Rail renationalisation- do you support it?

[najaB]

...and B.R. didn't have £40 billion of debt.

Though, as has been pointed out by yourself, BR also didn't have anything like the level of spend on infrastructure.

 

[highdyke]

No, Paul, all you've done is taken my post and made it say the opposite. That's not a particularly intelligent thing to do, unless of course you can produce evidence which proves that publicly owned railways are less efficient. I doubt that you can, when the official ORR figures show that B.R. made do with a fraction of the subsidies thrown at the privatised industry today, and B.R. didn't have £40 billion of debt.

Yes and a fraction of the wage cost, health and safety legislation.

The debt is held by nationalised NR, one could argue some of this was the decision to lower the track access costs after the Railtrack collapse. But productivity is down across the TOCs compared to the more liberalised FOCs.

The answer is to let public, private and mutuals bid, as they do in other countries and have a competitive, innovative industry.

Labour’s plans regarding franchising are well-documented, and Nash is thoughtful on this. ‘They’ve spoken of allowing a public sector operator to compete with the private sector for franchises, which is the case in Sweden, Germany, Netherlands and Denmark, and it seems to work. So I don’t think it’s as silly an idea as some people are saying. It provides a public sector comparator and ensures competitive bidding, although we generally have had fierce competition for franchises so I’m not sure that it’s necessary from that point of view, but it is some sort of a safeguard.

http://www.railpro.co.uk/railpro-magazine/magazine-archives/may-2015/interview-chris-nash

A lot of them are from overseas and very often they find it hard to understand how such a fragmented system could work; for instance when I talk with Japanese doctoral students and other academics, the Japanese view is absolutely that track and services need to be provided by the same company. I would say the same with North America – almost all North American transport economists believe vertical integration is absolutely essential to a railway. That’s certainly one thing that comes out.’

Japanese passenger/freight and US freight railways are private. The Japanese do provide some subsidy for passenger trains where needed, US freight is subsidy free give or take, although Amtrak is funded centrally, and there is some tax payer input into local light and commuter networks.

The mistake at privatisation was probably to fragment the network so much, although BR outsourced a lot too: Signalling work, train building.

They should have probably leased the network to a number of interested public, private and mutual organisations, with the regulator deciding running powers.

 

[najaB]

Japanese passenger/freight and US freight railways are private.

That's a very important difference between the US and UK: for the most part, their railway is a freight network that happens to allow passenger trains to run over it in marginal time. There is very little we can learn from them that is applicable to our network.

 

[Railsigns]

Japanese passenger/freight ... railways are private.

Wikipedia says otherwise.

All of the shares of JR Hokkaido, JR Shikoku, JR Kyushu and JR Freight are still owned by Japan Railway Construction, Transport and Technology Agency, an independent administrative institution of the state.

 

[Lankyline]

Labour of the 1960s and 70s, 80s wanted everyone to have a car, same with the Tories

Apart from Barbara Castle in the 60s who put together the idea of the social railway and PTEs because of public pressure (and who still managed to close 2040 miles of railway, after her predecessor mostly carried out the wishes of Beeching) there's little evidence Labour has ever been interested.

Labour in the 60's and 70's never publically backed car ownership, what transpired was that the civil servants in the MoT were pro road (a legacy from Marple's days) plus the road transport lobby were extremely influencial
Castle's predecessor was Tom Freeman and between her, Freeman and Marsh they cut more route miles than Marples did, yet Harold Wilson campaigned on a ticket of stopping the "Beeching cuts", essentially he lied through his back teeth as his govt actually accelerated the cuts.

Castle, to be fair tried to stand up to the road lobby and her pro road advisers and of course the social deprivation clause, but the point is this, putting the railways back into state control is dangerous both for the railways and the taxpayer, history has taught us as much.

 

[highdyke]

@ Railsigns. It also says JR East, JR Central and JR West are publically traded, but they all do act like private companies and compete, not old fashioned monolithic state monopolies like BR. JR East, Central and West carry the majority of the traffic. JR Hokkaido, JR Shikoku, JR Kyushu are very regional operators, territories equivalent to Scotland, Wales and Northern Ireland. They are trying to move the freight to the private sector, however the modal share is small at present.

The demise of the government-owned system came after charges of serious management inefficiencies, profit losses, and fraud.

Swiss railways are also a mix of state, private and community in the same way. These counties are the systems that are probably most applicable to the UK.

The US freight network is not applicable because of the geography, nevertheless it's probably the most efficient railway in the world.

 

[Railsigns]

@ Railsigns. It also says JR East, JR Central and JR West are publically traded, but they all do act like private companies and compete, not old fashioned monolithic state monopolies like BR.

I suppose this is the closest we'll get to an admission that you gave incorrect information in your post.

Meanwhile, the vast majority of railways around the world are owned by their respective states.

 

[najaB]

Meanwhile, the vast majority of railways around the world are owned by their respective states.

