Renationalising the railways is trendy but not smart

Virgin trainWho should own the railways? Both contenders for the Labour leadership, Owen Smith and Jeremy Corbyn, believe it should be the public sector. They point to rising ticket prices., widespread industrial action and a lack of seating (or so Corbyn claims.) as evidence that privatisation has failed. The public seem to agree, with 62% now in favour of renationalisation. But is it worth it?

It certainly wouldn’t be progressive. Households in the highest real income bracket make up 43% of yearly rail journeys, with those in the lowest income bracket making up only 10% of journeys. Nationalisation would mean that low-earners who very rarely use the train would be funding through their taxes reduced ticket prices and the maintenance of rail travel for the highest earners in the country. Such large amounts of public sector finances would be far better spent on services which low earners need most.

Nor would nationalisation eradicate large scale industrial disputes. Look no further than across the Channel: in the run up to Euro 2016 the French railways endured huge strikes. Even under a Socialist government the railways were not immune from clashes with the unions.

But perhaps the best reason to continue private management of the railways is the successful track record of rail privatisation. Since taken out of public ownership passenger numbers have doubled to 4.5 million per day, with Waterloo station in London recently becoming the first European transport terminal to handle 200 million passengers in a year.. Passenger satisfaction is the second highest in the EU, ahead of France, Germany and Italy which all feature nationalised railways. In 2013 the European Railway Agency reported that the UK had the safest railways in Europe. Passengers in the UK will even be able to enjoy the comfort of double beds and en suites on the Caledonian sleeper trains, while in France sleeper trains are being axed due to high costs.

Instead of burdening the taxpayer with the role of train operation we should advocate providing Network Rail with the tools it needs to improve journeys. This includes electrification of lines, update of current tracks and opening new tracks.

* Jack Watson is a Mechanical Engineering student and Secretary of Edinburgh Young Liberals

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91 Comments

  • …………………..But perhaps the best reason to continue private management of the railways is the successful track record of rail privatisation…………

    Really?

    As for Public Ownership of Railways…As has been said, since Beeching the railways were starved of funds…Thatcher described money to BR as a ‘subsidy’; money to roads as an ‘investment’…
    However, East Coast Rail Railways 2009-15 which took over when GNER and National Express had to hand back the franchise to the taxpayer after making over-optimistic promises on revenue.”…(It looks increasingly likely that Stagecoach/Virgin may well ask the taxpayer to step in again) paid a bigger premium per passenger to the government than does Stagecoach/Virgin…. However, like you, the Tory government didn’t want it seen that a ‘public company’ could out-perform the private sector so they re-privatised it….

  • Our ‘privatised’ railways are largely owned by foreign states – you couldn’t make it up. http://actionforrail.org/three-quarters-of-uk-rail-owned-by-foreign-states-research-reveals/

  • I agree that the railways are better under private operation but I’m not sure all of your measures are truly fair measures for “success.”

    What would be interesting is if, as more franchises come up for renewal, a model could be found that would see more workers CoOps (or a hybrid of one) winning the contract as it does look like an industry where that model of ownership would work.

    There is also the approach to the contract renewal that has overlooked the need to address the old BR odd ticket price disparities.

  • Richard Underhill 26th Aug '16 - 10:52am

    Imagine a Socialist President in France trying to install the Industrial Relations Act.
    Even Mrs Thatcher revived her predecessor’s legislation in stages. https://en.wikipedia.org/wiki/Industrial_Relations_Act_1971

  • Any article about rail privatisation or nationalisation that concentrates on the train operating companies and doesn’t mention the rolling stock ownership companies is completely missing the point.

    The rail industry is very complex, and there are some tremendous successes for management contracts under public-sector control (LOROL), some tremendous failures (GTR) and some pretty average results (Merseyrail, DOR East Coast). And you could pretty much say the same for private-sector franchises.

    Network Rail is, I think pretty much unarguably, better-run under the public sector than Railtrack was under the private sector. The only examples I can think of, globally, where the private sector does a decent job of infrastructure management are vertically integrated railways where they also run the trains – e.g. long-distance freight operators in the USA. The problem with that is that most rail is a monopoly; long-distance US freight isn’t (there are four distinct route from West Coast to East, owned by four different companies).

    But I still can’t work out what the ROSCOs contribute, apart from being one of the biggest PFI schemes in the UK and hiding a lot of debt – debt that the government is effectively guaranteeing – off the government’s books. Yet the three ROSCOs typically take out more profit each year than all the train operators combined.

  • The state should not be running anything. Privatisation and outsourcing have been a success wherever they have been applied – coupled with market liberalisation and allowing foreign firms access to our public services.

    I would support the privatisation / outsourcing / franchising of all public services – including the police / emergency services and even armed forces. As long as we have an effective regulator, I do not see what the problem is.

  • “Our ‘privatised’ railways are largely owned by foreign states – you couldn’t make it up. http://actionforrail.org/three-quarters-of-uk-rail-owned-by-foreign-states-research-reveals/

    And where is the problem with this? How other countries organise their railways is a matter for them. If they want to bid for our services and meet the requirements, we have absolutely no right whatsoever to refuse them. In fact it smacks slightly of xenophobia – much like the attitudes towards this Chinese deal.

  • The industrial action on the railways would be worse under nationalisation. Instead of isolated strikes at Southern, Scotrail over essential and welcome modernisation of 19th century practices, the whole network would be out. Given that RMT, ASLEF and the TSSA have mandates for strike action, we’d end up with a General Strike on the railways, which would paralyse the country.

  • Stimpson 26th Aug ’16 – 11:02am………………The state should not be running anything. Privatisation and outsourcing have been a success wherever they have been applied – coupled with market liberalisation and allowing foreign firms access to our public services………..I would support the privatisation / outsourcing / franchising of all public services – including the police / emergency services and even armed forces. As long as we have an effective regulator, I do not see what the problem is…..

    It’s done wonders for the housing market and, as for this “effective regulator”; private I presume?

  • “It’s done wonders for the housing market and, as for this “effective regulator”; private I presume?”

