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Source: (consider it) Thread: Rail nationalisation
Ricardus
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Would rail nationalisation be a Good Thing? I used to think so, but now I think It Isn't That Simple.

- AIUI, the private companies don't have very much autonomy at all in how they operate. I think the franchises specify what level of service is expected, many fares are regulated, and any kind of infrastructure change (electrification, opening new lines, new stations, etc) is a government decision. I think even deciding what kind of fleet you run has to be done through the Department for Transport. So, if you want the railways to be under democratic control, they kind of are already, and the debate is really about financing.

- OTOH, it doesn't make much sense to praise 'private sector innovation', and then take away most of its capacity to innovate.

- The franchising model is hideously complicated. I have a theory that once a system reaches a certain level of complexity, it is impossible to avoid perverse incentives, and also people start spending more time trying to 'play the system' than achieve whatever the system is set up to achieve.

- AIUI, as a percentage of the amount of money sloshing round the railways, the amount lost through dividends is not that high, and any attempt to finance the railways has to be paid for somehow. OTOH, I'm pretty sure Treasury bonds are cheaper.

- In the four years I've been commuting by train, the service in my area has quite noticeably improved and is set to improve further.

- The number of passengers has doubled since privatisation. So the income from fares should have doubled as well and this should be reflected in service improvements.

- I understand privatisation has actually strengthened the hands of the rail unions. British Rail could tell their drivers to take it or leave it, but if Northern drivers don't like what they're offered, they can take their services to First Transpennine, etc.

- Trains are not owned by their operators but by leasing companies that keep a very low profile. Apparently they are a licence to print money ...

If these thoughts don't seem to be leading to any conclusion, that's because I don't have one.

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Then the dog ran before, and coming as if he had brought the news, shewed his joy by his fawning and wagging his tail. -- Tobit 11:9 (Douai-Rheims)

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mr cheesy
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The problem with nationalisation is that national industries tend to be underfunded and poorly run. Running the railway is challenging and politically difficult to justify if it includes a lot of government wastage.

On the other hand, the privatised railway isn't exactly immune from government handouts and isn't always run well and efficiently.

As far as I can see, the problem isn't really to do with private vs public ownership, it is to do with the complexity of the privatisation model.

I think it would be a real challenge for the government to take it on and do it better. I'm not sure they really have the will to do it.

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my new book: Biblical But Bollocks. Available in all good bookshops.

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Boogie

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Yep.

Nationalise it - fund and manage it well.

While I watch the pigs fly by the window.

I wish all companies on earth were not-for-profit. All profits to be used in reinvestment and wages.

Oooops there goes another.

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Garden. Room. Walk

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DaleMaily
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The paradox that nationalised rail companies in other countries can own private rail franchises in the UK, and use the profits (and UK govt. subsidies) to subsidise fares in their countries is frankly bizarre.
In defence of the Major govt. that privatised the rails in the 90s, use was at an almost all-time low and I don't know of anyone who predicted it would be at the level it is today.

I like the idea of taking franchises back into govt. ownership as and when they expire, and it's quite likely that it could work very well in some areas and not at all in others; is there a problem with having some sections nationalised and others privatised? If the policy works well for South Eastern, keep it. If it doesn't work well for South West Trains, re-privatise it.

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The more I get to know the less I find that I understand.

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Doc Tor
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The inherent problem with privatising a monopoly is that it encourages rent seeking behaviour. Your 'customers' have no alternative, and you can milk them as if they were nothing more than a dairy herd.

Which is what's happened, over and over again, following the familiar cycle of government disenvestment, failing service, privatisation, rising prices and corporate profits.

To the point where many of our public utilities are back in state hands. It's just not our state that owns them. Every time I take a ride on our local Metro, I'm subsidising a passenger to go from Dusseldorf to Bonn.

And to take the now infamous case of East Coast Mainline, which returned a embarrassing sack of cash to the treasury when the previous franchise holder walked out and a non-profit government company had to take over.

So yes. When the franchises expire, take it back into public ownership. It's vital national infrastructure.

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Improbable Botany

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Baptist Trainfan
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Rail privatisation was done under John Major for purely ideological reasons. It was done in a hurry and has left us with a ridiculously complex, expensive and initially dangerous structure.

Its one advantage to me is that the industry can plan long-term investment and infrastructure projects; when nationalised it was subject to too much meddling by "here today, gone tomorrow" politicians.

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Doc Tor
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I'd be happy to see the railways taken over by a non-profit arms-length government agency, overseen by a cross-party committee, if that makes it more stable.

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Improbable Botany

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quetzalcoatl
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Railtrack has an interesting history, as I think it was privately owned to begin with. However, there were a series of conflicts with the regulator, and then the Hatfield crash seemed to cause panic, as it was unclear if a private company could carry out all the needed repairs and checks. This can be very expensive.

[ 12. May 2017, 11:17: Message edited by: quetzalcoatl ]

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no path

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Dafyd
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The problem with the present system is that it has few of the advantages of private enterprise. If you have short term contracts to run a service that gives an incentive to asset strip; if you have long term contracts you have no competition. The government can't let a service fail so it can't let them take risks.

If you can't get the advantages of private enterprise youight as well nationalise and get the advantages of public ownership.

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we remain, thanks to original sin, much in love with talking about, rather than with, one another. Rowan Williams

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Sioni Sais
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quote:
Originally posted by Dafyd:
The problem with the present system is that it has few of the advantages of private enterprise. If you have short term contracts to run a service that gives an incentive to asset strip; if you have long term contracts you have no competition. The government can't let a service fail so it can't let them take risks.

