Why we're still being taken for a ride by our train companies

There are too many "vested interests" to keep happy.

This week, two stories broke regarding the rail industry. On Tuesday it was the fact that fares are set to rise in January by up to 11 per cent on some journeys. That pushed the second to the very top of the news agenda: today's news that First Group has beaten off Virgin’s bid for the West Coast Main Line franchise.

The rise in fares was as predictable as death and taxes, and slightly more depressing than both. In real terms, they're now up a fifth since 1995. An annual ticket from London to Brighton now costs as much as a second-hand VW Golf, and that leaves change for some go-faster stripes for the seafront. Our trains are among the most expensive in Europe. Why?

If the train business doesn’t seem like any other industry, that’s because it’s not. Successive governments have never quite decided whether they’re a business or a social necessity – and they know full well there’s a decent case for the latter, because they’re clean, and thousands of people don’t die on them every year, which they do on the roads.

That means that under the current model you’ve got three competing obligations: quality (which takes investment), affordability and shareholder dividends. You can’t meet all three without money – so the burden for this was supposed to be split between the taxpayer and the passenger. That split used to be roughly 50/50, but the burden on passengers has crept up and up for the last 10 years towards 75 per cent passenger input.

You might say this could pose a few conflicts of interest, and you’d be completely understating the case. According to the Department for Transport the case for structural change has not been made. And this is true, assuming you discard countless industry experts, analysts and, um, the government’s own command paper on the subject.

It’s hard to know where to start. Fares can’t continue to rise at this rate, or the only people taking the train will be Lakshmi Mittal and at a push the Queen, assuming she can get an old person’s rail card. But the government hasn’t given any indication as to when the fares will stop going up. Given that it’s committed to £18bn of investment on goodies like Crossrail and Thameslink, not saying anything is probably a good idea, because it's going to be a decade at least.

But to be honest this is less of a problem than a point raised in the aforementioned command paper: the way the current system heaps the risks on taxpayers while giving fat payouts to shareholders, like the £88m pocketed last year by Stagecoach’s two founders (the polite euphemism in such reports is of “incompatible incentives”). This is due to the fact Labour (unchallenged by the other parties) brought in “revenue support” clauses, which guarantee taxpayers cover 80 per cent of shortfall between franchisees' forecasts and their actual revenues.

They’re not small, these sums of money. To pick an example entirely at random: despite paying out £340m to its shareholders last year, Stagecoach - the company with the directors who presumably keep their earnings in a pit with a diving board like Scrooge McDuck - also received £68m in bailout funds for the third South West Trains franchise a year ahead of schedule, after taking legal action against the government. At least RBS waited for things to really go belly up before they shafted us. This sort of thing might annoy those readers who think the railways should be publicly funded, but there’s something for everyone here, because ever since the railways were privatised the subsidies have flown up.

They might be siphoning cash straight out of the exchequer, but don’t worry, these companies are rummaging around in your pockets for loose change at the same time. Ever wondered why buying a ticket from a machine is like attempting to deal in equity derivatives while a 30-strong, tutting queue builds up behind you? Why you can get a “group save” in some places but not others, why you never seem to know for sure if your advance ticket is valid for the journey you’re trying to take, what constitutes "off peak", when “anytime” actually is?

You’d think the train companies would realise there’s an issue, what with successive reports on the subject by the Office of Rail Regulation and Which? pointing out that we all find the labyrinthine systems confusing, but maybe the message hasn’t got through. Either that or overpayments and fines are a nice little sideline.
 
Still, some friendly ticket office staff can help us, can’t they? Well, this leads us back to First Group’s bid for the West Coast rail franchise. It prompted Richard Branson to write to David Cameron, reminding him that the East Coast line had been handed to GNER and then National Express, both of whom hadn’t been able to deliver on their promised plan. Branson was apparently writing from the moral highground despite the fact Virgin has received £1.4bn in subsidies after, well, failing to deliver on its plans for the franchise. Sounds ludicrous? Well done; you're getting the hang of this.

What makes First Group more attractive? The fact it promises to run the line for less. How will it do that? Assuming you don't buy the growth predictions of eight per cent (generous), there’s only one way, and that’s by cutting jobs. This is assuming it does run the line, and doesn’t hand back its contract after promising to pay overly-ambitious premiums, as it did with another last year (which actually meant it was able to keep running the franchise for a few months without paying for it - result!).

The great irony is that somehow all this mess hasn't created that terrible a service. Anyone who thinks renationalisation is a silver bullet hasn't spent six hours in the waiting room at a provincial station on the Continent with no air conditioning and nothing but the town lunatic's thousand-yard-stare to keep you company; pretty much my summer of Interrailing in microcosm. But then anyone who thinks something good can come out of bodies that aren't competing in any normal way probably wasn't watching the women's badminton at the Olympics. The fact is, no one wins.

Actually, that's not quite true. Take a deal like Chiltern Railways' promise to invest £250m to cut journey times between London and Birmingham and provide an alternative route between Oxford and London. It's borrowing the money from Network Rail, which owns the infrastructure. Network Rail can do this because the government guarantees all its debt. The government has promised that Chiltern's successor will pay the outstanding amount once Chiltern's franchise ends, thus guaranteeing a loan from funds it's already underwriting. Have you got that? No, me neither. And such arcane deals require a veritable army of lawyers and consultants; an army that's deliberately complicated the various bidding processes in order to make itself ever more needed.

