Why is there now an obsession with re-nationalisation?

[bnm]

And of course HS1 , the infrastructure of which is owned by a Canadian Pension Fund.

Not quite. We still own HS1, we've merely sold a 30 year concession to operate it.

And that concession has been operated by majority UK investment funds since July 2017. The Canadian pension funds sold it on. UK investment companies Equitix and HICL each own 35% of the HS1 shareholding. The remaining 30% is owned by the Government of South Korea's National Pension Service.

 

[takno]

oh God help the railways 11p per litre? absolute peanuts compared to the duty on motorists... or, dare I say it, bus operators!

Trains don't run on the publicly-provided roads. If you are planning on running your car or bus completely off-road then you can buy the 11p stuff too, and save on the road tax to boot.

 

[nw1]

One other comment is that I would make the entire land-based public transport system (train, bus) _integrated_ with through ticketing, almost like what goes on in London on a national scale. This I think is almost more important than whether it's run on the ground by public or private organisations. The main thing is that public transport should be run as public service, not for private profit, with subsidy if need be. If the actual trains and buses are owned by private companies who are paid by government to run the services, that's not so bad as long as the whole system is planned for integration and with an ethos of public service. Switzerland has come up somewhere here, AFAIK this happens in that country. Private companies run services as well as SBB but the whole thing is designed to be integrated. Likewise London.

Try doing a journey like Southampton to Midhurst or Southampton to Swanage and you'll see what I mean. Perfectly doable on public transport, but disproportionately expensive and no attempt to integrate train and bus times. An extension of PlusBus to cover not just suburbs of a town but the rural hinterland would help a great deal.

This doesn't mean getting some inept and clueless politicians to plan the timetables BTW. Timetables would be planned by people with real experience of the industry. The main thing though is to allow people to get around on public transport with good connections and reasonably-priced fares.

 

[nw1]

good bits.... like the trains actually ran? I'm sure those trying to get to work on TL at the moment would prefer a situation where they were spoken rudely to but manage to get to work on time rather than the current situation where they are politely told the system is in meltdown and the TOC is using a calendar rather than a timetable!

That's quite a good summary of BR - yes, I do remember many of the BR staff in the 80s were grumpy old so and sos - but the trains generally ran to time and were not overcrowded even in the morning peak out of somewhere like Haslemere. You just lived with grumpy staff I guess.

 

[B&I]

Absolute safety on the railways is, of course, a desirable aim, but will never be achieved. However, if in achieving an unparalleled level of safety the cost is so high that no one can afford the tickets, people vote with their feet and get in their cheaper cars, buses, trams, motorbikes, planes. This of course means that overall, safety is made WORSE because there is a much greater risk of injury or death in most other transport modes. So excellent safety is good, but reasonable cost and implementation timescale need to be factors in safety investment decisions. Railway safety costs are generally badly skewed compared to other transport modes as the level of safety expected (or even achievable) on other modes is allowed to be much lower. eg - There are no or very few barriers on most roads stopping people stepping onto that road from the pavement - yet the railway is expected to fence off most of its infrastructure in the vain hope of stopping determined suicides and trespassing kids without adult supervision. Is it any wonder rail infrastructure is so expensive when HSE want pallisade fencing all over the place?

Doesn't Britain have more.miles of pedestrian guard rails than the rest of the world put together ?

 

[B&I]

One problem with a nationalised institution (any, not just rail), is that in general there is no or little competition in the same field. So, you are lets say a supervisor or manager or even director in Network Rail, if you get sacked, where might your next job be at the same sort of salary, benefits and job security? So just like in Government, town councils, health service etc, the people in the organisation stick together, inflate their departmental sizes to justify increases, hide problems, cover up bad news and work hard to ensure any blame is spread, so no one loses their job. Indeed you might even get a title from Her Majesty just when the sh&t has hit the fan on countless failed projects.

Are you saying this sort of thing doesn't happen in the private sector.?

