Was privatisation supposed to bring competition?

Discussion in 'UK Railway Discussion' started by Howardh, 27 Dec 2019.

  1. RealTrains07

    RealTrains07 On Moderation

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    And it could still be fragmented further now :lol:
     
  2. Journeyman

    Journeyman Established Member

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    This is true. There's a whole heap of things I think you'd need to measure, in order to work out how well the industry has done. In some ways, it's similar to bus deregulation, in that there was a very turbulent period early on, followed by some consolidation. The Railtrack era was a mess, but things did stabilise and improve quite a lot after that, and I think there's been some real successes since. Quite apart from anything else, the frequency of services and the number of people they carry has gone through the roof. I'm not saying that's due to privatisation, but it wouldn't have happened if the railway was genuinely as bad as some people say it is. There's also been massive improvements in safety, and the size of the passenger-carrying fleet is, I suspect, somewhat bigger.
     
  3. yorksrob

    yorksrob Veteran Member

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    It's true that there have been some noticable improvements over the past twenty years, but there have also been areas where the railway hasn't kept up. There are two sequential questions - would passenger numbers have increased as much, and how would the railway have responded to such an increase.
     
  4. Essexman

    Essexman Member

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    Privitisation was 'sold' on the basis that there would be competition but that soon became a minor objective, if at all.
    For example handing both Southend to London routes to National Express.
     
  5. Mikey C

    Mikey C Established Member

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    Competition does exist between London and Birmingham, with 3 operators and 2 separate routes, indeed off peak and advance prices are very good value. Indeed thanks to Chiltern, there is now competition between London and Oxford too

    I can't help feeling though that Chiltern compete heavily on these routes at the expense of their "core" stations, I was shocked at how expensive some of their off peak tickets to the likes of Princes Risborough and Aylesbury were in comparison to the Birmingham prices.
     
  6. Journeyman

    Journeyman Established Member

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    I think the answer to the first question is almost certainly yes - the number of people using the railway is hugely dependent on the state of the economy and the travelling habits of people using it. Trends in working and commuting patterns have hugely increased demand for travel, especially as property prices have forced people to live further from their workplaces.

    How BR would have responded if they'd still existed is very much open to debate!
     
  7. yorksrob

    yorksrob Veteran Member

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    True.

    In terms of the original question, privatisation was designed to provide competition - between companies for franchises. How beneficial to passengers this is, depends on whether central Government tries to push subsidy down to unrealistic levels.
     
  8. plarailfan

    plarailfan Member

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    I remember when the rail freight companies were originally set up, Transrail, Load haul, etc, Railfreight Distribution (RFD) said they had been given all the worn out and life expired class 47 loco's. As a result of this, they regularly hired in 56's and 37's from other sectors, which presumably stacked the odds against RFD making a reasonable profit.
    I think RFD and Freightliner were combined into one organisation, as I remember pairs of RFD 37's and pairs of 47's working Freightliner trains on a daily basis.
     
  9. Journeyman

    Journeyman Established Member

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    Having been involved in an assessment of franchise bids a year or two ago, I was shocked by (a) how similar the shortlisted bids were, and (b) how imprecise the whole business is. All this guff about "good news for passengers and taxpayers" that comes out whenever a new franchise is awarded is pretty nonsensical. I question whether it's really made all that much difference over the years.
     
  10. yorksrob

    yorksrob Veteran Member

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    As with any procurement, it's all in the specification.
     
  11. sheff1

    sheff1 Established Member

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    My reading of that Manifesto is different:
    "We believe that the best way to produce profound and lasting improvements on the railways is to end BR's state monopoly"
    "A significant number of companies have already said that they want to introduce new railway services as soon as the monopoly is ended. We will give them that chance."
    "A new Rail Regulator - who will ensure that all companies have fair access to the track - will award the franchises"

    All sound like a proposal for on line competition to me.
     
  12. Journeyman

    Journeyman Established Member

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    That's something that's really changed since the early days. Franchise specs in the nineties were "provide x trains per day on route y", and that was about it. Now, they're incredibly prescriptive, and that's why a lot of previously big players have walked away.
     
  13. yorksrob

    yorksrob Veteran Member

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    If the big players aren't prepared to provide improvements, there's little point in having them there.
     
  14. ForTheLoveOf

    ForTheLoveOf Established Member

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    It's probably inaccurate as I'm sure it depends far more on the maintenance state of an individual loco than anything else, but it's more than a little ironic to see the same class of "life expired" locos still being in squadron freight/charter service 25 years later - now between 51 and 57 years young. And what of the 37s that operated "main line" (replacement) services until just recently...
     
  15. Djgr

    Djgr Member

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    As someone who believes in competition

    I don't really believe in competition, economically, socially or morally. I believe in cooperation.
     
