City AM: Full privatisation

[al.currie93]

I fully agree; the sooner the railways are fully privatised the better - we will then be able to manage the services and reduce costs.

And when everything cocks up, the state will have to bail it out like we did with the banks.

And even this will be once we have three railway lines left running minimal services in peak hours because everything else has been closed because it isn't profitable :roll:

Well it was the last Government that caused the banking problem through changes to the legislation removing. The Civil Service makes more than enough cock-ups with the exist arrangements but you can not sack, penalise, nor prosecute them for their infractions.

That point is largely irrelevant to the case for fully privatising railways. And besides, arguably, it was Margaret Thatcher thay set the stage for the current recession due to removing the borrowing limits and causing 'the big bang' of 1986(?); no borrowing limits meant people could borrow as much as they wanted, starting a whole load of new service businessed and spending more which caused an economic boom... until the bankers and the borrowers realised that there was not enough money to repay those loans and all the money that was used to pick up the economy never actually existed... cue 2008...

 

[HH]

That would be the increase in passenger usage between the early 1980's and the early 1990's recession.

What increase? They were already falling again ahead of the recession.

 

[yorksrob]

What increase? They were already falling again ahead of the recession.

Poppycock.

I shall dig out the graph tonight when I have the time.

 

[al.currie93]

Evidence is needed that these factors have favoured rail since privatisation.

And there you have a very good reason for not bringing it back into public ownership.

Arguably passenger numbers started to rise, probably as a result of these factors, in the early 1990s, some years before the railways were fully privatised.

The big one I see that benefitted the railways since privatisation would be fuel costs... I remember petrol being less than 90ppl in more recently than 1997...

And who's to say that a future nationalised railway would be like that? With the railway now actually starting to be seen as important, I doubt that that will be the case.

 

[nw1]

And even this will be once we have three railway lines left running minimal services in peak hours because everything else has been closed because it isn't profitable :roll:
.

Not unlike the scenario described in an early Ben Elton book ("Gridlock" IIRC) in which a pompous Tory minister, Digby Parkhurst (based on Cecil Parkinson I suspect) suggested reducing the BR network to a single high-profit line from Waterloo to Chobham (ok, there's no line at Chobham but you get the point...)

I always thought that was a wild exaggeration but the most extreme Serpell option isn't that far off...
--- old post above --- --- new post below ---

Arguably passenger numbers started to rise, probably as a result of these factors, in the early 1990s, some years before the railways were fully privatised.

The big one I see that benefitted the railways since privatisation would be fuel costs... I remember petrol being less than 90ppl in more recently than 1997...

And who's to say that a future nationalised railway would be like that? With the railway now actually starting to be seen as important, I doubt that that will be the case.

My guess on high rail usage of late would be to do with the fact that - for whatever reason - people are more inclined to travel these days. Don't really know why to be honest, one would think with the internet there is actually less need to travel, but the evidence is there in increased traffic on the roads (has steadily risen over the last 30 years) and increased usage of the railways.

I doubt privatisation has made the railways busier. What it has done is led to a more fragmented system with incompatible stock (all those incompatible EMUs on the former SR) and a bureaucratic system of penalty payments and so forth when delays happen which means that the "right thing" for the passenger doesn't always take place.

I'd prefer state ownership simply because, ethically, I believe railways should be a public service. Profits should be put directly back into the railway, rather than being funnelled into private interests.

A big problem with the way society is run these days is there is an obsession with bean-counting over public service, and protecting the interest of the capital-T Taxpayer over the customer, whether that be the rail passenger, the hospital visitor having to pay high parking charges, or whoever. The former, of which George "Bullingdon Yob"sborne is the most visible proponent, means we have a country where public services are cut and to hell with the consequences. The latter means we all have to put up with fare increases above inflation and peak periods progressively encroaching on the middle of the day, just so that the Taxpayer doesn't have to fork out more money for the railways.

 

[HH]

Poppycock.

I shall dig out the graph tonight when I have the time.

I'll save you the trouble. Second graph down. You want sauce with those words?

