Time for radical reform of the railways

by Amanda Ramsay

The department for transport’s fiasco over the west coast mainline has cost the public purse a staggering amount: £40 million for the delays in negotiations with a startling £100 million estimated as the compensation bill. And all of this before the costs of re-running new bidding processes are taken into account!

The knock-on effect of this incompetence has held-up local and intercity rail services, to and from Bristol and in and around the city. On top of the delay and job insecurity for staff at First Great Western, the costs are hideous at a time of cuts that are threatening vital services in communities across the land.

More than ever, we need a publicly owned and integrated railway.

Public opinion is behind bringing rail back into public ownership, hardly surprising when it is estimated that £1.2billion pounds of taxpayers’ money could be saved every year by re-integrating the railways, simplifying the system for passengers and management alike. Over time this saving could be the equivalent of an across the board cut in fares of 18%.

Using this £1.2bn a year could pay for a gradual acquisition of passenger franchises; train operating companies could simply be absorbed into a public “passenger operations” organisation, as existing private franchises expire.

Remember it’s tax payers’ money not that of private companies that’s paid out literally billions in pounds since privatisation upgrading the tracks and signalling, making possible today’s faster, more reliable and more frequent trains.

Bringing rail back into public ownership is no pipe-dream. This has already happened on the east coast mainline. Labour brought the line back into government control in 2009. £187 million was paid back into the exchequer last year, rather than a few pockets of shareholders.

The beauty of the concept is crystal clear: money made over and above operating costs goes back to the Treasury. This allows for investment and planned reduction in ticket charges. At a time of austerity, both rebalancing the economy and keeping the cost of living under control would be direct benefits.

Operating companies like First Group get millions each year in subsidy to lease trains. There is no reason why that money can’t be used by a public passenger operating service. Then market the tickets to make the money needed to make it all add up.

At present, public money is being wasted because of the complexity and highly fragmented nature of our railways. Large sums of money are lost to the inefficiencies of the mind-bending complexity of contractual agreements between hundreds of companies. This is the Tory legacy of failed privatisation.

Labour’s shadow transport secretary Maria Eagle MP describes the current situation as “a something for nothing culture” across public transport, where train companies make big profits from high levels of public subsidy.

Rail privatisation has failed. The Conservatives promised their much coveted privatised railway scheme would require zero subsidy, which after tens of billions of pounds of taxpayers’ money has proved complete rubbish.

Amanda Ramsay is a Bristol South Labour party community campaigner

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9 Responses to “Time for radical reform of the railways”

  1. James Reade says:

    Why is the line that public support is behind something trotted out so often? Is it thought that somehow this will save effort in actually explaining the merits of something like rail nationalisation?

    Because you wholly fail in that. At no point do you even begin to convince me why the government needs to run the railways. You state “privatisation has failed” – what you mean is that the previous attempt to turn a public entity into a heavily regulated entity has failed. What have is hardly a private rail system – Adam Smith certainly wouldn’t recognise it that way, and neither would any economist worth their weight in salt.

    Explain to me why it is not in the interests of a free market provider of a train service to provide a safe, reliable, comfortable service? Why would they figure it’s better for them to provide an unsafe, unreliable, uncomfortable service? They would make more profit by providing a safe, reliable and confortable service – but oh no, I realise I just mentioned the p-word!

    We don’t need the government to run trains any more than we need them to run airplanes, to run stationery stores, to run supermarkets, etc. The main reason we don’t want them to also is that it would be good to have an innovative and dynamic service that actually meets our needs, that works for us not for protecting itself.

    The reality is the rail industry wants to be nationalised again so it can go back to being a cosy club where their workers are over-protected and hence not sacked when incompetent. I’d like to see incompetent rail workers sacked, the kind that don’t show up for work meaning my train is cancelled meaning I get home an hour later in the evening. Do you really think a nationalised service will achieve that? A nationalised service shielded from the competitive pressures that create a dynamic service that actually serves the customer rather than its own job protection?

    The reason the public want this nationalised beast back is that it is unable to comprehend the complex nature of the beast, and understand that the government is even more incompetent than the private sector at running a profitable, efficient, useful and pleasant to use rail system.

    Oh and private rail systems do work. Don’t cite me numerous examples of failures, I really don’t care – any attempt at privatisation like the one we saw here in the UK has been a botched attempt, creating a grotesquely distorted market – where the distortions are those created by numerous government regulations. These kinds of “privatisations” give privatisation a bad name. The less political meddling in the railways, the better.

  2. Amber Star says:

    @ James Reade

    And yet, you have failed to cite a single example of a country which has entirely private rail companies providing the safe, reliable and comfortable services which you say it would be in their interest to provide. Go on… name one!

  3. john zims says:

    I would guess from your comments that you are too young to have experienced British Rail?

    World war 2 rolling stock,a worthless timetable because so many trains were either late or cancelled,staff who thought it was a privilege for passengers to be allowed to use the service and a flag ship service that was so bad it was affectionately called inter – $hity,oh and did I mention very expensive tickets and ever decreasing passenger numbers.

  4. swatantra says:

    To put it simply privatization does not work when it comes to major industries like Rail and the Utilites, These are basic needs, and only a national integrated transport service can work, or an integrated Energy Supply Service. Itsnot the same for example like having a choice in buying Groceries or a choice in Pay TV Premium Channels from Sky or Virgin.
    So Amanda is right. The Coop Party hs come out with a Peoples Rail policy of mutual ownership, and the Govt should seriously be looking at that.

  5. Robert says:

    I agree with Amanda.

  6. SadButMadLad says:

    Just two sentences from the article are needed to show the stupidity in the whole article.

    “The department for transport’s fiasco over the west coast mainline has cost the public purse a staggering amount…
    More than ever, we need a publicly owned and integrated railway.”

    So because the government made a cock up we need the government (or at least a government run qango) to run it properly.

    What needs to happen is proper and full privatisation without any government meddling. No franchises. No settings standards. No subsidy either. The only company that will be a monopoly will be national rail, and even then other companies might own regions.

  7. SadButMadLad says:

    Amber Star, look up Canada.

  8. Chris Bergin says:

    Surely water. communication, power and other utilities are universal requirements and therefore need to be under the control of the country in which these services are needed. I consider that the selling off of National assests to companies based overseas, with no allegiance to this coutry, to be tantamount to Treason.

  9. Robert the crip says:

    I do not get it we had the government running railways and the power industry it failed, it may have failed as Government normally fails through people running the country, who have show in the main they cannot run a fish and chip shop. That’s why we went down the passivisation route we felt more firms more competition, all we ended up with is cartel and a money making machine with the railways.

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