Should the railways be renationalised?

[whole diary]

[Rhydgaled]

If you just want to get 'the next train' - then buy an appropriate ticket. It's not difficult.

It can be difficult. When the price of an anytime return is £236 (compared to £89.30 for an off-peak and £70.40 for super-off-peak), it's difficult (and I was buying from a TVM^▸ (Ticket Vending Machine), so couldn't check the validity of each for trains I was likely to use, although I didn't pay any of those prices because I have a railcard).

Train passenger numbers, which were broadly stable prior to that point, have doubled.   Co-incidence?   Maybe - who can tell?

I seem to recall that one of the 'trouble with our trains' type television programmes asked this question and partly answered it by looking at Northern Ireland railways; a state-owned vertically-integrated operation. Passenger numbers have been on the up there too (perhaps not as fast, but who's to say whether that is down to the difference in the operational model or the differences between the areas concerned). A vertically-integrated structure would probably be more efficient; that could in theory be a single private company running everything, but then what little competition there is in the current system would evaporate and you would have a for-profit monopoly.

On what specific grounds do you regard rail privatisation as a failure?

I'm not the person/group you were asking, but as I see it privatisation fragmented the network and that (possibly along with the need for the various companies involved with the railways to make profit) has increased the cost of providing what many see as a public service. The fragmentation has also created a blame-go-round, where the TOCs^▸ (Train Operating Company) blame NR^» (Network Rail - home page) or the government and they in turn blame one of the other players. Thus you have the current dispute on Southern where the media (and passengers?) blame either Govia Thameslink Railway (GTR) or the union; and the government get away with murder (not actually murder, but I don't know what the crime of removing useful staff is called; I assume the government agreed to the de-staffing in the franchise agreement (it may even have been required in the Invitation To Tender for the franchise, I don't know)). On the other hand, I have read fairly convicing arguments from the freight side of the industry (or possibly that was just one article in Modern Railways) that rail privatisation had been a huge success as far as freight was concerned. Perhaps then privatisation has failed passengers, but boosted railfrieght.

[4064ReadingAbbey]

If you just want to get 'the next train' - then buy an appropriate ticket. It's not difficult.

It can be difficult. When the price of an anytime return is £236 (compared to £89.30 for an off-peak and £70.40 for super-off-peak), it's difficult (and I was buying from a TVM^▸ (Ticket Vending Machine), so couldn't check the validity of each for trains I was likely to use, although I didn't pay any of those prices because I have a railcard).

I don't follow your argument. I take 'the next train' (train B) to mean the one leaving after the one which is either at the platform or has just left (train A). Generally later trains (B) are more likely to be the off-peak ones, so they will be less expensive than train A - or are in my neck of the woods anyway. If one has a very cheap TOC^▸ (Train Operating Company) specific ticket for train A and miss it and train B is run by another TOC then - tough.

Train passenger numbers, which were broadly stable prior to that point, have doubled.   Co-incidence?   Maybe - who can tell?

I seem to recall that one of the 'trouble with our trains' type television programmes asked this question and partly answered it by looking at Northern Ireland railways; a state-owned vertically-integrated operation. Passenger numbers have been on the up there too (perhaps not as fast, but who's to say whether that is down to the difference in the operational model or the differences between the areas concerned). A vertically-integrated structure would probably be more efficient; that could in theory be a single private company running everything, but then what little competition there is in the current system would evaporate and you would have a for-profit monopoly.

This is not an appropriate comparison. The railways system in Northern Ireland is very small, a couple of hundred route miles, compared to that on Great Britain. Distances are short. Also NI is still recovering from the effects of the civil unrest and depressed economy so it is starting from a low base.

If one compares growth in passenger traffic in some other countries over the same period - it has also increased in France, Germany, Belgium and Holland. Even if one allows that traffic started from a higher base than that pertaining during BR^▸ (British Rail(ways))'s last few years (when traffic was falling) - it has nothing like doubled as it has here.

I see no argument for suggesting that a vertically integrated organisation is 'more efficient'. This type of structure on these railways has certainly not resulted in such growth.

