Wednesday, 28 May 2014

A return to British Rail? Labour plans to renationalise trains - what are the consequences?

Post war British Rail saw a dramatic long term decline in rail use: this characterised the whole post war nationalised industry experience. Getting rid of British Rail has resulted in three key things:
- increased investment in the trains and its infrastructure
- allowed competition to improve services
- doubled the number of rail journeys by rail users.
Ask any train professional and they all say the same. The state has a poor long term record of running railways. British Rail was a disaster.

Where are we now?
All the track, signals, train pathway timetabling and stations are owned by a monopoly business largely financed by taxpayers and entirely owned by taxpayers. The train companies lease trains and run services over the nationalised tracks under strict controls from the Rail regulator and the Transport Department. They have to conform to five year centralised plans, and they gain near monopoly rights to use given regional track systems. The only element of competition in the whole thing is the competition for the franchises. The majority of the revenue to sustain Network Rail comes in the form of taxpayer financed subsidy.

When the railways were privatised a two tier structure was set up. There was a privatised monopoly track owner, and regional monopoly train franchise holders. This greatly limited the amount of competition introduced by privatisation, but even this limited competition administered a shake up and reversed .

Nationalisation plans by Labour:
Today the East coast mainline franchise is run as a nationalised monopoly, and Labour is looking at doing the same for some of the other franchises as they expire were they to win the next election. That would be a good way to stop the modest cost and price competition we currently enjoy  and would help limit innovation. For four decades a fully nationalised and integrated monopoly industry presided over large cash losses for taxpayers, high  and rising fares, declining train usage, little innovation and poor service levels. Why would a future completely nationalised BR be any different?

Simple question: are we all prepared to pay more to run the new British Rail? And will it be better. I know of no person who works in the rail industry who supports a return to British Rail. Labour is clueless as to how to pay for this, and naïve to expect a better service.

Fares for commuters on crowded routes into our main cities are too high and service levels not good enough. Too many cross country and mainline express trains fail to attract nearly enough paying passengers, whilst a limited number of trains and routes beyond the commuter lines suffer from overcrowding. We need more innovation, not less, more competitive pressure to do more for less as the airlines have done, new thinking on how to improve service and allow more of us more of the time to choose the train for our travel. That requires a more competitive industry with more private capital and management, not a return to BR days.  Where challenger railway companies have been allowed they have helped lower prices and improve the range and quality of services.