I wrote the minority report on how to introduce private capital into the nationalised railway when I was in government. I proposed keeping track and trains together. The majority went with the idea of splitting the ownership and management of track from trains. This just happened to be the EU view, which became a requirement. My main objection to the split was it created a massive monopoly track and stations provider which would be unresponsive to the ultimate customers, the passengers, and not especially responsive to the smaller and temporary franchise companies running the trains.
It was bound to lead to rows over who was to blame when a train is late. Was it poor track, bad signals, the  requirements of the network provider? Or was it poor trains, driver problems or other issues from the operating companies? As I feared there were plenty of delays and plenty of disputes about who was to blame. Poor signalling and network management was often the cause, but so was poor labour relations by the train companies.
It was also likely to push the network provider back into the public sector. Such a large concentration of power invited Ministerial intervention. The perceived need to continue to subsidise the railways meant a stream of cash going from taxpayers to the industry, with the network provider likely to be lobbying. One of the main reasons nationalised monopolies often served their customers badly was the perception of their Boards and senior management that their customer was the government, not the people using the service or buying the product. They looked upwards for taxpayer cash and Ministerial directives. They did not look down to find out what customers wanted and to treasure their financial contributions.
I recommend that the government examine ways to reconnect track with trains under common management. That way the investment programmes can be compatible and co-ordinated, and passengers know who to blame for poor or insufficient service.  The train company can be responsible for the whole experience, on the station, on the train and the train’s performance on the track. They would have more incentive to make those smaller but timely investments in better signals, better information systems, short passing places and the like that could revolutionise train service reliability and add to capacity where needed. One of the big constraints on train traffic growth today is the nationalised network providers inability to supply sufficient train slots at busy times for more popular services.
The integrated  companies in turn must not be unchallenged monopolies otherwise they too will be less responsive to customers and more minded to play political games around subsidy and government led structural decisions. The main rail company owning a given line or region of track would have to treat the track as a common carrier and be prepared to lease train spaces to rival companies. There will need to be an independent access regulator to ensure this is observed and practised fairly. Challenger companies should also have the right to add track to the existing network, again with suitable regulatory supervision of revenue sharing, safety and other matters. It is possible to design decent sized integrated companies that leave open competition between lines and services. The obvious case of East coast versus West coast mainline is not the only one. These lines should be owned by different companies.
Train companies will need subsidy in some cases. There needs to be clear rules over subsidy allocation. The things to avoid include  a subsidy system which protects a fossilised service, keeping routes which would be better replaced by new services. It is also a danger that the maximum subsidy goes to the least used service, providing a perverse incentive to run unpopular services because they have always been services.
(to be continued)
May 11, 2019
By far and away the best thing to do is to make the remuneration of the company directors entirely the responsibility of the Government.
The directors will then be accountable to the Government and the Government accountable to the voters.
May 11, 2019
*renumeration
May 11, 2019
Just to add this is not an ad hoc idea. I have a theory of Calibration. It provides a way of bringing the logic of the markets to Government. It provides a way of designing Governments to be motivated to improve.
You need transparency, choices, controls, direct lines of responsibility from actors to voters.
May 11, 2019
Governments aren’t a point of intellectual discussion but real, human based organisations whose primary concern isn’t efficiency but maintaining political control over events that affect them. Brexit should’ve taught people that when those in government are focused on preventing an attack on their power they tend to take a course of action that leads to ever greater political control
The State is a vested interest in its own right. It doesn’t exist for the benefit of those who finance it. When this simple truth is embraced then all the questions you ever wanted answered about why certain events are allowed to continue simply becomes clear
Governments resent reform because government is composed of people with a mindset that resent reform if those reforms entail a loss of power
Look at the behaviour of May and Sidwell. It is deeply sinister at the actions of these two. Pure, unbridled power over the lives of millions of people. One of them isn’t even accountable and that lack of accountability is absolutely DELIBERATE
May 11, 2019
Points well made. I think the sensible view is that the burden of proof is on the state to demonstrate that it’s jurisdiction is required in any particular area. The assumption should be that state has no jurisdiction unless it can be proved that such is necessary.
The railways are a tricky one. Undoubtedly, the way in which they were privatised was deeply unsatisfactory. I think a key point is to understand that rail is but one means of travel. There are others. So having a monopoly on the rails isn’t the same as having a monopoly on a travel route. The problem is that for many people, rail is an effective monopoly because alternatives are so unappealing. Making these alternatives more appealing would have the effect of removing rails effective monopoly and force them to improve their service to effectively compete for business. It is making these alternatives more appealing that is tricky, because that involves questioning whether or not the state should be interfering in this, and if it is deemed necessary, ensuring strict limits are in place to limit state power.