 

[Greenback]

I'll save you the trouble. Second graph down. You want sauce with those words?

I don't understand. The graph you refer to shows a small dip around 2008, then increases again. The text below states

Passenger journeys in Britain are recovering and, following a slowdown at the beginning of the recession, are continuing to grow at a fast rate. More investment in the rail network is urgently needed if overcrowding is to be contained.

I'm not sure how this is supposed to prove that passenger numbers were falling before the recession?

 

[HH]

I don't understand. The graph you refer to shows a small dip around 2008, then increases again. The text below states

Passenger journeys in Britain are recovering and, following a slowdown at the beginning of the recession, are continuing to grow at a fast rate. More investment in the rail network is urgently needed if overcrowding is to be contained.

I'm not sure how this is supposed to prove that passenger numbers were falling before the recession?

You're looking at the wrong recession.

Despite several major economies showing quarterly detraction during 1989, the British economy continued to grow well into 1990, with the first quarterly detraction taking place in the third quarter of the year... Economic growth was not re-established until early 1993, with the end of the recession being officially declared on 26 April that year

 

[Greenback]

Sorry, my mistake, I got a bit confused!

 

[yorksrob]

I'll save you the trouble. Second graph down. You want sauce with those words?

No, I'm watching my figure.

From ATOC itself:

www.atoc.org/clientfiles/files/.../npsA67D_tmp.pdf‎CachedSimilar

Up until the early 1990's recession, passenger numbers were rising at a similar rate to the post privatisation period.

Remember, a recession is only declared after two consecutive quarters of negative growth. This means that factors such as unemployment for example will often show signs of stagnation before the recession is officially declared.

 

[Deerfold]

www.atoc.org/clientfiles/files/.../npsA67D_tmp.pdf‎CachedSimilar

Up until the early 1990's recession, passenger numbers were rising at a similar rate to the post privatisation period.

That's not a stable link unfortunately. I'm geting a 404.

 

[HH]

Here's another two links:

The ORR

Official Government Statistics

Note that although there was a recession from late 1990 to early 1993, the drop in rail usage both pre- and post-dated the recession by at least 18 months.

 

[NSEFAN]

I think France did actually carry out quite a number of closures of both standard and narrow gauge lines mainly in the 1950s and 60s but I don't know about Germany

Indeed. There are plenty of closed lines in both France and Germany. SNCF services on TER rural routes are terrible, with a gradual downgrading of services and probable closures in the near future. There are also examples of recently closed lines in Germany, such as the route through sondershausen jecha.

 

[al.currie93]

I'd prefer state ownership simply because, ethically, I believe railways should be a public service. Profits should be put directly back into the railway, rather than being funnelled into private interests.

Fully agreed; that's one of (though definitely not the only) my big reasons too; I don't believe that it's right that such a large and crucial aspect of this country is in the hands of a private company.

 

[w0033944]

Fully agreed; that's one of (though definitely not the only) my big reasons too; I don't believe that it's right that such a large and crucial aspect of this country is in the hands of a private company.

Personally, I see it as being comparable to the roads. Even a cursory glance at the usage of the M6 Toll road shows that, despite congestion on the M6, a privatised road model is pretty unpopular, at least in the north-west, IMO as the means of gathering funds to offset the initial investment is (often literally) from users' pockets rather than as a percentage of every taxpayer's earnings.

Would the general public be prepared for the road network as a whole to be subject to tolling? It seems fairly clear that people will put up with increases in overall taxation more readily than tolling or targeted pricing, to say nothing of the fact that I doubt even the most committed free-market hardliner would appreciate it if their street, or the road between their house and their kids' school, was dug-up overnight by Serco due to being insufficiently profitable.

 

[nw1]

Indeed. There are plenty of closed lines in both France and Germany. SNCF services on TER rural routes are terrible, with a gradual downgrading of services and probable closures in the near future. There are also examples of recently closed lines in Germany, such as the route through sondershausen jecha.

