Alternative Forms of Privatisation?

[Peter Kelford]

The concept of privatisation, 20 years on is still contentious. I'm not about to blame or praise John Major and his government for doing it. I just think that it could have been done differently. There could privatisation of the major trunk routes and their branches together with rolling stock and infrastructure obligations. It would result in companies somewhere between pre and post grouping size. E.g. ECML + Cambridge/ Lynn line or GWML Penzance-Plymouth + all Cornish lines.

 

[Ted172]

I think another form of privatisation could be co-operative but using the same geographical franchises we have now. With a co-operative railway, profits will go back into the railways and communities around the railways. This could work for certain train operating companies but not all of them.

 

[Highlandspring]

John Major’s original intention, which was quickyly lost along the way, was vertical integration in the model of the Big Four.

 

[coppercapped]

The concept of privatisation, 20 years on is still contentious. I'm not about to blame or praise John Major and his government for doing it. I just think that it could have been done differently. There could privatisation of the major trunk routes and their branches together with rolling stock and infrastructure obligations. It would result in companies somewhere between pre and post grouping size. E.g. ECML + Cambridge/ Lynn line or GWML Penzance-Plymouth + all Cornish lines.

John Major’s original intention, which was quickyly lost along the way, was vertical integration in the model of the Big Four.

This whole debate about privatising the railways is one that never seems to die!

None of the concepts are new - they were all thought about during the run-up to the to the Railways Act 1993. There is a good description of the events and discussions 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 - the model adopted
• BR plc
• Sectorisation
• Hybrid of above.

So several models were available - and the supporters of each produced their own arguments. The was no basic premise about the structure apart from the feeling that costs could be reduced and the quality of service improved if the private sector were to be involved.

There were all sorts of arguments within the working groups on how to handle the necessary on-going subsidy and it became clear that finding an acceptable solution for this issue would drive the form of organisation finally adopted. It was decided the best way to handle the subsidy issue was for potential train operators to bid for a group of services - a clear figure was available for each area and any cross-subsidy between profitable and loss-making services was up to the individual operators to manage. This avoided the DfT having to identify costs and revenues on an individual service basis.

So, yes, other structures were possible but a clear method of paying a subsidy without the payments breaking the rules about giving state aid to private companies would have had to have been developed.

 

[Journeyman]

A lot of people at the time thought that InterCity could have been privatised as a single national business, possibly by a share issue. I think this probably could have worked - the extinction of the unified, consistent InterCity brand and network is one of the worst things to have come about through privatisation.

 

[Mag_seven]

There is only one option I would have preferred:

"Do Nothing"

 

[Aictos]

The only one I would have supported is:

Keep BR as it is but have separate accounts for Infrastructure and Services which is what the rest of the EU actually went for...

 

[PeterC]

A lot of people at the time thought that InterCity could have been privatised as a single national business, possibly by a share issue. I think this probably could have worked - the extinction of the unified, consistent InterCity brand and network is one of the worst things to have come about through privatisation.

Certainly the brand could have been kept but it would have been sufficient to require the TOCs to use the brand.

 

[tbtc]

These things always go in circles. People like the idea of microfranchises, like one for Devon/Cornwall... but then they want one unified network across a region... then they complain about a lack of competition... then they complain about unnecessary competition (when TOCs are fighting for the same market)... whatever we currently have, the grass always looks greener elsewhere - one year we should be merging "local" and "InterCity" services (so that we can hide the subsidies required for the quieter branches), the next we should free up different types of service into different franchises so that management can focus on one thing. Plus ca change...

One thing I would say is that we should be careful when wishing private companies take over the infrastructure and we should have some kind of plan for the viability of long distance routes that would pass over different "regions" - e.g. if you are the company running tracks and trains from Sheffield to Chesterfield then what's your incentive to give plum paths to "foreign" routes like Aberdeen - Penzance or Liverpool - Norwich - or to regulate those trains to keep them to time? Fragmentation can be a slippery slope...

the extinction of the unified, consistent InterCity brand and network is one of the worst things to have come about through privatisation

I'm not sure that InterCity was quite as unified/consistent as it's now remembered as being.

