Deregulation

[Zoe]

Does anyone think that at least some routes should be deregulated? Rather than have the DfT let a franchise to a company to run the service they specify, why not just have companies bid for paths directly. It would also allow for competition on the same route if for example half of the paths between London and Manchester went to Virgin and the other half went to First. Personally I'd say no to this but I would have thought that if you support the free market then this would work well.

 

[Greenback]

No. In my opinion it would be even mor eof a disaster than what happened at privatisation!

 

[Zoe]

No. In my opinion it would be even mor eof a disaster than what happened at privatisation!

The theory is that you'd end up with lower fares though due to competition on route and not the route monopolies we have now.

 

[Greenback]

Yes, like all theories what looks good on paper may not turn out to be so good in practice.

Public transport is no place for the free market. Look at bus deregulation.

 

[Ivo]

It's a good idea in principle, but it just wouldn't work. If nothing else, how many routes would actually attract attention from the TOCs? Some commuter routes would be well-fought, as would a few IC routes, but can you imagine what might happen with some even fairly major routes such as Norwich to Liverpool? West of Nottingham, it would be well-fought; east of Nottingham, you might get two trains a day, courtesy of stock being sent elsewhere...

It would just give too much control to the TOCs. Some routes would have to be offered to TOCs for subsidies, and by the time that happens you may as well just stick with the current franchise system. I'ts not perfect, but at least it does the job...

 

[anthony263]

Yes, like all theories what looks good on paper may not turn out to be so good in practice.

Public transport is no place for the free market. Look at bus deregulation.

Yes i agreee, especially if your buses are run by a certain cowboy operator

 

[lookingforit35]

Good in theory, dreadful in practice.

Competition on the same route sounds attractive, but the reality is you wait longer until a train from "your" operator departs. London to Manchester is every 20 minutes at present, but company travel policy (ie may favour just one operator), fare restrictions, return ticket availability etc would likely mean a choice of say one train per hour. And heaven knows the nightmare if one TOC cancelled a service - would the others honour tickets?

So yes, sounds plausible but I'd say no thanks.

 

[Zoe]

London to Manchester is every 20 minutes at present, but company travel policy (ie may favour just one operator), fare restrictions, return ticket availability etc would likely mean a choice of say one train per hour. And heaven knows the nightmare if one TOC cancelled a service - would the others honour tickets?

Considering that you have to book in advance these days on to travel without it costing you a fortune on many intercity routes. I don't see what difference it would make as once booked you have a choice of one train per day. There could also be a train from London to Manchester every 15 minutes.

 

[The Planner]

How would you divvy up the lucrative paths though ?? highest bidder ?? as TOCs would only bid for those and just ignore the lightly loaded services unless they were also subsidised to some extent.

 

[Hydro]

Everything would just get pared back to only those services that turn a profit. The idea of public transport services would collapse. A branch line will just have a couple of trains in the morning and a couple at night. The sweetest plum would be gone, and another operator would struggle to make any meaningful cash on what's left.

 

[LexyBoy]

No! As others have said, buses - and with rail there's even less room for competition as capacity is limited in a way it is not on the road.

If a company is desperate to compete, they can build their own line. Worked fine in the 19th Century

 

[Kingfisher200262]

Actually, there is some merit in this, if it were done properly. The key, in my (admittedly radical) opinion is to regard the operators as marketing and customer service companies, migrating the interface between combined infrastructure and train provider from the rail/wheel to the interior of the train.

So, here's how it would work.

1. Network Rail would produce a Utilisation Strategy (RUS) for a given route or area, and would work with DfT and the Regulator to optimise capacity for that route /area;

2. Network Rail would provide infrastructure AND TRAINS to operate on the route / area, based on the capacity agreed with DfT and ORR;

3. Operators would bid for paths WITH TRAINS to operate the route / area in question, either on an exclusive or shared basis. Each path would have a value based on recent past occupancy and growth potential as defined in the RUS.

So, you might well end up with, say the WCML being operated by a mix of First, Virgin, SNCF and even Alliance Rail, but for the passenger the benefits would be numerous, because the operators would compete with each other, both on price and quality of service.

The benefits to the industry are also numerous, because it would provide a real opportunity for a national, standard rolling stock fleet to evolve over a period of time, with standardised maintenance, and a huge benefit from economy of scale.

Utopia? Probably but I'm sure that all parties would benefit, if it could be worked out.

