Part nationalisation?

[ElectroSoldier]

As far as I can gather Jeremy Corbyn plans to part nationalise the railways by not renewing franchises when they come up for renewal thus bringing control back into national control.

I would like some opinions.
1st from what I gather that diagramming and services are already decided at government level, TOC have little choice in services so what real world effect would this have?

2nd He said he plan doesnt include buying the trains back from the ROSCOs. What effect would this have on the services if the government doesnt actually own the rolling stock?

3rd without freight to worry about would the services fair better than they did under BR?

 

[Journeyman]

It's all bit of an ideological crusade, really. The problems we have now will all still be there, and the same people will need to try and solve them.

 

[swt_passenger]

What does “without freight to worry about” mean? Presumably it will still be timetabled?

 

[plugwash]

I would like some opinions.
1st from what I gather that diagramming and services are already decided at government level, TOC have little choice in services so what real world effect would this have?

I would guess not much in the short term.

In the longer term it would mean that any changes the government wants to make would not be tied to an artificial franchising cycle. I'm not sure if that would be a good thing or a bad one.

2nd He said he plan doesnt include buying the trains back from the ROSCOs. What effect would this have on the services if the government doesnt actually own the rolling stock?

It means some of the same perversities that exist today will persist.

For example there are currently a bunch of spare off-least 319's, if all the trains were owned by the operator then spare trains could be easilly dragged out when a breakdown happens, but under the current model there is financial pressure to lease as few trains as possible and the off-lease trains are not available to cover for problems.

 

[thenorthern]

One thing to remember is the EU Directive 91/440 explicitly states that infrastructure management and operation of trains should be separate from each other. I know we are supposedly leaving the EU but as things stand Network Rail would still exist and there would be a state-owned train operating company that would be entirely separate and would have to pay track access fees at Market rate. Hull Trains and Grand Central would also still exist as they do paying the same rate to use the network as a state-owned train operating company.

 

[LNW-GW Joint]

If there is any element of private operation of trains (as seems to be Labour's intent, with open access and freight not being nationalised), you need the apparatus of economic regulation currently delivered by ORR.
That means the paraphernalia of a level playing field for TOCs, new entrants allowed, licensing, transparent access charges, delay attribution, no bullying by the state operator etc.
So any idea that it will be the monolithic "BR Mk2" is off the agenda.
There's also the issue of private capital in the railway, from HS1 to Heathrow Express, as well as the Roscos.
West Coast has just been awarded to First Trenitalia for at least 10 years, and Merseyrail (Serco/Abellio) has a contract with Merseytravel until 2033.
TfW Rail Services (Keolis) has a contract with the Welsh Government also until 2033.
So there are loads of questions for a putative Labour Transport Secretary.
There will be many continuing long-term leasing agreements with Roscos and manufacturers, not least the various deals with Hitachi which last into the 2040s.
All trade agreements have rules about competition and market access, even under WTO, and EU rules will apply at least until 2021.
It's by no means clear that the government could ring-fence the railway and prevent some element of competition in procurement and operation.

 

[trebor79]

It's all moot anyway as there's no way Comrade Corbyn is getting the keys to No 10.

 

[LOL The Irony]

But aren't the railways part nationalised anyways? What is Network Rail to Corbyn?

 

[JonathanH]

For example there are currently a bunch of spare off-least 319's, if all the trains were owned by the operator then spare trains could be easilly dragged out when a breakdown happens, but under the current model there is financial pressure to lease as few trains as possible and the off-lease trains are not available to cover for problems

No, absolutely not - for spare trains to operate there needs to be depot capacity, training for drivers and fitters and they need to be fit to run. You can't just go to the sidings and take the train you fancy out to fill a gap following a cancellation.

Moreover, BR was subject to stringent restrictions on its funding such that it couldn't just have an infinite fleet and unlimited staff to work it.

The fundamental concern that appears to drive the desire for nationalisation is the idea that profit leaves the rail industry. That really is about it.

