Railway subsidies: Worth it or not?

[met331]

I've read with interest the rantings and bitterness as usual towards railstaff on here. Here are just a few corrections and observations. Firstly wages.
The reason they are so high for drivers is quite simply down to greedy TOC's who when the railway was first privatised they decided that despite warnings regarding staffing they would cut their staffing levels by a third. They allowed all the older drivers to retire with a lovely payoff on a friday and by the following monday realised that all the drivers they let go were needed to operate their services.
Now these drivers liked the idea of staying at home and didnt fancy coming back to work on their old wages so the TOC had to offer a very large incentive to get them back. This created a big difference across the network and since then wages have risen to try and balance them out.
As far as subsidies and train operating costs are concerned there really is only one cause and that is the leasing companies who are instructed to keep leasing charges artificially high so as to make newer rolling stock look more attractive.
Now if your Virgin Westcoast and making a profit then thats great lease a fleet of Pendolinos for a little more than you were charged for a fleet of 30 year old electrics then you can make that commitment and look really cutting edge.
However at the other end of the scale Northern Rail who depend on subsidies and have to watch every penny are charged roughly 900k a year for pacer unit that cost around 250k to build.
Now the catch comes in because the arguement here will be why not allow Northern to buy their own new rolling stock and operate it. The reason is that the Government ( the same ones banging on about paying out too much subsidies) forbids the train operating companies from buying their own stock due to the franchise length and no guarantee of retension in the future.
So before we start persecuting staff and judging their wages maybe it may be helpful if those armchair fat controllers learnt a little about the modern railway and how it works rather than trying to make scapegoats of the people who actually make the mess that is the current system operate

 

[Beveridges]

Now if your Virgin Westcoast and making a profit then thats great lease a fleet of Pendolinos for a little more than you were charged for a fleet of 30 year old electrics

Class 90's - Only 13 years old when the Pendolinos were built.

 

[chuckles1066]

There are a lot of people in the press, twitter and on here who complain about the amount of subsidies the TOC's receive. My question to people is this:

Would you rather TOCs stopped operating services that are loss making or would you rather the same level of service was kept with the TOCs getting the subsidies to run services that run at a loss?

How much, exactly, do TOCs receive in subsidies?

 

[ChiefPlanner]

I think you will find that a Pacer costs around 75k a year for leasing -and drivers wages are probably "right" for the skills and safety responsibilities.

Whatever you may think - the Government deems protection of basic rail services to be worth doing - and have protected them in the franchises - if this was the USA then all services - bar a few - would have been long lost. Rail subsidies are tiny compared to the overall Government spend. No doubt the Daily Mail disagrees ...

 

[met331]

Class 90's - Only 13 years old when the Pendolinos were built.

i was refering to the class 87 as they were the mainstay of the VWC fleet

 

[LateThanNever]

I've read with interest the rantings and bitterness as usual towards railstaff on here. Here are just a few corrections and observations. Firstly wages.
The reason they are so high for drivers is quite simply down to greedy TOC's who when the railway was first privatised they decided that despite warnings regarding staffing they would cut their staffing levels by a third. They allowed all the older drivers to retire with a lovely payoff on a friday and by the following monday realised that all the drivers they let go were needed to operate their services.
Now these drivers liked the idea of staying at home and didnt fancy coming back to work on their old wages so the TOC had to offer a very large incentive to get them back. This created a big difference across the network and since then wages have risen to try and balance them out.
As far as subsidies and train operating costs are concerned there really is only one cause and that is the leasing companies who are instructed to keep leasing charges artificially high so as to make newer rolling stock look more attractive.
Now if your Virgin Westcoast and making a profit then thats great lease a fleet of Pendolinos for a little more than you were charged for a fleet of 30 year old electrics then you can make that commitment and look really cutting edge.
However at the other end of the scale Northern Rail who depend on subsidies and have to watch every penny are charged roughly 900k a year for pacer unit that cost around 250k to build.
Now the catch comes in because the arguement here will be why not allow Northern to buy their own new rolling stock and operate it. The reason is that the Government ( the same ones banging on about paying out too much subsidies) forbids the train operating companies from buying their own stock due to the franchise length and no guarantee of retension in the future.
So before we start persecuting staff and judging their wages maybe it may be helpful if those armchair fat controllers learnt a little about the modern railway and how it works rather than trying to make scapegoats of the people who actually make the mess that is the current system operate

Have to wholeheartedly agree. We have to get on to the government who has to own up to which part of the brewery they cannot organise - at the moment it is precisely all of it - including the enjoyable bit!

 

[met331]

further to my previous statement the government has in 2011 now removed the original clause that prevented older rolling stock being re-used cheaply. However a report into the problem was commisioned and concluded that the original high costs of older rolling stock prevented certain tocs from being able to afford new stock or benefitting from cascaded stock when it did become available.