 

[atillathehunn]

I was having a similar thought the other day, and the thought came to me when, as we were circling over Liverpool on the way in from Amsterdam the cabin crew were making their usual spiel, and then they thanked us for flying EasyJet and "we know you had a choice of airlines today". Well, the idea of privatising the airlines might work as something of a model. I know that there are substantial differences between running planes and running trains. But there might be some chance for an overlap.

There is a lot of demand for travel between Amsterdam and, say, London. And in response to that, there is a lot of competition. And each airline has to offer something slightly different. KLM for example give you free luggage, great if you're going to transfer to a long haul flight. EasyJet might offer you a dirt cheap flight, and gets you in early enough for a morning meeting. British Airways might offer you the best choice of flight from the airport in London closest to you. And Ryanair might dump you in Gronigen and claim it's Amsterdam, but only charge you £1.50. There are a finite amount of 'paths' through the airspace between the UK and mainland Europe, and each of these airlines bid for these slots into and out of each airport, and the airspace in between, each to cater to a different market. So why not apply the same to the core routes on the railway? Under the present system, there is very little direct interaction between supply and demand. And there's a pretty good analogy. Between Crewe and London there are two choices: Virgin and London Midland. Both offer very different services. Virgin: quick but quite expensive. London Midland: slow, but cheap. I can now use my 'vote' and say that I want a supply of cheap seats on a train that offers something different. I rarely have to be in London first thing in the morning, so I don't need to pay a premium to get there in 1hr30, and I am happy to pay £10 and it take 3hrs.

This type of competition is beginning to creep its way into the railway market with the various Open Access operators running on the East Coast, and we should welcome more of this from a more even keel. So effectively remove the dominant position of East Coast on running the services.

So I will admit that this is fine for the core routes, for example between London and Amsterdam. And I have never been on an anything but full flight between those two locations. But look at the example of the Highlands. I'm reasonably certain, and I am open to correction, that some of the flights between the Highlands and Islands operate only with the application of a subsidy from the government. At certain times of the day, these flights will make a profit. In the same way that the route between Norwich and Liverpool will make a profit, and at other times of the day it won't. So, you offer some form of incentive for an operator to run the service. This could be in the way of no track access charge, or just some form of direct subsidy, much in the same way that exists today.

A total hand over of the railway to the principles of the free market should probably be refused, but when the market for air travel took off (sorry...), it didn't mean the end of vital community air routes, like those between the Highlands and Islands, and many other examples round the world.

 

[Zoe]

Operators would bid for paths WITH TRAINS to operate the route / area in question, either on an exclusive or shared basis.

If you are going to allow a company to bid for exclusive rights to an area then that's little different to what we have now and there would be no competition on the route, there is the potential for Virgin to just get all the current WCML intercity paths, the idea of this plan is to get away from route monopolies. Much better to allow companies to bid for individual paths, it's unlikely they would be allowed to all go to a single TOC.

 

[Greenback]

Good in theory, dreadful in practice.

Competition on the same route sounds attractive, but the reality is you wait longer until a train from "your" operator departs. London to Manchester is every 20 minutes at present, but company travel policy (ie may favour just one operator), fare restrictions, return ticket availability etc would likely mean a choice of say one train per hour. And heaven knows the nightmare if one TOC cancelled a service - would the others honour tickets?

So yes, sounds plausible but I'd say no thanks.

Yes, that ound sjust like the bus industry in most places.

Considering that you have to book in advance these days on to travel without it costing you a fortune on many intercity routes. I don't see what difference it would make as once booked you have a choice of one train per day. There could also be a train from London to Manchester every 15 minutes.

Long distance inter city journeys are, in fact, quite a small percentage of the number of daily journeys. I don;t think that the existence of Advance tickets works as a good argument in favour of deregulation. There are far too many dibenefits for far too many othe rpassengers.

How would you divvy up the lucrative paths though ?? highest bidder ?? as TOCs would only bid for those and just ignore the lightly loaded services unless they were also subsidised to some extent.

Everything would just get pared back to only those services that turn a profit. The idea of public transport services would collapse. A branch line will just have a couple of trains in the morning and a couple at night. The sweetest plum would be gone, and another operator would struggle to make any meaningful cash on what's left.

Precisely. We need to move away from deregulation and the free market, not further towards it.

Actually, there is some merit in this, if it were done properly. The key, in my (admittedly radical) opinion is to regard the operators as marketing and customer service companies, migrating the interface between combined infrastructure and train provider from the rail/wheel to the interior of the train.

So, here's how it would work.

