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Thursday, 25 August 2016

Owen Jones And Public Ownership

In the wake of Jeremy Corbyn’s adventures on the 1100 hours Virgin Trains East Coast departure from London’s Kings Cross terminus last week, we now have the Traingate discussions rippling out from whether Jezza and his team were being slightly economical with the actualité to the wider question of who owns and runs the railways - and, for pundit and campaigner Owen Jones, to whom they might be accountable.
Owen Jones - asking the questions

To this end he has writtenFrom the floor to first class, Britain’s railways are a disgrace”, which may surprise all those who use Virgin’s “other” franchise, that which traverses the West Coast Main Line out of London Euston. Jones begins with a straightforward claim.

If you believe in free market dogma – that private ownership inevitably brings more efficiency, better quality and cheaper services – then there are two major embarrassments in Britain: the NHS and the rail industry … The NHS is embarrassing because it is a publicly run healthcare system that is superior to and more efficient than the privately run, fragmented mess that is the US equivalent … The rail industry is an embarrassment because it can demonstrate just how atrocious services run for profit can be”.

I’ll concentrate on the rail aspect. Jones also asserts “The desire for the railways to return to public ownership … is not born of mass false consciousness, of a failure to understand that privatisation has been a glorious success”.

His complaints are not new ones: overcrowding, potentially high fare levels, the level of public subsidy, perception that systems on mainland Europe are better-run, and that East Coast was better when in public ownership. To these, Jones adds the idea of passenger and worker representation in the running of franchises.

So let me take all of those one at a time: British Rail was, it has to be said, very good value for the taxpayer. Subsidy levels were far lower than they are today. But there were a lot of old, and ageing, trains, and service levels were not up to today’s standards, especially service frequency. But Jones scores one on subsidy.

On overcrowding, that was there in BR days too. It will not improve any time soon, whoever runs the railway. Modern passenger vehicles have a significant capital and maintenance cost, and keeping them in sidings waiting for the busiest rush hours, or even worse, kept in reserve for holiday periods, does not make economic sense. For long distance services, mainland European operators have a straightforward remedy: no seats are sold without a reservation. No seats available, you don’t get on.

That is, after all, what airlines do. Moreover, it’s what coach operators all over Europe - including the UK - also do. Only the railways retain the “walk up and go” concept. Whenever this is pointed out to pundits, they tend to find it a challenging one to answer. I will be interested to hear Owen Jones’ response to that one.

Fare levels come down to a political decision, made - if only by inference and default - by the last Labour Government, although the Tories have continued the policy. We can have lower fares, but the taxpayer - most of them do not travel by train at all - has to pay more. Government policy is for those taxpayers to pay less over time - and passengers, therefore, to pay more. Private sector operators using demand management to fill trains at quieter periods, while charging more for flexible tickets, are merely continuing a trend started by BR.

And that, as ever, brings us to the question of ownership. Here, some basic facts about the extent of private sector involvement need to be explained.

Let’s take Virgin Trains as an example.

They do not own the trains.
They run several, but not all, of their major stations, but do not own them.
They do not specify the timetable (the Government does that).
They have no say in train maintenance schedules (Alstom and Bombardier do that).
They do not own or manage the tracks on which their trains run.
Their East Coast trains are the same ones Government-run East Coast used.

Their franchise commitments are closely controlled by the Government - this is the same for all other private sector operators. For their East Coast franchise, Virgin contributes the branding and just a 10% share in the operation (Stagecoach has the other 90%).

The rail network is owned, maintained and run by Network Rail - a public sector company.

As to Jones’ more democratic accountability - this is an interesting idea, but it has to be stressed that the most important decisions affecting the railway - new trains, electrification, new ticketing, new lines, and so on - are not the kind of things that are done or varied on a day to day basis. And the scale of investment required is one that Governments will inevitably want to keep an eye on - as they underwrite the lease costs of all those trains.

I can imagine the frustration of Owen Jones, and everyone else for whom the railway does not always function as they might expect, but the private sector involvement is nowhere near as complete as it may seem, and as with so much else, turning this industry-sized supertanker around is not that straightforward.

But it’s good that mainstream pundits want to take the idea seriously. More please.

14 comments:

Anonymous said...

Question:
If its such a PITA why does Branson bother; altruism?

Dave Collier said...

No that's not true that all mainland Europe trains operate a bookings-only policy. Germany doesn't.
I travel around on the trains in Europe a fair bit, and nowhere so much as the West Coast Main Line. The problem with a booked-seats-only policy occurs when people need to be flexible - I quite often don't know which train I'll be getting back from London until I get to Euston. If there was an app whereby I selected my seat fifteen minutes before I got on the train - that would do it, or it would for those with a latest-generation mobile, so I suppose could be considered a bit techie-ist.

SimonB said...

What about the unnecessary cost and bureaucracy needed to make the pretend privatisation work? Wouldn't one company with proper oversight and regulation be better and waste less?

Tim Fenton said...

@2

Germany might not - but France, Italy, Spain and Portugal all operate reservation-only Inter-City train travel.

This has led, in Spain, to commuters having to commit to specific trains when travelling into Madrid from places like Toledo, to much annoyance.

Germany also generates its own - increasing - level of complaints about rail services, especially their reliability. I'll tag in Jon Worth on the next Tweet - he lives in Berlin, and might have something to say about that.

Anonymous said...

The tragedy of rail privatisation was the destruction of an integrated system. The nuttiest part was selling the rolling stock. There are BR designed and built trains that are hired by the Train Operating Companies, subsidised by the tax payer. Subsidy to hire units that the national railway already owned.