    I’d actually support building on the Green belt in certain areas, and building more “new towns”, or extending additional ones. There is no reason why say Bedwyn or Saffron Walden, or Andover could not become much larger places, other than NIMBYISM.

  • “Such large amounts of public sector finances would be far better spent on services which low earners need most.”

    This assumes that no large amounts of public sector money is being spent on rail sevices now.

    “Instead of burdening the taxpayer with the role of train operation we should advocate providing Network Rail with the tools it needs to improve journeys. This includes electrification of lines, update of current tracks and opening new tracks.”

    I thought you were against spending large amounts of tax payers money?

    Uniquely among privatised services rail can be renationalised without costing a penny – you just don’t re-let the franchises when the contracts come to an end.

  • Matt (Bristol) 26th Aug '16 - 11:54am

    Oh, for goodness sake.

    This article is not uninformed, and I agree with your main point Jack, that infrastructure investment is what will transform the railways.

    But I feel you are – like too flippin’ many people in this party who should know better – maybe unwittingly falling into the dichotomy that Labour and the Tories are setting up: that it is a straight choice beween an ‘all-private’ railway and an ‘all-public’ railway.

    Firstly, we don’t have an all-private railway – we have (in England, Scotland and Wales) a part-private railway system, and even Labour are only (as far as we know to date) proposing a piecemeal re-nationalisation, with still some ambiguity about whether this be a one-provider of a multiple-provider public model.

    There is a reasonable debate to be had about how the railways can be managed, that includes the overlooked options of regionalised public ownership (as an alternative to centralised public ownership) and mutualisation. These are the options Labour and the Tories seem determined to push aside in favour of set scripts that please their backers.

    And it could be entirely reasonable that we accept that railways management could be a mix of these options, with some continuing private investment alongside.

    NB – I know the Northern Irish model of railways transport is distinct and not inherently desirable, but it does provide us with a working example of the ‘old’ model – integration between railway infrastructure and service provision, with both run by a public company that is in turn part of a wider public corporation that also manages buses and coaches.

    I am not in favour of immediately returning to such a model at this time, but we should stop pretending that this is in some way unthinkable and taboo in modern society. We are not confined to always work within the pre-existing choices of past governments, or the intellectual assumptions of other political parties.

  • Bedwyn, for a start, is prone to flooding (as is the Dun Valley area); more houses will make the situation far worse…These places; what will the residents do for work, leisure, etc.? Will the homes be affordable or £500k plus?

  • “Who should own the railways? ”

    Well to probably the majority of people that is not in doubt; the infrastructure and rolling stock assets should be in public ownership. The real questions that people get excited about are who should operate the railways and what is the nature of the contractual agreement.

    Privatisation has been a success, albeit requiring the application of some hard learnt lessons. What we have seen by getting the private sector involved is that the politicians have had to change their relationship with the railways and actually face up and commit to long-term investments in both infrastructure and rolling stock and stand back and let the professionals do their jobs.

    Additionally,the imposition of private companies between the unions and government, has changed the balance of power and relationship between them (the junior doctors dispute is perhaps a good recent example of the of old style union relationship where ministers and politicians are directly involved in industrial relations and negotiations – it didn’t go well for either side). Yes, we still have industrial action, but it is now more local rather than nationally crippling.

    The hard learnt lessons, especially those from the Hatfield crash, have resulted in important changes in the balance of responsibilities between the state and private companies. Additionally, there has been the surprise lesson from the success of Directly Operated Railways, which seems to indicate that there is room for both further learning and adjustment, particularly around the types of companies we should be encouraging to operate our railways.

    Which brings us to the contractual arrangements, which effectively define the market.It is worth comparing TfL’s subcontracting model with the DoT’s franchising model as they route monies differently and drive different business models.

    In summary, I think we should be proud of the success of our public private partnership, but recognise that there is substantial room for improvement which is perhaps better achieved through incremental improvement to the current arrangements than disruptive change that renationalisation would represent.

  • Matt (Bristol) 26th Aug '16 - 12:07pm

    Richard Gadsden makes much sense.

    Stimpson manages to simultaneously accept Labour assumptions (that privatisation and franchising are effectively the same thing) and Tory assumptions (that everything would be better in private hands, and that there is nothing in public hands that the private sector wouldn’t want to manage), whilst only discussing public sector control of the railways in terms of one-provider, centralised national management.

    As Richard says, the railway structure we have inherited is complex, deliberately so. Isn’t it so much easier to discuss it in terms of black-and-white fantasies of ‘private’ versus ‘public’ when each can define them according to their own mania/ideology?

    Take a long hard look at our current railway system, and you will find it defies either category. What it is not, is accountable to the public.

  • Stimpson

    “welcome modernisation of 19th century practices”

    Like having a member of staff on the train to take control if the driver is incapacitated? Is that a 19th century practice in need of modernisation?

  • Dave Orbison 26th Aug '16 - 12:36pm

    @Stimpson ‘privatise the lot’ my paraphrase.

    I agree with expats housing is not such a good example. Then there’s Utilities. The great gas/ electricity rip off. By the Stimpson I’m curious as to why you claim this works provided there is an effective regulator. Surely competition ensures that the customer is always given the best product/service for the best possible price?

    Sorry but I don’t share your faith in the private sector nor, having worked for a regulator, do I have any confidence that the public can be protected from those eager to exploit any given sector.

    62% of the public support public ownership? Wow. Corbyn supports this too? Sounds like he’s more in tune with the public mood, how can that be

    Slightly off theme – 2 days ago Corbyn pledged full public ownership of the NHS and today we read of hospitals closing and £22bn cuts needed by 2020. I suppose the LibDem policy is to privatise the NHS too?

  • “Like having a member of staff on the train to take control if the driver is incapacitated? Is that a 19th century practice in need of modernisation?”

    The Rail Safety Board says it is safer not to have conductors or station staff as they lead to miscommunication incidents with drivers.

    If the driver is incapacitated then the train will just stop and the passengers can call 999.

  • The Lib Dems have always been a party that supports privatisation, outsourcing, liberalised markets and globalisation – it was a manifesto commitment to privatise Royal Mail, and the Orange Book ethos is central to the party.

