Railways: £8bn investment but soaring prices

It’s been a strange couple of days for news regarding Britain’s rail network.

Yesterday we heard that fares will be going up yet again, and in an extremely complex pricing system, it is not immediately clear which fares will be going up, nor by how much. What is clear, is that the Government has little control and the franchise companies are free to exploit the passenger as much as they like. Prices are extortionate as it is. This is ridiculous in a time when we are supposed to be trying to encourage people to leave their cars at home.

And as if by magic, today – less than 24 hours after that bad news – the Government has announced that the rail network will be receiving £8bn of investment. This will include 2,000 new carriages to ease overcrowing, and improvements to some lines. But with such a creaking system, £8bn will not go very far. It is a drop in the ocean compared to the profits that the operating companies enjoy. Overall Rail journeys have dipped slightly in the last year, which is hardly surprising given the ever-increasing prices. The sad fact is, that thanks to Thatcherite free market ideology, the Government has next to no control over such a vital part of this country’s infrastructure.

As I have documented on this blog before, most European rail networks are run as a national operation, and are much more frequent, efficient, punctual, safer and cheaper than in Britain. But for some reason, flying in the face of all this evidence, the argument ran in Britain that the rail network needed private enterprise to work. Privatisation hasn’t unleashed a ‘golden age of investment’, rather a dark age of shareholder exploitation, laziness and contempt for the customer. The same argument also runs for local buses too.

The fares will go up in January (a matter of weeks), but passengers will have to wait years to see the improvements (if at all).



Filed under News, railway history

19 responses to “Railways: £8bn investment but soaring prices

  1. x

    A couple of things,

    1) I think SNCF and DB are both running at losses. While the private NS is still doing OK. JNR was broken into bits and apart from the Bullet trains and commuter lines it is a balls up.

    2) The world’s most successful railway nation is Switzerland. Though there is a state railway (SBB) there are many private railways too.

    3) Yes it was the way the railways were privatized that has brought our rail system to the state that it is in. It would have been better to split it up on a regions. There could have been some competition for London to Scotland traffic for example. Though there wouldn’t have been competition directly between railway companies the railways could have been forced to keep the prices reasonable through competition with other transport systems and by statute.

    3a) One of the things I would have been in favour with that model would have been competition to operate the regional franchises. I have seen this in other industries and it doesn’t work. By the time a company is settled into the contract it is tendering time again. This invariably leads to the lowest bidder winning and the new company has to start learning the ropes. (I will add that in the industries I have seen this happen in the workforce just moves to the new company. It is only the “muddle” management that changes…

    3b) Of course prior to British Rail(ways) the country had 4 very competitive and very mature PRIVATE railways companies. Britain’s railways had been in “decline” since their Edwardian heyday. But by the time WW2 had arrived they were not only competing with road traffic they were turning more into transport companies. They were even looking at air travel. I suggest reading The History of the LMS by OS Nock and The History of the LNER by Bonavia.

    4) The high speed rail link is joke. It is a sop to the Scottish. On the continent high speed lines are passenger only; they have to be to keep to timetables. We have to ask whether shaving an hour or so off a trip from London to Scotland is really worth £30billion? How many people out of a UK population need to make that trip? Not many. And it will still kill the day travelling. Remember the Scottish were over represented in the last Labour government. And I won’t mention the SNP who want English money spent on Scotland at one turn and independence at the next.

    4a) The future of travel and office work is via the internet. Have a look at products like Citrix’s Go To Meeting. By investing in the high speed rail link we are in danger of making a similar mistake to those architects and town planners of the late 1960s who didn’t factor into the plans enough parking space. (The conurbation to my immediate east built a huge office block in the 60s to house all its council functions. It was hardly used. By the time it was completed people wanted to drive to work. The building only had 200 spaces for 4000 employees…….)

    4b) £30billion for the high speed link would therefore be better spent on glassfibre back bones for the internet.

    5) In conclusion yes the railway system is crap. But as with most things in history it isn’t just one group’s or one person’s fault.

    6) Getting back to more familiar salt water logged territory. As a student of naval social history do you know what the expression “getting out at Fratton” is a euphemism for? It is the only RN / railway link I could think of…. 😉

  2. x

    3a) Please amend to “I wouldn’t be in favour of”

  3. James Daly

    I do feel that the ideology behind privatisation is as intellectually bankrupt as Rumsfeld’s misguided notion that upon liberation in 2003 Iraq would flower into a vibrant democracy and all would live happily ever after.

    Personally I don’t see any problem with an important state service running at a loss, if my tax has to go on something, a decent public transport system has to be near the top of the list. OK, if the railways were state run and leeching money that would be a problem, but I don’t get the fixation with profit.

  4. x

    State run done well is better than private done badly then?

    I have worked in local government, in co-operatives, and in a PLC and they are all just as bad each other.

    A nationalised business running at loss means borrowing.

    When a worked for a major privatised utility I was frustrated that there was a fixation with the bottom line over actually solving the problem. For example under equipping front line operatives. But at the same time I was horrified by the tales being regaled to me about how the utility was run when in state hands; the hour breakfasts, two hours of work, the hour at eleven for tea, then another hour of work before disappearing to do their own work. And the massive over manning.

    Saying I don’t find much comfort in the emergence of the hollow company. One afternoon at the utility I realised that there was one real employee of the utility in the building. Eveybody else worked for another company that was either directly contracted to the utility or in some cases was a sub-contractor or temp to another sub-contractor. The building itself was leased. As were the lorries we were using.

    I am great fan of organisations like John Lewis where everybody is shareholder. I worked for a co-op, but even though many co-op employees were members this had little or know bearing on their employment. I think the John Lewis model has a lot to offer the NHS. There are other alternatives to, such as did you know ambulances in Spain are run by a charity?

  5. How can rail travel be made more attractive/efficient?

  6. x

    They main trouble at the moment is the quality and capacity of the coaching stock. Then Britain’s railways still suffer to many technical faults (signalling, engineering, permanent way, etc.)

    Perhaps the question to be asked is why are the British so wedded to their cars? Even if every material fault with the railways was cured in an instant would the travelling public really move en masse to the railways? Probably not. Of course then we have to ask if the motorway system is overburdened? I would suggest not. A lot of the choke points seem to be in cities where their residents use the motorway as a route across their cities. Perhaps closing junctions within cities would clear the bottle necks? Are the roads full of freight? No. Are the roads full of rep’s and business travellers? Not really.

    So why are Brits wedded to their cars then? It is because railways are inconvenient though I suggest that is more subjective. And strangely that is what is pushing the supposed need for the high speed lines. Shaving an hour there or ten minutes there so the British travelling public, that is the long distance travellers (the inter city bods a minority), aren’t inconvenienced any more than have to be. It is all about expectation. Our grandparents would have given up a day to travel to the capital. We expect to do it in half the time; but the reality is any trip over 150miles (and back) will “kill” a working day. In reality the time savings are inconsequential.

    I suggested above the main problem with this is that we are a cusp of change in a society. Tele-presence, on-line, communication is going to replace the need for many business traveller. And the shift to home working touted for the 1990s may actually arrive. So the question is should we spend 30billion on system that supports a concept of travel that will be soon redundant. Or spend it on the “travel” system of the near future.

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