British Rail Leeds to London - Inside story (1991)

[HH]

The real shame of those rail stats is this:

Consider in 1988/9, the fares revenue was £1.8bn (about 3bn in today's money). The subsidy was around £446 million (less than £1bn now). This was in the days of so-called inefficient BR. Remember a lot of capital investment was going on - new sprinters, ECML electrification, new signalling, networker trains etc.

Wind the clock forward to 2012, fares revenue is £7.29 bn (over double what it was). Therefore you would expect the railway, even with no efficiencies, to be now subsidy free and is a position to replace the large amounts of sprinters bought 20 odd years ago! There is not only no investment plan in sight, the fares are making up only 65% of the cost!

In conclusion, some people have done very nicely out of rail privatisation, but it's not the farepayer or taxpayer!

That is a conclusion, but not necessarily correct. Total TOC profits are not that high, and NR is the biggest contributor to cost increases. I suspect however (without having the figures) that Rolling Stock is an area where large profits have been made, virtually for nothing - little work and little risk. DfT procuring the stock isn't helping there, judging by the price of IEP.

 

[Metroland]

I don't own a car. I use a combo of train, bike and bus and can get pretty much anywhere within reason. My monthly travel costs rarely exceed £100 pounds per month (£50 is probably the average), where most car drivers costs are around £500-600 plus per month. (around £6600 per year).

Whereas some rail fares are expensive, many do offer good value, I can get to a large amount of places for the £10-20 mark, and rail rovers offer excellent value.

If people want to spend that sort of money it's their choice, but I take the view that the £5k per year saved is either better spent on other things or invested for the future.
--- old post above --- --- new post below ---

That is a conclusion, but not necessarily correct. Total TOC profits are not that high, and NR is the biggest contributor to cost increases. I suspect however (without having the figures) that Rolling Stock is an area where large profits have been made, virtually for nothing - little work and little risk. DfT procuring the stock isn't helping there, judging by the price of IEP.

Whose talking about profits, that's your assertion? I'm only stating facts, there's no disputing, that unit costs have risen substantially. If the railway was running under the same framework of 1989, given there are now double the passengers, it should have been pretty subsidy free. Given that fare increases always go up above the rate of inflation, we can therefore conclude for the taxpayer and fare-payer privatisation has not been a good financial deal. Fact.

Please cite one economist, commentator or politician that disagrees.

You could argue that freight costs have fallen, that is true.

You could also argue that passenger numbers are up and that's because of privatisation. However that point is debatable as most nationalised railways across Europe and London Underground have seen substantial passenger increases. Plus the government has more control over the buying and running of trains than it ever did!

 

[yorksrob]

That is a conclusion, but not necessarily correct. Total TOC profits are not that high, and NR is the biggest contributor to cost increases. I suspect however (without having the figures) that Rolling Stock is an area where large profits have been made, virtually for nothing - little work and little risk. DfT procuring the stock isn't helping there, judging by the price of IEP.

That the taxpayer hasn't done particularly well out of the current set up seems to be the conclusion of the powers that be. That's the key issue, whether correct or not.

 

[snail]

Interesting fare comparison.

The First Coast website is advertising Leeds to London for £13 in February. What was the equivalent to that fare 20 years ago?

 

[Metroland]

Back to ~1990 I preferred Railwatch, which gives a good insight to what BR at its height was like

http://www.youtube.com/watch?v=H_ooheAqz6c

http://www.youtube.com/watch?v=hEqieTcay5g

http://www.youtube.com/watch?v=RTmvuRU_2Gg

http://www.youtube.com/watch?v=BX01NnAQGfc

http://www.youtube.com/watch?v=i0SkapMBB94

http://www.youtube.com/watch?v=qTeNmYRx3KE

http://www.youtube.com/watch?v=TNGzUrjOjuo

http://www.youtube.com/watch?v=7d_jheThmTU

http://www.youtube.com/watch?v=Zg4FdUZ82VE

 

[Goatboy]

What a fascinting show, I had no idea there was a regular documentary series presented in a non patronising way back in the 90's. Wonder what happened to it?