France now seems to be similar to us in the 1960s. My first experience of overseas railways was the Aurillac to Neussargues (eventually to Clermont-Ferrand) in 1983. At the time it was a somewhat irregular service but crucially there were a good number of intermediate stops serving small villages which appear to have now gone. Also the line west of Aurillac, towards Brive, appears to have a terrible service now - I'm sure it was better in 1983. It's unfortunate that the Continent often seems to catch the "Anglo-Saxon disease" when it comes to public service cuts, privatisation, etc... where the UK "leads", others follow.

I suspect there are less in Germany - certainly in the Oberbayern region there appear to be a good number of lines of the sort that would probably have the chop in the UK. Most of the main stops between Munich and Salzburg for instance have connections for branch lines which look fairly rural. Indeed, throughout the whole stretch Aachen-Cologne-Frankfurt-Nürnberg-Munich, there seem to be more branch lines - though I haven't got out at all the main stations and given them a thorough investigation.

One thing that Germany seems to do which we didn't appear to do prior to Beeching is to have regular "Taktfahrplan" services on these branch lines, even if frequency is once every 2 hours. While enforcing a clockface timetable at peak times (see the "Why do trains stop" thread) isn't necessarily a good idea, having it off peak ensures good connections with the main lines. A look at the WR 1965 timetable (on timetableworld.com) suggests that a lot of the Beeching lines had infrequent and irregular services - small wonder they didn't attract the passengers. If Ilfracombe, Lyme Regis, Clevedon, Padstow, Blandford and the rest had had "Taktfahrplan" services, one wonders whether they would ever have closed.

 

[yorksrob]

That's not a stable link unfortunately. I'm geting a 404.

Apologies.

Try this:

http://www.atoc.org/clientfiles/files/publicationsdocuments/npsA67D_tmp.pdf

Page 11 has an interesting graph that clearly shows a fairly substantial increase in passenger miles up until 1990. It's also interesting to note that numbers level off then decline fairly gently until 1994 (likely due to the recession) but plummet during the period of upheaval and drift leading up until the completion of the privatisation process.
--- old post above --- --- new post below ---

Here's another two links:

The ORR

Official Government Statistics

Note that although there was a recession from late 1990 to early 1993, the drop in rail usage both pre- and post-dated the recession by at least 18 months.

The increase in passenger numbers before 1990 clearly shows that the railway before 1994 was able to take advantage of positive economic conditions (which was what you were denying).

This thread asks whether a fully privatised railway without regulation and subsidy could work. I think the answer is in why the railway has been able to continue growing during the most recent recession, when it hasn't during previous ones. The difference is that the railway is now highly regulated, and TOC's have to operate a specified level of service (sometimes with subsidy) and make the best of it by continuing to fill seats. BR had to cut it's cloth and contract to the prevailing economic conditions, but still achieved substantial growth in numbers when conditions allowed.

If we had full privatisation (i.e. no regulation and no subsidy) companies would likely cut back unprofitable services both during economic boom times but much more during recessions, so the line on all of these graphs would plummet continually.

 

[dcsprior]

My guess on high rail usage of late would be to do with the fact that - for whatever reason - people are more inclined to travel these days. Don't really know why to be honest, one would think with the internet there is actually less need to travel, but the evidence is there in increased traffic on the roads (has steadily risen over the last 30 years) and increased usage of the railways.

Its possible that recent economic uncertainty has made people travel more for work. It has been widely reported that through the recent recession, unemployment was relatively low, but pay increases were too - the implication being that people were willing to accept lower pay when taking a job, and lower pay rises in order to keep their job. Its not hard to imagine that people were willing to travel more in order to get or keep a job.

Speaking for myself, I work for a company which has IT support staff at all of its main locations around the country, but its main IT department all at its head office. So when I felt ready to move to a more specialised role, I had a choice: stick with the employer who I trusted to look after me and still be around in 5/10/50 years time, or take a gamble at the tail end of a recession. I choose the first option, even though this means a 400 mile journey twice a week.