  • Dave Orbison 26th Aug '16 - 1:05pm

    Stimpson – I don’t profess to have an in depth knowledge of the LibDems having been a floating voter in 2010.

    In your unquestioning love of all things privatised you refer to this as the Organe book ethos.

    But isn’t that a faction with the LibDems as opposed to it being the definitive bible of LibDems and wasn’t the Orange bookers those who drove the LibDems into the Coalition? If so, I can’t resist asking what went wrong?

  • For Labour to be electable, they had to move towards economic liberalism.
    For the Tories to be electable, they had to move towards social liberalism.

    The Orange Book Lib Dems represent the electable centre ground. Privatisation, outsourcing, offshoring, free trade, globalisation and market liberalisation have been a boon for all. In fact many Tories are as protectionist as socialists, just for different reasons.

  • paul barker 26th Aug '16 - 1:16pm

    Totally agree. The reason our Railways have problems now is that succsessive Governments ran them down from the 1940s to the 1990s. Since privatisation passenger numbers have double, on mostly the same tracks. If we had now all the lines that were closed in the 1960s things would be very different.
    There is a strong argument for more Public investment in rail but ownership is irrelevant to that.

  • Well it’s slightly OT but I’d rather renationalise the national grid. Quite why such a vital resource was ever privatised is utterly beyond me. I see disaster looming as it seems now to be run by folk with little to no experience of load balancing, their profits depend on the marginal capacity that our ‘slow-motion car crash’ energy policy has wrought, plus it very well might end up in foreign hands. Never mind Chinese part-owning Hinckley Point, what if they owned the national grid? Or the Russians? Or the French? Well I’ll be retiring to France so it doesn’t matter to me but you blighters should be worried 🙂

  • Dave Orbison 26th Aug '16 - 1:19pm

    Stimpson – so do you regard the Orange bookers experiment using the LibDems as a vehicle for prompting their ethos as an electoral success?

  • Hands up ….. who remembers our railways before privatisation ?? I do,and it was not good. Also, the railways started as private companies, only nationalised around WW11 time.
    I think a more contructive view would be to continue to improve the privatised system, not to go backwards

  • The Lib Dems got into government. So yes it was a success.

    The reason they lost so many seats is due to hard left bullying from Miliband and the trade unions, and hard nationalist bullying from Nigel Farage and the kippers directed at Nick Clegg, not to mention the Tories turning on the Lib Dems in marginal Lib Dem seats, by deliberate rutheless targetting, not to mention the ridiculous increase in Green support.

    The narrative was that Clegg was a traitor and a liar (both completely untrue), and unfortunately the electorate fell for it. It had nothing to do with Clegg’s competence, values and behaviour.

  • As for conductors, it seems to me their main function nowadays should be to check for suicide bombers or knife-wielding fanatics. In fact I’d rather have a burly train marshall than a conductor because presently the passengers are on their own. As usual though we will wait for the inevitable disaster before this occurs to anyone.

  • Lorenzo Cherin 26th Aug '16 - 2:00pm

    Jack makes a good case but two points worth alluding to .

    The reason in the survey he altogether misses the point, on demographics , is surely the reason the poorer or even middle income, potential or actual passengers, are rare, is the fares are so expensive !

    The UK has done well on safety and cleanliness and quality in some ways in addition , but at an enormous cost in fare increases . We need to establish a public private ethos . Profit making private companies , but more , much more subsidy , the mix must be the answer , let the profits be less or not , and the subsidy , investment or not , but we must accept that trains need to be affordable to most !

  • Sadie Smith 26th Aug '16 - 3:35pm

    I fear that anyone who bases ideas on what has happened in the last six to ten years will be missing the point. The country has spent a fortune on privatising things. So higher salaries are paid to the same managers for doing less. Really bright.

  • Another sub Tax Payers Alliance / IEA article appearing under the guise of “Lib Dem” Voice. No wonder the Party bumps along at 8% in the polls.

  • Stevan Rose 26th Aug '16 - 4:26pm

    This is far more complex than it appears and as much about monopoly/competition as it is about public/private.

    Some core infrastructure should be monopolies. The rail and road networks, the National Grid electricity and gas networks, water and sewage services. It would be grossly inefficient to have competing networks. Investment decisions need to be made on strategic public interest grounds rather than shareholder interest. Thus public corporations, run at an arm’s length for operational purposes, are the best delivery mechanism.

    When I comes to service delivery, competition is usually positive in increasing standards, reducing costs. The ownership model of the competitors doesn’t matter. Manchester Airports Group is a fantastic success story for public investment returning profit to local councils but competing with and beating private competition, even taking it over. And there are many examples of poorly managed private utility companies.

    The difficulties are with private monopolies whether or not competition is possible. So water should be public not private. Virgin West Coast Mainline needs competition. The East Coast Mainline was operating very well in public ownership with open access commercial competition on some routes. Channel 4 works as a state owned corporation competing with ITV and Channel 5 as well as the BBC. Workers’ Co-operatives, local authority enterprises, not for profits, management buy-outs, all viable ownership models that can work in some areas. I wouldn’t want to be too ideological about this. Whatever works for consumers including prices and returns.

  • Phil Beesley 26th Aug '16 - 4:29pm

    At least 30 huge companies provide railway services in the UK — I’m adding up manufacturers of rolling stock, track providers, train service operators and lease/PFI facilitators. Unless you are a total rail nutter — and I am not — it takes a long time to determine who is responsible for what.

    Even if the UK unravelled a few aspects of privatisation — train service operators, perhaps finance by PFI — it’s still a complex business. People talking about “renationalisation” haven’t defined what they mean.

    What do I think? Preferably, renationalise the lot (aside from rolling stock manufacture). Secondly, don’t change.

  • Stevan Rose – “This is far more complex than it appears and as much about monopoly/competition as it is about public/private.”

    Totally agree, no one mentions the ROSCO’s (as noted above by Richard Gadsden), nor the rail freight and logistics service operators.

    “The ownership model of the competitors doesn’t matter.”
    Whilst in general I would agree, I think the evidence indicates that having a mix of ownership models is beneficial, where the intent is to deliver service. For example, I think one of the effects of Directly Operated Railways, was to “raise the bar” on service and profitability for the “for profit” franchise holders.