And I still fail to understand why people think the current system is intended to offer competition. It never was. The franchise system was set up as a transparent way for public funds to be handed to private organisations in exchange for running unremunerative trains - the equivalent of the Public Service Obligation grants paid to BR. It was hoped that private operators would be able to offer the equivalent service to that offered by BR at a lower cost. The franchisees were given, in return, a time limited monopoly to run trains in a geographically defined area. The only exceptions are the Open Access operators - whose number has remained strictly limited.

As I stated before any competition in fares is a bonus. Can anyone imagine any two service groups in BR days intentionally competing in this fashion?

On what specific grounds do you regard rail privatisation as a failure?

I'm not the person/group you were asking, but as I see it privatisation fragmented the network and that (possibly along with the need for the various companies involved with the railways to make profit) has increased the cost of providing what many see as a public service. The fragmentation has also created a blame-go-round, where the TOCs blame NR^» (Network Rail - home page) or the government and they in turn blame one of the other players. Thus you have the current dispute on Southern where the media (and passengers?) blame either Govia Thameslink Railway (GTR) or the union; and the government get away with murder (not actually murder, but I don't know what the crime of removing useful staff is called; I assume the government agreed to the de-staffing in the franchise agreement (it may even have been required in the Invitation To Tender for the franchise, I don't know)). On the other hand, I have read fairly convicing arguments from the freight side of the industry (or possibly that was just one article in Modern Railways) that rail privatisation had been a huge success as far as freight was concerned. Perhaps then privatisation has failed passengers, but boosted railfrieght.

While undeniably the cost of supplying a railway service increased dramatically after the time of the Hatfield crash, the situation has now been brought under control. Over the past four years the train running side of the railway has returned more money to the DfT^» (Department for Transport - about) than the DfT has paid out in subsidies. At the moment, taking all the TOCs together, they return some £600 million to the DfT per year. Included in the TOCs costs - before these payments are made - are the access fees paid to Network Rail. These fees now cover practically all the cost of operating, maintaining and renewing the railway.

The Network Grant payable to Network Rail directly by the DfT now covers - almost exclusively - the enhancements being made to the network. That part of the Network Grant which serviced the interest on NR's debt has fallen away as this debt is now classified as Government debt. In other words the rebuilding of London Bridge station, the Thameslink works, the GW^▸ (Great Western) electrification all come out of the Network Grant.

One other point. No staff are being removed from the TSGN services - if anything staff numbers will increase. The de-staffing statement is incorrect regardless of what the unions suggest.

[Bmblbzzz]

If you just want to get 'the next train' - then buy an appropriate ticket. It's not difficult.

It can be difficult. When the price of an anytime return is £236 (compared to £89.30 for an off-peak and £70.40 for super-off-peak), it's difficult (and I was buying from a TVM^▸ (Ticket Vending Machine), so couldn't check the validity of each for trains I was likely to use, although I didn't pay any of those prices because I have a railcard).

I don't follow your argument. I take 'the next train' (train B) to mean the one leaving after the one which is either at the platform or has just left (train A). Generally later trains (B) are more likely to be the off-peak ones, so they will be less expensive than train A - or are in my neck of the woods anyway. If one has a very cheap TOC^▸ (Train Operating Company) specific ticket for train A and miss it and train B is run by another TOC then - tough.

So how does 'tough' correspond to 'not difficult'?

[4064ReadingAbbey]

If you just want to get 'the next train' - then buy an appropriate ticket. It's not difficult.

It can be difficult. When the price of an anytime return is £236 (compared to £89.30 for an off-peak and £70.40 for super-off-peak), it's difficult (and I was buying from a TVM^▸ (Ticket Vending Machine), so couldn't check the validity of each for trains I was likely to use, although I didn't pay any of those prices because I have a railcard).

I don't follow your argument. I take 'the next train' (train B) to mean the one leaving after the one which is either at the platform or has just left (train A). Generally later trains (B) are more likely to be the off-peak ones, so they will be less expensive than train A - or are in my neck of the woods anyway. If one has a very cheap TOC^▸ (Train Operating Company) specific ticket for train A and miss it and train B is run by another TOC then - tough.

So how does 'tough' correspond to 'not difficult'?