That's an interesting statement - and I'm not entirely sure it's true. Might be worth doing a count, but what do you mean - are you talking about infrastructure, vehicles?

 

[highdyke]

I suppose this is the closest we'll get to an admission that you gave incorrect information in your post.

Meanwhile, the vast majority of railways around the world are owned by their respective states.

Okay, so now I've addressed that a couple of the Japanese companies have the state as a shareholder, are you going to address what would you do about the wage inflation pushing up costs on the current UK network, disabled accessibility and increased health and safety? For example the rail accidents in the late 1990s added considerable costs. Or will you keep comparing apples and oranges?

More to the point why you think monopolies are a good idea, assuming you are arguing for BR mark 2? Considering almost all western countries have broken them up, or deregulated them?

 

[Railsigns]

Okay, so now I've addressed that a couple of the Japanese companies have the state as a shareholder, are you going to address what would you do about the wage inflation pushing up costs on the current UK network, disabled accessibility and increased health and safety? For example the rail accidents in the late 1990s added considerable costs. Or will you keep comparing apples and oranges?

Okay. I accept that the cost of running the railway is higher today than it was twenty years ago, for the reasons you've given. I do not accept that those reasons justify that subsidies to the railways have risen to their present level (from around £1 billion to around £4-6 billion p.a.); a large proportion of that increase is due to the inefficiencies of privatisation. By renationalising, we can maintain current investment levels and still realise a saving to the taxpayer of more than £1 billion annually.

More to the point why you think monopolies are a good idea, assuming you are arguing for BR mark 2? Considering almost all western countries have broken them up, or deregulated them?

I have never said that monopolies are a good idea. I have consistently made the point that BR was not, and would not be, a monopoly; the railways are in competition with other modes of transport.

 

[highdyke]

Well we can agree the current mode of privatisation in the UK is not optimal. I'm not wedded to the idea of ownership because all three main ways can be applicable. We should be interested primarily in 'what works' rather than who owns it. Profits are not a bad thing if they increase innovation and investment, monopolistic excess profit is bad. Public ownership is fine, provided the incentives are there.

Whereas I agree the railways main competitor is other modes, where there has been competition (ECML, WCML, Oxford to London in particular) this has been beneficial all round, and spurs sensible cost control and innovation.

It would be a mistake in my view to go back to BR as benchmarking is hard and the Unions have too much control at the same time we should not aim for competition for the sake of it, there are arguments for cutting admin and complexity, integration with rail and other modes.

 

[najaB]

That's an interesting statement - and I'm not entirely sure it's true. Might be worth doing a count, but what do you mean - are you talking about infrastructure, vehicles?

Interesting reading so far, looking at the descriptions in Wikipedia the majority of railways are nationalised, but the form of nationalisation is *very* different. Looking at the 20 largest railways (I may have gotten a few of them wrong as the articles don't use consistent terminology):

• United States,Canada, Brazil and Mexico are more or less completely private.
• Australia, Japan, Italy, Romania and the United Kingdom have mixed ownership to differing degrees.
• France, Russia, Germany, South Africa, Poland and Spain have private companies of which the Government is either the sole or majority shareholder
• Kazakhstan is interesting - it's a private company owned by the sovereign wealth fund
• Argentina, India, China and Ukraine have direct governmental control

So I guess the question is what does nationalised mean, and what does 'renationalised' mean in the context of this thread? Not all the nationalised railways are actually vertically integrated, and some of the nationalised railways have competition and duplication (you know, the things that are described as wasteful) as they aren't monolithic.

 

[Railsigns]

Whereas I agree the railways main competitor is other modes, where there has been competition (ECML, WCML, Oxford to London in particular) this has been beneficial all round, and spurs sensible cost control and innovation.

I think you're overstating the benefits of 'on track' competition whilst also overlooking the problems that it causes. Please give one example of where it has led to "innovation" that wouldn't have occurred without it.

 

[highdyke]

Chiltern railways is a good example of growth in the face of major competition from two other operators, coach companies and a two motorways. BR spent years running that line down, until Chris Green came along. Chiltern have been innovating since.

Competition increases efficiency and innovation in all sectors normally. When the Post Office ran the telephones, waiting several months for a phone was not unusual. Competition has changed that and driven prices down for internet access.

https://www.gov.uk/cma-cases/passen...petition-policy-project#final-policy-document

 

[Railsigns]

Chiltern railways is a good example of growth in the face of major competition from two other operators, coach companies and a two motorways. BR spent years running that line down, until Chris Green came along. Chiltern have been innovating since.

Innovating how?

 

[highdyke]

New services, new types of tickets, wifi, car parking, generally looking to compete with the roads and LM and Virgin on price and service. The CMA report gives lots of examples.

Again Japanese have used loads of innovation to keep lines open.

https://www.youtube.com/watch?v=bACOzHX7B50

 

[Railsigns]

New services, new types of tickets, wifi, car parking, generally looking to compete with the roads and LM and Virgin on price and service.

