BBC Nationalisation/Privatisation Article

[DaveNewcastle]

He has a degree in Philosophy, Politics and Economics from Oxford University

. . . the second guy is an absolute joke. . . . . . . His degree puts me off too to me that is one of those degrees that breeds people like that (morons that make my cynical....)

Ahem.

I won't tolerate such a sweeping criticism without a response [though how this impacts on UK Railways is not obvious to me]. Many of the sharpest minds I have had the privilege of knowing and with having engaged have had the benefit of a thorough training in Philosophy, and many of those have also studied Politics and Economics. Furthermore, I would find it hard to find better graduates in Philosophy and Politics than those from Oxbridge. In terms of Universities offering Economics, I'm more agnostic.

My own view on the subject is not as a choice between the polar opposites of privitisation vs nationalisation. The interesting discussion over privatisation in the 90's was in the choices of models offered to governement and then, having made its choice, government's actual responses as the circumstances developed (and they developed in ways that none of the offered models predicted). If we learn anything, it is in how to make political decisions which have resilience against developments which show that the evidence failed to predict the actual future outcomes. That is precisely the business of Philosophers at work in the world of Politics. We do well to make critical observations where errors of judgement were made, not where unwanted outcomes from unforeseen circumstances are not to our liking. . . . . . nor how the proponents of unwanted outcomes were educated.


Having opened out this debate, I'll conclude that I strongly believe that any country's Politics would be more effective, more efficient and more capable if its Politicians and Civil Servants had a thorough understanding of Philosophy and that any national service and infrastructure (specifically including transport) would benefit similarly if its personnel had the same understanding.

What we do not need, are more people whose greatest abilities lie in reporting what has evidentially gone wrong after the event.

 

[Dave1987]

Will it be acceptable to close most of the railway lines around London for most of the day? Would it be acceptable to completely close the majority of commuter and rural lines outside London and the South East as they have no chance of profitability in the forseeable future? For both of these propositions I would say no.

TOCs may not be quangos but the majority are franchisees and the terms of their franchise is set by the Government. No Government would set franchises which allow such cuts.

An airline pre book system? Would that be for all tickets available on the system? Say I wanted to travel between Bicester and Oxford - would I have to pre book? I, and the vast majority making such short and medium distance journeys would drive instead. If I missed my pre-booked train what would happen?

You are really not getting my point. People moan about the huge subsidy that the TOCs get, the reason they get this subsidy is because they are obliged to run every single service whether that service is used or not! If everyone wants the current system of just turn up on the day and travel you have to accept higher ticket prices and subsidy to cover the cost of running the services that run at a loss. It's as simple as that.......

 

[Metrailway]

You are really not getting my point. People moan about the huge subsidy that the TOCs get, the reason they get this subsidy is because they are obliged to run every single service whether that service is used or not! If everyone wants the current system of just turn up on the day and travel you have to accept higher ticket prices and subsidy to cover the cost of running the services that run at a loss. It's as simple as that.......

I think we are getting our wires crossed. I completely agree with you that passengers (including myself) expect a certain service level, hence subsidies for many services are required.

I'm neither pro re-nationalisation or pro privatisation, although I dislike the way the railways are currently organised.

 

[yorksrob]

You are really not getting my point. People moan about the huge subsidy that the TOCs get, the reason they get this subsidy is because they are obliged to run every single service whether that service is used or not! If everyone wants the current system of just turn up on the day and travel you have to accept higher ticket prices and subsidy to cover the cost of running the services that run at a loss. It's as simple as that.......

It is true that if you want a remotely useful passenger service with specified levels you will need to pay a subsidy. However, it would be untrue to suggest that there aren‘t other efficiencies that could be made before you start cutting. If you must reduce subsidy, cutting the service should be the last resort (not the first, as Beeching had it).

 

[NSEFAN]

It is true that if you want a remotely useful passenger service with specified levels you will need to pay a subsidy. However, it would be untrue to suggest that there aren‘t other efficiencies that could be made before you start cutting. If you must reduce subsidy, cutting the service should be the last resort (not the first, as Beeching had it).

What efficiencies could the modern railway make that would allow the service patterns to remain unchanged whilst cutting costs at the same time? We are already moving towards more efficient electric trains and increased automation to reduce staff costs. What else could be done in the mean time?

 

[yorksrob]

What efficiencies could the modern railway make that would allow the service patterns to remain unchanged whilst cutting costs at the same time? We are already moving towards more efficient electric trains and increased automation to reduce staff costs. What else could be done in the mean time?