 

[AlbertBeale]

No, absolutely not - for spare trains to operate there needs to be depot capacity, training for drivers and fitters and they need to be fit to run. You can't just go to the sidings and take the train you fancy out to fill a gap following a cancellation.

Moreover, BR was subject to stringent restrictions on its funding such that it couldn't just have an infinite fleet and unlimited staff to work it.

The fundamental concern that appears to drive the desire for nationalisation is the idea that profit leaves the rail industry. That really is about it.

That, and in whose interest decisions are made; ie it's not just money going out to shareholders, and fat-cat salary levels, there's also the basic principle that decisions should be made in the interests of the community, which commercial companies (by definition) don't prioritise.

 

[thenorthern]

There is also the problem of EU rules about state owned railways which mean poor regulation, poor management, excessive subsidies, market rates having to be paid, competition having to be allowed and difficulty in raising capital for new projects.

I don't know how true this is but in France the subsidy per passenger is something like £10 on average whereas in the United Kingdom its something like £3.

 

[Bletchleyite]

There is also the problem of EU rules about state owned railways which mean poor regulation, poor management, excessive subsidies, market rates having to be paid, competition having to be allowed and difficulty in raising capital for new projects.

I don't know how true this is but in France the subsidy per passenger is something like £10 on average whereas in the United Kingdom its something like £3.

But you can control that based on what you set the fare levels to vs. the spend. It isn't, other than the tiny profit margin the railway runs vs. other businesses, anything to do with who owns/runs it. It's a Government decision on how much subsidy they want to put in.

AIUI the EU rules simply require separate accounting for track and train. There are in practice relatively few private open access operations interested - even Flix is a tiny operation and likely to remain at that "couple of train pairs a day" type level.

 

[thenorthern]

But you can control that based on what you set the fare levels to vs. the spend. It isn't, other than the tiny profit margin the railway runs vs. other businesses, anything to do with who owns/runs it. It's a Government decision on how much subsidy they want to put in.

AIUI the EU rules simply require separate accounting for track and train. There are in practice relatively few private open access operations interested - even Flix is a tiny operation and likely to remain at that "couple of train pairs a day" type level.

Sort of if I remember correctly the rail access charge has to be set at market rates meaning that the two operations are largely separate.

 

[tbtc]

Whilst I'm all for improvements and have no particular problem with state/private ownership/provision - I'm a fan of what works best - I try to be pragmatic - the problem I have with the Corbyn idea is "...then what?".

I mean, you can further nationalise the (already part-nationalised) railway by taking over the TOC role when the contracts expire - great - but... what then? He's not saying "nationalise so that we can then introduce the following improvements", he's not telling the Great British Public what the amazing solutions are that he has up his sleeve, if only we could take back (more) control of the railways - I'd love to know what improvements there are going to be that the ORR/ DfT/ Network Rail etc cannot already make happen (which may require paying TOCs a few quid more to deliver improvements).

That's why I'm deeply sceptical of this - it's nationalisation for the sake of nationalisation, for the kind of people who view nationalisation as an end in itself (whereas I view it as a potential means to an end of delivering better services).

If you are the kind of person who worries about the money taken out of the railway by TOC parent companies or the cost of repainting trains and station signs every five years then, fair enough - for me these costs are rounding errors (like the way that the tabloids whipped people up before the referendum to be upset about Eastern Europeans sending Child Benefit back to their home countries) - in the grand scheme of things it's not going to make much difference to a network where we'd have to pay tens of millions of pounds for a single mile of new railway.

Is the plan that the Government would specify all new trains and pay for them outright rather than leasing them? Fair enough - but the DfT's experience in ordering the 800/801s doesn't fill me with confidence.

Is the plan that the Government will specify much more services ? If so, what's stopping that from happening right now?

Is the plan that the Government will specify cheaper fares? If so, what's stopping that from happening right now?

