Should we nationalise the railways?

 

There is one strong reason why nationalising the railways would be an odd idea – they are largely nationalised already.

All the track, signals, train pathway timetabling and stations are owned by a monopoly business largely financed by taxpayers and entirely owned by taxpayers. The train companies lease trains and run services over the nationalised tracks under strict controls from the Rail regulator and the Transport Department. They have to conform to five year centralised plans, and they gain near monopoly rights to use given regional track systems. The only element of competition in the whole thing is the occasional competition for the monopoly franchises. The majority of the revenue to sustain Network Rail comes in the form of taxpayer financed subsidy.

When the railways were privatised a two tier structure was set up. There was a privatised monopoly track owner, and regional monopoly train franchise holders. This greatly limited the amount of competition introduced by privatisation, but even this limited competition administered a shake up and reversed the long term decline in rail use that had characterised the whole post war nationalised industry experience. Labour re nationalised the track and stations, though pretended they had not by holding all the assets and shares in a so called private company which just happens to be financed and owned by taxpayers.

Today the East coast mainline franchise is run as a nationalised monopoly, and Labour is looking at doing the same for some of the other franchises as they expire were they to win the next election. That would be a good way to stop the modest  cost and price competition we currently enjoy  and would help  limit innovation. For four decades a fully nationalised and integrated monopoly industry presided over large cash losses for taxpayers, high  and rising fares, declining train usage, little innovation and poor service levels. Why would a future completely nationalised BR be any different?

Fares for commuters on crowded routes into our main cities are too high and service levels not good enough. Too many cross country and mainline express trains fail to attract nearly enough paying passengers, whilst a limited number of trains and routes beyond the commuter lines suffer from overcrowding. We need more innovation, not less, more competitive pressure to do more for less as the airlines have done, new thinking on how to improve service and allow more of us more fo the time to choose the train for our travel. That requires a more competitive industry with more private capital and management, not a return to BR days.  Where challenger railway companies have been allowed they have helped lower prices and improve the range and quality of services.

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101 Comments

  1. Lifelogic
    Posted May 9, 2014 at 6:20 am | Permalink

    There is the problem of a virtual monopoly on certain commuter routes and the absurdly complex and restrictive ticketing systems. As you say it already has the dead hand of the state controlling almost everything in the system anyway.

    The main problem is that trains are not very efficient as a mode of transport, not very green, vulnerable to the unions, do not go door to door, do not run at all times of the day and cost far more than cars. Outside a few commuter and intercity routes cars, taxis, motorbikes and coaches are far more efficient and flexible. You provide decent and more roads and let competing companies run coaches etc.

    Stop all the subsidies and abandon HS2 would be a very good start so we can see the real costs on each route. Then use the money saved to build some new roads, bridges and underpasses for the hugely under provided road network.

    • Hope
      Posted May 9, 2014 at 8:27 am | Permalink

      Would the EU allow it under its competition rules or mergers? I find it difficult for anyone to say it is fully privatised when the taxpayer gives so much to the private railway industry.

      Perhaps this is why your leader is so keen on allowing HMRC to raid anyone’s bank account without court order, permission or challenge. Perhaps the EU could help themselves like they did in Cyprus? It is completely outrageous and totally without justification. Any time the government finds it self short just help itself. I thought overseas aid was bad enough in stealing our taxes to throw away, but Cameron has gone one stage further to alienate himself from voters. Today even Clegg confirms Cameron will only be able to get minor changes in his ridicule of Cameron about EU renegotiation.

      • Lifelogic
        Posted May 9, 2014 at 2:19 pm | Permalink

        Indeed this and the GAAR totally random tax system are both huge outrages and hugely damaging – worse still coming from people who claim to be low tax Conservatives.

        How much tax do you owe? Well however much HMRC think it might like to rob you of out of your bank account. But this is what can one expects from such EU and IHT ratters – 299+ tax increases, pro EU heart and soul, fake green, say one thing do the opposite, enforced equality nonsense socialists to the core.

      • Excalibur
        Posted May 10, 2014 at 1:22 am | Permalink

        We live in a police state, Hope. It is time we became more militant in defence of our freedoms.

    • lifelogic
      Posted May 9, 2014 at 8:34 am | Permalink

      What to trains carry 4% of the journeys by mileage is it or similar? And you still need something else probably a taxis, or car at each end, perhaps doing a double (two way journey) for the drop of and pick up. This is also despite all the huge subsidy of trains and over taxation of cars and petrol.

      Other than for a few routes it is totally bonkers. But not quite as daft as wind energy, HS2, gender neutral insurance, restrictive employment laws, subsidies for electric cars and the rest of the idiotic Cameron socialism.

      • Hope
        Posted May 9, 2014 at 4:07 pm | Permalink

        Do not forget Cameron claimed he would not promote closer union with the EU. This point was challenged by Jacob Rees-Mogg when the government has spent £18 million pounds on, you guessed it, promoting closer union withe EU. Now Cameron has claimed one of his seven points to negotiate is to prevent closer union with the EU!

        What credibility does he have when his actions clearly demonstrate he is not telling the truth? Now he claims tax rises would have to occur if HMRC was not given the power to raid our bank accounts! How about stop spending, stop wasting our taxes on overseas aid, EU or promoting closer union with the EU. Cameron could not run a welk stall let alone a railway or country.

    • Leslie Singleton
      Posted May 9, 2014 at 8:45 am | Permalink

      Lifelogic–On my recent trip to Scotland I went up the M6 and down the A1. Does my poor old memory play me false or was it not announced a good few years ago now that the A1 would be brought to Motorway standards along its whole length? What happened to that?? I appreciate improvements have been and are being made, such that at least there are few if any roundabouts now, but how can it be that this important road can still be as it is? Two points in particular come to mind, viz, first, some of the road is four lanes both sides with a hard shoulder whereas (maybe I have this wrong because it is scarcely believable) parts are still only two lanes each side with no hard shoulder and a fortiori with signs saying the verges are soft so don’t even think of pulling over even in an emergency; secondly, there is a stretch that is still along the lines of a chicane with speed limit at a seemingly permanent 50 mph. In the two lane sections enormous (and getting bigger one hears) articulated trucks, many with trailers, blocking up the “fast” lane are frustrating at best but who can blame them for not wanting to crawl along in the snail lane? Lorries on a road such as this are the very essence of the Economy and little by way of disruption would be involved in upgrading this hugely functional and important road compared with the vanity project HS2. As I have said before, screw the businessmen and their almost laughable need to get to Birmingham in such a hurry. Proof positive that the Government, amazingly, couldn’t care less about Goods traffic is the decision not to join the two HS lines. Given that, why build HS2 at all; plus of course never much comment on why the Great Central cannot be revived. £80 billion is a lot of money just to avoid appearing anti-climactic and would pay for revamping the A1 ten times over and then some.

      • Leslie Singleton
        Posted May 10, 2014 at 8:44 am | Permalink

        Postscript–It literally went without my saying that I never seriously considered going by train. There would have been two or three changes with need for a hire car at the other end plus a car park at this end that enabled me to be away for a week (at risk of the soft top being slashed or worse) all at vast cost with today’s difficulty of ticketing not to mention the risk of my fishing stuff being stolen if no room near me to store it. The job of trains should be freight–to get as much as possible off the roads. In any event it is blindingly obvious that teleworking will become the Way To Go.

