Renationalise the railways?
A question to which the answer is yes.
By Mehdi Hasan Published 09 March 2012 13:58My fellow New Statesman columnist - and the new professor of contemporary thought at Brunel University - Will Self put in a typically brilliant performance on BBC1's Question Time last night, especially on the subject of rail privatisation.
He interrupted a rambling answer from fellow QT panellist and Conservative cabinet minister Eric Pickes to say:
I merely seek to observe that the [rail] subsidy was £1 billion before [when] they were nationalised, in real terms, and it's now £4 billion.
He continued:
The fundamental mistake - and there were many mistakes about the privatisation of the rail system - but the most fundamental mistake was rail travel, your journey to work, is not a fungible good and that means it cannot be exchanged for anything else. You can't get to Guildford station and think: 'Oh I went go to work in London today. I'll go to Mars on this new rocket train that's been provided by this splendid private company'.
It was a ludicrous idea from the get-go and the particular way that they did it with the track hived off from the rail operators has caused absolute chaos, some dreadful crashes and the current predicament that you find yourselves in.
"So what would you do?" asked Pickles. Self replied, to huge applause from the Surrey audience:
I'd renationalise it.
The 16-year rail privatisation experiment has been an utter disaster. Above-inflation increases in UK train fares - that are now the highest in western Europe - make it more and more unpopular as time goes by. Tory ministers, their cheerleaders in the right-wing press and their Blairite fellow-travellers in the Labour Party often forget - or choose to ignore! - that there is a clear majority in favour of renationalisation of the railways - on the left and the right. The inconvenient truth for ministers is that the likes of Bob Crow - and Will Self! - are more in touch with voters than they are. And the recent row over multi-million-pound, taxpayer-funded Network Rail bonuses - which were eventually and reluctantly waived by Network Rail bosses after public outcry - didn't do the privatisation cause much good. It was another reminder of how messed up the system is.
In fact, as transport expert Christian Wolmar wrote back in October 2008, a month after the start of the financial crisis:
[W]hat New Labour refuses to let on is that the railways are effectively largely publicly-owned anyway. Network Rail, which owns the infrastructure, is a company without shareholders that is dependent on government backed debt (to the tune of £20bn), for its survival. It receives billions in annual grants direct from government and is, to all intents and purposes, a state-run enterprise.
Wolmar also pointed out that with Network Rail already in public hands, it would cost little or nothing to "renationalise them", once the train operators decided to hand back their franchises when their terms expired or once they got into financial difficulties.
This isn't just an ideological or political argument; it's financial. A recent study by the Transport for Quality of Life thinktank found that renationalisation could save the taxpayer £1.2 billion a year "through cheaper borrowing costs, removing shareholders' dividends and reducing fragmentation". £300 million alone, said the study, would be saved if train operating companies were taken into public ownership.
It's a no-brainer: the time has come to renationalise the railways. It would be a popular, effective and money-saving move in our current "age of austerity". Ed Miliband and Maria Eagle - are you listening?
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53 comments
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Thatcher didn't nationalise the railways, 'twas Major. I thought Maggie was actually against rail privatisation...
Well at least it would put an end to the fatcat few wringing out millions upon millions of pounds in "share dividends". Richard Branson pays himself at least £24,000,000 a year out of Virgin Trains, a firm which has been bailed out ( banking style) by the taxpayer on the orders of DfT beurocrats numerous times in the 15 years that Sticky Dicky Branson has been at the helm. Little wonder then that he has a smile as wide as one of "his" Pendolino's. Northern Rail, shareholders £22 million, directors will not disclose, frontline staff have to make efficiency savings and get it in the neck.
Annual savings of £1.2bn (if this is actually achieved) are obviously better than nothing, but the government will still be subsidising the rail network by £3bn+ pa.
In what other ways will renationalisation improve teh service.