 

[Cletus]

Why would the man who said he wanted his ticket signed been arrested?

Who the woman (Margaret Cooper?) who's company was in financial troubles in that recession?

 

[HH]

Whose talking about profits, that's your assertion? I'm only stating facts, there's no disputing, that unit costs have risen substantially. If the railway was running under the same framework of 1989, given there are now double the passengers, it should have been pretty subsidy free.

Costs have risen; the question is whether they would have risen anyway. I don't know how you could prove that they wouldn't, and therefore this is an assumption, and one that I don't necessarily fully agree with. I feel pretty certain that both power and staff costs, at the least, would also have risen under BR.

Also a doubling of passengers does not necessarily mean a lowering of unit cost. That's another assumption. There are plenty of examples where size has led to inefficiencies, or diseconomies of scale.

 

[Metroland]

Costs have risen; the question is whether they would have risen anyway. I don't know how you could prove that they wouldn't, and therefore this is an assumption, and one that I don't necessarily fully agree with.

The majority of this was addressed in the McNulty report. Costs have risen for a number of reasons, from above inflation pay rises, to the Hatfield effect, the bankruptcy of Railtrack and the financing of NR, from fragmentation and over specification, to over regulation and inefficient supplies and labour markets.

http://assets.dft.gov.uk/publicatio...ealising-the-potential-of-gb-rail-summary.pdf

I feel pretty certain that both power and staff costs, at the least, would also have risen under BR.

Power costs make up a relatively small proportion of overall costs to the industry. As for labour costs, it is highly doubtful they would have risen so fast. The labour market is highly unionised and has fully exploited either skill shortages, or the fragmentation of the industry. It has been able to gain above inflation pay rises because it is a specialised market, with a highly restrictive input. None of this was properly anticipated for or evaluated during privatisation.

Also a doubling of passengers does not necessarily mean a lowering of unit cost. That's another assumption. There are plenty of examples where size has led to inefficiencies, or diseconomies of scale.

No, but under normal circumstances increased ridership does lead to less call on the public purse. You only have to look at the late 1980s boom in passenger numbers under British Rail and the consequential falling subsidy.

I accept the privatised train companies could have chosen a form of operation that is not especially cost effective, it terms of service pattern, interfaces, or delivery, and this is somewhat addressed in the McNulty report too.

However, the wider question is why has private industry failed to deliver significant cost benefits over a supposedly inefficient nationalised model. I think there are a number of reasons for this, the most significant being public service obligations cannot be squared with the desire to make a profit, and consequently over regulation (demanded by the public and politicians) leads to further erosion of that position. The question of moral hazard within the industry, and lack of truly open supplies, labour and management markets is another problem.

It's not to say another model of privatisation could not have delivered more. Nevertheless, my point stands that in financial terms for the tax payer and fare payer, the current model to date has not been a good deal and a lot of money has been wasted. This is almost universally agreed by economists, transport commentators and academics.

 

[HH]

This is almost universally agreed by economists, transport commentators and academics.

That's not saying a lot. How many economists have pronounced on the matter? Academics are academic (i.e. they have no experience of the real world), and transport commentators are universally a bunch old ex-BR fuddy-duddies, who've been predicting doom since the world began.

I agree that there are several things that went wrong with privatisation, but again: "Costs have risen for a number of reasons, from above inflation pay rises, to the Hatfield effect, the bankruptcy of Railtrack and the financing of NR, from fragmentation and over specification, to over regulation and inefficient supplies and labour markets" who is to say that many of these, and similar problems, would not have happened anyway?

I'm sorry, but you are presenting opinion (and I don't care how many people have it, it's still an opinion) as facts. Learn to distinguish the difference.

 

[9K43]

When the smoking Donny man got on the loco it made me shudder.
I had to put up with those who smoked all my time on the railway.
I hate the stench of fag smoke, and only recently has it been made where it should be eg as far up Ben Nevis as possible so I do not have to smell the stench of other peoples cig smoke.
One person smoking in a confined space can upset a bus load of non smokers.