    • Anonymous
      Posted May 9, 2014 at 9:08 am | Permalink

      The vast majority of rail staff under 20 years service will not have experienced a strike.

      Perhaps not even a strike ballot.

    • Lifelogic
      Posted May 9, 2014 at 11:01 am | Permalink

      Also encourage people not to travel too much for business and just to do it on line, Skype or video. Long distance travelling & meetings, of more than a couple of people, are so often rather an inefficient use of time.

      The one advantage trains can have (if you can get a seat that is) is that you can work on them so high speed trains are not really much of an advantage anyway.

      Scrap HS2 is the best thing they could do for trains and remove the unfair subsidies and cross subsidies for rail. Do the same in energy too and the Royal Mail too why should Londoner post users have to subsidise post to remote Scottish islands. They should do it on line as they would if they had to pay the true costs.

      • Alan Wheatley
        Posted May 10, 2014 at 7:22 am | Permalink

        Your assertion re the post is ill-considered. Or do you want to destroy the concept of “nation”? If the post, then why not every other aspect of life.

    • Anonymous
      Posted May 9, 2014 at 11:27 am | Permalink

      Lifelogic – I use buses and they go door-to-door – boy ! DO they go door-to-door. Everyone else’s door before they get to mine. Every little estate, every cul-de-sac.

      Taxis work out at £5 a mile around here.

      A few months ago a chap in Kent complained on the Jeremy Vine show about becoming a member of the 5000 club. That’s £5000 for his season ticket. But when Jeremy worked it out it was costing £11 to travel each 70 mile trip.

      Italy – apparently – could do the same distance for something like 60p and that was – again, apparently – without subsidy.

      I’ve never experienced a mainline union strike since privatisation. I did experience some under BR but, to be fair, the staff were paid a lot less under that company.

      • Anonymous
        Posted May 9, 2014 at 11:31 am | Permalink

        Lifelogic – Italy’s unsubsidised mega-cheap trains.

        What do you think the secret is to their outstandingly successful economy and how could we emulate it ?

        • Lifelogic
          Posted May 9, 2014 at 2:30 pm | Permalink

          I think the trains are subsidized in Italy greatly they must be. But they are at least cheap that is true.

          Italy is in a pretty terrible state at the moment as is France. Cameron is dreadful, but not quite as bad as Hollande. But then Hollande was at least honest about the destruction he was going to cause. Cameron pretended to be a low tax, EU sceptic, low tax, sensible Conservative that is why he is hated so much now.

    • Peter
      Posted May 10, 2014 at 1:22 pm | Permalink

      Some muddled thinking here.

      You want the government to end all rail subsidies, which is reasonable enough, but in the next breath you call for the same government to build more roads.

      If it is not involved in railways any more, why should it be involved in roads either?

      Then you say roads are “under provided”. By what measure? Of course they are overcrowded, but perhaps that’s because their monopoly owner has set the price for using them too low…

      How about trying a +really+ free market in transport for a change?

  2. Mark B
    Posted May 9, 2014 at 6:21 am | Permalink

    The whole point of denationalization of the railways, was to break the power of the RMT Union. In that, it succeeded. But it has raised a whole new sway of problems.

    The taxpayer should remove itself from subsidizing. Let market forces decide. If the rail companies cannot make a profit, then they should suffer the same fate as any other business.

    Why should I, through my taxes, subsidize both the cost of someones travel and, the salaries of Chief Exec’s and the like. We are back in the 60′s and 70′s and British Leyland and British Steel etc.

    The franchises should be allowed to have much longer contracts, so they can invest and look longterm. Why should anyone invest in a company that may lose its income in 5 years or less ? Twenty to thirty years would be sufficient, with possible roll-over contracts granted for good performance.

    The track and the Stations do need to be held in the public ownership. But they need to be directly managed by the Dept. of Transport and consign a Quango to the flames of a bonfire. This is for both safety and security reasons and to save monies over the longer term. Government can rent-out the tracks and stations on a use-by-use basis, reducing costs to the rail companies for tracks and stations not always needed and, reduce fares on those lines, helping the rail companies to make sensible and sustainable profits.

    • Bill
      Posted May 9, 2014 at 8:44 am | Permalink

      My memory also is of constant rail strikes in the 1970s and always the Union leaders were ‘very angry’ and threatening to bring the infrastructure of the country to a halt and sometimes they did. I remember one occasion when the Union either wanted to, or did, strike on the matter of the fireman who stood on the footplate to shovel coal into the engine. The abolishing of the fireman’s job was seen as a terrible thing despite the fact that the trains were not powered by steam but by electricity. In other words, the Unions quite unnecessarily wanted someone else in the driver’s cab doing a non-existent job.

    • Anonymous
      Posted May 9, 2014 at 11:34 am | Permalink

      Mark – It didn’t ‘break’ the unions – privatisation raised the wages from poverty levels and gave workers less to strike about.

      • Edward2
        Posted May 9, 2014 at 12:54 pm | Permalink

        Anon, are you saying that wages and conditions for rail workers rose after private companies took over as bosses from the State.
        According to the theories of Uanime5, all free market bosses just exploit the workers, drive down wages and suck all the profits into their own pockets!

    • uanime5
      Posted May 9, 2014 at 9:09 pm | Permalink

      The taxpayer should remove itself from subsidizing. Let market forces decide. If the rail companies cannot make a profit, then they should suffer the same fate as any other business.

      All that will do is lead to the railways becoming highly fragmented, making it impossible to travel long distances by train. Care to explain how this will benefit the economy.

      Why should anyone invest in a company that may lose its income in 5 years or less ? Twenty to thirty years would be sufficient, with possible roll-over contracts granted for good performance.

      So you want companies to be able to run the railways into the grounds for 20-30 years and their only punishment will be someone else having to pick up the pieces. Don’t expect this to lead to innovation.

  3. alan jutson,
    Posted May 9, 2014 at 6:24 am | Permalink

    When the railways were so called privatised it all seemed rather like a dogs dinner, as in effect the State still seemed to be hugely involved.

    Rail travel from my perspective seems very expensive for what it is, unless you can book up weeks in advance be part of a small group, or take advantage of special offers.

    Surely the idea of train travel is encourage people to hop on and hop off as and when you choose (especially when you are retired) like buses, given they run to a fixed timetable.

    • Hope
      Posted May 9, 2014 at 8:31 am | Permalink

      Exactly, and this is before the ludicrous HS2 planned by Labour’s Lord Adonis and introduced by Cameron. Another £50-80 billion of taxpayers’ money wasted by Cameron gold plating a Labour/ EU policy.

      • Lifelogic
        Posted May 9, 2014 at 4:29 pm | Permalink

        Indeed bonkers over £5000 per family (no doubt double or triple in the end) and I do not even want to go to Birmingham. there is no shortage of capacity anyway. Cheaper to buy them all a good car and rather more popular and useful. Bought, of course, using money taken off them under threat of imprisonment.

