Remember the railway network is nationalised

Listening today to criticisms of the governemnt’s aim to get the UK railway system to a similar level of efficiency as contiental systems by reducing some 30% of cost, I was struck by people telling me our system is dearer becausee it is privatised. I seem to remember passanger numbers and freight volumes rising strongly, and subsidies falling, when it was fully privatised. Then costs and subsidies rose swiftly again ocne the main part of the railway, the track and signals were renationalised. The old nationalised monopoloy had a poor record with falling use, safety problems and high levels of subsidy.


  1. Simon
    March 8, 2012

    Our rail network has been running at (peak time) capacity for more than 50 years.

    During the decades prior to privatization, there was rising investment in roads, and falling investment in rail. As road travel became easier and cheaper, people switched to cars away from rail.

    For the last 10 years road investment has been limited, and car costs have risen rather than fallen. At the same time, rail investment has increased, and new technology has increased network capacity. Thus, car use has stalled, and rail use has increased.

    Cost efficiency of rail comes through investment in rail. I’m sure I don’t need to remind you who was responsible for the lack of investment in rail in this country, and was therefore responsible for its current lack of efficiency.

    1. The Realist
      March 8, 2012

      Simply put we as a country were not really generating any wealth and until the middle 80,s we were virtually bust. The railways had 40 years of underinvestment for that reason post War. When they were privatised I argued that it should have been via the Bond market and long duration Bonds as it required huge capital investment with a long term payback and a classic utility yield. This still does not explain the huge inefficiency and the fact the pay typically 30+% more than most if not all European countries.

    2. wab
      March 9, 2012

      “Cost efficiency of rail comes through investment in rail.”

      Well that is an optimistic way to look at it. But is there a single significant rail system in the world that does not require massive public subsidy to work? The massive subsidy of UK rail means that London train commuters push up house prices a lot further out of London than would otherwise be the case, and that has caused all sorts of problems. Why London train commuters think that the rest of society should subsidise their lifestyle is a mystery.

      The UK perhaps does particularly badly with rail, but it’s not clear to me that investment per se is the issue so much as the fact that the last Tory government purposefully privatised the railway in as inefficient a way as possible so that the entire system could not easily be re-nationalised. The country is now paying the cost.

      1. Robert Christopher
        March 9, 2012

        Privatisation was according to EC/EU rules.

        1. Greg Tingey
          March 10, 2012

          WHAT a convenient HALF-truth!
          The “EU rules”
          MERELY said that track and running should be separately ACCOUNTED FOR, not functionally split as the idiot tories did here …

          I’ve heard that lie form Railtrack PR slimes at public meetings – _ I think it’s long past its’ sell-by date, now, don’t you think?

          Try again…..

  2. David John Wilson
    March 8, 2012

    We need a government policy for the transport of freight. This should look at the movement of containers between British Ports so that they arrive at the nearest port to their final destination not one at the other end of the country. There should be container terminals at strategic places away from the coast connected to the ports by rail. Distribution by lorry would then normally be from those container terminals. This would hugely reduce the traffic on our roads and reduce fuel consumption and thus costs.
    There is a lot of spare capacity on the railways overnight that should be used for this freight traffic. We then need to look at more internal freight movements taking place by rail between inland container terminals.
    Taking a local example we should see a majority of non-perishable goods arriving at the Waitrose distribution centre, in containers, by rail.

    1. outsider
      March 8, 2012

      Dear Mr Wilson, “There should be” is fine. Are you suggesting that civil servants should dictate freight routes? Are you suggesting that taxpayers should fund these investments? If not who? Most of our big ports are foreign owned. I cannot see why they would want to invest billions to undermine themselves.

    2. Martyn
      March 8, 2012

      20 years or so ago just such an inland port was planned for Didcot in Oxfordshire, with its good road and rail network. The plans were torpedoed by the various unions who saw their monopolies under threat and the project sank without trace, never to be seen again.

      1. Alan Wheatley
        March 9, 2012

        Sounds like a re-run of Freightliner, which if memory serves correct was an attempt by the nationalised railway to modernise that the unions torpedoed.