  • Peter Parsons 26th Aug '16 - 5:29pm

    @Stevan Rose “Whatever works for consumers including prices and returns.”

    The current rail system doesn’t work for consumers. It is too complex and having multiple operators on routes contributes to this. I’ve stood on Stoke-on-Trent station listening to the announcements that certain tickets are not valid on the next service to Manchester Piccadilly (there are 3 different operators who run services on that part of the network) based on nothing more than which train company sold it. If the train I planned to catch is delayed or cancelled I simply want to be able get on the next one on the same route. I do not want to have to care about which company is running the next service, and I shouldn’t have to pay a significant premium on my ticket price (or pay twice) to do so (and I won’t even get into the farce that is split ticketing).

  • Stimpson,

    Insanity: doing the same thing over and over again and expecting different results. Albert Einstein

    Orange Bookery came very close to killing the Lib Dems as a political force. Repeating the experiment is likely to be fatal, just look at the German example of Orange Bookery, the Free Democratic Party, running sixth in a six horse race.

  • Graham Evans 26th Aug '16 - 9:52pm

    @Peter Parsons “If the train I planned to catch is delayed or cancelled I simply want to be able get on the next one on the same route.” Fair enough, but are you willing to see some fares rise to pay for this increased flexibility? Moreover, everyone seems to think that the advent of budget airlines has brought improved services and brought down prices for most people. Do you really want to return to the situation where you could only fly on the national carriers at a fixed price? If there is capacity on a route to enable different companies to compete then why is it a good thing to have competition for airway slots but not for rail slots? Obviously it is an entirely different situation when there is no spare capacity and the government and operator think that no alternative viable way of getting from A to B, or where the benefits of competition are quite marginal as is the case on many commuter routes. Incidentally, while it is true that shareholders have the opportunity to benefit at the expense of the travelling public from a monopoly situation, the same is true of the rail unions who have been able to obtain for their members pay levels which most other workers, both in the private and public sectors, would envy.

  • As I have just rejoined the party, it appears I now have my get out of moderation card. I just hope my decision doesn’t come back to haunt me and the party is able to avoid the siren call of Orange Bookery, because it isn’t a vote winner and never will be.

  • Stephen Hesketh 27th Aug '16 - 6:27am

    If I read only LDV, I would have to conclude that our party, like Labour, was also heading for its own restructuring’ moment.

    The truth on the ground is that the Lib Dems have not been taken over by the Orange Book minority. Colleagues fearing for the heart, soul and mind of our party should take great encouragement from the very clear adoption of Social Liberal Forum-proposed economic motion and our total rejection of fracking for gas at the Spring Conference.

    Social Liberal Democracy is alive and kicking in the party and amongst the membership at large.

  • Yes the highest earners are disproportionally rail commuters. That is not a reason to ignore spiralling prices. Everyone should have access to use the train to travel to work if they need it. Many are priced out and this is only getting worse. I pay about 4000 a year to get to work – only travelling 35 miles. It makes no sense to force people onto the roads. Its not a rich vs poor issue, we have the worst combination of price and quality in Europe and its getting worse because nearly all the franchises effectively have a monopoly.

  • Mick Taylor 27th Aug '16 - 7:36am

    The current privately run train services are not costless to the taxpayer. They are subsidised to a far greater extent than the former British Rail. British Rail was systematically starved of investment by successive governments and forced to become one of the most cash efficient railway in Europe. If it had had investment at the rate governments now pay to private companies it would have been able to create a far better and unified service than is currently provided by the mish mash of services we now have. Compulsory arbitration for public service disputes would solve the labour relations problems.
    The public want public ownership by a large majority. As Lib Dems we should be seeking ways of providing a publicly owned unified railway system not trying to justify the mess that passes for a railway system and invent increasingly bizarre ways of keeping it in private hands. Public money is already being poured into the railways. Without it most privatised rail companies would collapse. Stop this farce and bring the rail system back into public ownership by stopping franchises once they reach the end of their term.

  • “Households in the highest real income bracket make up 43% of yearly rail journeys, with those in the lowest income bracket making up only 10% of journeys.”

    Chicken or egg? Like in premier league football, an increased interest does not mean you should have the right to price out ordinary people and then claim that because your ticket holder is typically of a higher income that this practice is fine. I also wonder how often it’s higher income people who end up sitting on the floor next to the toilets or whether they “assert” themselves into seats reserved by others on busy trains or utilise upgrades to first class?

  • grahame lamb 27th Aug '16 - 8:28am

    The train-operating companies are in the private sector so why is tax-payers money being transferred to them. Is the tax-payer to be asked to subsidise Marks and Spencer? No. Is the the tax-payer to be asked to subsidise some of the banks? Oh, I wonder. And what about new power stations? Not one of any kind built since privatisation. The private companies say to the Government please give us loads of tax-payers dosh so that we can pass it directly to our shareholders. Don’t worry, the public are too thick to notice daylight robbery.

    This can’t be true. Surely.

    Do the Liberal Democrats have a policy? If so, I haven’t noticed it. Who is Tim Farron anyway?

  • We should ask Grahame Lamb what he suggests to deal with this issue. There is, however, absolutely no doubt in my mind that public, “third” and private sectors should work together. “Control” seems to be the word of the year – there is no doubt that the more we transfer to the private sector, the less (democratic) control we have. All manner of scandals have demonstrated that. With a “mixed economy”, using public subsidy, we can have the benefit of democratic control along with competition. This is what Thatcher and ger successors have thrown away.

  • Dave Orbison 27th Aug '16 - 9:43am

    @Tim13 “we should ask Grahame Lamb what he suggests to deal with this issue”.

    Why? He simply asked what the LibDem policy is. I asked the same question earlier this week and the best that was offered by Simon Shaw was a reference to the travel journalist Simon Calder (presumably not the official Transport spokesman for LibDems) or to google his MP and his local Press. Hardly a national platform for communicating LibDem policy.