  16. 387star

    387star On Moderation

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    Watch Ken Loach's amazing film 'The Spirit of '45' to remind yourself that once we had the glory days of the Railways Utilities etc under public ownership.

    BR wasn't perfect but it was a hell of a lot better and less costly than the fragmented nightmare we have now. As stated competition has never really existed and competition can be a bad thing too for staff too. A nurse on ITVs 'The dirty war on the NHS' is in tears about how she was made to compete with other staff members to meet performance targets
     
  17. 387star

    387star On Moderation

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    Thankfully the awful Blair Government is far removed from what Labour are now offering
     
  18. ForTheLoveOf

    ForTheLoveOf Established Member

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    Back in the early days, the idea of privatisation really was that private enterprise would see the same sort of efficiency gains that had been achieved when the bus companies were privatised. That's one reason why the bus companies came to dominate the first round of franchises - they just thought it was more of the same as what they were doing in the bus industry. Hence Stagecoach letting loads of staff go on voluntary redundancy and early retirement when they started off with SWT...

    Unfortunately for them, BR had actually established a remarkably tight ship as far as the public sector went (no doubt due to the continuous pressure for savings by the Government during the latter half of its existence). Stagecoach, and the other bus bandits in for a bit of quick cash, soon learned the error of their ways and the industry has never really been the same since.

    Today's industry is about the "innovation" that a very small pool of deep pocketed corporations bidding for a tightly defined specification can offer. In other words, who's betting that this market will go this way, or that market the other. It's not really privatisation in nearly the same sense as it was in the 1990s.

    The only "first generation" franchises that were truly a breath of fresh air were Virgin's West Coast (and to a lesser extent CrossCountry) operation, and arguably Chiltern. Nowhere else was the private sector slated to deliver a substantial upgrade and improvement in services other than "private sector magic™".
     
    Last edited by a moderator: 27 Dec 2019
  19. sheff1

    sheff1 Established Member

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    Ah yes, what a breath of fresh air Operation Princess was. Removal of cross country services from a swathe of stations which had had them for years and, on the routes which remained, replacement of existing stock with inadequate short trains which stank to high heaven with human waste.
     
  20. ForTheLoveOf

    ForTheLoveOf Established Member

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    It wasn't all good, by any means, but the fundamental principles behind what remains of Operation Princess is a lot more useful to most passengers than the irregular hotchpotch of services there were before.
     
  21. al78

    al78 Established Member

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    So do I, but I have a feeling that for a cooperative system to work properly and to the benefit of the population, it would have to conflict with human nature, a bit like communism.
     
  22. tbtc

    tbtc Veteran Member

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    The grass is always greener. People complain about "wasteful" competition and un-coordinated services but then complain about monopolies - you get people who want us to go back to one nationalised railway complaining when one holding company is awarded the franchise for a TOC adjacent to one it already operates - do the people complaining about a "monopoly" between two stations really want a world of different companies bidding for each path and no inter availability of tickets?

    Was it really?

    That's one of the sticks that people like to beat it with but if "competition" was really the goal then the Government wouldn't have leased it out as a couple of dozen franchises that all had local monopolies.

    There were various speeches in the '90s suggesting various types of privatisation (remember the "secretaries in third class" one?) but the version that the Government went for was one full of local monopolies, so I don't think there was ever going to be huge competition (other than routes where Open Access found it viable, and the increasing costs of operations mean that they are few and far between).

    It only seems fair to compare privatisation to the versions that different Governments have tried to deliver (rather than some - possibly well intentioned - possibly simplistic - desire of some politicians, which wasn't reflected in the flavour of privatisation that was chosen)

    BR would probably be running at lower public subsidy... because BR were good at downgrading/closing things on the sly - BR weren't bound by ten/fifteen year franchise commitments with every specification written by lawyers - BR would deal with problems like the Northern "overtime" issue by just withdrawing Sunday services (like they did on a few lines) - they'd have turned a number of stations/lines down to just a token service (or effectively replaced them with a replacement bus service) - it was much easier for BR - whereas the modern privatised railway is lumbered with commitments to maintain minimum levels of service.

    I thought you were complaining about increased subsidies a minute ago? Now you're complaining about unrealistically low levels of subsidy? Which is preferable? Privatisation is apparently damned if subsidies go up and damned when they come down (and damned if the share paid by passengers increases)...

    Yeah, the version of permanent opposition we now have is certainly far removed from those thirteen years of actual Government - much easier to have pure opinions nowadays (without having to deliver anything)

    Agreed - I think a few people have forgotten how bad the service was pre-Princess. Fine if you wanted to travel all the way from Liverpool to Brighton (or Aberdeen to Bournemouth or whatever - insert any pair of far flung cities) and could afford to sit around all day for the one direct train, but not much use if you were doing an everyday/regular journey of up to ninety minutes (i.e. a fairly typical XC passenger). The only trains north of Newcastle were effectively positioning journeys for stock maintained a Craigentinny - the service from Birmingham to York was nominally hourly but with awkward gaps and services that were sometimes via Donny, sometimes via Leeds and sometimes via Donny *and* Leeds - the 158s on routes that people now claim have always been "InterCity"... things are generally a lot better now, other than the length of the Voyagers.
     
