Atomic Systems

Why did we need Nationalisation in 1948...because of the Government running the railways into the ground during World War 1. The 1923 Grouping was supposed to fix that but various acts regulating the amount of profits the companies could make (based on pre 1914 levels) meant that they couldnt do it. After yet more abuse during WW2 we needed change, so we got BR.

Now I voted for renationalisation because it would get us out of the current mess, which I cant see getting any better. Also I believe that certain things are essential to the fabric of a modern civilised society, and transport is one; water supplies are another. These things are so basic yet so important that government should have a hand in them. I dont see nationalisation as the final solution, some elements of private involvement could bring good things, but the current system is IMHO a flawed creation of lawyers and accountants who dont realise that theoretical Adam Smith free-market economics dont apply to every single situation.

I dont have all the answers, but perhaps creating some proper railway companies based on geographical areas with the track and train elements brought under the same roof...

BTW Roscos were created because it was expected that the TOCs would be sufficiently worried by their short franchises that they would not invest in new stock. The roscos were there to think in the long term. Any system that meant parties were worried about investing should have sunk without trace, but instead it was taken up.

Privatised rail industry running both the services and the infrastructure but with major infrastructure projects publicly funded.

alexnick wrote:If you ask me, Major's government, knowing they were going to lose, deliberately ran the country into the ground, so that it would be a problem Labour would have to deal with, and tarnish Labour's reputation.

Disagree - they rushed it through in the hope that it would provide an instant success, but made a mess of it instead.

One of the biggest mistakes has been separating the wheel/rail interface, RSSB, Network Rail and various interest bodies now have a say in this through the VT SIC but the fundamental problem remains that you are relying on goodwill and coercion to achieve results.

I'm tempted to withdraw my earlier assertion that the track should be Government run. Let the TOCs look after thier own track with shared routes requiring a joint company to achieve this. Then perhaps we won't get those Siemen's bogie's with primary yaw stiffness akin to a Shinkansen set.

Regards,

Dan

Privatisation was done primarily to get the cost of the railways off the Government's books - that way the UK's economic position is that much strengthened. As a policy, it worked - Britain is in the longest period of continuous economic growth in recorded history - the success of the UK economy is in part attributable to HMG not having large amounts of debt and cost saddled on it. It was also done because NSE and Intercity were emerging into profit, and private industry wanted a part of it.

The problem is the way it was done. HMG took 91/440/EC to the extreme - taking separate accounts to mean separate companies, and going against the advice of just about everyone to create Railtrack. Franchising Mk1 was also a bodge-job, these being awarded to the highest bidder, and based on DoT calculations of there being little latent demand and a network in terminal decline - a simple extrapolation of the trend under BR.

The problem with full nationalisation - whether outright or by stealth - is that it puts the railways into the hands of those who are both not aware of issues nor are liable to suffer from the effects of badly managing those issues - transport never won or lost an election. The only people who can really run the railway are those whose livelihoods are dependant on running it well - which leads to another problem with nationalisation: Subsidy. Until Beeching, BR ran itself on the basis of 'whatever loss made will be written off by the Government' - to coin a phrase, one hell of a way to run a railway. BR was bankrupt by 1956, and drove itself towards Beeching. The high subsidy to operators is an issue now - although as I said above, Franchising Mk1 was atrocious. The fear is that franchising06 is still trying to use Franchising Mk1 principles.

The way out is not to go wholly private - a system which is so network-dependant cannot be run without a degree of oversight. But equally the way is not to unify it under a single management structure - this stifles innovation and could well try to run it as a 'one-size fits all' arrangement (even within sectors this would not be possible - the market in Essex is different to that in Hampshire, for example). I'd keep the principle of franchises, but let them for longer, with more chance for investment, but constrained by a deal which demands continual improvement throughout the term of the franchise. Network Rail, in some form, should be retained - but the franchises would have greater involvement in infrastructure decisions affecting them - both managerial and financial.

And Freight? Unless you wish to nationalise the haulage industry, then private railfreight companies must be kept to compete against (and cooperate with) private road hauliers. As Prof Hibbs has noted, even when the haulage industry was nationalised in the 1950s, it still competed against railfreight. Railfreight is not part of the railway, it is part of freight - moving stuff from A to B. Multi-Modal partnerships are changing railfreight - I would expect this to continue and expand - but isn't possible with a nationalised railfreight operator.

mattvince wrote:The only people who can really run the railway are those whose livelihoods are dependant on running it well - which leads to another problem with nationalisation: Subsidy. Until Beeching, BR ran itself on the basis of 'whatever loss made will be written off by the Government' - to coin a phrase, one hell of a way to run a railway. BR was bankrupt by 1956, and drove itself towards Beeching. The high subsidy to operators is an issue now - although as I said above, Franchising Mk1 was atrocious. The fear is that franchising06 is still trying to use Franchising Mk1 principles.

