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Why is there now an obsession with re-nationalisation?

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GrimShady

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It's useful to compare similar projects under BR and post privatisation:
East Coast vs Great Western electrification.
Intercity 125 vs IET

To be fair Network Rail has been able to deliver some projects reasonably well, such as station rebuilds and junction upgrades. Bu these don't feature much interaction with the TOCs.

EC Vs GWR - I think this goes down as a BR win solely because the actually managed to complete it even if the OHLE wasn't the greatest.

IC125 Vs IEP - Another BR win tbh given that the development of IC125 was negligible in comparison and and increase in passenger comfort by MK3, which the IEP has failed in, at least in it's current form.
 
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richieb1971

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Saw grayling on TV say it matters not if nationalised or private because the failings are based on lack of investment.
 

WesternLass

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The whole ‘privatisation’ under Major was done with indecent haste. The Thatcher view that ownership would bring responsible accountability, that owner operators would work harder and reap the rewards failed when the operators were effectively given a licence to print money, irrespective of service levels. The ‘Experiment’ that has been privatisation hasn’t worked, and it’s time to rethink. What goes around comes around....... (and all that from blue blooded Tory Girl Western Lass)
 

quantinghome

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Saw grayling on TV say it matters not if nationalised or private because the failings are based on lack of investment.

If Grayling had a bucket with lots of holes, he'd argue it was empty because not enough water was being poured in.
 

neilmc

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I agree with WesternLass. It's a dodgy car dealer's dream, no effective competition in a market where people are being forced to use the product because the alternatives are even worse and legislation which is basically crooked and allows the producer to get away with giving pretty much any shoddy service they choose whilst the consumer has very limited rights and can be easily criminalised and threatened with exorbitant "costs" for an easily-made mistake which would never apply anywhere else.
 

3141

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I agree with WesternLass. It's a dodgy car dealer's dream, no effective competition in a market where people are being forced to use the product because the alternatives are even worse and legislation which is basically crooked and allows the producer to get away with giving pretty much any shoddy service they choose whilst the consumer has very limited rights and can be easily criminalised and threatened with exorbitant "costs" for an easily-made mistake which would never apply anywhere else.

The section I've put in bold could have been said about BR by somebody speaking in support of privatisation 25 years ago.

The section I've italicised could equally have been said about BR, but mainly it suggests there are people who try to push things as far as they possibly can and get bad-tempered when they don't get away with it.
 

DynamicSpirit

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The whole ‘privatisation’ under Major was done with indecent haste. The Thatcher view that ownership would bring responsible accountability, that owner operators would work harder and reap the rewards failed when the operators were effectively given a licence to print money, irrespective of service levels. The ‘Experiment’ that has been privatisation hasn’t worked, and it’s time to rethink. What goes around comes around....... (and all that from blue blooded Tory Girl Western Lass)

I agree that the privatisation was done hastily and resulted an franchising system that really wasn't fit for purpose. But I think you'd struggle to argue for 'licence to print money, irrespective of service levels' since service levels are very carefully specified by the DfT and largely out of the control of the TOCs (beyond that they can provide higher service levels if they choose), and most TOCs don't really make much money anyway, compared to revenue only a tiny amount is profit. (And all that from a Labour member ;) )

I agree with WesternLass. It's a dodgy car dealer's dream, no effective competition in a market where people are being forced to use the product because the alternatives are even worse and legislation which is basically crooked and allows the producer to get away with giving pretty much any shoddy service they choose whilst the consumer has very limited rights and can be easily criminalised and threatened with exorbitant "costs" for an easily-made mistake which would never apply anywhere else.

How is the legislation crooked? The consumer arguably has far more rights today than in BR days (did BR have delay repay, for example?). Lots of journeys face competition from cars, buses, aeroplanes - and even in a few cases the bicycle. It's very imperfect competition and granted there are few alternatives for journeys into London, but that's the nature of transport - nothing to do with privatisation. And there are some big flows where there is a lot of competition between rail companies where none existed in BR days (look at London to Birmingham for example).

As for 'dodgy car dealer's dream'... How many passengers do you see being fraudulently mis-sold journeys using false advertising, dodgy-car-dealer-style? Very few I'd say (the only questionable area being where people aren't advised of the best fare for their journey, but that's only going to be a small minority of passengers).
 