The point is that one buys a ticket with very restricted availability with open eyes, if you can't use it - caveat emptor.
It is entirely possible (= not difficult) to buy a ticket, possibly at an increased price, to permit travel on the train after the one one has missed.

[Rhydgaled]

And I still fail to understand why people think the current system is intended to offer competition. It never was. The franchise system was set up as a transparent way for public funds to be handed to private organisations in exchange for running unremunerative trains - the equivalent of the Public Service Obligation grants paid to BR^▸ (British Rail(ways)). It was hoped that private operators would be able to offer the equivalent service to that offered by BR at a lower cost. The franchisees were given, in return, a time limited monopoly to run trains in a geographically defined area. The only exceptions are the Open Access operators - whose number has remained strictly limited.

As I stated before any competition in fares is a bonus. Can anyone imagine any two service groups in BR days intentionally competing in this fashion?

But why would a private operator in a monoploy position be cheaper than BR? Surely the argument generally used by advocates of privatisation is that competition drives costs down. In an environment with no competition, there is no incentive to reduce costs since if the customer has no choice they have to pay whatever the sole provider whats to charge. State-owned monopolies have no competition hence the claim that privatised operators would reduce costs, but fragmenting the railways increased costs and cancelled out that effect (if it exists at all).

While undeniably the cost of supplying a railway service increased dramatically after the time of the Hatfield crash, the situation has now been brought under control. Over the past four years the train running side of the railway has returned more money to the DfT^» (Department for Transport - about) than the DfT has paid out in subsidies. At the moment, taking all the TOCs^▸ (Train Operating Company) together, they return some £600 million to the DfT per year. Included in the TOCs costs - before these payments are made - are the access fees paid to Network Rail. These fees now cover practically all the cost of operating, maintaining and renewing the railway.

The Network Grant payable to Network Rail directly by the DfT now covers - almost exclusively - the enhancements being made to the network. That part of the Network Grant which serviced the interest on NR^» (Network Rail - home page)'s debt has fallen away as this debt is now classified as Government debt. In other words the rebuilding of London Bridge station, the Thameslink works, the GW^▸ (Great Western) electrification all come out of the Network Grant.

Really? I thought the network grant was also used to reduce the TOC's track access charges. Regardless of that, how big is the network grant compared to BR's subsidy, how much did BR spend on enhancements and how much have fares risen above inflation?

If you just want to get 'the next train' - then buy an appropriate ticket. It's not difficult.

It can be difficult. When the price of an anytime return is £236 (compared to £89.30 for an off-peak and £70.40 for super-off-peak), it's difficult (and I was buying from a TVM^▸ (Ticket Vending Machine), so couldn't check the validity of each for trains I was likely to use, although I didn't pay any of those prices because I have a railcard).

I don't follow your argument. I take 'the next train' (train B) to mean the one leaving after the one which is either at the platform or has just left (train A). Generally later trains (B) are more likely to be the off-peak ones, so they will be less expensive than train A - or are in my neck of the woods anyway. If one has a very cheap TOC specific ticket for train A and miss it and train B is run by another TOC then - tough.

So how does 'tough' correspond to 'not difficult'?

The point is that one buys a ticket with very restricted availability with open eyes, if you can't use it - caveat emptor.
It is entirely possible (= not difficult) to buy a ticket, possibly at an increased price, to permit travel on the train after the one one has missed.

It is possible to buy a ticket to permit travel on a different train, yes; but the point I am trying to make is this:
where the price differential between a time-restricted ticket and an any-train one is huge, purchasing the anytime is a difficult decision to make (esspecially if, as in my example, the exact details of the restrictions are not known to the purchaser).

A passenger might be intending to start their return journey sometime between 15:30 and 16:30, does 'peak' start at 16:00, 17:00 or 17:30? And if it is not a short journey, does the fact they started their return journey at 15:30 matter if they are still on the train at 17:40, probably the bussiest time of the evening peak? Without knowing this, it is difficult to decide whether I need to buy the more-expensive fully-flexible fare (of course, if I was booking online, I could check validity, but at a TVM you can't).

[ChrisB]

Regardless of that, how big is the network grant compared to BR^▸ (British Rail(ways))'s subsidy, how much did BR spend on enhancements and how much have fares risen above inflation?