If you can't get the advantages of private enterprise youight as well nationalise and get the advantages of public ownership.

Well put. Back before the rationalisations devised by Dr Beeching, which were desperately needed by a nationalised network, many routes were duplicated so competition was possible on many major routes. The duplicate routes were with few exceptions removed (Settle & Carlisle, a few in the South-East) so competition is very rare. All one is left with is a service level agreement, and no franchisee will take on an SLA that doesn't provide them with a healthy operating profit.

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Ricardus
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quote:
Originally posted by Doc Tor:
The inherent problem with privatising a monopoly is that it encourages rent seeking behaviour. Your 'customers' have no alternative, and you can milk them as if they were nothing more than a dairy herd.

Hence regulated fares ...

(It has just occurred to me as odd that rent controls in the form of regulated fares are entirely mainstream, whereas rent controls on actual rent are seen as some mad Marxist experiment ...)

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Then the dog ran before, and coming as if he had brought the news, shewed his joy by his fawning and wagging his tail. -- Tobit 11:9 (Douai-Rheims)

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chris stiles
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quote:
Originally posted by DaleMaily:
The paradox that nationalised rail companies in other countries can own private rail franchises in the UK, and use the profits (and UK govt. subsidies) to subsidise fares in their countries is frankly bizarre.

Not such a bizarre paradox if you accept that it's possible for a nationalised industry to run such things well.

And as it happens in more than one industry (energy being the other example) perhaps the lesson is to look at the reasons why it succeeds in France and Germany and fails in the UK.

Personally I think a lot of it can be blamed on the entrenched class system; which caused people at differing levels of the hierarchy to view each other as ontologically different on some level which meant that they would never pull together towards the same goal, along with the view that science and engineering (unless it was theoretically or done at a loss) was somehow something fairly grubby and not what a gentleman would do.

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Marvin the Martian

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I do not agree that rail nationalisation would be a good idea.

Firstly, there is absolutely no reason to assume that the current levels of rail spending would continue afterwards, and every reason to assume that they would fall. The railway would become just one more public service, and one that would be a very tempting target for governments who want to save a few quid or transfer the money to other areas. As things stand, the government is tied into franchise contracts that it cannot just abandon. Nationalisation would mean an inevitable return to the days of underfunded services using obsolete stock.

Even with these contracts tying the government's hands to some extent, rail funding keeps getting reduced and projects keep getting shelved. With a free hand to do what they like to the railways, does anyone seriously think the government would suddenly decide to do anything other than cut costs left, right and centre?

Secondly, customer service would suffer immensely. Without competition (even the level of competition provided by having to get your franchise renewed every few years) there would be no incentive for rail bosses to care about their passengers, because the passengers would have no alternatives whatsoever. "Like it or lump it" would become the order of the day. I'll grant that there are a lot of routes right now where there is no competition on a day-to-day basis, but a vastly unpopular franchise is unlikely to be renewed and that in itself provides an incentive for the bosses to keep their passengers happy. Also, if lack of competition is the problem then surely the answer is to allow more companies to enter the market rather than creating a countrywide monopoly and eliminating competition altogether!

Thirdly, just look at how much better the railways have been since privatisation. Passenger numbers have more than doubled. Thousands of new trains have been built to replace the worn-out ones BR was happy to keep using. Instead of the line and station closures that characterised BR, new lines and stations have been opening at a rate not seen since before the wars. Safety has improved immeasurably - nobody on board a train has been killed in an accident for over 10 years (Grayrigg, February 2007). These are hardly indicators of a failing system!

I fail to see any reason other than blind ideology why the railways should be nationalised.

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Hail Gallaxhar

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ThunderBunk

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Marvin, I would turn everything you have said on its head. Competition requires redundancy which is why, in a network like the railways, it's almost impossible. Privatisation has not created any interest in enhancing services for passengers whatsoever. It has simply led to an obsession with evacuating value from the network into the hands of commercial companies with no interest in the network or its passengers other than keeping that process of bleeding dry just about functioning.

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Currently mostly furious, and occasionally foolish. Normal service may resume eventually. Or it may not. And remember children, "feiern ist wichtig".

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quetzalcoatl
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I would add that Railtrack was nationalized, I think in 2002. This was after the Hatfield crash, after which I don't any private company was prepared to take on the job of maintaining safety, with all the continual checking and repairs needed. There's a moral here somewhere, I just can't extract it.

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no path

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Doc Tor
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Marvin - this is from the Institute of Economic Affairs (hardly a hotbed of Marxist thought, and indeed the article goes on to press for more deregulation). It opens with:
quote:
Taxpayer subsidies to the rail sector have reached astronomical levels. At £6 billion per year (including Crossrail), they have roughly trebled in real terms over the last twenty years. But the high rate of subsidy has not led to a reduction in fares, which recently have risen above the official rate of inflation.
It's plain that all the costs (new trains and new infrastructure) are nationalised, while the profits are privatised. If we'd given BR three times the cash in real terms, we wouldn't be having this conversation now. So while your point one stands, it only does because the current system is gamed in favour of the private companies. Nationalisation would be cheaper for the tax payer.

Your second point seems to lack the self-awareness of someone who travels regularly by train. Lack of competition is inherent in supplying a monopoly service. I can't choose to get a different train provider to get to London, and very few people can.

Your third point is tied to the answer to the first. With a three-times real increase in subsidy, of course it's got better. It's got better because we've paid for it, not the private companies.

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Improbable Botany

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Marvin the Martian

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quote:
Originally posted by ThunderBunk:
Competition requires redundancy which is why, in a network like the railways, it's almost impossible.

