Why is there now an obsession with re-nationalisation?

[Gareth Marston]

Absolutely. The DfT is confused about what it should be doing and doesn't have either the skill set or the right attitude - the civil service is all about process (how things happen) rather than product (making sure things do happen when they should).
.

In addition their doing things in silos seemingly believing that "goodies in franchise agreements" can be delivered without reference to the wider railways ability and capacity to deliver things outside of the control of the franchisee. The recent problems with electricification, thameslink timetable Big Bang etc clearly show that DfT don't understand how the railway works and what it can and can't do.

 

[Railwaysceptic]

So, the Big Four could have avoided nationalisation, so long as the government bunged them a massive buyout. That sounds familiar, alright: it's how our wonderful modern day 'free market' works time and time again, from badly-run railway franchises to reckless and corrupt banks. The fact that it still costs huge amounts of taxpayers' money, and doesn't lead to any better service, doesn't matter, so long as right wing ideologues can sleep safe at night, knowing that something hasn't been nationalised.

Whatever your view about the nationalisation of the railways by Atlee's government, it was not done because of any desire to help the railways, the railway companies or the travelling public. It was done because Labour dogma said it had to be done.

The "big four" had all suffered considerably during World War Two and had not been properly compensated for the services provided. It's quite possible that they might have been able to borrow at commercial rates and use the money to repair much of their infrastructure. Remember: the railways still generated a cash surplus in those days. It is not certain they absolutely needed a public handout.

 

[coppercapped]

Whatever your view about the nationalisation of the railways by Atlee's government, it was not done because of any desire to help the railways, the railway companies or the travelling public. It was done because Labour dogma said it had to be done.

The "big four" had all suffered considerably during World War Two and had not been properly compensated for the services provided. It's quite possible that they might have been able to borrow at commercial rates and use the money to repair much of their infrastructure. Remember: the railways still generated a cash surplus in those days. It is not certain they absolutely needed a public handout.

Quite so.

(The dogma dates back to Sidney Webb who wrote the original Clause iV of the Labour Party's constitution which was adopted in 1918. This read:

To secure for the workers by hand or by brain the full fruits of their industry and the most equitable distribution thereof that may be possible upon the basis of the common ownership of the means of production, distribution and exchange, and the best obtainable system of popular administration and control of each industry or service.

The theory was admirable, but didn't mention the customer. Even Marx recognised that the purpose of all this manufacturing was consumption...).

 

[Gareth Marston]

Quite so.

(The dogma dates back to Sidney Webb who wrote the original Clause iV of the Labour Party's constitution which was adopted in 1918. This read:

The theory was admirable, but didn't mention the customer. Even Marx recognised that the purpose of all this manufacturing was consumption...).

And the 1993 Railways Act came from the same sort of blinkered ideological thinking stable....

 

[DynamicSpirit]

Quite so.

(The dogma dates back to Sidney Webb who wrote the original Clause iV of the Labour Party's constitution which was adopted in 1918. This read:

The theory was admirable, but didn't mention the customer. Even Marx recognised that the purpose of all this manufacturing was consumption...).

And the 1993 Railways Act came from the same sort of blinkered ideological thinking stable....

Yes I think between the two of you, you've summed things up very well. The railways were nationalised, and then privatised, on both occasions for basically ideological reasons. Both times, the Governments involved thought they were doing good, but on neither time had they seriously thought through whether what they were doing would actually help the industry.

I have some sympathy with the nationalisation rationale - because at the time, noone had had enough experience of nationalised industries in the UK to appreciate how they would work in practice, or what lack of competition would do. And because there were very bitter memories of awful exploitation of employees by large uncaring private companies prior to WWII (though I'm not sure whether the 'Big 4' railway companies were guilty or not in that regard). I have less sympathy with the privatisation because I feel it really ought to have been obvious that the competition that's necessary to spur private innovation just wasn't sufficiently present in the privatisation model that the Government picked.

My fear is that, if we do see a Labour Government in the near future, the railways will get nationalised once again for ideological reasons rather than because serious thought has gone into how they could work better as a nationalised industry - and while this won't be disastrous, it will result in a change of ownership without actually changing anything significant on the ground, so it'll basically be a few wasted years not solving things that need to be fixed. On the other hand, that's arguably no worse than a Tory Government unnecessarily going out of its way to keep everything private and franchised whether that's appropriate or not - again for ideological reasons.