Exactly. And as the fare rise % above inflation is set by the Government, why do people think/expect rises to fall if rail is renationalised? Surely with rail directly under Government, they are *more* likely to squeeze pax if Treasury coffers are empty?

[Reginald25]

Firstly thanks to all the 'welcomes'.

The comments  and responses (whether they agree or disagree with me) are thought provoking. My point overall is that it rail travel must be SIMPLE but flexible.

Perhaps not specifically related to privatisation, but for example, if I go to London I don't want my visit to be delayed or shortened due to a advance specific train ticket, so I invariably buy an off-peak ticket which allows travel on any off-peak train. advance tickets make life NOT simple, and discourage the less rail orientated traveller. Similarly tickets that restrict users to trains of specific companies make life DIFFICULT.

I would emphasise my first point. I have never heard of anyone saying 'I'm travelling by Great Western', only I'm travelling 'by train'.

[ChrisB]

You obviously don't fly very often.

Otherwise you'd notice that zero flexibility is the aay they work and no obe seems particularly phased by it. Yes, its nice to have added fkexibility, but there are many out there that are coping very well on Advance fares, just as everyone manages when flying

[Tim]

You obviously don't fly very often.

Otherwise you'd notice that zero flexibility is the aay they work and no obe seems particularly phased by it. Yes, its nice to have added fkexibility, but there are many out there that are coping very well on Advance fares, just as everyone manages when flying

in the air flexibility again depend son what fare you have.  If you are on a flexible and expensive airfare you will find that airlines can be very flexible - rerouting you, putting you on an earlier flight etc.

I have no objection to cheap non-refundable non-changeable rail tickets.  They are great for many people.  It is just that the railway needs flexible fares too.  These can/should be more expensive just not eye-wateringly so. 

It annoys me that billions of public money (or NR^» (Network Rail - home page) debt which one day will amount to the same thing) was spent on upgrading the WCML^▸ (West Coast Main Line) to give Manchester a fantastic schedule to London with a train every 20 minutes.  That is a true turn up and go, don't bother to check the timetable railway and as such ought to have attracted legions of new passengers due to its flexibility.  But the flexible fares are very high which means that most people buy advance fares.  For those passengers the effective frequency of trains London to Manchester is 1 train per day.   

[grahame]

You obviously don't fly very often.

Otherwise you'd notice that zero flexibility is the aay they work and no obe seems particularly phased by it. Yes, its nice to have added fkexibility, but there are many out there that are coping very well on Advance fares, just as everyone manages when flying

The longer distance the journey the more it's likely to be planned ahead and work on a "zero flexibility" system.  I can't imagine the Central Line tickets on a "specified tube only" being very popular.  Can't imagine too many people with flexible tickets on the Ghan either!

[4064ReadingAbbey]

And I still fail to understand why people think the current system is intended to offer competition. It never was. The franchise system was set up as a transparent way for public funds to be handed to private organisations in exchange for running unremunerative trains - the equivalent of the Public Service Obligation grants paid to BR^▸ (British Rail(ways)). It was hoped that private operators would be able to offer the equivalent service to that offered by BR at a lower cost. The franchisees were given, in return, a time limited monopoly to run trains in a geographically defined area. The only exceptions are the Open Access operators - whose number has remained strictly limited.

As I stated before any competition in fares is a bonus. Can anyone imagine any two service groups in BR days intentionally competing in this fashion?

But why would a private operator in a monoploy position be cheaper than BR? Surely the argument generally used by advocates of privatisation is that competition drives costs down. In an environment with no competition, there is no incentive to reduce costs since if the customer has no choice they have to pay whatever the sole provider whats to charge. State-owned monopolies have no competition hence the claim that privatised operators would reduce costs, but fragmenting the railways increased costs and cancelled out that effect (if it exists at all).

I don't know if you have noticed, but the DfT^» (Department for Transport - about) runs a selection process (competition) for an operator to run a defined group of train services over a defined set of routes (a 'franchise') for a limited length of time. The winner is that company that offers what the DfT considers the best deal - whether it requires the lowest subsidy, offers the best premium payments, additional trains or whatever the DfT considers worthwhile for the customers at that point in time. The pressure is then on the TOC^▸ (Train Operating Company) to minimise its costs and maximise its income over the life of the franchise.