All competition requires is more than one company providing similar services. Look at the success of Hull Trains or Grand Central on the East Coast Main Line, or the fact that since privatisation the West of England line has become a genuine alternative option for passengers from Exeter to London rather than the closure-threatened backwater it was under BR.

We need to be opening more lines and creating more competition in the network, not going back to the days of no choice.

quote:
Privatisation has not created any interest in enhancing services for passengers whatsoever.
And yet service enhancements have happened at a far faster rate than they ever did under BR.

quote:
It has simply led to an obsession with evacuating value from the network into the hands of commercial companies with no interest in the network or its passengers other than keeping that process of bleeding dry just about functioning.
I simply do not recognise the modern rail network in this comment. I mean, obviously the companies make a profit but customer service is miles better now than it was under BR.

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Hail Gallaxhar

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Marvin the Martian

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quote:
Originally posted by Doc Tor:
If we'd given BR three times the cash in real terms, we wouldn't be having this conversation now.

My whole point is that if the railways were nationalised we wouldn't give BR the cash. The government would spend it on something else.

quote:
Nationalisation would be cheaper for the tax payer.
At what cost to service levels?

quote:
Your second point seems to lack the self-awareness of someone who travels regularly by train. Lack of competition is inherent in supplying a monopoly service. I can't choose to get a different train provider to get to London, and very few people can.
If I want to get to London from here I have a choice of three different companies, two of which use exactly the same tracks. A monopoly is simply not an inevitable situation for the railways.

I would like to see a change to the franchise system to allow multiple companies to operate trains over each route, or at least each main line, as currently happens on the WCML (other than a little bit in the middle) and ECML south of Doncaster. Combined with construction of new lines that would see an improvement in services for everyone.

quote:
Your third point is tied to the answer to the first. With a three-times real increase in subsidy, of course it's got better. It's got better because we've paid for it, not the private companies.
My point is that that level of increased spending would simply never have happened without privatisation.

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Hail Gallaxhar

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mr cheesy
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I think to be fair that the situation is entirely dependent on where you are and where you are going.

I think the vast majority of journeys have no competition at all.

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my new book: Biblical But Bollocks. Available in all good bookshops.

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Ricardus
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quote:
Originally posted by Doc Tor:
Marvin - this is from the Institute of Economic Affairs (hardly a hotbed of Marxist thought, and indeed the article goes on to press for more deregulation). It opens with:
quote:
Taxpayer subsidies to the rail sector have reached astronomical levels. At £6 billion per year (including Crossrail), they have roughly trebled in real terms over the last twenty years. But the high rate of subsidy has not led to a reduction in fares, which recently have risen above the official rate of inflation.
It's plain that all the costs (new trains and new infrastructure) are nationalised, while the profits are privatised.
Your last paragraph does not follow from what the article says. The article does not say that the huge increase in subsidies is being extracted from the system in the form of private profit. It says the subsidies are being wasted in the form of financially inefficient infrastructure upgrades and pointless bureaucracy. IOW, the financial inefficiency - in the view of the author - is caused by government decisions, not by private rent-seeking.

To address an earlier point: I do not think it is consistent on the one hand to say that railways should be under government ownership, and then complain that the historically crap state of the railways is because the government underinvested in them.

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Then the dog ran before, and coming as if he had brought the news, shewed his joy by his fawning and wagging his tail. -- Tobit 11:9 (Douai-Rheims)

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Doc Tor
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quote:
Originally posted by Marvin the Martian:
quote:
Originally posted by Doc Tor:
If we'd given BR three times the cash in real terms, we wouldn't be having this conversation now.

My whole point is that if the railways were nationalised we wouldn't give BR the cash. The government would spend it on something else.
Well, that's just the game plan I outlined on my first post. Underfund, privatise, corporate profits.

We can choose to do it differently. And more cheaply. And as East Coast Trains showed, better in every single way.

You're saying that nationalisation is ideological. But so was privatisation. And it's failed to cut costs, failed to cut fares, failed customer satisfaction, and failed to maintain the infrastructure. Everything good about the railways is down to the public money spent on it. The private companies do the bare minimum (or below - every time a train is late, the taxpayer supplies the compensation) and take away the 'profit'.

But you're good with that, right?

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Improbable Botany

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Doc Tor
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quote:
Originally posted by Ricardus:
Your last paragraph does not follow from what the article says. The article does not say that the huge increase in subsidies is being extracted from the system in the form of private profit. It says the subsidies are being wasted in the form of financially inefficient infrastructure upgrades and pointless bureaucracy. IOW, the financial inefficiency - in the view of the author - is caused by government decisions, not by private rent-seeking.

No, the article doesn't say that the increase in subsidies is due to private profit, and it does say that it's down to government inefficiencies. But that's because the article is from a free-market right-wing think tank with its own drum to beat. I was using the figures from a right-biased source so that I didn't have to link to yet another Guardian page.

But the point still stands. The taxpayer builds the infrastructure. The company off-shores the profit gained from an investment they didn't have to finance. Trebles all round!

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Improbable Botany

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ThunderBunk

Stone cold idiot
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quote:
Originally posted by Ricardus:

To address an earlier point: I do not think it is consistent on the one hand to say that railways should be under government ownership, and then complain that the historically crap state of the railways is because the government underinvested in them.

It's perfectly consistent. The greater evil is private ownership by rentiers looking to drain every last penny from the network. The lesser evil (if only because it costs the taxpayer less) is underfunded public ownership, though that requires the luxury of a transport network that can cope with a gently declining rail network. We have neither luxury: we can't afford to support rentiers or have the rail network in decline, and therefore a well-supported, well-functioning rail network in public ownership is essential.