Oh, there are all sorts. Bear in mind, I'm not saying I agree with all of these, merely that if someone said "we need to cut costs and to do that we must cut services" I would try these first:

Fewer franchises - economies of scale
destaffing (not something I support as such, but I would prefer above service cuts).
Replace ROSCO's with a system where TOC's own their own trains once the costs have been paid off).

That said, If a route already has a better than half hourly service, reducing this in response to demand would be preferable to the above.

 

[NSEFAN]

Oh, there are all sorts. Bear in mind, I'm not saying I agree with all of these, merely that if someone said "we need to cut costs and to do that we must cut services" I would try these first:

Fewer franchises - economies of scale
destaffing (not something I support as such, but I would prefer above service cuts).
Replace ROSCO's with a system where TOC's own their own trains once the costs have been paid off).

That said, If a route already has a better than half hourly service, reducing this in response to demand would be preferable to the above.

I agree with the idea of having larger franchises. A move towards these is gradually happening as the cost savings become apparent (merging of Great Western, Wessex Trains and Thames Trains, for example). I believe the next big merger is Thamelink and Southern becoming one franchise?

De-staffing is not at all ideal, in my opinion. London Overground have the right idea, with staff at every station. Sadly, if there's no money to pay for full time staffing then it is an easy place to save a bit of cash.

I would be wary of getting TOCs to own their trains directly, without some mechanism to force them to pass the trains onto the new owners when the franchise changes.

I would also be wary of going too far down the "fewer passengers = fewer services needed" route, as that was a common BR closure-by-stealth tactic. Granted some services would have to be reduced, but I'd rather shorter trains were used in order to keep the service level attractive to avoid driving even more people away.

 

[jon0844]

It is true that if you want a remotely useful passenger service with specified levels you will need to pay a subsidy. However, it would be untrue to suggest that there aren‘t other efficiencies that could be made before you start cutting. If you must reduce subsidy, cutting the service should be the last resort (not the first, as Beeching had it).

I always thought that if passenger numbers rose sharply, there'd be loads of extra revenue to cover the cost of the extra rolling stock.. but that clearly isn't true as you need all that extra rolling stock for just a few hours each day (well, okay, maybe 6-7 hours morning and evening).

As such, now we have record number of passengers, the costs have risen and presumably had BR enjoyed such a huge increase in traffic - it too would have required more money.

So for one, I don't believe nationalisation would suddenly mean the taxpayer would pay loads less or take us back to as things were. Which by all accounts was a railway that, although it did see some big investment and upgrade work occasionally, mostly seemed to work on the basis of putting off as much work as possible 'until tomorrow', hence the need to spend so much money now to catch up.

Replace ROSCO's with a system where TOC's own their own trains once the costs have been paid off

While the ROSCOs probably charge too much, there must be some advantages of leasing - if this means the ROSCO is responsible for ensuring they receive refurbishments and upgrades as and when required.

I quite like the idea of the deals where you not only buy new trains, but also get the maintenance included and effectively pay for nn trains to be available to you (the TOC) on a daily basis.

I am sure the system needs tweaking, but I can't see that the Government would ever want to fund the purchase itself, and making TOCs do so would cause problems as mentioned - namely how they're passed on to the next operator. What if the new operator said they didn't want them, or the TOC bought trains that weren't suitable for use anywhere else?

 

[Dave1987]

What really annoys me is the way the public think that the subsidies are in place to make sure TOCs make a profit. When like I have said they are actually in place to ensure the TOC still runs the loss making services.

 

[Tomonthetrain]

Well why not make it that the only ROSCO is...HM Government?

DOR could be used for that function?

Same with the RSP...make it so DOR run it similar to a PTE?

 

[yorksrob]

I would be wary of getting TOCs to own their trains directly, without some mechanism to force them to pass the trains onto the new owners when the franchise changes.

I would also be wary of going too far down the "fewer passengers = fewer services needed" route, as that was a common BR closure-by-stealth tactic. Granted some services would have to be reduced, but I'd rather shorter trains were used in order to keep the service level attractive to avoid driving even more people away.

Well, I'm not sure whether they have to own them directly, or whether some not for profit company should own them. It's more making sure that companies aren't paying out once the construction costs have already been paid for.

I agree about reducing services. I'd only really countenance this on frequent services i.e. more than half hourly.
--- old post above --- --- new post below ---

I always thought that if passenger numbers rose sharply, there'd be loads of extra revenue to cover the cost of the extra rolling stock.. but that clearly isn't true as you need all that extra rolling stock for just a few hours each day (well, okay, maybe 6-7 hours morning and evening).

