Privatisation vs nationalisation vs the RoW

[yorksrob]

Whilst the famous reshaping report doesn't go into a huge amount of detail it is worth noting that it envisaged a really quite significant liner train network.

Appendix 4 sketches out some detail of around 55 depots connected by relatively small trains up to 680 tons, many over relatively short distances. Such trains would seem to be well within the capability of a Type 2 on many routes, especially as they could operate in multiple if necessary.

We all know that the forecasts for domestic container movement turned out to be embarrassingly optimistic but at least Dr Beeching was willing to give it a try.

I can think of a few other things he should have tried with the network.

 

[squizzler]

I can imagine that in very short order the UK (and USA) will differ from the Rest of World in having public transport in private ownership and so-called private transport in public ownership.

We know railways and busses are in private ownership, but how might private transport be in public ownership? Through collapse of the wheeze of stimulating demand for new motorcars by PCP car loans, that's how. This Guardian article explains the risks. If the car finance outfits and the finance houses that underwrite them were to fail and be bailed out by the government, then all those new cars you see on people's driveways might well be owned by a government entity. Since I gather most cars are brought on PCP these days, and motoring remains the most popular form of transport, under such an eventuality the government would have re-nationalised the UK's transport.

 

[coppercapped]

I can imagine that in very short order the UK (and USA) will differ from the Rest of World in having public transport in private ownership and so-called private transport in public ownership.

We know railways and busses are in private ownership, but how might private transport be in public ownership? Through collapse of the wheeze of stimulating demand for new motorcars by PCP car loans, that's how. This Guardian article explains the risks. If the car finance outfits and the finance houses that underwrite them were to fail and be bailed out by the government, then all those new cars you see on people's driveways might well be owned by a government entity. Since I gather most cars are brought on PCP these days, and motoring remains the most popular form of transport, under such an eventuality the government would have re-nationalised the UK's transport.

When will people understand that the national railways in Britain are NOT, repeat NOT, in private ownership?

And in the USA many rapid transit systems are owned by the municipality or local authorities. Amtrack and the North East corridor is essentially a branch of Federal Government even if outside this area the trains run on privately owned railroads.

Opinions are all very well, but they should be founded on facts.

 

[yorksrob]

When will people understand that the national railways in Britain are NOT, repeat NOT, in private ownership?

And in the USA many rapid transit systems are owned by the municipality or local authorities. Amtrack and the North East corridor is essentially a branch of Federal Government even if outside this area the trains run on privately owned railroads.

Opinions are all very well, but they should be founded on facts.

But we've undergone privatisation, and the powers that be are always eager to tell us that any progress on the railway is due to privatisation, so why wouldn't the public believe that the railways are in private ownership ?

 

[Dr Hoo]

But we've undergone privatisation, and the powers that be are always eager to tell us that any progress on the railway is due to privatisation, so why wouldn't the public believe that the railways are in private ownership ?

Do you happen to have any recent/current references for this comment?

All recent statements from 'the powers that be' (such as DfT, Transport Scotland, TfL and Merseytravel) that I have looked at seem to refer to how much they (as public bodies) are investing with no mention of 'privatisation'.

RDG obviously doesn't count as it has no meaningful power.

 

[BanburyBlue]

Your question regarding the Rest of the World hasn't really been answered. I can't give a comprehensive answer but I can give some indications for those countries in which I take an interest.

On the continent of Europe at the time the railways were developing the supply of private capital was not as great as was the case in Britain so many were built in the form of concessions granted by the Government or by royal decree or licence. To permit the concessionaire to make a profit very few competing lines were permitted by Government although in some cases the cities at the start and end of two routes might have been the same they both served very different areas of the country. This can be most clearly seen in France.

The Belgium railways were built to bind the country together. After the defeat of Napoleon in 1814 the Congress of Vienna created a new United Kingdom of the Netherlands to act as a buffer between France and Prussia but this split during the Belgian Revolution of 1830–1839 resulting in the creation of the three modern nations, Belgium, the Netherlands, and Luxembourg. The Belgium railways were planned by the state in the very early days of railways to link the areas with Brussels.

At the same time the railways in what is now Germany were planned and built by each state, Bavaria, Prussia, Hessen, Württemberg, Baden, Sachsen and so on, which made up the German Customs Union (Zollverein). The routes in each State were generally centred on the respective capital city and the method of funding varied from place to place and line to line.

All this is a long way of saying that most railways in Europe had a great deal of Government involvement from the beginning and practically all of them are now Government owned. The Swiss private railways are often at least partially owned by the Cantons and other local authorities through which they run. Of course the railways in the USA were privately funded and constructed and I think that the Canadian Pacific route in Canada is also private.