[ 12. May 2017, 17:16: Message edited by: ThunderBunk ]

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Currently mostly furious, and occasionally foolish. Normal service may resume eventually. Or it may not. And remember children, "feiern ist wichtig".

Foolish, potentially deranged witterings

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Ricardus
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# 8757

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quote:
Originally posted by Doc Tor:
No, the article doesn't say that the increase in subsidies is due to private profit, and it does say that it's down to government inefficiencies. But that's because the article is from a free-market right-wing think tank with its own drum to beat. I was using the figures from a right-biased source so that I didn't have to link to yet another Guardian page.

But the point still stands. The taxpayer builds the infrastructure. The company off-shores the profit gained from an investment they didn't have to finance. Trebles all round!

Both you and the IFS agree that for every £1 of extra subsidies, the quality of the network only increases by the equivalent of 50p (or at least some amount that is less than £1). Which raises the question as to where the other 50p goes. I'm not saying you're wrong on this point (it's one of the questions I have about the network), but I don't think the answer is that it's extracted by private interests, because, AIUI, the amount paid out in dividends, though a big number in itself, is only a small percentage of the money in the system.

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Then the dog ran before, and coming as if he had brought the news, shewed his joy by his fawning and wagging his tail. -- Tobit 11:9 (Douai-Rheims)

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Doc Tor
Deepest Red
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Small percentage is true - somewhere between £300-500m from a total income of around £10bn - 4%ish. Much of which goes to subsidise European state railways, and we're not factoring executive levels of pay and bonuses either.

But I thought the argument was that privatisation was supposed to be efficient, driving down costs etc. It hasn't and it won't.

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Improbable Botany

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Ricardus
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# 8757

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quote:
Originally posted by Doc Tor:
But I thought the argument was that privatisation was supposed to be efficient, driving down costs etc. It hasn't and it won't.

I agree, that particular argument for privatisation doesn't seem very convincing to me. But the converse argument for nationalisation doesn't seem to me all that convincing either, for the reasons I've stated.

(The other factor to take into account would be the transfer of financial risk - but my understanding of this is even more limited.)

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Then the dog ran before, and coming as if he had brought the news, shewed his joy by his fawning and wagging his tail. -- Tobit 11:9 (Douai-Rheims)

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lilBuddha
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Transport will always have government subsidy, or will only be available for the wealthy. To maintain a system open to everyone, privatisation doesn't make sense, least of all the hodgepodge that exists currently.
Nationalisation has its issues, but those can be addressed as well. Inefficiency is a bit overplayed as the private companies have a bit of this as well and shift money out of the system.

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So goodnight moon, I want the sun
If it's not here soon, I might be done
No it won't be too soon 'til I say goodnight moon

- A. N. Parsley, D. Mcvinni

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Russ
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Franchising is a form of sequential competition which avoids the redundancy of direct competition.

BR was too big to be allowed to fail. Franchise operators aren't.

In BR days there was huge inefficiency relating to archaic work practices.

If the railways are currently better run than they've been for a long time, maybe it's a good time for evolutionary change rather than trying to tear things up and impose an entirely different model.

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Wish everyone well; the enemy is not people, the enemy is wrong ideas

Posts: 2867 | From: rural Ireland | Registered: May 2001  |  IP: Logged
Shubenacadie
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# 5796

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When talking of monopolies, remember that other forms of transport are available. OK, there's not much alternative for commuting into central London, but for many journeys, trains are in competition with cars, buses and/or aeroplanes, and the only monopoly the railways have is people like me who avoid those alternatives whenever possible.

quote:
Originally posted by Russ:
In BR days there was huge inefficiency relating to archaic work practices.

Remember too that the nationalised railway lasted for 45 years and changed during that time. BR in its last few years was, if I remember rightly, said to be one of the most cost-effective national railway systems in Europe, going by how much service it provided relative to the amount of subsidy.
Posts: 52 | From: UK | Registered: Apr 2004  |  IP: Logged
Dafyd
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# 5549

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quote:
Originally posted by Russ:
Franchising is a form of sequential competition which avoids the redundancy of direct competition.

The redundancy is a prerequisite for the advantages of competition. In order for competition to be effective in regulating prices the market has to be responsive, and it can't be responsive if there's no redundancy.

quote:
BR was too big to be allowed to fail. Franchise operators aren't.
You can't allow them to fail in the middle of their contract.

quote:
If the railways are currently better run than they've been for a long time, maybe it's a good time for evolutionary change rather than trying to tear things up and impose an entirely different model.
The most inefficient that the railways have been in my lifetime was immediately after privatisation. They improved once Railtrack was effectively renationalised.
The quality of the East Coast Main line, which is the service I use most often, seems to have gone down a little since 2015 when it was taken out of the nationalised holding company and given to Virgin.

Marvin might be right that the quality of the service would improve if you could run two services on the same line. Although it seems to me that the advantages to passengers of competition between operators might well be outweighed by the disadvantage of having to decide what time to travel on the basis of which operator they wanted to travel on.

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we remain, thanks to original sin, much in love with talking about, rather than with, one another. Rowan Williams

Posts: 10146 | From: Edinburgh | Registered: Feb 2004  |  IP: Logged
L'organist
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# 17338

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A good thing? Not if it means going back to the "good old days" of the 70s and 80s with wild-cat strikes, work-to-rules, cancellations, rude staff, etc, etc, etc.

While some of the current franchise holders seem able to provide a half-way decent service on many lines (Southern anyone?) it is either as bad as it always was or worse - and no, I'm not just thinking of the running sore of the row over OMO trains.

