What else can Britain sell off

[Gonnagle]

Dear Taxpayer,

A few thoughts.

Using the good Prof's scandalous cost for travelling to and from work and rounding it down to £3000, if we times that by, lets say a million passengers a year, well that is easy, 3 billion pounds going to private investors.

Now if we use Wiki as a reference,

https://en.wikipedia.org/wiki/Glasgow_Central_station

With over 30 million passengers in 2015-16, Glasgow Central is the twelfth-busiest railway station in Britain, and the busiest in Scotland.[5] According to Network Rail, over 38 million people use it annually, 80% of whom are passengers.[6] The station is protected as a category A listed building.[7]

30 million passengers a year, but then, Glasgow Central is only the twelfth busiest station in Britain.

But lets be conservative here, lets half that amount, Wiki can sometimes not be the most reliable source of info.

15 million x 3000, anyone!! You young Smithers, you have your hand up, oh you just want to go to the toilet, well off you go young man, hurry back I am sure you must be fascinated to know how the ordinary citizen is being ripped off.

45 billion pounds a year

Now Dear Taxpayer, I have only used my wonderful Glasgow Central ( yes it is mine ) as a test case, here is Wiki again and you can choose your own station and do your own sums.

https://en.wikipedia.org/wiki/List_of_busiest_railway_stations_in_Great_Britain

Now you can for reference go and check Udayanas link on subsidies.

https://en.wikipedia.org/wiki/Rail_subsidies#Europe

A paltry 4.4 billion pounds per year, but then I ask myself, why are we even subsidising such a wonderful Golden egg.

Now granted, the above calculations are a bit simplistic, but if we delve deeper.

http://www.thisismoney.co.uk/money/markets/article-3241294/Virgin-Rail-lines-27m-dividend-sales-hit-1bn.html

Mr Branson, sorry my apologies, some numpty gave him a Knighthood, Sir Richard is coining it in thank you very much, but then it starts to become a little more complicated.

Sir Richards company gives hundreds of millions back to us in taxes but then gets a nice wee bung back from state owned Network rail for failure to maintain lines, so maybe that is something else we can sell off.

And if we go a little deeper ( my apologies for using Sir Richard as a example, other scroungers are available )

https://www.theguardian.com/commentisfree/2013/jun/10/truth-richard-branson-virgin-rail-profits

These sums are what got Virgin interested in rail in the first place. In his biography of Branson, Tom Bower records a phrase used by the billionaire's lieutenants while weighing up the west coast deal: "It's a licence to print money. Can't go wrong."

A licence to print money But wait, in the above article there is mention of off shore accounts, surely not, not Dear sweet Sir Richard.

To end Dear Taxpayer, I will allow you to draw your own concussions and please remember it could only be my confirmation bias working overtime, I have made no mention of cramped conditions or reliability, I have made no mention of what the first line in Udayanas link states,

Many countries offer subsidies to their railways because of the social and economic benefits that it brings.

Social and economic benefit, our transport is a basic, something we need to keep the country moving, so once again I ask, who should be in charge of the very basics of life, some foreign power, a private investor, or the Great British public.

Gonnagle.

[ProfessorDavey]

On the assumption that you travel to work 200 days in the year, that's 37p per mile to travel into and out of London at the busiest times. Seems like a bargain to me, unless you have the misfortune to be in Southern Rail's area, in which case you are probably being robbed.

Check out the comparison for comparable commutes in the UK and other European countries.

http://www.independent.co.uk/news/uk/home-news/british-rail-passengers-rpice-hike-train-fares-europe-income-southern-virgin-gwr-a7506711.html

Price per mile in the UK (using my line as the comparison) is over 3 times more than the next highest (Germany) and over 6 times more than France.

But their rail services are all subsidised by tax payers to a much greater extent than ours.

But differences in subsidies doesn't come close to explaining the difference in cost.

So subsidies in Germany and France are less than double those in the UK, yet our fares are more than 3 times and 6 times greater respectively.

One of the reasons, of course, is that a load of the UK subsidy actually ends up subsidising the French and German railways as their state owned companies run a significant number of our train operating companies, including mine (part owned by the French state railways. S my exorbitant fare allows commuter fares around Paris to be just 16% of the cost of mine, on a per mile basis.