As such, now we have record number of passengers, the costs have risen and presumably had BR enjoyed such a huge increase in traffic - it too would have required more money.

So for one, I don't believe nationalisation would suddenly mean the taxpayer would pay loads less or take us back to as things were. Which by all accounts was a railway that, although it did see some big investment and upgrade work occasionally, mostly seemed to work on the basis of putting off as much work as possible 'until tomorrow', hence the need to spend so much money now to catch up.

Whilst I wouldn't have a problem with BR running things, I agree that it wouldn't be a panacea, hence why I suggested individual changes rather than full nationalisation (although I feel it's perhaps unfair to suggest that BR were always putting things off. I'd be more inclined to blame Government imposed budgetary constraints).

While the ROSCOs probably charge too much, there must be some advantages of leasing - if this means the ROSCO is responsible for ensuring they receive refurbishments and upgrades as and when required.

I quite like the idea of the deals where you not only buy new trains, but also get the maintenance included and effectively pay for nn trains to be available to you (the TOC) on a daily basis.

I am sure the system needs tweaking, but I can't see that the Government would ever want to fund the purchase itself, and making TOCs do so would cause problems as mentioned - namely how they're passed on to the next operator. What if the new operator said they didn't want them, or the TOC bought trains that weren't suitable for use anywhere else?

Well I'm sure you do get advantages, but it's a question of how much you pay for them.

I notice that Government investment seems to pay for most of the major new stock builds, so do the costs of maintenance and refurbishment add up to a lifetime of leasing costs .

 

[transmanche]

I agree with the idea of having larger franchises. A move towards these is gradually happening as the cost savings become apparent (merging of Great Western, Wessex Trains and Thames Trains, for example).

I'm not convinced - well not yet anyway.

If you look at PPMs, the top-performing TOCs are the small ones; c2c, London Overground, Merseyrail and Chiltern. OK, two of those benefit by being 'closed systems' - but would they score so highly if they were part of a larger TOC? At the moment all management focus is on those networks. As part of a larger TOC, they would just be a small part of the whole and thus not the sole focus of management effort.

Taking FGW - it's made up of three distinctive type of service, as distinguished in their previous franchise areas. Whilst there will indeed be some benefits with interworking of staff & stock and services designed to complement rather than compete - but if management focus is all on improving the of performance LDHS services, then naturally it means they can't be as focused on the London commuter services.

 

[455driver]

I thought the whole article was poorly written:

Agreed.

Nationalisation- has the author thought that the german railways are actually funding our railways??? Xc haven't been performing well.

I think you will find that XC are funding the German Railways, half(ish) of the subsidy XC receive is taken as "profit" for the shareholders, ie DB.

Also, they chuck in the EC run by DOR is doing well but has it performed better than under privatisation?

EC are not doing well at all.

The privatisation part was very poor and lacks any good arguements.

Just like the rest of the article where it cherry picks whichever stastistics back up the point it wants to make.

 

[ainsworth74]

EC are not doing well at all.

Well that depends on the measure you use. In terms of paying money to the treasury it's doing just about the best of any TOC!

 

[Muzer]

What really annoys me is the way the public think that the subsidies are in place to make sure TOCs make a profit. When like I have said they are actually in place to ensure the TOC still runs the loss making services.

Almost all services are loss-making.

As other people have implied but perhaps not explicitly stated, almost all trains would have to go if they were required to all make a profit. Have a look at Beeching's final proposals before he was kicked out for an idea of what the network would look like - the biggest intercity routes and London commuter routes (the latter running only in peak times), nothing else. Someone do correct me if I'm wrong.



The whole booking in advance thing is a load of rubbish, honestly. The whole advantage of the railways over flight is the flexibility. The importance of the fact that you can walk up to any station, anywhere, and get on any train you like (perhaps paying more than you would booking in advance), should not be underestimated. If the system were an "advance tickets only" style thing, I can guarantee you the railways wouldn't be half as popular as they are. Just think about it - a friend or relative a few towns down the line asks if you can visit them for something - it's a simple case of going to the station and buying a ticket. You're a commuter and something makes you have to stay late - no problem, just catch the next train using your season ticket. Etc., etc.

 

[Dave1987]

Almost all services are loss-making.

As other people have implied but perhaps not explicitly stated, almost all trains would have to go if they were required to all make a profit. Have a look at Beeching's final proposals before he was kicked out for an idea of what the network would look like - the biggest intercity routes and London commuter routes (the latter running only in peak times), nothing else. Someone do correct me if I'm wrong.