Matt I have huge respect for your opinions, you know more about this than me. When you say BR went bankrupt, surely exactly the same would happen to the current companies if their subsidy was stopped? I think many percieve them as being in some way false as while they make money from their services they also recieve loads from the government which helps pay shareholders. What is the real difference then in having BR whose defecit was just written off at the end of each year and companies that are kept afloat by subsidies?

I still think one railway company covering it all would be ideal......maybe it could be also part private so people could invest in it aswell?

Less profitable local branch lines can be sold off to local authority backed companies (for example the Esk Valley line).

Can see matt's point about private freight companies.......as this is less of a public service and more of a private industry this should remain so. Would be good if freight companies could invest in their own infrastructure in some places (Great Central Railway for example).

A subsidy is an amount coming in, therefore it affects the accounts.

A bankrupt company that has its debt written off as part of the national debt just helps make the country bankrupt!

This latest thing about TOCs having to make premium payments to the Government in order to run the franchise is in part intended to encourage the TOCs to cut costs while still growing services. Can be achieved through maintenance savings, running more trains, increasing ticket prices, reducing ticket prices (yes it sounds odd but it encourages more people to travel, some money is better than none at all!).

All part of the crazy world of the railway industry

Regards,

Dan

Ok, how about this (bear with me here )

One private company running the inter city services and owning the tracks.

Regional authorities (in the vain of TfL) to run regional trains (London, South East, South Central, South West, West Midlands, East Midlands, North West, West Yorks, South Yorks, East Yorks, Anglia, Home Counties, North East, Cumbria, South Scotland, North Scotland, South Wales).

Private companies to be able to run open access Inter-Regional services (such as Trans Pennine Express).

Less used branches to be sold off and run by small private trusts.

Freight to remain private.

Other infrastructure owned and run by one public/private company.

mattvince wrote:The problem with full nationalisation - whether outright or by stealth - is that it puts the railways into the hands of those who are both not aware of issues nor are liable to suffer from the effects of badly managing those issues - transport never won or lost an election. The only people who can really run the railway are those whose livelihoods are dependant on running it well - which leads to another problem with nationalisation: Subsidy. Until Beeching, BR ran itself on the basis of 'whatever loss made will be written off by the Government' - to coin a phrase, one hell of a way to run a railway. BR was bankrupt by 1956, and drove itself towards Beeching. The high subsidy to operators is an issue now - although as I said above, Franchising Mk1 was atrocious. The fear is that franchising06 is still trying to use Franchising Mk1 principles.

Exactly what I've been saying. The goverments job is to run the country, not to run businesses. That should be left to the professionals. Our railway was built up on private enterprise and operated sucessfully under private enterprise for 150 years. They took imginative steps in the 1930s to tackle road competition, even though unfair laws in that era gave road hauliers an advantage. There would have been no need to nationalise them had the government kept their promise to pay compensation to the railways for war damage etc...excpet that the Labour party was funded by unions and the unions thought that it would be a good idea.
I accept that there are some problems with the current system, but still maintain that the principle of privatisation was right. It's all very well saying that the government should run it in the people's interest, but it isn't in the governmnet's interest. If it's run by businessmen, it's very much in their interest to provide a good service...as they'll be out of a highly-paid job if they don't.

Mattvince wrote: Until Beeching, BR ran itself on the basis of 'whatever loss made will be written off by the Government' - to coin a phrase, one hell of a way to run a railway. BR was bankrupt by 1956, and drove itself towards Beeching.

MuzTrem wrote: Exactly what I've been saying. The goverments job is to run the country, not to run businesses. That should be left to the professionals. Our railway was built up on private enterprise and operated sucessfully under private enterprise for 150 years.

There would have been no need to nationalise them had the government kept their promise to pay compensation to the railways for war damage etc...excpet that the Labour party was funded by unions and the unions thought that it would be a good idea.

Hi
You've been reading too many Tory party history books again.
Mattvince was making a valid point...but there is 40 years between 1956 and 1996.
Some railways always lost money from day one, therefore you cannot state they ran for 150 years successfully.It would have been interesting if there had not been a war, to see if the big four survived.
Personally I doubt it, people would still have gone towards the motor car.
Basically BR under the sectors was starting to run very, very well....but as I posted earlier greedy Torys and their hanger ons wanted a slice of a very juicy pie....and they got it.....luckily me and a few million voters haven't got such short or jaded memories.
Cheers
Jon

PS Unless you're a rich person by birth, I cannot understand why you are so anti-union....do you think you'd be sat where you are without them....no you'd be working a six day week for a start.

MuzTrem wrote:

mattvince wrote:The problem with full nationalisation - whether outright or by stealth - is that it puts the railways into the hands of those who are both not aware of issues nor are liable to suffer from the effects of badly managing those issues - transport never won or lost an election. The only people who can really run the railway are those whose livelihoods are dependant on running it well - which leads to another problem with nationalisation: Subsidy. Until Beeching, BR ran itself on the basis of 'whatever loss made will be written off by the Government' - to coin a phrase, one hell of a way to run a railway. BR was bankrupt by 1956, and drove itself towards Beeching. The high subsidy to operators is an issue now - although as I said above, Franchising Mk1 was atrocious. The fear is that franchising06 is still trying to use Franchising Mk1 principles.

