Was privatisation supposed to bring competition?

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

  1. Chew-chew

    Chew-chew Member

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    In what way were they the glory days? Initially, the nationalised system was run down after the war and saddled with the debt from buying it. The modernisation plan was a missed opportunity with too many types of often ineffective traction brought into service. A period of significant cuts and closures followed and the cash strapped 70s and 80s were hardly glorious. All the while BR lost passenger and freight business hand over fist.

    BR did some things well, such as Intercity, but this really was a time of managed decline rather than glory days.
     
  2. satisnek

    satisnek Member

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    I wouldn't call it 'competition' myself, because it's hardly a level playing field. A fast electrified route, a slower non-electrified route and a mutation of the Euston-Northampton-Birmingham stopping service which was never intended for through passengers. The companies cater for different market sectors. I've always compared them to Sainsbury's 'Basics', 'Be Good To Yourself' and 'Taste The Difference' ranges (I'll leave you to work out which is which!) rather than Sainsbury's, Asda and Tesco.
     
  3. Grumpy Git

    Grumpy Git Member

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    Hint, he got a knighthood, (and I don't mean Ian Duncan Smith).
     
  4. yorksrob

    yorksrob Veteran Member

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    Having used BR in the late 1980's/early 1990's, it certainly didn't feel like managed decline, or a railway losing passengers 'hand over fist '.
     
  5. TUC

    TUC Established Member

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    The fact that there is limited space for competition on some lines surely should not be an argument against competition where it is possible. Look at the ECML and the effect on fares, particularly between Doncaster and London, together with the Open Access benefits for people in Hull, Halifax and other towns where BR lacked the commercial judgement to offer London services.
     
  6. TUC

    TUC Established Member

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    And there were greater benefits from the 'x trains per day on route y' . Given that these were usually lined to minimum.requirements on earliest and last trains and frequencies, it is difficult to see why in most circumstances more complex requirements are needed.
     
  7. yorksrob

    yorksrob Veteran Member

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    The effect of competition on fares on the ECML has been noticable, but sadly not overwhelming. Fares do vary slightly, with GC typically undercutting LNER a bit, but the private operators are still slavishly following the policy of forcing people into AP.

    An alternative, offering reasonably priced walk-on fares would be truly innovative (as happens on some other main lines).
     
  8. XC victim

    XC victim Member

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    I suppose the competition aspect was suppose to be in the bidding for Franchises rather than competing day to day for passengers. It would appear unlikely some would wake up one morning planning to travel from Bristol to Reading but instead deciding to travel from Hull to Halifax because the train was nicer (or cheaper).

    But the franchise idea has some major flaws.
    First the whole idea of the system is that some companies will be better at running their franchise than others. And where there is a winning you also necessarily have to have losers. So you are condemning many passengers to an inferior service.
    Secondly the rail network is a Network, comprising of some well used bits and some not so well used. Those bits that are not so well used are just as vital as the well used bits (you don’t go around getting rid of bits of your body you don’t use). Splitting up the rail network so that means that some franchises are doomed to failure before they begin. Compare say Chiltern with CrossCountry
    Thirdly most passengers are travelling from one place to another. The franchise system completely ignores this. See that lack of discount ticketing for journeys involving more than one TOC or trying to get information at your local station about a rival’s services
     
  9. TUC

    TUC Established Member

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    For the former, what about all thr '&connections' tickets issued by various TOCs?

    For the latter the impartial retailing rules apply. Most stations I am familiar with ehich are served by multiple TOCs havr information on all of them.
     
  10. LNW-GW Joint

    LNW-GW Joint Veteran Member

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    The various temporary "nationalised" TOCs over the years continued to operate in a commercial framework, as was required by the DfT/ORR rules.
    This means things like paying access charges to NR and leasing stock from Roscos.
    They were not permanent monopolies with almost no oversight, as they were under BR.
    Yes, ownership changed, but the underlying rules didn't.
    Even nationalised TOCs have financial targets, known in some places as profits.
     
  11. TUC

    TUC Established Member

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    Sorry, but that is a silly suggestion. It is far more about doing exactly the same journey but choosing between TOCs on the basis of price or other factors.
     