 

[HH]

Page 11 has an interesting graph that clearly shows a fairly substantial increase in passenger miles up until 1990. It's also interesting to note that numbers level off then decline fairly gently until 1994 (likely due to the recession) but plummet during the period of upheaval and drift leading up until the completion of the privatisation process.

You obviously have on some very oddly tinted spectacles. From the point that BR were formed in 1948 there are a lot of ups and downs, but miles were roughly the same in 1992 as they were in 1948 (I've bolded miles because journeys show a worse story - no doubt ECML electrification helped the miles). There's no evidence of the untrammelled growth we have seen since privatisation.

No doubt there are other factors, but there is a huge difference in attitude between BR and the TOCs. BR were in a defensive mind set, running an industry they believed was in permanent decline. If you weren't in rail management at the time it's hard to understand just what a difference privatisation made. I was at Great Eastern, and the decision to increase the Shenfield Inners to 6tph would have been almost impossible to get through under BR; you can't prove these things have a positive business case. First were very willing to give it a go however and it proved itself almost immediately.

I don't believe that if the railways were taken back into public ownership then all the good changes that have happened over the last 17/18 years would suddenly disappear, but over time we would see a return to the insular mindset that pervaded BR.

 

[Gareth Marston]

Evidence is needed that these factors have favoured rail since privatisation. But let's de-bunk the first for you. Population growth in France has been slightly higher than the UK over the time period and yet the state-run french railway has not enjoyed the success of its UK counterpart. Moreover the population has only grown significantly over the last 10 years, which fails to explain the rail growth post-privatisation compared to what preceded it.



And there you have a very good reason for not bringing it back into public ownership.

Comparing France with the UK is not comparing apples with apples I'm afraid different factors entirely at play. The population of England and Wales declined by 200K between the 71 & 81 census's, grew by 1.4 million from 81 to 91, grew by 2.1 million between 91 & 01 and then by a whopping 4.1 million between 01 & 11. It's fairly inconceivable that this rapidly expanding population is not having an effect on demand for services including rail. The population grew by 1.2 million in the BR era from 71 to 91 and then by 6.2 million in the privatisation era from 91 to 11. That's 5 million potential extra customers at a time that's seen an unprecedented era of uninterrupted economic growth 92 to 07. Previous recessions were accompanied by mass unemployment over 10% and a fall in total numbers employed this ones been different with lower unemployment rates and numbers employed increasing to record levels. The labour market and high petrol pump prices are an explanation of why rail use has not declined but continued to grow.

The Major government of the early 90's was the most reviled of the 20th century and suffered the biggest losses at the next general election in 97, it wasn't just rail privatisation. It's probably more a reason not to have the same party in power for 4 terms.

 

[yorksrob]

You obviously have on some very oddly tinted spectacles. From the point that BR were formed in 1948 there are a lot of ups and downs, but miles were roughly the same in 1992 as they were in 1948 (I've bolded miles because journeys show a worse story - no doubt ECML electrification helped the miles). There's no evidence of the untrammelled growth we have seen since privatisation.

No doubt there are other factors, but there is a huge difference in attitude between BR and the TOCs. BR were in a defensive mind set, running an industry they believed was in permanent decline. If you weren't in rail management at the time it's hard to understand just what a difference privatisation made. I was at Great Eastern, and the decision to increase the Shenfield Inners to 6tph would have been almost impossible to get through under BR; you can't prove these things have a positive business case. First were very willing to give it a go however and it proved itself almost immediately.

I don't believe that if the railways were taken back into public ownership then all the good changes that have happened over the last 17/18 years would suddenly disappear, but over time we would see a return to the insular mindset that pervaded BR.

I'm sure it would be difficult to prove that Thameslink could have a good business case, but it was was "got through" under BR. The same could probably be said for reopening Birmingham Snow Hill, electrification of all sorts of places and the new trains that came with them. Did this part of history somehow pass you by ?

Anyhow you miss the key point of the discussion, which is not whether a return to public ownership would be desireable, but whether we should go to full privatisation meaning a model without regulation or subsidy. I believe that there are clear pointers from history as to why this would be an unmitigated disaster. Do you have a view on the matter in hand ?

