Miliband, if elected, may be put under pressure to bring railways under state control

[aylesbury2]

This article from the Guardian suggests that this could happen. What would be the consequences?

Bring rail under state's control to win back power, Ed Miliband told
Labour candidates call for bold policy to cap fares as the party's election chiefs pledge radical manifesto

Ed Miliband has come under pressure to bring the rail network back into national ownership if Labour wins the next election, as more than 30 of his party's parliamentary candidates call for a bold new policy to improve services and control train fares.

In a joint letter to the Observer, the prospective MPs – many of whom will fight in marginal seats where they say the commuter vote could be crucial – argue that a policy of gradual renationalisation would allow fares to be kept under control and profits to be reinvested in services.

Their intervention comes as radical options for the future of the rail network are being considered by Labour's lengthy policy review, which is nearing completion. It also coincides with a pledge in the Observer by two key figures in the Labour election team to present the most radical manifesto in a generation.

While Miliband has said he is interested in "innovative solutions" for the railways and is open to considering a greater degree of state control, shadow chancellor Ed Balls is said to be resistant to anything that would be portrayed by Labour's opponents as anti-business or a lurch back to the pre-Thatcher era of nationalised industries.

In their letter, the candidates say a big move on rail ownership and fares could prove a vote-winner on doorsteps, particularly in marginal seats in the south, which Labour must seize if it is to win an overall majority. They argue that under the present franchising system, private companies can charge high fares and "walk away with hundreds of millions of pounds every year, despite running monopoly services and benefiting from £4bn of public investment in the rail network every year".

 

[Monty]

My pension says that even if he was elected it wouldn't happen.

 

[LNW-GW Joint]

This article from the Guardian suggests that this could happen. What would be the consequences?

If you read the article, it's not Miliband advocating state control, he is being pressured to make it Labour policy by prospective MPs.
Ed Balls is not in favour, having higher priorities for budgets.
The front bench has been very careful not to make a commitment.
Remember Tony Blair said in 1997 "railways are not a priority".
We'll know next year. And they have to win an election first.
It's also difficult to think of anything on the passenger railway that the government doesn't control already.

 

[cjmillsnun]

Some would argue that the consequences would be that the sky would fall... However.....

In the short term, there would be little or no issue.

It depends what happens investment wise in the medium to long term...

BR was traditionally starved of cash. So much so that equipment got life expired before replacement (eg signalling).

It would also depend on who managed the new organisation. If it was managed as a QANGO with good management, it could work very well. If it was micro-managed by DaFT (which is the most likely scenario as they do this with the TOCs anyway!), then you may as well not bother.

As most on here have already said. It most likely won't happen. It's an idea being floated by PPCs

 

[306024]

I remember going to a union meeting in one of the committee rooms in the House where John Prescott said all this - that was nearly some 20 years ago! So maybe his wish may eventually surface.

Personally I doubt it will become part of the election manifesto for the reason that the leadership won't want to be subjected to questioning on the precise detail of how they would actually achieve it.

On a lighter note, for anyone who is a fan of Yes Minister, it could depend upon how Sir Humphrey (or whoever it is today) will view it. As it would doubtless mean an increase in budget and manpower for the DfT the Civil Service could decide to try to make it happen.

Then again we may need to scrap HS2 to pay for it

 

[DaveNewcastle]

At this time of year, it's not uncommon to hear of some surprising ambitions by people who hope to attract the letter 'X' later in the month.

As with most flirtatious displays, the attractive posturing and the long-term performance may differ.

It would be wise to avoid the 'noise' created by those people during their 'mating season'. No doubt some sort of attraction will succeed with some people who may, later, feel jilted.

 

[Rapidash]

Apparently there is a letter in today's Observer by 30 prospective Labour parliamentary candidates calling for gradual renationalisation.

 

[Welshman]

I remember reading about someone asking at the beginning of Tony Blair's New Labour Government whether they would reverse the policy of the previous Tory regime and re-nationalise the railways, and the reply being on the lines of it was then too difficult to undue, and, anyway, they enjoyed seeing the Tories getting the blame!

