Nationalisation-the way forward

[Waverley125]

having previously been quite skeptical about the benefits of nationalisation (fearing a return to the bad old days of BR), I've converted to being pro-nationalisation. This for me, is a case of simple facts.

1)Companies e.g. stagecoach make profits on franchises massivley subsidised by the taxpayer. These franchises are nationalised in all but name.

2)Since privatisation, passenger numbers & fares have gone up. But so has subsidy. This is illogical

3)Private companies will always look to make a profit, so will not treat rail as the important amenity it is.

Therefore, i reckon the government should be looking to nationalise, in stages, the network. Firstly NX's franchises, followed by Stagecoach due to its contractual dispute with the DfT. We should then be looking to set up a workable nationalised railway system. Such a system would accept as a principle that rail is never going to recoup the money it invests through the farebox, but that the additional economic benefits brought by having a rail service is important enough to merit this loss.

The system, must be properly structured, and I'd suggest doing it as follows:

HMRI-Oversee safety on the railways, regularly inspect lines & can instruct maintenance to be carried out. Test trains would be turned over to HMRI from NR.

British Rail Office-Would have power to hire & fire regional heads, as well as setting minimum standards for all regions services. Would dole out the anual rail budget. Possible British Rail Chairman-Adrian Shooter or Chris Garnett

Regions would then divide up the network, being responsible for train operation, station management and maintenance. Each would have an annual maintenance budget, and an additional infrastructure allowance for improvements & rolling stock aquisition.

London Region: London Overground, Thameslink Services

Eastern Region: C2C, NXEA, FCC (Great Northern Services)

Midland Region: EMT, London Midland

Western Region: FGW (Thames valley & local services)

Southern Region: SWT, Southern, Southeastern

Northern Region: TPE, Northern

Liverpool Region: Merseyrail

Intercity: Virgin, AXC, NXEC, EMT (Liverpool-Norwich), FGW (Mainline services). This would be what is currently an open-access operator, running inter-regional services. Swallow livery would not be re-used.

Welsh Region: ATW

Scottish Region: FSR, SPT

Railfreight would remain privately run, subject to minimal track access charges as the purpose of nationalisation is to help encourage modal shift. As such, while regions could set ticket prices, they would be expected to do so to encourage travel.

High-speed domestic services would be run open access by another national company.

This system would encourage increases in service to presently poorly served areas. To prevent future government cuts, the maintenance budget would be legally ringfenced, so that even if all infrastructure projects are cancelled maintenance must stil be carried out to original specs. Staff from present franchises would be offered the chance to transfer over. High level management with good records would be offered regional manager positions (equivalent to CEO of a franchise, e.g. Chris Gibb to be Intercity Manager). DfT would have no day-to-day involvement in the running of the railway.

 

[EM2]

All well and good. Just one point that I can't see that you've addressed.
Would you expect that this re-nationalised railway will make a profit?
Because if so, it will never work in the modern age.

 

[F Great Eastern]

"Since privatisation, passenger numbers & fares have gone up. But so has subsidy. This is illogical"

In some cases this is true yes, but there are many areas that started of with susbsidy and since have gone onto a premium, so it's not the case across the board at all. I would think in the last few years it may ahve gone down overall, but the silly bidding from the likes of National Express is playing a large part in this.

 

[Spaceflower]

I think with privatisation there is too much onus on profit, therefore non profitable areas risk being neglected, as has been happening in the bus industry. Also the way franchises work currently, i believe there is little scope for investment unless from the taxpayer.

The whole privatisation for me was about the government making more money. I'm pro- nationalisation.

 

[OMGitsDAVE]

I think rail comies should but on a 5-year trial, where they have to prove what they have got. If they do not pass this trial to a high standard, the franchise is nationalised for a year (like NXEC), and then the PUBLIC would vote on who they think should be put forward for the franchise.

Such as:
- NXEC loses franchise.
- 1 Year later (after DfT running), companies enter their names for the voting & what they promise to bring.
- 2 months or so later, voting opens. Voting can last from 1 - 6 months, depending on the size.
- Voting brought down to 3 bidders.
- Voters bid with agreements, and challenges for the franchise.
- Winner takes over. (5 year trial)

BUT, if a company passes the 5 year trial, they get the full franchise agreement, until the end where another vote will take place.

These votes could be online, meaning there is a less chance of it getting on people's nerves and the likes.

