Rail renationalisation- do you support it?

[Xenophon PCDGS]

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

Is being British-owned the panacea that some claim it to be? If that be the case, why is so much of British industry owned by overseas owners.

Whatever happened to British Leyland, for example?

 

[Railsigns]

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.

I've already explained why the railways aren't a monopoly, whether in public or private hands.

 

[highdyke]

They are in some commuter markets, arguably inter-city markets, especially if you don't own a car. In reality some services are the only game in town.

The Southern Rail dispute is a good example.

Here was have an intransigent TOC v intransigent Union, each side knowing at various levels they have a captive market.

This sort of dispute could never take place in the energy, IT, telecoms, car, breakfast cereal, horse grooming markets, because consumers could switch to alternative services, employees to alternative employers, there is a limit of what can be realistically charged. If the market is working correctly, once it settles, profits should be relatively thin.

I accept SR has some fares regulated because of this.

 

[najaB]

I accept SR has some fares regulated because of this.

On a point of order: SR = ScotRail, SN = Southern.

 

[Railsigns]

They are in some commuter markets, arguably inter-city markets, especially if you don't own a car. In reality some services are the only game in town.

And what has privatisation done to end the monopolies (if we accept that's what they are, which is highly questionable) on commuter routes? B*gger all, because the little on-track competition that there is exists only on a few inter-city routes.

 

[highdyke]

And what has privatisation done to end the monopolies (if we accept that's what they are, which is highly questionable) on those routes? B*gger all, because the little on-track competition that there is exists only on a few inter-city routes.

That is quite true, effectively the railway is more of less a series of pseudo-monopolies, with a huge amount of government interference/support running on highly regulated nationalised infrastructure. Christian Wolmar argues it is faux capitalism, and in some ways it is. The mistake would be to bring back British Rail, where bench marking is even harder and consumer choice far less. There is competition for bidding for franchises at the very least. With a nationalised network, there is no real incentive not to spend your budget.

 

[LateThanNever]

Is being British-owned the panacea that some claim it to be? If that be the case, why is so much of British industry owned by overseas owners.

Whatever happened to British Leyland, for example?

It is not a panacea but it does mean that more of UK state money aka taxpayers' money is spent at home with those same taxpayers.

That well-known neoliberal rag The Observer had an editorial yesterday basically concluding on renationalisation that "Network Rail’s undoubted achievements have left a towering mountain of debt: more than £40bn. It has to be reduced, and it would be dangerous to add to it at the rate seen over the past decade."

Aside that, whilst Network Rail might need to borrow, the government doesn't - as Quantitative Easing has shown us it can just create money - the private rail corporates take out £222m a year to feed shareholders and this is not accounting for the separate profit on stock leasing which, if it chose, the government could add to their own borrowing at virtually nil cost.
It's all well outlined here http://www.taxresearch.org.uk/Blog/2016/08/28/why-we-can-afford-to-nationalise-the-railways/

 

[Railsigns]

The mistake would be to bring back British Rail, where bench marking is even harder and consumer choice far less.

Choice isn't always a good thing. Once I've made a decision to travel by train, I neither need nor want to have to choose between different operators. Life's complicated enough. I just want to take the first train at the time that suits me best.

The same goes for most public services. Do you really want to choose which hospital to go to or which school to send your children to? Wouldn't it be better all round if everyone would just use whichever facility is closest to them, confident that they'll get a reasonable level of service? There should be more effort put into ensuring that all public services meet a specified standard and intervening when they don't, instead of this fallacy that burdening people with more 'choice' is the answer. Choice is good when it comes to buying goods; not essential services.

 

[highdyke]

I don't agree, I really like having a choice between internet providers, energy companies. Many parents like to send their kids to the best schools.

Like many I'm against excess profiteering and the general flow of money going in one direction and that needs to be tackled.

If you took some of the kids or people or student age now back to the 1970s, when the TV shut down at 11pm, 3 channels, there was only a couple of overnight radio stations, and pretty much no local radio, everything was more or less government run they'd be shocked. I don't think many could function in that society coming from this age. A lot of crap food and service, with little choice in many cases.

 

[matt_world2004]

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.