Barn

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The State has done pretty well out of VTEC. We got Stagecoach/Virgin to take on a huge amount of revenue risk and give many, many millions in premium payments that were ultimately unsustainable with the specification the Government required. Public commissioning, public specification and private risk is a bit of a win for the public sector in many ways.

The key to privatisation is to do it in a way in which the private sector can lose lots of money as well as make it. Although seen as a failure of the system, losses are a big part of capitalism working well - they mean that the profits when made are justifiable. I would be far more worried if no TOC ever failed: we really would then be in 'licence to print money territory'.

What'll happen now is that LNER will be 'profitable' on the basis it will generate a surplus but one which is much less than the premiums paid by VTEC and it'll be held up as an exemplar for nationalisation.
 

quantinghome

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What'll happen now is that LNER will be 'profitable' on the basis it will generate a surplus but one which is much less than the premiums paid by VTEC and it'll be held up as an exemplar for nationalisation.

VTEC's premiums only exceeded the previous nationalised operator by burning through their £165m performance bond. Virgin tried various things to make the line more profitable. They didn't work.
 

Barn

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VTEC's premiums only exceeded the previous nationalised operator by burning through their £165m performance bond. Virgin tried various things to make the line more profitable. They didn't work.

Yes, they didn't work. In the meantime they paid shedloads of cash to the public sector, forfeited their parent company guarantee, and lost money. So long as the performance bond covers the disruption costs, it's hard to see where the hit to the public purse has been. True capitalism (not crony capitalism / corporatism) means allowing companies to fail when they get things wrong.
 

HH

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Yes, they didn't work. In the meantime they paid shedloads of cash to the public sector, forfeited their parent company guarantee, and lost money. So long as the performance bond covers the disruption costs, it's hard to see where the hit to the public purse has been. True capitalism (not crony capitalism / corporatism) means allowing companies to fail when they get things wrong.
Indeed, the Transport Select Committee said the same things. I also get the feeling that they're not impressed with the SoS.
 

gsnedders

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And remember the NAO's view previously was that if no franchise ever fails then the contracts are being let too low; if the franchises never fail then they have a lot of allowance for risk in them that could the majority of the time be going to HM Treasury.
 

USRailFan

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The whole ‘privatisation’ under Major was done with indecent haste. The Thatcher view that ownership would bring responsible accountability, that owner operators would work harder and reap the rewards failed when the operators were effectively given a licence to print money, irrespective of service levels. The ‘Experiment’ that has been privatisation hasn’t worked, and it’s time to rethink. What goes around comes around....... (and all that from blue blooded Tory Girl Western Lass)

Wasn't Thatcher said to actually be against privatising BR?
 
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Isn't everyone missing the point that the national rail network, upon which millions depend to carry out their daily lives and upon which industry depend to deliver the goods to keep the economy going, is far too important to be left to "market forces". Even the shambolic way the industry has been "privatised" shows how the "market" doesn't apply to railways. It's impossible to have true competition, because there are a limited number of paths available on each line at any given time. If market forces were allowed to apply, then any TOC should be allowed to run any train they want at any time they and their shareholders decide it would be most profitable to do so.

Passengers would have the "choice" of a bargain basement offering of a Pacer from "Lidl-rail" or a Pendolino from "Harrods-rail". Cheap and not so cheerful, or 5-star luxury at a premium price. The minute DfT starts meddling in who can run trains, to where and when through the franchise (or management contract) system, market forces disappear and any of the supposed benefits of the free market disappear. But even then, the trains can't occupy the same track at the same time, so there's no real choice.

The current system isn't privatised, its a series of mini-monopolies presided over by bureaucrats with no incentive to improve things for passengers, only to keep as much of the "cost" of running the railway off the Government's public balance sheet as possible. For someone like Grayling and his ilk to whine that it's not their fault the railway is failing but that it's down to lack of investment is tantamount to them visiting every commuter who has had their lives ruined over the past months by the Northern Rail and Thameslink timetable fiasco and punching them square in the face. These are the same passengers who are faced not only with paying higher fares for a worse service, but also having to pay their taxes as well to fund the rest of the railway and the salaries of the idiots who are continually failing to deliver an adequate service.
 

ChiefPlanner

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Wasn't Thatcher said to actually be against privatising BR?

