Is Open Access abstractive or does it genuinely plug gaps?

[35B]

I would personally put this down to cultural and institutional attitudes rather than the state having a monopoly. Britain and the Anglosphere in general (from my point of view) seem to think of railways as costly relics of the 19th century, partly evident by the DfT's desire to reduce subsidy and shift the cost onto the user rather than the taxpayer. It's not helped by the fact we're trying to run a 21st century operation on 19th century infrastructure without the political will to build new railways.

I think your response is a fair position, and we'd need to agree to disagree. However, I will pick up on this paragraph. While I think it's got a lot of truth in it, I think the role of monopoly is valid - and has a bad history going back into the 19th Century. The railways have a long and ignoble history, at least to Captain Mark Huish, of treating their paying customers as an afterthought, and using their monopoly power entirely selfishly (and, no, they are not unique in that!).

This trait has remained throughout railway history, to varying degrees. We are seeing a resurgence of this at present, wrapped in the sheen of public control and accountability. This relies for its effectiveness on the lack of a comparison point - which is one reason why I am with @Snow1964 in regarding the continued existence of OA operators as essential - and the hostility to them from DfT as a sign to fear

 

[Sorcerer]

I think your response is a fair position, and we'd need to agree to disagree. However, I will pick up on this paragraph. While I think it's got a lot of truth in it, I think the role of monopoly is valid - and has a bad history going back into the 19th Century. The railways have a long and ignoble history, at least to Captain Mark Huish, of treating their paying customers as an afterthought, and using their monopoly power entirely selfishly (and, no, they are not unique in that!).

This trait has remained throughout railway history, to varying degrees. We are seeing a resurgence of this at present, wrapped in the sheen of public control and accountability. This relies for its effectiveness on the lack of a comparison point - which is one reason why I am with @Snow1964 in regarding the continued existence of OA operators as essential - and the hostility to them from DfT as a sign to fear

Perhaps the role of a monopoly is valid then. After all Italy's high-speed rail network has increased it's market share with the arrival of Italo, and the Madrid-Barcelona corridor has never been so competitive with four operators. It certainly gives enough of a kick up the backside for national operators to lower prices and get their services in order. But I would still put it down to some institutional attitudes as well because I think a monopoly is more likely to be a bad thing if the railways are viewed in the way we view them in Britain compared to the way they might be viewed in Switzerland.

 

[35B]

Perhaps the role of a monopoly is valid then. After all Italy's high-speed rail network has increased it's market share with the arrival of Italo, and the Madrid-Barcelona corridor has never been so competitive with four operators. It certainly gives enough of a kick up the backside for national operators to lower prices and get their services in order. But I would still put it down to some institutional attitudes as well because I think a monopoly is more likely to be a bad thing if the railways are viewed in the way we view them in Britain compared to the way they might be viewed in Switzerland.

A monopoly is never better than a necessary evil. The example of Switzerland should be seen as an exception rather than a rule. While I've never used the Spanish rail system, all comment I've ever heard of RENFE suggests that it's possession of monopoly power works is unhelpful.

 

[KHCT]

To be fair, some of the current nationalised operators do cherry picking too, putting better, or newer, or faster rolling stock on some routes, or giving better catering on selected routes, even beating those of longer duration than some others they operate.

As an example, there is no logical reason (apart from selective cherry picking) why a London Lincoln service, gets First class with free food, but Bournemouth (whose population is almost double) gets no food, similar duration (about 100 minutes) both DfT Operator administered. It's blatant selective cherry picking by route.

I completely agree with this. Take Transpennine Express as an example; full catering service in both first and standard on their 'core' and Scottish routes, but good luck away from that. Not even a trolley is provided between Sheffield and Cleethorpes, Leeds and Hull or York and Scarborough/Redcar. The reason is simple - there's no money in it. Even British Rail managed to provide a catering offer to the good people of Hull.

Sadly, if service provision is to be levelled out it will only go one way. The government is very clear that it wants subsidy to fall which mean there's zero chance of anything extra being provided that doesn't pay it's way.

I've said before that is Government/DfT want to complain that open access is 'abstractive' they need to fight them for the business they claim is being pinched. Once again this weekend Hull Trains is providing an extra service to cater for football fans travelling to London from Hull on Saturday. I don't see LNER going after commercial opportunities like that, certainly away from it's core route.

I just lean towards state ownership because if railways are a public good, there comes a fundamental tension between that reality and the fact a private company's top priority is delivering a return on investments to it's shareholders.

If it wasn't for private companies chasing a return on investment you wouldn't have had the network we had/have in the first place. Can you imagine if developing the rail network from scratch had been left to the dead hand of government.