Imposing a franchise system that reintroduced some of the worst byzantine lunacies of the pre-nationalisation era was a work of utter folly and any move to bring back into public ownership would at least mean a joined-up national framework for things like ticketing, etc.

IMV the problem is two-fold: the perennial one of lack of investment is bad and will only be solved when it is recognised that not only is a massive amount required and that disruption will be huge; then there is the perhaps more pressing problem which is that we seem to have lost the knack of being able to run a railway system in the UK.

Maybe its time to hand it over to someone else lock, stock and barrel?

[ 13. May 2017, 10:21: Message edited by: L'organist ]

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Rara temporum felicitate ubi sentire quae velis et quae sentias dicere licet

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Enoch
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# 14322

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quote:
Originally posted by L'organist:
... Imposing a franchise system that reintroduced some of the worst byzantine lunacies of the pre-nationalisation era was a work of utter folly and any move to bring back into public ownership would at least mean a joined-up national framework for things like ticketing, etc. ...

Sorry. That isn't correct. The pre-nationalisation era wasn't that byzantine because the same entity owned the track and operated the trains that ran on it. The companies were more than a bit complacent. Had they continued, it is almost inevitable that at least one of them would have gone bust by about 1955 and had to have been bailed out. Nerds can argue over their beers about which one would have capsized first.

There was though quite a lot of route duplication and the disruption following from nationalisation meant that getting round to doing anything about it was postponed for about 15 years.

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Posts: 7095 | From: Bristol UK(was European Green Capital 2015, now Ljubljana) | Registered: Nov 2008  |  IP: Logged
mr cheesy
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# 3330

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I think another factor to consider is the massive increase in rail passengers on many lines. It is hard to know how British Rail might have coped because it never had to cope.

Rail privatisation has had many problems, however it is generally true to say that it has provided services to meet demand because of the profit imperative which meant that more passengers = more profit. Of course this has noticeably failed on some lines eg Southern.

In contrast, a nationalised railway might have not given two shits about what passengers actually wanted or needed because it made no difference to anyone within the nationalised structure whether there were 2 journeys or 2 million journeys.

It is true that the Europeans seem to have their heads screwed on with regard to nationalised railways, but there are also some large nationalised railway systems which show the lack of investment and will to make changes. Take the Indian railway system as an example. It is supposedly one of the biggest employers on the planet and moves enormous numbers of people about, and yet suffers from terrible underfunding and lack of investment.

The chances of individual commuters affecting the decisions made on some Indian railway lines seems astronomically small.

I'm generally a believer in nationalised industries and deplore the stupidity of the British railway, particularly ticketing. But I'm not really convinced that re-nationalising the thing is going to make it better.

I suspect the only thing which could make the British rail system better would be a regulator with teeth - whoever actually operated the trains and owned the track. And that's very unlikely to happen.

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my new book: Biblical But Bollocks. Available in all good bookshops.

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Baptist Trainfan
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# 15128

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quote:
Originally posted by Dafyd:

BR was too big to be allowed to fail. Franchise operators aren't.

You can't allow them to fail in the middle of their contract.

GNER did, so did Connex - that's why those routes went back (for a while) into the public sector.

[ 13. May 2017, 13:48: Message edited by: Baptist Trainfan ]

Posts: 8772 | From: The other side of the Severn | Registered: Sep 2009  |  IP: Logged
Dafyd
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# 5549

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quote:
Originally posted by Baptist Trainfan:
quote:
Originally posted by Dafyd:
You can't allow them to fail in the middle of their contract.

GNER did, so did Connex - that's why those routes went back (for a while) into the public sector.
I'm not sure that 'we can always nationalise them if they fail' is a compelling reason not to nationalise them.

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we remain, thanks to original sin, much in love with talking about, rather than with, one another. Rowan Williams

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Sioni Sais
Shipmate
# 5713

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quote:
Originally posted by Dafyd:
quote:
Originally posted by Baptist Trainfan:
quote:
Originally posted by Dafyd:
You can't allow them to fail in the middle of their contract.

GNER did, so did Connex - that's why those routes went back (for a while) into the public sector.
I'm not sure that 'we can always nationalise them if they fail' is a compelling reason not to nationalise them.
On the other hand, we could say "Wait until they fail, then renationalise them".

I doubt it will take long.

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"He isn't Doctor Who, he's The Doctor"

(Paul Sinha, BBC)

Posts: 23807 | From: Newport, Wales | Registered: Apr 2004  |  IP: Logged
Enoch
Shipmate
# 14322

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quote:
Originally posted by mr cheesy:
I think another factor to consider is the massive increase in rail passengers on many lines. It is hard to know how British Rail might have coped because it never had to cope. ...

There's a very strong argument for saying that the massive increase in passengers would never have happened if the old BR had been allowed to go on rattling along its familiar tracks, that the shake up in the industry is what has caused the service to attract more people to use it.

quote:
Originally posted by Sioni Sais:
On the other hand, we could say "Wait until they fail, then renationalise them".

There's also a pretty strong argument for saying that if a franchise goes bust, that's proof that its value is negative. So the bankrupt franchisee shouldn't get compensated for being relieved of its obligations.

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Brexit wrexit - Sir Graham Watson

Posts: 7095 | From: Bristol UK(was European Green Capital 2015, now Ljubljana) | Registered: Nov 2008  |  IP: Logged
lilBuddha
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# 14333

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quote:
Originally posted by Enoch:
quote:
Originally posted by mr cheesy:
I think another factor to consider is the massive increase in rail passengers on many lines. It is hard to know how British Rail might have coped because it never had to cope. ...