 

[Carlisle]

I've read with interest the rantings and bitterness as usual towards railstaff on here. Here are just a few corrections and observations. Firstly wages.
The reason they are so high for drivers is quite simply down to greedy TOC's who when the railway was first privatised they decided that despite warnings regarding staffing they would cut their staffing levels by a third. They allowed all the older drivers to retire with a lovely payoff on a friday and by the following monday realised that all the drivers they let go were needed to operate their services.
Now these drivers liked the idea of staying at home and didnt fancy coming back to work on their old wages so the TOC had to offer a very large incentive to get them back. This created a big difference across the network and since then wages have risen to try and balance them out.
As far as subsidies and train operating costs are concerned there really is only one cause and that is the leasing companies who are instructed to keep leasing charges artificially high so as to make newer rolling stock look more attractive.
Now if your Virgin Westcoast and making a profit then thats great lease a fleet of Pendolinos for a little more than you were charged for a fleet of 30 year old electrics then you can make that commitment and look really cutting edge.
However at the other end of the scale Northern Rail who depend on subsidies and have to watch every penny are charged roughly 900k a year for pacer unit that cost around 250k to build.
Now the catch comes in because the arguement here will be why not allow Northern to buy their own new rolling stock and operate it. The reason is that the Government ( the same ones banging on about paying out too much subsidies) forbids the train operating companies from buying their own stock due to the franchise length and no guarantee of retension in the future.
So before we start persecuting staff and judging their wages maybe it may be helpful if those armchair fat controllers learnt a little about the modern railway and how it works rather than trying to make scapegoats of the people who actually make the mess that is the current system operate

The scenario you describe above about too many early retirements amongst older drivers then having to tempt them back with higher pay i thought was mainly limited to a mess up on the SWT franchise and not an industry wide problem

 

[30mog]

Might be a good time to say.

If the subsidy is say £5 billion a year. Some of this is wages for 100,000+ railway workers. Who give 25% of it back in income tax. Pay 20% on much of the spending of those wages in the form of VAT. Many of them probably own a car meaning, like everyone else 70% of what they spend on petrol goes back to the government.

Thus, I suspect a £5 billion subsidy is longer term only actually £3 billion?

Now lets talk about how much gets spent on roads...

 

[met331]

The scenario you describe above about too many early retirements amongst older drivers then having to tempt them back with higher pay i thought was mainly limited to a mess up on the SWT franchise and not an industry wide problem

it was but once one company pays a huge salary then the rest have to follow as a precident is set. Aslef can then use that salary as a benchmark that all other companies will eventually have to follow otherwise they lose drivers to better paying companies

 

[notadriver]

Only new light rail/tram systems would employ drivers on well below 30k. Edinburgh will pay its tram drivers the roughly the same amount as its bus drivers get : 20k to start with a maximum of 24k after year 2 and a 40 hour working week. It's DISGUSTING.

Scotrail are advertising for trainee drivers who will likely after the forthcoming payrise once fully qualified be on 42k, a 4 day, 35 hour week with Sundays outside the working week and an enhancement for overtime.

 

[Carlisle]

Only new light rail/tram systems would employ drivers on well below 30k. Edinburgh will pay its tram drivers the roughly the same amount as its bus drivers get : 20k to start with a maximum of 24k after year 2 and a 40 hour working week. It's DISGUSTING.

I agree its not a great wage but considering the tram system was almost terminated at haymarket due to lack of funds its better than no trams at all serving the city centre .

 

[warriorwarlord]

The scenario you describe above about too many early retirements amongst older drivers then having to tempt them back with higher pay i thought was mainly limited to a mess up on the SWT franchise and not an industry wide problem

Ah this sounds familiar, I heard a legend that not long after SWT was formulated as a shadow TOC of BR, Eurostar turned up at Waterloo, the drivers based there realised on the other side of the concourse they could be earning the same pay and conditions that their European counterparts were enjoying and jumped on the boat. I'm not 100% sure if that story is true but it sounds plausible and explains the competitive element of drivers wages.

 

[Gareth Marston]

Might be a good time to say.

If the subsidy is say £5 billion a year. Some of this is wages for 100,000+ railway workers. Who give 25% of it back in income tax. Pay 20% on much of the spending of those wages in the form of VAT. Many of them probably own a car meaning, like everyone else 70% of what they spend on petrol goes back to the government.

Thus, I suspect a £5 billion subsidy is longer term only actually £3 billion?

Now lets talk about how much gets spent on roads...

