Rail services to come under unified state control

[roverstillidie91]

https://www.bbc.co.uk/news/business-57176858

[SydneyRover]

There is one thing it couldn't be run any worse, it will still be privatised but contracts instead of franchises. I thought with a franchise you lease the right to own and run a business according to the what the franchise (should be franchisor) holder wrote on the contract.

[MachoMadness]

It sounds positive to me. Doesn't go as far as I'd like but it can't be any worse than the current situation.

[Herbert Anchovy]

As someone who’s a bit of a nerd when it comes to Railways, this is my take:

1. It’s certainly a positive step forward. However I’m slightly disappointed that it doesn’t go further. Now we’ve left the EU the pathway is clear for full on rail nationalisation.

2. Probably belongs in another thread, but this is at least 1 advantage to Brexit. Under state aid rules, it’s unlikely that this would be sanctioned by the EU.

3. During the 2019 general election, Labour proposed something very similar to this and were shouted down by the Tories! And now they’ve nicked the idea as their own!

[SydneyRover]

Good points HA but if johson and Co go the full levelling up they will be taking labour's full manifesto

[big fat yorkshire pudding]

A balance is surely the answer? We need competition to bring things on but it needs to be backed by strong legislation and governance. That joined up approach should deliver the best outcome.

I have to say I feel sorry for Trainline shareholders this morning though.

[Axholme Lion]

All our national infrastructure should be nationalised IMO.

[big fat yorkshire pudding]

All our national infrastructure should be nationalised IMO.

Crikey what a disaster that would be.

[GazLaz]

Is this not a case of subsidising private enterprise with public money?

[BillyStubbsTears]

A balance is surely the answer? We need competition to bring things on but it needs to be backed by strong legislation and governance. That joined up approach should deliver the best outcome.

I have to say I feel sorry for Trainline shareholders this morning though.

How do you have competition in what are de facto monopolies?
That was the bleeding obvious elephant in the room when we embarked on this idiotic privatisation experiment in the 90s. A Govt minister was crowing at the time that no country in the world had privatised the rail system in the way we had. No. And no country has done in the 25 years since either.

Let's be frank about why this move is being made now. Following COVID and the likelihood of fewer commuter trips for the foreseeable future, the business model of the TOCs is holed beneath the water line. So the Govt is effectively taking on the risk, but ideologically it cannot allow the obvious consequence - to nationalise operations. They are going to package up relatively risk-free operations and give them off to the Sercos if this world to run for their own profits.

[wilts rover]

As someone who’s a bit of a nerd when it comes to Railways, this is my take:

1. It’s certainly a positive step forward. However I’m slightly disappointed that it doesn’t go further. Now we’ve left the EU the pathway is clear for full on rail nationalisation.

2. Probably belongs in another thread, but this is at least 1 advantage to Brexit. Under state aid rules, it’s unlikely that this would be sanctioned by the EU.

3. During the 2019 general election, Labour proposed something very similar to this and were shouted down by the Tories! And now they’ve nicked the idea as their own!

HA will probably be able to correct me here if I am wrong - but I believe most of the existing francise companies are nationalised and owned by the public. It just that they are the national rail companies and public of other countries, mostly European.

So an advantage of Brexit is that our Government will be giving British taxpayers money in subsidies to German taxpayers (Arriva - which is part of Deutsche Bahn).

[SydneyRover]

All our national infrastructure should be nationalised IMO.

Crikey what a disaster that would be.

I really hope that they will be successful pud, the public and the country needs a good rail service, if they can't do it with the area and population of the UK that appears to me to lend itself to that very purpose I suggest that it's time to leave the stage. Yourself or anyone for that matter could show me where they have runs on the board for something as complicated as this.

[selby]

  Has it come about because  the numbers travelling by train are well down and nobody wants the franchise.
  There are very few passengers on the high speed trains on the East Coast main line nowadays.

[albie]

As a matter of interest, can anyone point to any privatisation that has worked well?

By worked well, I mean for the general public, not for the shareholders of the companies.

By way of example, I get my water from a monopoly supplier. This was a public interest provider of utility services sold off to a PLC. If I don't like the quality of service now on offer, I can do nothing......there is no option to transfer to another provider!

I agree with AL, all key public services should be provided by a non profit seeking company in full public control.

[SydneyRover]

All privatisations here end up with the consumer paying more for a poorer service as the boards get stacked with cronies of the government of the day.

[Axholme Lion]

All our national infrastructure should be nationalised IMO.

Crikey what a disaster that would be.