[ProfessorDavey]

Social and economic benefit, our transport is a basic, something we need to keep the country moving, so once again I ask, who should be in charge of the very basics of life, some foreign power, a private investor, or the Great British public.

I'm a pragmatist, and not someone with a ideological view on what should be in the private sector or public sector as many on both the hard left and hard right are.

However what I see in our privatised railways is a system that is eye waveringly expensive both the the customer and overall to UK PLC (cost to tax payer through subsidy and direct to customer), with overall costs clearly significantly greater than in other countries. Yet by comparison our service is very poor - unreliable and overcrowded.

So as a pragmatist I look at other ways to run railways, notably those in comparable European countries and I see services that are mech better and much cheaper, and that is even when you add in the greater state subsidy. And the unifying feature - they are state owned.

One further point on economics - you need to factor in the cost to the economy of unreliable services. As someone working in London regularly either 1 or colleagues are simply unable to get into work because of poor service. Sure home working is possible for some, but overall there is a hit on productivity - how much I don't know, but it must be very considerable for a economy the size of London's.

[Udayana]

Dear Taxpayer,

A few thoughts.

Using the good Prof's scandalous cost for travelling to and from work and rounding it down to £3000, if we times that by, lets say a million passengers a year, well that is easy, 3 billion pounds going to private investors.

Now if we use Wiki as a reference,

https://en.wikipedia.org/wiki/Glasgow_Central_station

30 million passengers a year, but then, Glasgow Central is only the twelfth busiest station in Britain.
...

hmm, whatever is meant by "30 million passengers" it does not mean 30 or even 15 or even 1 million individuals paying £3000 each. Probably they are counting numbers of journeys, with further complications wrt interchanges, non-ticketed journeys .. ad infinitum.

Your fag packet would run out of space just trying to understand that one statistic.

[ProfessorDavey]

hmm, whatever is meant by "30 million passengers" it does not mean 30 or even 15 or even 1 million individuals paying £3000 each. Probably they are counting numbers of journeys, with further complications wrt interchanges, non-ticketed journeys .. ad infinitum.

Your fag packet would run out of space just trying to understand that one statistic.

Indeed - my £3200 equates to about 400 journeys, on the basis that my normal daily commute results in 2 journeys, one there in the morning and one back in the evening.

[Gonnagle]

Dear Prof,

One further point on economics - you need to factor in the cost to the economy of unreliable services. As someone working in London regularly either 1 or colleagues are simply unable to get into work because of poor service. Sure home working is possible for some, but overall there is a hit on productivity - how much I don't know, but it must be very considerable for a economy the size of London's.

Well in my own way I was when I mention basics, if a commuter can not make it to his work on time on a regular basis the economy suffers.

For me, the job of keeping the country moving should be one of government, maybe it could be selling point on your favourite subject Brexit, we could tell foreign investment, look we will ensure your workers are there on time every time.

Gonnagle.

[Udayana]

...
So as a pragmatist I look at other ways to run railways, notably those in comparable European countries and I see services that are mech better and much cheaper, and that is even when you add in the greater state subsidy. And the unifying feature - they are state owned.

One further point on economics - you need to factor in the cost to the economy of unreliable services. As someone working in London regularly either 1 or colleagues are simply unable to get into work because of poor service. Sure home working is possible for some, but overall there is a hit on productivity - how much I don't know, but it must be very considerable for a economy the size of London's.

Indeed. However it is wrong to conclude that just a re-nationalisation of the railway is bound to improve the service and economics of our own system. We need to understand the details of exactly why these continental systems work better than ours and then work out the best way of implementing improvements here.

If those same companies are doing fine in Germany (say) but just screwing up our system - again, you need to understand the details even if only to ensure our state system (if reinstated) doesn't continue doing the same.

[Gonnagle]

Dear Udayana,

Rounding off, that's all I was doing, I could have rounded up, I was just showing how rotten the system is, and it is, Jeremyp can quote figure of 37p per mile but that is still to high for low earners, but if you use the good Profs cost it becomes staggering.

But then that is only one problem of this whole mess, what about routes that are being cancelled because they are not profitable, or as the Prof says, overcrowding, if I was an employer in London I would want my staff to be well rested when they come to work.

Gonnagle.