May 11, 2019
“Without destruction there can be no construction.” Mao.
Short and sweet.
May 11, 2019
+100
May behaving like the worst of third world dictator and the Tory Party unable to control her.
May 11, 2019
What is needed is a joined up railway system.
I donât believe that you need to have different companies competing to ensure they are âresponsive to customersâ. Numerous franchises have demonstrated over the years that is clearly not the case. North Wales lived with insufficient rolling stock to accommodate passengers because it suited the franchise to run things that way. Fortunately I only ever used the service occasionally for leisure. Small companies also use politics to get their own way.
A unified rail service could also standardise training of staff and offer a long term as opposed to a career that lasts as long as the chancers that run franchises survive. It could offer economies of scale and a greater vision of developments for the future. The challenge would be to keep the monopoly running well. There are ways to do so without having to break up the service into competing companies. This government ties itself in knots trying to introduce rival competitors where that model is not appropriate. We donât have competing armies or police forces. Why do we need competing rail companies? You just need effective control of one, well-run, big rail company that is in business for the long term not just the length of a franchise.
May 11, 2019
Oh heavens no,no,no. Keep the government and the civil service out of such things as remuneration as much as possible. Surely more appropriate would be if the CO’s pay was directly linked to customer satisfaction including service reliability.
May 11, 2019
It all sounds a bit like the comparison with Telecoms where both carrier and service provider are private businesses.
BT own most of the lines, lease the service out to others on those lines, but it’s still in the dark ages for many areas in the Country.
Sensible management and investment is the answer, no matter if it is private or public ownership.
May 11, 2019
Indeed, our telecoms situation is a disgrace, the dead hand of an ex public sector company with a massive pension deficit, its monopoly and over regulation.
My question to JR is so what if we continue to have the appalling project and overall management that seems to have been blighting this industry for years.
Successive ministers of state, Grayling seems to be one of the worst and the civil servants and network rail just seem, from my admittedly âonly a voterâ view, to be incompetent.
Surely if network rail had managed its budgets and projects efficiently, their debt wouldnât be what it is now, not needing such a bail out and maybe track and operation separation might have worked?
May 11, 2019
Sounds like you advocate a conservative , customer oriented solution to the problems of rail travel. I would support such, all we have to wait for is a conservative givernment. The way they are behaving there won’t even be a conservative party.
May 11, 2019
Indeed democracy, freedom and choice. Is there any policy that the May Government holds that is remotely Conservative? It of it all seems well to the left of T Blair, absurdly high taxes combined with endless interventions and red tape and appalling and declining public services too. Giving us a party even less popular than John Major after his ERM fiasco.
At least they are not pointlessly bombing countries I suppose.
May 11, 2019
As the population here is being deliberately altered by blatantly organised “migration” and laws etc here being changed to suit the new arrivals, instead of them to us, I have no doubt we’ll soon be seeing trains with people sat on the roof.
May 11, 2019
All efforts must be directed at preventing Marxist Labour and their allied hard-left unions from taking political control of such organisations. Such control would afford a considerable degree of political control over many aspects of our lives and invest huge amounts of power into the hands of a few Marxist zealots
John Redwood is rightly focused on ensuring that the customer is put at the heart of these country-wide entities. This is the correct approach. Meanwhile, Labour is only concerned with nationalisation allowing total political leverage with the needs of the customer a complete irrelevance
The nation needs to wake up and understand what Labour’s become. The people that have taken over this once moral party are pure bred Marxists and hard left ideologues. They are a threat to all we have and all we own
I’d like to see all privatised entities protected under law from political nationalisation by Marxist Labour. Labour will bankrupt the taxpayer to nationalise these industries. They’ll bankrupt the nation to construct their Marxist client state. if this does happen there’s no going back as they’ll be in power even when not in government
May 11, 2019
” theyâll be in power even when not in government ” – with May’s talks with Corbyn and pals on WrexitBrexit plans it seems she’s already arranging it.
May 11, 2019
I see that Claire Perry has some interesting expense claims for her grown up children in the Telegraph today. These people never seem to learn do they? I wonder if she has learnt that the national debt and national deficit are not the same thing yet!
She is a totally inappropriate choice for energy/climate secretary lacking as she does any real understanding of energy, engineering and science. She was also âvery sadâ when Soubry et al left the party.
