Tuesday, 24 July 2018

Changing Trains

Few coherent people entirely support the policies of just one political party and one of the Labour policies I warm to is the proposal to renationalise the railways.

Despite being old enough to remember how much worse they were before privatisation than they are now, the idea has deep emotional appeal.

Trains really don't make sense in a privatised-for-competition kind of a way: just like the water and sewage companies, it's all a bit peculiar.

Buses work out badly under competition but you can at least conceive that on the profitable routes at the busy time of day three or four operators can whisk a bus along a bit of road and compete on frequency, price or the like.

But trains can't so easily weave around one another. On the odd route where they can compete, the demand that you buy tickets before travel and while trying to crane your neck round to look at a departure board on the other side of the station from the ticket office to check whether you want this ticket or that ticket if you are to be able to board a timely train. But for most of us, rail competition is a work of fiction, as we have a monopolistic supplier for whatever commute or common trundle up the line to the big town we most often make.

But this is a bit of a heart versus head kind of a subject. And the more I think about it, the more I struggle with two things about renationalisation, even ignoring the potential impact on private pension provision and the like.

First - that I think most people cheering on the idea of rail nationalisation believe it will put an end to the ridiculous fares we pay in the UK.  "The rail companies make millions off of us!" goes the cry. 

The trouble is that's millions in profit from billions in turnover: take the profit out of the system and you free about 2% of the money involved.  With annual fare rises officially of the order of 3%-4% and actual fare rises* locally ranging between 10% and an outrageous 45% in recent years, 2% is not a lot to take out of the system. It's not even one year's worth of fare rises.

A fare freeze for a year and you've taken all the profit out of the system.  I think when the fare rises then go back to their usual painful pattern there would be a lot of public disappointment.

The second problem is taking rail investment into the hands of the government. There are two parties who mostly take turns having power in the UK - and to be blunt, one of them is about twice as effective at winning elections as the other.

Thinking about the agendas of recent Chancellors, do we want to go from the ongoing programme of new rolling stock being added to the network in the past twenty years to a situation where two years out of three there would be scant investment because public spending is "bad" and the rail unions bankroll the 'wrong' party?

* How do they keep getting away with this lie by the way? They claim 3% or the like in the headline figures but then every damn ticket gets rounded up by another 9p.

1 comment:

  1. T'other problem is that while a government could get rid of the franchisees easily, they don't own the trains.

    The trains are owned by Angel, Porterbrook and Eversholt. And you'd either have to buy them out, or you'd have to carry on paying rent, while buying new trains yourself as the government - and keep doing that for the lifespan of the trains they all just bought last week, ie about 40 years.

    Buying them out would cost a fuck of a lot of money, and waiting 40 years would take a very long time to make a difference.

    They do take out quite a lot of profit (more than the train companies do) and they also spend money on interest, which is at a higher rate than the government would pay (ie the banks make a profit too), so there are some real savings to be had in there. Maybe two years of fares freeze. Two years in the next 40, and fares going up as much as ever in the other 38.