1. Network Rail would produce a Utilisation Strategy (RUS) for a given route or area, and would work with DfT and the Regulator to optimise capacity for that route /area;

2. Network Rail would provide infrastructure AND TRAINS to operate on the route / area, based on the capacity agreed with DfT and ORR;

3. Operators would bid for paths WITH TRAINS to operate the route / area in question, either on an exclusive or shared basis. Each path would have a value based on recent past occupancy and growth potential as defined in the RUS.

So, you might well end up with, say the WCML being operated by a mix of First, Virgin, SNCF and even Alliance Rail, but for the passenger the benefits would be numerous, because the operators would compete with each other, both on price and quality of service.

The benefits to the industry are also numerous, because it would provide a real opportunity for a national, standard rolling stock fleet to evolve over a period of time, with standardised maintenance, and a huge benefit from economy of scale.

Utopia? Probably but I'm sure that all parties would benefit, if it could be worked out.

Your suggestion is sensible from an operator and rolling stok viewpoint. Many TOC's want greater freedom and a move towards full deregulation. This is enough to make me against the idea!

In amongst all these passenger benefits, how would the current regime for interavailable tickets and through tickets work? I would be very much against a regime which does away with any of the facilities that we fought so hard to retain during the privatisation process.

 

[Zoe]

Long distance inter city journeys are, in fact, quite a small percentage of the number of daily journeys.

They are quite lucrative though. I'd have thought the number of journeys from London to Manchester by rail would be relatively high or it wouldn't justify three trains per hour.

 

[Greenback]

A total hand over of the railway to the principles of the free market should probably be refused, but when the market for air travel took off (sorry...), it didn't mean the end of vital community air routes, like those between the Highlands and Islands, and many other examples round the world.

The competition that people want would only apply to a very few routes - the busiest and most profitable. Operators would not be interested in providing services on large parts of the network at all.

Once again, think of the bus networks outside of London. There is no competition at all in some places, and extremely limited competition in others. The vast majority of bus users have no choice which company they use, and therefore see no beenfit of the supposed competition that deregulation was meant to bring in the form of lower fares and higher quality.

It is a dangerous path to takle, and one that will lead to a few benefits for a small section of the population, no change for most, and huge disadvantages for a signifcant number.
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They are quite lucrative though. I'd have thought the number of journeys from London to Manchester by rail would be relatively high or it wouldn't justify three trains per hour.

In my opinion it doesn't justify three trains an hour! No doubt it is lucrative, as there must be sales of the ridiculously priced Anytime and First Anytime tickets.

 

[Kingfisher200262]

Your suggestion is sensible from an operator and rolling stok viewpoint. Many TOC's want greater freedom and a move towards full deregulation. This is enough to make me against the idea!

In amongst all these passenger benefits, how would the current regime for interavailable tickets and through tickets work? I would be very much against a regime which does away with any of the facilities that we fought so hard to retain during the privatisation process.

I think you could underpin the system with something akin to the existing Settlement Plan and ORCATS, though it would probably need some tweaking to work properly with this new model.
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If you are going to allow a company to bid for exclusive rights to an area then that's little different to what we have now and there would be no competition on the route, there is the potential for Virgin to just get all the current WCML intercity paths, the idea of this plan is to get away from route monopolies. Much better to allow companies to bid for individual paths, it's unlikely they would be allowed to all go to a single TOC.

You're right, of course, but I suspect there are some patches where there wouldn't be much demand for paths and it may be necessary to bundle them together on an exclusive basis, with a subsidy (unless all the subsidy were paid to Network Rail and the operators were just on a revenue share with DfT) to get them away at all.

 

[yorksrob]

Even with a lucrative route with three trains per hour, what's to stop a more powerful competitor using their muscle to drive the alternative operators out of business (which is precisely what happenned on many of our de-regulated bus routes).

Don't say you'd regulate to stop this happenning, because that's not de-regulation. De-regulation is about letting "the market" dictate what services are provided, and contrary to certain ideologies, "the market" will often gravitate towards a system of private monopolies, because these produce the greates opportunity to generate a profit.

If you look at shops, larger chains will often buy up or drive out smaller competitors, but shops are relatively footloose and there are lots of them, so this is less of a problem. On the railway, each route is, in effect, its own limited market with its own limited infrastructure, so the chance for developing a monopoly is even greater (If you want to buy a packet of biscuits, you can go to at least four super markets and any number of smaller shops. If you want to go to London, you only have the two, or of you're lucky, three operators running services between where you are now and where you want to go).

For these reasons alone, de-regulation is a non-starter.