Faced with the railways' declining market share the European Union wanted to bring market disciplines into railway operation. The first attempt was the Railway Directive 91/440/EC of 1991 which required that separate accounts for infrastructure and train operation must be kept and that trains run by other than the state administration should be permitted to use the tracks (Open Access). Subsequent Directives formed what is known as the First Railway Package and since then there have been the Second and the Third Railway Packages.

France went to great lengths to keep the SNCF as a monopoly but this is now cracking. In Germany the Federal Government changed the law to (mostly) comply with the EU Directives some years ago so that the individual States (Länder) now commission local and regional services within their area. The successful bidders contract to operate a given number of train-km over a given route for a fixed term. The Land may also specify the type of stock and service frequencies. In some cases the Land acts as a ROSCO. All the usual suspects have won contracts, Abellio, National Express and so on. The Länder claim that large savings have been made following competitive tendering but there are still questions about DB Netz, the infrastructure organisation, giving the DB passenger operations 'sweetheart' deals. In any event DBAG sees the operation of the S-Bahn networks as part of its core business and went to great legal lengths to delay the award of the Nürnberg S-Bahn to National Express so much so that NE had to back out. There is no Rail Regulator in Germany equivalent to the ORR so issues tend to get resolved in the courts.

There are many private freight haulage companies in Germany, some being subsidiaries of international companies and some private short lines.

In the last few years DBAG has lost its long-distance passenger monopoly, but the competition has had a rocky start and operates on only a couple of lines.

Do not think that everything in the foreign garden is wonderful. The reliability of long distance train operation in Germany has been woeful over the past few years (although it now seems to be improving slightly) and there are continual complaints about overcrowding.

The UK has the safest railway in Europe, see the Eurostat statistics.

Thanks - that's very helpful and informative.

I don't think I believed everything in Europe was wonderful - it just seems that we are lead to believe it is.

I'm not sure our current franchise model works (and I'm not saying by that that I want to go back to BR). But as the government are getting £Ms/£BNs in revenue from the franchises I can't see there being much political will to change things. I suppose I was wondering if there were lessons we could pick up from other countries?

 

[LNW-GW Joint]

I'm not sure our current franchise model works (and I'm not saying by that that I want to go back to BR). But as the government are getting £Ms/£BNs in revenue from the franchises I can't see there being much political will to change things. I suppose I was wondering if there were lessons we could pick up from other countries?

I think it's rather the other way round - they are learning from us, mistakes and all.
Our trend is currently to devolve Network Rail management to the nine Routes, who will have powers to do their own thing within the CP model.
Private investment in new infrastructure projects is being sought, not least with HS2 and East-West Rail.
The franchise model looks like sticking around as it has reached a degree of stability, but of course Labour [says it] would bring them all into public ownership.
But they haven't said (ie don't know) how the railway would work or be funded under that model.
Devolution of control of local services to the regions is also happening in fits and starts, although the Treasury never quite lets go of the purse-strings.

 

[HowardGWR]

But we've undergone privatisation, and the powers that be are always eager to tell us that any progress on the railway is due to privatisation, so why wouldn't the public believe that the railways are in private ownership ?

Because they are ignorant of the facts. The press keep telling them that the railways are privatised because journalists are ignorami.

 

[yorksrob]

Do you happen to have any recent/current references for this comment?

All recent statements from 'the powers that be' (such as DfT, Transport Scotland, TfL and Merseytravel) that I have looked at seem to refer to how much they (as public bodies) are investing with no mention of 'privatisation'.

RDG obviously doesn't count as it has no meaningful power.

Pretty much every Ministerial statement on the subject of the railways makes an unfavourable comparison with BR (as opposed to with ten years ago, when electrification had ceased, or fifteen years ago when new trains were few and far between). This is perhaps not surprising now that political changes have made more people consider Nationalisation.

 

[Dr Hoo]

Pretty much every Ministerial statement on the subject of the railways makes an unfavourable comparison with BR (as opposed to with ten years ago, when electrification had ceased, or fifteen years ago when new trains were few and far between). This is perhaps not surprising now that political changes have made more people consider Nationalisation.

Sorry to press my original point, but do you have any recent ministerial quotes relating to 'privatisation', please?

Comparisons with BR are not quite the same thing.

Personally I feel that the general narrative across the political spectrum has changed in the past few years although I accept that not everybody has necessarily noticed (e.g. some journalists).

The nationalisation of Network Rail has been a major factor, of course.

Thanks in advance.