At the end of the franchise the process is repeated. I'll say it again - this is where the competition occurs.

That this strategy has been successful can be seen in the fact that, taken as a whole, the TOCs now return some £800 million per year to the DfT. In 1995/6 ALL the TOCs were subsidised.

While undeniably the cost of supplying a railway service increased dramatically after the time of the Hatfield crash, the situation has now been brought under control. Over the past four years the train running side of the railway has returned more money to the DfT than the DfT has paid out in subsidies. At the moment, taking all the TOCs together, they return some £600 million to the DfT per year. Included in the TOCs costs - before these payments are made - are the access fees paid to Network Rail. These fees now cover practically all the cost of operating, maintaining and renewing the railway.

The Network Grant payable to Network Rail directly by the DfT now covers - almost exclusively - the enhancements being made to the network. That part of the Network Grant which serviced the interest on NR^» (Network Rail - home page)'s debt has fallen away as this debt is now classified as Government debt. In other words the rebuilding of London Bridge station, the Thameslink works, the GW^▸ (Great Western) electrification all come out of the Network Grant.

Really? I thought the network grant was also used to reduce the TOC's track access charges. Regardless of that, how big is the network grant compared to BR's subsidy, how much did BR spend on enhancements and how much have fares risen above inflation?

You are correct - when the Network Grant was introduced to prop up Network Rail's finances it was done to avoid having to rework the franchise agreements with all the TOCs to change their subsidy profiles. Effectively it kept the access charges at the same level as previously. However, whatever the route chosen to channel money to Network Rail it would not have affected the subsidy received from, or the premium paid to, the DfT by the TOC as the financial profile would have been adjusted accordingly. If the money had been paid to the TOC it would have been transferred to Network Rail without affecting the TOC's net accounts.

This now no longer true - as I wrote above the TOCs return a net premium to the DfT.

Between 1995-96 and 2004 the increase in regulated fares was set at RPI^▸ (Revenue Protection Inspector (or Retail Price Index, depending on the context))-1%. From 2004 to 2013 the fares increases were set at RPI +1%. Since then fare increases have been set at RPI. If you want to know more, the House of Commons Library publishes a Briefing Paper (SN01904) Rail Fares and Ticketing, the latest edition is dated 3 March 2016 which contains a full history.

In 1993-94, the last year of its accounts, BR received payments from central government of £930 million.  This is approximately £1695 million in todays money using the RPI deflator. BR did not separately call out 'enhancements' in its accounts but simply listed 'capital expenditure'. According to Network Rail's accounts for 2015-16 it spent £3.1 billion on renewals and £3.5 billion on enhancements. It borrowed, from the Treasury rather than from the financial markets, £4.4 billion for investment. I omitted in my earlier statement NR's borrowings (now exclusively from the Treasury) to refinance the debt represented by borrowings it had previously made on the financial markets, in 2015-16 this amounted to £3.1 billion. The point I am trying to make is that NR has been financed in a very different way to BR so the numbers are not strictly comparable. These days the financing structure is very similar to that 'enjoyed' by BR - the only source of cash - apart from the access charges - is the Treasury to the limit set by the Control Period agreement. Extra borrowings as now seen will not be possible in future Control Periods. When the distortions due to the changeover have worked out of the system the level of enhancement spending will fall compared to what has been seen recently.

If you just want to get 'the next train' - then buy an appropriate ticket. It's not difficult.

It can be difficult. When the price of an anytime return is £236 (compared to £89.30 for an off-peak and £70.40 for super-off-peak), it's difficult (and I was buying from a TVM^▸ (Ticket Vending Machine), so couldn't check the validity of each for trains I was likely to use, although I didn't pay any of those prices because I have a railcard).

I don't follow your argument. I take 'the next train' (train B) to mean the one leaving after the one which is either at the platform or has just left (train A). Generally later trains (B) are more likely to be the off-peak ones, so they will be less expensive than train A - or are in my neck of the woods anyway. If one has a very cheap TOC specific ticket for train A and miss it and train B is run by another TOC then - tough.

So how does 'tough' correspond to 'not difficult'?