      • Lifelogic
        Posted May 9, 2014 at 4:36 pm | Permalink

        Indeed bonkers, over £5000 per family (no doubt double or triple in the end) and I do not even want to go to Birmingham thanks. There is no shortage of capacity anyway. on the existing rail/coach/car. Cheaper to buy every family all a good car and rather more popular and useful. Bought, of course, using money stolen off them under threat of imprisonment so that perhaps they will no longer be able to put petrol in their cars or maintain them, and get to work.

  4. Narrow Shoulders
    Posted May 9, 2014 at 6:44 am | Permalink

    You make pertinent points about competition and innovation in tbe private sector Mr Redwood. But….

    National railways are run very successfully by government in other countries so subsidy is possible with punctuality, safety and service without excessive profit taking. It is after all primarily a service.

    I am broadly OK with the current arrangement but do feel that in the short term profit should be diverted to capacity on busy routes. It is after all primarily service.

    My other major gripe over the current arrangement is the profit taking on delays. The operating companies claim from railtrack over delays after a short time but the passenger’s compensation entitlement does not kick in for a much longer period. The operating companies are welcome to keep any unclaimed compensation but they should not make a profit on timing differences for delay allowances between their claim period with railtrack and the passenger’s with them. It is after all primarily service.

    The problem of under use during off peak and remote routes was known to the operating companies at bid time. Of course they should address demand if they can but this should not be used to fleece users at peak times. It is after all primarily a service and the operating companies must have been aware of this at bid time.

    • Anonymous
      Posted May 9, 2014 at 8:54 am | Permalink

      The British Army is nationalised.

      No-one has ever complained about its excellence and its clockwork timing – on parade ground or battle field.

      • ian wragg
        Posted May 9, 2014 at 12:54 pm | Permalink

        That will all change now the clowns in charge are talking of sending women to the battlefront. It is instinct for men to protect women so now our brave soldiers will have the added worry of preventing the women being captured. As a nation we continue to sink lower and lower on the altar of PC.
        Pathetic.

      • Lifelogic
        Posted May 9, 2014 at 4:42 pm | Permalink

        Well they are not too bad as armies go, but they are not that efficient and marching up and down the parade ground is not a very constructive activity anyway – really more a way of killing time for people with little constructive to do, I would have thought.

        The procurement system for the UK military is dreadful.

    • Lifelogic
      Posted May 9, 2014 at 11:05 am | Permalink

      “National railways are run very successfully by government in other countries so subsidy is possible with punctuality, safety and service without excessive profit taking. It is after all primarily a service.”

      Why should car users, bike users, people who do not travel much and coach users subsidise train users? They only work with huge state subsidy which taxes others, in unfair competition and kill growth.

      • uanime5
        Posted May 9, 2014 at 9:11 pm | Permalink

        They only work with huge state subsidy which taxes others, in unfair competition and kill growth.

        Oil, gas, and fracking also receive huge state subsidies. Are you saying that they should also lose these subsidies to encourage growth?

        • Edward2
          Posted May 10, 2014 at 8:39 am | Permalink

          You keep repeating things which have been demolished many times Uni.
          It is not a subsidy if an industry enjoys the same tax postion as is available to any other.
          It is the renewable energy industries that actually receive subsidies.

    • Ray Veysey
      Posted May 9, 2014 at 12:05 pm | Permalink

      If you want to look at other nations I suggest you don’t look at France. SNCF is stuffed with “functionaires” who cannot be sacked and is therefore vastly over staffed and unionised. To the extent that the unions prevent improvements and innovation that would reduce the workforce. I was involved with a project that would have improved safety and operation on their network which was canned because the unions refused to accept it. It has not been taken up since.

  5. Mike Stallard
    Posted May 9, 2014 at 6:50 am | Permalink

    Christopher Booker in the Telegraph, working with Dr Richard North who is, by his own admission a nerd, said that the railway set-up introduced by John Major was merely obeying the EU Directive from DG MOVE. In which case, there is nothing that can be done because, as we all know, Directives have to be obeyed. DG MOVE’s own website lays claim to all the railways within the EU.

    What is troubling, though, is this. You do not know if it is true. I do not know if it is true. All these Directives seem to be arranged in secret and I do not think you or anyone else much is part of the decision process. Is there actually an accessible record kept in Parliament or anywhere else for that matter of the discussions within the EU Commission, or the discussions between Coreper and our own Civil Service? All we seem to get in a fait accompli.

    Which is why it is high time to get out. Secrecy is an open door to wrong decisions, to corruption and to serious mistakes. Go on, tell me I am wrong, and if so, in what way.

    Reply That is not true. I was on the Committee which considered how to privatise the railways, and produced a minority view in favour of a different approach to the one adopted .At no point were we advised to adopt a particular proposal to conform with EU law.

    • acorn
      Posted May 9, 2014 at 8:10 am | Permalink
    • Hope
      Posted May 9, 2014 at 8:32 am | Permalink

      JR, does this include directives ? The blogger stated directives not law.

    • Denis Cooper
      Posted May 9, 2014 at 9:22 am | Permalink

      My understanding is that the Major government chose to go beyond what was necessary to comply with EU law, which only required the train operations to be separated from the infrastructure for accounting purposes.

      Reply The Major government made up its own mind about rail privatisation. We knew of no EU requirements on us when we argued over how to change the railways. Why do people keep on doubting me, when I have no wish to disguise EU controls where they exist!

      • forthurst
        Posted May 9, 2014 at 4:24 pm | Permalink

        “Reply The Major government made up its own mind about rail privatisation. We knew of no EU requirements on us when we argued over how to change the railways.”

        If the government had no intention of being guided by the advice of JR’s committee, it may have decided not to bother to inform of EU Directive 91/440/EEC which quite clearly required separate accountability for infrastructure and train operation so that other train operating companies could use the same track competitively. Deutsche Bahn is compliant with this despite being one holding company controlling train operations, track and freight.

        http://www.jrtr.net/jrtr29/f19_pro.html

        The Fourth Railway Package is rather more draconian, but nevertheless states, “However, the Commission can accept that a vertically integrated or “holding structure” may also deliver the necessary independence, if it puts in place strict “Chinese walls” to ensure the legal, financial and operational separation, including for example: totally distinct decision-making bodies…”

        My recollection of how BR was privatised was that it was fragmented into a hundred different business units in order to maximise the total consideration achieved; from this can be deduced that the intention was to maximise the income from all operations. The corollary of this is that the continuing running costs and consequently the public subsidy would also be maximised. In particular, the rolling stock consisting of the extremely dangerous slam door trains from one of which, I myself nearly exited, prematurely, were sold to leasing companies and then leased back to the train operators on long leases, thus ensuring that the train manufacturing facilities finished up in foreign hands, when the rolling stock should have been part of the original operational bid, thus allowing it to be written off and replaced, providing immediate work for the manufacturing businesses.

        It is very clear that the EU rules are designed for continental railways where trains can and do pass through more than one country (EU region).