 

[Journeyman]

I've yet to see a single argument advanced to explain how a privatised railway actually leads to a better, more efficient service.

But you can't prove a nationalised one will either.

 

[B&I]

This argument id a

Quite , along with a shedload of other subsidies to the Northern Ireland diaspora . Can anyone please explain to me the positive economic contribution to the UK economy of Northern Ireland......

This argument is a sluppery slope whivh will eventually see the profitable UK reduced to a small portion of London. However, that will enable the rest of us to get on with re-creating an economy not entirely dependent on financial services, and we can impose a hard border on the rump UK. And cut off its water

 

[B&I]

Fortunately, it seems that some of us are just naturally more self-aware than others.......

If that's the case, some of us seem to have a natural aptitude for concealing it in their posts on this forum

 

[mpthomson]

I suppose we should wonder how many in the population support the Labour Party's socialism principles of nationalisation but are supporting the Conservatives because they support Brexit above all else.

I would imagine resolving Brexit with success is closer to the top of people's current agendas than nationalisation of the railways and so the status quo remains with the current political landscape ATM. And they (current party) happen to support capitalism and privatisation as a main principal.

The whole issue of re-nationalising rail is very conflicting for Labour, given many of its MPs stance on Brexit. Re-nationalisation of the railways in the way Corbyn/Momentum would like and are trying to sell to the public is illegal under EU law. In order to do it we'd have to be out of the EU and then a Labour government would have to repeal the bit of legislation covering it, as it's been adopted as UK law too.

It's a useful stick to beat the government with but if Brexit isn't towards the harder end it stands zero chance of happening for the foreseeable future. This quest for renationalisation of many industries one of the reasons that Corbyn, McDonnell and the fellow travellers of the hard left are so pro Brexit as it can't legally happen while we're in the EU. The problem he has is that the majority of his party strongly support Remain.

 

[LNW-GW Joint]

yeah it was, wasn't it.... anybody remember Rail Track?

France has funded its last round of high speed lines by joint funding between public SNCF and the private sector (mainly the construction companies who built them).
That's the public-private model which HMG are aiming at for HS2, with funds from major investors (inc overseas, eg China) and pension funds.
The future model for the East Coast Partnership may be something like that too.
The point is to keep much of the capital cost off government books (now that NR is in the public sector and can't borrow on the market).
The weakness of "nationalise everything" is that the government breaches its spending limits and nothing gets done.

 

[DarloRich]

The whole issue of re-nationalising rail is very conflicting for Labour, given many of its MPs stance on Brexit. Re-nationalisation of the railways in the way Corbyn/Momentum would like and are trying to sell to the public is illegal under EU law. In order to do it we'd have to be out of the EU and then a Labour government would have to repeal the bit of legislation covering it, as it's been adopted as UK law too.

It's a useful stick to beat the government with but if Brexit isn't towards the harder end it stands zero chance of happening for the foreseeable future. This quest for renationalisation of many industries one of the reasons that Corbyn, McDonnell and the fellow travellers of the hard left are so pro Brexit as it can't legally happen while we're in the EU. The problem he has is that the majority of his party strongly support Remain.

The problem is the renationalisation angle plays well with large sections of the general public. Without the expert knowledge here those in the real world think they are being ripped off by fat cat foreign owners who are siphoning profit out of our country into theirs. Again I have some sympathy with that view. DB, SNCF and NL aren't running franchises for the goodness of their heart. It must be worth their while.

 

[Teflon Lettuce]

Trains don't run on the publicly-provided roads. If you are planning on running your car or bus completely off-road then you can buy the 11p stuff too, and save on the road tax to boot.

oh? and "not running on the roads" means that trains should be given a huge subsidy on their fuel does it? Fuel Duty is NOT a way of funding roads.... any more than Road Tax is... it is purely a way of the treasury milking the motorist... if you want to make the case that it is because trains are more environmentally friendly then surely ALL public transport should benefit from the same subsidy

 

[Teflon Lettuce]

The whole issue of re-nationalising rail is very conflicting for Labour, given many of its MPs stance on Brexit. Re-nationalisation of the railways in the way Corbyn/Momentum would like and are trying to sell to the public is illegal under EU law. In order to do it we'd have to be out of the EU and then a Labour government would have to repeal the bit of legislation covering it, as it's been adopted as UK law too.