She had enough sense to see it was a Privatisation "too far" compared to relative simple utilities. However - certain factions and no doubt "economic purists" of the Adam Smith Institute and their kind had their way in the Major Government to wreak the policy on the public. They had not much to do apparently , and were looking for new challenges.

Cost us Billions frankly - I am amazed looking back how the railway was kept running through all this re-organisation / business policy changes etc etc (let alone the 360+ days hiatus on rolling stock and the impact on planning for real services , as oppossed to contract management etc) ....the real story has yet to be told ......
 

AndrewE

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She had enough sense to see it was A Privatisation "Too Far" compared to relative[ly] simple utilities. However - certain factions and no doubt "economic purists" of the Adam Smith Institute and their kind had their way in the Major Government to wreak the policy on the public. They had not much to do apparently , and were looking for new challenges.

Cost us Billions frankly - I am amazed looking back how the railway was kept running through all this re-organisation / business policy changes etc etc (let alone the 360+ days hiatus on rolling stock and the impact on planning for real services , as opposed to contract management etc) ....the real story has yet to be told ......
I don't think there are any such things! (relatively simple utilities, that is.) The story of the public water supply (just) in the city of Manchester, which was told in the basement of the Liverpool Rd station of MOSI, makes it clear how if you want a public utility you just have to roll up your sleeves and build it. They had decades of contractors running rings round them, taking money but never delivering a reliable water supply. A bit like lots of "our" utilities now, in fact.
 

ChiefPlanner

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I don't think there are any such things! (relatively simple utilities, that is.) The story of the public water supply (just) in the city of Manchester, which was told in the basement of the Liverpool Rd station of MOSI, makes it clear how if you want a public utility you just have to roll up your sleeves and build it. They had decades of contractors running rings round them, taking money but never delivering a reliable water supply. A bit like lots of "our" utilities now, in fact.

One wonders how (a) Railways were built in the first place for "markets" - there are plenty of serious errors with a good number of basket cases in an era of no sensible competition (b) One has to admire the drive of the Victorians - taking Birmingham as an example - of "Gas and Water socialism" , who both lit the city and provided pure Welsh drinking water from the Elan Valley to any Brummy tap , improving living standards and even making a modest profit which funded such things as Art Galleries and Parks .

Of course , they were not funding in the case of (b) Water Analylists , Merchant Banks , "International Investors" etc......and of course , these were real issues of the time .....
 

AndrewE

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One wonders how (a) Railways were built in the first place for "markets" - there are plenty of serious errors with a good number of basket cases in an era of no sensible competition (b) One has to admire the drive of the Victorians - taking Birmingham as an example - of "Gas and Water socialism" , who both lit the city and provided pure Welsh drinking water from the Elan Valley to any Brummy tap , improving living standards and even making a modest profit which funded such things as Art Galleries and Parks .

Of course , they were not funding in the case of (b) Water Analylists , Merchant Banks , "International Investors" etc......and of course , these were real issues of the time .....
Quite. Lots of small people were fleeced by prospectors and stock agents encouraging them to buy into speculative ventures, although I don't think the bankers were quite as parasitic as they are nowadays, also I'm sure that there weren't as many layers of consultants and contractors.
However I don't think specialist Water Analysts existed as a breed: the LNWR made history when it appointed a chemist at its Crewe works to advise on water chemistry, whose work rapidly spread into all the other areas of manufacturing where a real understanding of the process was essential, like iron and steel-making (to say nothing of paint, soap or grease manufacture!)
 

Barn

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Even the shambolic way the industry has been "privatised" shows how the "market" doesn't apply to railways. It's impossible to have true competition, because there are a limited number of paths available on each line at any given time.

The competition is manifested in the bids for franchises: i.e. which private sector entity will take on the most risk from, and provide the greatest benefit to, the public sector. They are competing not against active competitors but against the hypothetical situation of what their competitors would have done had they won the tender process.

The biggest issue for competition is that fewer and fewer companies think that this is a risk worth taking.
 

ChiefPlanner

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Quite. Lots of small people were fleeced by prospectors and stock agents encouraging them to buy into speculative ventures, although I don't think the bankers were quite as parasitic as they are nowadays, also I'm sure that there weren't as many layers of consultants and contractors.
However I don't think specialist Water Analysts existed as a breed: the LNWR made history when it appointed a chemist at its Crewe works to advise on water chemistry, whose work rapidly spread into all the other areas of manufacturing where a real understanding of the process was essential, like iron and steel-making (to say nothing of paint, soap or grease manufacture!)