        1. Greg Tingey
          March 10, 2012

          Totally wrong
          The RAILWAY union were in favour – it was the DOCKERS who tried to stop it.
          And failed.
          Please get your facts straight

    3. Bob
      March 8, 2012

      @David John Wilson
      It would be better than HS2, because without HGVs the motorways could run faster and safer. The journey time by car could easily be cut by thirty minutes between London and Birmingham – door to door therefore cutting the hour wasted at each end trying to get to and from the stations.

      HGVs are a major factor in motorway accidents and hold ups, I was almost wiped out by a “veiculo longo” on the M1 on Wednesday afternoon. Cars and lorries are a dangerous combination.

      1. Robert Christopher
        March 9, 2012

        HGVs are also a major factor in the wear and tear of road surfaces while cars have much less effect.

    4. Greg Tingey
      March 10, 2012

      What is this “planty of spare capacity for freight?
      Especially around London?
      Please do tell….

  3. Jonathan
    March 8, 2012

    I think perhaps you are half right on this, John.

    It is unquestionable that rail use has increased since privatization (even despite steeply rising fares and worse trains), not only that but the reopening of old lines – which we were repeatedly told by the DoT and BR werent viable – shows that taking rail out of direct government control is a good thing, indeed the situation would be even better than it is now if only the DoT stopped trying to stick its oar in to fight rail expansion (the worst example being the “guided busway” face in Cambridge, which would have been much cheaper, much more efficient and useful as a standard railway).

    On the other hand, its a bit much to claim that the increased cost and subsidy is down to the renationalization of Network Rail. For a start, most of the waste is the fault of the franchise system – with its consultants and lawyers fees, the guaranteed subsidy (and in some cases profit) levels and the implicit understanding that the state will step in and take over should the franchise holder decide to walk away.

    Secondly, Railtrack was an awfully run company – whilst it might not have recieved the subsidy that NR gets, this is mainly due to Railtracks failures (in maintaining the system, in upgrading the WCML and in terms of monitoring what its subcontractors were doing) which of course led directly to Hatfield and the panic (because they had no idea whether the problems that caused that disaster were more widespread) that consumed the company afterwards.

    The only way to really bring down costs, and to improve and expand the network, is to reintegrate wheel and rail, get rid of franchising and have a private firm – or better yet private firms split on a geographical basis – run the network. After all, we already know this works.

  4. uanime5
    March 8, 2012

    I seem to recall the quality of maintenance on the railways dramatically falling and under staffing becoming common after full privatisation leading to the Clapham Junction, Southall, Ladbroke Grove, and Hatfield rail crashes. The main part of the railway, the track, and signals were renationalised was because companies were placing the needs of their shareholders above the needs of the British public in a way that was very dangerous for all involved.

    Lower costs shouldn’t be praised when they are at the expense of safety.

    1. sjb
      March 9, 2012

      Don’t forget fatalities also occurred on British Rail’s watch:

      1988. Clapham Junction. Thirty-five dead. Poor signals maintenance.

      1978. Taunton. Twelve dead. Used bed linen placed in plastic bags next to a heater in a sleeping car.

      1975. Nuneaton. Six dead. Speed restriction not visible to driver.

      1968. Hixon. Eleven dead. Inadequate warning notice, although a third party was deemed the most culpable.

      1961. Singleton. Seven dead. Poor working practices.

    2. outsider
      March 10, 2012

      To be fair it was not as simple as that. Part of the problem was that a new regulator appointed by Lord Prescott imposed swingeing financial penalties at his behest unless Railtrack improved punctuality faster, even though it was terrific by subsequent standards. Maintenance downs thus became exaggeratedly expensive. More generally, Labour was determined to get rid of Railtrack because it was not prepared to put the much higher investment it planned through a private company.

  5. lojolondon
    March 8, 2012

    The British Isles have been run by a bunch of (socialist fools-ed) for the last 13 years, who taxed everything they could, and right at the front of the queue was ‘anything that is ‘bad’ for you’.
    So alcohol, cigarettes, petrol and cars (3 of those based on the fallacy that CO2 is ‘bad’ for you) have been at the forefront of the tax assault.
    The result of this is that motorists have been forced to use the dire, way overpriced public transport. When you consider that it will cost 4 people over £600 to travel tomorrow from London to Birmingham on the train, you can see why they still use their cars!!
    Unfortunately, rail franchises, like so many of the PFI schemes, is simply a licence to print money. Rail users face the highest fares in Europe, the government faces the highest subsidies in Europe, and the franchises, most of which do not pay British taxes have massive profits.
    All because instead of crushing the unions years ago, we took the easy way out, devolving the business of transport.