        Reply Let me try again to explain what happened. I was a government Minister on the government Ministerial committee to decide how to privatise the railways. We therefore had access to all official government legal and policy advice. At no point in our long discussions were we told we had to adopt a particular scheme in order to comply with EU regulations. A majority on the committee favoured the scheme that was adopted. I argued for keeping track and trains together, creating competing companies for each mainline or service.

    • Lifelogic
      Posted May 9, 2014 at 11:10 am | Permalink

      To Reply:

      Why are your usually very sensible views always in a minority in your party and the house? Why are the others so daft or misguided or corrupt? Voting (almost to a person) in favour of the obviously totally mad climate change act.

    • Mark B
      Posted May 9, 2014 at 5:09 pm | Permalink
    • uanime5
      Posted May 9, 2014 at 9:16 pm | Permalink

      Christopher Booker in the Telegraph, working with Dr Richard North who is, by his own admission a nerd, said that the railway set-up introduced by John Major was merely obeying the EU Directive from DG MOVE.

      Care to explain why no other EU country has privatised their railways. Could it be because this directive doesn’t require that the railways be privatised?

      All these Directives seem to be arranged in secret and I do not think you or anyone else much is part of the decision process.

      All directive are voted on in the European Parliament which is open to the public. There’s also a record of the decision process, statements from experts, and the full text of this directive available on the EU’s website.

  6. Gary
    Posted May 9, 2014 at 6:53 am | Permalink

    The railways are similar to the banks. We subsidize their staying in business and their fat bonuses to directors. Maybe we should try privatizing them both, banks and railways ?

  7. margaret brandreth-j
    Posted May 9, 2014 at 7:16 am | Permalink

    It doesn’t seem long ago since Network rail and the carriage companies became separated . I believe that too much competition is counter productive, but as you say when assets are held in private concerns which the tax payers fund what is the difference. The labels are changed on the same brand. The difference in renationalisation is perhaps the perception that British is for the British people and businesses are for the business man alone.
    As with any large concern though it is staff quality and ability to innovate which pays and improves. It brings to mind the NHS and the franchises which are given to private companies.They shout louder , have more clout because of their financial position, yet services are little improved due to inexperience and bluff.
    I ask is it ownership of the services in the railways which is the important factor or is it simply management who cannot deploy their services in a balanced way?
    The tone of today’s diary captures my mood of the last few days. I hear that the NHS wants to get rid of the unqualified managers and replace them with Dr’s. These people are the least qualified around and have demonstrated over many years that their organisational skills are not desirable. We Nurses on the other hand , ran hospitals , kept the books in balance, organised wards and services and had the Dr’s visiting to carry out their professional duties. We had been trained to do this. Perhaps there is a similar scenario between those experienced to run railways and those who say that they can.

  8. Alte Fritz
    Posted May 9, 2014 at 7:21 am | Permalink

    Apocryphal evidence suggested that one challenger which ran a very popular service was forced out of business by an existing franchisee which denied it use of a significant Midlands station. Real competition is possible and challengers should be enabled.

  9. Steve Cox
    Posted May 9, 2014 at 7:28 am | Permalink

    Maybe instead of granting exclusive franchises to operating companies there should be competition, especially on the overcrowded commuter routes. For example, why not try and encourage the owners of Easy Jet and Ryan Air to either advise on how a low cost, no frills rival could enter the market or else to actually do so themselves. You could have commuter trains with no seats (I know a lot of passengers wouldn’t notice the difference at the moment) but fares perhaps half the price of their competitors. I’m sure lots of other O’Leary style innovations could be found too. This would require Network Rail to radically improve its performance so that more trains could be run on the same lines, or else nothing will improve. Perhaps that is the biggest challenge of all?

    • Anonymous
      Posted May 9, 2014 at 8:58 am | Permalink

      Steve – Rail capacity and passing points (lack of) is what stops this on the railway.

      BAA did try to run the short service from Paddington to Heathrow as an ‘airline’ but ended up giving way to railway expertise.

  10. David Hope
    Posted May 9, 2014 at 7:51 am | Permalink

    To see the power of competition look at Birmingham- London and York- London return.
    The former costs £29 on the day for many trains the latter £91 for one time and most are over £100.
    The former has multiple train companies and 2 lines, the latter 1.

    I think i’d be good if it was all less piecemeal and one company controlled stations, lines and trains for a route – there would be clearer responsibility and you wouldn’t have network rail massively overcharging for, say, station upgrades.

    However, most of all we need competition, in city commuter routes from new lines but also from roads – they can be just as effective in competing. I suspect one reason train usage is up so much compared to 30 years ago is that we have built so so few new roads, as car numbers have gone up, so many journeys are too slow to be practical by car

    • Anonymous
      Posted May 9, 2014 at 9:00 am | Permalink

      Young peoples’ car insurances are around £3k pa too.

      This is without paying parking, fuel and for the upkeep of the car itself.

    • Iain Gill
      Posted May 9, 2014 at 10:42 am | Permalink

      You can travel York/London on Grand Central as well as East Coast. Grand Central has much cheaper on the day prices, although booked in advance it varies which is cheaper.

  11. alan jutson,
    Posted May 9, 2014 at 7:54 am | Permalink

    Off topic

    I see the Press have given some more space to the HM Revenue & Customs proposals to direct debit Bank accounts if they think more than £1,000 is owed in tax.

    Seems nothing is sacred, Joint accounts, ISA accounts, Building Society accounts, Bank accounts of all kinds.

    Given the inefficient workings of HMR&C and the miscalculations often made by this department, how is the review of this proposal going John ?

    Are we to fear midnight raids on our joint savings and current accounts because our partners are deemed at fault !

    Will HMR&C get their wishes of guilty until proven innocent through parliament approval ?

    Reply These proposals are currently out for consultation. I want them changed

    • stred
      Posted May 9, 2014 at 8:19 am | Permalink

      Does the consultation propose the raids to be applicable to savings accounts held abroad or in other EU countries? If not, perhaps we should consider moving savings abroad.

    • alan jutson,
      Posted May 9, 2014 at 8:31 am | Permalink

      Reply-reply

      Thank you

      I hope the majority of Mp’s think likewise.

    • Richard1
      Posted May 9, 2014 at 8:33 am | Permalink

      MPs need to make a very strong point that HMRC is a govt bureaucracy, there to serve the govt by collecting taxes which are voted by Parliament. It is not a court. The proposals in the budget regarding HMRC’s powers are an assault on fundamental legal and constitutional principles built up over centuries. If people are evading taxes let them be prosecuted in the normal way.

      That George Osborne has put his name to this should raise questions as to his suitability to be Conservative leader when the time comes.

    • Anonymous
      Posted May 9, 2014 at 9:04 am | Permalink

      Reply to reply – Raiding of personal bank accounts is entirely in keeping with the sort of country many of us fear this is becoming.

      One would hope that there is at least some good warning of a ‘bank raid’ but HMR&C is notoriously incompetent and unapproachable so faith is low.

      • APL
        Posted May 9, 2014 at 1:24 pm | Permalink

        Anon: “some good warning of a ‘bank raid’ but HMR&C”

        HMRC would simply freeze the account until they got their ‘pound of flesh’. Thus having the twin benefit from the bureaucratic point of view of causing as much inconvenience to the poor victim with bonus points if they manage to drive his business insolvent too.