  12. XC victim

    XC victim Member

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    I get loads of emails from CrossCountry and Northern offering me discounted tickets (25% off, £1 give away etc) but only on their services.

    last August I was travelling to Yorkshire from Banbury and back again. At Banbury station for several days there were announcements and notices that services on Sunday would be retimed to run a couple of minutes later due to an event at Wembley. How ever absolutely no mention was made anywhere that all cross country services had been cancelled that day due to industrial action. In fact I only knew about it due to these forums and their twitter account. I knew someone travelling on that day who was completely unaware of any disruption.

    several years ago I was travelling from Sheffield to Derby on Sunday morning. At Sheffield I was told there was no service for 2 hours due to maintenance work. When I pointed out there was a CrossCountry service in 10mins they said, “well if you really want to travel with them “
     
  13. hooverboy

    hooverboy Member

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    totally agree.

    from a customer perspective it's much easier to distinguish between the types of train and the fare payable.
    I think stagecoach/SWT were onto something with their colour coding of trains.It would have been a good idea to adopt such a franchise along these lines nationally.

    ie. how much do you want to pay/ how fast do you want to get there?

    slow= metro trains( a few regional franchises)= red livery.. cheapest tickets.Ticket valid red trains only
    semi-fast ( 1 or 2 national franchise)= blue livery... mid tier.Ticket valid blue or red trains
    fast( 1 national intercity franchise) = white livery.. top tier.Ticket valid All trains.

    (I should really add airport express in there too..lets say bright yellow livery with bloody great plane logo's..nice and easy for passengers to identify)

    It would about halve the number of total franchises, and for the national operators, they will order big quantites of "go anywhere" stock, so cheaper for purchase and maintainance

    and get rid of the advance ticket nonsense.People want simple fares and want to know the cost,not some random generated variable fee
    just have two fare types .Online/E-ticket and TVM/counter purchase.

    A national deadline for peak/off peak would be a good idea. ie set nationally at 9am
     
    Last edited: 28 Dec 2019
  14. Mikey C

    Mikey C Established Member

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    The WCML route to Birmingham isn't especially fast though.

    Looking up some typical times, 1 hrs 21 to New Street versus 1 hrs 46 to Moor Street is near enough, especially as many might prefer the comfort of either the Mk3s or even the Turbostars over the Pendolinos.
     
  15. Mikey C

    Mikey C Established Member

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    I wasn't suggesting there was necessarily down to privatisation BUT was pointing out that saying it's dubious to consider privatisation a disaster when numbers have doubled. Other European countries haven't had the same increases - our increases have been double that in France for example.

    https://www.raildeliverygroup.com/about-us/publications.html?task=file.download&id=469771169
     
  16. coppercapped

    coppercapped Established Member

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    This whole discussion about the privatisation and competition is repeated every few months and all the hoary old arguments and myths keep getting dragged out of the cupboard again.

    The trouble is that people's recollections fade with time — the original discussions and debates about the desire for and the form that any privatisation should take took place a quarter of a century ago. And, as in most things, unless one is sufficiently interested to study the topic closely myths and half remembered arguments tend to be come the accepted wisdom.

    Luckily the events and discussions leading up to the Railways Act 1993 were captured by several contributors who were active players or close to the action and published in the book “All Change. British Railway Privatisation”. It was edited by Freeman and Shaw and published by McGraw-Hill in 2000, nearly 20 years ago. It is a good and easily understandable description of the whole process and includes an analysis of the early years of the privatised railway.


    There have also been a number of academic papers published on various technical aspects of the process and its outcomes.

    Five models for privatisation were put forward by different groups (the Cabinet Office, the DfT, the Treasury and outside parties) at different times in the years before the Railways Act 1993. Very briefly these were:

    * Regional - essentially re-creating the ‘Big 4’ (but could have been up to 12)
    * Track Authority
    * BR plc
    * Sectorisation
    * Hybrid of above.

    So several models were available - and the supporters of each produced their own arguments. The was no ‘basic premise’ apart from the feeling that costs could be reduced and the quality of service improved if the private sector were to be involved.

    The first two options were produced by right-wing ‘Think Tanks’, the Centre for Policy Studies and the Adam Smith Institute. They both proposed breaking up BR before privatisation, but for different reasons.

    The concept of on-rail competition, which initiated this thread, was just one of the models proposed. It required a separate track authority with the train operators bidding for paths and was proposed by the Adam Smith Institute following a similar line of thought which led to bus privatisation and deregulation in 1985.

    The results of the bus policy was not as successful as its chief protagonist, Nicholas Ridley, had envisaged, (partly because of the weak financial position of many of the bus operators — which was even more obvious in the case of BR as it was loss making and required a continuing subsidy) and in the final run-up to the Railways Bill the idea of on-rail competition was dropped because the Government didn’t again want to suffer the bad press that it received after the bus business.

    There were all sorts of arguments within the working groups on how to handle the necessary on-going subsidy and it became clear that bidding for paths on a monthly, bi-monthly or annual basis was not applicable for railways because of the inter-related nature of its operations. So that was dropped as well. It was decided the best way to handle the subsidy issue was for potential train operators to bid for a group of services — a clear figure was available for each area and any cross-subsidy between profitable and loss-making services was up to the individual operators to manage. This avoided the DfT having to identify costs and revenues on an individual service basis.