Very simple, yet efficient rule.

 

[Metroland]

The Guardian had this debate earlier:

http://www.guardian.co.uk/business/2009/jul/02/rail-franchise-alternatives

Here's my opinion:

Vertical integration:

Pros: Less red tape, simpler track/train interface, less admin. Produced the most cost effective railway in the world, which is US freight.

http://www.aar.org/PubCommon/Documents/AboutTheIndustry/Overview.pdf [p7]

Cons: Natural monopoly, Financial failure would mean even bigger headaches, compartmentalisation of operations, harder to see where subsidies go for naturally loss making services.

Longer franchises

Pros: Gives time for TOCs to make money back on investment, worked well on Chiltern. Therefore funding more likely to come from private sector.

Cons: Harder to get rid of problematic operators, still the same old system where one hand doesn't know what the other is doing between the TOC and infrastructure owner, vast amounts of admin required for operational issues and contracts and risk aversion with costs.

Full nationalisation

Pros: Profits get ploughed back in to the railway, simple structure, gets around the problem that lines that are not freight heavy haul or main lines are loss making and allows cross subsidisation without the middle man.

Cons: Tends to to be hijacked by unions and run for the workers rather than customers without regulation, performance motive gone, unless overseen by a third party, State has to pay for all investment and Transport tends to get the least spending in the UK.

So is there an ideal system? Not especially, each has its pros and cons. Ideally all the world's railways would be equipped with a common signalling system like ERTMS, and you would have full open access with common rules, a number of full commercial services and a number of services supported by the state that are naturally loss making, like rural. Track could either be state or privately run. The only con would be cherry picking by private companies, so would need strong regulation. Ideally, all external costs for all modes would be internalised in order to allow fairer competition. The above is what the EU is actively trying to work towards but will take many years.

 

[90019]

Scottish Region: FSR, SPT

It's only FSR.
SPT and FSR are one and the same.
--- old post above --- --- new post below ---

Pros: Profits get ploughed back in to the railway

I have my doubts about that.

For example, look at the roads. In 2007, only approx. 17% of the money extracted from road users was reinvested in the roads, which is why we have a road network that is reaching it's full capacity in places, and one of, if not the, lowest amounts of motorways per square mile in the EU.

And this is from a government that is apparently fairly pro-road.

 

[Metroland]

I'll just add I think part of the problem is this ideological obsession for completion rather than public service. We've seen the transport sector almost entirely bankrupt itself through cut-throat completion and vast distortions in markets. The politicians cannot see the railways do not work in isolation and added vast amounts of performance and safety red tape, which puts the railways at an enormous disadvantage compared to other modes. Japan has the highest rail passenger modal share, and one of the reasons is road tolls. You cannot expect the railways to make profits with 'free at the point of use' roads and tax free aviation fuel and no mechanism to take into account positive and negative external costs.

It would actually be far better to just consider public transport as a public service, run for the passenger. Union power can be curtained through effective regulation and independent arbitration, similar to the police. There needs to be a new ethic in public service, where performance is driven by the rights of the user and overseen by a third party to control efficiency, rather than by profit. People in public service (and I include MPs, Doctors, Civil servants etc in this too) should understand about vocation and professionalism in order to motivate, not bonus cultures and large salaries.

I'd actually be in favour of a transport system that is overseen by an intelligent mind and the public at large rather than leaving it wholly to amoral markets, lobbying and vast market distortions.

It's only FSR.
SPT and FSR are one and the same.
--- old post above --- --- new post below ---


I have my doubts about that.

For example, look at the roads. In 2007, only approx. 17% of the money extracted from road users was reinvested in the roads, .

So say the road lobby who do not tell people about the huge costs of accidents, policing, congestion and so on which are often internalised in other modes (Such as TOCs paying out fines for minutes delay to each other and passengers). They are not 'profits', the taxes are used to pay for costs born by society as a whole, such as loss of GDP when skilled workers are killed in accidents (which the railways have to may compensation for) or to the NHS. More to the point the roads, like the railways do not stand in isolation. Car users gain by less congestion by passengers travelling on public transport, or less accidents and delay after freight is shifted to the railways, without spending any more on the roads. Rail users gain by cheaper fares paid by funds raised from roads, which provides an incentive to use public transport rather than clog the system up causing £24 billion pounds worth of cost to the economy.