 

[tbtc]

We really should have a mega "privatisation" thread. But here are a couple of my opinions (which nobody asked for) about the cost rises etc:

Safety seems to be much more of a priority nowadays - maybe because of private firms being more paranoid about media reputation (compared to BR)? Look at the hysteria over every level crossing accident/ SPAD nowadays - these things were pretty unreported. I think that this can be directly related to privatisation (though the 24hr new agenda has made this worse too)

Building standards are a lot more robust (which means "expensive"). No more flinging up a cheap plastic bus shelter for passengers waiting for a Pacer - like BR could get away with. Things seem pretty over-eingineered nowadays in comparison. I think that this can be directly related to privatisation (though some things like DDA compliance has made things more complicated/ expensive too)

Despite Bob Crow's protestations, nationalisation would be terrible for Unions - they've exploited the division between different TOCs very well, hence the big pay rises/ job security (at a time when many people in the UK are seeing real terms pay cuts/ redundancies/ downsizing). I think that this can be directly related to privatisation - BR didn't need to buckle to Union demands as they could afford to play hardball.

The number of passengers increasing is important, but it ignores the fact that a lot of that increase is made up of commuters (who require additional peak hour capacity that is underused during the rest of the day, so may end up costing the railway money) and those on cheap advanced tickets (who aren't paying the full cost). So doubling passenger numbers doesn't mean fare revenue doubles and may mean that costs increase more (to provide the rush hour trains that are only required a couple of times a day). This isn't totally related to privatisation, but it is worth considering the significance of 'Passenger numbers have doubled' - take the example of bus companies who've seen passenger numbers go up considerably due to OAPs getting "free' bus passes but actual revenue to the bus company may have gone down. Bums on seats isn't always the best way to assess profitability.

 

[hairyhandedfool]

Why would the man who said he wanted his ticket signed been arrested?....

The train was late so presumably he had a curfew.

 

[Metroland]

That's not saying a lot. How many economists have pronounced on the matter? Academics are academic (i.e. they have no experience of the real world), and transport commentators are universally a bunch old ex-BR fuddy-duddies, who've been predicting doom since the world began.

I agree that there are several things that went wrong with privatisation, but again: "Costs have risen for a number of reasons, from above inflation pay rises, to the Hatfield effect, the bankruptcy of Railtrack and the financing of NR, from fragmentation and over specification, to over regulation and inefficient supplies and labour markets" who is to say that many of these, and similar problems, would not have happened anyway?

I'm sorry, but you are presenting opinion (and I don't care how many people have it, it's still an opinion) as facts. Learn to distinguish the difference.

We're going to have to agree to disagree.

I presented the facts a few posts ago about above inflation fare rises virtually every year, and rising tax payer input despite greater revenue input, apart from maybe the last couple of years or so. The figures are there for all to see.

As you have not provided any real evidence to the contrary, apart from possible unproven assertions it would have happened anyway (a position very few agree with, including the government and DfT who commissioned the McNulty report) with regret there is no point in continuing the discussion.

 

[HH]

We're going to have to agree to disagree.

I presented the facts a few posts ago about above inflation fare rises virtually every year, and rising tax payer input despite greater revenue input, apart from maybe the last couple of years or so. The figures are there for all to see.

These are facts. That it would have been better under BR is an opinion.

 

[Retorus]

Wow, very cool seeing them fly through my home station at 09:18 in the video.

 

[43074]

Building standards are a lot more robust (which means "expensive"). No more flinging up a cheap plastic bus shelter for passengers waiting for a Pacer - like BR could get away with. Things seem pretty over-eingineered nowadays in comparison. I think that this can be directly related to privatisation (though some things like DDA compliance has made things more complicated/ expensive too)

I seem to remember Chiltern Railways were fined £500,000 by DfT because they failed to complete station improvement schemes on time (i.e for failing to install a platform shelter at one of their stations by a date) amongst other things. Part of this fine was also for carrying out timetable improvements in favour of Open Access operator Wrexham and Shropshire. The delights of rail privatisation... :roll:

 

[yorksrob]

The number of passengers increasing is important, but it ignores the fact that a lot of that increase is made up of commuters (who require additional peak hour capacity that is underused during the rest of the day, so may end up costing the railway money) and those on cheap advanced tickets (who aren't paying the full cost). So doubling passenger numbers doesn't mean fare revenue doubles and may mean that costs increase more (to provide the rush hour trains that are only required a couple of times a day). This isn't totally related to privatisation, but it is worth considering the significance of 'Passenger numbers have doubled' - take the example of bus companies who've seen passenger numbers go up considerably due to OAPs getting "free' bus passes but actual revenue to the bus company may have gone down. Bums on seats isn't always the best way to assess profitability.

