New Transport Secretary - Louise Haigh

[Dai Corner]

What does that even mean? They can't just take control of something they don't own.

Indeed. They'd have to agree a price with the owners and raise the money by increasing taxes, reducing spending or borrowing. All of which the new Chancellor has said she wouldn't do.

 

[GRALISTAIR]

The only way as I see it is for the new GBR or whatever they call it to start their own ROSCO. In time, it would all come under that umbrella- mind you it would be a long time!

 

[Fazaar1889]

What does that even mean? They can't just take control of something they don't own.

Apologies, was watching the match. I meant buy. But as @dk1 says, it's of course too expensive.

You can't want private sector investment in the UK with one hand, while confiscating their property with the other.
Apart from the sheer capital cost, there are long-term contracts in place (eg for the GWR/LNER IEP fleets, or the Avanti 390s) which include maintenance by the manufacturer.

Fair enough, thanks for the info. Wasn't aware of these kinds of things.

The only way as I see it is for the new GBR or whatever they call it to start their own ROSCO. In time, it would all come under that umbrella- mind you it would be a long time!

For some reason. I had kind of assumed this would automatically be the case.

 

[John R]

Too expensive?

Too difficult?

Not renewing the existing TOC contracts when they expire doesn't cost anything and is relatively easy.

Taking control of the rolling stock would effectively mean some type of nationalisation of the rolling stock companies, or forced purchase of their existing assets. That would cost billions, be highly complex, and the purchase price would effectively have to include the expected profits those companies would make. As most rolling stock companies have finance arrangements in place to pay for the stock's construction, those would need to be unwound too. The only winners would be the big legal firms, who would make a fortune.

There are far more important things for Labour to worry about and allocate financial resource to.

 

[Fazaar1889]

Not renewing the existing TOC contracts when they expire doesn't cost anything and is relatively easy.

Taking control of the rolling stock would effectively mean some type of nationalisation of the rolling stock companies, or forced purchase of their existing assets. That would cost billions, be highly complex, and the purchase price would effectively have to include the expected profits those companies would make. As most rolling stock companies have finance arrangements in place to pay for the stock's construction, those would need to be unwound too. The only winners would be the big legal firms, who would make a fortune.

There are far more important things for Labour to worry about and allocate financial resource to.

With nationalisation going forward, do you think it's likely the government will buy future rolling stock?

 

[John R]

With nationalisation going forward, do you think it's likely the government will buy future rolling stock?

I just can't see it would be a high priority. I would be much happier if any change in DfT's involvement was to specify new stock (and refurbs) to a much higher quality than recent orders have seen.

 

[Nicholas Lewis]

That’s not exactly what he said. The claim was the strikes wider effect on the UK economy was larger than the cost of settling. Though how they account for the ongoing increase in costs from a pay rise versus the limited costs of disruption isn’t clear.
Surely tying the unions into agreeing efficiencies is why this hasn’t been settled already? Numerous posters on here have said they would accept a rise with no alterations to terms and conditions, but that merely kicks the can down the road for making changes.

Apologies didn't mean a pay deal comes with changes to T&Cs now but an acceptance that the unions are key to driving out future efficiencies and taking on the challenge of how the industry ensure more reliable resourcing on non rostered days. This is best worked out with the local reps at each operator who probably can help provide solutions if management accept them at the table on equal terms and this what i see Louise promoting .

 

[dk1]

Not renewing the existing TOC contracts when they expire doesn't cost anything and is relatively easy.

Taking control of the rolling stock would effectively mean some type of nationalisation of the rolling stock companies, or forced purchase of their existing assets. That would cost billions, be highly complex, and the purchase price would effectively have to include the expected profits those companies would make. As most rolling stock companies have finance arrangements in place to pay for the stock's construction, those would need to be unwound too. The only winners would be the big legal firms, who would make a fortune.

There are far more important things for Labour to worry about and allocate financial resource to.

Exactly. I was referring only to the ROSCOs comment.

 

[LNW-GW Joint]

Apologies didn't mean a pay deal comes with changes to T&Cs now but an acceptance that the unions are key to driving out future efficiencies and taking on the challenge of how the industry ensure more reliable resourcing on non rostered days. This is best worked out with the local reps at each operator who probably can help provide solutions if management accept them at the table on equal terms and this what i see Louise promoting .

I was under the expectation that Labour's GBR would mandate/negotiate standard terms and conditions for its TOCs, as Wales and Scotland have done in their patches.
It could do that now with its DOLR TOCs and then roll in the other TOCs when it takes control.
I can't see the GBR TOCs (depending on how they reorganise them) having multiple T&Cs.
Or is this impossible/unlikely for some reason?

 

[JonathanH]

Or is this impossible/unlikely for some reason?

If different staff are being paid different amounts for doing the same job, and have different areas of productivity that they can 'sell', then harmonising terms is going to be very difficult.

 

[dk1]

If different staff are being paid different amounts for doing the same job, and have different areas of productivity that they can 'sell', then harmonising terms is going to be very difficult.

Borderline impossible I’d say.