    This article is no doubt related to all the media coverage that has recently occurred and comes down to how best to run our railways. Of course the LibDems are perfectly entitled to disagree with Corbyn’s proposals but it is not clear if they do. If the LibDems do not support public ownership (certainly a mixed bag of responses on LDV) then the public are entitled to ask the LibDem leadership what do you intend to do?

    Of course the problem with doing even that, as Grahame Lamb alluded to, is first you would have to find Tim Farron. Where is he?

  • Jane Ann Liston 27th Aug '16 - 9:50am

    I support the renationalisation of the railways in principle. However I think this has to be achieved by a coherent strategy worked out well in advance, rather than just in little bits. I accept the point about East Coast, though as I’m sure that is one of the more lucrative services, it would perhaps have been unrealistic to use it as a model of how renationalising the whole network would have worked.

    As to the richer people making most use of the trains – changed days indeed! In the 1960s and 70s it was only richer people who could afford to drive and eschew the railways, and the message in the 1980s continued that those travelling by train were only doing so because they were too poor to afford a car. (it’s almost the same for cycling now, with on the whole wealthier people choosing to pedal, by the way, or so it seems.)

    I do remember the railways in the 1980s and have to admit that in general the service is much better now. Most of the re-openings, for example, have happened post-privatisation. The old BR mindset seemed to assume that people didn’t really want to travel by rail except for long intercity journeys, but those living outwith the cities who really wanted to take a train would somehow make their way to the nearest ‘railhead’. And as for re-opening stations, that wouldn’t do because it would increase journey times, thus making the service less attractive and losing passengers! While there is still some of that thinking around, it is much, much less prevalent now.

  • “The public want public ownership by a large majority. ”

    It’s a knee jerk emotional response in many cases, ideological in others, would potentially increase fares / increase subsidies, and won’t improve the services one jot. Look at it properly. The rails are publicly owned and run and the way they manage the network is at the root of most operational issues. Poor rolling stock? ROSCOs and the Department for Transport are really in charge despite the branding. Private ROSCOs don’t add value so just set up a state owned not for profit arms length competitor. Surly/incompetent managers and staff? TUPE says they don’t change if you change ownership. Same people, same skills, same culture, same problems. Fares too high on commuter routes – blame the Government/Regulator as they set most of the fares. Fares too high on unregulated routes? Blame the Government/Regulator if they’ve prevented competition and/or the franchise fee is unsustainable so the franchiser holder might be carrying a loss. The TOCs on regulated routes take a risk that fares + subsidy cover running costs + dividend for investors. Not all lines make a profit. The old BR would close the line, the TOC tries to increase use to make it pay. So change the genuinely underperforming components but most of the time that’s not the brand on the train. The tax payer doesn’t subsidise TOCs, they subsidise the service where it costs more to run than is covered by fares that have been set by the Government Regulator. You can’t compare to a retailer where pricing isn’t fixed. The tax payer receives fees back on unregulated profitable lines. There’s no guaranteed profit and the risk has been privatised. Nationalisation would just take the risk of losses back into the public domain. It’s not simple.

    “Their takeover of Stansted signalled increases in charges”

    Excellent, that’s extra profit for my council to help pay for my bin collections. But it also triggered the development of Southend Airport as a competitor.

  • Agree that Rail Track is the main culprit. Train operator employees are well trained, no pun intended. This is a compelling read, thanks. Subsidising fares should also be considered. I get around Spain for a fraction of the price in a better service. But there is not so much to maintain.

  • Peter Parsons 27th Aug '16 - 10:41am

    @Graham Evans ““If the train I planned to catch is delayed or cancelled I simply want to be able get on the next one on the same route.” Fair enough, but are you willing to see some fares rise to pay for this increased flexibility? Moreover, everyone seems to think that the advent of budget airlines has brought improved services and brought down prices for most people. Do you really want to return to the situation where you could only fly on the national carriers at a fixed price? If there is capacity on a route to enable different companies to compete then why is it a good thing to have competition for airway slots but not for rail slots?”

    The current fares structure on the railways is a complicated mess. The staff don’t understand it (I’ve had staff refuse to sell me what I knew to be a valid and cheaper ticket and had to claim a refund from the company post-travel) and many customers don’t understand it as it requires knowledge of subtleties of the network organisation such as the Network Railcard boundaries. I shouldn’t have to investigate the vagueries of split ticketing for getting from A to B because, with a bit of effort, it is possible to get from A to B cheaper by buying 2 or 3 tickets than by buying 1 (my current record is a reduction from £102 to £28) if you know how to do it.

  • Peter Parsons 27th Aug '16 - 10:41am

    The airline comparison has flaw. Airplanes only have slots at takeoff and landing. Trains have slots for the whole of a journey due to being tied to rails. If a slow turboprop takes off from Heathrow to go to Glasgow, and then 10 minutes later a fast jet takes off to do the same route, the fast jet will not be stuck behind the turboprop for the whole of the journey, whereas on the railway that is exactly what happens. On much of the rail network local stopping services share the tracks with the long distance trains. The long distance trains don’t want to be held up by the slower services so the capacity is limited by the need to interleave appropriately to allow both types of train to run at the speed they want to. Take the example of the Stoke-on-Trent to Manchester section I referenced previously. The Northern Rail stopping service on that line takes just under an hour, fast trains from Stoke to Manchester take just over 30 minutes typically. If a fast train leaves Stoke too soon after the stopping service it will simply catch it up and be held up, so essentially there is a 30 minute time window in every hour when it is not desirable to send fast trains up the line, meaning capacity is constrained and it doesn’t happen. Slots for fast trains or slow trains are therefore limited and can’t simply be increased without consequence.

  • Jane Ann Liston 27th Aug ’16 – 9:50am…………….. I accept the point about East Coast, though as I’m sure that is one of the more lucrative services,……….

    If that were so why did the GNER and National Express hand back the franchise to the taxpayer?

