few diversionary routes (hence all the weekend and holiday bustitution), and an inability to cope with the current rise in rail travel.
@Roland: British Rail immediately before privatisation had much lesss government interference than the present ostensibly private railway. In many ways it was the model of the state-owned run-at-arms-length operation that many on this forum would apparently like to see. BR was certainly starved of investment in the 1980s and 1990s, but its operational decisions were made by railway people, not by civil servants. For instance, in the 1980s, Chris Green, as head of BR’s Network SouthEast sector, modernised the lines into Marylebone, and it was likely this that has made Chiltern Railways the thriving operation that it is today. But it was contrary to the preferred option of Whitehall mandarins at the time, which was to turn concrete over Marylebone station and run the (presumably much-reduced) services using it via Baker Street station.
Firstly, we should not be talking about re-nationalisation but about a rolling programme of taking rail operations back into public ownership. As each franchise comes up for renewal it could be operated by a publicly owned company instead. The structure of public ownership should be at arms-length from government, and could take a number of forms, from joint ventures with private companies to mutual companies that are commercially managed. As there are 15 rail franchises to be re-tendered before the next general election, a good start to this process could be made in the current parliament.
Natural monopolies like rail operations should be publicly owned, and the same could be said for water utilities. What have we got to show from 15 years of private rail operations ? Doesn’t the UK deserve a modern, efficient rail system comparable to the best in Europe, that could be developed to encourage people to use the train, rather than the plane or car for long journeys ? How can you have a strategic vision or plan for rail operations when you have 26 different companies managing different bits ? Public ownership will not be a panacea for our rail services, but at least it would allow us to start building a rail system for the future.
@Alex
It is interesting that you point out that the reduction in government interference was a contributing factor to BR’s changing operational performance in the decades prior to privatisation. I find it noteworthy that one of the contributing factors to the success of the Olympics cited by Seb Coe, was the lack of political interference . It does seem there is a lesson here…
I appreciate your (and other’s) contributions that describe what a new model of public ownership could look like and how it might be achieved and how it could meet the challenges around stakeholder engagement, specifically those around political interference and investment.
I do believe that some form of public-private partnership model is what is required. A successes of the current model is that failing franchise holders (eg. National Express) can be relatively easily replaced and publicly seen to be replaced; I’m not sure if the same would apply if the entire operation was in public hands. Similarly, whilst the government receives some flak about the trains, the main focus of complaint is on the operating companies rather than ‘the government’ (ignoring the various recent rail procurement fiasco’s at the DoT). As I have said elsewhere whether there is room for a modern social enterprise business model (it seems to be working for Welsh Water) needs to be further researched.
I think we can presume that anyone who has a good word to say about privatisation of railways does not use them on a regular basis. I have been travelling to work for over 25 years on trains and really all we have got is fares rising at an eye-watering rate, accompanied by regular scandals by which we find that safety is compromised for increased profit.
@Tom Papworth
“I am personally shocked at how many people in the party think that there is anything worth salvaging from the failure of central planning, which failed in every field of life where it was practised”
Like it did during the Second World War, where resources were in such short supply that even furniture design & manufacture was under central control? That government was a real failure, wasn’t it? Oh…
As a Liberal, there’s no issue with saying that certain activities shouldn’t be performed by the State.
But don’t make fatuous statements containing massive lies.
How quickly people forget how bad the nationalised railways were. If taken into state ownership investment would be even worse. That is becauuse the goverment always has so many competing groups for there resorces and railways will never be top of the list. As bad as it may appear to be to some people, it is better in private hands than goverment ownership.