My understanding is US Passenger railways are almost completely nationalised amtrak is not a private company neither are the regional subway and metro operators.

 

[Harbornite]

Is being British-owned the panacea that some claim it to be? If that be the case, why is so much of British industry owned by overseas owners.

Whatever happened to British Leyland, for example?

BL was renamed Austin Rover group in 1982 and some of its constituents (Morris and Triumph) were axed while others (Jaguar, Austin Rover) were privatized. The Austin brand was axed in 1986 and the Rover group survived until 1999 when it's remnants became MG rover and we all know what happened to that. Jaguar ended up with Ford, it was later joined by Land Rover and in 2008, both companies (along with the rights to the Rover brand) were sold to TATA.

 

[Railsigns]

I don't agree, I really like having a choice between internet providers, energy companies. Many parents like to send their kids to the best schools.

Does it matter to you that there isn't a choice of different postal companies' post boxes in the street? It certainly doesn't matter to me.

 

[Harbornite]

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

It's about 45%, I was under the impression that the lot was being sold but I was wrong.

 

[najaB]

My understanding is US Passenger railways are almost completely nationalised amtrak is not a private company neither are the regional subway and metro operators.

That is true. However Amtrak is run on a commercial basis with very limited public subsidy (in most years it is the bare minimum that is required by law). They don't own or operate the majority of infrastructure, which means that their schedules are quite literally at the whim of the private freight railways. The US network has to be one of the few railways where passenger services routinely have to wait on freight services. While it may be owned by the government, it definitely isn't run for its public service utility.

I didn't know we were including subway systems - I don't imagine there are any private subways anywhere any more. Certainly they will be the exception rather than the rule. It would take more Wiki-surfing to find out the status of metro systems, but you have the complication of where does a metro system become a regional railway?

 

[Carlisle]

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.

Yes that's interesting, it seems to show the railway is best at serious innovation when its fairly up against it. For example take one of the greatest achievements of the privatised era, the modernised WCML, which was planned , approved and started long before anyone knew the huge growth in passanger numbers/ revenue was actually going to happen

 

[Railsigns]

I didn't know we were including subway systems - I don't imagine there are any private subways anywhere any more.

Why aren't citizens around the world making a fuss about all these public sector 'monopolies'? It must be because, just like their main line counterparts, they:

a) aren't monopolies at all, and
b) operate more efficiently in the public sector.

 

[highdyke]

Does it matter to you that there isn't a choice of different postal companies' post boxes in the street? It certainly doesn't matter to me.

It will when they go on strike or the service is lousy...

 

[najaB]

Why aren't citizens around the world making a fuss about all these public sector 'monopolies'? It must be because, just like their main line counterparts, they:

a) aren't monopolies at all, and
b) operate more efficiently in the public sector.

I can't agree that being in the public sector automatically means more efficient operations. There are too many examples of wasteful practices in public sector organisations that simply wouldn't have been allowed to continue if it was a private industry.

Yes, some of them are just tabloid press trying to score cheap points, but in too many cases they are true.

 

[jimbo99]

Why aren't citizens around the world making a fuss about all these public sector 'monopolies'? It must be because, just like their main line counterparts, they:

a) aren't monopolies at all, and
b) operate more efficiently in the public sector.

And back in the 1980s we should have continued with the state running the telephone service on the basis citizens around the world were similarly not making a fuss?

 

[Harbornite]

Why aren't citizens around the world making a fuss about all these public sector 'monopolies'? It must be because, just like their main line counterparts, they:

a) aren't monopolies at all, and
b) operate more efficiently in the public sector.

No one would ever argue that British Leyland or British Rail were particularly efficient. Quite the opposite, in fact.

 

[Robertj21a]

Why aren't citizens around the world making a fuss about all these public sector 'monopolies'? It must be because, just like their main line counterparts, they:

a) aren't monopolies at all, and
b) operate more efficiently in the public sector.

Is this a 'wind up' or are you actually trying to be serious ?

 

[Railsigns]

No one would ever argue that British Leyland or British Rail were particularly efficient. Quite the opposite, in fact.

As a matter of fact, some people do.
--- old post above --- --- new post below ---

Is this a 'wind up' or are you actually trying to be serious ?