The point is that one buys a ticket with very restricted availability with open eyes, if you can't use it - caveat emptor.
It is entirely possible (= not difficult) to buy a ticket, possibly at an increased price, to permit travel on the train after the one one has missed.

It is possible to buy a ticket to permit travel on a different train, yes; but the point I am trying to make is this:
where the price differential between a time-restricted ticket and an any-train one is huge, purchasing the anytime is a difficult decision to make (esspecially if, as in my example, the exact details of the restrictions are not known to the purchaser).

A passenger might be intending to start their return journey sometime between 15:30 and 16:30, does 'peak' start at 16:00, 17:00 or 17:30? And if it is not a short journey, does the fact they started their return journey at 15:30 matter if they are still on the train at 17:40, probably the bussiest time of the evening peak? Without knowing this, it is difficult to decide whether I need to buy the more-expensive fully-flexible fare (of course, if I was booking online, I could check validity, but at a TVM you can't).

That is an issue which is all to do with the fares structure and the design of the 'user interface' of the TVM. As such it is not directly linked to the question of 'on-rail' competition - although long term there will be an effect. In fact there are now moves afoot to re-examine the whole issue of ticketing and routing and aligning these to variety of channels through which tickets may now be bought. So you could say that public pressure and competition has brought this issue to the top of the 'to-do' list. Nevertheless, as always, the onus remains on the purchaser to be an informed buyer, you can't expect to be spoon-fed. Caveat emptor.

[Reginald25]

All comments re air/train travel valid and useful. However apart from the intermediate distance routes (e.g. to Scotland from down South) air travel tends to be for longer (and hence more planned journeys) whereas trains typically are used for shorter journeys, and hence the specific journey / flexible ticket issue  is different in the two cases. Most of my flying was long distance and, as another commentor said, you can usually change the flight without issue. Not sure how easy it is to change with most EasyJet/similar cheaper flights, although when I've been in that situation, I have always been able to get an earlier flight if needed.

[4064ReadingAbbey]

It annoys me that billions of public money (or NR^» (Network Rail - home page) debt which one day will amount to the same thing) was spent on upgrading the WCML^▸ (West Coast Main Line) to give Manchester a fantastic schedule to London with a train every 20 minutes.  That is a true turn up and go, don't bother to check the timetable railway and as such ought to have attracted legions of new passengers due to its flexibility.  But the flexible fares are very high which means that most people buy advance fares.  For those passengers the effective frequency of trains London to Manchester is 1 train per day.   

The ORR^» (Office of Rail and Road formerly Office of Rail Regulation - about) publishes reams of data. For 2015-16 those applicable to your penultimate statement are

Number of passenger journeys by ticket type (millions)


* Franchised ordinary fares: Anytime/Peak 376.0
* Franchised ordinary fares: Advanced         61.2
* Franchised ordinary fares: Off-Peak         537.2
* Franchised ordinary fares: Other               29.2
* Franchised season tickets                       711.6

Advanced fares are not bought by most people.

[John R]

No, but the vast majority of those journeys will be relatively short journeys for which advance fares are not available.  I wonder what the relative proportions are on the inter-city flows, which is more relevant to the example given of Manchester to London.

[4064ReadingAbbey]

No, but the vast majority of those journeys will be relatively short journeys for which advance fares are not available.  I wonder what the relative proportions are on the inter-city flows, which is more relevant to the example given of Manchester to London.

Again looking at the ORR^» (Office of Rail and Road formerly Office of Rail Regulation - about)'s data

Number of passenger-km by ticket type (billions), first column. Using the figures from my previous post the average journey length in kilometres can be calculated. The results are in the 2nd column.


* Franchised ordinary fares: Anytime/Peak   11.3     30.0
* Franchised ordinary fares: Advanced         12.1    197.7
* Franchised ordinary fares: Off-Peak           22.7     42.3
* Franchised ordinary fares: Other                 0.4     13.7
* Franchised season tickets                         17.6     24.7

So, the average journey length made by people using Advance tickets is clearly much longer than those made by people holding other sorts of tickets. But absolutely these ticket holders make up between 3 and 4% of the total number of travellers.

As far as I can see no further breakdown of the figures is available, from the ORR at least, to answer the rest of your question.