BR did all of that, except of course for wifi, which didn't exist back then, and competing with other railway companies, because it didn't have to.

 

[Carlisle]

BR did all of that, except of course for wifi, which didn't exist back then, and competing with other railway companies, because it didn't have to.

Yes I agree, Chiltern were handed a totally modernised route, new signalling new trains DOO already introduced etc etc

 

[highdyke]

BR did all of that, except of course for wifi, which didn't exist back then, and competing with other railway companies, because it didn't have to.

BR did some good things but it was mostly cost cutting, like Pacers or cheap skate electrification - as well as cutting back lots of services and losing traffic. The key is to increase ridership AND bring down overall costs.
--- old post above --- --- new post below ---

Yes I agree, Chiltern were handed a totally modernised route, new signalling new trains DOO already introduced etc etc

To Banbury on mostly single warn-out track north of Princes Risborough. The real boost to the line came post privatisation.

 

[Harbornite]

Yes I agree, Chiltern were handed a totally modernised route, new signalling new trains DOO already introduced etc etc

Chiltern also cooperated with its fare share of upgrades to said route (Evergreen 3, LHCS etc).

 

[Domh245]

By renationalising, we can maintain current investment levels and still realise a saving to the taxpayer of more than £1 billion annually.

Could you not also achieve this through rationalising as well? Having a smaller amount of mega-franchises would help to cut through a lot of the inefficiencies, or possibly even going down the London Overground route of having a company provide a service to strict guidelines. It would also avoid some of the issues of
renationalisation like becoming a political football and being overly micro-managed. Renationalisation certainly isn't this silver bullet that most of the country think it is.

 

[matacaster]

In theory, a nationalised rail service is the most efficient way to run a railway. Similarly, communism with its planned 5 year economy is also a great idea.

In practice though, what actually happens with a monopoly provider is that a single central plan is created by a committee which has often reached the top by sucking up to its political masters. Entrepreneurial types jump ship and you get left with an ever incresing army of people who are only interested in protecting their backs and having an easy life, supporting each other. The unions enjoy a monopoly position too and take advantage.

You end up with things like the disastrous modernisation plan where loads of rubbish desisns are bought off the drawing board with no comeback on the manufacturers. The manufacturers all end up being british regardless of whether their product is ok and politicians do not invest in railways because health sevrice and pensions always trump railways.

Is a privatised railway all good - no. Fares at Virgin in particular are painful (tricky dicky has a 'pretty, trustworthy face', but he's a real del-boy shyster that the establishment haven't worked out how to handle yet) and NR costs are far too high. Too much money is / has been syphoned off to very expensive directors etc- eg (HS2, NR)

 

[Carlisle]

BR did some good things but it was mostly cost cutting, like Pacers or cheap skate electrification - as well as cutting back lots of services and losing traffic. The key is to increase ridership AND bring down overall costs.
--- old post above --- --- new post below ---


To Banbury on mostly single warn-out track north of Princes Risborough. The real boost to the line came post privatisation.

I'm pretty sure if BR hadn't electrified the ECML when they did (1991) we'd only just be doing it now

 

[highdyke]

I'm pretty sure if BR hadn't electrified the ECML when they did (1991)we'd only just be doing it now

Railway history is complex there, the Great Northern had plans to do it, as did the LNER, they got by on Steam as they couldn't afford much else. BR got by on Deltics, the Government holding back funds with it's road spending until the BR Board finally put something together, firstly for commuters in the 1970s, then IC passengers in the 1980s. But the business case only just got through and much was watered down.

 

[Busaholic]

Chiltern also cooperated with its fare share of upgrades to said route (Evergreen 3, LHCS etc).

For Chiltern, read DeutscheBahn?

 

[Carlisle]

You end up with things like the disastrous modernisation plan where loads of rubbish desisns are bought off the drawing board with no comeback on the manufacturers. The manufacturers all end up being british regardless of whether their product is ok and politicians do not invest in railways because health sevrice and pensions always trump railways.

That was a totally different technological era before globalisation, significant foreign ownership and joint international projects, were there actually any proven off the shelf diesel locomotive designs available for BR to purchase in those days like the ROSCOs have done with relative ease in recent years? also many aircraft and motor vehicles we built in that era weren't hugely successful either

 

[Harbornite]

For Chiltern, read DeutscheBahn?

Ah crap yeah. Oh well!

 

[highdyke]

https://en.wikipedia.org/wiki/Chiltern_Railways

Well from 2008

 

[Harbornite]

https://en.wikipedia.org/wiki/Chiltern_Railways

Well from 2008

Warch this space, Arriva mightt revert to being British owned like it was back then if DB decide to sell it.

 

[Robertj21a]

Warch this space, Arriva mightt revert to being British owned like it was back then if DB decide to sell it.

Has it changed ? - I thought DB had said it was considering a sale of up to 49% in Arriva ?