If Labour don't opt for renationalisation after its policy review, let's hope it looks seriously at simplifying the system - one train operator; one provider of infrastructure. It probably won't happen: there are a lot of "vested interests" (the same ones who were the party's corporate partners only a few years ago) to keep happy. There are all sorts of other ways of getting value for money out of the railways which haven't been explored like developments around train stations, but this is the big one. The alternative is that we all continue being taken for a ride.

 

First Group has beaten off Virgin’s bid for the West Coast Main Line franchise. Photograph: Getty Images

Alan White's work has appeared in the Observer, Times, Private Eye, The National and the TLS. As John Heale, he is the author of One Blood: Inside Britain's Gang Culture.

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Manchester united: "A minority of absolute idiots are trying to break us apart"

At the vigil, one man's T-shirt read: "The only thing that's allowed to be separated by colour is the laundry."

A day after one of the worst atrocities in the history of the city, Manchester's people were keen to show the world the resilience of the Mancunian spirit.

Dom's, an Italian restaurant, is in walking distance from Manchester Arena, where 22 people lost their lives to a suicide bomber the night before. On Tuesday, the staff were giving out free coffee, tea and pizza to anyone who needed it. On a table outside, there was a condolences book, and teary passersby left RIP messages to those who perished. Under a bright blue sky, the community seemed more united than ever, the goodwill pouring out of everyone I met. But the general mood was sombre. 

"We need to make space for healing and for building up our community again, and just getting people to feel comfortable in their own city," the Dean of Manchester, Rogers Govendor, told me.

The terrorist has been named as Salman Ramadan Abedi, a 22-year-old Mancunian of Libyan descent. But with a population of 600,000, Manchester is a cosmopolitan hub, and proud of it. Throughout the day I encountered people of all skin shades and religions. On one of the roads off Albert Square, a couple of Orthodox Jewish boys set up a little stand, where people could grab a bottle of water and, if they so desired, hold hands and pray.

On the night of the tragedy, Muslim and Sikh cab drivers turned off the meter and made their way to Manchester Arena to offer free rides to anyone - many of them injured - who trying to escape the mayhem and reach safety. "It's what we do around here," my taxi driver said with a thick Arabic accent.

The dissonance between the increasingly frantic debate on social media and what was discussed on the streets was stark. I spoke, on and off the record, with about two dozen residents, eavesdropped on a number of conversations, and not once did I hear anyone speaking out against the cultural melting pot that Manchester is today. If anything, people were more eager than ever to highlight it. 

"Manchester has always been hugely multicultural, and people always pull together at times of trouble and need," said Andrew Hicklin. "They are not going to change our society and who we are as people. We live free lives."

It was also a day where political divisions were put aside. Theresa May and Jeremy Corbyn agreed to suspend their campaigns. For the next few days there will be no Labour vs Tory, no Brexiteer vs Remainer, at least not in this part of the country. This city has closed ranks and nothing will be allowed to come between that cohesion.

"I don't demonise anyone," said Dennis Bolster, who stopped by to sign the condolences book outside Dom's. "I just know a small minority of absolute idiots, driven by whatever they think they are driven by, are the people who are trying to break us apart."

Later in the day, as people were getting off work, thousands flocked to Albert Square to show their respects to the victims. Members of the Sikh community entered the square carrying "I love MCR" signs. The crowd promptly applauded. A middle-aged man wore a T-shirt which said: "The only thing that's allowed to be separated by colour is the laundry." A moment of silent was observed. It was eerie, at times overwhelmingly sad. But it was also moving and inspiring.

Local poet Tony Walsh brought brief respite from the pain when he recited "This is the Place", his ode to the city and its people. The first verse went:

This is the place In the north-west of England. It’s ace, it’s the best

And the songs that we sing from the stands, from our bands

Set the whole planet shaking.

Our inventions are legends. There’s nowt we can’t make, and so we make brilliant music

We make brilliant bands

We make goals that make souls leap from seats in the stands

On stage, everyday political foes became temporary allies. Labour leader Jeremy Corbyn, home secretary Amber Rudd, Lib Dem leader Tim Farron, Mayor of Greater Manchester Andy Burnham and house speaker John Bercow all brushed shoulders. Their message was clear: "we are Manchester too."

The vigil lasted a little over half an hour. On other occasions, a crowd this size in the centre of Manchester would give authorities reason for concern. But not this time. Everyone was in their best behaviour. Only a few were drinking. 

As Mancunians made their way home, I went over to a family that had been standing not far from me during the vigil. The two children, a boy and a girl, both not older than 10, were clutching their parents' hands the whole time. I asked dad if he will give them a few extra hugs and kisses as he tucks them in tonight. "Oh, absolutely," he said. "Some parents whose children went to the concert last night won't ever get to do that again. It's heartbreaking."

Felipe Araujo is a freelance journalist based in London. He writes about race, culture and sports. He covered the Rio Olympics and Paralympics on the ground for the New Statesman. He tweets @felipethejourno.

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