 

[Sorcerer]

If it wasn't for private companies chasing a return on investment you wouldn't have had the network we had/have in the first place. Can you imagine if developing the rail network from scratch had been left to the dead hand of government.

It was also a different world back then where private companies were capitalising on a new revolutionary form of mass transport where there was no competing motorway or airline market. Today though railways are just one of several forms of transport infrastructure, and because they are capital-intensive and take a long time to generate a return on the investments, you would be very unlikely to get a rural branch line constructed by private companies today even if they provided a social good, and in fact these are often the first ones to go during cuts because they aren't profitable on paper. Even Thatcher understood this risk.

We see it happening in Japan with rural lines being closed despite the JR Group also having investments in property to offset some costs (and indeed it's often said JR Group are real estate companies with some train operations). Even Brightline, once seen as the model example of private rail development, is now at risk of bankruptcy because railways do not generate fast enough returns to pay off it's debts and a return to it's shareholders. Government by contrast can borrow cheaper and over longer terms.

It's not to say railways can't be privately operated, but there is definitely a fundamental tension between railways being a public good and trying to operate them on a profit-driven basis with the primary goal of financial returns. But that's a subject for another thread entirely.

 

[Bald Rick]

The point, though, is that Open Access increases the total market for rail, rather than just taking a slice of someone else's cake.

It does both of course, which is the premise of the thread.

 

[35B]

It does both of course, which is the premise of the thread.

And its that premise that I disagree with completely - because it is so limiting of potential.

 

[Bald Rick]

And its that premise that I disagree with completely - because it is so limiting of potential.

I’m not sure how you can disagree with a fact (accepting that some people do this, of course).

Every single assessment for new Open Access shows that each are generative as well as abstractive.

 

[35B]

I’m not sure how you can disagree with a fact (accepring that some people do this, of course).

Every single assessment for new Open Access shows that each are generative as well as abstractive.

Sorry, to be clear, I disagree with those who are stuck on the point that Open Access is solely abstractive and removes from the existing railway, without considering the wider sector growth that it enables.

 

[Bald Rick]

Sorry, to be clear, I disagree with those who are stuck on the point that Open Access is solely abstractive and removes from the existing railway, without considering the wider sector growth that it enables.

Ah ok, sorry.

Notwithstanding the subject of the thread, I think a key point to consider is whether the railway needs open access to identify and exploit those growth opportunities. Or whether they could be gained more effectively and / or efficiently without OA. There’s no doubt that the railway has delivered significant growth in many places without it.

 

[35B]

Ah ok, sorry.

Notwithstanding the subject of the thread, I think a key point to consider is whether the railway needs open access to identify and exploit those growth opportunities. Or whether they could be gained more effectively and / or efficiently without OA. There’s no doubt that the railway has delivered significant growth in many places without it.

I don't think "the railway" "needs" OA to identify those opportunities. I do however think that it is a positively heroic assumption that, if OA is killed off, those opportunities for new services will be both identified and (more importantly) enabled.

The Lumo ECML service is a case in point - much hated by OA haters, but there is no suggestion that in the absence of an OA, those services would have been provided by the incumbent.

 

[cle]

Looking at Hull Trains - it did two things:

Built a long-term demand for Hull-London rail travel (as well as Selby/Brough) - which has been sustained, organic and did not wildly abstract what was a token 1 up, 1 down business service. It's hard to deny that, and they used speed appropriate stock, available capacity and provided a differentiated brand and service. And it worked.

Shone a light on some of the underserved interim ECML stations such as Grantham and Retford, and gave them additional, often faster (as it pointedly avoided P'boro) services to London. Possibly more abstractive, re number of services total in play (eg from GNER) - but it exploited a service which was more focused on headline Leeds/York/Newc/Edin services - and it built more demand from those smaller stations.

Connecting those two things is Doncaster, which was probably the most abstractive piece - but again - it increased service, especially to underserved and unserved places, so was permitted. And of course offered many connections.

 

[Bald Rick]

The Lumo ECML service is a case in point - much hated by OA haters, but there is no suggestion that in the absence of an OA, those services would have been provided by the incumbent.

I’d argue differently, in that the principle Lumo based their business propostion on was limited stop, faster services between London and Edinburgh (along with some smaller markets, eg Stevenage - Scotland). That was the market they were (and are) chasing. LNER always planned to introduce these, planned in the same timeframe as Lumo, and subsequently have done.

Hull is a very diferent example, in that it has genuinely created a new market which, at the time, ‘the railway’ appeared not to be interested in. That’s not to say more direct services to Hull would not have happened in their absence of course, but we will never know.

 

[35B]

I’d argue differently, in that the principle Lumo based their business propostion on was limited stop, faster services between London and Edinburgh (along with some smaller markets, eg Stevenage - Scotland). That was the market they were (and are) chasing. LNER always planned to introduce these, planned in the same timeframe as Lumo, and subsequently have done.