• 158s were InterCity (running routes like Glasgow/ Edinburgh - WCML - Manchester and other CrossCountry routes down to Portsmouth etc)
• 73s were InterCity (Gatwick Express)
• Mk2s were InterCity

Routes from London to cities like Norwich/ Oxford didn't qualify as InterCity, nor did routes between like Edinburgh - Glasgow Queen Street or Bristol - Cardiff (but the one from London to Gatwick Airport did).

Some trains ran InterCity services without carrying the branding/livery (like the 158s I've mentioned), some trains ran around in what most passengers would have assumed was InterCity livery (e.g. the "Mainline" 37s).

We all complain about inconsistencies and differences between TOCs today but it was ever thus - e.g. the ECML getting more in the way of First Class facilities/ meals than the parallel MML did.

Don't get me wrong - BR were great at branding and marketing - probably much better at those tasks than they were at actually running trains most of the time - but I think that the InterCity brand/network was more complicated/diverse than people now remember it.

 

[pdeaves]

Routes from London to cities like Norwich/ Oxford didn't qualify as InterCity

... except that Norwich was InterCity Anglia (the point still stands, though)

 

[61653 HTAFC]

If the GB system hadn't been privatised in the way it was back in 1993, some degree of "liberalisation" of the market would have been enforced by the European Union. This may have led to the same Open Access services we have now, or in the situation now seen in many mainland EU countries which sees private operators (ironically including National Express in Germany) taking on certain routes.

Open Access type operations also take place in Europe, such as the RegioJet services in Czechia.

 

[LOL The Irony]

Here's one: Government owns everything, private companies bid to run certain areas eg: North West England and then lease the rolling stock and pay track access charges. Where nobody bids or pulls out, the Government then take over the running until a new company comes along (if and when). So as long as these companies give sufficent notice before they leave (lets say 6 months), there aren't any penalties. Provisions can also be there in case a company or company's parent goes bankrupt, the service can be operated by the Government the very next day.

 

[43096]

A lot of people at the time thought that InterCity could have been privatised as a single national business, possibly by a share issue. I think this probably could have worked - the extinction of the unified, consistent InterCity brand and network is one of the worst things to have come about through privatisation.

I always thought the best option for InterCity would have been to split off the infrastructure side (but only because they would have had to) and just sold it/floated it as a straight commercial business. No IC franchises, no subsidy, just a privatised company (like BP, BT etc were).

 

[AndrewE]

If the GB system hadn't been privatised in the way it was back in 1993, some degree of "liberalisation" of the market would have been enforced by the European Union. This may have led to the same Open Access services we have now, or in the situation now seen in many mainland EU countries which sees private operators (ironically including National Express in Germany) taking on certain routes.

Open Access type operations also take place in Europe, such as the RegioJet services in Czechia.

My memory is that Europe was pushed into "liberalisation" by the UK (especially Thatcher) because it was thought that the UK's wonderful infrastructure companies could clean up across the channel as well as worldwide.
What followed was a long period of European resistance to "Anglo-Saxon capitalism," as they could see it didn't have any of the objectives that their utilities operated by. Also a more recent spell of worldwide utilities being taken back off UK companies due to repeated failures to deliver or to invest as promised.
As has been said before, you can't polish a turd!

 

[Bevan Price]

I can think of possible models - assuming privatisation was being forced through by tory government:

1. BR sold as a single entity.
2. Passenger operations sold as a single entity, free to modify some services & fares ; freight sold separately, infrastructure remained under state ownership, receiving fees from train operators.
3. A modified version of the current London Bus system - state specifies services & fares; contractors invited to tender for provision of stock and staff to operate those services.

All were flawed possibilities, and just like the current franchise system we are lumbered with, the amount of public subsidy would have increased in order to boost dividends paid to shareholders of the private companies