It's a useful stick to beat the government with but if Brexit isn't towards the harder end it stands zero chance of happening for the foreseeable future. This quest for renationalisation of many industries one of the reasons that Corbyn, McDonnell and the fellow travellers of the hard left are so pro Brexit as it can't legally happen while we're in the EU. The problem he has is that the majority of his party strongly support Remain.

how is nationalised industry against EU law? if there is an EU law against it then it hasn't bothered the French, Germans, Dutch, Spanish, Italian etc etc!

 

[LNW-GW Joint]

how is nationalised industry against EU law? if there is an EU law against it then it hasn't bothered the French, Germans, Dutch, Spanish, Italian etc etc!

But it is why they are all having to move to competition in their passenger markets (and hence the current strikes in France), and allow open access.
It's not just EU law. WTO rules also presume competition in transport markets (eg train manufacture).
The main EU rule to date is that infrastructure and operation must be accounted for separately (not necessarily in different or private organisations).
There is absolutely no rule that public ownership is illegal.
Public and private operators coexist in most EU countries (not France, yet).

 

[The Ham]

oh? and "not running on the roads" means that trains should be given a huge subsidy on their fuel does it? Fuel Duty is NOT a way of funding roads.... any more than Road Tax is... it is purely a way of the treasury milking the motorist... if you want to make the case that it is because trains are more environmentally friendly then surely ALL public transport should benefit from the same subsidy

If the TOC's paid tax on fuel then so that would happen is that the government would have to pay money in one hand to the likes of Northern to then get it back in the other via taxes.

Of course given that fuel duty isn't a devolved thing then it could mean that the English Government could get back sine of the extra money that they give to the devolved governments!

 

[Wivenswold]

To add to the excellent post from LNW-GW Joint;

There's a lot blamed on EU rules that's nonsense.

In case of Brexit trolling, simply ask which specific EU Law the troller is looking forward to us changing in the UK in March 2019. The answers are always amusing.

 

[Teflon Lettuce]

If the TOC's paid tax on fuel then so that would happen is that the government would have to pay money in one hand to the likes of Northern to then get it back in the other via taxes.

Of course given that fuel duty isn't a devolved thing then it could mean that the English Government could get back sine of the extra money that they give to the devolved governments!

in the same way that it gives money to councils {partly} for subsidised bus services... which then gets given by the councils to bus companies... who then pay it back to the government in taxes?

 

[RLBH]

oh? and "not running on the roads" means that trains should be given a huge subsidy on their fuel does it? Fuel Duty is NOT a way of funding roads.... any more than Road Tax is... it is purely a way of the treasury milking the motorist... if you want to make the case that it is because trains are more environmentally friendly then surely ALL public transport should benefit from the same subsidy

I think the argument here is that road users should cover the cost of providing roads, in the same way that users of the railway network are expected to cover the cost of running trains, people who need passports are expected to pay for them, and so forth. Fuel duty is an exceptionally blunt way of doing this, vehicle excise duty worse in some ways and better in others. Really it needs to be tackled by means of road pricing based broadly on vehicle weight and miles driven, but such proposals always seem to be set about by the Bright Ideas Squad until they become intrusive and unworkable.

As it happens, I tend towards the view that private motorists probably do cover at least their fair share of the road infrastructure, but the heaviest goods vehicles probably don't. Buses and coaches are presumably somewhere in the middle. In fact, I'd be reasonably happy if a change in transport policy saw passenger rail decrease significantly as a result of freight being priced off the road and on to rail.