[ProfessorDavey]

Indeed. However it is wrong to conclude that just a re-nationalisation of the railway is bound to improve the service and economics of our own system. We need to understand the details of exactly why these continental systems work better than ours and then work out the best way of implementing improvements here.

If those same companies are doing fine in Germany (say) but just screwing up our system - again, you need to understand the details even if only to ensure our state system (if reinstated) doesn't continue doing the same.

I think there are a range of reasons.

But fundamentally you need to understand the different drivers for the French state owner railway company operating in France and in the UK. In France they are acting effectively as a nationalised public service, with necessarily emphasis on service and efficiency of operation. In the UK they are simply acting as another commercial organisation and their key driver will be profit, which can be piled back into the French system (the French government isn't a charity).

Add to that the lack of any meaningful competition, which is of course a necessary component for a free market private system to operate effectively.

Further, that in many cases there is no incentive in some of the deals struck for the service to be run effectively - I gather that Southern earned exactly the same from government subsidies throughout the period where their industrial dispute meant that they were barely operating a viable service.

Finally the fragmentation and short-termism embedded in the system. That the train operating companies aren't responsible for the rails on which they run and the signals that allow them to proceed or otherwise. Secondly that there is no real incentive to invest by train operating companies as the timeline of the return one investment is way beyond the length of their franchises.

The problem for me is that I cannot see how you can rectify all these issues and also create a proper free market that might drive down cost and drive up service quality in the private market. It simply doesn't work as far as I can see and I'm struggling to see any example across the globe of an effective privatised railway system, while I can see loads of effective ones that are state owned.

[Udayana]

Dear Prof,

Well in my own way I was when I mention basics, if a commuter can not make it to his work on time on a regular basis the economy suffers.

For me, the job of keeping the country moving should be one of government, maybe it could be selling point on your favourite subject Brexit, we could tell foreign investment, look we will ensure your workers are there on time every time.

Gonnagle.

Agreed. The government has set up the Office of Road and Rail to monitor and regulate transport issues. One could feel that it has been set up to be inadequate and toothless.

https://www.gov.uk/government/organisations/office-of-rail-and-road

[Udayana]

...
The problem for me is that I cannot see how you can rectify all these issues and also create a proper free market that might drive down cost and drive up service quality in the private market. It simply doesn't work as far as I can see and I'm struggling to see any example across the globe of an effective privatised railway system, while I can see loads of effective ones that are state owned.

Yes, I agree with this. All I am saying is that Corbyn (or whoever) can't demand re-nationalisation and expect everything to magically work. He needs detailed plans, or people with them, on how the economics and management is going to be arranged.

The same applies to the NHS, social care, energy etc. If he did get in and even started work on these immediately, in 2022 we would just be 5 years down the road with little or no improvement.
 

[Gonnagle]

Dear Prof,

Great post, I wish I could be as erudite as your good self.

Dear Udayana,

Agreed. The government has set up the Office of Road and Rail to monitor and regulate transport issues. One could feel that it has been set up to be inadequate and toothless.

Well sorry, but for cynical old me, it is another case of the Tories walking away from their responsibilities, I have read they are wedded to a thing called little government, but I could be wrong.

Gonnagle.

[ProfessorDavey]

Yes, I agree with this. All I am saying is that Corbyn (or whoever) can't demand re-nationalisation and expect everything to magically work. He needs detailed plans, or people with them, on how the economics and management is going to be arranged.

Of course, and I'd have no confidence in Corbyn achieving it, as he is an ideological nationaliser, and just as bad as the ideologue privatisers who got us into the problem in the first place.

However I don't think the challenges are as great as some suggest. In order to achieve nationalisation you simply need to wait a few years until franchises lapse and simply revert them into public control. In fact this has happened in the past - with the East coast route, which reverted to public control for a period of about 6 years, and ran very successfully during that period after the debacle of National Express.

[Gonnagle]

Dear Prof,

However I don't think the challenges are as great as some suggest. In order to achieve nationalisation you simply need to wait a few years until franchises lapse and simply revert them into public control. In fact this has happened in the past - with the East coast route, which reverted to public control for a period of about 6 years, and ran very successfully during that period after the debacle of National Express.

Problem solved, Mr Corbyn just needs to ensure that we are all aware it is ours to use or abuse, it is far to precious to be abused, we need it to keep the country moving.

Gonnagle.