 

[Railsigns]

No doubt there are other factors, but there is a huge difference in attitude between BR and the TOCs. BR were in a defensive mind set, running an industry they believed was in permanent decline.

Well that's just patent nonsense. Investment made by BR in the 1980s and early 1990s which delivered new trains, electrification and reopened stations and lines is not indicative of a mind-set that believed the industry was in permanent decline.

 

[Gareth Marston]

You obviously have on some very oddly tinted spectacles. From the point that BR were formed in 1948 there are a lot of ups and downs, but miles were roughly the same in 1992 as they were in 1948 (I've bolded miles because journeys show a worse story - no doubt ECML electrification helped the miles). There's no evidence of the untrammelled growth we have seen since privatisation.

No doubt there are other factors, but there is a huge difference in attitude between BR and the TOCs. BR were in a defensive mind set, running an industry they believed was in permanent decline. If you weren't in rail management at the time it's hard to understand just what a difference privatisation made. I was at Great Eastern, and the decision to increase the Shenfield Inners to 6tph would have been almost impossible to get through under BR; you can't prove these things have a positive business case. First were very willing to give it a go however and it proved itself almost immediately.

I don't believe that if the railways were taken back into public ownership then all the good changes that have happened over the last 17/18 years would suddenly disappear, but over time we would see a return to the insular mindset that pervaded BR.

The key is the mindset of the government in power toward rail, there's evidence that there has been a shift in the last 10 years of some sort starting with a rail enthusiast as transport secretary and followed by Chancellor keen on capital infrastructure projects. I'm sure BR would have been very different in these circumstances. The freedom of current TOC managers has been made possible by substantially greater sums of public money being available than was ever for BR and Network Rail being able to run up vast debt without public sector or shareholder restraint. This era is now closing so things could well be different again by the end of the decade.

 

[warriorwarlord]

I did find one aspect of this article slightly worrying

"there is little commercial pressure for Network Rail to bring this debt under control"

Now, if (fairly recent) history has taught us anything, track and maintenance is the LAST place you'd want commercial pressure in.

 

[Gareth Marston]

Well that's just patent nonsense. Investment made by BR in the 1980s and early 1990s which delivered new trains, electrification and reopened stations and lines is not indicative of a mind-set that believed the industry was in permanent decline.

On the Cambrian in the late 80's we had 3 new classes of DMU, the restoration of through trains to London, RETB and was followed in the early 90's by another new class of DMU and line speed improvements. The improvements we are getting now are coming off the back of public money won by hard lobbying from local people. A fully private sector would never even consider anything but cherry picking what it perceived as the most profitable routes.

 

[Abpj17]

Comparing France with the UK is not comparing apples with apples I'm afraid different factors entirely at play. The population of England and Wales declined by 200K between the 71 & 81 census's, grew by 1.4 million from 81 to 91, grew by 2.1 million between 91 & 01 and then by a whopping 4.1 million between 01 & 11. It's fairly inconceivable that this rapidly expanding population is not having an effect on demand for services including rail. The population grew by 1.2 million in the BR era from 71 to 91 and then by 6.2 million in the privatisation era from 91 to 11. That's 5 million potential extra customers at a time that's seen an unprecedented era of uninterrupted economic growth 92 to 07. Previous recessions were accompanied by mass unemployment over 10% and a fall in total numbers employed this ones been different with lower unemployment rates and numbers employed increasing to record levels. The labour market and high petrol pump prices are an explanation of why rail use has not declined but continued to grow.

The Major government of the early 90's was the most reviled of the 20th century and suffered the biggest losses at the next general election in 97, it wasn't just rail privatisation. It's probably more a reason not to have the same party in power for 4 terms.

Quite so. But it's more than that too. Population is only part of the story. Despite having similar populations in total, their population densities and other demographics that affect travel are very difficult - making it difficult to compare.

