Who cares about the railways?

Well…I do, and I know lots of readers of this blog do. The most popular site that you’ve clicked through to from this blog over the first five months of this blog is…the New Adlestrop  Map which maps much of England’s old rail network before Beeching ripped it up.

Stereotypical popular culture tends to relegate all things transport as something uncool that only trainspotters in old anoraks are interested in. You don’t get the music industry over here making top tracks about “Station Road” like our continental cousins.

– By Tape Five

I think trainspotters & other rail enthusiasts are great – they are the eyes and ears of the rail network. They also do what they do for free. Without them, the network would be in an even worse state than it already is.

I’ve blogged before about housing and transport. Transport – and trains are in the news today because it’s the annual fare rises that kick in. Having watched the money drain from my salary during my commuting days, and given what’s happening to inflation vs low salary/wage rises, I wonder how close to the ‘tipping point’ employees are getting before they say to employers that they can no longer afford to work for them due to the costs of getting to & from work.

One of the things that I have been toying with is trying to collate an evidence base around the state of our transport network along with a quantitative analysis of past policies (including rail privatisation) on said network. My own view of rail privatisation is that it was done in a manner that made its reversal nigh on impossible. The BBC points the finger at this lot for the privatisation, one of whom (Sir George Young) is now Leader of the House of Commons.

The latest fare rises have brought up renewed calls for renationalisation – which is my preferred system on the grounds that railways are a natural monopoly. You don’t have lots of firms competing against each other providing broadly similar services. There’s not enough land to go round for a start. There are also very few substantial alternatives (e.g. road or short-haul air, the latter of which is subsidised as aviation fuel is not taxed).

I also have issues with the privatised and fragmented system because of accountability issues. Who’s accountable when stuff goes wrong? In the mind of the general public, they don’t see the separation of Network Rail and the train operating companies and the rolling-stock-owning companies (ROSCOs – that in my view bleed the railways dry – look at those profit margins). The general public just wants to get from A to B promptly, safely and comfortably, on time and not get ripped off in the process. Life’s too short for most of them to look into the intricacies of who does what. It’s the same with politics. Most people don’t separate the executive from the legislature. When government ministers moan that ‘it’s a problem for Parliament to solve, people don’t see the niceties of Whitehall structures. You’re a politician paid by tax payers: sort it out!

The above you could say are issues of principle – economic, political and public administration. Those in favour of privatisation could point to their own such principles of trying to bring in market forces to force greater efficiencies in the railway network. But what does the data say? This for me is where campaigners in favour of renationalising the railways need to go. Things like:

  • Comprehensive data of state subsidies to the railway network over the past 30 years. How much was the government subsidising the rail network by in the run up to privatisation, what were the figures post privatisation and post-railtrack?
  • A breakdown of that data to cover capital and revenue spending. How much went on stations? How much went on the tracks and signals? How much went on rolling stock?
  • Given the profit margins of rolling stock companies, how much of a stake does the government get in the rolling stock purchases that it subsidises? In the latest round, we the tax payer subsidised the purchase of £188million of new rolling stock to the tune of £80million. Who owns the asset? Or have we just handed over all of that money to the rolling stock companies to clean up? The same question arises with the Crossrail contract of £1.4billion. Who will own the rolling stock? Will we, the taxpayer get some of the revenue that comes from leasing the rolling stock or will the rolling stock companies clean up – again?
  • Over the same 30 year period, what has been the expenditure and profit margins of all private firms? I assume Companies House will have that information but part of the challenge will be finding out which firms were working on the railways given the fragmentation and extensive and poorly managed subcontracting that was in part responsible for a number of high profile accidents such as Hatfield and Potters Bar.
  • How much money was spent in the years post-privatisation on procurement, contracting and sub-contracting? How did this compare to arrangements pre-privatisation in terms of costs, deliverables and outcomes?
  • What has been the additional upfront investment (i.e. that was not reinvested revenue) that has come into the railways as a result of privatisation? What is the net figure when comparing the amount of money that has gone into the network versus money that has leeched out of it?
  • What has been the change in the amount of money raised/collected as a result of increasing fares over the past 30 years? (Both annually and comparing pre and post-privatisation figures).

Broader questions and issues include:

  • What have been the changes in the number of people employed on the railways and in the types of jobs people do? Have they become more skilled? Less skilled? More clerical/managerial/administrative? What impact have technological advances had on the railways? Where have they led to increased costs? Where have they led to decreased costs? Where have they led to better and more reliable services?
  • How many rail lines have been built and/or reopened since privatisation? What has been the economic impact? How many jobs have been created (or reasonably attributed) to the opening of those lines? (Think the old East London Line and the integration of London Overground into the London Tube Network. Compare the old tube maps of the late 1990s to the maps of today – and ponder the differences that having an integrated network (and a map that publicises the Overground routes) now have. Exactly.
  • Which politician or which organisation has strategic oversight of where the transport and rail network is going in the future? Who has the vision for example to drive the re-connection of Oxford and Cambridge? Who has the vision to see the benefits of extending such a line all the way out to Norwich and Bristol respectively, potentially taking off a lot of traffic going into London? Who has the vision to make similar observations in other parts of the country? The New Adlestrop Atlas misses out the North of England. In my view that project needs to be completed and digitised in a manner I set out in the section titled Making the old railway map useable in my blogpost about Open data for transport infrastructure. I’d like to think that visualising the potential on a map might just stimulate the minds of people who can make these things happen. (One for a university geography department or research unit to take on? Cambridge University did a historical one for the 19th Century) Given the parlous economic state of parts of the north of England in particular, I’d like to think that investment in transport infrastructure could help reverse the decades of decline. We know that transport spending is skewed towards London. For me it’s not a case of less spending for London and more for the north, investment should be increased across the board – especially at times like this. Hence it will be interesting to see what impact future infrastructure bonds will have in particular on investment in rail infrastructure. Will the Government be able to leverage funds locked up in pension and insurance companies (that need lower risk investments) to kick start investment in transport that might help to alleviate some of the economic problems?
Those of you interested in the issues I’ve raised in this blog may be interested in the Better Transport Campaign (which tweets at FairFaresNow on rail issues). You may also be interested in Christian Wolmar‘s writing at www.ChristianWolmar.co.uk  


