"so no subsidies whatsoever."
Which would lead very quickly I suspect to a pruning of the current network that would leave Beeching and his cuts forgotten as little more than a "tweak". And in an age of railway enthusiasm and growing usage.
How are TOCs "extorting" money from the state ?, as in use of violence, intimidation or abuse of authority.
As one contractor in a foreign country said to me recently, with regard to working with Western versus local authorities, "with you guys it's simple, you write a contract saying what you want, if I do that, you pay me what we agreed, if I don't do it, you don't pay me, and you assign a specific representative to monitor me and for me to contact you via - as a contractor, how could I want more than that; but with the local authorities, the contract means nothing, I have to bribe 100s of individuals every day to even carry out the work, and what I do has no relation to whether I get any money which is entirely down to whether I've kept the people who sign the cheques happy through bribes, employing their relatives and doing their favours. Thus my charges to them are much higher than to you."
If the UK Government still cannot write a contract saying what it wants, and what it will pay for it and then enforce it; then the best thing is to get shot of the railways entirely to the market as the Government clearly needs to be wound up sharpish as unfit for purpose.