 

[90019]

So say the road lobby who do not tell people about the huge costs of accidents, policing, congestion and so on which are often internalised in other modes

It wasn't from the road lobby.
My figures were from an official government report on spending a couple of years ago, although I'm really p*ssed off because I can't find the pdf anywhere to show my source, which is a right pain in the ar*e

The AA's comment in it was that the road network itself is underfunded and struggling to cope in areas, with users spending huge amounts of money to use them, of which only a small percentage is being reinvested in what they are paying to use.

 

[anthony263]

No doubt i think some some the franchises have been a bad idea, i would name first great western as an example but they seem to be getting their act together.
Some franchises on the other had have worked brilliantly such as chiltern and if there have been a few good points of privatisation, such as the open acess operators servig routes & places which may not have had a direct train service, even if the railways were nationalised.

Maybe we could nationalise the railways but still allow the open acess operators to continue operating and this could get a bit messy as the Welsh assembly would want to keep control of the welsh franchise and the same with the scotish government.

I have reard that the government is paying out more money in subsidy for the railways now than when they were nationalised, so maybe it might be a good idea to nationalise although i do agree about the problems with the Unions (the RMT particulary) and another problem is that the government if money is tight could juist cut services where it wants if the rail network was under public ownership like they have in the past.

 

[Metroland]

It wasn't from the road lobby.
My figures were from an official government report on spending a couple of years ago, although I'm really p*ssed off because I can't find the pdf anywhere to show my source, which is a right pain in the ar*e

The AA's comment in it was that the road network itself is underfunded and struggling to cope in areas, with users spending huge amounts of money to use them, of which only a small percentage is being reinvested in what they are paying to use.

Yep, but its figures quoted by the road lobby because they are simplistic and don't take into account the big picture, you would need to read papers from transport economists [for example http://www.its.leeds.ac.uk/projects/STCC/downloads/SurfaceTransportCostsReport.pdf ]to gain a better understanding. Indeed you have just quoted the AA, which IS (part of) the road lobby and wants money spent on roads not for the good of the country, but to get more AA membership direct debits.

Unfortunately there are too many people that engage in ideological debates without really understanding these issues and this is why we have so many problems. Sometimes the right solution is to spend more on a new road, other times its to set up bus based park and rides, other times it light rail or heavy rail. This is the intelligent debate we need to have in this country rather than leaving it all up to what makes the most or political interference. This is relevant, the whole reason BR had problems was it was under invested in for years, because groups with vested interests or politicians with ideologies would not allow any money to be spent on it, despite being more ideal for certain transport needs. We cannot have the nationalisation debate without understanding this, because if no money is spent for the very same reasons, it will be complete rubbish and will constantly lose passengers.

 

[Oswyntail]

...... People in public service (and I include MPs, Doctors, Civil servants etc in this too) should understand about vocation and professionalism in order to motivate, not bonus cultures and large salaries......

Whoopee, a hobby horse of mine You will find that, in general genuine public service workers are motivated this way (and are relatively lowly paid). What has happened (at least in the Health Service/ DH) is that "consultants" from the private sector have been brought in and demanded "comparable" bonus/salary schemes. Unfortunately, those brought in tend to be the ones the private sector wanted to get rid of.

 

[O L Leigh]

There are so many arguments for and against that it is perfectly possible to argue that both privatisation and nationalisation are the way forward. What I am certain of is that change for change's sake is not necessarily the right answer to a problem. The right answer is the one that works best, not the one that is most popular.

I'm not entirely sure that public opinion would actually support a nationalised rail network once they got their heads around what such a thing would actually mean. Under the current arrangements the DfT may actually control virtually every aspect of the privatised rail industry and pump in sizeable sums of money, but the public as a whole are generally ignorant of this fact. All they see are greedy TOC's making big profits on the back of running public services. Take that away and suddenly Johnny Q Public can see where his money is going and in what amounts, and I can't see him being overly impressed (especially if he's a season ticket holder).

Besides, other "successful" nationalised rail networks overseas only manage to do so well because the Governments and public understand that success only comes as a result of investment and subsidy in spite of poor financial returns. We just don't have that ethos here in the UK. We're still suffering the effects of almost 50 years of anti-rail sentiment, mismanagement and under-funding dating right back to the creation of British Railways. The British public as a whole would see such investment as pi$$ing countless billions up the wall.