And I know some passenger rail services are subsidised. But that isn't done by letting them use the tracks for free - the TOCs are paid by the government to run services, and the TOC then pays Network Rail to use the tracks they run on. That Network Rail is owned by the government doesn't really matter here, the same set-up would apply if the subsidised service were to be provided by bus, ferry or helicopter.

 

[takno]

oh? and "not running on the roads" means that trains should be given a huge subsidy on their fuel does it? Fuel Duty is NOT a way of funding roads.... any more than Road Tax is... it is purely a way of the treasury milking the motorist... if you want to make the case that it is because trains are more environmentally friendly then surely ALL public transport should benefit from the same subsidy

No, it's not a strictly managed charge for road use, and as I've said already it doesn't cover the costs the public sector incurs in providing those roads. It is broadly an attempt to gain some revenue from the users of those roads which is somewhat matched to how much use they make, whilst also taxing the negative externalities of that road use - pumping pollution out right next to other people and the like. It's a pretty blunt instrument, but it isn't terrible at its job.

The main point here is that motorists and bus companies pay the full economic cost of their fuel and a supplement for the pollution, and on top of that they pay an additional amount to cover some but by no means all of the cost of the roads they use to make the journey. Train companies pay the full economic cost of their fuel and a supplement for the pollution, but the amount they pay on top to cover some of cost of the rails they run their trains on is made through track access charges.

You might argue that the subsidy for roads should be higher and that for trains lower, or that both should cover their costs, or anything else you like, and that reducing or increasing the additional tax to motorists would be a way of doing that. Arguing that fuel tax should be equal for road users and non-road users is a simple misunderstanding of why there is a large tax on it in the first place though.

 

[The Ham]

in the same way that it gives money to councils {partly} for subsidised bus services... which then gets given by the councils to bus companies... who then pay it back to the government in taxes?

Yes, however, the railways also pay for access to the tracks that they use which are heavily funded by the government, whilst the buses don't. As such making trains pay tax on their fuel would add in a layer of complexity which didn't exist for the buses.

If bus companies where to be charged for using the roads then maybe bringing in fuel taxes for trains could be seen as fair.

However, there could be an argument for adding a fuel tax for trains which was ring fenced to pay for rail electrification to encourage a switch to more EMU usage.

 

[Teflon Lettuce]

Yes, however, the railways also pay for access to the tracks that they use which are heavily funded by the government, whilst the buses don't. As such making trains pay tax on their fuel would add in a layer of complexity which didn't exist for the buses.

If bus companies where to be charged for using the roads then maybe bringing in fuel taxes for trains could be seen as fair.

However, there could be an argument for adding a fuel tax for trains which was ring fenced to pay for rail electrification to encourage a switch to more EMU usage.

hmmm.... and what, exactly, do buses get for their money by way of infrastructure? bus companies get nothing... they even struggle to get local authorities to provide adequate "stations" ie bus stops/ interchanges {bus stns}... they certainly don't get much in the way of segregated track. One only has to look at Swansea where First put in millions of pounds of investment for the Metro using the FTR with the promise of proper track... ok so there were flaws which meant that it had to be changed.... but guess what.. instead of adjusting the "track" instead the city council has arbitarily decided to completely remove it... to the point where there will not be a single bus lane in the city centre! In fact, seeing as though trains get proper stations and a guaruntee of a fully reserved track I think there is an argument that trains should pay more in fuel tax whilst bus companies pay less... after all your argument is you should pay for what you get... so the more you get the more you pay!

 

[LNW-GW Joint]

The whole issue of re-nationalising rail is very conflicting for Labour, given many of its MPs stance on Brexit. Re-nationalisation of the railways in the way Corbyn/Momentum would like and are trying to sell to the public is illegal under EU law. In order to do it we'd have to be out of the EU and then a Labour government would have to repeal the bit of legislation covering it, as it's been adopted as UK law too.