  23. Mikey C

    Mikey C Established Member

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    The Blair Labour party is indeed very different from the current Labour party as it won 3 elections with massive majorities whereas in the subsequent 4 elections post Blair Labour have comprehensibly lost...
     
  24. theironroad

    theironroad Established Member

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    Railways are 'natural monopolies' in economic terms, so any attempt at privatisation was going to be limited. Selling pathways between A and B is the newtesy to competition, but multiple operators in single London termini with a!located platforms soon showed that during disruption that it wasn't always feasible.

    I'd reckon that London to Birmingham does provide some decent competition and smaller flows such as Basingstoke or Winchester to Bournemouth if you compare fares.
     
  25. Mikey C

    Mikey C Established Member

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    The current system may be flawed, but as passenger numbers have DOUBLED since privatisation, it's hardly been a disaster. If passenger numbers had gone down and services closed, then yes it would have been a nightmare but the opposite has happened.

    The Beeching Cuts all happened under BR. The Settle and Carlisle closure proposals all happened under BR.
     
  26. yorksrob

    yorksrob Veteran Member

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    I wasn't complaining. I was observing, although you clearly want me to be complaining.

    The Major government promoted privatisation on the basis that it would reduce public subsidy. It clearly failed in that for decades.

    And yes, I certainly believe that some recent franchise agreements have tried to drive down subsidy too far.

    The two statements above are not mutually exclusive or contradictory.
     
  27. ForTheLoveOf

    ForTheLoveOf Established Member

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    I think that the correlation between passenger numbers and ownership may be being mistaken for a causation. It's clearly true that privatisation has not stopped, or rather has enabled, passenger growth. But it's impossible to know whether a BR system would not perhaps have done even better. After all, the railways of 1994 were in most respects unrecognisably different to the railways of 1969. In those 25 years (the length of time the current episode of privatisation has been around so far, depending on your measure of when it started) BR made massive improvements in the main. This, in spite of some of the most vicious funding cuts any surviving industry saw.

    As ever, the only difference that public vs private ownership itself causes is who gets the profits. It's for that reason that, all other things equal, I'm slightly more in favour of public ownership because it means that profits are invested back into the industry (or at least into the Treasury). Unfortunately the media and therefore the public at large believe that a change in the sector of ownership implies other changes, and on that basis demand privatisation, and now nationalisation. The examples of the numerous OLRs that have come about during the privatised era (SET, EC, LNER) have shown that pure ownership is not determinitive of anything other than the end point of profits.
     
    Last edited by a moderator: 27 Dec 2019
  28. theironroad

    theironroad Established Member

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    I think that the myth that passenger numbers have risen is a causal effect of privatisation has been put to rest.

    There's no doubt BR needed to up its game, but with new rolling stock and learning lessons incutomer service, BR would probably have had the same rate of increase.

    Closure of unprofitable branch lines as part of Beeching had far more to do with a shift to personal transport rather than whether the railways were in the public or private sector.
     
  29. geoffk

    geoffk Established Member

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    We should have gone for a London Buses or MacDonalds type of franchising, with three or four train "brands", Inter-City and something like network South east and Regional Railways, with Scotland and Wales having their own franchises as now. Then we wouldn't have money wasted on new train liveries and staff uniforms every few years, no single-operator "walk-on" tickets and open access having to offer something genuinely new like Grand Central, and not just duplicate a franchised service. There could have been a Swiss-style Strategic Timetabling Authority with all operators collaborating, not possible in our system where each operator is seeking to maximise passenger numbers and revenue at the expense of others.
     
  30. ForTheLoveOf

    ForTheLoveOf Established Member

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    You could even call them ScotRail and Transport for Wales. Oh wait...

    I'm confused. If you want open access operators then how do they earn their money? Through the likes of ORCATS? How would you encourage people to spread across fast and slow services on corridors like London to Birmingham?

    You could almost call it the Office for Rail and Road. Oh wait...

    The primary motivation of most franchised TOCs in introducing new services is to meet franchise requirements they'll otherwise be penalised if they don't meet - c.f. TPE's Edinburgh services. The additional revenue from a route is of course a consideration, but with the size of the penalties for non-compliance it is a much smaller consideration.

    So are you saying that it is a bad thing they are trying to meet the franchise specification the Government deemed appropriate? It seems to me, without being too sympathetic to those kinds of outfits, that they are damned if they do and damned if they don't.
     

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