May 11, 2019
An excellent article by Douglas Murray in the Telegraph today also.
A great institution now bends to the rabble. Cambridge University has put itself in thrall to an ideology of intolerance in the guise of fairness.
May 11, 2019
Staffed by rabid left wing zealots all sucking on the taxpayers teat.
May 11, 2019
An uplifting piece by Charles Moore too I hope he is right.
Despite the Remainersâ best efforts to crush Brexit, democracy will prevail
The Tories and Labour will struggle to survive if they mimic the EUâs open disdain for the voters.
May 11, 2019
Can you explain how the EU shows ‘open disdain for the voters’? Which ones? Where?
May 11, 2019
Can you think of an appropriate choice for energy/climate secretary? In previous years we’ve had Ed Miliband, Chris Huhne, Sir Edward Davey and Amber Rudd. The present Secretary of State, Greg Clark, is ex-BBC management
May 12, 2019
Peter Lilley.
May 11, 2019
Re the expense claims – surely civil servants are tasked with signing them off? Are they culpable?
May 11, 2019
The subject of getting the trains to run on time ought to be appealing to
our dictatorship. Booker and North’s Castle of Lies claims that separate track
management was developed as a policy with Continental cross-border transport in
mind. Britain, which of course was not subject to the same considerations, was
yet required to conform by a directive from Brussels.
May 11, 2019
Train operators face similar ‘slot’ problems to flight operators at major airports – Which can only be resolved in two ways: More capacity and better technology. Network Rail has not done enough on either count when you look at how congested with passengers railway terminals are.
I don’t see it as viable to allow train companies to manage shared track – but certainly NR could be broken up into logical regional companies.
If the government is going to carry on micro-managing railways then they have to show clearly what the goals are, at a micro level, then allow NR to get on with it.
Why are foreign owned rail companies allowed to make such huge profits that they can subsidise railways in Germany and France, allowing cheaper fares there?
May 11, 2019
Does the government produce economic forecasts showing expected tax income and spending plans for, say, the next five years?
If so, how much is the government including for payments to the EU?
Or are we seriously governed by only ever looking one year ahead?
How much is included foy âpayments to the EUâ in the budget for this year?
May 11, 2019
For 4 years this has never been disclosed. The headline figures may be available but the detail is never revealed.
May 11, 2019
“The integrated companies in turn must not be unchallenged monopolies otherwise they too will be less responsive to customers “
But is that not where other forms of transport come into the equation? Someone having to go to Newcastle, from London say has the option of driving, flying, even going by coach, not just by rail. I might add, back in the ’70s what pushed BR to develop of the HST & APT into working prototypes and (in the case of the HST, squadron service) was not competition from other rail operators -there was non- but that from both the motorways and airlines offering short hop internal flights.
What is more, BR could offer a HST125 (mph) service because they controlled the entire working timetable and thus could make the necessary changes to find WTT routes for these significantly faster services without TOC “A” demanding that their much slower service times remain unchanged, on a section of line that does not have and can not have passing loops added for what ever reason.
“The things to avoid include a subsidy system which protects a fossilised service, keeping routes which would be better replaced by new services.”
There is often a very fine line to be drawn between a subsidy system which protects a fossilised service and a subsidy system which protects the needs of those who can not use an existing or replacement alternative. Funny how the pre WW2 Big Four could often keep such routes open though, by simply ‘robbing Peter to pay Paul’, in other words using high profits from one route to subsidise the another, before any dividends or bonuses were paid.
We need a practical approach to the railways, not one based on political dogma, be it Left, Right or Green – sorry, I see little hope so far… đĄ
May 11, 2019
Let me rephrase that please, we need a practical approach to transport in the UK….
May 11, 2019
The big four understood the need to keep diversionary routes in place for engineering work and line blockages.
May 11, 2019
@37/6; Indeed, even BR understood that, until a certain appointment, starting 1 June 1961. Why do politicos always believe that outsiders know better than industry professionals?!
I have no problem in outside people being appointed alongside industry professionals but they should be the checks and balances, not the masters.
May 11, 2019
Unfortunately the DfT tell companies what trains they are going to get and what services they need to run and that is why the companies “look up” for funding. The railways were originally built to profit from freight – passenger services were secondary. No way can they run without subsidy now that freight has gone.
Bryan Harris makes a good point about foreign train operators leeching our subsidies to run cheap services at home.
May 11, 2019
Electrification, automation are the answer.
We could also seek to manage down immigration to below replacement for 10 years or so.