It's a useful stick to beat the government with but if Brexit isn't towards the harder end it stands zero chance of happening for the foreseeable future. This quest for renationalisation of many industries one of the reasons that Corbyn, McDonnell and the fellow travellers of the hard left are so pro Brexit as it can't legally happen while we're in the EU. The problem he has is that the majority of his party strongly support Remain.

The main issue for Corbyn's Labour is not public ownership per se, which is not illegal, but unfair state support for industries and business generally.
If (say) Labour nationalised steel and started to pump large sums into new capacity, that would be seen as anticompetitive in the EU, and banned.
Similarly, the EU is in dispute with Italy over state support for Alitalia, which would be out of business otherwise.
Rail services in the UK are rather different because it is not a significant cross-border industry, or competes across Europe.
In any case Eurostar and Eurotunnel are not nationalised and do not have a cross-border monopoly.

However if Labour chose to gift train orders to Derby without a competition there would be action from the EU.
As it stands, rail passenger services must be periodically competed on the open market.
We achieve that easily using franchises, although we also restrict bidding to the private sector which is not an EU rule.
Labour would have to change the law if they wanted to avoid putting services out to competition (to public or private operators).
ie a monolithic BR with an indefinite power to run services, and not allowing open access or new entrants, would not be permitted under current legislation.
That's why, as I understand it, Labour is not proposing to "nationalise" freight, open access or rolling stock procurement.
They haven't said what they intend for the TOCs once in public hands, but the law currently says they must be periodically competed for.

 

[Bletchleyite]

oh? and "not running on the roads" means that trains should be given a huge subsidy on their fuel does it? Fuel Duty is NOT a way of funding roads.... any more than Road Tax is... it is purely a way of the treasury milking the motorist... if you want to make the case that it is because trains are more environmentally friendly then surely ALL public transport should benefit from the same subsidy

What, out of interest, is the level of BSOG (Bus Service Operator's Grant, aka previously fuel duty rebate) by comparison?

 

[B&I]

France has funded its last round of high speed lines by joint funding between public SNCF and the private sector (mainly the construction companies who built them).
That's the public-private model which HMG are aiming at for HS2, with funds from major investors (inc overseas, eg China) and pension funds.
The future model for the East Coast Partnership may be something like that too.
The point is to keep much of the capital cost off government books (now that NR is in the public sector and can't borrow on the market).
The weakness of "nationalise everything" is that the government breaches its spending limits and nothing gets done.

Would you say that previous experience of PFI contracts for roads, hospitals and schools in Britain demonstrates that this way of working leads to a good quality product being delivered cheaply and efficiently ?

 

[LNW-GW Joint]

Would you say that previous experience of PFI contracts for roads, hospitals and schools in Britain demonstrates that this way of working leads to a good quality product being delivered cheaply and efficiently ?

Seems to have worked for M6 (Toll) and some big new bridges (Severn, Mersey etc), Heathrow Express, the Thames Tideway Tunnel etc.
Crossrail is at least partly a public-private project, based on contributions from property owners and employers.
The hospitals and schools at least got built (unless it was a Carillion contract).
If HMG hasn't got the debt capacity to fund them 100%, you have a PFI or similar or do without.
Airlines (even cash-rich BA) typically lease half their fleets to keep the capital spend down.
There is allegedly a "wall of money" in savings and pensions funds that the government wants to tap, rather than lower its debt rating.
Denis Healey and Jim Callaghan, and even Gordon Brown, know all about Labour debt exposure, devaluation and austerity.
It works in some sectors, but I'll agree the track record on transport isn't good.
But you can blame incompetent "client" organisations like Railtrack and Network Rail for much of that.

Do you remember the public spending dilemma of the 1970s?
We could have two of: the Channel Tunnel, a 3rd London Airport, or Concorde, but not all three.
Then they found that they couldn't cancel Concorde, because we'd promised the French not to (to stop them doing the same).
We're still waiting for the 3rd London Airport, unless you count Stansted.
The Channel Tunnel eventually got built with private money, as the losing shareholders will attest.
When rail nationalisation actually gets on the agenda, there will be a similar debate about need and affordability.