Rail future published some research that said the £4billion subsidy was around £1.5 billion when you take into account what flowed back directly from industry

 

[30mog]

Can anyone regardless of their political taste tell me the logic of subsidizing something to a point where many still cant afford to use it? Open Return London - Newcastle probably going to be £310-315 from January? A round trip of 540 miles meaning even a gas guzzling 4 x 4 will cover twice the distance with four people for the same - effectively making the fuel cost eight times cheaper than train ticket. So unless its being charged to the company who on earth buys such tickets?

Based on overall government subsidy of £4 billion per annum to the rail industry. Each taxpayer is charged an average of about £200 annually. Based on 23% of railway money coming from subsidy [reports suggest its a farebox/subsidy split of 75:25 steadily changing to 80:20]. Then an average of £870 from each taxpayer would underwrite all the current revenue of the rail industry. And mean the current level of service could be provided free of charge. That said, if it happened current overcrowding on trains might be nothing compared to what would come next.

Thus, people have to be charged something to avoid total anarchy on the railways. Therefore, if I were in charge I would promote a railcard costing about £800 a year that caps fares at perhaps 12p a mile peak and 8p a mile off-peak.

Sounds good and borderline practical doesn't it? Trouble is, it would bring too much disdain from the government as places outside the M25 actually benefit. And a loss of revenue from fuel duty.

 

[chuckles1066]

Can anyone regardless of their political taste tell me the logic of subsidizing something to a point where many still cant afford to use it?

I dealt with some London-based consultants a few months back in my line of work and the senior partner indicated that they had a vacancy due to taking on a new client and because of my knowledge of their product would I be interested?

Patchway - London Paddington annual season ticket = £10,420.

WTF? Does anyone actually pay these fares?

 

[yorksrob]

Can anyone regardless of their political taste tell me the logic of subsidizing something to a point where many still cant afford to use it? Open Return London - Newcastle probably going to be £310-315 from January? A round trip of 540 miles meaning even a gas guzzling 4 x 4 will cover twice the distance with four people for the same - effectively making the fuel cost eight times cheaper than train ticket. So unless its being charged to the company who on earth buys such tickets?

Based on overall government subsidy of £4 billion per annum to the rail industry. Each taxpayer is charged an average of about £200 annually. Based on 23% of railway money coming from subsidy [reports suggest its a farebox/subsidy split of 75:25 steadily changing to 80:20]. Then an average of £870 from each taxpayer would underwrite all the current revenue of the rail industry. And mean the current level of service could be provided free of charge. That said, if it happened current overcrowding on trains might be nothing compared to what would come next.

Thus, people have to be charged something to avoid total anarchy on the railways. Therefore, if I were in charge I would promote a railcard costing about £800 a year that caps fares at perhaps 12p a mile peak and 8p a mile off-peak.

Sounds good and borderline practical doesn't it? Trouble is, it would bring too much disdain from the government as places outside the M25 actually benefit. And a loss of revenue from fuel duty.

I think there are some very fair points made there.

Any service requiring a public subsidy should, be available to as wide a range as possible. With the railway, you have the difficulty that a lot of local services will indeed be heavily used by a wide range of people, including those on lower incomes (and these are the ones most often accused of costing the most in subsidy - though where operating subsidy feeds into capital expenditure, I'm not so sure).

One of the great bonuses IMO of cheap advanced fares is that they have helped to democratise InterCity travel quite a bit in the same way that Freddie Lakers Sky Train helped to democratise air travel, so much so that I think Mr Hammond's assertion that the railways are "a rich man's toy" are unfounded. That said I'm inclined to agree that the balance between cheap advance purchase and expensive walk on fares isn't right on some long distance routes.

Wouldn't requiring travellers to pay an upfront cost of £800 for a railcard be regressive, as the majority of lower income households wouldn't be able to commit to £800 worth of train travel in the first place and the capped railfares per mile would effectively be restricted to the wealthy ?

 

[30mog]

Wouldn't requiring travellers to pay an upfront cost of £800 for a railcard be regressive, as the majority of lower income households wouldn't be able to commit to £800 worth of train travel in the first place and the capped railfares per mile would effectively be restricted to the wealthy ?

No. Even those on modest incomes think nothing of £500 a year to tax and insure a car. And the figure quoted is out of a desire to keep all happy.

 

[chuckles1066]

No. Even those on modest incomes think nothing of £500 a year to tax and insure a car. And the figure quoted is out of a desire to keep all happy.

Your figure is ok to me but you're overlooking the fact that (in this area at least) it's one train an hour if I'm lucky.

My car is parked 12 feet away from me, I can go and get into it at any point I wish, I'm not dictated to by timetables.

And I don't have to share my space (such as it is when your crammed onto a unit that should have three coaches but has turned up with only two) with a bunch of Brits coughing without covering their mouths.

Add to that <insert any number of other reasons that Brits are unpleasant to be around in public places>.

If you asked me to spend £500 (your figure) on travelling by road or by rail, road wins every time.