My perception of those wishfully cheering on Will Self on QT was that renationalisation would significantly reduce prices for hard-pressed commuters. But would it ? The rail networks would still be running at a massive loss.
In what way would government management of the rail system actually reduce rail costs (apart from cheaper borrowing).
Many countries have national transport systems. It's seen as an investment in infrastructure for industry and business as well as mobility. Having a joined up system would enable long term strategic planning and services that meet passenger needs.
"It's a no-brainer: the time has come to renationalise the railways."
State-run monopolies are only marginally preferable to private ones. No monopoly ever functions in the public interest.
A much better idea would be to take up the track and use the land for toll roads.
@Christo60
"long term strategic planning" by governments always ends in disaster. Not sometimes, not usually, always.
"State-run monopolies are only marginally preferable to private ones."
Why say "only marginally"?
Mainstream economics operates on the basis that most choices are about marginal benefits.
"No monopoly ever functions in the public interest"
Mainstream economic theory holds that this is only the case where there are no economies of scale.
Given economies of scale, a monopoly, private or public will deliver more at a lower cost than a competative market. This was well understood in the early 19th century and was the reason monopoly gas companies were encouraged.
"It's a no-brainer: the time has come to renationalise the railways."
The much-praised Japanese railway system is privately operated by a number of regional companies.
I don't care who owns em as long as they are used to drive Moslems to the coast and then drown em.
For all the people who are against renationalising the railways, are you equally dedicated to privatising the roads?
"a monopoly, private or public will deliver more at a lower cost than a competative (sic) market."
This is true - but 'cost' is not the same thing as 'price' ...
"Why say only marginally?"
I think you've completely missed the point here ...
"Mainstream economics", my @rse! :-)
Serious question, how many other countries actually have full-privatised railways? It is my understanding that even the U.S, the most capitalism-obsessed nation of all, has railways partly run by the state governments. Please correct me if I'm wrong. I spent a month travelling Europe by rail last year, everywhere I went the fares were justifiable and the trains were on time. Pretty sure all of these were nationalised, or majority-nationalised.
"A much better idea would be to take up the track and use the land for toll roads."
???
Problem 1: Railways lines don’t give you much road
A four-lane (2×2) motorway, is about 30m wide
Most existing two-track railway lines are 10m wide or less
Problem 2: roads based transport is chaotic so SWOT and jams are inevitable at peak times.
Centally controled sytems can avoid this.
Generally speaking, a 2-track railway will have a carrying capacity an order of magnitude greater than that of a road of the same width.
The Germans are also having problems with their publicly owned train system Deutsche Bahn. It receives subsidies of well over E10bn annually and has been criticised for lack of investment and resultant delays.
The Germans have been talking seriously of privatising it.
@Mark 90
What in my statement is fabricated?
How is this idiotic comment still up here?
breivikfan
09 March 2012 at 13:48
A great post. It shows us how far the road marked 'neoliberal extremism' we have travelled when none of our three main parties supports re-nationalisation, a measure backed by the overwhelming majority of the public. Bringing back British Rail would be a clear vote winner, as I argued here
http://www.theweek.co.uk/politics/2989/bring-back-british-rail-surefire-...
and in the NS here: http://www.newstatesman.com/business/2009/11/railways-public-privatisation
yet our parties are so in hock to global finance and big business they daren't put it forward.
Labour's refusal to back renationalisation is particularly stupid- it could have made the difference between them winning and losing the last election.
As to the government's latest proposals- where does one start?
I co-founded the Campaign for Public Ownership
http://campaign4publicownership.blogspot.com/2012/03/britains-railway-ma...
as I felt outraged that the political elite weren't listening to public opinion on this issue and
and I urge people who feel similarly disgusted by Britain's great privatised train robbery to get involved in campaigns of groups like ours and Bring Back British Rail.
London - Edinburgh is 550 Km
Berlin - Frankfurt is 550 Km
Picking a weekday at random (Mon 2 April) travelling at midday the return fares are:
UK - £100-£140
Ger - £220
@ Raymond Dance
Clearly you are an eco warrior.