 

[Gareth Marston]

Yes I think between the two of you, you've summed things up very well. The railways were nationalised, and then privatised, on both occasions for basically ideological reasons. Both times, the Governments involved thought they were doing good, but on neither time had they seriously thought through whether what they were doing would actually help the industry.

I have some sympathy with the nationalisation rationale - because at the time, noone had had enough experience of nationalised industries in the UK to appreciate how they would work in practice, or what lack of competition would do. And because there were very bitter memories of awful exploitation of employees by large uncaring private companies prior to WWII (though I'm not sure whether the 'Big 4' railway companies were guilty or not in that regard). I have less sympathy with the privatisation because I feel it really ought to have been obvious that the competition that's necessary to spur private innovation just wasn't sufficiently present in the privatisation model that the Government picked.

My fear is that, if we do see a Labour Government in the near future, the railways will get nationalised once again for ideological reasons rather than because serious thought has gone into how they could work better as a nationalised industry - and while this won't be disastrous, it will result in a change of ownership without actually changing anything significant on the ground, so it'll basically be a few wasted years not solving things that need to be fixed. On the other hand, that's arguably no worse than a Tory Government unnecessarily going out of its way to keep everything private and franchised whether that's appropriate or not - again for ideological reasons.

Today's clamor from the general public for a return to nationalization is not coming from an ideological angle - they just know the current system is failing and are rejecting it. The Tory's are desperate to prove that the current system is working so have accepted or specified multiple unrealistic bids of jam tomorrow to placate the public in a sort of tph frequency arms races that takes no account of the underlying ability of the infrastructure or planing systems ability to deliver and have just exacerbated discontent this summer.

 

[LNW-GW Joint]

The idea in the 1990s was that the railways would be a regulated utility, like electricity, gas, telecoms, water, aviation etc.
The ORR is just one of several similar industry regulators which have had varying degrees of success in their sectors.
The railways don't exist in isolation, they have to be taken along with the other national assets and run accordingly.
I still can't quite get the Labour logic about all this, because they are not proposing the "nationalisation" of all the utilities, still less the coal and steel industries which was their 1940s mantra.
These days the fabled "triple alliance" of coal, steel and rail has no meaning.

At the bottom of this is why the government should be running (as opposed to controlling) these industries.
The 1948 nationalisations, as per Clause 4 and all that, put each entire industry in government hands (the staff effectively became civil servants).
These evolved somewhat in the 1960s/70s, and the privatisations of the 1980s/90s put most of them in the private sector, but the railway was left in a curious half-privatised state.
Nobody talks today of nationalising telecoms and aviation, they are too successful as they are, with UK firms in those sectors being globally significant.
The energy sector is not popular but is not really targeted for nationalisation (bar nuclear which has never been privatised).
Railways, and perhaps water, seem to be different. Why?
What is it about railways that people think the government should run them on a day-to-day basis?
And doesn't it do that already if somewhat at arm's length via the TOCs (and directly with Network Rail)?
I'm at a loss to know what controls the government would get from "nationalisation", that it doesn't already have via direct ownership or franchise specifications.

The unions seem to want an enlarged Network Rail with the TOCs folded into it (ie insourced), making the entire operation "in house".
Given Network Rail's organisational, management and performance shortcomings I doubt this it what will happen.
I would expect "nationalised" TOCs to remain separate, along with private freight and open access, and still regulated by a body like ORR.
That also gives scope for separate operation of (eg) HS1/2, Heathrow Express and the various devolved regional systems, and allows new entrants.
Otherwise, the railway becomes a monolithic, closed body like it was under BR, and I don't think this is likely to happen.
I'd also remind folk that BR ended as effectively 4 separate business-oriented railways (Intercity, NSE, Regional and Freight).
The old Big 4-based geographic Regions were abolished in 1993, before privatisation started, and folded into the business sectors.