Now, 15 years on, [despite the fact I would love to have a nationalised and well-funded railway system where the profits are ploughed back into the business], I think it would be even more difficult to reverse, and doubt that any possible future Labour government would have the stomach for it.

 

[D1009]

Arguably the railways are under more state control now than they were under BR.

 

[NotATrainspott]

I think this will pan out to be a lot less radical than it seems right now. One option is for DOR to bid for every franchise available so that the minimum quality of bids could be increased and to provide competition between the state and the private sector. If the private sector really is so wonderful, it should always win out in these bids against the lumbering state-owned DOR.

Another possibility could be a switch to a concession model for non-Intercity services. No one is going to bid for Northern or the London commuter franchises and do anything more than the bare minimum required for the franchise spec, unlike the InterCity ones, so it makes sense to allow local authorities much greater control of them. They would collect the farebox, set service levels and the like but would subcontract out the actual running of the train services to the companies who normally bid for franchises.

Either way it's a superior model for the services which are socially useful rather than economically profitable.

 

[ianhr]

If elected they would tend to have other priorities. They always have had. A large percentage of their MPs represent constituencies where rail usage is low. Previous Labour governments do not have a good record on rail investment. Throughout the periods when they were in power in the 60's,70's,and 1997-2010 the railways essentially stagnated. There is one exception to this and that was the influence of Andrew Adonis in the dying years of the Brown government....it still amazes me how he got them to agree to his plan.

 

[Flamingo]

As a rail worker, I don't think renationalisation would benefit me. I've worked for public sector in the past, and found management to be poor, driven by the latest political target, working hours to be a lot worse, and pay an awful lot worse.

At the moment, the private companies are obsessed with image and passenger surveys, and the threat of having a franchise removed for poor performance does keep a very large stick hanging over them. This would all be removed at a stroke. As an example, FGW spent several million in training all customer-facing staff in "customer care" a few years ago -could anybody see a public-sector body doing this? And imagine the outcry over public money being "wasted".

Also, a lot of my colleagues (but not me) have invested money as shareholders in the company. What would happen to that if the railway was renationalised?

I believe the phrase that covers it is "Be careful what you wish for."

 

[Moonshot]

As a rail worker, I don't think renationalisation would benefit me. I've worked for public sector in the past, and found management to be poor, driven by the latest political target, working hours to be a lot worse, and pay an awful lot worse.

At the moment, the private companies are obsessed with image and passenger surveys, and the threat of having a franchise removed for poor performance does keep a very large stick hanging over them. This would all be removed at a stroke. As an example, FGW spent several million in training all customer-facing staff in "customer care" a few years ago -could anybody see a public-sector body doing this? And imagine the outcry over public money being "wasted".

Also, a lot of my colleagues (but not me) have invested money as shareholders in the company. What would happen to that if the railway was renationalised?

I believe the phrase that covers it is "Be careful what you wish for."

Absolutely 100% correct

 

[kylemore]

Arguably the railways are under more state control now than they were under BR.

Exactly! They're under "State Control" just now - what is Network Rail if it's not a Nationalised Track authority? Are there any privately owned main line Railways in the UK? The system has been designed so that the Taxpayer foots the losses whilst the Private Companies (many of whom give money to Labour) cream the "Profits".

As a sop to the ever dwindling "Traditional Labour" the most they will do is slightly adjust the arrangements to make it look as if they are bringing it more under state control whilst privately assuring their Masters, sorry! - Partners, that Taxpayer money will continue to flow into the "Private Sector" as before.

 

[cjmillsnun]

I remember reading about someone asking at the beginning of Tony Blair's New Labour Government whether they would reverse the policy of the previous Tory regime and re-nationalise the railways, and the reply being on the lines of it was then too difficult to undue, and, anyway, they enjoyed seeing the Tories getting the blame!

Now, 15 years on, [despite the fact I would love to have a nationalised and well-funded railway system where the profits are ploughed back into the business], I think it would be even more difficult to reverse, and doubt that any possible future Labour government would have the stomach for it.