I'm referring to the toll roads comment if that wasn't clear.
Prescott and Blair - well, Prescott, said Labour would renationalise it in 1997. We're still waiting... A national railway system is there to keep the country on the move - not make a profit!
The reason why trains cost so much more to operate, and to use, in Britain compared with the rest of Europe can be expressed in one word: privatisation.
We need to renationalise the railways, uniquely without compensation in view of the manner of their privatisation, as the basis for a national network of public transport free at the point of use, including the reversal of bus route and rail line closures going back to the 1950s.
Only public ownership can deliver this. Public ownership is of course British ownership, and thus a safeguard of national sovereignty. It is also a safeguard of the Union in that it creates communities of interest across the several parts of the United Kingdom. Publicly owned concerns often even had, and could have again, the word "British" in their names.
The book, a copy of which has been sent to the Reviews Editor of this magazine, can be bought here - http://www.lulu.com/product/paperback/confessions-of-an-old-labour-high-....
Did you ever travel on the railways in the nineteen seventies? Filthy, late and often not running at all because of strikes. I did, and it made me well acquainted with buses, I can tell you. Today's railways are a joy in comparison. Expensive, I grant you, but cars are not cheap either. Dr Beeching, a typical 'Whitehall knows best' apparatchik, was the most hated man since Adolf. He closed many lines, such as the one between Oxford and Cambridge, which may be re-opened. As for replacing railways with roads, that was another ridiculous solution long ago shot down in flames. I LOVE the idea of High Speed trains and the consequent death of internal air flights.
... and the utility companies.
How is something that receives 3bn pounds in subsidy "privatised"?
No matter how much I agree with the re-nationalisation of railways (and utility companies) there must be some safeguards. It must be run for the travelling public - not for the benefit of the staff. It also must have proper, accountable management, not a bunch of faceless time servers appointed from the Establishment. But what chance of anything being nationalised with this bunch of idealogues in charge? None, methinks! If it worked, it would seriously undermine their ethos.
A problem with rail is that we have a society that does not accept risk.
If we increased the criteria for rail so that the death rate was 1% per passenger mile of traveling by road then the cost of rail would reduce significantly.
The irony is in trying to make rail too good, it pushes people into cars.
So fundamentally, it will never be possible to fix the UK rail system so that it is low cost.
"The rail networks would still be running at a massive loss." Shinsei67 09 March 2012 at 13:14
It's not really a loss though is it? It's a subsidy for the economy. Without being able to get around the economy stops working. It's the cost of doing business. The point should be to minimise the subsidy. It's hard to answer your question about more savings without knowing what the saving of £1.2 billion derives from but clearly the economies of scale of centralising things like marketing, ticket sales, payroll, staff training, safety practices etc etc all of which will currently be duplicated as a multiple of the number of TOCs that exist will clearly lead to massive savings. Which I suspect explains the Surrey audiences applause as praise for simple common sense.
All of you are making valid arguments for and against the renationalisation of the railways. But should the private sector be in receipt of a 3 bn £ hand out?
Most rail travel is undertaken to move people about the country who are doing so in pursuance of their employment. This has obvious economic benefits for their employers. But in many cases its these companies who are avoiding paying their social share of rail travel costs by using tax dodging methods.
Another aspect of rail nationalisation should be a decrease in the reliance upon the road system by industry. Oh yeh but this would put privately owned road haulage companies in financial difficulties. So what maybe less lorries on the roads would mean a decrease in the cost of derv.
Labour has to make this a policy for the challenges of the next General Election.
"It's not really a loss though is it?"
Well, it's a loss in the sense that even with expensive season tickets and crowded trains the rail network costs £3-4bn more than it raises in ticket sales.
So the government chooses to pay a subsidy as the rail network is a public good.
