Renationalisation of the railways

[david_carnell]

I no longer commute by train to work. I've found cycling to be time and cost efficient in comparison.

With that caveat, and with a distinct possibility that I may do so again in the near future, I have looked on in horror at the continued above inflation ticket price rises that commuters are subjected to. 13% does not seem reasonable or fair.

The endless closures of track for maintenance at weekends because this is when it is cheapest to do the work rather than the most convenient for commuters (which would be at night) continues to make travelling at weekend a nightmare to plan.

A lack of competition for services means passengers face the same monopoly of service they did under British Rail and the associated bind that means there is little one can do about rising ticket prices.

The legacy of an ill-thought-out privatisation programme left a myriad of operating companies offering competiting and not complementary timetables and a further company owning the infrastructure. A logisitical gordian knot.

I move that the Labour Party should make it a manifesto commitment to renationalise the entire network as-and-when franchises come to an end and run the entire network on a not-for-profit basis. Borrowing from the Treasury at favourable rates for infrastructure and rolling stock investment would by-pass the cry of "where will the money come from?" and passengers would benefit from cheaper fares.

An industry already heavily subsidised by the tax payer is not privatised. It is using tax payers money to line the pockets of shareholders. A ridiculous situation.

The knock-on effect of reduced car usage and the associated environmental benefits would be significant.

I commend this motion to the House.

[Marmora Man]

In many ways I would support this proposal - except I would not want "re-nationalisation" as I believe there are many benefits in competition and I abhor the idea of a centralised government (of any colour) running major businesses.

Railways are an essential part of the national infrastructure - in the same way that roads, airports, canals and seaports are. Of these, only roads are truly nationalised - and even for these some have been funded by private sector under a PFI model that, on the whole, works well and fairly.

By all means re-jig the current model which is daft. Return to the geographical areas with the company responsible for track, transport, staff, railway stations and maintenance. Subsidy will be needed - and can be based upon some capita type of levy / calculation.

To those that would argue that this would not be competitive - I would say, yes the different areas do not compete directly but, if all are eligible for subsidy, then their operating costs per mile, customer satisfaction, punctuality, journey time and a host of other metrics can be measured and compared - with the more successful being rewarded with lower cost access to capital or a different level of subsidy. Possibly complicated but better on the whole than the public sector beast that was, once, British Rail.

PS: Slight flaw in your point D-C in that you cannot complain about double digit fare increases and also complain that the train operators choose to carry out maintenance at a time that incurs the lowest cost.

[david_carnell]

Mamora Man - I don't think that's a flaw in my argument. When the companies in question are there to make a profit first and foremost, the rise in fares and cutting of maintenance costs are related onlysofar in that they are both ways of increasing profit.

I would proffer that a nationalised service would do neither. Prices would remain low or subsidised and maintenance would take place when convenient to passengers (as happens almost anywhere else in Europe) rather than when it costs the operating companies the least.

[Huguenot]

I'm just not sure whether any of the assumptions you've made are valid?

They seem to be the following, nationalisation will...

Transfer even more of the cost of travel from the passenger to the taxpayer

Stop engineering works at weekends, and do them at night instead

Reduce the amount of trains on popular routes by preventing 'competition'

Make it more cost effective because cash paid out in 'profit' will no longer be paid

(Somewhat bizarrely) be better service than a private one (ha ha! remember BR??)

Whilst there's an 'ideological' debate about the first point, I can't see any evidence that the second point is true, and I can't find any reason for supporting the third point.

The second to last suggestion is extremely questionable, and I believe based on a false premise.

Subsidies of TOCs have decreased significantly since privatision. Take this (from the RMT): "Using the data provided by the SRA, it can be seen that the level of subsidies has declined from more than ?2bn in 1996 to ?1.2bn in 2003. Subsidies constituted a massive 71 per cent of total income in 1996, and 45 per cent in 1997, the two years before the franchises were fully operational. The lowest level of subsidies was in 2002 at 21%."

That subsidy figure was at ?1.0bn by 2009, at less than 20%.

At the same time income for TOCs has tripled and been reinvested in the service - not paid out in 'profits'.

Training Operating Companies are only generating 3%-5% annually in operating profit (and remember that's taxed), so if your proposed changes increased costs by 5%(not unknown in the bloated and inefficient nationalised sector), you've lost all the financial advantages you claimed.

Privatisation has undoubtedly transferred the cost of train travel from the taxpayer to the passenger, but the simultaneous outcome has been massive reinvestment in the service from 3bn to over 6bn annually, not profiteering.