        Alan Jutson: “I hope the majority of Mp’s think likewise.”

        They don’t care, they’ll probably exempt themselves from the measure.

    • Atlas
      Posted May 9, 2014 at 9:08 am | Permalink

      I agree with Alan. Indeed this is a move we would have expected of Labour.

      Does it worry you that such moves add weight to UKIP’s argument that ‘they are all the same’ in so far as we now have Con/Lib as well wanting to pick the pockets of the voter without have to prove to an independent court that they have any right so to do? I note your point about wishing to change these proposals. I fully support your wishes.

    • Bob
      Posted May 9, 2014 at 9:33 am | Permalink

      I recently had an unsubstantiated demand for £1300 from HMRC for alleged unpaid payroll taxes. They were not able to support their claim with any facts so I told them that my RTI submissions were complete, up to date and all paid.

      I have heard nothing more about it.

      Presumably under the proposed scheme they will just be able to help themselves to whatever they like without even going to court? A bit like the method used in Cyprus.

      I guess the coalition will usher this through without too much ado.
      I suspect this is another “backdoor” EU edict.

    • Iain Gill
      Posted May 9, 2014 at 9:58 am | Permalink

      When the tax man owes me money, and has not paid in months on end, can I take the money directly out of his bank account?

      I thought not

    • ian wragg
      Posted May 9, 2014 at 11:12 am | Permalink

      You may want it changed, but you are not a member of the quad and no doubt CMD will nod it through (because its the right thing to do…………….).
      As I understand the directive on privatising the railways, the tracks and rolling stock had to be owned separately, isn’t that so.. That came from the EU.
      HS2 is EU promulgated and the EU will decide in Astra Zeneca. Tell me again John, what’s the point in Parliament when 80% of decisions are made by foreigners.

    • Lifelogic
      Posted May 9, 2014 at 11:18 am | Permalink

      These are appalling, if HMRC is owed money they should prove it in a court first like everyone else. They are not very competent anyway, do not even reply to post or know their own over complex rules. It is as appalling as the GAAR (General Anti Abuse Rule)) introduced by Osborne. Introduced so HMRC can decide, almost at random, after the event how much tax you have to pay.

      This is hugely damaging to investment decisions as business cannot predict the future tax bill and return. It is hugely anti Conservative but introduced by the ratters Cameron and Osborne. How are IHT thresholds coming on?

    • APL
      Posted May 9, 2014 at 11:55 am | Permalink

      Alan Jutson: “Will HMR&C get their wishes of guilty until proven innocent through parliament approval ?”

      Parliament ( the political gangster cartel, Lib, Lab, Con ) have already sold the pass on this one.

      John Redwood has stated his opinion that there are no constitutional limits to Parliamentary powers. You are already a slave, you just don’t realize it yet.

    • uanime5
      Posted May 9, 2014 at 9:30 pm | Permalink

      So the government plans to lower corporation tax to get people to invest in the UK and at the same time wants powers to take money out of people’s bank accounts without requiring permission from the courts. I can’t help but feel that the latter may discourage the former.

  12. Robert
    Posted May 9, 2014 at 8:20 am | Permalink

    In some ways the privatisation of the railways have played right into the hands of ASLEF and the RMTs – wage inflation has been enormous. I know of a couple, both Conductors working for a Train operating company, who after 4 months of training, now have a joint income of £60,000 for a basic 35 hour week plus free travel and a gold plated pension. Their actual take home is £90k with their commission and overtime. One of them has no GCSEs whatsoever, or customer service experience, while a graduate friend of mine with a 1st class degree from a decent university is stuck on £15k with a blue chip company as starting salary and a student debt of £21k. The couple had their training all paid for.

    Drivers on the other hand now have a basic wage of £50k and I hear some are hitting £100k on overtime. Not bad for 6 months – 1 years training, with often no entrance requirements other than psychometric tests to make sure you can follow instructions and concentrate. Their pay rates can be found here. http://www.aslef.org.uk/information/102222/102225/companies/

    In the early 1990s back in BR days the pay rate for a Driver was £200 pw and a Guard around £140 pw with some enhancements for shifts etc .

    It seems to me the mistake at privatisation was to continue internal training, which means that there is a very limited pool of people able to do these jobs (or go on strike for more cash!). This instead of external training and licensing like other modes of transport. A bus drivers wage is typically £18k, while less training, is often much more hassle than a train driver’s job. But there are a wide variety of ways to train.

    As for competition between train services, where there is competition it seems to bring down prices.

    For example, from Loughborough to London, a distance of 113 miles the peak walk on ticket is £160 return, slightly off-peak costs £87.50 return and off-peak £59.50 return – all provided by a monopoly TOC. (EMT)

    Compare that price to Birmingham to London, a distance of 118 miles. There are 3 train operating companies competing for business (Virgin, Chiltern and London Midland). The picture is very different: While Virgin offer a £164 anytime return, Chiltern do it for £95, and London Midland £69. Slightly off peak the fares are down to £50 on Chiltern. The off-peak itself costs £50 on Virgin, £28.90 on Chiltern, and £23 return on London Midland, less than half the price of the monopoly provider! These are all ‘walk on’ prices and can much lower booking in advance.

  13. Alan Wheatley
    Posted May 9, 2014 at 8:39 am | Permalink

    An interesting question with a predictable answer, but none the less appropriate.

    I think it helps to remember that the railway network came about as a result of private initiate, private finance and private companies running a private railway.

    I think it also helps to remember that the railways initial success came about because it was an ideal solution to the needs to the time. As needs changed and alternatives became available the bubble burst. Over a hundred years later there is amazing enthusiasm for rail that is dramatically disproportionate to contemporary transport needs.

    The closer we can return to private rail companies running a business that turns a profit without public subsidy the better.

  14. Richard1
    Posted May 9, 2014 at 8:39 am | Permalink

    Its one nonsensical populist gimmick after the next from the socialist Miliband. Full nationalisation of the railways would ensure sclerosis in their development and management and losses to the taxpayer, as before. The one constituency which will do well out of it will be the unions who will acquire heightened powers to hold the public to ransom, now it will be a ministerial decision as to what happens to pay & benefits for employees. Presumably that’s the real reason Miliband is in favour of nationalisation. Its also the reason why travellers and taxpayers should be against it.

  15. Robert Taggart
    Posted May 9, 2014 at 8:44 am | Permalink

    YES – alas !…
    We all use the roadways which we all own ( just the odd exceptions) – this makes for a level playing field – for all users.
    Ergo, a publicly owned railway (the tracks not the trains) – would put them on a par with the roadways.
    That said BR PLC was always our preffered option.
    Signed, ailing anorak !