  • Sue Sutherland 27th Aug '16 - 1:25pm

    Simon Shaw I agree we Lib Dems should come up with a middle way but this would be because we aren’t ideologically wedded to either public or private ownership. Our solution would seek to reduce climate change, an overarching requirement to ensure humanity’s survival, and then to meet the needs of customers. As we are Lib Dems we wouldn’t just be looking at the needs of the many (fast trains) but also those who want to travel shorter distances.
    I can’t find the post of the person who pointed out just how difficult it is to juggle both requirements on a single track but the obvious answer seems to be to have two different tracks meeting two different needs. We would also be trying to use rail rather than road for the delivery of goods for environmental reasons so this combination would enable this to happen. The structural unemployment of lorry drivers which would result would be partly solved by improving passenger security on trains, thus employing drivers.
    Public investment would be required for the infrastructure and their would probably need to be subsidies for certain parts of the network. This is where state monopolies were beneficial eg when the electricity supply to remote areas was funded by the profit from installing it in areas of high population, but it might be possible to charge more when awarding contacts to areas of high use in order to benefit less populated areas, depending on the profit which was expected to accrue to companies in high density areas.
    I’m sure there are lots of holes in my argument, but that’s what Lib Dems are good at. If these skills could be put towards increasing the use of rail to reduce climate change that would be amazing.

  • nvelope2003 27th Aug '16 - 1:31pm

    There is a shortage of lorry drivers but more would be needed if freight was moved onto the railways as it needs to be delivered to places not connected by a siding.

  • nvelope2003 27th Aug '16 - 1:40pm

    How many of those who want the railways renationalised actually use them to a significant extent, if at all. 60% of the population do not use them regularly. How many people remember what BR was like ?

    The railways are a useful addition to our transport network but carry a relatively small percentage of travellers, the majority of them being relatively well off middle class people.They seem to be an ideal candidate for private sector operation.

    So many railway enthusiasts rarely if ever use trains but want the taxpayers to continue to provide them, maybe so they can watch them from their cars.

    People like me who depend on public transport just want a reliable service, not endlessly disrupted by union militants, at a reasonable cost in terms of fares and taxpayer funded subsidies if they are unavoidable.

    We do have a fairly comprehensive bus and Express Coach network serving the main places in the UK.

  • nvelope2003 27th Aug ’16 – 1:31pm…..There is a shortage of lorry drivers but more would be needed if freight was moved onto the railways as it needs to be delivered to places not connected by a siding…..

    I fail to see your reasoning? If a train, instead of a truck, delivers a load from Southampton to Newcastle a driver who would have spent 8 hours driving can make umpteen local trips in the same time..

  • grahame lamb 27th Aug '16 - 4:05pm

    I have noted all the comments above including in particular the ones by those of you who have been kind enough to respond to my own comments.

    From conversations I have recently had, I sense that there is a new willingness (amonst members of the public at least) to look at the structure of the railways in the UK and to consider new and imaginative solutions. I am not going to prescribe (well, not today, anyway) but I do think that the time is right for a root-and-branch review of the whole system. Not everyone uses the train everyday, of course, but in London and the South East most of us know someone who does: directly or indirectly we are affected. I should very much like to know what the official policy position of the Liberal Democrats is. That goes for Labour and Conservative too.

  • nvelope2003 27th Aug '16 - 4:08pm

    Expats: Very long distance freight such as that is the major source of rail goods traffic. I assume that what those who want the railways to carry more freight are talking about is the shorter distance stuff so instead of having one lorry taking it all the way you will need a lorry at each end and another train driver. The shipper of freight would not be very happy if his customer had to wait for hours if not days while a long freight train was unloaded by one truck as it might have quite a long journey unless miles of extra railway track was laid.

  • To me it comes down to which is the better option, one company running everything (BR type scenario) or multiple companies doing running the tracks and trains. From a personal perspective I think a single company solution makes sense and as I believe if a industry by its nature is a monopoly it should be either owned by the state or a Non Profit committed to supporting the people, nationalisation even if over time makes sense. If however it is felt competition is the best solution for rail, then nationalisation makes no sense. I look forward to being convinced real competition can occur on the railways.

  • Mick Taylor 27th Aug '16 - 7:53pm

    All this nonsense about how bad BR was! BR was deliberately starved of cash to make privatisation look a better bet. And to those who insist we shouldn’t be taking part if we don’t use trains, I don’t have a car and use trains and buses all the time. I used them when it was BR and the trains round here ran more or less on time and did so even in the heaviest of winters.
    To Simon Shaw I would say this, you clearly don’t understand arbitration. Compulsory arbitration means the result is legally binding on both sides, so strikes after the fact shouldn’t happen at all.
    Now as to subsidy.
    1. Investment in infrastructure is much higher than that provided in the B R days.
    2. Private rail companies are subsidised to provide services – though not for highly profitable lines – and the cost to the taxpayer is much higher than the previous cost of BR, who, because they were a united railway system, were able to cross-subsidise less profitable lines from highly profitable ones.
    3. Why should private companies running railways be treated any different from any other companies providing services?
    4. The waste of having numerous rail companies running services (it’s not real competition at all) and having a myriad of ticketing outlets and a whole raft of incomprehensible fare structures could all be swept away if we had a single publicly owned railway whose aim was to provide decent service rather than make a profit.

  • @Mick Taylor

    BR was deliberately starved of cash to make privatisation look a better bet.
    But I seem to remember that Labour governments also starved BR of cash, just as they did with the Post Office and in the case of the Post Office ensured they took most of the profits rather than allowing the business to reinvest…

    Sorry, I don’t buy your argument, basically successive governments over several decades showed that politicians made poor managers of business; particularly when it came down to industrial relations – the recent junior doctor’s dispute should serve as a timely reminder of just how poorly government handled industrial negotiations and how both sides played more to the media than to addressing the real issues at hand…

    Basically, privatisation forced the government to get serious and make long-term investments, as exemplified by the recent contract awarded to Bombardier. Likewise after Hatfield, the government had to get serious about investing in existing infrastructure. Because the (Conservative) government learnt that the level of investment required after decades of under-investment, by successive governments, made the railways unattractive to investors. Even with private companies involved the government still backslides, for evidence of this we only need to look at the long list of rail infrastructure improvement projects with strong business cases that are on hold; yet politicians remain committed to a vanity project, who’s business and economic case hasn’t stood up to scrutiny…

    I would say this, you clearly don’t understand arbitration. Compulsory arbitration means the result is legally binding on both sides, so strikes after the fact shouldn’t happen at all.
    I would suggest that for arbitration to be considered a ‘normal’ part of day-to-day industrial relations then there is something seriously wrong, which as we know all to well is the case when politicians and unions treat any dispute as an opportunity to gain some limelight; I suspect ACAS has had less business from the rail franchise operators than it would have had if the railways were still nationalised…

    Finally, I question your belief that a nationalised railway, with significantly less oversight (as the entire management would disappear into the civil service) would require less subsidy than the current arrangements, and would remain focused on delivering service to the travelling public and not jobs for union members.

