It’s that time of year when rail
passengers find out how much their fares are going up by again. The latest
rise, determined by today's RPI inflation figure, will take the overall
increase in fares to around 25% during this Parliament. That’s just
extortionate! Labour has had to weigh in too with Shadow transport secretary
Mary Creagh warning of a further rise of 24% by 2018 should the Conservatives
stay in power. All that’s just the usual political tit-for-tat, but there
should now be a bigger issue going on in the background, that of who actually owns
and runs the railways and who pays for them.
Train travel shouldn’t be expensive;
it should benefit from "economy of scale" and be the cheapest
form of transport. This is where it fails. It is often more expensive than a
taxi. Some European lines cost one-seventh of those in the UK. The average
commute into London costs three and a half times that into Paris and ten times
that into Rome.
Fares are so high in the UK because of the Treasury's rail franchise
bid system where the highest bid wins, meaning the passengers have to pay
higher fares. It is in effect a stealth tax imposed by the Treasury hiding
behind the rail operators to raise more revenue from an unsuspecting public
being steadily priced off the railways.
All Done Wrong
The privatisation of the railways was done against the advice of
everyone who knew anything about the subject. Quite predictably, it cost far
more in subsidies than the old nationalised system. In a few years it destroyed
more than a century of experience in safety and track maintenance.
Don’t forget, it finished off most of what was left of our train
manufacturing businesses. Passenger numbers increased not because of privatisation
but in spite of it, as more and more people were forced by unhinged house
prices to commute vast distances to work – and could only do so by train.
Good Idea if Done Right
Privatisation was a fine idea if it had been introduced correctly –
however it wasn’t! The whole point of privatising public services was to open
them up to the commercial market place, to generate competition which will then
bring down prices. This never happened on the railways, franchises are
generally regional with the winning operator providing most services and thus
having a monopoly. Because they’re run by a cartel which conspire to squeeze as
much money out as possible, there is no competition. You can cross the Atlantic
for the same as a peak time fare to London, its gone beyond obscene these days.
The bigger problem for me is the subsidies the operators receive. In
reality the whole rail franchising arrangement is fundamentally flawed and
unsustainable. In 2012/13 the train operating companies collectively received
£1.3bn in direct subsidies through franchise receipts and a further £3.9bn in
indirect subsidy through investment in Network Rail services. In return, train
operating companies paid back just £1.2bn in franchise payments to the
government, but they took £172m in profits and paid out £204m in dividends to
shareholders. How is this beneficial to us
the taxpaying public?
The idea should have been to run the railways and other industries as a
public service not as a profit making enterprise. There is no way that a
railway for example can be run if there are shareholders and executives making
hundreds of thousands in salaries and dividends. A railway simply because of
how it works could never ever make a ‘real’ profit. It should have been run
with the public service in mind, not as a means of a few people using money
from the Government and the public to laugh their way to the banks.
How can we sell off a railway and then the company that runs it gets
taxpayers money to fund it? Where’s the sense in that? But we allow it and do
nothing , could you see other European countries putting up with that ?
Yes, Investment Is Happening
For many years, investment in such things as electrification almost
ceased. So I can’t fault this Government in investing in the railway infrastructure,
and yes they are putting billions into it, with schemes like the Northern Hub;
large scale expansion of electrification; Crossrail and yes the much derided
HS2 (not the right solution that one, see previous blogs on my opposition).
But who’s all this investment going to benefit? Well if the current arrangements remain in
place, financially the private train operating companies are quids in. The
passengers pockets won’t benefit, fares will just continue to rise to fill the
pockets of the TOC shareholders.
Another thing that has improved is punctuality, but this is another
whitewash. It’s only because the timetables are now padded to avoid penalties
from the ‘Passenger’s Charter’. The trains themselves take just as long if not
longer, and break down just as much, but are not officially late.
The Whole Thing Needs Looking At
A sure fire indicator that things aren’t working is when they start
going back to what they had. I find it amazing that Network Rail, successor to
the disastrous Railtrack, is now officially classified as a ‘government body’
and its debts of £30 billion are part of the national debt. Meanwhile, one of
the most successful ‘privatised’ train companies, East Coast, is currently
publicly owned, and many of the others are owned by foreign state railways.
Look at the figures referred to above. The train operating companies
paid the government £1.2bn in franchise payments whilst making profits of
£172m. Well unless my maths are wrong that means they raised c£1.4bn, why shouldn’t
this be made by the taxpayers?
The time is right to re-look at the whole operation, this needs to
include :
- Reverting to state ownership by not renewing franchises as they end
- Investment in rail manufacturing
- The leasing companies – who should own the rolling stock?
- Selling off of unused railway land
- Removal of parking charges at rural and suburban stations which just add to the fares
- Simplifying the whole tickets and fare structures so that passengers know they’re travelling on the cheapest available ticket for the train they’re on.
- Significantly reduce prices to those comparable with other European countries. Yes this will cost money, but it is a public service, something we seem to have forgotten.
- Create better freight flows which will bring in proper revenue, this should be linked to getting freight off the roads. Investment and encouragement would be needed but it would be for the good of everyone.
- Scrapping of trains that are over 30years old, my office overlooks the mainlines into Manchester Piccadilly Station and at least 60% of the trains that go past were built in the 70s and 80s and to coin a phrase are knackered’!
The list could go on I’m sure. We have strategic reviews of things like
defence every few years, now it’s time for one on the railways. It’s time to
learn the lessons of not just the last 20 years but the last 150 years.
I Can Dream
I can dream but I hope that if UKIP were to have a hand in government
(part of a coalition maybe?), it will re-nationalise all of our beloved railway
and return it to a public service for the good of the UK, instead of a
profit-centre for the fat cats it is now. LibLabCon are happy for things to
carry on as bad as they are now, and we can't rely on them to improve anything.
I used to love travelling by train but I find the fares today are just extortionate;
I won't give the operators the satisfaction of lining their pockets.
So the truth will out. In my humble opinion it was always better for
the railways to be nationalised and subsidised. What a pity it took us so many
years and so many billions of wasted money to find out what we already knew.
Bring back BR. Maybe follow Labour’s lead and call it ‘New-Rail’.
