This is the question Steve Wolmar poses in comment is free.
With banks being nationalised almost daily and the national debt now soaring well over the 40% which used to be Gordon Brown’s target, what about the railways? Could it not be possible to slip them back into the public sector, something that many people would love to see happen?
There is undoubtedly a strong case to be made, since the railways may soon find themselves in financial difficulties.
The railways have always been in financial difficulties. The cost of building, maintaining and operating the infrastructure and fleet is horrendous.
I joined the rail industry in the dying years of British Rail, so I can recall what it was like. As a recently self-employed individual going into a heavily unionised public sector industry, I was appalled at the endemic wastefulness. Much of this was driven by local agreements that appeared to be cast in stone (do you cast stone, I wonder?). And, any attempt to amend these agreements could precipitate a strike. At the very least, it would result in a lack of cooperation when putting together rosters that relied heavily on overtime. On the subject of strikes, I learned first hand how corrosive and pointless such action is. At the end of the 1994 strike, we agreed to the package that was on the table at the beginning – with a few tweaks, but, essentially it was what the new Railtrack management group wanted. So, what was the point? There were those who worked during the strike and as a consequence, working relations were poisoned. Again, what was the point? Nothing was gained and those who did work, did so because they needed to put food on the table and pay the mortgage.
Still, all of this is a digression. I would simply point out to those who hark back to the good old days of BR, that it wasn’t so good. It was more joined up, sure, and that was a good thing. Regulating trains for example was a simpler matter. Generally, the fast trains took precedence, but it was not so unusual to do a little creative regulating to ensure that connections were kept – yes, I did and no, I shouldn’t have. These days, signallers don’t have the same level of autonomy over regulation and, generally, this is probably something we have lost.
We also lost the relationships between various departments. Once Railtrack took over the infrastructure, barriers went up between the train operators, the infrastructure owners and the maintenance companies. It has taken fifteen years to redevelop those relationships.
My work now takes me through all sectors of the industry and generally, what I am finding is a high level of professionalism among the people I see. Generally, on balance, things have improved.
In fact, what New Labour refuses to let on is that the railways are effectively largely publicly-owned anyway. Network Rail, which owns the infrastructure, is a company without shareholders that is dependent on government backed debt (to the tune of £20bn), for its survival. It receives billions in annual grants direct from government and is, to all intents and purposes, a state-run enterprise.
This is the elephant in the room. Network Rail owns the infrastructure, so what Network Rail says, goes – even if it isn’t what they choose to do themselves. Network Rail is, effectively, a nationalised company. Since taking maintenance back in-house, so, too, is that activity.
Steve Wolmar is correct in his general analysis that the taxpayer is paying for this lot. However, he is not right in his desire to have BR back. Things have changed since then – and not all of them for the worse. Okay, okay, not all for the better, either…
But, please, please, whatever happens, don’t let’s have the old BR back, with Bob Crow and cronies effectively running the show, with the return of such things as walking time, restrictive practices and those awful local agreements. Whatever the evils of the current arrangement, nothing will be made better by the government running it. Nothing ever is…
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Update: Apparently, I’m an old timer.
My memories reach further back, to the pre-WW2 “big four” – LMS, LNER, GW and Southern. These [except for the Great Western] were themselves the products of grouping older, smaller companies together. In those days there was still a real sense of pride among railway staff, and a meaningful competitiveness between the companies striving to produce the best service. It was the war, bringing government control, and then nationalisation, and later privatisation to nondescript companies some of whom had no previous experience of railway management, which destroyed the old traditions. The railways should be treated as a precious national asset, and as much freight and passenger traffic moved back on to them and off the impossibly overcrowded roads.
“In those days there was still a real sense of pride among railway staff…”
This, too, is unlikely to happen in any government-run ‘business’….
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Actually, pride in the industry is one of those things that has survived.
I think we should nationalise everything.Gold plated pensions,couple of months sickies,long holidays,good bonus’s,free energy….wonderful.I am now fully converted to Brown the Magnificient.The man is a genious..I just couldn’t see it….nurse..nurse..Iv’e dropped my pill.
Fair enough but the cost of fares now is prohibitive.
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Yes, they are – but nationalisation wouldn’t change that. They are already heavily subsidised. My first paragraph sums up the problem – railways are horribly expensive to build, maintain and run.
LR, you are the expert.
As to the cost of fares and subsidies, let me point out as a Land Value Taxer that the bulk of the wealth/income that railways generate does not accrue to the railway companies – it never did.
There is a famous example recounted in the London Transport museum – when they built the first few stops of the Metropolitan Line, the railway company noticed that land shot up in value round the stations. So they just bought up a swathe of Hertfordshire agricultural land and extended the Metropolitan line for another twenty miles.
The profit they made from selling off the now valuable land was more than enough to pay for the infrastructure.
Applied to today’s situation, if we had Land Value Tax (the least-bad tax), part of it would arise simply because places are near stations (whatever that part is) and this could and should be used for railway maintenance, expansion and subsidising fares, thus returning part of the profits that railways generate for other people back to the railways (whether they are privately or publicly owned is actually irrelevant for this argument).
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The problem with raising revenue through land sales is that they can only do it the once. The big problem with infrastructure costs is that it needs replacing every few decades. At the time of nationalisation, it was in dire need of replacement – the same applied at the time of privatisation. LVT might be a way forward, but my concern is that like road fund tax, it would simply be subsumed into the exchequer and not used for its intended purpose. I simply do not trust government to do anything honestly or competently. I wonder why?
Who actually now decides what is done on the railway long-term?
With ORR, DfT Rail, and NR all wanting different things (the TOC’s are TOLD in their franchises) no wonder the Treasury says NO to the Statement of Funds Available!
LR, agreed. But the point about LVT is that it is (or should be) a truly local tax, which is why it should replace Council Tax, business rates etc.
If the local council knows that it can enhance property values by spending sensible amounts (out of the LVT receipts) on transport (whether roads or railways, public or private, whether new infrastructure, maintenance or fare subsidy) it has a simple break-even calculation; are the potential extra LVT receipts more or less than the amount to be spent? If ‘more’, the money is well spent, if ‘less’, then the money should be spent on something else (or used to reduce LVT bills).
If councils did the same calculation to their army of snoopers, 5-a-day advisors and climate change officers, then all these people would be getting their P45s within days.
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Your last paragraph says it all, really.
I worked for British Rail and Railtrack for many years, and I feel that Longriders comments are a little one sided.
No doubt there were some restrictive practices, but the management of British Rail, particularly in the last dozen years was pretty good, managing a very tight and unreliable income very well and introducing many innovations.
The proof of the pudding of course is whether privatisation has led to a step change in the quality of the railway system. Obviously there has been improvement, but there was constant improvement under BR management. For privatisation to be worthwhile there must be a significant improvement in the rate of progress. I can’t see this with the passenger railway, for instantance the aquisition of new stock has proceeded at about the same rate, but the privatised freight railway has reversed a trend of falling or static traffic levels.
The privatised passenger railway has also benefitted from higher subsidies to directly cushion fares, yet the private companies have been unable to improve on BRs rate of increase of carryings, relative to national economic conditions. Now the Treasury is starting to insist that fares must cover 75% of income (as BR was obliged to do) we shall have to see how they fare!
Hardly one sided – I have pointed out both the good and the bad I experienced from before, during and subsequent to privatisation. I stand by my stance – I would hate to see a return to the days of BR. Whatever is wrong with the industry, having it managed by government will only make things worse, not better.