But this subsidy as well as going to mid-range public sector workers commuting into Whitehall offices also goes to bankers commuting into the City.
So you have to ask is this a good use of £3-4bn of taxpayers money.
And I repeat the question I asked earlier what is going to cause a nationalised rail service to make considerable cost savings over the current situation ?
Does anyone think their mobile phone or broadband bills would be lower if BT were still a public monopoly ?
And the utilities, for all their faults, offer cheaper electricity and gas in the UK then most of western Europe pay.
Privatising the railways was a huge ideological mistake by the conservatives. Travelling on the the nationalised railways under British Rail was hardly one of the best experiences a rail passenger could have by any standards - but the trains ran on time and (importantly) they were cheap. Well, cheap compared to using the car anyway. My local railway operator put up fares last year by 12% - twelve-f*cking-per-cent! This at a time of recession and zero pay rises. So, I use the car - even with petrol prices and parking fees its still cheaper than buying a rail ticket.
So I say we re-nationalise the f*cking lot - the railways, the energy and water companies, Laurie Penny's blog ... THE LOT. Stick two fingers up at the piss-takers who have been making a packet exploiting the poor bloody cash-strapped public and take the f*cking whole lot back - and that includes BT too ...just for good measure . ;-)
@dan Absolutely. What's worse, from ticketing to travel it is a bleedin' farce. When you add in the idea that anyone would consider giving a bonus to the saps who run these companies - you realise just how surreal the modern world is and just how out of touch our leaders are.
Yes renationalise the railways, also the water and fuel companies All of these are things we can't do without and should not be profit making.
"Yes renationalise the railways, also the water and fuel companies All of these are things we can't do without and should not be profit making."
And nationalise the supermarkets too ? Can't do without food.
"This isn't just an ideological or political argument; it's financial. A recent study by the Transport for Quality of Life thinktank found that renationalisation could save the taxpayer £1.2 billion a year"
Well who doesn't want to save £1.2bn a year! I wonder who commissioned the report? Lets have a look:
"The report - for Aslef, the Rail, Maritime and Transport (RMT) union, the Transport Salaried Staffs Association and Unite"
Not something worth mentioning Mehdi?
And get it done before the high-speed debacle gets up and running - another scheme to move billions of pounds of public money into private hands!
"through cheaper borrowing costs, removing shareholders' dividends and reducing fragmentation"
Now lets have a look at this part.
These are illusory savings. 'Cheaper' government borrowing is just another form of subsidy, though better hidden. And by buying businesses which are expected to make zero profits/dividends forever, taxpayer money is hardly being invested wisely.
But the bigger question is, where's the analysis? Any company could borrow cheaper if it borrowed at government rates. Any industry could be taken over and have dividends canceled for "savings". Any industry with multiple competitors could be consolidated into a state monopoly to eliminate "fragmentation".
Surely this would apply to airlines? Car manufacturing? Mobile phone companies? Should all plumbers nationwide work for a single state owned plumbing company?
Its obvious that in fact there is no analysis at all. The entirety of the argument here is that private companies make profit, so by definition the public sector must be more efficient, since they don't need to make any profit.
Is it 1972 again?
i was going to make an ironic joke about Mehdi's obsession with all things Iranian/Muslims etc etc, and then i saw that there's a thing called "breivikfan" who did it in ever such a retarded manner.
poor love, i read in the BMJ that's what happens when one has swallowed down too much cum when sucking off infected cattle.
Bring back Shitish Rail, it were right good back in the 70's and 80's. Late trains, shit food on board, the trains stunk and don't forget the unions! £50,000 a tube driver is on. Brilliant! Anybody wonder why it is so expensive? A thick as fuck train driver in London almost on equal pay as GP's in France...you couldn't make it up.
At the end of the day, it depends on whether you want your money to go into the pockets of executives and shareholders, or ticket inspectors and guards. The cost of travel will roughly be the same. Privatisation allows the executives and shareholders to squeeze the money upwards. Nationalisation pushes the money downwards. But ticket costs remain the same.