 

[Nicholas Lewis]

If different staff are being paid different amounts for doing the same job, and have different areas of productivity that they can 'sell', then harmonising terms is going to be very difficult.

and very expensive as it would be have to be the best terms.

 

[jon0844]

Borderline impossible I’d say.

Attempting to do it would mean years of disputes. No union is going to cave in just because it's Labour.

Logistically I can't help but feel that even after taking control of each former TOC they aren't going to simply merge everything into one anytime soon.

 

[dk1]

Attempting to do it would mean years of disputes. No union is going to cave in just because it's Labour.

Logistically I can't help but feel that even after taking control of each former TOC they aren't going to simply merge everything into one anytime soon.

It’ll never happen. We’ve had over 20 years as a TOC with three differing drivers terms & conditions and are no closer to harmonising now than we were in April 2004. Think of that on a national scale and the task is clear to see.

 

[Thirteen]

Leasing rolling stock can end up being cheaper than buying outright and even the likes of TfL sold and leased back the Elizabeth Line trains, they did originally lease the Class 378s but they own them now. I think the 1995 stock is leased from Alstom rather than owned outright.

 

[Andyh82]

I’m worried there will just be a focus on nationalisation as if that will solve everything. The poorly informed general public think whenever there is an issue of any sort, infrastructure faults, short forming etc, the reason for it is because money has been paid to shareholders rather than being spent on fixing the issue.

Northern Rail proves nationalisation doesn’t solve much on its own


I’d like to see a serious long term plan for infrastructure and rolling stock, that ensures people working in these sectors have continuous work, and that they stick to it.

Lots of ‘Boring’ small bottle neck fixing projects rather than big unrealistic projects would be a priority for me

 

[Yew]

Indeed. They'd have to agree a price with the owners and raise the money by increasing taxes, reducing spending or borrowing. All of which the new Chancellor has said she wouldn't do.

Given that the ROSCOS are not providing rolling stock out of civic duty, but for profit on top of their often more-expensive private sector borrowing, surely it would be cheaper to use low cost public finance to reduce the overall cost.

 

[JonathanH]

low cost public finance

Public finance doesn't remain "low cost" if there is seen to be an unsustainable amount of it

 

[jon0844]

I’m worried there will just be a focus on nationalisation as if that will solve everything. The poorly informed general public think whenever there is an issue of any sort, infrastructure faults, short forming etc, the reason for it is because money has been paid to shareholders rather than being spent on fixing the issue.

I am always amazed that people think that nationalisation is going to bring down fares. The only thing that can bring down fares is to either cut services and therefore cut costs (not good for growth) or to increase subsidies to do all the necessary works to bring the network and rolling stock/stations up to the required standards. As you get growth, you need more trains/carriages and more paths, which means upgrading signalling and infrastructure. That's not cheap.

If the DfT wanted to cut ticket prices and make public transport more of an essential service, vital to the economy, and to get people out of their cars to reduce congestion (and pollution until such time all vehicles are electric and charged via green energy) then they could do that even with private operators.

There's also that issue of when you take over control, you no longer have the ability to shift the blame. If the service is awful, it's on you.

It will be interesting to see what Labour decides to do if and when it takes over 'ownership'.

 

[brad465]

I am always amazed that people think that nationalisation is going to bring down fares. The only thing that can bring down fares is to either cut services and therefore cut costs (not good for growth) or to increase subsidies to do all the necessary works to bring the network and rolling stock/stations up to the required standards. As you get growth, you need more trains/carriages and more paths, which means upgrading signalling and infrastructure. That's not cheap.

If the DfT wanted to cut ticket prices and make public transport more of an essential service, vital to the economy, and to get people out of their cars to reduce congestion (and pollution until such time all vehicles are electric and charged via green energy) then they could do that even with private operators.

There's also that issue of when you take over control, you no longer have the ability to shift the blame. If the service is awful, it's on you.

It will be interesting to see what Labour decides to do if and when it takes over 'ownership'.

The first operators' contracts expire later this year IIRC. If it is possible to give them a short term extension to the end of the financial year, this might provide more time to think things through, link with with the next budget and synchronise with taking over other TOC's whose contracts expire in March/April 2025.

 

[Yew]

Public finance doesn't remain "low cost" if there is seen to be an unsustainable amount of it

Then it is fortunate that we have one of the best credit ratings available. If you want to pay down debts, then giving money to a for-profit company that has bought trains at worse interest rates than you have available hardly seems like a sensible way to go about it.

I am always amazed that people think that nationalisation is going to bring down fares. The only thing that can bring down fares is to either cut services and therefore cut costs (not good for growth) or to increase subsidies to do all the necessary works to bring the network and rolling stock/stations up to the required standards. As you get growth, you need more trains/carriages and more paths, which means upgrading signalling and infrastructure. That's not cheap.

Private companies typically have a profit margin built in, and multiple private companies have unnecessary duplications in supporting functions.

 

[Thirteen]

1972 replacement needs to happen soon. I'd expect an announcement on new trains for Northern shortly beforehand so Labour don't risk appearing like all the money is being spent in the south again.