Concentrate on capacity of the main routes with significant integration of the bus/taxi/airport/rail nodes and service.
We should encourage & give priority to mass transport options in / out and around cities at peak times. This means rationing or pricing on key exit routes to favour passenger density or mass transport.
Key coach terminals could be located near motorway hubs with local mass transport being provided from the city centre being provided at a pro-rata mile cost of the full journey to the coach providers by say TFL.
Can we have new trainlines where say hybrid-coaches able to use the railway line space as well as normal roads?
Private helicopter and Jet flights should be restricted & taxed on per capita, per mile emissions on noise, exhausts etc.
May 11, 2019
@anon; “Electrification, automation are the answer.”
Electrification yes, automation no, that is a pipe dream on the ex BR system without massive re-investment (that would rival that of the 1955 modernisation plan), read my comment in the first part of this series of articles by our host for why.
“Can we have new trainlines where say hybrid-coaches able to use the railway line space as well as normal roads?”
Theoretically yes, and it has been tried before, such attempts have always been beset with fundamental problems, sometimes with the safety of the ro-rail wheel-sets. Another issues is the extra weight the vehicles have to carry as road vehicles due to the ro-rail equipment, this impacts the on how much of a fare paying load it will carry, and performance thus point to point timings.
May 12, 2019
Basically automation doesn’t work on ballasted track on the open network – open to the elements and gradients over long distances, that is. That will always need on board staff.
May 12, 2019
Automation will happen.
Technology just gets better , so i would never say never.
It will increase safety and enable more train services.
Hybrid trains – i was thinking tarmac the lines and use tyres for light passenger trains with wider & higher clearance.
Electric trucks are arriving shortly.
Trains/track will change otherwise i am not sure what or who will use them?
Who are the railways subsidised for?
May 12, 2019
The railways are subsidised to decongest our cities – so for everyone.
We’ll have virtual office-ing before we get full automation on the open network. Railways will be obsolete before that happens.
The consequences of a train broken down mid section on a long distance network without a member of staff aboard to override and implement rules and regulations to get things moving again are well known to rail experts in the field. Delay penalties amount to hundreds of thousands of pounds.
May 11, 2019
Demand via need for use dictates which services survive & thrive through being worth paying for.
May 11, 2019
The mess on the railways is a direct consequence of allowing civil servants to design a privatised railway system in compliance with their Brussels’ masters. As well as the deficiencies itemised by JR, there is the fact that fragmenting an inherently unprofitable operation into a multiplicity of for profit businesses meant that inevitably the travelling public would be fleeced twice, once through the increased cost of tickets and once again through the increased taxpayer subsidy to one main component of the operation so that several other businesses could return a ‘profit’. Is there also anything more ridiculous than than a temporary business based on a time limited franchise?
There are natural monopolies and it makes little sense trying to introduce competition into them by artificial means when there is only one possible product and conduit of supply be it water, gas, telephone landlines or railways. All the privatisations and fragmentations of service suppliers have led to nothing more than higher costs for consumers and foreign owned profits without a more responsive service provision; only the removal of the monopoly for the supply of end user appliances which were manufactured in the main by the appalling GEC company which deservedly went bankrupt has been a benefit to consumers.
We can all look forward to an article by JR on how the provision of government by a duopoly of responsive and incompetent suppliers can be replaced by a provision based exclusively on fair competition such that poor performing operations can be deprecated and replaced.
May 11, 2019
…unresponsive..
May 11, 2019
Who is the customer? Well a lot of the time it turns out to be local government!
Most councils have slapped preservation orders on stations most of which are unsuitable buildings and often cost an arm and a leg to maintain.
May 12, 2019
Yes it would have been so much cheaper, and simpler, to have knocked down St Pancras, like was done with Euston in the 1960s, and start a-fresh…
May 13, 2019
Its all very well playing the nostalgia card but tax payers and fare payers expect their money to be used to run trains not a branch of the National Trust !
I expect in a few years time motorists will find their taxes used to preserve such “fine” buildings as Watford Gap or Hilton Park services etc.
May 11, 2019
This design of keeping, track, train and stations as a unit that is run by a private company is the one used in Japan’s cities and it works for them. The costs have remained low, below Japan’s RPI. We could do the same with some of our services but we need to regulate and increase the cost of all transport so it is similar to achieve true competition.
May 12, 2019
@Bruce Blake; You want to be treated as a customer how commuters are treated in Japan, due to under investment in infrastructure, far cheaper to pay station staff to literally push the last possible standing passenger into the train and then shut the doors rather than raise costs due to funding investment…