If you have shares in the railways or your dad is an executive of a rail company you prefer privatisation. If your dad is a ticket inspector or guard, you prefer nationalisation.
Selling off BR was hardly A sucsess, But labour stood on A platform of renationalising the Industies the Tories sold off in the 1987 election ,and the result of that Election labour done worse in London than in 1983
@Mr Danger the argument is not based on the fact that private companies make a profit and so are less efficient. The argument is that privatisation was brought in as a money saving scheme and to increase competition and efficiency. However this has not been the case. The rail system has been running inefficiently and there appears to be no real competition as no company seems to get taken to task on their poor service. Add to this the fact that prices have rising constantly and are due to rise by another 50% in the next few years, whilst wages havent and all the while the boards of these transport companies reimburse themselves for all their 'hard work' with hefty bonuses. Their bonuses in effect seem to be covered by the increased ticket prices that are suffered by everyone else. No one would have a problem with privatisation if it was working effectively. As Medhi said, this is not an ideological debate, it is 'common sense' as D.Cameron often loves to say.
@Ziggy You can make it up actually, as you've quite succinctly proved to everyone
The first thing to do is to abandon any attempt to let the East Coast franchise. The current management of this franchise (the government) are doing a better job than the previous two private sector Train Operating Companies, both of which had to hand the keys back.
Railways already been subserdised by govenment. The differance is govrnment are not accountable. Southern railway are expensive the ticket staff are obnoxious pigs.
Within 50 years the average railway will employ as many as the average automated factory: nationalisation is dreamland.
On 3rd November 2011 the Paris Metro’s oldest and busiest line was converted to fully driverless automatic operation without any interruption of services: Metro Line number 1 is 17km long and carries 725000 passengers per day. The Siemens automatic train protection system ensures greater train frequency and faster journey times and trains are spaced at 85 second intervals instead of the 105 second intervals of driver-operated systems. The train frequency can be adapted flexibly to suit rider demands; important during special events. The conversion started with mixed running of driver operated and driverless trains and by 2013 all 49 trains will have been modified to driverless operation. Controlled by central command it has 954 platform screen doors, intercoms to the command centre and on-board cameras to maintain customer communication. It was financed entirely by the operator RATP and cost 300 million Euros only 4% more than conventional equipment replacement.
Worldwide automated driverless systems and lines
Europe
London Docklands Light Railway opened 1987 (driverless but has a Passenger Service Agent who close the doors and checks tickets during the journey).
Paris Métro Lines 1,2,3,4,5,6,7,8,9,10,11,12,13 OCTYS system provides ATP and high level ATO with mobile block system - Siemens CBTC
London's Victoria Line opened 1967 (a member of staff opens & closes the train doors but does not normally drive the trains).
London's Central Line converted to automated operation in the mid-1990s (a member of staff opens & closes the train doors and only drives the trains on Sundays; at other times trains are computer driven).
London's Jubilee Line converted to automated operation in 2011 (a member of staff opens & closes the train doors).
London's Northern Line is due to be converted in 2012.
Glasgow Subway uses driverless trains on its line. The driver checks the way is clear and operates the doors.
Munich U-Bahn (driver operates the doors and handles emergency situations, accelerating and braking is fully automated; a fully driverless turning at terminus stations is planned)
Vienna U-Bahn (uses the same system as Munich)
Barcelona Metro lines 2, 3, 5, and 11
Madrid Metro Lines 1,3,4,5,6,7,8,9,10,11,12
Madrid Metro Branch line
North America
Montreal Metro Line 1 Green, Line 2 Orange and Line 5 Blue, opened in 1966 (Lines 1 and 2) and 1986 (Line 5), operates in ATO mode introduced since 1976.
Bay Area Rapid Transit in San Francisco opened in 1972.