    1. Greg Tingey
      March 10, 2012

      I think you’e forgotten to take your dried frog pills!

  6. Roger Ford
    March 8, 2012

    You claim, presumably from Conservative mythology that “the old nationalised monopoloy had a poor record with falling use, safety problems and high levels of subsidy”.

    Fact. Between 1983 amd 1989/90 subsidy fell, at 1989/90 prices from £1,329 m to £587m.

    Fact: Over the same period Government subsidy as a share of total passenger revenue fell from45% to 25%. Today it’s around 50%

    Fact. Ridership increased from 18.3 bn passenger miles to 20.9bn (21.3bn in 1988/89.

    Fact: Over the same period Freight tonnage was down slightly from 145.1 m tonnes to 143.1m (149.5m in 1988/89)

    Fact: By 2000 when Railtrack was forced into adminstration passenger miles were 23.7 billion and freight tonnage lifted down to 95.4 million.

    1989/90 is chosen deliberately because it marks the end of the economic cycle. Note that passenger ridership in 2000 had only just topped the 1988/99 peak.

  7. Paul Danon
    March 8, 2012

    Indeed, and the east-coast operator is nationalised.

  8. forthurst
    March 8, 2012

    “The old nationalised monopoloy had a poor record with falling use, safety problems and high levels of subsidy.”

    Then John Major turned it into a dog’s breakfast. Who interviewed him for the job?

  9. Electro-Kevin
    March 8, 2012

    I seem to remember ( when studying for my Chartered Inst of Transport Dipl at the time of privatisation) learning – from CIT lecturers, not unionists – that BR was the most productive in Europe in terms of passenger miles per railway employee.

    You may dispute this. I cannot substantiate it. One thing that I do know for sure – as a train driver of tweny years standing (formerly BR) – is that the railway is far less flexible than it used to be and this is directly down to the privatisation model – that very part of the ‘non privatised’ railway which took shape precisely as it was intended: the idea of competing interests on the same infrastructure. The reasons should become obvious as I shall attempt to explain and DID try to explain in letters pages during the privatisation debate:

    Each company of operational staff is now compartmentalised within its own franchise – many within the same regions. That’s the nub of the problem. No longer can a freight driver stand in for an inter city driver – no longer can a freight loco be used to head a faulty inter city train (we were one and the same.) We can no longer count on a commuter unit in the section ahead being suitable to assist the failed unit in the section behind, this owing to the fact that different franchises have chosen different coupler designs. This is before we consider the other technical and contractual complexities.

    There was also the fact that trains used to be formed longer in many cases – we could thank good old British Rail Engineering Ltd for this and so sturdy were their trains that many are still going strong today, way beyond their lifespan.

    Worse than this is the fact is that privatisation necessitated the introduction of tier upon tier of ‘professionals’ to negotiate penalties and contracts, conduct training and assessment courses, subcontracted maintainance and engineering etc whilst taking their hefty cut out of the rail industry. I suspect quite a few people indirectly involved in operations have become rich under the new system.

    It’s not all bad. Privatisation did get rid of the ‘oiks’ in the main. Many frontline rail staff are now well educated and have transfered from other skills and from professions such as teaching, engineering and pre-deregulation banking. Many are, in fact, more Conservative than so called Conservatives in your party ! I say this in anticipation of a kicking from the Daily Mail about how militant and Lefty we all are. That said, few of us are as gnarly and pragmatic as the old BR footplate crew used to be.

    Not a fan of Bob Crow btw – though I would choose to have him at my side in a bar brawl.

    1. outsider
      March 10, 2012

      Thank you Electro-Kevin for that illuminating comment. The problem was that the whole complex privatised railway structure was designed to promote and facilitate competition. But there never was competition because there were no takers for rail franchises on that basis. So we have had the downside of the structure without the intended benefits. Which only shows again that politicians should not restructure private industries (including banking).

  10. lifelogic
    March 8, 2012

    I agree exactly.

    Of course trains do not really make much sense in a county the size of the UK – other than for a few commuter, fixed freight and intercity routes.