The politicians don't seem to have got their heads round this at the moment.
Chris Grayling is intent on his East Coast Partnership (also a merger of NR Route and TOC) and clearly wants a different system that the current one.
Network Rail is well on the way to being devolved to its individual Routes with a supporting centre.
He also believes it's the way to get big new money into the railway (particularly infrastructure).
Meanwhile Labour just parrots the nationalisation card, as though that solves every problem.
They need to put up some more detailed analysis of what they intend before we all vote next time, with costs attached.
By the time they get in, the railway may look significantly different to how it does today, and be harder to unpick.
Extension of public ownership is all very well, but there's a downside when the IMF comes calling with austerity conditions in order to fund the government loans.
Labour had a nightmare in 1974-79 on government debt, and the Tory privatisations were the result.

Membership of the EU constrains some of the government's actions, but contrary to common belief does not ban public ownership or operation.
It does mandate a level of competition on the railway, which we interpret as franchises, as well as the technical interoperability standards (TSIs).
Leaving the EU notionally gives us more freedom, but depending on what trade agreements we end up with we could find similar rules apply in the future.
The public-private partnership we have now may be unsatisfactory in many ways, but I doubt the private part of it is about to be completely wiped off the map.

 

[B&I]

Yes I think between the two of you, you've summed things up very well. The railways were nationalised, and then privatised, on both occasions for basically ideological reasons. Both times, the Governments involved thought they were doing good, but on neither time had they seriously thought through whether what they were doing would actually help the industry.

I have some sympathy with the nationalisation rationale - because at the time, noone had had enough experience of nationalised industries in the UK to appreciate how they would work in practice, or what lack of competition would do. And because there were very bitter memories of awful exploitation of employees by large uncaring private companies prior to WWII (though I'm not sure whether the 'Big 4' railway companies were guilty or not in that regard). I have less sympathy with the privatisation because I feel it really ought to have been obvious that the competition that's necessary to spur private innovation just wasn't sufficiently present in the privatisation model that the Government picked.

My fear is that, if we do see a Labour Government in the near future, the railways will get nationalised once again for ideological reasons rather than because serious thought has gone into how they could work better as a nationalised industry - and while this won't be disastrous, it will result in a change of ownership without actually changing anything significant on the ground, so it'll basically be a few wasted years not solving things that need to be fixed. On the other hand, that's arguably no worse than a Tory Government unnecessarily going out of its way to keep everything private and franchised whether that's appropriate or not - again for ideological reasons.

While I understand the benefits of competition in private industry generally, and how it promotes innovation, is there any realistic chance of this happening with a mature railway network like Britain's ?

We are not talking about Victorian pioneers carving out new lines, or even the LMS and LNER racing to Scotland. We are talking about a big network of interdependent lines, to which any modification is very costly. There must therefore be some question about whether private companies would be able to fund any significant changes. Of course, in our present system there is little sign that they are willing to, as they are being paid to run an outsourced railway on behalf of a government which specifies every significant aspect of how it is to be run.

I'd be very happy to see genuine private enterprise introduce new and innovative railway solutions, not least because it would providbmore capacity and help shift travel away from cars, HGVs and domestic aircraft. However, even many of the proponents of privatisation on here now seem to accept that this is unlikely, and seem instead to be arguing for colossal state subsidy just so.long as the railways remain privately-run in name. I struggle to see the point of that

 

[Railwaysceptic]

. . . .My fear is that, if we do see a Labour Government in the near future, the railways will get nationalised once again for ideological reasons rather than because serious thought has gone into how they could work better as a nationalised industry - and while this won't be disastrous, it will result in a change of ownership without actually changing anything significant on the ground . . . .

. . . and this is why I am so suspicious of Labour's wish to re-nationalise the TOCs. I suspect that it's really just a desire to end the rise in earnings of railway workers. (Labour knows that when working people's wages rise, most of them stop voting Labour)

That Labour does not seem to care about the real issues facing the railway at present - the absolute control by Civil Servants who have proved themselves to be unfit to be in charge; Network Rail's inability to complete electrification projects on time and within budget; Network Rail's inability to carry out normal work at a sensible cost; the entire franchise system with its ludicrous arrangement of monies paid in and then rebated; the subsidy culture where no-one, politicians, Civil Servants, Network Rail, quangos, has any desire for a lean and cost effective railway and where it is considered respectable to scrounge off the taxpayer; our dependence on foreign companies to manufacture our trains and operate our services - makes it impossible for me to take them seriously.