The whole booking in advance thing is a load of rubbish, honestly. The whole advantage of the railways over flight is the flexibility. The importance of the fact that you can walk up to any station, anywhere, and get on any train you like (perhaps paying more than you would booking in advance), should not be underestimated. If the system were an "advance tickets only" style thing, I can guarantee you the railways wouldn't be half as popular as they are. Just think about it - a friend or relative a few towns down the line asks if you can visit them for something - it's a simple case of going to the station and buying a ticket. You're a commuter and something makes you have to stay late - no problem, just catch the next train using your season ticket. Etc., etc.

So if people love the current system so much why do they complain so adamantly about the price. If they want low low ticket prices the only way is to have a pre booked system for every train.

 

[W230]

So for one, I don't believe nationalisation would suddenly mean the taxpayer would pay loads less or take us back to as things were. Which by all accounts was a railway that, although it did see some big investment and upgrade work occasionally, mostly seemed to work on the basis of putting off as much work as possible 'until tomorrow', hence the need to spend so much money now to catch up.

...hence why I suggested individual changes rather than full nationalisation (although I feel it's perhaps unfair to suggest that BR were always putting things off. I'd be more inclined to blame Government imposed budgetary constraints).

This is an interesting point. I always felt as if track upgrades and stock refurbishments were always put off under BR but ultimately if the government said they were having less money then they had to 'make do and mend'. However, I don't think the government would be able to put off track upgrades as easily now the railways are part privatised as they would begin to lose more and more money to the TOC's as a result of delays due to the financial penalty of poor infrastructure.

In truth, I still can't work out what the best way of running the railways in the UK really is. While I feel the railways are a public service and should always be subsidised to a point, I can't agree that they should be haemorrhaging money just to keep some rural branch open somewhere (even though I'm always saddened to see closures). I guess the point is where do you draw the line?

There's a lot said about the efficiencies of other country's state owned railways but I'm a bit sceptical that we could ever manage the same sort of state run efficiency ourselves - yet there should be no reason we couldn't!

 

[jon0844]

Network Rail is the biggest cost/drain of money - yet everyone moans about the profits made by the TOCs and seems to think that if you get rid of that, you'll save billions.

NR has of course got a network that needs more regular maintenance, not just because of a backlog, but because of heavier usage. Heavier usage also means it's harder to fit in engineering work without causing disruption.

 

[Muzer]

So if people love the current system so much why do they complain so adamantly about the price. If they want low low ticket prices the only way is to have a pre booked system for every train.

Yes - which is exactly what happens for non-commuter routes where this sort of thing is more feasible. Advances and Megatrain, for example.

I'm just saying that selling *only* advances (on ANY line) is a bad idea.

 

[Dave1987]

Yes - which is exactly what happens for non-commuter routes where this sort of thing is more feasible. Advances and Megatrain, for example.

I'm just saying that selling *only* advances (on ANY line) is a bad idea.

I really think a study should be done on train usage, then the public told which services are real loss makers and then it say "use it or lose it". Just like big loss making bus route have been cut. I just can't see the merit in passengers and taxpayers paying for services to run when hardly anyone uses them. Yes it would mean many routes only operate during the morning and evening peak but if its not worth operating an off peak service then its not worth it.

 

[NSEFAN]

I really think a study should be done on train usage, then the public told which services are real loss makers and then it say "use it or lose it". Just like big loss making bus route have been cut. I just can't see the merit in passengers and taxpayers paying for services to run when hardly anyone uses them. Yes it would mean many routes only operate during the morning and evening peak but if its not worth operating an off peak service then its not worth it.

It doesn't have to be hardly anyone using them. I'm sure there are routes that people would describe as busy, but still cost a lot to run. A good example would be routes with many mechanical signal boxes.

 

[Muzer]

I don't believe the vast majority of the London Underground has ever turned a profit, presumably due to the vast maintenance and staffing costs. Would you abolish it?

 

[Hellfire]

So if people love the current system so much why do they complain so adamantly about the price. If they want low low ticket prices the only way is to have a pre booked system for every train.

I think it's a bit naive to think that a pre-booking system would necessarily result in lower ticket prices all round. TOCs currently restrict the number of seats on any one train that can be booked in advance presumably because if they sold every seat at a pre-booked price, they would not cover their costs or make a lower profit.

Therefore if all tickets had to be pre-booked, the cost of tickets would have to rise in any case, at least for some passengers.

