Should the railways be renationalised?

[whole diary]

[JayMac]

Two of the candidates for the Labour leadership election, Andy Burnham and Jeremy Corbyn, have pledged to renationalise the railways if they become Prime Minister.

What do you think? Yes or No? Or should an alternative privatised system replace franchising, such as concessions similar to London Overground and other TfL^» (Transport for London - about) operations?

[grahame]

A very interesting wider discussion to have.

Personally, I'm not going to express a view - but rather pledge to work in partnership in the system for making the most appropriate use of public transport (and indeed to making inputs within the system to help it develop forward n a positive way).   I am, though, looking forward to follow ups here 

[bobm]

There's a very interesting article on the BBC^» (British Broadcasting Corporation - home page) from March 2015 looking at the issues involved if re-nationalisation was to occur.

It is too long to quote - but is here  http://www.bbc.co.uk/news/magazine-31621300

[ellendune]

Its not an easy question. 

If you dig up a plant every few days, rearrange its roots and replant it, it is not going to do well.  Successive reorganisations of railways has a similar effect.  Just going to a Directly Operated Franchise would probably not be too damaging in that respect but the indication is that the politicians want to go further than that. 

Private franchises were supposed to bring lots of private investment into the industry.  In practice this has not really occurred (Chiltern excepted) because the franchises are too short for the private companies to get a return. The exception is train leasing but in this the government has to guarantee a continued use for the train so there is no real transfer of risk so it is not really a true private investment. 

The TfL^» (Transport for London - about) concession model seems to have a lot to attract it, but then so does a long Chiltern like franchise.

I am not convinced of the benefits of vertical integration - I fear it would create as many problems as it solves - particularly for freight operations, where competition does seem to have worked. 

Reforming the existing system seems to be more attractive. 

Finally remember that many of our franchises are government operated - just not by the British government!

[Red Squirrel]

The tracks, signalling, power systems, bridges, tunnels and major stations are already nationalised. The government supervises the franchising arrangements, specifies the rolling stock, and to a large extent determines what services run where and the fares that can be charged.

Wouldn't a more interesting question be: Should railways be de-nationalised?

[didcotdean]

Rather than being actually nationalised, the railway has in effect been contractualised.

The current structure manages to build in much of the worst features of both public and private sector operation.

[Tim]

The current structure manages to build in much of the worst features of both public and private sector operation.

That would be my contention.  Either properly privatise it or properly nationalise it.  At the moment we have franchising which is the worse of both worlds.  Not helped by the fact that for both Labour and the Tories this is an ideological issue rather than a practical one (see, respectively, Andy Burnham's announcement and the privatisation of the East Coast contract).

I would do away with Franchising.  That is pointless as there is no risk transfer and private companies have repeatedly demonstrated that they cannot be trusted on things like fares.  If you wanted to run some of the trains on a contract basis (as with London buses or my council bin collections, or London Overground) or some self contained routes to be run by a public body (as with London Underground or potentially Merseyrail), I'd be fine with that too.

 

[didcotdean]

The franchises as they are today might not transfer much risk but they don't transfer much reward opportunity either.

[Oberon]

Network Rail was effectively nationalised earlier this year, I wonder if Messrs Corbyn & Burnham realise this? My own preference would to be to go back to the pre 1948 state of affairs with no franchising and vertical integration, with the respective companies helped along, as they would have to be, by state aid for rural routes and generally for modernisation. I think this makes sense and would be far better than what we have in 2015, the railways run on the basis of silly little 7 year franchises.

Admin Note: Post merged into existing topic.  bobm

[Tim]

The franchises as they are today might not transfer much risk but they don't transfer much reward opportunity either.

correct, so why bother?  It is a huge expense and a management distraction.  Oh and the DfT^» (Department for Transport - about) can't even manage to run the franchise competitions competently   

[Rhydgaled]

Apart, perhaps, from freight (where it seems competition actually stands a chance of working) my view is that 'privatisation' (more acuractly 'contractualisation' as didcotdean put it) was a big mistake. Judging from the old TV documentaries from British Rail days I have seen, service standards are probably much the same (ranging from good to b. awful) but the railway costs more now. And now, the DfT^» (Department for Transport - about) and TOCs^▸ (Train Operating Company) can blame the failings on each other, at least with a nationalised system you know who to blame (the government).