Grow up. I refer you to the official ORR figures showing that BR survived on an annual subsidy of around £1 billion, a fraction of what the rail industry gets now.

Where do you get your data from? "The Two Ronnies" sketches?

 

[Harbornite]

As a matter of fact, some people do.

What about British Leyland though? Says it all really, although I am fundamentally opposed to state ownership of certain assets. For example, I feel that nuclear power stations should be state owned and on occasion, nationalising an important company can sometimes save it (like Rolls Royce).

As for BR, they did will to reduce subsidies for intercity I'll admit, but BR's history was marked by cost cutting (APT, IC250, additional HST orders) and rationalisation of infrastructure. Before secotrisation, BR had the regional system which wasn't that efficient, and let's not get started on the modernisation plan.


On another note, I don't want to be picky but there's a minor mistake in that article. Deutsche Bahn didn't exist until 1994.

 

[Robertj21a]

As a matter of fact, some people do.
--- old post above --- --- new post below ---


Grow up. I refer you to the official ORR figures showing that BR survived on an annual subsidy of around £1 billion, a fraction of what the rail industry gets now.

Where do you get your data from? "The Two Ronnies" sketches?

It was a genuine question, no idea why you have a need to reply in that manner. Hardly the way to go about persuading people that you are 'in the right'.

 

[Railsigns]

It was a genuine question, no idea why you have a need to reply in that manner. Hardly the way to go about persuading people that you are 'in the right'.

Asking someone whether they're 'trying to be serious' isn't the most polite opening line I've ever heard.

 

[AngusH]

I think the subsidy question is more complicated than it seems.

Yes, British Rail got less from the government than the current system, but the amounts varied considerably.


Excluding the privatisation years, where the figures are affect by the sale of assets,
only 1988-89 is below a billion:

926 million in 1988-89


other years average about 2-2.5 billion.

3,557 million in 1992-93 (higher)
2,120 million in 1990-91 (fairly average)



(adjusted for inflation)




http://dataportal.orr.gov.uk/displayreport/html/html/a830de20-83bf-408d-9c22-7f3ec23999f9


Going back further Serpel report stated that the government paid a grant of £809 million in 1981, (approx 2.6 billion in 2014-15)

Even the Beeching report stated the deficit in 1961 to be £135.9 million (approx 2.5 billion in 2014-15 pounds).

 

[Andrewlong]

Does it matter to you that there isn't a choice of different postal companies' post boxes in the street? It certainly doesn't matter to me.

But there are different companies out there - you just have to find them on the Internet and contact them to send your parcel. As to sending letters and other written communications - we have email, text etc - all a lot cheaper than sending a letter.

I like competition and choice. I would like to see multi operator franchises on a line trying to offer different rates to tempt me to choose. What we have now is a state run railway setting fares and franchises and little incentive for the operators to compete unlike say with supermarkets.

 

[Railsigns]

I like competition and choice.

Do you think there should be a choice of emergency services to come to your aid in the event of an emergency? Let's keep those lazy firefighters on their toes with a good dose of competition, eh? What about the armed forces? Or the royal family?

Where do you draw the line?

 

[Robertj21a]

Asking someone whether they're 'trying to be serious' isn't the most polite opening line I've ever heard.

Your post looked like it was intended to be 'tongue in cheek' (albeit without a 'smilie'). It certainly wasn't the sort of comment I would expect most people to make.

 

[Lankyline]

QUOTE]

In 1975 BR received £2.13 billion which included up to £1.5billion to support less economic services for 5 years.

Your absolutely right the question of subsidies / grants is hugely complex and has been subject to various differing methods of calculating revenues/costs etc. for example the Cooper brothers formula which was introduced (they eventually became Cooper Lybrand) took no account of contributory revenue, true engineering costs were ignored and replaced them with an average figure plus 12.5% was added to cover admin regardless of the actual figure !

It also virtually ignored freight and other services that might be sharing costs. The effect was to put on paper losses through the roof making insignificant lines, mainly rural, look like they had huge deficits !
Source "The Great Railway Conspiracy"

In fact if anyone wants to understand the arguments for and against privatisation I whole heartedly recommend reading this book, I picked this up through my local library