Is the plan that the Government will increase the number of new trains built each year? If so, what's stopping that from happening right now?

Is the plan that the Government will build new lines? If so, what's stopping that from happening right now?

Is the plan that the Government will resolve the arguments about DOO/ strikes? If so, what's stopping that from happening right now?

It's much like Brexit really, a simple slogan for change that doesn't convey how complicated everything is. And just like the Brexiters who know that we must leave but can't find a meaningful list of things that EU membership has *actually* prevented us from doing (something about bananas and passports isn't significant enough...), nationalisation is being suggested as a solution without any evidence it'll solve anything.

We're not going back to the 1980s, we're not going to have one Proper Railway Man/ Sir Topham Hat who'll get a bucketload of money from the Government every five years and be able to run the railway without interference/ scrutiny. We're stuck with a network of incompatible trains, a backlog of infrastructure improvements, a lot of arguments about "efficiencies". We need solutions to these things, and the current Labour offering doesn't fill me with hope that their political vanity will make much difference to the everyday passenger experience.

But aren't the railways part nationalised anyways? What is Network Rail to Corbyn?

The problems with Network Rail are an inconvenient truth for fans of nationalisation.

I was more of a fan of nationalisation pre-Network Rail, when I could see a great future for a state owned infrastructure provider. Since Network Rail became reality, it's not become the poster-boy for nationalisation that it might have been.

 

[Raul_Duke]

Whilst I'm all for improvements and have no particular problem with state/private ownership/provision - I'm a fan of what works best - I try to be pragmatic - the problem I have with the Corbyn idea is "...then what?"

Then what will happen is BR Mk2 will say, “We’d like to resignal and upgrade capacity at Leicester. It will cost £500m ish.” (for example)

And all the people who shouted loudest for nationalisation on twitter and in the media will go, “But that £500m could pay for the NHS’ weekly budget for staff lanyards. WE MUST PROTECT THE PEOPLES NHS!”

And Leicester will not be resignalled. And the money will be swallowed by the NHS.

(As this is Railforums, I should point out this is crude satire, and much as I believe this is pretty much what would happen, I am very much in favour of the NHS. So be cool.)

 

[tiptoptaff]

Then what will happen is BR Mk2 will say, “We’d like to resignal and upgrade capacity at Leicester. It will cost £500m ish.” (for example)

And all the people who shouted loudest for nationalisation on twitter and in the media will go, “But that £500m could pay for the NHS’ weekly budget for staff lanyards. WE MUST PROTECT THE PEOPLES NHS!”

And Leicester will not be resignalled. And the money will be swallowed by the NHS.

(As this is Railforums, I should point out this is crude satire, and much as I believe this is pretty much what would happen, I am very much in favour of the NHS. So be cool.)

This is the point I've tried to get across to friends and colleagues of mine who favour nationalisation - who's going to approve £100m for new trains in Bristol when that same £100m could fund x nurses in Durham, y teachers in Harrow, z fire fighters in Gravesend etc etc...

So the railway will suffer from underinvestment. The railways are not a priority for the general public - they'll always think money can be better spent elsewhere and the government will follow the whims it'll think will get it re-elected.

And for my colleagues - most of whom never worked for BR, do they really think the pay awards we've been getting would continue under a Corbyn government? If anyone's ideology is going to follow that rail staff (drivers especially) are higher earners and don't need a pay rise as much as nurses or police officers, or aren't well enough to do that we cant afford tax increases, it's Corbyn's. This is a selfish point, but ultimately, I have to vote for what's best for my family and I.

 

[quantinghome]

Since Network Rail became reality, it's not become the poster-boy for nationalisation that it might have been.

True, but then again Railtrack was even less of a poster boy for privatisation.