    Coaches, cars and planes are the future.

    1. lifelogic
      March 9, 2012

      Or at least they would be if the government stopped subsidising trains and over taxing the others.

    2. Greg Tingey
      March 10, 2012

      Ah – a time-warp from 1962
      Fan of the (questionable-ed) Marples are we?

      1. lifelogic
        March 10, 2012

        Indeed good old Dr Beeching/Marples saved us a fortune in pointless subsidy.

        If trains are so efficient why to they cost as much as 10 times what car/coach does even though they pay no tax on fuel, no road tax, get a subsidy & pay no vat?

        1. Sean Baggaley
          March 11, 2012

          Dr. Beeching—contrary to popular belief—did not require anywhere near as many closures in his report as were made. However, he was also a product of his age: everyone thought that the automobile was the future. There were very few people who felt otherwise. The subsequent Labour government performed a major U-turn and reneged on one of its most popular election promises: they ended up closing many more lines that even Beeching, and the Tories who commissioned him, had ever dared to suggest.

          The cost was staggering.

          The “network effect” of the entire rail system was smashed to bits. It’s a little-understood fact that removing a town from the railway map does not inconvenience only the residents of said town, but also anyone who wanted to get to that town from somewhere else. Thus, closure of the railway line through that town also means you end up with people having to drive to it, not just from it, because there is no other convenient to get there. The rail option becomes worthless as nobody wants to get off at a town some 20-30 miles away and take a long bus journey. You might as well just drive.

          Many of those branch lines didn’t make much profit, granted, but they fed the more important lines. Removing those ‘feeder’ services reduced the patronage on those main lines too, making them less viable in turn. The upshot of which was a domino effect: closing some superficially unprofitable lines led to an unexpected drop in patronage on the main lines they connected to, thus leading to closure of that line, and so on. The result was a massively crippled network.

          The network effect is well known now, but was not very well understood in the 1960s when Dr. Beeching’s original report was written. I can understand his reasoning and the underlying theories of the day upon which his choices were made, but the fact remains that those underlying theories were proved wrong. Many of his line closures have since been reversed, either as railways, or (e.g. in and around Manchester) as light railways and trams.

          Also, many lines were actually closed before Beeching’s report, because incompetence and stupidity are not limited to governments and politicians, but are also easily found in the world of private enterprise. As evidence, I offer the constant petty bickering and deliberate (and staggeringly stupid and expensive) spoiling tactics employed by both the SER and LC&DR prior to 1899.

          Cars have a place in a unified, joined-up, transport system, but the UK doesn’t have one of those. It just has a bunch of standalone systems that insist on bickering and fighting each other like those two 19th Century railway companies mentioned above, when they could work so much better together, as a single, seamless whole.

          But that would require politicians act logically and sensibly, which isn’t likely to happen in my lifetime. After all, the government in the UK still seems to choose ministers for the most powerful positions using a game of musical chairs, instead of actually checking their CVs and ensuring they have a clue what they’re doing.

          Lord Adonis appears to have been a statistical fluke—even a stopped clock tells the right time twice a day—but it is ministers like him that we need: people who genuinely care about their ministerial position, instead of seeing it as a stepping stone to somewhere more ‘prestigious’.

  11. Caterpillar
    March 8, 2012

    I don’t know the figures but I’ll take the opportunity to pick up on the growth of freight point and … HS2 will free up capacity for freight which has indeed been growing strongly and with the west coast main line forecast to hit a capacity crunch, will allow capacity to be added without disruption to the existing line/service.

    I suspect one issue with the capacity vs cost is that in the short to medium term a capacity leading not lagging strategy is probably needed, thus there are bound to be costs.

    Two asides:-
    (i) Is there anything like Braess’s paradox on rail networks as has been seen on roads? (Or knock on with intermodal)
    (ii) More local ports tends to look an option when transport costs are modelled for inflows only, but when outflows are included the numbers don’t come out like that (so many imports will go down the M5 to Plymouth, rather than come in by ship, there is little for the ships to pick up).

    1. Robert Christopher
      March 9, 2012

      An excellent explanation of Braess’s paradox, written in English, as opposed to ‘Maths’, can be found here, under the heading ‘Example’:

  12. Ian
    March 8, 2012

    How about selling off track, signals, trains the lot to regional, pre-1948-type all-in-one railway companies? Institutional investors could buy them up and then cheaply refinance those costly Network Rail PFI schemes.