    The possibility of 'Open Access' was included as the Conservative government wanted to at least offer lip service to the idea of on-rail competition. At the time it was not expected to attract any interest as it was not anticipated that an open access operator would be profitable as all of the rest of the network needed a subsidy. The only difference was that under EU rules an open access operator would only have to pay his marginal costs for track access and not a proportion of the fixed costs.

    So, although on-rail competition was considered in the early phases of the privatisation debate it was dropped as it wasn’t compatible with the realities of railway operation and the bad taste left by bus privatisation.

    Competition on the railways was for a franchise, not between franchises — which were essentially time-limited geographic monopolies — or open access operators. This was understood at the time although it seems that now many are trying to re-write history.
     
    Last edited: 28 Dec 2019
  17. Carlisle

    Carlisle Established Member

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    True, but the routes you mention existed as such in BR times & ticketing could’ve been further tweaked by them in order to achieve largely the same result you describe,without needing to split the entire railway into hundreds of different companies
     
  18. philosopher

    philosopher Member

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    For competition to work on the railways, I think the franchised operators should remain, but some of their paths given to an open access operator. So for example at the moment there are three trains an hour between London and Manchester. If one of these train paths was given to an open access operator then there would be genuine competition between Avanti West Coast the open access operator. I admit though this would only really work well on the busy intercity routes that have at least two trains an hour to ensure that departure time does not become the main determinant of what train operator passengers choose.
     
  19. Railwaysceptic

    Railwaysceptic Member

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    You have to bear in mind that all this was before the Internet, so no, I don't have a link for you to click. The privatisation of the railway was extremely controversial with a wide variety of people pointing out that the price being asked by the Government was far below what many believed to be market value. Consequently the major political players both for and against were constantly being interviewed on TV and radio. Claire Short, for example, repeatedly said she feared the railway would be little more than a property company. The manifesto was one small part of the national debate.

    I imagine a particularly diligent researcher might find transcripts in BBC archives and probably The British Library could produce copies of newspaper/magazine reports of the time.
     
  20. Dr Hoo

    Dr Hoo Established Member

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    Thanks for the response to my question. In the absence of any book citation (or whatever) I will treat the supposed quote with some scepticism.
     
  21. Horizon22

    Horizon22 Member

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    The competition is within the franchise bids as people have said. That's why owning groups throw millions of pounds at developing a bid and writing up the specification with hundreds of extra staff recruited for any bd that's on the table. It can be a very fluid time if you're employed in that area. There's some very limited competition on the East Coast and arguably the routes to Birmingham.

    Now over the past 25 years, whether that's what people came to expect by a "privatised" railway is a different matter. As we've seen however franchises are now being past any Direct Award period for months and then years, the DfT franchising schedule is now a complete work of fiction and it may all get binned in the Williams review.
     
  22. Meerkat

    Meerkat Established Member

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    You assume that a public monopoly would make the same profits as a private operator forced to be more efficient by shareholders and franchise competition. The only way to make a public operator efficient is to cut their budget. The bidders for German local services have been significantly below DB.

    So it is competition then - each trying to peel its target market away from the other providers. Unlike a public monopoly which would pick the line that was most convenient for the operator, provide a flat service for all markets, and the customer likes it or lumps it.
     
  23. satisnek

    satisnek Member

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    Well not quite. As mentioned above, the Marylebone - Snow Hill service started under BR at the time when passenger usage was 'turning the corner', and if the railways had never been privatised then it would certainly have continued as a slower, one-class alternative to the Euston route, primarily aimed at the leisure market. Whether it would have been developed to the same extent that it has been under Chiltern Railways is another issue.

    The slow LNW service (for London - West Midlands traffic) is essentially in competition with road coach services and caters for a completely different market.
     
  24. TUC

    TUC Established Member

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    GC do not force people onto AP (although I think it is mainly rail enthusiasts who seem to have an objection to the concept of AP. Most people welcome the opportunity to pay a lower fare and understand they will pay more for flexibility.). But even on flexible tickets GC gives a significant difference in fares. A GC Anytime Return from Doncaster to Kings Cross is £134 compared to an Any Permitted fare of £221 (and £179 on Hull Trains). Yes, there are a limited number of GC journeys, but I do not think anyone would say they would be better off without the completion and pay £221.
     
  25. 2392

    2392 Member

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    This was one 'privatisation' that Thatcher shied away from, on advise from her Transport Minister Nicholas Riley. The idea he had, was for British Rail to continue pretty well as was. But introduce 'open access', allowing small outfits [like Grand Central, Hull Trains etc] to operate for want of a better term niche services that BR found uncompetitive for whatever reason. As has happened no doubt as an unexpected side effect, open access allowed the likes my outfit [as I'm a member] the North Yorkshire Moors to operate the [in the main] 6 miles Grosmont-Whitby and West Coast to operate the summer steam service on the Fort William-Mallaig section of the West Highland line.
     