Hull is a very diferent example, in that it has genuinely created a new market which, at the time, ‘the railway’ appeared not to be interested in. That’s not to say more direct services to Hull would not have happened in their absence of course, but we will never know.

I'd agree that Hull is more distinctive, but I am far from convinced that the Lumo paths (or the trains to fulfil them) would have been taken up by LNER.

 

[Bald Rick]

I'd agree that Hull is more distinctive, but I am far from convinced that the Lumo paths (or the trains to fulfil them) would have been taken up by LNER.

My point is that they have done, and planned to do so a long way out; LNER available capacity London to Edinburgh in terms of seats has been increased considerably.

 

[Tetchytyke]

If it wasn't for private companies chasing a return on investment you wouldn't have had the network we had/have in the first place. Can you imagine if developing the rail network from scratch had been left to the dead hand of government.

This rather glosses over the fact that the vast majority of those private companies chasing a return on investment spectacularly failed to do so.

Grouping in 1921 came about because most of those companies were losing huge amounts of money. They were amalgamated to stem the losses and to rationalise the network into something more coherent.

Nationalisation came about in 1947 because even the Big Four couldn't afford to refurbish their networks without money from the dead hand of government.

The Lumo ECML service is a case in point - much hated by OA haters, but there is no suggestion that in the absence of an OA, those services would have been provided by the incumbent.

In the case of Lumo, I think it is fairly clear that LNER would have provided the capacity.

The amount of actual capacity provided by Lumo is relatively inconsequential at 6 trains each way per day from Newcastle to London. LNER have three trains per hour from London to Newcastle, to offer some perspective on that. And the trains themselves are relatively small trains.

However, the existence of these paths has created other timetable problems elsewhere on the ECML. I don't know whether it is fair and informed comment or not, but the Lumo paths have been cited repeatedly as one of the reasons why Durham now has such a terrible service.

The extensions to Glasgow Queen Street wouldn't have been provided but, at the same time, is one southbound train at 18.18 of much utility anyway?

My view about Lumo's WCML service is pretty similar.

I disagree with those who are stuck on the point that Open Access is solely abstractive and removes from the existing railway, without considering the wider sector growth that it enables.

I don't think OA is solely abstractive. Even Lumo isn't solely abstractive.

Hull Trains is an OA operator which I would say is largely generative and would stand on its own two feet even if it wasn't allowed to call at Doncaster.

Grand Central is more of a mixed bag- it has generated growth from Bradford/Halifax and from Hartlepool/Sunderland but I think it is fair to say that it wouldn't be economically sustainable if it wasn't allowed to call at York and Doncaster.

Lumo? Its entire business model is based on revenue from Edinburgh, Newcastle, and Preston to London. Perhaps its business model might attract some new people off the plane (although I'm sceptical, no matter how much First hammer this point) but it appears to be largely abstractive.

The real test, for me, is whether these OA companies would be profitable if they had to pay the real cost of accessing the rail network rather than paying the subsidised access charges. I happen to think Hull Trains would be. The others? I'm not convinced at all.

 

[A S Leib]

The extensions to Glasgow Queen Street wouldn't have been provided but, at the same time, is one southbound train at 18.18 of much utility anyway?

Would CrossCountry be reinstating 1tp2h to Motherwell and Glasgow Central without Lumo competition? (Only relevant to Newcastle / maybe Morpeth*, but then from King's Cross and likely Stevenage, you'd likely go via Euston or Watford / Milton Keynes anyway.)

*07:50 and 09:52 departures from Morpeth, which seem attractive enough. Five services southbound, but the last calling at Morpeth leaving Glasgow at 14:43.

 

[Merle Haggard]

This rather glosses over the fact that the vast majority of those private companies chasing a return on investment spectacularly failed to do so.

/snip

That's an interesting assertion.

Accepting that there may not be a correlation between dividends paid to shareholders and profit but in the last year of the L&NWR before grouping a dividend of 8% was paid. Working revenue £46,130,753 . Traffic expenses £36,517,288. Interest and other fixed charges £2,464,452. Dividends £7,822,286 paid 8% to shareholders. Source; The London & North Western Railway, M. C. Read. His source given as British transport Historical Records Office.

Was this unique? The coal carrying railways of South Wales might be contenders for higher dividends than the L&NWR

Inflation 1922 to now is given as about 7,200% but I cannot substantiate it. However multiplying by 70 will give an idea of the L&NWR's profitability at today's prices. I make it about £550 million.

 

[35B]

That's an interesting assertion.