 

[DynamicSpirit]

. . . and this is why I am so suspicious of Labour's wish to re-nationalise the TOCs. I suspect that it's really just a desire to end the rise in earnings of railway workers. (Labour knows that when working people's wages rise, most of them stop voting Labour)

No, Labour's wish to renationalise has nothing to do with wages (Do you seriously imagine many people in the Labour Party would have any serious desire to lower workers' wages? )

From experience in numerous discussions in the Labour Party, I would say the reasons so many in the Labour Party are so keen on nationalisation is because of

• An awareness of how much subsidies and costs have increased since privatisation, and an assumption that this is all because of privatisation and would therefore be very quickly fixed with nationalisation
• Most Labour members believe the myth that private companies are making massive, extortionate, profits, and assume that nationalisation would allow these mythical billions to be poured back into the railway, making a massive difference to fares.
• There still tends to be a bias amongst at least some members to thinking that nationalisation equates to the public owning and controlling things and is therefore a morally superior way of running certain key industries of national importance.
• A tendency to always assume blame lies with the TOCs when things go wrong, to some extent reinforced by a mindset that tends to presume all large private companies are automatically out to exploit people.

I suspect this is fairly similar to the reasons why many members of the public say 'yes' to nationalisation when asked in opinion polls.

As you'll have gathered from my tone... I'm happy to see railways nationalised if a good practical case can be made that it will lead to a better or more efficient railway, but I fear nationalisation with the motives most Labour members currently have is going to lead to bitter disappointment.

 

[Gareth Marston]

No, Labour's wish to renationalise has nothing to do with wages (Do you seriously imagine many people in the Labour Party would have any serious desire to lower workers' wages? )

From experience in numerous discussions in the Labour Party, I would say the reasons so many in the Labour Party are so keen on nationalisation is because of

• An awareness of how much subsidies and costs have increased since privatisation, and an assumption that this is all because of privatisation and would therefore be very quickly fixed with nationalisation
• Most Labour members believe the myth that private companies are making massive, extortionate, profits, and assume that nationalisation would allow these mythical billions to be poured back into the railway, making a massive difference to fares.
• There still tends to be a bias amongst at least some members to thinking that nationalisation equates to the public owning and controlling things and is therefore a morally superior way of running certain key industries of national importance.
• A tendency to always assume blame lies with the TOCs when things go wrong, to some extent reinforced by a mindset that tends to presume all large private companies are automatically out to exploit people.

I suspect this is fairly similar to the reasons why many members of the public say 'yes' to nationalisation when asked in opinion polls.

As you'll have gathered from my tone... I'm happy to see railways nationalised if a good practical case can be made that it will lead to a better or more efficient railway, but I fear nationalisation with the motives most Labour members currently have is going to lead to bitter disappointment.

conversely Ive met Tories who fervently believe the current system costs the Taxpayer less than BR- well private Enterprise is more efficient it?

 

[Railwaysceptic]

No, Labour's wish to renationalise has nothing to do with wages (Do you seriously imagine many people in the Labour Party would have any serious desire to lower workers' wages? )

Yes, I'm absolutely convinced that since Harold Wilson became leader, Labour has had an undeclared agenda not to allow working people's wages to rise by much. Obviously this has never been openly announced and probably many unobservant members of the party are not aware of this.

I've snipped the rest of your post but I don't disagree with it.

 

[class26]

conversely Ive met Tories who fervently believe the current system costs the Taxpayer less than BR- well private Enterprise is more efficient it?

If we had a trully privatised railway it would cost the tax payer less because all lines not in profit would be closed down. That would be something like Serpell version A
I am not for one moment advocting this, simply saying how it would be on a trully privatised system.

 

[Gareth Marston]

If we had a trully privatised railway it would cost the tax payer less because all lines not in profit would be closed down. That would be something like Serpell version A
I am not for one moment advocting this, simply saying how it would be on a trully privatised system.