Regards your last point, the total number of timetable kilometers have risen by 35% since privatisation - meaning a better service by all reasonable measurements.

I don't really understand your logic behind the 'loan' from the treasury - if it's being paid off by the taxpayer it's just more government expenditure - all you've tried to do is hide it.

In all then I think you've rather been drawn in by the 'hype' regarding fare rises and poor service, and it doesn't bear up under scrutiny.

[Huguenot]

BTW - nationalisation would do nothing to 'solve' the South London train nightmare which hinges totally upon infrastructure, not investment or ambition.

[Loz]

I can see the many flaws in the privatisation programme. A private monopoly will always be worse that a public monopoly. For privatisation to work, competition must be introduced.

Having said that, privatisation has actually (almost surprisingly) provided a vast improvement on the dreary old inefficient British Rail. In ED, at least, Southern is doing a pretty good job - dumping the old operator (NSE?) and bringing them in showed that the operators cannot get away with crap service.

Huguenot is right - it is the network infrastructure that is holding back rail travel. And that bit is virtually renationalised.

[Huguenot]

Yes, to clarify, Network Rail own the infrastructure (not the TOCs) and it is a company limited by guarantee. Because the 'guarantee' is owned by HMG, it is considered for all practical and accountacy purposes to be a state owned company.

Jack straw confirmed this: "... rail privatisation ... was one of the most catastrophic reorganisations, which we have had to resolve, and having done that? [ Interruption. ] The hon. Member for Wellingborough (Mr. Bone) may mock, but we brought Network Rail into public ownership..."

It is Network Rail which presides over the cost of maintaining the infastucture, and it is this cost which is a third higher than similar networks in Europe.

It should also be noted that the Network Rail 'profits' are owned by the government: there are no shareholders getting paid off.

i.e. it is the state-owned part of the rail network that is inefficient, not the private part.

[Masterblaster]

Actually, I think one of the main reasons why network rail has such high costs is the failure of people to understand risk. People expect the train to have zero risk, but quite happily pack their kids into the car as a replacement, and with a far higher risk of death. The extra requirements which came in after Clapham cost a huge amount, and were not justified by risk analysis, though, of course this is of little comfort to relatives of victims. Same goes for nuclear power.

[Jeremy]

On the plus side, the quality of trains/carriages has improved in recent years, and long distance journey times seem to be falling.

But on the other hand - ticket prices continue to increase at above-inflation rates, and reliability is still a big issue (not convinced this is entirely down to rail infrastructure). Privatisation has created little competition, and on the few routes where you can choose between providers, customers end up with the wrong tickets, and face disgusting penalties.

Ideologically I also have a problem with vital infrastructure being ran as a private business. The priority should be customers, not shareholders. And if the private sector can run it with a profit, why (theoretically) shouldn't the public sector be able provide the same service with lower fares?

[Huguenot]

Jeremy, so far as I know there is no substantiated theory or balance of evidence that suggests private ownership is inherently more efficient than public ownership. The IMF and the World Bank don't think so either.

Not only this, but because costs of borrowing are higher for private rather than public initiatives, private has to be considerably more efficient than public ownership for it to work.

However, I do think that public ownership can become unwieldy when too much power in the hierarchy is concentrated in the hands of managers (politicians) selected on short term contracts for their electability rather than capability.

If you did that in any business you'd shut it down might quick.

There's also evidence that suggests that it was the restructuring of Britain's national industries in the 80s and 90s that lead to productivity improvements there - not the privatistion itself.

It's anyone's guess as to whether these businesses could have restructured had they not been due for privatisation.

[Jeremy]

In my (somewhat limited) exposure to the public sector, it does seem rather disorganised and slow-moving compared to most private companies. So I can well believe that privatisation could bring efficiency improvements. But really, there's no reason why it should be the case.

[Consequential]

Although fiscally conservative, I support this agenda of the left wholeheartedly. Privatisation of the railways has been a dismal failure. Anyone familiar with the Metronet contract and how it was abused will agree with me on this. They enjoyed seven whole years of utterly shafting commuters and their actions were largely down to the piss-poor contracted offered by the last Labour government. Though the right wing is, admittedly, largely to blame, and as a result, is one of the core reasons I no longer vote Conservative. Their continuing support of privatisation seems, to all intents and purposes, an excuse to line their own pockets without a thought for the country as a whole. What next? Will they be outsourcing the custody of the nation's atomic clocks?