Accepting that there may not be a correlation between dividends paid to shareholders and profit but in the last year of the L&NWR before grouping a dividend of 8% was paid. Working revenue £46,130,753 . Traffic expenses £36,517,288. Interest and other fixed charges £2,464,452. Dividends £7,822,286 paid 8% to shareholders. Source; The London & North Western Railway, M. C. Read. His source given as British transport Historical Records Office.

Was this unique? The coal carrying railways of South Wales might be contenders for higher dividends than the L&NWR

Inflation 1922 to now is given as about 7,200% but I cannot substantiate it. However multiplying by 70 will give an idea of the L&NWR's profitability at today's prices. I make it about £550 million.

It also makes some massive assumptions about the number of companies as distinct from their size, the motives of investors, and the relevance of the condition of the railways at the end of WWI.

In particular, a common theme in the story of the branch lines was of local investors hoping for a crock of gold, but in reality being more focused on getting rail access to the wider world for their produce.

The big companies, in the period pre WWI, were generally secure, profitable, and paid the sort of dividends that the middle and upper classes relied upon. One reason why those were in long term decline before 1914 was the regulation of tariffs, because they were seen as monopolists in need of control. I find it interesting to take that perspective on the privately operated railways of a century or more ago, and then apply it to government controlled railways now. Not in a public good/bad way, but as a useful test of logic.

 

[Tetchytyke]

Accepting that there may not be a correlation between dividends paid to shareholders and profit but in the last year of the L&NWR before grouping a dividend of 8% was paid.

What of the others?

There’s a reason the L&NWR became one of the two main constituent parts of the LMS.

 

[The Pelican]

Part of the problem with the comparison to the pre-1948 companies is that you need a story for what the companies would have spent the second half of the 20th century doing- in one world, they might have rushed for a Serpell style profitable core, and mainly had one or two 125mph/100mph mainlines each, in another they would have gone for lots of freight and a 75mph top speed like the American private railroads. The most likely one to me seems that, after a beeching style postwar period (perhaps approached differently by company), something like the current system of subsidies would have emerged for substanial parts of the reigonal network.

 

[stevieinselby]

Hull Trains is an OA operator which I would say is largely generative and would stand on its own two feet even if it wasn't allowed to call at Doncaster.

I realise it's a bit tangential to your point, but the biggest downside to HT not calling at Doncaster is that it would leave Selby to Doncaster and onward connections to places like Sheffield with basically no service again, so I really hope that doesn't happen. But agreed, it would still leave HT with a viable business case for services between Hull and London, even if maybe not at quite the same level of service they're offering now.

 

[NCT]

What of the others?

There’s a reason the L&NWR became one of the two main constituent parts of the LMS.

This says to me bullish shareholders who end up losing their shirts are sometimes a more effective vehicle for delivering lasting social benefits than a government that's naturally cautious.

 

[IanXC]

My key thought on this is, if the OAOs were to leave the industry tomorrow (as they could) what services would the DfT or DfTO want to put in place to fill any gaps. My prediction is that we would find LNER operating 1 additional train per hour, with alternate hours being Hull and Leeds via Garforth.

I realise it's a bit tangential to your point, but the biggest downside to HT not calling at Doncaster is that it would leave Selby to Doncaster and onward connections to places like Sheffield with basically no service again, so I really hope that doesn't happen. But agreed, it would still leave HT with a viable business case for services between Hull and London, even if maybe not at quite the same level of service they're offering now.

Of course that would be easily overcome by changing at Leeds instead.

 

[stevieinselby]

Of course that would be easily overcome by changing at Leeds instead.

Selby to Doncaster direct – 15 minutes
Selby to Doncaster via Leeds - 65 minutes
"easily"

 

[IanXC]

Selby to Doncaster direct – 15 minutes
Selby to Doncaster via Leeds - 65 minutes
"easily"

I may have been overly distracted by "and onward connections".

I'm far from convinced there is a big flow of passengers from Selby to Doncaster, even if there was an hourly service!

 

[Bald Rick]

My key thought on this is, if the OAOs were to leave the industry tomorrow (as they could) what services would the DfT or DfTO want to put in place to fill any gaps. My prediction is that we would find LNER operating 1 additional train per hour, with alternate hours being Hull and Leeds via Garforth.

That’s a good way of looking at it, and your assessment is about right in my opinion.

 

[stevieinselby]

I'm far from convinced there is a big flow of passengers from Selby to Doncaster, even if there was an hourly service!

Sure, it's not a huge demand, but it's a journey I make regularly and there are always other people I see doing the same ... nearly 10,000 journeys a year, making it the 5th most popular destination from Selby ... an hourly service would be nice, the current 2-hourly pattern is adequate, but reducing it to the pre-privatisation level of a couple of trains each way after people have been used to having more regular services for the last 25 years would definitely be an unpopular move, especially when the alternative is so much slower.