Politically, environmentally, economically and scially unacceptable but it wont stop some right wingers grizzling about wanting it..

 

[The Ham]

Politically, environmentally, economically and scially unacceptable but it wont stop some right wingers grizzling about wanting it..

Probably the same people who think that the taxpayer alliance make some good points. Ignoring that the amount of tax paid should be viewed in the light of the benefits received in return.

 

[sprunt]

Likewise the 'wasteful' delay attribution we have today would surely still exist too? Even if only to establish where problems exist, and where to distribute more funds/staff or whatever. No good just laying it all on BR as a whole.

It would exist - it's of course correct that if something goes wrong within an organisation they should seek to know why - but it would at least increase transparency to the consumer. I'm thinking in particular of the threads that come up in the ticket advice sub-forum from frustrated people who are being passed around various TOCs all claiming that they aren't the ones responsible for delay repay in that particular scenario. If they're all part of the same organisation, that wouldn't happen.

 

[sprunt]

• Most Labour members believe the myth that private companies are making massive, extortionate, profits, and assume that nationalisation would allow these mythical billions to be poured back into the railway, making a massive difference to fares.

If GTR are making a single penny of profit at the moment, that's massive and extortionate.

 

[LNW-GW Joint]

If we had a trully privatised railway it would cost the tax payer less because all lines not in profit would be closed down. That would be something like Serpell version A
I am not for one moment advocting this, simply saying how it would be on a trully privatised system.

Plenty of air services (eg highlands and islands, Anglesey) are subsidised by the government, and operated by private airlines.
Not so very different to rail franchises really, but there is no clamour to nationalise the airlines in receipt of subsidy, or complaints of them "ripping off the taxpayer".
DfT is considering subsidising air services from London to places like Newquay and Dundee, not least because if poor rail services.

 

[gsnedders]

Plenty of air services (eg highlands and islands, Anglesey) are subsidised by the government, and operated by private airlines.
Not so very different to rail franchises really, but there is no clamour to nationalise the airlines in receipt of subsidy, or complaints of them "ripping off the taxpayer".
DfT is considering subsidising air services from London to places like Newquay and Dundee, not least because if poor rail services.

The significant difference is that air services are subsidised on a route-by-route basis, whereas ToCs are subsidised as a whole for the entire lump.

 

[ChiefPlanner]

The significant difference is that air services are subsidised on a route-by-route basis, whereas ToCs are subsidised as a whole for the entire lump.

Dare I say it - that the cost structure - broken down by route and station - as well as by service group (even individual trains) , a feature of cost wise BR , is now completely and utterly lost.....

Not to mention revenue apportionment.

 

[AndrewE]

Dare I say it - that the cost structure - broken down by route and station - as well as by service group (even individual trains) , a feature of cost wise BR , is now completely and utterly lost.....

Not to mention revenue apportionment.

No, No, you must be wrong! It is better now - simply because it is not in the public sector!
I suggest anyone who hasn't read 1984 (or re-read it in the last 5 years) should do so pdq, or stop posting on this thread.

 

[B&I]

Plenty of air services (eg highlands and islands, Anglesey) are subsidised by the government, and operated by private airlines.
Not so very different to rail franchises really, but there is no clamour to nationalise the airlines in receipt of subsidy, or complaints of them "ripping off the taxpayer".
DfT is considering subsidising air services from London to places like Newquay and Dundee, not least because if poor rail services.

This is because the air services in question are so marginal that almost no-one cares. Hence the subsidies

 

[DynamicSpirit]

This is because the air services in question are so marginal that almost no-one cares. Hence the subsidies

I care. I'd like to know if those subsidy reports are correct. To my mind, it seems scandalous that the Government could be subsidising a form of transport that is so environmentally damaging for inland journeys within the UK, especially if rail is available is an alternative. Any subsidy that makes flying more attractive is inevitably going to having the effect of pulling at least a few people off the trains, thereby making the train services a bit less viable. I'd certainly consider a letter to my MP about it.

Can anyone confirm, or does anyone have details of these claimed subsidies?