    We’d be left with just subsidising genuinely uneconomic routes – as with the buses. This suggestion means leaving the EU with its must-seperate-track-and-trains rule, but what the heck.

    1. uanime5
      March 9, 2012

      Perhaps we should just copy the French model and have separate state and private railway companies. This would give the private companies some real competition.

  13. Cary
    March 8, 2012

    John Redwood’s memory is playing tricks on him if he thinks rail subsidies have fallen since privatisation (figures in the link below). The problem with privatisation is that it has created a fragmented system that is grossly inefficient. Where privatisation has worked it has gone hand in hand with greater competition, but rail privatisation did not increase competition.

    Reply: I said they fell during the period of privatisation, and rose again following the renationalisation of Railtrack

    1. John Roberts
      March 9, 2012

      So, which would you rather John – the safety record of Railtrack, with several major accidents which were partly or wholly attributable to the infrastructure operator or the privatised TOCs , or the 5 years without a fatal accident which we’ve now enjoyed under Network Rail (and indeed just short of 10 years with only 1 passenger fatailty attributable to the rail industry)?

  14. Mark
    March 9, 2012

    Unfortunately the thinking about fares is not very joined up. People travel at peak rush hour because they have to get to their jobs on time. It is not exactly a matter of choice: fail to turn up punctually and they’ll lose the job. The beneficiaries of this peak travel are really their employers, who should therefore bear the added cost of peak travel, and then decide whether it makes sense to organise their working day differently. It will make no difference to peak demand simply to load the cost onto hapless commuters. It is to be hoped that fares increases are not a back door for the useless HS2 project to et some funds.

    The move towards electronic cards for fares rolls out the tracking of individual movements to yet another area of transport. What safeguards are being put in place to prevent the misuse of this information? None, I suspect.

    Of course, the news is dominated by the fares and cards, and not the efficiency issues. Even the summary report:

    gives rather a garbled, complex message, and it may end up falling foul of the EU’s plans:

    I presume part of the reason for the obfuscation is that a large chunk of the inefficiency is due to the unions, and much of the rest due to the regulator pandering to those it regulates.

    There seems to be little if any focus on how to integrate rail with other modes of transport.

    More joined up thinking required.

    1. uanime5
      March 9, 2012

      The inefficiency is largely due to private companies who know that no matter how expensive or ineffective they are their customers cannot use another train operator because there’s no competition on the railways. This won’t change without more regulations or more competition.

  15. Lindsay McDougall
    March 9, 2012

    We should remember the Labour government’s role in the demise of the private company Railtrack. Labour bullied Railtrack into reducing their track access charges below market rates, denying Railtrack vital income. Railtrack then cut corners on track maintenance, with disasterous consequences, but their reduced revenue meant that something had to be cut back. Stephen Byers saw his opportunity to strike and replace Railtrack by the nationalised Network Rail. Track maintenance costs rose threefold in the immediate aftermath of that decision. Whether they are now under better control I don’t know. Presumably Network Rail’s peformance is monitored by a parliamentary committee.

    1. uanime5
      March 9, 2012

      Since where has there been a market rate for track access charges? Railtrack was the only company in the UK that could set this charge so their price was the market rate.

      Given that Railtrack heavily cut back on track maintenance wouldn’t it be a good thing that 3 times more was spend on track maintenance by Network Rail?

      Railtrack also refused to comply with rail regulations or raise its performance.

  16. Alan Wheatley
    March 9, 2012

    We should also remember that the very existence of the railways is due to private initiative and investment.

  17. David Saunders
    March 9, 2012

    Fairness -if such a thing exists – should not be formulated by the prejudices of politicians as to which group should or should not be favoured. The best governments get out of the way of free enterprise with low taxes and less red tape to allow the self enlightened interests of those who an do well to produce the benefits that those less able or fortunate may enjoy. We need conviction politics by Conservatives to energise wealth creation and a resurgent economy, both of which are hindered by the current leadership and the EU.

    1. uanime5
      March 9, 2012

      If the rail industry wants less political interference they shouldn’t demand millions in subsidies from the Government. As long as they need the taxpayer to finance them they can expect to be heavily regulated.