I'm in favour of public ownership of railways but it's a precondition to improving the railways, not an end in itself. The current system of separate train operating franchises, infrastructure and rolling stock owners is so fragmented that any improvements to the railways are incredibly different to achieve. Just look at Northern at the moment. Aside from the general incompetence of Arriva, it's incredibly difficult to drive through improvements and have any sort of accountability, because it's always Someone Else's Problem. The railways need to be reintegrated. Let the franchises expire. ROSCOs stay as they are but new rolling stock is bought outright.

More detailed info on Labour's thinking are given here: https://www.railmagazine.com/research-hub/reference/exclusive-labour-s-railway-vision
and here:
https://www.railmagazine.com/news/rail-features/exclusive

 

[option]

As far as I can gather Jeremy Corbyn plans to part nationalise the railways by not renewing franchises when they come up for renewal thus bringing control back into national control.

I would like some opinions.
1st from what I gather that diagramming and services are already decided at government level, TOC have little choice in services so what real world effect would this have?

2nd He said he plan doesnt include buying the trains back from the ROSCOs. What effect would this have on the services if the government doesnt actually own the rolling stock?

3rd without freight to worry about would the services fair better than they did under BR?

1) Some TOCs could be 'nationalised' into the combined authorities, so there could be more localised decisions on services & funding.

2) The state uses loads of stuff that it doesn't own. Most bus companies don't own their buses. It has no impact.

 

[quantinghome]

This is the point I've tried to get across to friends and colleagues of mine who favour nationalisation - who's going to approve £100m for new trains in Bristol when that same £100m could fund x nurses in Durham, y teachers in Harrow, z fire fighters in Gravesend etc etc...

So the railway will suffer from underinvestment. The railways are not a priority for the general public - they'll always think money can be better spent elsewhere and the government will follow the whims it'll think will get it re-elected.

And for my colleagues - most of whom never worked for BR, do they really think the pay awards we've been getting would continue under a Corbyn government? If anyone's ideology is going to follow that rail staff (drivers especially) are higher earners and don't need a pay rise as much as nurses or police officers, or aren't well enough to do that we cant afford tax increases, it's Corbyn's. This is a selfish point, but ultimately, I have to vote for what's best for my family and I.

The government is the ultimate provider of rail funding. It already 'buys' new trains through payments to TOCs or hugely complex and expensive arrangements such as for the Class 800s. Infrastructure projects are paid by direct support to Network Rail.

 

[SuspectUsual]

A quart won’t ever fit into a pint pot, regardless of who owns the glassware

 

[coppercapped]

That, and in whose interest decisions are made; ie it's not just money going out to shareholders, and fat-cat salary levels, there's also the basic principle that decisions should be made in the interests of the community, which commercial companies (by definition) don't prioritise.

What do you mean, exactly, by "the interests of the community"?

Is the "community" homogeneous? Are all sections of it in agreement as to what their interests are?

 

[AlbertBeale]

What do you mean, exactly, by "the interests of the community"?

Is the "community" homogeneous? Are all sections of it in agreement as to what their interests are?

No, of course not, that's what local authorities and governments etc do, try to balance needs and priorities (and the survival of the planet) in some sort of democratic way. Some people won't be happy with any decision, of course, but better some sort of democratic decision-making than decisions made in the interests of fat-cats.

 

[LNW-GW Joint]

But aren't the railways part nationalised anyways? What is Network Rail to Corbyn?

It's probably better to say simply that NR is in the public sector, as it gets most of its money from public bodies.
It has a quasi-independent status, and is regulated by ORR (another statutory arms-length public body).
The DfT can't actually tell NR what to do on a daily basis, even though it provides major funding on a 5-year basis during the negotiations with ORR (the HLOS/SoFA process).
But NR gets its funding from the notionally independent/private TOCs by way of access charges, plus a grant from DfT for significant enhancements.
The ORR presides over NR's spending and the charges it makes, and aims to balance the needs of the TOCs and NR.
NR is granted a license by the ORR to run the railway for a fixed period, and it can be prosecuted for not obeying the terms of its licence.

This can all be changed by a new Railway Act, but one of this scale would take several years to develop and get through parliament.
Until then, Mr Corbyn has to work within the current legal structure (including the EU regulations).