 

[LNW-GW Joint]

Personally I feel that the general narrative across the political spectrum has changed in the past few years although I accept that not everybody has necessarily noticed (e.g. some journalists).
The nationalisation of Network Rail has been a major factor, of course.

Meanwhile the press is happy to lap up this sort of stuff, in response to an RDG initiative to improve the railway's image:

Mick Cash, general secretary of the Rail, Maritime and Transport union, said the RDG's announcement was "just the same old fantasy railway and jam tomorrow, driven by the financial interests of the overseas private companies that have been granted a licence to plunder Britain's railways for another two decades.
"The only national plan that would enable us to build for the future would be to kick out the private racketeers who are robbing us blind and bring the entire rail network under public ownership and public control."

http://www.bbc.co.uk/news/business-41803602

 

[gareth950]

Meanwhile the press is happy to lap up this sort of stuff, in response to an RDG initiative to improve the railway's image:

http://www.bbc.co.uk/news/business-41803602

Why does the RMT have to use such hyberbolic OTT language? Has it occurred to them that they'd get the public on side a lot easier if they didn't?

 

[coppercapped]

Why does the RMT have to use such hyberbolic OTT language? Has it occurred to them that they'd get the public on side a lot easier if they didn't?

I rather suspect that because of the view of the world they (i.e., the management of the RMT) hold, that is their normal way of seeing things. They are not aware of the disconnect with ordinary members of the public - and if they are aware, they don't mind. The style won't change as they see nothing inappropriate about it - otherwise it would have been changed long ago.

 

[yorksrob]

Sorry to press my original point, but do you have any recent ministerial quotes relating to 'privatisation', please?

Comparisons with BR are not quite the same thing.

Personally I feel that the general narrative across the political spectrum has changed in the past few years although I accept that not everybody has necessarily noticed (e.g. some journalists).

The nationalisation of Network Rail has been a major factor, of course.

Thanks in advance.

Actually, comparisons with BR are very apt because the Conservatives are likely to present opposition to nationalisation in this way - it plays well to the same audience who were originally taken in by John Major's proclamations at the time.

From a recent googling:
Chris Grayling:
"Transport secretary warns rail nationalisation would scupper hopes of Cleethorpes-London line"
Grimsby Telegraph 06/06/2017
http://www.grimsbytelegraph.co.uk/n...rt-secretary-warns-rail-nationalisation-93655

Chris Grayling:
"Of all these different reforms, it’s that last one — privatisation — that stands out.
Because it’s the only one that worked.
It didn’t just stabilise passenger numbers.
It transformed them.
And laid a path for future success.
For a growing, competitive, profitable railway that delivered for the passenger and the taxpayer.
And that success is something to bear in mind today."

https://www.gov.uk/government/speeches/rail-renaissance-dealing-with-the-consequences-of-success
Speech to the Transport Times UK Rail Summit, 13/09/2017

Chris Grayling:
"Mr Grayling praised HS2 after attacking Labour's plans to re-nationalise rail services, claiming: "Re-creating British Rail is an expensive, reckless idea - and it won't fix the problems we face today or deliver modernisation that passengers want."
http://www.heraldscotland.com/news/...h_HS2_to_create_Elizabethan_era_for_railways/
The Sunday Herald 03/10/2016

Of these, I have to say its the second example I find particularly untrue, because it seems obvious to me that the foundation for the railways success today was laid as much by British Rail during the 1970's, 80's and early 90's as any other time, but I suppose that's our difference in belief/interpretation/experience etc.

Anyhow - that's the narrative of central Government. It's been the same for many years.

You're welcome btw.

 

[HH]

Mick Cash, general secretary of the Rail, Maritime and Transport union, said the RDG's announcement was "just the same old fantasy railway and jam tomorrow, driven by the financial interests of the overseas private companies that have been granted a licence to plunder Britain's railways for another two decades.
"The only national plan that would enable us to build for the future would be to kick out the private racketeers who are robbing us blind and bring the entire rail network under public ownership and public control."

This is actually a slight change from the normal message as it looks like he's trying to decry two things at the same time - foreign ownership and private ownership. Unfortunately the wires get crossed a little and it's "overseas private companies" that get blamed. All the foreign companies are, of course, state owned and all the private companies are British.

Never mind Mick, never let facts get in the way of a good rant.

With wor Mick on one side and Grey Chris on the other, is it any wonder our railways are the envy of the world?

 

[Dr Hoo]

Actually, comparisons with BR are very apt because the Conservatives are likely to present opposition to nationalisation in this way - it plays well to the same audience who were originally taken in by John Major's proclamations at the time.