  16. Bert Young
    Posted May 9, 2014 at 8:52 am | Permalink

    I do not use trains as a mode of transport because , with the cost and difficulty of parking , it is far too expensive . I am told that if I wish to travel to Scotland from where I live ( South Oxfordshire ) , I would have to negotiate a ticket with 3 different carriers ; compared to the cost of getting there by road – particularly with 2 people on board , it is not an economic proposition . In the early 60′s I was invited on to a panel of invigilators to quiz the then newly appointed Director of Finance of British Rail on the subject of ” the economy of route planning ” ; his approach was logical and , at the time , plausible ; it was entirely based on reducing costs of operation to benefit the ticket price of the rail user . Look at the result 50 plus years down the line !! . It is my view that nothing has been achieved as far as the cohesion and effectiveness of rail services since that time ; as for costs – well , they have spiralled almost beyond comprehension . Unions were a very considerable problem across the board during the 60′s and 70′s and had to be tackled aggressively ; things have moved on since then and other factors have taken their place . Transport remains a vital ingredient in the planning and content of our economy and must be scrutinised by expert and experienced individuals continuously . They must have the trust and respect of the country in order to keep things in balance ; I have little faith in the way we are led at the moment and am not surprised how this impinges on the running and effectiveness of our railways . Drastic change is required at the top to restore the ways things are planned and done .

  17. Joshaw
    Posted May 9, 2014 at 9:10 am | Permalink

    I don’t claim to know the answer to this.

    I’ve been using the railways on and off for over 40 years and in many respects I think the service is better than it has ever been. Newer, cleaner and more reliable. Unfortunately, it seems to be impossible to even suggest this without being howled down by people who have either forgotten how awful the trains were in the 1970s, or never knew in the first place.

    In theory, nationalisation makes sense. However, unlike others, this country never seems able to make nationalisation work. That is why I’m extremely sceptical.

  18. Posted May 9, 2014 at 9:10 am | Permalink

    Arguably the Hatfield train crash on 17 October 2000, caused by a broken rail which was neglected to be fixed by Balfour Beatty was a defining moment in the collapse of Railtrack.

    In any case, it has effectively been renationalised and most people do seem happy enough about that. I have seen the claim that the Nationalised East Coast franchise returns more revenue to the taxpayer than all the other franchises combined. Does anyone know if this is true, untrue or a slight exaggeration?

  19. Posted May 9, 2014 at 9:31 am | Permalink

    I believe that it was a mistake to separate the track and infrastructure ownership from that of the train operating, although I understand that this is an EU requirement.
    The two have to work hand in hand, for example, to run longer trains both the infrastructure, such as platform lengths, and the trains, more carriages, have to be changed. It is far easier for one organisation to do this, when it can work out the best solution rather than two separate organisations who have to account and cross charge each other for the changed expenses. Solutions to some problems are often good for one party, but bad for the other, for example, train wheels. If these are made of harder steel, they don’t wear so fast, but instead wear the track faster. A single company would seek the optimum solution, two separate companies seem to spend more time and accountants arguing than actually doing something.
    I would advocate a return to something like the “Big Four” companies that existed prior to nationalisation, where there was some of competition, and certainly a means of comparison as to their relative performance. I would prefer them to be privately owned, but with the present level of state interference, they might as well be run by the state.

    Reply I recommended keeping track and trains together, with competing lines and companies and contestability.

  20. Denis Cooper
    Posted May 9, 2014 at 9:38 am | Permalink

    While not being dogmatic about it I’ve never seen much sense in privatising businesses which are intrinsically loss-making and which can only survive, let alone make profits for their private owners to take, if they are subsidised by the taxpayer.

    If an intrinsically loss-making business is not essential then shut it down.

    But on the other hand if the government considers an intrinsically loss-making business to be essential and decides that it must be kept going with public subsidies, then surely it makes more sense for it to be publicly owned and controlled.

    • Lindsay McDougall
      Posted May 9, 2014 at 1:28 pm | Permalink

      Railways do not have to be loss making. Just set them free and stop subsidies. Setting them free would involve vertically integrated privately owned regional rail monopolies. Competition would come from air, cheap car travel, bus and coach, and road haulage. No need for the State to intervene at all. No franchises, no lawyers, no consultants, no leasing companies.

    • waramess
      Posted May 9, 2014 at 5:18 pm | Permalink

      We can’t be sure the railways are “intrinsically” loss making. Certainly they are as they exist at the moment but, the alternative has not been tried.

      Were the government to sell the track, stations and service for each given route then we might be in a position to judge.

      After all, the railways compete with road transport in which we might consider both cars and coaches as competition and in some instances air transport. Also worth remembering that lack of demand during business hours will be an issue for road transport also.

      The railways will fail in areas where they are unable to offer a competing service (not always based on price) and they will be kept on their toes in areas where they are able to compete.

      Personally I think we might be surprised at how well they do in competition and, where they fail due to lack of demand, particularly in rural areas, the small buses will take over.

      Of course there is always the old chestnut of safety and, government are at least capable of implementing safety checks and large fines for failure, a big incentive to avoid such fines as they could not pass the cost on to customers without adversely affecting competitiveness.

      The reason why it will never happen however is that Westminster is largely made up of socialists and closet socialists, all of whom want to see the state grow and who are either overtly or covertly in favor of nationalisation.

    • Posted May 11, 2014 at 9:06 am | Permalink

      Denis,

      then surely it makes more sense for it to be publicly owned and controlled.

      You’re sounding a bit more leftish these days, Denis. I’d like to think I may have played some small part in your political shift!

  21. AndyC
    Posted May 9, 2014 at 10:08 am | Permalink

    I’m inclined to think railways are a special case; I think it’s right to say that no modern network anywhere runs profitably from a business point of view. I recall Mrs Thatcher looked at rail privatisation, only to decide it wouldn’t work. The 1990s privatisation was an awful botch, compounded by the various manipulations after 1997. What we have now is probably a better service than under BR, but the improvement has come at such vast cost as to be poor value, to passengers and taxpayers alike. Go abroad and the chances are you will see a rail system which is more modern, more efficient and cheaper to use than what we have here. Spain for example.

    (I have a particular gripe about double decker trains. Why can’t we have them here? The answer seems to be, because we didn’ t have them in the 1860s!)

    I forget the attribution, but someone once wrote ‘ railways make socialists of us all’. I’m far from being a socialist, but I think the external benefits railways provide do create a compelling case for re-nationalisation and better targeting of resources for investment. We currently seem to have public funding and private profit. I’m not sure what to make of HS2, for example… I like the idea of progress, but it seems terribly expensive and I distrust the commercial agenda of many of those who are pushing it.

    Reply We can’t have double decker trains without changing every bridge on the line where the trains go under the road!

    • AndyC
      Posted May 9, 2014 at 4:12 pm | Permalink

      Ah, the ancient British art of NoCanDo! I know bridges are the issue, true, but it’s depressing really. It says we’re stuck with our 19th Century infrastructure, presumably until the bridges crumble to dust. A rolling upgrade of this nature really shouldn’t be beyond the engineering wit of a country that produced Stephenson, Brunel et al. A large expensive project, yes, but would it not be better to spend the billions on things like this, which would make a real difference to capacity, rather than HS2?