A very good point. Although to be fair to the modern railway industry, bums on seats do bring a lot of political capital, as Government's find it more difficult to make cuts when passenger numbers are increasing. This was as true for BR during the late 80's as it is today.

I think cheap advanced tickets are actually quite important politically as well as they make the railway more open to lower income groups. Mr Hammond's comment that the railways are "a rich man's toy" are an illustration of quite a dangerous mindset for the railway.

 

[tbtc]

A very good point. Although to be fair to the modern railway industry, bums on seats do bring a lot of political capital, as Government's find it more difficult to make cuts when passenger numbers are increasing. This was as true for BR during the late 80's as it is today.

I think cheap advanced tickets are actually quite important politically as well as they make the railway more open to lower income groups. Mr Hammond's comment that the railways are "a rich man's toy" are an illustration of quite a dangerous mindset for the railway.

Agreed - cheap advances are great for filling "empty" seats off-peak and for avoiding the impression that railways are only there for the "business" market - if you want to attract subsidy then (as you say) you need to show that you are there for *everyone*.

It's just dangerous when people multiply the increased passenger numbers by the increase in the cost of full open tickets to come up with an amazing increase in revenue, when the reality is that a big increase in passenger numbers is those on cheap advanced tickets (or the kind of "TOC specific" tickets that weren't available under BR).

 

[HH]

People also forget that during the first franchising period regulated fares were set to RPI -1% and adjusted by performance, which in some cases (SE for example) led to further real price reductions.

 

[Metroland]

These are facts. That it would have been better under BR is an opinion.

Indeed, but my point was private industry has not reduced costs over a nationalised one, in fact increased them, please try to read more carefully next time.

 

[dstrat]

http://www.youtube.com/watch?v=cyyYeIuaNik

Full programme, 48 mins.

 

[yorkie]

The nationalisation vs privatisation debate is boring me (and I know I'm not alone thinking that!) and has been done to death in many threads, so back to the video...

Anyone know if any of the staff are still on the railway now, if so which ones?

The inspector who caught the woman travelling from Grantham, Peter Kirton, sadly died last year, there is some info here. The guard who he was inspecting (Kevin) is still on the railway but works for XC and has almost every connection memorised. If you have a ticket to a random station that hardly anyone has heard of, the chances are he will not only know where it is but be able to tell you the times & even platform of the next train to catch to get there!

I doubt many of those drivers are around, some of them looked on the verge of retirement then. But some of the on-board staff may still be there?

 

[YorkshireRider]

Jon, the guard who signed the ticket is still here and still on the ECML, although RMT business means he isnt on board working a train that often.

 

[LE Greys]

I remember this being broadcast, not very long after Running to Time about the design and construction of the 91s (which taped and still have the second half of). I don't really have time now, but certainly intend to watch both later. It will make an interesting contrast.

 

[ainsworth74]

(which taped and still have the second half of)

Youtube has the whole thing here.

 

[Roverman]

Jon, the guard who signed the ticket is still here and still on the ECML, although RMT business means he isnt on board working a train that often.

Bet he's on a sight more than £13k now

Just to put the Senior Conductor wage into context of 1991, my father was a Fire Officer in West Sussex Fire Brigade and he earnt £16k.

 

[OuterDistant]

One of the drivers is shown setting out at 03:00, and signing on duty at 04:30 after walking to work. A 4 mile walk to set you up for the day?

 

[Roverman]

Well he wasn't exactly pushing it, 4 miles in 90 minutes is not a lot for a fit person. I manage 2.5-3 miles most Sundays and I'm not fit.