From a recent googling:
Chris Grayling:
"Transport secretary warns rail nationalisation would scupper hopes of Cleethorpes-London line"
Grimsby Telegraph 06/06/2017
http://www.grimsbytelegraph.co.uk/n...rt-secretary-warns-rail-nationalisation-93655

Chris Grayling:
"Of all these different reforms, it’s that last one — privatisation — that stands out.
Because it’s the only one that worked.
It didn’t just stabilise passenger numbers.
It transformed them.
And laid a path for future success.
For a growing, competitive, profitable railway that delivered for the passenger and the taxpayer.
And that success is something to bear in mind today."

https://www.gov.uk/government/speeches/rail-renaissance-dealing-with-the-consequences-of-success
Speech to the Transport Times UK Rail Summit, 13/09/2017

Chris Grayling:
"Mr Grayling praised HS2 after attacking Labour's plans to re-nationalise rail services, claiming: "Re-creating British Rail is an expensive, reckless idea - and it won't fix the problems we face today or deliver modernisation that passengers want."
http://www.heraldscotland.com/news/...h_HS2_to_create_Elizabethan_era_for_railways/
The Sunday Herald 03/10/2016

Of these, I have to say its the second example I find particularly untrue, because it seems obvious to me that the foundation for the railways success today was laid as much by British Rail during the 1970's, 80's and early 90's as any other time, but I suppose that's our difference in belief/interpretation/experience etc.

Anyhow - that's the narrative of central Government. It's been the same for many years.

You're welcome btw.

Thank you for these links, which I have now had chance to study. Perhaps it does just boil down to perception.

Two of the links are to newpaper reports that make little or no reference to 'privatisation' as a current political issue or proposal (e.g. in the sense of 're-privatising' Network Rail or selling off residual 'public' systems like LUL and other metros). Privatisation is basically referred to as a historical event that marked a turning point.

Understandably there are references to ongoing investments by private elements of the rail industry, notably in the rolling stock sphere. There is certainly no shortage of mentions of ongoing government investment, whether in the main network or HS2.

The Secretary of State's speech to the Transport Times UK Rail Summit is obviously more definitive as evidence of current thinking. Again it clearly positions 'privatisation' as a historical event that marked a turning point. It quite openly accepts that 'separation' has caused some problems and endorses greater co-operation and integration (but without the need for a major structural upheaval). Meanwhile, government support will continue.

As one who is now a retired observer after over forty years in the industry I can see clearly that in many areas services have been improved beyond recognition since BR, especially in terms of frequency and safety. In an 'old' industry like the railways people are always building on the legacies of the past, be they the Victorian engineers, those who electrified the Southern, who developed the trainload freight model, who recognisied the need for market segmentation or who embraced particular new technologies, etc. It isn't 'just' about BR or whether particular changes started in the private, nationalised or hybid eras.

 

[yorksrob]

Thank you for these links, which I have now had chance to study. Perhaps it does just boil down to perception.

Two of the links are to newpaper reports that make little or no reference to 'privatisation' as a current political issue or proposal (e.g. in the sense of 're-privatising' Network Rail or selling off residual 'public' systems like LUL and other metros). Privatisation is basically referred to as a historical event that marked a turning point.

Understandably there are references to ongoing investments by private elements of the rail industry, notably in the rolling stock sphere. There is certainly no shortage of mentions of ongoing government investment, whether in the main network or HS2.

The Secretary of State's speech to the Transport Times UK Rail Summit is obviously more definitive as evidence of current thinking. Again it clearly positions 'privatisation' as a historical event that marked a turning point. It quite openly accepts that 'separation' has caused some problems and endorses greater co-operation and integration (but without the need for a major structural upheaval). Meanwhile, government support will continue.

As one who is now a retired observer after over forty years in the industry I can see clearly that in many areas services have been improved beyond recognition since BR, especially in terms of frequency and safety. In an 'old' industry like the railways people are always building on the legacies of the past, be they the Victorian engineers, those who electrified the Southern, who developed the trainload freight model, who recognisied the need for market segmentation or who embraced particular new technologies, etc. It isn't 'just' about BR or whether particular changes started in the private, nationalised or hybid eras.

Well, the articles come out quite specifically against nationalisation, which means the status quo. As far as the general public is concerned, the patchwork of companies that came after BR are the privatised railway, so any statement defending the status quo will be seen as defending privatisation. This has been the mood music of central Government for a long time.

This effect is strengthened by the large number of TOC's that appear like private concerns to the public.

This is all in response to the post some time back asking why the general public regard the current set up as the 'privatised' railway.