    • acorn
      Posted May 10, 2014 at 9:35 am | Permalink

      You wouldn’t change the bridge, you would lower the track using modern concreting technology. You can put a lot more electric horsepower into a train set nowadays to cope with the gradient. The UK has the oldest rail system, hence the most technically out of date in Europe, because we were the first to have one; but, as usual, we did not innovate. You need an innovative public sector to produce and innovative private sector. The government has been the primary Venture Capitalist in most if not all the general purpose technologies we use and enjoy today. A lot of organisations have mushroomed in the rail business, as a consequence of privatisation; for reasons that are not clear.
      Not exactly bubbling with entrepreneurial thinking or many numbers, for a “technical” document. You do get the modern bullshit phrases like, “Using initiatives to raise the innovation maturity level.”

      PS. I have just listened to Osborne blaming the BoE for “not using the tools he has given them” to control HIS policy (Help-toBuy) to pump money into a housing market that was drastically short of supply. Basic, stupid economics. Osborne is doing (lots of ed) damage to our economy. The media is saying the recession is all over but fail to understand, “UK GDP per capita is currently around 15% below the level we might have expected it to be at if it had followed pre-recession trends” as Wren-Lewis says.

      Reply Labour lost us 7% of our national output through their reckless conduct of the state finances and banking policy. No-one has a policy to get us back to original trend. That output was lost.

  22. Neil Craig
    Posted May 9, 2014 at 10:10 am | Permalink

    There isn’t a railway system in the world that comes close to breaking even if you include return on the capital held.

    That doesn’t prove it would be better under a private enterprise system. In fact if we want permanently massively subsidised railways it may be that the best way to do it is through state ownership.

    Do we want that.

    The alternative is innovation – this is much easier under free enterprise but not impossible under state ownership.

    There is no reason why trains should have drivers, nor why they should be the enormously heavy monsters they are rather than like busses. Automated driving exists (though not in Britain) for road traffic and automated rail, being orders of magnitude easier, could have been here many years ago.

    I would suggest a government prize for an immediately deployable automated rail system. If that is forbidden then immediately turn most of the railways into roads with legal permission to use automated driving systems on them. Ownership is not the primary problem, technological backwardness is.

    • Martyn G
      Posted May 9, 2014 at 12:54 pm | Permalink

      You make a very good point re auto-trains – as in the Docklands Light Railway for example, which seems to me to work pretty well without drivers!

  23. david
    Posted May 9, 2014 at 10:15 am | Permalink

    Railways are now subsidised to the tune of 4 billion per year 4 times the amount when nationalised, not including Crossrail and HS2. Lets have them properly privatised remove all subsidies, and let the passengers carry the full cost. I’m sure the MP for Wokingham in the commuter and stockbroker belt, where well off people get taxpayers money buy the bucket load to travel on the train to their overpaid jobs in the City will agree with me.

    Reply The London commuter services attract very little subsidy. The subsidy of course is for the little used lines.

    • Posted May 11, 2014 at 9:17 am | Permalink

      Is this really true? Doesn’t the London Underground need subsidies too?

      I thought the problem was that commuter railways are heavily used for a few hours , but in just a single direction, for a few hours each day. That obviously makes the economics much more difficult than with what used to be known as the Inter City routes.

      Not that we should have a problem with subsidies. If they are necessary to help people to get to work , to pay their taxes, and keep the economy moving, they are a necessary expense.

      We subsidise all roads that aren’t tolled. That subsidy doesn’t seem to cause the same resentment among tax payers. When was the last time a road was closed because it was considered to be uneconomic?

      Reply Motorists pay many times more in motor taxes than they get in road provision, unlike train users who pay no special taxes on their transport

      • Posted May 11, 2014 at 8:35 pm | Permalink

        As I understand it there isn’t such a thing as a motor tax. There is an emissions tax on vehicles, there is duty on fuel, there is VAT on fuel, so all road building and maintenance is largely funded out of general taxation.

        That’s probably the technical argument. Certainly in most peoples’ opinions, they pay their fuel duty and emissions to cover the costs of the roads. But, there isn’t a clear cut difference between road and rail users. Nearly everyone at some time makes use of both forms of transport. The roads alone simply would not be able to handle the volume of traffic necessary to bring everyone in and out the the major cities on a daily basis. Road users do benefit from having the rail network functioning properly. The roads would be unusable in large parts of the country without it.

        Therefore it does make much more sense to think in terms of transport taxes rather than “motor taxes”.

        Reply I was referring to the Road Fund licence – the clue is in the name

        • Posted May 13, 2014 at 12:39 pm | Permalink

          Governments used to call it a tax, now they call it a licence. Maybe in future they’ll call it a levy. But if it looks like a tax and it has to be paid like a tax then it is a tax. IMO.

          Is there some government bank account that separates licence revenue from tax revenue or is it all treated in the same way?

  24. Atlas
    Posted May 9, 2014 at 10:15 am | Permalink

    John,

    … but you have not mentioned the monopoly role of the privately-owned train leasing companies…
    … making for a Cartel so driving up prices?…

  25. Posted May 9, 2014 at 10:26 am | Permalink

    Let’s do the opposite and privatise HS2

    Let’s see if the private sector will put up £50bn for this white elephant. Surely a good test as to whether the project is worthwhile.

    Wait, I can see a queue of private equity firms is forming already :

    Their running for the door !

  26. Lindsay McDougall
    Posted May 9, 2014 at 10:28 am | Permalink

    Right on. Let us never forget that Notwork Rail is only able to borrow on the capital markets because it is underwritten by the Government. i.e. taxpayers. Its borrowing is going to increase from £20 billion to £40 billion, all underwritten by us and all off balance sheet.

    If you want to get a better performance from the railways on London commuter routes, remove the shackles from private bus and coach companies in running commuter services. Don’t control their routes, don’t control their service frequencies, and allow them to build more bus and coach stations – all without subsidy.

    The privatisation of railways under John Major was flawed. There are costs incurred because it is a Bonanza for regulators, lawyers, consultants and rolling stock leasing companies (in which the banks invest). Vertically integrated privately owned regional rail monopolies might be better. The competition – and there is plenty of it – would come from air, bus and coach, cheap car travel and road haulage.

    While we are about it, when is the Government going to give the green light to BOTH a second runway at Gatwick AND a third, short, runway at Heathrow, financed by private money.

  27. David Ashton
    Posted May 9, 2014 at 10:38 am | Permalink

    I travel regularly between Birchwood,Warrington and Manchester. I have two observations to make.

    Firstly, before privatisation there were 2 trains per hour 10 minutes apart, following privatisation the frequency increased to 5/hour, meaning you do not have to check a timetable, just turn up and go. The trains are generally on time, and carry many more passengers. Before privatisation the emphasis a was on cutting costs at the expense of service, whilst after privatisation there was greater emphasis on improving service. Presumably due to government imposed penalties for not meeting standards, penalties they would not impose on themselves. It was not due to competition, which brings me to my second observation.

    The service is provided by three companies, Northern Rail, First TransPennine, and East Midlands. I buy my ticket from the machine and get on any train, there is no check on which train each passenger uses. I have no idea how the money is distributed between the three companies. It appears to me that this gives a perverse incentive to the operating companies to provide a worse service to encourage passengers to use it’s ‘ competitors’ trains with the advantage of lower wear and tear and cleaning costs.