 

[RLBH]

I care. I'd like to know if those subsidy reports are correct. To my mind, it seems scandalous that the Government could be subsidising a form of transport that is so environmentally damaging for inland journeys within the UK, especially if rail is available is an alternative. Any subsidy that makes flying more attractive is inevitably going to having the effect of pulling at least a few people off the trains, thereby making the train services a bit less viable. I'd certainly consider a letter to my MP about it.

Can anyone confirm, or does anyone have details of these claimed subsidies?

There's an indirect subsidy in that Air Passenger Duty is not due (or is set at a rate of zero) for Highlands & Islands flights.

 

[Dr Hoo]

Dare I say it - that the cost structure - broken down by route and station - as well as by service group (even individual trains) , a feature of cost wise BR , is now completely and utterly lost.....

Not to mention revenue apportionment.

This is a very interesting point (although not having worked for a post-privatisation TOC I don't know how things are done today). Nevertheless, it cuts both ways.

As a BR service group manager I did indeed have a pretty good idea of which trains made or lost the most money. That made it very easy to decide which services to cut when times were hard. That is why things like the single-unit service on the Whitby line, Saturdays only on the Brigg Line, single-shift operation between Spalding and Sleaford, and off-Peak only via Pontefract Baghill came about.

 

[yorksrob]

As a BR service group manager I did indeed have a pretty good idea of which trains made or lost the most money. That made it very easy to decide which services to cut when times were hard. That is why things like the single-unit service on the Whitby line, Saturdays only on the Brigg Line, single-shift operation between Spalding and Sleaford, and off-Peak only via Pontefract Baghill came about.

It's a very obvious shortcoming of privatisation that none of these things were rectified in the twenty years since privatisation, many of which were not lean periods at all. In the case of Whitby in particular, we're still waiting for a satisfactory resolution.

 

[gsnedders]

I care. I'd like to know if those subsidy reports are correct. To my mind, it seems scandalous that the Government could be subsidising a form of transport that is so environmentally damaging for inland journeys within the UK, especially if rail is available is an alternative. Any subsidy that makes flying more attractive is inevitably going to having the effect of pulling at least a few people off the trains, thereby making the train services a bit less viable. I'd certainly consider a letter to my MP about it.

Can anyone confirm, or does anyone have details of these claimed subsidies?

e.g. https://www.gov.uk/government/news/dundee-london-air-route-funding-secured-until-2019

 

[Gareth Marston]

It's a very obvious shortcoming of privatisation that none of these things were rectified in the twenty years since privatisation, many of which were not lean periods at all. In the case of Whitby in particular, we're still waiting for a satisfactory resolution.

One can add in some InterCity destinations on that list as well with privitisation locking in the austerity cuts. On the Cambrian we had the first service from Aberystwyth to Shrewsbury cut thankfully BR put this back on before privatization and its was then locked into the franchise agreements.

 

[quantinghome]

Contrary to the assumption by many posters, Labour are actually putting in a significant amount effort into developing their rail nationalisation plans, and into understanding what they want to achieve from it. There is certainly a recognition that the monolithic 'statist' organisation of the past had a number of drawbacks.

The following article in RAIL a few months ago shows the sort of issues Labour are looking at:

https://www.railmagazine.com/news/rail-features/exclusive

Clearly it's not a complete blueprint for a nationalised railway, but it does show that this is emerging from a thoughtful process, not just following a blinkered ideological approach (unlike other parties I could mention...)

 

[underbank]

As a BR service group manager I did indeed have a pretty good idea of which trains made or lost the most money. That made it very easy to decide which services to cut when times were hard.

But that's a very one dimensional view that takes no account of potential for growth, damage to other social aspects (i.e. rural isolation, increase in road use, etc). You can't just look at cutting costs to make savings (that's a typical public sector reaction). The "business/entreprenneural" reaction is to look at how to make a loss making activity profitable or at least make it break even via cross-selling etc. For railways, that could mean i.e. better timings, different routings, etc and working WITH other interested parties such as local authorities, quangoes, public transport operators etc to collaboratively get more customers - ie combined tickets for local attractions or other public transport options or subsidies where there is a genuine need for a railway service that will never be profitable. If the lazy option of cutting services is taken, then it just makes the situation worse elsewhere, i.e. even fewer passengers on other services where the lesser used lines were feeding in to other services.