I imagine there will be ways for a Labour Government to give TfL the money for long term upgrades without spending too much dosh.

A commitment to building the entire Bakerloo Line 2024 stock in Goole would be economic growth for that area and a win for London as well. If Siemens is in the running for the tram replacement tender then possibly the trams could be built at Goole but that seems unlikely.

 

[JamesT]

Then it is fortunate that we have one of the best credit ratings available. If you want to pay down debts, then giving money to a for-profit company that has bought trains at worse interest rates than you have available hardly seems like a sensible way to go about it.

This may end up being somewhat circular, but we have a good credit rating because there is a degree of restraint in government borrowing. Borrowing by the ROSCOs is off the balance sheet so doesn’t count. Similarly, the explosion in use of PFI under Blair allowed investment without breaking the EU rules on member states budget deficits and debt to GDP ratio.
The new government has been elected on a promise not to increase borrowing, it seems deeply unlikely they would choose purchasing trains outright over other priorities for spending.

 

[jon0844]

Private companies typically have a profit margin built in, and multiple private companies have unnecessary duplications in supporting functions.

There are many things that would be better run and managed by the Rail Delivery Group precisely to stop such duplications.

 

[Tramfan]

I am always amazed that people think that nationalisation is going to bring down fares. The only thing that can bring down fares is to either cut services and therefore cut costs (not good for growth) or to increase subsidies to do all the necessary works to bring the network and rolling stock/stations up to the required standards. As you get growth, you need more trains/carriages and more paths, which means upgrading signalling and infrastructure. That's not cheap.

If the DfT wanted to cut ticket prices and make public transport more of an essential service, vital to the economy, and to get people out of their cars to reduce congestion (and pollution until such time all vehicles are electric and charged via green energy) then they could do that even with private operators.

There's also that issue of when you take over control, you no longer have the ability to shift the blame. If the service is awful, it's on you.

It will be interesting to see what Labour decides to do if and when it takes over 'ownership'.

There's always the option to blame failures on the previous Government - cleaning up their mess, years of mismanagement etc.

 

[Yew]

This may end up being somewhat circular, but we have a good credit rating because there is a degree of restraint in government borrowing. Borrowing by the ROSCOs is off the balance sheet so doesn’t count. Similarly, the explosion in use of PFI under Blair allowed investment without breaking the EU rules on member states budget deficits and debt to GDP ratio.

I"m glad you've bought up the topic of PFI, it has widely been regarded as an expensive and ineffective mistake. Perhaps we might have finally found an advantage of Brexit!

I would suggest that our credit rating is not due to the total scale of our borrowing, but due to the type of borrowing. Borrowing to fund day-to-day expenses is generally considered unwise, and leads to inflationary issues such as those seen in places such as Zimbabwe. However borrowing to invest, either in new projects that will return more money to the taxpayer than they cost, or in restructuring the cost of existing financial obligations to make them more cost-effective, as would be the case with nationalizing rolling-stock, are typically well received, as they put government finances in a better longer-term position.

What matters for creditworthyness is the relative size of the nations incomings and outgoings, and the idea that the worlds leading financial institutions cannot see the use of for-profit private finance for rolling stock as what it is, an expensive accounting trick.

 

[class ep-09]

It’ll never happen. We’ve had over 20 years as a TOC with three differing drivers terms & conditions and are no closer to harmonising now than we were in April 2004. Think of that on a national scale and the task is clear to see.

The only way I can see it could happen ( same salary and T&C’s for all crew ) is to employ newcomers on new contract countrywide and let the existing employees retire or transfer to the new one .
Similarly to GWR drivers after harmonisation - before 3 different T&C’s now just one GWR driver grade.

 

[Snow1964]

The only way I can see it could happen ( same salary and T&C’s for all crew ) is to employ newcomers on new contract countrywide and let the existing employees retire or transfer to the new one .
Similarly to GWR drivers after harmonisation - before 3 different T&C’s now just one GWR driver grade.

The big problem is this effectively stops anyone moving from one company to another if they think the new T&C will be worse than they currently get. To join a new company will get the new standard terms and conditions and salary, and lose any better legacy terms.

To do voluntary move requires handing in notice and resigning at existing employer. So that is end of legacy T&C for that employee.

Of course and compulsory or TUPE transfer keeps conditions, but no organisation is going to choose inheriting expensive staff if it has a choice.

 

[John R]

The big problem is this effectively stops anyone moving from one company to another. To join a new company will get the new standard terms and conditions and salary.

To do voluntary move requires handing in notice and resigning at existing employer. So that is end of legacy T&C for that employee.

Of course and compulsory or TUPE transfer keeps conditions, but no organisation is going to choose inheriting expensive staff if it has a choice.

You're missing the point that it will be just one organisation going forward, and even if there is a degree of separation, if they are all government owned, it shouldn't make any difference.

 

[Bald Rick]

The big problem is this effectively stops anyone moving from one company to another. To join a new company will get the new standard terms and conditions and salary.

It doesnt stop anyone doing that at all. It might incentivise some drivers not to move, but equally it might trigger some to want to move more quickly.