At least when I mentioned SNCF and Swiss rail as comparisons, it wasn't about the extent/reach of the network, but the other dimension of...given a rail network, what is the experience of the journey like (cost, quality, frequency etc.)

 

[moggie]

You can tell when the railways are doing well when it draws out the nutter brigade from their London piles to give us their infinite wisdom on how to run the railway, just like they did pre 1994.

Thankfully that Pillock from Clacton has popped his nut above the parapet so thankfully that will deflect much of this ill informed claptrap from interested bystanders who normally have no interest in rail whatsoever other than to wax lyrical about the joys of steam trains.

Suffice to say, so long as the majority of their trains can sit in sidings most of the time doing nothing while someone else's rails in the 'north' are ripped up that will be OK.

 

[Carlisle]

You obviously have on some very oddly tinted spectacles. From the point that BR were formed in 1948 there are a lot of ups and downs, but miles were roughly the same in 1992 as they were in 1948 (I've bolded miles because journeys show a worse story - no doubt ECML electrification helped the miles). There's no evidence of the untrammelled growth we have seen since privatisation.

No doubt there are other factors, but there is a huge difference in attitude between BR and the TOCs. BR were in a defensive mind set, running an industry they believed was in permanent decline. If you weren't in rail management at the time it's hard to understand just what a difference privatisation made. I was at Great Eastern, and the decision to increase the Shenfield Inners to 6tph would have been almost impossible to get through under BR; you can't prove these things have a positive business case. First were very willing to give it a go however and it proved itself almost immediately.

I don't believe that if the railways were taken back into public ownership then all the good changes that have happened over the last 17/18 years would suddenly disappear, but over time we would see a return to the insular mindset that pervaded BR.

Yes but on Great Eastern BR had already managed to electrify and re signal lines , modernise stations, introduce new and refurbished trains ,and convert almost the entire GE suburban network to DOO which rightly or wrongly depending on ones opinion I guess ,defiantly enabled the likes of First to move in and make a quicker, easier and better profit and fine tune things without having to face the cost and upheaval of total fleet renewal, investment in infrastructure or long running disputes with unions etc

 

[HH]

I believe that there are clear pointers from history as to why this would be an unmitigated disaster. Do you have a view on the matter in hand ?

You couldn't just sell off rail to the highest bidder and leave it. I don't think anybody really thinks that, even the journo that wrote the piece.

--- old post above --- --- new post below ---

Yes but on Great Eastern BR had already managed to electrify and re signal lines , modernise stations, introduce new and refurbished trains ,and convert almost the entire GE suburban network to DOO which rightly or wrongly depending on ones opinion I guess ,defiantly enabled the likes of First to move in and make a quicker, easier and better profit and fine tune things without having to face the cost and upheaval of total fleet renewal, investment in infrastructure or long running disputes with unions etc

The electrification of GE took place a long while before the 1990s. Anyway you seem to be confused just what parts of the railway TOCs manage.

Mostly though you misunderstand the point; I'm not saying BR didn't do good things; or that franchised TOCs have only done good things. What I'm saying is that BR was managing an industry in decline and TOCs are incentivised to grow passengers. Regardless of what happens in future, privatisation unlocked rail growth in the UK. It's why Brussels models its policies on what has happened here.

 

[Deerfold]

Mostly though you misunderstand the point; I'm not saying BR didn't do good things; or that franchised TOCs have only done good things. What I'm saying is that BR was managing an industry in decline and TOCs are incentivised to grow passengers. Regardless of what happens in future, privatisation unlocked rail growth in the UK. It's why Brussels models its policies on what has happened here.

I'm not sure why that requires privatisation.

In West Yorkshire there was large growth in usage in the late 80s and early 90s with the local PTE having policies to encourage use, lowering fares, increasing services, opening new stations and lines and publicising them.

This paused shortly before privatisation, my local line was initially much worse immediately following privatisation. There's been only small increases in available seats since privatisation.

Fares have leapt (and are about to again with the removal of validity of CDRs and Day Rovers in the evening peak, apparently against the wishes of the PTE).