Railways, gas ,electricity and water should be owned by us. All the money should be ploughed into maintenance and upgrading the infrastructure rather than lining the pockets of faceless investors who let the fabric of the system collapse to maximise profits.

[big fat yorkshire pudding]

As a matter of interest, can anyone point to any privatisation that has worked well?

By worked well, I mean for the general public, not for the shareholders of the companies.

By way of example, I get my water from a monopoly supplier. This was a public interest provider of utility services sold off to a PLC. If I don't like the quality of service now on offer, I can do nothing......there is no option to transfer to another provider!

I agree with AL, all key public services should be provided by a non profit seeking company in full public control.

Conversly if your electricity provider was more expensive, your broadband poor, your mobile phone package not the best you can seemlessly switch to another.

Banking, you can earn money by using the competition to move your money around effectively and changing accounts etc.  There's loads of examples of it working very well.

Of course there's bad ones too isn't there?  But that competition can drive better service.

Back on the topic of railways, BST has some.point that you can't pick which train provider to use on a line. Theoretically that competition is placed at source in the tenders of the franchise. This only works well if the tender process is effective and managed well (weakness there). Perhaps there are other methods to drive the competition. Do we think a central rwil system would give the consumer what it wants?  Did it work well as British rail?

I tend to favour centralised infrastructure but franchising out of the actual service.

[BillyStubbsTears]

BFYP
It didn't work well as BR because successive Govts starved BR of investment.

Deutsch Bahn hasn't done badly at providing an effectively nationalised monopoly service in Germany. My experience has been that they are reliable, modern, fast and decent value for money.

[albie]

Pud,

What is your evidence that "competition can drive a better service" please?

I don't really know what you mean, so can you give a bit more substance?
I am interested in your idea that the service can be franchised, but the infrastructure held by the public sector.

Does that not mean that the public purse pays for upkeep and investment in the system, but that private providers can then take profit without risk from that provision?

[BobG]

As someone who’s a bit of a nerd when it comes to Railways, this is my take:

1. It’s certainly a positive step forward. However I’m slightly disappointed that it doesn’t go further. Now we’ve left the EU the pathway is clear for full on rail nationalisation.

2. Probably belongs in another thread, but this is at least 1 advantage to Brexit. Under state aid rules, it’s unlikely that this would be sanctioned by the EU.

3. During the 2019 general election, Labour proposed something very similar to this and were shouted down by the Tories! And now they’ve nicked the idea as their own!

HA will probably be able to correct me here if I am wrong - but I believe most of the existing francise companies are nationalised and owned by the public. It just that they are the national rail companies and public of other countries, mostly European.

So an advantage of Brexit is that our Government will be giving British taxpayers money in subsidies to German taxpayers (Arriva - which is part of Deutsche Bahn).

Ditto the water companies and  the electricity companies too. Almost all of 'em.

BobG

[Muttley]

All our national infrastructure should be nationalised IMO.

I always knew you were a socialist at heart!

[selby]

  Muttley, you don't have to be a socialist to want the main utilities under the control of the government, I think most want that to happen and taken out of the control of private companies.

[SydneyRover]

  Muttley, you don't have to be a socialist to want the main utilities under the control of the government, I think most want that to happen and taken out of the control of private companies.

Do you want this selby, do you have shares in utilities?

[Axholme Lion]

All our national infrastructure should be nationalised IMO.

I always knew you were a socialist at heart!

I am with some matters. Much of Labour's policies which won them the 1945 General Election looked ok to me.

[big fat yorkshire pudding]

Pud,

What is your evidence that "competition can drive a better service" please?

I don't really know what you mean, so can you give a bit more substance?
I am interested in your idea that the service can be franchised, but the infrastructure held by the public sector.

Does that not mean that the public purse pays for upkeep and investment in the system, but that private providers can then take profit without risk from that provision?

Yes that's in essence exactly how it should happen though the franchise can include charges for infrastructure built in to the contracts, something I have seen many times.

Many seem to have this fear of big nasty private companies. The reality is that on the ground that's not what most are.  The model should be set in a manner that the risk and reward sits with the companies.

By the way in rail the government should run its own franchise.  Compete with the private sector on commercial terms and drive the quality service that way.  Where it fails it's not often because companies are set up wrong but that contract terms were wrong, wrongly tendered or structured incorrectly.

[selby]

 As an individual share holder no Syd, as I also have some shares in  funds based  in the UK in my portfolio I probably have, they will be a small percentage though, as my main funds investments are in Europe, Asia, and the US as knowing very little of the quality of their companies I use fund management to spread the risk world wide.