However, as ellendune has posted: "If you dig up a plant every few days, rearrange its roots and replant it, it is not going to do well.  Successive reorganisations of railways has a similar effect." Sadly, I don't think we can successfully bring back B.R. now, the damage of fragmentation has been done. But franchising is a mess, and I would like to see the railway moving gradually to directly operated passenger services, avoiding major upheaval as much as possible. Vertical integration would be nice if it can be managed, but again as mentioned by ellendune, what would you do with freight? Plus, the EU^» (European Union - about) requires that open-access competition is facilitated.

Either properly privatise it or properly nationalise it.

I agree that the current psudeo-privatised system is a mess, but I don't think properly privatising it is possible. Alot of the railway is loss-making and requires subsidy, hence government involvement (at least in some areas) is unavoidable; unless you want to close all but a few of the key main lines and perhaps some London commuter services (even this might not work, as feeder traffic from unprofitable branches would probably be lost).

[TaplowGreen]

Surely EU^» (European Union - about) law makes this debate academic to a certain extent anyway, it couldn't simply be renationalised without allowing private operators access to the tracks under a number of EU directives?

I think the key one is EU directive 91/440?

[Tim]

Surely EU^» (European Union - about) law makes this debate academic to a certain extent anyway, it couldn't simply be renationalised without allowing private operators access to the tracks under a number of EU directives?

I think the key one is EU directive 91/440?

I am not suggesting for a moment that this might happen, but an opt out from EC91/440 might be something that Cameron could achieve in his renegotiation of our relationship with the EU. 

[onthecushions]

It depends what you mean by "nationalised".

As about half of the industry's income comes from grant/subsidy, it is (in)effectively regulated, controlled and operated by Government.

What has changed recently is the redrawing of Network Rail's debt as in the public sector, restoring treasury control over 75% of the industry's spending. Also Board direction has been tightened with control returning to Government. Finally, the DfT^» (Department for Transport - about) has again sharpened its control by creating something called the "Rail Executive" with a chair and members for the main activity sections.

This is a return to the Government control exercised, firstly in WW1, WW2 (where the RE^▸ (Religious Education) included executives of the companies) but more like that of 1947 when Attlee created a British transport Commission with 5 executives underneath, one of which was, you've guessed it, the "Railway Executive". The members were I believe Civil Servants, even if from the industry originally, such as its first chair, Sir Eustace Missenden, the backroom hero of Dunkirk who summoned trains from nowhere to distribute the 338 000 troops evacuated from France. The term "British Railways" was a trading name, derived from wartime posters. The RE evolved into the BRB^‡(resolve).

Whether the RE chooses to franchise or directly operate, to purchase outright and amortise or to hire, to maintain its own IMU's and TRRC's or contract out is really immaterial, other than what is best value in the round. Even "BR^▸ (British Rail(ways))" bought out much of its rolling stock, signalling, electrification and track.

What is missing is perhaps the central staff training, research and technical development. The private sector in the UK^▸ (United Kingdom) cannot reasonably do all this itself. Indeed, most countries have traditionally looked to UK practice for a lead.

Bring on that crowned lion and wheel,

OTC

[stuving]

I am not suggesting for a moment that this might happen, but an opt out from EC91/440 might be something that Cameron could achieve in his renegotiation of our relationship with the EU^» (European Union - about). 

Dave? Why would he want that? He's not likely to be nationalising anything, at least not intentionally. Network Rail never was really private - that's what the classification by ONS^» (Office for National Statistics - website) was about.

The Single Market stuff, including open tendering and other access requirements like this, is all pretty much as Thatcher ordered - and much decried as such by many in Europe.

Admin Note: edited to fix quotes - bobm