It's actually dead easy to reverse. The WC fiasco has made it easier as most TOCs will be on short term direct awards.

Just let the franchises expire, one by one, and assign DOR to manage them afterwards. Aside from freight, ROSCOs (leave them in private hands but regulate them), and a handful of open access operators, you have a nationalised railway for minimal cost.
--- old post above --- --- new post below ---

As a rail worker, I don't think renationalisation would benefit me. I've worked for public sector in the past, and found management to be poor, driven by the latest political target, working hours to be a lot worse, and pay an awful lot worse.

At the moment, the private companies are obsessed with image and passenger surveys, and the threat of having a franchise removed for poor performance does keep a very large stick hanging over them. This would all be removed at a stroke. As an example, FGW spent several million in training all customer-facing staff in "customer care" a few years ago -could anybody see a public-sector body doing this? And imagine the outcry over public money being "wasted".

Also, a lot of my colleagues (but not me) have invested money as shareholders in the company. What would happen to that if the railway was renationalised?

I believe the phrase that covers it is "Be careful what you wish for."

Yes I can actually. Both Intercity and NSE did just that under Chris Green's management.

 

[w0033944]

I'd be interested to hear the explanations of those against renationalisation as to why a gradual process, franchise by franchise as they expire, couldn't work. I'm not sure at present whether I favour renationalisation or not, hence I'm interested in differing opinions and arguments which I can then weigh-up before forming my own opinion.

 

[northwichcat]

and pay an awful lot worse.

Well with subsided franchises being operated by limited companies which are actually are in profit it makes it easy for unions to negotiate bigger pay rises because it's the profitable company who employ the rail workers not the loss making government. If it was public sector then it would be seen as loss making with no scope for any payrise above the rate of inflation.

 

[Railsigns]

Also, a lot of my colleagues (but not me) have invested money as shareholders in the company. What would happen to that if the railway was renationalised?

I have no sympathy for anyone who's bought shares in any privatised public service industry. They're quite happy to sit back and watch the money roll in while the going is good. When a state-owned company in which the public used to have a stake is sold off by a right-wing government, it rewards those who embrace capitalism by buying the shares and penalises those who do not. There's something quite sinister about that. I could have bought shares in the Royal Mail and made a tidy profit but, being strongly opposed to its privatisation, I chose not to.

 

[Rapidash]

BBC News just had one of the signatories on. She argued that they were not pushing for a BR style nationalisation, but something like the continental system where state railways are allowed to bid to run routes, which for whatever reason has not happened here. Made some sense to me....

 

[ivanhoe]

From what I have read, it would be done when each franchise comes to an end. The example of East Coast is a poor example. Its a good
cash cow . Let's take Northern . Will total state control improve things dramatically? I would doubt it. It has special needs which will always require subsidy particularly if we want to keep the current Northern routes intact.

Would you reorganise the current franchises into different sectors? Its been nearly 20 years now and much has changed in the industry. By all means go for a more efficient railway and that will require concessions by all sides. However, if Labour is really serious about improving the transport needs of the masses, then please sort out the bus industry outside of London. Its a mess , its expensive and is driven mainly by the profitability of each route and its funding is shambolic. It will also get worse as the baby boomers get their bus passes.

 

[Moonshot]

I have no sympathy for anyone who's bought shares in any privatised public service industry. They're quite happy to sit back and watch the money roll in while the going is good. When a state-owned company in which the public used to have a stake is sold off by a right-wing government, it rewards those who embrace capitalism by buying the shares and penalises those who do not. There's something quite sinister about that. I could have bought shares in the Royal Mail and made a tidy profit but, being strongly opposed to its privatisation, I chose not to.

Absolutely nothing sinister whatsoever......everyone has the right to buy shares. Those that choose not to cannot complain about it. I remember the early days of BT and British Gas etc.....people were queing up to buy them. And of course nowadays, the likes of BT and British Gas are not a drain on the taxpayer.....