And if you haven't booked a seat, you don't get to travel which would cause a lot of problems on busy commuter services where a large proportion of people stand.

And what happens, in the unlikely situation, where insufficient pre-booked seats have been sold to make the trip pay. Does the train get cancelled or do they have a seat sale at the last moment?

I think what people complain about is the high cost of walk on fares compared with advance purchase. Having said that, this is no different to budget airlines where you will find yourself paying considerably more if you book the day before a flight rather than six months in advance.

 

[Oswyntail]

... do they have a seat sale at the last moment?... budget airlines where you will find yourself paying considerably more if you book the day before a flight rather than six months in advance.

Funny that! The "product" is going to be worthless as soon as the flight takes off / the train leaves. There should logically come a point where the operators need to get rid of it at any price rather than get nothing. So, in a world of "all seats to be pre-booked", walk-on fares, where the passenger is taking the risk of non-availability, should be much cheaper.

 

[yorksrob]

I really think a study should be done on train usage, then the public told which services are real loss makers and then it say "use it or lose it". Just like big loss making bus route have been cut. I just can't see the merit in passengers and taxpayers paying for services to run when hardly anyone uses them. Yes it would mean many routes only operate during the morning and evening peak but if its not worth operating an off peak service then its not worth it.

That is a curious argument. As taxpayers we pay for many services that don‘t turn a profit yet we still pay for them because they are of a wider benefit.

What would your position be for a service that is busy throughout the day but which doesn‘t cover its costs ?

 

[Dave1987]

That is a curious argument. As taxpayers we pay for many services that don‘t turn a profit yet we still pay for them because they are of a wider benefit.

What would your position be for a service that is busy throughout the day but which doesn‘t cover its costs ?

Well if people want the level of service to remain they shouldn't complain about the cost of travel or the level of subsidy the TOCs get. I'm sure if the TOCs weren't obliged to run some services they wouldn't because there simply isn't the demand to justify them. That is where govt subsidy comes in so the TOC doesn't make a huge loss every month. This is what Bob Crow doesn't like to admit when he harks on about the subsidy the TOCs get.

 

[Tom B]

I really think a study should be done on train usage, then the public told which services are real loss makers and then it say "use it or lose it". Just like big loss making bus route have been cut. I just can't see the merit in passengers and taxpayers paying for services to run when hardly anyone uses them. Yes it would mean many routes only operate during the morning and evening peak but if its not worth operating an off peak service then its not worth it.

How do you define "loss-making"? You can surely not define it precisely.

For instance, a given service which is quiet and carries a very few passengers at an obscure time of day may be considered loss-making, but actually if you withdraw it you'd still have to operate it ECS to complete a diagram.

Or a branch line shuttle using one pacer, which is stabled, serviced, maintained at a depot which is viable because it looks after 50 units on a well used commuter service.

Some companies will withdraw a service even if it is profitable, but doesn't make the margins they demand.

 

[Simon11]

I think it's a bit naive to think that a pre-booking system would necessarily result in lower ticket prices all round. TOCs currently restrict the number of seats on any one train that can be booked in advance presumably because if they sold every seat at a pre-booked price, they would not cover their costs or make a lower profit.

Therefore if all tickets had to be pre-booked, the cost of tickets would have to rise in any case, at least for some passengers.

And if you haven't booked a seat, you don't get to travel which would cause a lot of problems on busy commuter services where a large proportion of people stand.

And what happens, in the unlikely situation, where insufficient pre-booked seats have been sold to make the trip pay. Does the train get cancelled or do they have a seat sale at the last moment?

I think what people complain about is the high cost of walk on fares compared with advance purchase. Having said that, this is no different to budget airlines where you will find yourself paying considerably more if you book the day before a flight rather than six months in advance.

I think you would find all tocs would love to fill every seat with advance passengers as they receive payment upfront, get to yield manage the whole train and receive all the money. Tocs would love to move away from walk-up products but this simple wouldn't happen.

 

[Hellfire]

I think you would find all tocs would love to fill every seat with advance passengers as they receive payment upfront, get to yield manage the whole train and receive all the money. Tocs would love to move away from walk-up products but this simple wouldn't happen.

But the question is whether they would accept a train load of passengers at advance prices?

 

[petermerchant]

in relation to this there is a petition on change.org petitioning the labour party to make it part of their manifesto in the election:

https://www.change.org/en-GB/petitions/ed-miliband-and-the-labour-party-make-a-pledge-in-your-upcoming-election-manifesto-to-renationalise-the-rail-network#