    .

  28. Terry
    Posted May 9, 2014 at 11:25 am | Permalink

    The short answer is, we should not nationalise all the railways, only the tracks and possibly, the rolling stock. The long answer is make a study of systems around the world and short list the best ones. Then decide from there.

  29. Peter Davies
    Posted May 9, 2014 at 2:36 pm | Permalink

    In short you have answered the question yourself – it is already nationalized in all but name with franchises running most of the rolling stock – whats left to nationalize?

    I take it this has come as another barking idea from a political party that thinks VAT increases have added £500 per year to the price of groceries (which have zero VAT) and now think its a scandal that the UK Govt has no way of intervening in large company takeovers due to powers they gave away to Brussels.

  30. Stuart Saint
    Posted May 9, 2014 at 5:08 pm | Permalink

    No

  31. Posted May 9, 2014 at 8:13 pm | Permalink

    I think we should have a state-run nationalised rail service.

    I am all for free markets but there are some special situations where common sense dictates the opposite.

    I believe when there is a network such as this it does make more sense to have maximum co-operation and coherence between all parties rather than an inherently unco-operative regime that competition would bring.

    This should bring efficiencies, no duplication of effort and a seamless service for passengers.

    Of course, we would need to change the law that provides legal protection to strikers and most other employment law, otherwise the railways would soon be held to ransom by unions.

    The problem of budgets being overrun and taxpayer money being wasted could be dealt with by having decent management, employing the same techniques used in the commercial world, such as rewarding those who work well and ultimately sacking those that don’t.

    I agree that the railways are already partially nationalised so we don’t have far to go, but it is vital we repeal employment laws first, otherwise efficiencies could not be achieved.

    Reply We tried that for many years and it led to a rapid decline in the rail industry, massive subsidies and lots of job losses. Why don’t you recommend the same approach for air transport where the network co-ordination issues are even more safety critical than in rail?

    • Posted May 10, 2014 at 8:53 am | Permalink

      Reply to reply:

      I did add the caveat that the law would need to be changed first to remove many employment regulations such as protection for strikers. Had these laws not been in place in the 1970s I don’t believe we would have experienced the problems you described, as long as we employed good management.

      Aircraft are not forced to share the same track and the air does not need to be maintained.

  32. uanime5
    Posted May 9, 2014 at 9:41 pm | Permalink

    For four decades a fully nationalised and integrated monopoly industry presided over large cash losses for taxpayers, high and rising fares, declining train usage, little innovation and poor service levels. Why would a future completely nationalised BR be any different?

    Well given that the private sector has also resulted in rising fairs, little innovation, and poor service levels it’s clear that the private sector is equally bad. Also one advantage of nationalisation means that any profit goes to the treasury, rather than the bonuses of rail executives.

    We need more innovation, not less, more competitive pressure to do more for less as the airlines have done, new thinking on how to improve service and allow more of us more fo the time to choose the train for our travel.

    We have a high level of competition in airlines because an airplane can fly from one airport to another airport anywhere in the world. By contrast a train can only go to a station connected to their current station, which severely limits competition.

    Given that the countries with the most innovation and best rail services have nationalised their railways we should be copy what has been proven to work, rather than trying to make privatisation work.

    Also there’s been a 59% increase in the number of people in work who need to claim housing benefit since 2010. It seems that the economic policies of the Conservatives, which have resulting in falling wages and an increased cost of living, resulted in the benefit bill continuing to rise.

    http://www.independent.co.uk/news/uk/politics/exclusive-socalled-inwork-poverty-soars-by-59-under-coalition-as-more-people-with-jobs-are-forced-to-claim-housing-benefit-9340907.html

    Reply glad to see you think a privatised railway has created more fairness!

    • APL
      Posted May 10, 2014 at 8:30 am | Permalink

      uanime5: “Also one advantage of nationalisation means that any profit goes to the treasury,”

      No it doesn’t does it? Because it is difficult to identify one nationalised industry that made a profit; British Steel, British Leyland, The National Coal board, The NHS – which manages to kill quite a few of its customers too, The Post Office, The Post office telecommunications – all of them lost money or were subject to significant public subsidy.

      uanime5: ” rather than the bonuses of rail executives.”

      And the chief executives of the Nationalised industries, not to mention the chief executives of our local authorities – which are publicly ( but unaccountability ) administrated, were (in the case of the nationalised industries ) and are in the case of the local authorities on very comfortable five or six figure salaries.

      Let’s not even start on MPs. In fact I’d like to see a break down of the top 10% of the population by earnings and the sector those people work in.

      But as usual, both your assertions are false.

  33. Edward2
    Posted May 10, 2014 at 8:44 am | Permalink

    Am I the only person who finds your determination to be last post on every daily article by Mr Redwood rather tiresome Uni?

    • Posted May 11, 2014 at 9:37 am | Permalink

      Possibly!

      How about making the last word about nationalised industries always being problematic in the past being because Governments didn’t separate out their investments from general public spending properly? Necessary investments on the railways were considered part of the PSBR as it used to be known. Investments decisions couldn’t be taken rationally, but only on the basis of what was acceptable to politicians in terms of public spending.

      Privatise the industry, and hey presto! Public spending reduces. But not really if the money is borrowed from the same sources and has to be underwritten by government anyway.

      It is better the way it is now with “a private company which just happens to be financed and owned by taxpayers.”

    • margaret brandreth-j
      Posted May 11, 2014 at 1:55 pm | Permalink

      Edward are you trying to get the last word

  34. Peter
    Posted May 11, 2014 at 11:24 am | Permalink

    I cannot think of a worse way to run the railways than the current model of “privatisation”.

    It is complex, expensive and encourages totally pointless (yet lucrative) “gaming” by the participants, eg extracting compensation from each other for delays. To cap it all, the big decisions are still taken by politicians and the taxpayer is on the hook!

    Though I do not support nationalisation, a return to the sectorised model adopted by BR in its last years would be a considerable improvement on the current state of affairs.

    Even better, of course, would be a return to a fully private industry where companies were free to compete with other modes as they saw fit – with no taxpayer subsidies for any form of transport, roads included.

  35. Richard
    Posted May 11, 2014 at 5:15 pm | Permalink

    The problem is that the government is selling the franchises to the highest bidder who is then trying to recoup their money from the travellers within the confines of the prices and rules set by the government.

    This is not a sensible model.

    Instead the government should simply award the running of the franchises to the lowest bidder with all decisions concerning investment and pricing to be left to the government.

  36. Daniel Charles
    Posted May 12, 2014 at 8:00 pm | Permalink

    Don’t we subsidise pretty much everything that was privatised after Thatcher, not just the failing industries. We subsidise BAE and our defence industry is still good.

  37. Kenn Heeley
    Posted May 28, 2014 at 11:31 am | Permalink

    Hello

    I note that Guy Opperman the Conservative member for Hexham has largely reproduced your piece on his blog today and has not given you any achnowledgement at all.
    Rather a poor show and could be construed as plagerism.

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  • About John Redwood

    John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College, and has a DPhil from All Souls, Oxford. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.
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