 

[ExRes]

13 years of Labour misgovernment brought absolutely no change to the railway, Blair was a complete and utter liar about anything and everything every time he opened his self serving mouth, Brown was no different so what makes anyone think Ed 'Mr Bean' Milliband will be any different ?

Yes, I would like to see a state owned railway system, along with water, gas, electricity etc etc, but it isn't going to happen because the cost would be too high once the franchise owners and their lawyers were paid off, we're stuck with a highly fragmented and badly operated system which can only be changed using East Coast as a trial to run a state owned system alongside the current mess

 

[Railsigns]

Absolutely nothing sinister whatsoever......everyone has the right to buy shares.

What's sinister isn't the fact that people are buying the shares, it's the political motive behind the sell-off, i.e. the expectation that giving people the chance to own a few shares will turn them into Tory-voting capitalists.

 

[northwichcat]

Let's take Northern . Will total state control improve things dramatically? I would doubt it. It has special needs which will always require subsidy particularly if we want to keep the current Northern routes intact.

One thing to note with Northern it consists of roughly two former Regional Railways areas but with the more lucrative regional routes removed and put in to other franchises.

 

[swt_passenger]

If you read the article, it's not Miliband advocating state control, he is being pressured to make it Labour policy by prospective MPs.
Ed Balls is not in favour, having higher priorities for budgets.
The front bench has been very careful not to make a commitment.
Remember Tony Blair said in 1997 "railways are not a priority".
We'll know next year. And they have to win an election first.
It's also difficult to think of anything on the passenger railway that the government doesn't control already.

BBC version here, includes:

Leader Ed Miliband said Labour was looking at all options but would not "go back to old-style British Rail".

Ed Miliband told BBC One's The Andrew Marr Show: "We've got to be pragmatic and we've got to recognise that the system at the moment has flaws in it.

"I'm never going to write a blank cheque and I'm not going back to the past but we are looking at the different options.

http://www.bbc.co.uk/news/uk-27273672

I guess this is the sort of stuff prospective candidates have to say to get selected. Meanwhile the OP's thread title is quite misleading...

 

[Moonshot]

What's sinister isn't the fact that people are buying the shares, it's the political motive behind the sell-off, i.e. the expectation that giving people the chance to own a few shares will turn them into Tory-voting capitalists.

As Tony Blair stated publically on the very first day as Prime Minister " The Tories got a lot of things right.....we accept that ".

Reducing state influence is the way forward....absolute no brainer.

 

[northwichcat]

13 years of Labour misgovernment brought absolutely no change to the railway

Didn't it?

The things that I can think off without spending too much time thinking about it:
1. The WCML upgrade - OK we didn't get the 140mph running but there have still been significant improvements
2. A vast variety of new trains including the first ever tilting trains in the UK and most of the slam door stock being withdrawn.
3. The new St Pancras station including the new Eurostar terminal
4. Starting a rolling electrification program (which the Coalition have continued with after initially pausing it as part of their Spending Review.)
5. nationalrail.co.uk
6. Major station refurbishments at stations like Manchester Piccadilly and Leeds
7. Higher frequency of services on XC

 

[Railsigns]

Reducing state influence is the way forward....absolute no brainer.

That statement is incompatible with your support for rail privatisation, which has increased, not decreased, state influence over the railways.

 

[thenorthern]

I would think a manifesto commitment for Labour would be to "look into nationalisation of the railways" but I doubt they would ever be re-nationalised though.

I remember though when there was the Virgin Trains fiasco in 2012 Labour called for re-nationalisation, funny how when they were in power for 13 years they never managed to do that but they expect Cameron to do it after 2.

 

[Moonshot]

That statement is incompatible with your support for rail privatisation, which has increased, not decreased, state influence over the railways.

As I pointed out earlier, rail today is NOT privatised at all........true privatisation will only occur when the entire industry is free of state control. As far as I am concerned, the whole industry ( starting with Network Rail ) should be in the private sector - with investment decisions being driven by passenger needs