      Also low taxes tend to result in a lot of inept businesses, as only the competent ones can survive in a high tax environment.

  18. Barbara Stevens
    March 9, 2012

    However you look at the railroads they were sold off to private companies, who made a killing with large salaries in the first few years, with nothing being done for modernisation. When the scale of the money needed was revealed the taxpayer had to help fund them; but the big salaries continue. They have behaved no better than the bankers over the years. What we have now is a fragmented service, poor capacity, and poor carraige stock which should have been got rid of years ago. Hardly enough seats, no real service at stations at all, and no staff. If this is privatisation then public ownership might be better. The fares are outrageously over priced and not of good value, staff are not really well trained and appear not interested in the jobs like they used to be; I could go on. We can then assume since privatisation things have gone from bad to worse. The private sector didn’t realise the extent of the work needed to modernise this industry and people leapt in ready to make a profit, they had a culture shock when the numbers added up. If you look at France where it’s a private company but with the state holding shares as well, they are modern, clean, and the fares reasonable. Jointly they have succeeded where we have failed. The most obvious thing being the salaries are controlled to levels that are acceptable. Here, greed manifested it’s self with the eye on the ball for self interest before the industry. Now I have little faith in private ownership, or public ownership, they all appear to have self interests before the people who have to use the service.

    Reply: The track and signals are state owned. There have been plenty of new carriages.

    1. JT
      March 9, 2012

      Barbara … why do you think prices are too high ?
      International comparison may be irrelevant when you consider the cost of property, the wage differential, the level and means of investment

  19. Mike Stallard
    March 9, 2012

    Nowadays rail is out of date and it needs pruning. Ancient scions of the past – the Trades Union, the train drivers, the railtrack EU imposed fiasco, the new line between midlands and London – are as historic as the Tower of London and just about as much use.

    Railways only work at a profit is when there is a very dense population that needs shifting quickly and regularly and predictably. In Singapore, where there are vast high rises of people needing to get to the centre to work, it works a treat.
    Linking coal mines to power stations, too, makes a lot of sense.
    Otherwise, lorries, buses, cars and even taxis are much more efficient and economic, as we see quite clearly in, say Brisbane.

    A totally private company, left to itself could manage this, especially if it were allowed to make a profit and sell shares. Government just doesn’t seem able to – especially with the EU breathing down its neck.

  20. Sean Baggaley
    March 11, 2012

    The problem with the railways and their costs is that they aren’t entirely due to its somewhat fragmented nature and the decades of underinvestment that beset British Rail, but are also due to the fact that it appears to cost nearly twice as much money to build anything at all in the UK than it does elsewhere. Even Italy gets more built with a lot less money.

    The UK’s construction industry is so hamstrung by the gateau of arse-covering management layers caused by its subcontractor culture that a staggering amount of money is being spent simply on consultants hired to confirm what the in-house teams already knew. (Seriously: why is an entity named “Network Rail” hiring railway experts? Shouldn’t Network Rail be the experts?)

    Mr. Redwood, and that sorry lot of MPs currently in Parliament, need to explain to us little people how this scandalous state of affairs came to pass.

    How, in short, it is possible for a straightforward 100-mile railway built through simple rolling terrain, and clearly derived from the High Speed Rail technology that dates back to the 1960s, is estimated at around £17bn., while the Swiss are quietly building a brand new railway under the alps, (the Gotthard Base Tunnel), along with all its new approaches, links, etc., for just half that sum?

    And this national malaise doesn’t apply solely to rail, but to all infrastructure projects in the UK. Even roads cost far more to build, upgrade and maintain than everywhere else.

    Frankly, Capt. Deltic, I’m disappointed that you haven’t pursued this problem harder. It really is a national disgrace that the successors to construction and logistics giants like John Mowlem and Robert McAlpine have managed to reduce their legacies to such pathetically embarrassing little coughs.

    THIS is the real cause of the symptoms we’re seeing today. Why are we arguing over which of the 2-3 major projects we should build first? This is the UK, not the bloody Canary Islands: we should be able to build all of them! The only reason we can’t is because each option costs so much now that we simply cannot afford to build more than one at a time. At the rate we’re going—Crossrail was first mooted decades ago; Thameslink is also about 18 years late—we’ll never catch up with our needs.

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