  • “BR was deliberately starved of cash to make privatisation look a better bet. ”

    BR was abysmal long before privatisation was a twinkle in a Transport Secretary’s eye. Involving the private sector in the delivery of rail services (it isn’t proper privatisation really) was and remains an underhand method of investing in railways without the borrowing appearing on the public accounts. The infrastructure is publicly owned and managed via Network Rail so that is public investment not subsidy. The structure also protects politicians from public anger about rail operations – they have outsourced blame.

    “Private rail companies are subsidised to provide services ”

    No they’re not. The Government decides a service is needed and sets the fare and decides the rolling stock. On many lines there is insufficient fare revenue available to cover the cost of running the service so a subsidy is required. The TOCs tender to run a portfolio of services based on fare revenue plus subsidy available. TOCs are paid to run services not subsidised to run them. If the rail services were privately run, unprofitable lines would be closed and/or fares would need to cover the full cost. When you fix the price of a service at below cost, insist that unprofitable services be provided regardless, and control how the service is delivered (rolling stock), you can’t treat the service operators like other companies. The TOCs do cross-subsidise within their franchise routes – they commit to a package and can’t cherry pick.

    There’s no waste as, with the exception of a tiny number of open access routes, there is no duplication, standard ticketing works across all operators and can be bought from any operator whether they run the service or not. Nationalisation would have no effect on fare structures. You would still need variable promotional and discount fares to fill empty seats. Timetables are integrated. Via National Rail (ATOC) you do effectively have an integrated rail network.

    What bits do you want in public ownership? Are you including a revival of BREL? The ROSCOs? Or just the brand names on the carriages? Following a popular mantra of renationalise the railways solves nothing really. Same people, same problems, same costs and subsidies, same fares, same timetables, new paint jobs at public expense, embarrassing increase in public borrowing, more pressure to close loss making lines.

  • Jane Ann Liston 28th Aug '16 - 1:05am

    @Expats ‘Jane Ann Liston 27th Aug ’16 – 9:50am…………….. I accept the point about East Coast, though as I’m sure that is one of the more lucrative services,……….

    If that were so why did the GNER and National Express hand back the franchise to the taxpayer?’

    Even a potentially lucrative service can be badly managed, especially in the case of unforeseen circumstances. I presume that the GNER/NE/Sea Containers operating model was not robust enough. Another operator might have managed it better.

  • I work in the industry, i wont comment about the problems in industrial relations as i be sacked. The issue is that companies own nothing its all lease from stations to track.and rolling stock. The issues with the railways at the moment are the complexity of the franchisee system and the fact that the infastructure that is currently being used was designed for a simplified and declining railway. So the number of trains being operated in some area exceed the capacity for the system its running on. The choice boils down reducing the number of trains but length the the train size. Until the infrastructre catches it. Also a centralised brain to cordinate rail service is needed with a switzerland style management where the timetable is written by the central body and then lines are contracted out to private operators. Thise pruvate contractors have rolling stock and trains all under their control.

  • nvelope2003 28th Aug '16 - 9:47am

    There seems to be a great deal of selectivity in the attitudes of some people in the way they regard surveys of public opinion. The majority support the reintroduction of grammar schools but the party is strongly opposed to that.
    When an opinion poll shows support for renationalising the railways then we are supposed to support it according to some though it is not really necessary as they are already nationalised but like most Government bodies they use private contractors to provide certain services.
    If Network Rail was renamed British Rail and the contractors who provide train services were forbidden from putting their names on the carriages and stations all the steam would go out of this discussion and we could all go back to complaining about late trains, curly sandwiches and blaming the Government for everything that goes wrong in our lives but I guess that is just what they do not want.

    The chief problem with railways, whoever runs them, is the stranglehold the unions, particularly the RMT, have over them. No Government, even a Liberal Democrat one, would ever allow the nation’s freight distribution to be controlled by the RMT as there would soon be empty supermarkets and factories closing because they could not get supplies.

    There is a great deal of talk about profiteering by private companies who are trying to provide the services but no mention of the profits made by the unions who are continually disrupting them, usually in a way that costs them almost nothing but adds to their already vast reserves and the salaries of their leaders.

  • Robert Wootton 28th Aug '16 - 9:50am

    A different economic system would allow the private railway companies to merge and become a community interest PLC monopoly. Thus eliminating profiteering and establishing an integrated national railway network.
    The government’s job is to govern/regulate the national infrastructure for the benefit of every citizen.

  • “If that were so why did the GNER and National Express hand back the franchise to the taxpayer?’”

    Because, bearing in mind the existence of some limited open access competition that appears to make peak East Coast fares less than half those on the West Coast, there are not the same opportunities to fleece the passenger and make a profit after coughing up the franchise fee demanded by the Government. It’s lucrative but not that lucrative.

  • Stevan Rose 28th Aug ’16 – 10:42am…….“If that were so why did the GNER and National Express hand back the franchise to the taxpayer?’”………………..Because, bearing in mind the existence of some limited open access competition that appears to make peak East Coast fares less than half those on the West Coast, there are not the same opportunities to fleece the passenger and make a profit after coughing up the franchise fee demanded by the Government. It’s lucrative but not that lucrative……………

    But the public run East Coast Rail (2009-15) paid in over £1 billion to government coffers (the second best return of all companies)….

  • nvelope2003 28th Aug '16 - 4:17pm

    Expats: The £1 billion was over 6 years. Virgin offered £3.3 billion over the franchise term. We shall have to wait to see if they can do it.