I was thinking of modern day "Water Analylists" - up spreadsheet gazers , working out options for increasing margins on acquisitions , (whilst cutting out maintenance and skilled old boys who knew the water areas better than their own children) - about as helpful as a forthcoming so called "Royal" occasion - where the groom is a "Tequila Promoter / or Ambassador" ....check out the Daily Mail. Valuable job that. The LNWR ones did aproper job.

I think of "BR" Divisional Managers post "OFQ" - who looked after all aspects , operations etc - as well as infrastructure - who (if they survived) - got their workload reduced by at least 50% - and the aggregate salary probably more than doubled + bonuses. In my years of BR service - which I am proud of - and I never joined for the money , we were lucky if we got 2 to 3% increment for good performance.

In public service jobs - consider a "Borough Engineer" for say Wembley UDC circa 1948 - apart from keeping a 24/7 watch on all utilities , etc - worked to arrange the Olympics - albeit the Austerity Ones....not quite what recent quangos and Lords got paid for ....
 

ChiefPlanner

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The competition is manifested in the bids for franchises: i.e. which private sector entity will take on the most risk from, and provide the greatest benefit to, the public sector. They are competing not against active competitors but against the hypothetical situation of what their competitors would have done had they won the tender process.

The biggest issue for competition is that fewer and fewer companies think that this is a risk worth taking.

Indeed - and the paucity of interested parties has somewhat diminished over the last few "competitions" - leaving even previously content overseas participants less than keen.

Anyone remember how freight was treated - 3 companies artificially created against market forces ( + RES , and RfD) , all bought by Wisconsin Central who put them back together and then sold on.?

Has market share increased overall. ?
 

DynamicSpirit

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Quite. Lots of small people were fleeced by prospectors and stock agents encouraging them to buy into speculative ventures, although I don't think the bankers were quite as parasitic as they are nowadays,

I think you've been reading too much left-wing propaganda there. The vast majority of 'bankers' are simply ordinary people trying to get their job done in an imperfect world, and you'll find most just as ethical as most other human beings in professional occupations. Doubtless there are a few bad eggs, as there would be in any industry.
 

Mutant Lemming

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I think basically it boils down to having a service run by the people for the people. Unfortunately extremists have long took over the capitalist camp and have brainwashed most people into believing their dogma.
 

cactustwirly

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I think basically it boils down to having a service run by the people for the people. Unfortunately extremists have long took over the capitalist camp and have brainwashed most people into believing their dogma.

Or a service which represents the best value for the taxpayer, whilst providing the necessary investment in the rail service.
 

Barn

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I think basically it boils down to having a service run by the people for the people. Unfortunately extremists have long took over the capitalist camp and have brainwashed most people into believing their dogma.

I'm with you on the "for the people" point. But remember that franchises and timetables, many fares and (increasingly) the finer details of rolling stock allocation, etc, are all specified and commissioned by the DfT. That is already public.

In terms of "by the people" I'm completely non-dogmatic. If the public sector can do it best, fine. If you can shunt risk to a private sector provider for a reasonable sum, that's fine too.

We can argue about the latter point, but it is important to be clear that we have an outsourced / franchised railway, not a private railway. A true private railway would be owned and run by the private sector and it would run such services at such prices as it felt would be most profitable. That is a long way from where we are now.
 

Mutant Lemming

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Or a service which represents the best value for the taxpayer, whilst providing the necessary investment in the rail service.

As we have seen with bus services since 'privatisation' - virtually non existent in many sizeable towns, villages no longer served, staff wages cut - with the resulting drop in standards, increase in accidents etc.
You will never get best value for the taxpayer when some private party has to take their cut.
 

Barn

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As we have seen with bus services since 'privatisation' - virtually non existent in many sizeable towns, villages no longer served, staff wages cut - with the resulting drop in standards, increase in accidents etc. You will never get best value for the taxpayer when some private party has to take their cut.

That's different though. That's the public sector pulling out of bus transport and leaving it to the market. The public sector has not pulled out of railway service provision, it has just contracted out the operational delivery of a specification set by the public sector.
 
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