It's a good job that BR trains were well made and have lasted so long but that extra value is being enjoyed by the companies that bought them for a pittance in the mid '90s. Forever rent.

savernake said...

Branson's VTEC put in a ludicrously over-optimistic bid for the franchise which the government (after two private company collapses and one public company success on the ECML) stupidly accepted because it wanted the moolah.

Now passenger numbers and profits are nowhere near what Virgin/First (?) promised they'd be in their bid and so they are steathily raising fares (you have to travel later and return earlier for cheap fares) and are proposing to sack a whole lot of staff, including replacing ticket office staff (who are obliged to inform you of the cheapest fare) with ticket machines (which aren't).

The government will probably back the company against the unions because they are desperate not to have another ECML franchise collapse.

Its no way to manage a railroad.

Philippe said...

Well done Tim, you have explained why Owen Jones has wrong end of the stick of the British rail industry. As you have said quite rightly, much of it is Government owned, mostly through Network Rail or various private companies which owned bit and bobs of the service.

The big thing is simply the lack of investment in rail between Beeching and the BR privatisation, and everyone from Network Rail to ATOCs is finding the huge sums to put it right eg. £45 billion just for HS2. Much of it was due to governments during that time putting more investment in roads that other form of travel. (Thatcher famously hated travelling by train), special rail rules in other European countries and the British aversion in infrastructure investment and planning for the future.

Dave Collier said...

France, Italy, Spain and Portugal (and Poland) operate reservation-only train travel, but what happens when you miss your booked train? Well you find yourself a seat somewhere if you can, how successfully depends on the train. The West Coast Main Line does this better, it has unreserved coach(es). Pragmatic, we Brits. Top marks.
In those countries, though, there's much more of a tradition of booking at the last minute, and the machines on the stations allocate you a seat right up to a few minutes before the departure of the train. If there's no seat available you can usually still buy a ticket, but have to fight to find a seat. Impressive investment in the technology.
Britain has this strange system of a return ticket being much cheaper than two singles, so that the French/Italian system wouldn't work.
It's true that Deutsche Bahn comes in for criticism about punctuality, but that's mainly because German trains used to run on time, these days the punctuality is more more-or-less, similar to British trains.
I like British trains, whenever we return from a trip, I think how impressive the service is, given the constraints of very busy lines and low bridges. Seat reservations? Only if there's a last-minute app would that work.

Anonymous said...

Whilst ECML sets are the same as they have been since introduction decades ago I travelled in Virgin East Coast First class a couple of months ago. The carriages have had another significant makeover (3rd or possibly 4th in 25 years) the whole carriage smelled of the new leather seats and the at seat service was indeed first class, on a par with airline business class.

For what we paid the inclusive snacks and drinks more than covered the extra cost over standard class.

The return trip was cancelled due to a lineside fire and we ended up on an EMT service from St Pancras on a HST set which didn't appear to have been improved since I was catching the regular service between Luton and Sheffield 30 years ago. No inclusive snacks or drinks, despite this service also being delayed by over an hour due to a signal fault.

The only upside was the delay repay payment on our Virgin tickets for the cancellation.

I'm also a regular user of local services and the costs are more than acceptable. A return trip from local station to city is less than a couple of hours car parking.

Paul said...

Is now a good time to point out Network Rail is state owned because private sector Railtrack failed so spectacularly

SteveB said...

There is no problem on Britains railways that cannot be made worse by a politician with "ideas" of his/her own. Actually, having written that I can't think of any women politicians who have been unwise enough to meddle.


As for oevercrowding and reservations. Why don't we compare the motorways. Huge traffic jams and gridlocks in many areas at more or less predicatble times. SO, why not make motorist reserve a slot. Those that do it will have a clear run and those that don't won't be allowed to travel. No more unreasonable than restricting rail passengers.

savernake said...

I'm not sure about all this pre-booking only. If you book close to the day then you'll only find ordinary cheap day return tickets available which you can buy on the day at the station and which give you much more flexibility on what time you return than if they're prebooked. A lot of people are not that computer knowledgeable for pre-booking, especially the old.

If the whole system is pre-booked, then presumably all seats will be booked but presumably there will be no standing. A lot of passengers are not going to be served. How are they to be served? There is only a finite number of trains and one severely overstretched network which at rush hours can take no extra trains. To get a system which enables all passengers who want to travel to prebook would require massive investment in both infrastructure and new trains.

Rangjan said...

I have travelled in France and Italy by train and it never involved prebooking. It's always been: turn up at the station, buy a ticket, and get the next train. Perhaps I was automatically allocated a seat by the ticketing system (which also highlights how disjointed and fractured and out of date our ticketting systems are in this country!). Or perhaps your experience applies to specific services.

savernake said...

So over-confident was Virgin/Stagecoach's bid for the franchise that, according to Tony Miles of "Modern Railways" on the wnxx forum: "There are some people in the industry betting that VTEC won't last the course."

Which leaves the DfT in a quandary. Let them go bust and its a PR disaster, or bail them out and then have every subsequent franchise bid turned into a farce by the bidders knowing they can underperform and have the government over a barrel.

In a recent piece of PR puff Branson has been boasting about VTEC having 140mph stock running in 2018. This is dishonest on two levels. Firstly 140mph capable stock - the Class 91 - has been running on East Coast for over 30 years. If BR had been left in control the necessary track upgrading would have been quickly done and the ECML would have been running at 140mph for 20 years. Since privatisation no trackwork has been done or is proposed. Branson's 140mph stock will run at 125 mph.

Indeed compare the fastest time York to London in the 90's - 1 hour 48 minutes - with today's fastest under Virgin, using the same stock - 2 hours 12. Progress.