Exactly what I've been saying. The goverments job is to run the country, not to run businesses. That should be left to the professionals. Our railway was built up on private enterprise and operated sucessfully under private enterprise for 150 years. They took imginative steps in the 1930s to tackle road competition, even though unfair laws in that era gave road hauliers an advantage. There would have been no need to nationalise them had the government kept their promise to pay compensation to the railways for war damage etc...excpet that the Labour party was funded by unions and the unions thought that it would be a good idea.
I accept that there are some problems with the current system, but still maintain that the principle of privatisation was right. It's all very well saying that the government should run it in the people's interest, but it isn't in the governmnet's interest. If it's run by businessmen, it's very much in their interest to provide a good service...as they'll be out of a highly-paid job if they don't.

The railways are a public service though rather then a private enterprise.....they are needed to serve the needs of the public with profit a side issue. If the railways were to be truly privatised then there would be massive cut backs in infrastructure and services because much of it isn't profitable without Government subsidy.

I couldn't agree with Samd22 more. The railways should not be run as a business, that leaves the prime interest with the owners, but the government, who are 'kept in check' by the voters - therefore the British public get the railways they want. Believe it or not, people do care about transport policy.

The government can regulate the road haulage industry through taxation - I think we should pay to use motorways like in France too, so that the competition from road traffic is restricted (I'm doing this on environmentalist grounds). So the need for a privatised rail freight industry seems unnecessary. It is worth subsidising unprofitable railway services, to make sure that our transport network remains available to all, and it keeps polluting cars off the roads.

I would also say not to trust economic theory on the subject - it ignores human interest (remember that economic theory was used to prove that it was a good thing to cut of 90% of Bolivia's water supply). Also, don't trust the Conservative party - they don't represent the majority's interests these days (or for the last 20 odd years, for that matter).

Nick

andrewtoplis wrote:Matt I have huge respect for your opinions, you know more about this than me. When you say BR went bankrupt, surely exactly the same would happen to the current companies if their subsidy was stopped? I think many percieve them as being in some way false as while they make money from their services they also recieve loads from the government which helps pay shareholders. What is the real difference then in having BR whose defecit was just written off at the end of each year and companies that are kept afloat by subsidies?

Good point - that is one of the problems with Franchising Mk1. If the Government was to cut subisdy, no doubt the owning groups would hand back the keys at the drop of a hat - except for those paying a hefty premium. Unfortunately, not all TOCs make money - Wessex Trains existed solely on subsidy payments, and VXC is on a 'cost-plus' basis, being another loss-maker. Cut those and the services would have to go - which would result in HMG walking into a political hurricane. There is a very good fundamental argument about subsidy - it equalises the cost basis on which rail competes against road, and until road users pay the full cost of using the road - by mile and by demand, then there is every good reason to keep rail subsidy. Subsidy should, in fairness, also be provided where HMG imposes a legislative or regulatory change - hence why SWT recieves a subsidy for the Desiro sets (surely also the DDA/RVAR should be subject to this?).

As for it being a 'public service' - it raises a fundamental point about the entire transport industry. If you were to have a nationalised public transport network, someone would want to start their own company in order to do the job cheaper or of better quality than the nationalised company - or would do the job themselves (ie drive). Do you allow this to happen, or should all transport (train, bus, plane, car, bicycle?) be nationalised?

Jon - the real problem is that in 1951 the bus industry kicked the fares up when the Government introduced Duty on fuel, as their operating costs increased. That's what made people buy cars - rail was a victim of the whole affair.

Some railways always lost money from day one, therefore you cannot state they ran for 150 years successfully.It would have been interesting if there had not been a war, to see if the big four survived.

Brilliant point, had the major players in the big four not bought out many railways making a loss from day 1 would not have existed and probably the whole boom would have ended practically straight away because the problem with private industry is profit or nothing.

Had BR not been formed the cutbacks of the 50's would have already been happening as the big four would have singled out the big loss makers and slowly but surely cut them back.

Only nationalisation or majority government infrastructure control would alow re-expansion of the railway network (as shown in Scotland if I'm correct).

Samd22 wrote:Ok, how about this (bear with me here )

One private company running the inter city services and owning the tracks.

Regional authorities (in the vain of TfL) to run regional trains (London, South East, South Central, South West, West Midlands, East Midlands, North West, West Yorks, South Yorks, East Yorks, Anglia, Home Counties, North East, Cumbria, South Scotland, North Scotland, South Wales).

Private companies to be able to run open access Inter-Regional services (such as Trans Pennine Express).

Less used branches to be sold off and run by small private trusts.

Freight to remain private.

Other infrastructure owned and run by one public/private company.

Does anyone agree with my idea?