John Major's Original Privatisation Plan-Any merit today?

[Sad Sprinter]

So apparently John Major originally wanted to privatise the railways back to the "Big Four" days. Generally, railway forums are sceptical of big four style privatisation plans in the modern day-as am I. But would it have any advatange in capacity terms? For instance, the existing duplication of mainlines such as to Birmingham and Manchester-would there be a financial incentive to upgrade lines to compete with other services? St. Pancras to Manchester and Paddington to Birmingham are the main examples.

I'm assuming the work needed to increase the capacity to run these extra services would outweigh the passenger revenue?

 

[hexagon789]

So apparently John Major originally wanted to privatise the railways back to the "Big Four" days. Generally, railway forums are sceptical of big four style privatisation plans in the modern day-as am I. But would it have any advatange in capacity terms? For instance, the existing duplication of mainlines such as to Birmingham and Manchester-would there be a financial incentive to upgrade lines to compete with other services? St. Pancras to Manchester and Paddington to Birmingham are the main examples.

I'm assuming the work needed to increase the capacity to run these extra services would outweigh the passenger revenue?

I thought that idea was the preference of John Redwood but Major didn't agree with that idea and that's why we ended up with the system we did to an extent.

 

[coppercapped]

This topic comes up regularly...

There is a good description of the events and discussions leading up to the Railways Act 1993 in the book “All Change. British Railway Privatisation” edited by Freeman and Shaw and published by McGraw-Hill in 2000.

Five models for privatisation were put forward by different groups (the Cabinet Office, the DfT, the Treasury and outside parties) at different times. Very briefly these were:

* Regional - essentially re-creating the ‘Big 4’ (but could have been up to 12)
* Track Authority
* BR plc
* Sectorisation
* Hybrid of above.

So several models were available - and the supporters of each produced their own arguments. It was said that John Major was a supporter of the 'Big Four' model but this, and the other models, were put to one side as the difficulties of squaring the EU requirements for transparent state aid to private companies with the necessity for on-going subsidy became apparent. The railways were not, and were not expected to be, profitable.

The situation you postulate would never have happened - returning to a 'Big Four' (or six or eight or whatever) was not possible.

 

[devonexpress]

This topic comes up regularly...

There is a good description of the events and discussions leading up to the Railways Act 1993 in the book “All Change. British Railway Privatisation” edited by Freeman and Shaw and published by McGraw-Hill in 2000.

Five models for privatisation were put forward by different groups (the Cabinet Office, the DfT, the Treasury and outside parties) at different times. Very briefly these were:

* Regional - essentially re-creating the ‘Big 4’ (but could have been up to 12)
* Track Authority
* BR plc
* Sectorisation
* Hybrid of above.

So several models were available - and the supporters of each produced their own arguments. It was said that John Major was a supporter of the 'Big Four' model but this, and the other models, were put to one side as the difficulties of squaring the EU requirements for transparent state aid to private companies with the necessity for on-going subsidy became apparent. The railways were not, and were not expected to be, profitable.

The situation you postulate would never have happened - returning to a 'Big Four' (or six or eight or whatever) was not possible.

Out of interest why was it 'not possible' have only 4 train companies to provide funding too is a lot better than the current system of franchises overlapping franchises.

 

[krus_aragon]

Out of interest why was it 'not possible' have only 4 train companies to provide funding too is a lot better than the current system of franchises overlapping franchises.

The "Big 4" model would have been individual companies responsible for the infrastructure and services in each respective area (as if they owned them, just like in the pre-nationalisation days). The EU directive to allow fair open-access required infrastructure and operations to be separated (at least on the balance books).

You could have had four big franchises, but the whole "vertical integration" that BR had been doing all along wasn't an option.

 

[devonexpress]

The "Big 4" model would have been individual companies responsible for the infrastructure and services in each respective area (as if they owned them, just like in the pre-nationalisation days). The EU directive to allow fair open-access required infrastructure and operations to be separated (at least on the balance books).

You could have had four big franchises, but the whole "vertical integration" that BR had been doing all along wasn't an option.

Yet now for example on LNER, the government wants to merge train and tracks back together?

Surely it would have made sense for the train company to run the trains as if they owned them, but took more of a managerial role of the track, with a government body giving approvals etc?

 

[krus_aragon]

Yet now for example on LNER, the government wants to merge train and tracks back together?

My layman's understanding is that it's more a case of wanting to reshape NR divisions to reflect franchise boundaries, so that they can work closer/better together. They'd still be separate, accounting-wise.

Surely it would have made sense for the train company to run the trains as if they owned them, but took more of a managerial role of the track, with a government body giving approvals etc?

Quite possibly. But that wouldn't quite be what most thought of as the "Big 4" option.

 

[Tobbes]

The "Big 4" model would have been individual companies responsible for the infrastructure and services in each respective area (as if they owned them, just like in the pre-nationalisation days). The EU directive to allow fair open-access required infrastructure and operations to be separated (at least on the balance books).

You could have had four big franchises, but the whole "vertical integration" that BR had been doing all along wasn't an option.

We need to be a bit careful here. IIRC (@ChiefPlanner & @Bald Rick can confirm) the EU separation of rail and operator accounts to allow open access (and therefore on-rail intra modal competition) happened after the UK adopted this privatisation model in the 10 mins in 1995-96 when it look superficially workable/successful. Then Hatfield and Railtrack blowing up financially, and all the rest - but by which time it was too late as the EU had endorsed a Railtrack-esque model.

If this is right, then the Big 4 model could have had other EU State Aid problems, but it wouldn't have been the railway package that was causing the issue.