PATCO Speedline between Philadelphia and New Jersey operates in automated mode since 1969, but can be overridden by a staff member.
Washington Metro has an automated mode, where the driver is responsible for opening and closing of doors and of overriding the system.
South America
CPTM lines 7, 10 and 12
Caribbean
Tren Urbano - the entire system is fully automated, but can be over-ridden. Substations providing the power are remotely controlled from a operational control centre.
Asia
East West MRT Line (includes Changi Airport Extension) and North South MRT Line
Seoul Subway Lines 5,6,7,8,9 - driver on standby and will drive the train when ATO malfunctions or is not available.
Korail Bundang Line (Utilizes the SelTrac system with driver on board in case of emergencies)
Taipei Metro Red Line (Tamsui Line)
Taipei Metro Green Line (Xiaonanmen Line, Xindian Line, Xiaobitan Branch)
Taipei Metro Blue Line (Banqiao-Nangang Line, Tucheng Line)
Taipei Metro Orange Line (Zhonghe Line, Xinzhuang Line, Luzhou Line)
Tokyo Metro Marunouchi Line (Main line converted to ATO in 2010, Hōnanchō branch continues to use ATC/TASC)
Tokyo Metro Namboku Line
Tokyo Metro Fukutoshin Line
Tokyo Metro Chiyoda Line (Kita-Ayase branch)
Tokyo Metro Hibiya Line (ATO trialled during the 1960s, trains now operated in manual mode)
Tokyo Metropolitan Bureau of Transportation Toei Ōedo Line
Nankō Port Town Line in Osaka
Osaka Municipal Subway Nagahori Tsurumi-ryokuchi Line
Osaka Municipal Subway Tanimachi Line (ATO trialled from October 1967 until February 1968, trains now operated in manual mode)
Fukuoka City Subway Kūkō Line
Fukuoka City Subway Hakozaki Line
Fukuoka City Subway Nanakuma Line
Sendai Subway Nanboku Line (World's first railway system to use fuzzy logic to control the speed of trains)
Yokohama Municipal Subway Green Line
MTR Kwun Tong Line
MTR Tsuen Wan Line
MTR Island Line
MTR Tung Chung Line
MTR Airport Express
MTR Tseung Kwan O Line
MTR East Rail Line
MTR West Rail Line (Utilizes the SelTrac system with driver on board in case of emergencies)
MTR Ma On Shan Line (Utilizes the SelTrac system with driver on board in case of emergencies)
Beijing Subway Line 4 (Utilizes the SelTrac system with driver on board in case of emergencies)
Wuhan Metro Line 1 (Utilizes the SelTrac system with driver on board in case of emergencies)
The best reason for nationalising the railways can be found here.
http://www.publications.parliament.uk/pa/cm200506/cmhansrd/vo060228/hall...
Mehdi is wrong on this one, call me a Blairite fellow-traveller or whatever.
I am not pro-privatization but to nationalise the railways may have additional costs, it might not be very good for the private sector and companies will just provide their own competition. Though my own view is that Thatcher should not have privatized the railways, I do not think that renationalisation is a viable answer. I think we should seek to mutualise the railways instead so they can be properly owned by the travellers and by the workforce, but regulation to ensure lower fares etc. Also, the rest of England needs proper democratization of the transport, like in London.
But on travel, Labour shouldn't be seeking leftwing populist ideas which may not be entirely sensible but they should be looking to fresher ideas like mutualisation, but also reforming the way we do transport. Many Tory voters are angry at the high fuel prices, energy prices and transport prices. If Labour promises a cut in fuel duty by 1.5p per litre, it will fuel growth and jobs but help people with travel as well as becoming incredibly popular.
Mike C writes, 'If you have shares in the railways or your dad is an executive of a rail company you prefer privatisation. If your dad is a ticket inspector or guard, you prefer nationalisation.'
Stupid comment. As the majority of us are neither you take the argument no further forward.