    Whilst it may not always be practical to have competing services on the same route, the franchise system does give an element of competition which is something railways have not had for decades and as a result there have been few innovations in working practices to bring down the colossal costs. The problem with subsidies to a nationalised monopoly is that there is no incentive to improve efficiency. Network Rail is an example of this.
    The Governments of the past may have underinvested in BR but that was because they saw it as a bottomless pit of wasteful expenditure under the control of the unions and wished to use the limited resources available for the roads where most travel took place because it was cheaper and offered the users, whether freight or passenger, door to door journeys. They have reversed this policy somewhat because of environmental factors and because of traffic jams and also to compete (get it) with the rail systems of Europe which made our system look pathetic, although in France for example, local service are very poor.

  • Dave Orbison 28th Aug '16 - 7:49pm

    @ Simon Shaw “be warned there is a local vetting system (if considering joining the LibDems)”. Really? Why should I or anyone else need to feel warned. I have only joined a political party in good faith. That once included the LibDems by the way. At that time nobody felt it necessary to ‘warn me’. How odd you feel it necessary to do so?

    Also, you ask “why do I need access to the LibDem Railway Policy in mid 2016”. Not that I realised I was accountable to you for my actions but just to put your mind at rest, given the public interest in this matter, not least many comments on LDV, yes despite being mid 2016, many of which offered conflicting views as to what should be done, it didn’t seem controversial to try and find out if there is an agreedLibDem party line on this. Hope that puts your mind at ease.

  • Dave Orbison 28th Aug '16 - 9:25pm

    @Simon Shaw Yes, I saw Paul’s helpful comments which of course post dated my original query as to what LibDem policy was.

    As for accusation that I am ‘obsessed’ for merely querying what the policy is, absent any reference I could find on the LibDem website, I find that rather silly. I think the disproportionate focus on Corbyn rather than any constructive policy proposals offered by the LibDems, if anything not least by yourself, would be more deserving of the ‘obsession’ tag.

    On a wider note I’m not sure how insulting former supporters is conducive to rebuilding support for the LibDems. I’m sure you feel you know better.

  • Dave Orbison 28th Aug '16 - 10:55pm

    Simon Shaw – you went back and counted how many times I asked a reasonable, and by the way totally genuine question re LibDem policy, any you accuse me of being obsessed?

  • Dave Orbison 28th Aug '16 - 11:31pm

    Simon Shaw I didn’t consider it accurate nor did I comment to that effect. Not for the first time, and no doubt not for the last, you simply make wrong assumptions of anyone who had the temerity to disagree with you.

  • Steve Trevethan 29th Aug '16 - 10:08am

    “That which works has a truth.” [from J. Dewey]
    The success of East Coast Railways 2009- 2015 shows that it had a truth aka. some valid information.
    A mixed approach with some nationalised, some privatised, some on a “not for dividend” basis etc. might provide:
    * comparisons between actual performances
    * less opportunity for cartel connections
    * competition between management types [This might be interesting if applied to banks.]
    Monolithic policies are less efficient because they reduce the threat of a good example.
    PS. It might be worth considering where profits go and whether responsible tax is paid upon them.

  • Steve Trevethan: Yes a mixture of different forms of operation would be a good idea although the success of East Coast was mainly because they did not have to offer a premium payment while the private companies did have to do so and overestimated the likely revenue. I am not sure premium payments are a good idea because you cannot force a private company to pay it regardless as they would go bankrupt and create even more cost. It would make more sense to offer a percentage of any profit. The company making the best offer would get the franchise. No doubt someone will quickly tell me why that would not work !

  • Nom de Plume 29th Aug '16 - 2:09pm

    It could be worth looking at what they do in other countries. I sometimes use the Czech rail system. They have a dense, extensively used rail network. It includes a national rail carrier (ČD) as well a private competitors. There is government investment in rail infrastructure and ČD is profitable. I am impressed.

  • The “success” of the DOR East Coast operation was anything but for the Treasury and the DfT. They were banking on far more than £1bn coming back to them in premiums from National Express.

    The resultant hole in the railways finances made the DfT do some very strange things as far as subsequent franchise competitions were concerned as they needed to get their net franchise premium/subsidy line back in balance.

    All the Government does when it runs a franchise itself is put a few expensively paid senior executives (mainly retired railwaymen) in charge of the existing management. It isn’t a very different outfit from an ordinary franchise but in the case of East Coast it under delivered on the expected financial return. Hence the rush to get it franchised again.

    The challenge going ahead is to try and end this bizarre money go round with the all powerful and slightly Stalinist DfT at the centre of a giant railway financial spiders web, passing the buck on fares rises and other bad news onto the train companies who have to dance fully to the DfT tune if they want another franchise.

  • Alex Macfie 2nd Sep '16 - 8:28am

    Graham Evans:

    “why is it a good thing to have competition for airway slots but not for rail slots

    We should bear in mind the differences between air and rail travel for the passenger. The airline industry, with its focus on discrete routes (especially for low-cost airlines) and mandatory pre-booking, lends itself to direct competition among operators much more easily than does rail, which is most useful as an integrated network and passengers generally buy walk-up tickets valid on any train (yes, I know there are advance tickets, but even these have some inter-availability among operators and they are not how the majority of train journeys are done). I’m not saying competition is not possible (I think the current arrangement of managed competition works fine), but it would not be desirable for trains to move wholescale to the low-cost-airline model of operation.

  • @Graham Evans – If there is capacity on a route to enable different companies to compete then why is it a good thing to have competition for airway slots but not for rail slots?

    Because the slots are different! With airway slots, I’m buying a landing/takeoff slots at various airports and then operating services between them. So if I purchase a slot at Luton say, and at some airport in Maine, there is little stopping me from operating a trans-Atlantic service; unlike with the railways where having a platform slot at Euston and Edinbugh is meaningless unless you also have the path that connects the two.

    Personally, I think we should be auctioning airport slots off, so airlines only get the use of slots for a number of years (15~20 years as per the railway franchises and mobile network operators), I suspect it would radically change the economics around expansion at Heathrow.

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