What it seems to me is that the UK Government is trying to make the railways pay their way, so that any shortfall in income will mean a squeeze on investment. As such it is nothing new, as previous attempts to make the railways "pay their way" resulted in the ill-fated Modernisation Plan that achieved almost none of the things it should have, and the Beeching Report.

Given that we currently have a privatised rail network I would like to see whether or not it could be made to work before writing the whole thing off as a failure. This means a root and branch change to the way that the DfT manages the industry to give TOC's greater freedom of self-determination to invest and innovate as they see fit.

I just don't think that now is a good time to consider a wholesale change. It risks throwing the baby out with the bath water.

O L Leigh

 

[Spaceflower]

Given that we currently have a privatised rail network I would like to see whether or not it could be made to work before writing the whole thing off as a failure. This means a root and branch change to the way that the DfT manages the industry to give TOC's greater freedom of self-determination to invest and innovate as they see fit

Personally I don't think that would be a good idea. Ruthless service cuts, a fragmented service, higher costs of travel, polarisation/centralisation or whatever you want to call it.

 

[Metroland]

I'm not entirely sure that public opinion would actually support a nationalised rail network once they got their heads around what such a thing would actually mean. Under the current arrangements the DfT may actually control virtually every aspect of the privatised rail industry and pump in sizeable sums of money, but the public as a whole are generally ignorant of this fact. All they see are greedy TOC's making big profits on the back of running public services. Take that away and suddenly Johnny Q Public can see where his money is going and in what amounts, and I can't see him being overly impressed (especially if he's a season ticket holder).

Besides, other "successful" nationalised rail networks overseas only manage to do so well because the Governments and public understand that success only comes as a result of investment and subsidy in spite of poor financial returns. We just don't have that ethos here in the UK. We're still suffering the effects of almost 50 years of anti-rail sentiment, mismanagement and under-funding dating right back to the creation of British Railways. The British public as a whole would see such investment as pi$$ing countless billions up the wall.

What it seems to me is that the UK Government is trying to make the railways pay their way, so that any shortfall in income will mean a squeeze on investment. As such it is nothing new, as previous attempts to make the railways "pay their way" resulted in the ill-fated Modernisation Plan that achieved almost none of the things it should have, and the Beeching Report.

Probably the most lucid explanation of the problem I have seen! And of course aided and abetted by some of the idiot media who run nothing but negative stories. They do not inform people why something might be the right tool, or a good thing, represent it fairly (look at the late train and accident stories!) or get behind it! But then I suppose there is a lot of advertising space to fill from hungry car companies and plenty of money to be made out of negative news stories. That said, public service broadcasters like the BBC do a woeful job, presenting completely distorted pictures in entertainment programmes like Top gear. As a result people might say 'oh nationalisation is a good thing', but whether they are prepared to pay for something and support it, when they have a very distorted and jaded view of is another matter.

 

[O L Leigh]

Personally I don't think that would be a good idea. Ruthless service cuts, a fragmented service, higher costs of travel, polarisation/centralisation or whatever you want to call it.

Surely it doesn't have to be that way.

Giving a TOC total freedom may mean that they run down the loss-making routes in preference to the one that make a profit, but I wouldn't support such an approach. The DfT has a role to play in protecting such services and encouraging the TOC's to develop them, and I wouldn't want to see that changed.

However, what I would want to see change is the DfT meddling in the minute detail of every TOC's affairs. If a TOC has identified a need for new rolling stock they should be free to either invest in new trains or bid for cascaded stock from elsewhere. At the moment, all decisions on rolling stock provision are made by the DfT. Likewise, I see no reason why the DfT should interfere in timetabling issues apart from ensuring that certain expectations are met. The TOC's are not stupid and realise that the best way to make money from the rail franchises is to get bums on seats, and that means providing the services that people actually want.

I don't believe that the privatised rail model is dead and buried. Just because the current system doesn't work very well does not mean that the concept as a whole is wrong. Given that we already have a privatised railway, lets try a few different things with it and see if they work any better before writing it off.

O L Leigh

 

[Mystic Force]

The worse part of privitisation for me are the ROSCOs they operate as a cartel and manage to keep leasing units that are unfit easily done by limiting the purchase of alternatives. They were also sold off for far less than they should have. And the holding of stock by these companies will prevent renationalisation.