5 thoughts on “Who cares about the railways?

  1. I don’t begin to have all the answers to this, but these are issues I have given quite some thought to over the years (especially as my MA thesis is about EU rail liberalisation).

    First of all, I think there is something deeply rooted in British capitalism that explains how bad the UK experience has been – a British firm is more likely to asset-strip than a German one. Plus there are traditions in some other countries for state owned firms to behave more like market players too (DB acquiring Arriva, NS with Abellio etc.)

    Second, there are some aspects of the UK rail market that make it fiendishly complex. It’s massively centred on London, because the UK is very centred on London. Major investment has not happened for decades (how many other EU countries have so much diesel power still?) and trying to invest in an already overcrowded network is not simple.

    Third, the way privatisation was done was probably wrong, by creating too many small firms. I don’t buy the argument that separation of track from operators is a bad idea, as it works OK elsewhere in Europe (and is indeed required under EU law). Plus some of the open operators (Grand Central for example) have been genuine innovators.

    More state intervention is definitely in order, but I am not sure this necessarily means nationalisation of services. East Coast (state owned) could of course be allowed to bid to operate other franchises…

    Overall though the UK has not in recent times had a holistic debate about the future of its transport policies. What modal mix do we want? Do we favour basic, cheap, regular services, or fewer, expensive ones for businessmen? Do we prioritise commuters or long distance travellers? Once we work out some of the answers to those questions we might manage to have some decent political decisions in transport policy.

  2. I don’t fully buy Jon’s argument that it’s a “tradition” of operators like DB and NS to “behave like market players”. Abellio, Keolis (SNCF) and the various DB companies (Regio, Schenker, Arriva) are in the UK because they see that there is a chance to make money out of the British market, while their home markets are proving slow to deregulate.

    What we’re looking at is a system which creates a net of export UK rail subsidy (and therefore export UK taxpayers’ money) to Germany, Netherlands and France, which either a) reduces those rail systems’ requirements for subsidy, and/or b) pays dividends to shareholders.

    The complex privatisation of the railways in the UK has benefitted others at the expense of the person who should matter the most – the passenger. (Though you could argue those foolish enough to buy Railtrack shares didn’t get a good deal either.)

    Aside from the complex failures below the surface, the most visible failure to the consumer is almost none of the promised choice, other than “take it or leave it”, nor competition, save for some minimal activity from open access operators on niche routes.

    Even then, it’s a deeply inclined playing field the open access player finds themselves in. These operations seem to come with the risk of being squeezed by the DfT being unable to give the open access operator reasonable track access, as happened with Wrexham & Shropshire on paths and station calls through the Midlands – effectively denying them the ability to compete with Virgin, because Virgin were protected by a “moderation of competition” clause in their franchise. Furthermore, open access operators are now being pursued by organisations who already hold franchises, such as DB acquiring Grand Central. Time will tell if this is as a base for expansion, or a predatory move. Maybe we’ll get to see, if a DB company wins the ICEC franchise in 2013?

  3. For me the most insulting thing about the privitisation of the railways is that every time I take a train I’m thanked by a bunch of soulless adverts and automated announcements for “choosing” to have travelled with that operator. My choice was not to travel with Virgin Trains!! My choice was to go from Manchester to Bristol, and because there is only one way to do that using a train, I have been forced into using Virgin Trains, despite the fact that their trains are overcrowded, uncomfortable, preposterously expensive, have one table per carriage, tiny windows which don’t open and a bizarre smell permeating the vestibules that I presume is related to the incessant air conditioning. If I had a choice I would have used East Coast because the journey would be cheaper, I would get a table, there are nice big windows and more comfortable seats, but unfortunately I would also end up in a completely different place.

  4. I’m not sure about the railways being a natural monopoly, after all they were largely built by competing independent operators. They became a monopoly in the process leading to nationalisation and the “rationalisation” that followed so that duplicate lines were taken out because there was no need for them when there was a single operator. As infrastructure competition has been withdrawn since the effective renationalisation of railtrack it is not surprising that there is limited innovation in new routes.

    However, we’re not in the c19th any more and the economic drivers that enabled investors to build parallel networks or to fight it out over alternative routes within larger towns are weakened by the competition from the road network so perhaps this is why, if rail is not to be seen as part of a broader transport market it is now a natural monopoly.

    Prior to privatisation br had become very efficient but the question is whether that efficiency would come back on nationalisation and whether it could be combined with the sorts of innovation and investment that are usually driven by competition but which have not materialised in rail at least in part because a competitive market was never created.

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