 

[option]

The government is the ultimate provider of rail funding. It already 'buys' new trains through payments to TOCs or hugely complex and expensive arrangements such as for the Class 800s. Infrastructure projects are paid by direct support to Network Rail.

Under the present system;

NR keep their revenues, & so can do maintenance with little political interference.
Not all TOCs/services are subsidised, so not all rolling stock is being paid for from state payments.
Some infrastructure projects are funded locally, & with developer contributions.

 

[thenorthern]

Lets not forget the last time the railways were state owned there was no devolution meaning almost all the decisions about railways were made at Westminster.

Today however its very different.

 

[coppercapped]

No, of course not, that's what local authorities and governments etc do, try to balance needs and priorities (and the survival of the planet) in some sort of democratic way. Some people won't be happy with any decision, of course, but better some sort of democratic decision-making than decisions made in the interests of fat-cats.

The planet doesn't need the protection of Governments of any variety - it will continue on its annual journey around the Sun with no great difficulty.

I think what you are trying to say is that in future the climate may have changed sufficiently that the way we organise our lives will have to adapt. And there I agree.

But what of the case where a decision that benefits the 'fat cats' also benefits the bulk of the population? What does one do then? Make a decision that is less beneficial to the 'fat cats' on principle although the bulk of the population will not benefit as much? How does one persuade the voters that this decision was made for their benefit and welfare?

 

[Andyh82]

But aren't the railways part nationalised anyways? What is Network Rail to Corbyn?

Something that is to be shushed. The nationalisation agenda is based around the fact that all the problems on the railways are caused by the TOCs, and things would be much better if the fat cats were not creaming off millions in profits every year and this money was spent on the railways instead. This myth is perpetuated by MPs, city mayors, union leaders.

In reality half the problems are on Network Rail’s watch, and aren’t many TOCs actually making a loss, or only a very modest profit?

 

[quantinghome]

Something that is to be shushed. The nationalisation agenda is based around the fact that all the problems on the railways are caused by the TOCs, and things would be much better if the fat cats were not creaming off millions in profits every year and this money was spent on the railways instead. This myth is perpetuated by MPs, city mayors, union leaders.

In reality half the problems are on Network Rail’s watch, and aren’t many TOCs actually making a loss, or only a very modest profit?

The people working on Labour's plans for the railways understand that it's not just money removed through dividends but the sheer inefficiency of the existing system. Hundreds of people employed in arguing about delay attribution. Millions spent in franchise bidding. The lack of joined up thinking. I dread to think how many people are employed in contract administration between the various companies. That's the bugger problem, and no amount of tinkering with franchising will solve it.

 

[Raul_Duke]

The people working on Labour's plans for the railways understand that it's not just money removed through dividends but the sheer inefficiency of the existing system. Hundreds of people employed in arguing about delay attribution. Millions spent in franchise bidding. The lack of joined up thinking. I dread to think how many people are employed in contract administration between the various companies. That's the bugger problem, and no amount of tinkering with franchising will solve it.

That’s all true. But nationalised industries aren’t exactly known for their efficiency either.

The fragmentation certainly needs solving. Personally I’d favour more vertical integration.

 

[MarlowDonkey]

The fragmentation certainly needs solving. Personally I’d favour more vertical integration.

Perhaps it's necessary to look back at how it was handled before 1923. You had vertically integrated local and regional Companies, but also a framework that allowed running powers, Company B running trains on Company A's network, jointly owned infrastructure and working arrangements where a line was leased or a third party ran the trains.

I'm not sure quite how many Companies you would have in the present day, but if say it was Southern, Western, Wales, West Coast, Midland, Scotland, East Coast, East Anglia, then Cross Country might continue to exist as a train operator with running powers over South, West, West Coast, East Coast and Scotland. Thameslink would have running powers on Southern, Midland, East Coast and East Anglia etc.