There's a very strong argument for saying that the massive increase in passengers would never have happened if the old BR had been allowed to go on rattling along its familiar tracks, that the shake up in the industry is what has caused the service to attract more people to use it.
Really? And just how would all the new people to the system got around?

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So goodnight moon, I want the sun
If it's not here soon, I might be done
No it won't be too soon 'til I say goodnight moon

- A. N. Parsley, D. Mcvinni

Posts: 16061 | From: out of the corner of your eye | Registered: Dec 2008  |  IP: Logged
Eirenist
Shipmate
# 13343

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The local franchisee here (Chiltern Railways) provides an excellent service, jointly with London Transport. It's owned by Deutsche Bahn, though . . .

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'I think I think, therefore I think I am'

Posts: 368 | From: Darkest Metroland | Registered: Jan 2008  |  IP: Logged
Marvin the Martian

Interplanetary
# 4360

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quote:
Originally posted by Doc Tor:
Well, that's just the game plan I outlined on my first post. Underfund, privatise, corporate profits.

It's almost as if you think things would be different if the railways were renationalised now.

quote:
We can choose to do it differently. And more cheaply.
But we won't. Renationalisation would be a return to the bad times.

quote:
And as East Coast Trains showed, better in every single way.
East Coast Trains was a franchise that happened to be owned by the government, which is a very different thing to the whole railway being owned by the government. For one thing, a nationalised railway wouldn't have any franchise commitments to keep.

quote:
You're saying that nationalisation is ideological. But so was privatisation. And it's failed to cut costs, failed to cut fares, failed customer satisfaction, and failed to maintain the infrastructure.
Costs and fares aren't going to fall. Fact. Customer satisfaction is far higher than in BR days, mostly because private companies actually give a shit about it while nationalised ones don't. The infrastructure, meanwhile, is probably better than it's ever been.

quote:
Everything good about the railways is down to the public money spent on it. The private companies do the bare minimum (or below - every time a train is late, the taxpayer supplies the compensation) and take away the 'profit'.
That's not true - compensation for late running is paid by the Train Operating Company that is responsible for the delay.

quote:
But you're good with that, right?
I don't have an ideological objection to companies making a profit, if that's what you mean.

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Hail Gallaxhar

Posts: 29706 | From: Adrift on a sea of surreality | Registered: Apr 2003  |  IP: Logged
Alan Cresswell

Mad Scientist 先生
# 31

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quote:
Originally posted by Marvin the Martian:
Costs and fares aren't going to fall. Fact. Customer satisfaction is far higher than in BR days, mostly because private companies actually give a shit about it while nationalised ones don't. The infrastructure, meanwhile, is probably better than it's ever been.

On the first, I basically agree. The costs of running the rail network are what they are, and the potential savings from nationalisation (eg: no longer providing a profit for shareholders) will be marginal. So, unless the government subsidises the service far more than they currently do fares are also going to remain more or less the same in order to cover those costs.

I'm a lot less sure about your assertions that a) private companies git a shit about customer satisfaction and b) that nationalised companies don't. I fail to see the evidence to support either of these assertions. Where there is genuine competition and poor customer satisfaction is a driver to people switching then that may be an impetus to improve customer service - but, given the experience of privatised energy or telecoms companies who generally provide shit service despite the fact that it's very easy to change it certainly isn't a universal feature of privatised services, and where there is no alternative and there's a de-facto monopoly (eg: only one franchise holder on the route you need to use) even less so.

Though, if a nationalised company is in the hands of a Tory government it does, of course, go without saying that they wouldn't give a shit about their customers. Why should they when the Tories don't give a shit about anyone else in the country?

I also agree that the rail infrastructure is in a much better state than before privatisation. Though, whether similar improvements would have also occured under a nationalised BR is impossible to answer. But, much of the infrastructure is still in need of improvement. Private operators are only going to invest in improvements where those improvements will result in a return on their profits. Which limits them to improvements that will make that return before the end of their franchise (since they're not guaranteed to win it again, especially if the competition can build on their investment without actually having paid for it), and many improvements have a long term pay-back. Network Rail being in public hands at least allows some of that long-term investment in the infrastructure to take place. Other improvements may be needed but not profitable, and so private operators are going to be reluctant to pay for them. There are lots of commuters who would really love a bit more space on their commute, even if they still can't get a seat - but, longer trains need longer platforms, more frequent trains need line and signalling that can cope, both of which are expensive. If the improvements don't significantly boost passenger numbers then there is little scope for increased income to pay for these investments, and private operators will invest where that investment will either cut operating costs or boost passenger numbers (or both) so that the investment will be repaid (within the duration of the franchise). Again, public ownership means that public money can be invested in these upgrades, with the investment repaid through other parts of the economy (eg: less stressed and more productive employees).

The biggest problem with nationalisation is that the government changes. It only takes 2-3 Parliaments with a government unsympathetic to the railways to underinvest in maintenance and improvements and the whole thing goes south. A private company at least has a profit motive to maintain a minimal level of service to renew their franchise. A government determined to follow an extremely ill-advised and destructive austerity programme with an eye only on that years balance sheets will almost inevitably cut funding to vital services, leaving future governments to pick up the pieces (at much greater cost than maintaining things now). We've seen the Tories over the last decade gut everything they can lay their hands on, the railways would be no different.

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Don't Brexit if you haven't a scooby how to fix it.