 

[pt_mad]

The whole issue of re-nationalising rail is very conflicting for Labour, given many of its MPs stance on Brexit. Re-nationalisation of the railways in the way Corbyn/Momentum would like and are trying to sell to the public is illegal under EU law. In order to do it we'd have to be out of the EU and then a Labour government would have to repeal the bit of legislation covering it, as it's been adopted as UK law too.

It's a useful stick to beat the government with but if Brexit isn't towards the harder end it stands zero chance of happening for the foreseeable future. This quest for renationalisation of many industries one of the reasons that Corbyn, McDonnell and the fellow travellers of the hard left are so pro Brexit as it can't legally happen while we're in the EU. The problem he has is that the majority of his party strongly support Remain.

As far as I know labour are still supporting leaving the EU? So nationalisation should be possible after that after the existing law is repealed as you say?

But regardless of that couldn't the franchises just be nationalised in the way that the LNER is. As they come up, set up a state owned holding company to run them on a regional basis in exactly the same way? Presumably that's legal.

Come to think of it why is state ownership of domestic rail operations even illegal under EU law in the first place? At the same time other states have a stake in our railway tocs.

 

[B&I]

Seems to have worked for M6 (Toll) and some big new bridges (Severn, Mersey etc), Heathrow Express, the Thames Tideway Tunnel etc.
Crossrail is at least partly a public-private project, based on contributions from property owners and employers.
The hospitals and schools at least got built (unless it was a Carillion contract).
If HMG hasn't got the debt capacity to fund them 100%, you have a PFI similar or do without.
Airlines (even cash-rich BA) typically lease half their fleets to keep the capital spend down.
There is allegedly a "wall of money" in savings and pensions funds that the government wants to tap, rather than lower its debt rating.
Denis Healey and Jim Callaghan, and even Gordon Brown, know all about Labour debt exposure, devaluation and austerity.
It works in some sectors, but I'll agree the track record on transport isn't good.
But you can blame incompetent "client" organisations like Railtrack and Network Rail for much of that.

Do you remember the public spending dilemma of the 1970s?
We could have two of: the Channel Tunnel, a 3rd London Airport, or Concorde, but not all three.
Then they found that they couldn't cancel Concorde, because we'd promised the French not to (to stop them doing the same).
We're still waiting for the 3rd London Airport, unless you count Stansted.
The Channel Tunnel eventually got built with private money, as the losing shareholders will attest.
When rail nationalisation actually gets on the agenda, there will be a similar debate about need and affordability.

Have a look at how much PFI cost, compared to simply using public money, and how we will be paying several times the value if the relevant assets for decades to come. What about the NHS trusts running out of money thanks to PFI repayments ? Classic case of penny wise, pound foolish

 

[LNW-GW Joint]

As far as I know labour are still supporting leaving the EU? So nationalisation should be possible after that after the existing law is repealed as you say?
But regardless of that couldn't the franchises just be nationalised in the way that the LNER is. As they come up, set up a state owned holding company to run them on a regional basis in exactly the same way? Presumably that's legal.
Come to think of it why is state ownership of domestic rail operations even illegal under EU law in the first place? At the same time other states have a stake in our railway tocs.

It isn't illegal.
But the operations must be competed for periodically, to prevent a monopoly and get value for money.
That's why LNER will have to be refranchised out in due course (on current legislation).
It's also the reason we get Direct Awards for 2 years or so to keep the services going pending a full competition.
Our problem is that there are no public operators to compete with each other (and no comprehension of the need to compete, by the look of things).

 

[EM2]

But the operations must be competed for periodically, to prevent a monopoly and get value for money.

Idle curiosity, but what would happen if no-one wanted to bid for a franchise? Would the Government have to take control, or would they have to give a direct award to the incumbent?