  26. Gerald Fiennes

    Gerald Fiennes Member

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    It is sometimes overlooked that there is a significant amount of 'franchise to franchise' competition out there, not just pure open access (GC, HT etc.). XC competes with EC, TPE, EMR, GW and SWR along significant elements of its routes; there are three franchised operators competing on London Birmingham, two to destinations North thereof. This leads to lower fares/better services as well, but effectively is being subsidised by the franchise payments/premia (being reduced).
    The main 'architect' of on track competition was Sir Steve Robson, the key Treasury official of the day. However, politicians were never that keen and, indeed, were readily persuaded that some limit had to put on it through 'moderation of competition' (another great railway acronym) which lasted for eight years and was designed to make the franchises saleable. Without this policy, it is highly unlikely that some of the larger franchises (eg. GW, WC, MML, XC and East Coast) would have been sold. This allowed the proponents to claim that they were interested in the principle of on-track competition without having to face its consequences.
     
  27. LNW-GW Joint

    LNW-GW Joint Veteran Member

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    Freight is of course open access and has full on-line competition.
    Rolling stock privatisation began with the 3 main Roscos dividing up the BR fleet, but is now much more sophisticated with a number of different players, including banks and manufacturers, also local government can own its own stock (eg TfL, Merseytravel), leasing it to the TOC locally.
    A major change since original privatisation has been the way rolling stock is increasingly leased from and maintained by the manufacturer, rather than the TOC.

    Competition on the continent is principally with time-limited operating contracts on relatively small groups of services, closer to our "concession" type of operation (eg LO, ME).
    On high speed lines it is more likely to be by bidding for open access paths using the spare capacity on new lines, a luxury we haven't got.
    Italy has on-line competition between Trenitalia and Ital, and the same model is taking shape in France and Spain.
    Most of the players are familiar state operators in their own country, occasionally with airlines and other backers mixed in.
    All the EU "state operators" are on time-limited contracts with their governments with a declared intent to allow domestic competition in the next few years/decade.
     
  28. Mikey C

    Mikey C Established Member

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    Competition doesn't work very well with a franchising system, as why pay heavily for a franchise if rivals can pick off some of your customers?

    Back in the 50s, 60s, 70s ITV regional franchises were a licence to print money, as the only commercial TV operator in the UK, and the franchises were worth fighting for

    Now we have 100s of channels (plus streaming), so masses of competition instead, and ITV pays minimal amounts to the government.
     
  29. yorksrob

    yorksrob Veteran Member

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    To be fair, in it's defence, GC does have a £54 Wakefield - London off-peak single, which is getting towards affordable walk-on travel (even though anything over £100 for a return fare is stretching it a bit).

    I would regard somewhere in the £30 - £40 range to be a reasonable price to pay for a single, off peak journey between Wakefield and London. Slightly more than this is what the majority of advance fares are pitched at. I do not object to the concept of paying a small premium for flexibility, so long as the overall price is somewhere in line with what I regard to be a reasonable price for a journey. What I object to is where that premium is multiple times the cost of what I regard to be a reasonable price for the journey. In this case, the standard off-peak fare of £118 is not what I would consider to be a reasonable premium for flexibility.

    Of course, as I've said before, what I'd really like to see is something equivalent to the £33 super-off peak return fare from Crewe to London, on the ECML. If on track competition were really working to passengers benefit, something like this would be available.
     
  30. hooverboy

    hooverboy Member

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    not really a fair comparison though,is it?

    back in those days there was a limited amount of bandwidth,general public didn't have access to any of it,and the data rates were abominable.
    these days the equipment has matured to the extent of joe public having access to a fairly substantial amount,outside the "licenced" broadcasters.
    you can say the same for ISP's and Telco's.
    this is still work in progress as the amount of data per user is still increasing exponentially.hence the need for innovation from basic sms/email to the streaming apps we see today.
    It's still very much work in progress with cloud/server based computing(next is streaming games in HD/High FPS), and real time data apps like active traffic management.
    the standard modem you have and the typical 1gb/s LAN gear on your PC motherboard is going to be faster by the order of 10* in the next 5 years or so.
    This is even before we get to really safety critial gear like autonomous vehicle detection.
    the railway will eventually follow suit, first with in cab signalling, and then real time positioning/maintainance.

    from a railway perspective, the real kick in the pants was done in the 1960's/1970's with the advent of widespread motor ownership.
    It gave people the "right here,right now" option to go where they pleased,when they pleased.Something that the train could not provide.

    The railway still has the option of "but we can get you there faster", but at the moment certainly not noticeably so, and is more expensive for sure.

    the best bang for the buck will be to get the signalling systems up to date nationwide.this is NR's remit rather than any specific ToC.
     
    Last edited: 29 Dec 2019

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