Posts: 31744 | From: East Kilbride (Scotland) or 福島 | Registered: May 2001  |  IP: Logged
Doc Tor
Deepest Red
# 9748

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quote:
Originally posted by Marvin the Martian:
quote:
Originally posted by Doc Tor:
Well, that's just the game plan I outlined on my first post. Underfund, privatise, corporate profits.

It's almost as if you think things would be different if the railways were renationalised now.
Yes. So do an awful lot of other people. (60% in favour)

quote:
quote:
We can choose to do it differently. And more cheaply.
But we won't. Renationalisation would be a return to the bad times.
'When did you stop beating your wife?' [Roll Eyes]

quote:
quote:
And as East Coast Trains showed, better in every single way.
East Coast Trains was a franchise that happened to be owned by the government, which is a very different thing to the whole railway being owned by the government. For one thing, a nationalised railway wouldn't have any franchise commitments to keep.
And wouldn't be infected by the short-termism. And look how well things went when government owned East Coast were running on government owned Railtrack. It's almost an exemplum, or something.

quote:
quote:
You're saying that nationalisation is ideological. But so was privatisation. And it's failed to cut costs, failed to cut fares, failed customer satisfaction, and failed to maintain the infrastructure.
Costs and fares aren't going to fall. Fact. Customer satisfaction is far higher than in BR days, mostly because private companies actually give a shit about it while nationalised ones don't. The infrastructure, meanwhile, is probably better than it's ever been.
Because it's government run. Duh.

quote:
quote:
Everything good about the railways is down to the public money spent on it. The private companies do the bare minimum (or below - every time a train is late, the taxpayer supplies the compensation) and take away the 'profit'.
That's not true - compensation for late running is paid by the Train Operating Company that is responsible for the delay.
Granted. Except for the execrable Southern trains, where a great deal of the problem is, and they do exactly this.

quote:
quote:
But you're good with that, right?
I don't have an ideological objection to companies making a profit, if that's what you mean.
You're good with privately owned monopolies holding users to ransom. Got that.

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Improbable Botany

Posts: 8413 | From: Ultima Thule | Registered: Jul 2005  |  IP: Logged
AndyHB
Apprentice
# 18580

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quote:
Originally posted by Ricardus:
Would rail nationalisation be a Good Thing? I used to think so, but now I think It Isn't That Simple.

Having read the thread through fairly quickly, I think the real problem is the severe lack of a balanced transport policy from any of the main parties. If the parties were to consider such a policy, then we would see more appropriate levels of funding being directed towards the various foirms of transport. All too often the governing party feels that it has to be seen to be 'improving' the roads, or the tracks, or the cycle routes or pedestrianised areas. Rarely do they think about all the forms equally.

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lilBuddha
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# 14333

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quote:
Originally posted by AndyHB:
All too often the governing party feels that it has to be seen to be 'improving' the roads, or the tracks, or the cycle routes or pedestrianised areas. Rarely do they think about all the forms equally.

For one, they are not equal. Nor should they be so considered.

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So goodnight moon, I want the sun
If it's not here soon, I might be done
No it won't be too soon 'til I say goodnight moon

- A. N. Parsley, D. Mcvinni

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Leorning Cniht
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# 17564

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quote:
Originally posted by lilBuddha:
For one, they are not equal. Nor should they be so considered.

Thinking equally about several things is not the same as thinking them equal. If you're not thinking about some of the things for ideological or political reasons, you probably got it wrong.

[ 15. May 2017, 20:26: Message edited by: Leorning Cniht ]

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lilBuddha
Shipmate
# 14333

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quote:
Originally posted by Leorning Cniht:
quote:
Originally posted by lilBuddha:
For one, they are not equal. Nor should they be so considered.

Thinking equally about several things is not the same as thinking them equal. If you're not thinking about some of the things for ideological or political reasons, you probably got it wrong.
I'm not convinced AndyHB had any sort of real point anyway.

--------------------
So goodnight moon, I want the sun
If it's not here soon, I might be done
No it won't be too soon 'til I say goodnight moon

- A. N. Parsley, D. Mcvinni

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Marvin the Martian

Interplanetary
# 4360

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quote:
Originally posted by Alan Cresswell:
I'm a lot less sure about your assertions that a) private companies git a shit about customer satisfaction and b) that nationalised companies don't. I fail to see the evidence to support either of these assertions. Where there is genuine competition and poor customer satisfaction is a driver to people switching then that may be an impetus to improve customer service - but, given the experience of privatised energy or telecoms companies who generally provide shit service despite the fact that it's very easy to change it certainly isn't a universal feature of privatised services, and where there is no alternative and there's a de-facto monopoly (eg: only one franchise holder on the route you need to use) even less so.

I heartily agree with you about customer service being irrelevant to a provider who has a monopoly - but a monopoly is a monopoly, whether privately-owned or government-owned.

So no, for various reasons it isn't a universal feature of privatised systems. But privatised systems are run by companies that want to maximise profits. To do that they need to sell more of their product to more people, and to do that they need to have a product that people will choose to buy instead of the products of their competitors. This requirement is what drives investment, innovation and improvement.

Conversely, in a monopoly situation there is no need for the provider to innovate, improve, or even maintain existing standards. They can provide as shitty a service as they like for as little investment as they like because their customers have no choice but to accept what they're offering. Nobody here would deny that truth in the case of a private company, so why on earth would it be any different when the monopoly is held by the government? I mean, the private company would at least be interested in making a profit, whereas the government doesn't even have that motivation to provide something people will like.

quote:
Though, if a nationalised company is in the hands of a Tory government it does, of course, go without saying that they wouldn't give a shit about their customers. Why should they when the Tories don't give a shit about anyone else in the country?
My only disagreement is with the implication that the other Parties would be any different.

quote:
But, much of the infrastructure is still in need of improvement.
It always will be.

quote:
Private operators are only going to invest in improvements where those improvements will result in a return on their profits. Which limits them to improvements that will make that return before the end of their franchise (since they're not guaranteed to win it again, especially if the competition can build on their investment without actually having paid for it), and many improvements have a long term pay-back.
This is where the franchise allocation system comes into play. The various bidders all propose improvements that they will implement if they get the franchise, and the one with the best proposal wins. The losers don't make any profit because they don't get to run any trains at all.

quote:
Network Rail being in public hands at least allows some of that long-term investment in the infrastructure to take place.
True, but it also means that investment is liable to be removed the moment the government decides it doesn't want to spend the money any more. Midland Main Line electrification being an excellent case in point.

quote:
Again, public ownership means that public money can be invested in these upgrades
It can, yes. I just don't believe it will.

quote:
The biggest problem with nationalisation is that the government changes. It only takes 2-3 Parliaments with a government unsympathetic to the railways to underinvest in maintenance and improvements and the whole thing goes south. A private company at least has a profit motive to maintain a minimal level of service to renew their franchise. A government determined to follow an extremely ill-advised and destructive austerity programme with an eye only on that years balance sheets will almost inevitably cut funding to vital services, leaving future governments to pick up the pieces (at much greater cost than maintaining things now). We've seen the Tories over the last decade gut everything they can lay their hands on, the railways would be no different.
I completely agree. Which is yet another reason why nationalisation is such a bad idea.

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Hail Gallaxhar

Posts: 29706 | From: Adrift on a sea of surreality | Registered: Apr 2003  |  IP: Logged
Dafyd
Shipmate
# 5549

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quote:
Originally posted by Marvin the Martian:
This is where the franchise allocation system comes into play. The various bidders all propose improvements that they will implement if they get the franchise, and the one with the best proposal wins. The losers don't make any profit because they don't get to run any trains at all.

In other words, it's a monopoly punctuated by short periods of competition in which the franchise is awarded by the government.

Now, it is a premise of your position that the government just doesn't care about anything except saving money. That is certainly not going to change if the government's only involvement is to award the franchise (allowing it to pin the blame for any failings on the franchise operator). So the government certainly is not going to award the franchise on the basis of innovation or investment. It's only on your premises going to award the franchise on the basis of minimising government payments. (Or possibly maximising the amount of revenue that goes to companies with good lobbyists, but that's not much of an incentive to investment either.)
If nationalised railways don't work, then railways run on a government-awarded franchise don't work either.

The reason rail services have improved is that contrary to your premise the last Labour government did actually care.

Also, of course, some of the rail services are being run by the nationalised railway services of other countries.

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we remain, thanks to original sin, much in love with talking about, rather than with, one another. Rowan Williams

Posts: 10146 | From: Edinburgh | Registered: Feb 2004  |  IP: Logged
Marvin the Martian

Interplanetary
# 4360

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quote:
Originally posted by Doc Tor:
quote:
Originally posted by Marvin the Martian:
It's almost as if you think things would be different if the railways were renationalised now.

Yes. So do an awful lot of other people. (60% in favour)
That doesn't mean you're right.

quote:
quote:
quote:
We can choose to do it differently. And more cheaply.
But we won't. Renationalisation would be a return to the bad times.
'When did you stop beating your wife?' [Roll Eyes]
You are suggesting that a government monopoly would mean a fantastic level of service and innovation, based on what? Some notion that the government will love us and want us to be happy?

quote:
quote:
For one thing, a nationalised railway wouldn't have any franchise commitments to keep.
And wouldn't be infected by the short-termism.
The average UK rail franchise runs for ten years, which is twice as long as the maximum length of any UK government. And yet you think franchises are more likely to be infected by short-termism than governments?

quote:
And look how well things went when government owned East Coast were running on government owned Railtrack. It's almost an exemplum, or something.
For what it's worth, I don't really have a problem with government-owned companies bidding for franchises, so long as the bidding process is done fairly. It's the franchise system itself that provides the competition necessary for improvement and innovation to thrive.

quote:
quote:
That's not true - compensation for late running is paid by the Train Operating Company that is responsible for the delay.
Granted. Except for the execrable Southern trains, where a great deal of the problem is, and they do exactly this.
Southern is in the middle of a dispute with the RMT union that has been running for over a year now, and is the cause of most of the disruption. I find it sad that the company is the only one getting any grief about it.

quote:
You're good with privately owned monopolies holding users to ransom. Got that.
I've said more than once on this thread that I'd like to see competition increased on the railways.

And as I just said to Alan, if a monopoly is holding users to ransom it doesn't really matter whether it's privately-owned or government-owned. The users still get shafted.

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Hail Gallaxhar

Posts: 29706 | From: Adrift on a sea of surreality | Registered: Apr 2003  |  IP: Logged
Marvin the Martian

Interplanetary
# 4360

 - Posted      Profile for Marvin the Martian     Send new private message       Edit/delete post   Reply with quote 
quote:
Originally posted by Dafyd:
Now, it is a premise of your position that the government just doesn't care about anything except saving money.

No, it is a premise of my argument that the government doesn't care about people. Tory, Labour, Lib Dem, UKIP, SNP, Green - none of them give a shit about us. We're just statistics on a spreadsheet to them, numbers to be shuffled around and played with in order to further the implementation of their ideologies.

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Hail Gallaxhar

Posts: 29706 | From: Adrift on a sea of surreality | Registered: Apr 2003  |  IP: Logged



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